Meaning and Defination of Management

Close Tab
Chapter 1

Business Management

Nature & Significance of Management

1. Meaning of Management

Management is a distinct process consisting of planning, organizing, staffing, directing, and controlling, performed to determine and accomplish stated objectives. Simply put, it is the art of getting things done through others with the aim of achieving organizational goals effectively and efficiently.

2. Definitions by Management Thinkers

Peter Drucker (Father of Modern Management):
"Management is a multi-purpose organ that manages a business and manages managers and manages workers and work."
Harold Koontz & Heinz Weihrich:
"Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims."
F.W. Taylor:
"Management is the art of knowing exactly what you want your men to do and seeing that they do it in the best and cheapest way."

3. Effectiveness vs. Efficiency

For management to be successful, it must balance two crucial elements. Doing work effectively means achieving the goal, but doing it efficiently means achieving the goal with minimum cost.

Basis Effectiveness Efficiency
Meaning Doing the right task and achieving the end goal on time. Doing the task right with minimum cost and zero wastage.
Objective To achieve end results on time. To conduct a cost-benefit analysis.
Main Focus Focuses on the end result (Time). Focuses on cost optimization (Cost).

Corporate Example

Suppose a car manufacturing company's target is to produce 1,000 cars in a month. The manager achieves this target by operating on double shifts, which leads to high power and labor costs.

Here, the manager is Effective (because the 1,000 cars were produced on time) but Not Efficient (because the cost of production went significantly over the budget due to overtime and extra power consumption). Good management requires a balance of both.