Concept of Management

 Management is a very popular term and has been used extensively for all types of activities and mainly for taking charge of different activities in any enterprise. People in organizations are performing diverse tasks but they are all working towards the same goal.

Management (or managing) is the administration of an organization, whether it is a business ,a non-profit organization, or a government body. It is the art and science of managing resources.

Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees (or of volunteers) to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. 'Run the business' and 'Change the business' are two concepts that are used in management to differentiate between the continued delivery of goods or services and adapting of goods or services to meet the changing needs of customers. The term 'management' may also refer to those people who manage an organization—managers.

Larger organizations generally have three hierarchical levels of managers, in a pyramid structure:

•  Senior managers, such as members of a board of directors and a chief executive officer (CEO) or a president of an organization. They set the strategic goals of the organization and make decisions on how the overall organization will operate. Senior managers are generally executive-level professionals and provide direction to middle management, who directly or indirectly report to them.

• Middle managers: examples of these would include branch managers, regional managers, department managers, and section managers, who provide direction to front-line managers. Middle managers communicate the strategic goals of senior management to the front-line managers.

• Lower managers, such as supervisors and front-line team leaders, oversee the work of regular employees (or volunteers, in some voluntary organizations) and provide direction on their work.

In smaller organizations, a manager may have a much wider scope and may perform several roles or even all of the roles commonly observed in a large organization.

Social scientists study management as an academic discipline, investigating areas such as social organization, organizational adaptation, and organizational leadership.

The term ‘management’ has been used in various senses:

1. Management can be referred to as the process of planning, organizing, staffing, directing, coordinating, and controlling, at other times it is used to describe people as the task of managing them. It is also known as the body of knowledge, practice, and discipline.

2. There are some people who describe the concept of management as a leadership and decision-making technique, while others have analyzed the management as a process of economic resources, production factors or authority.

The concept of Management can be defined as the process of achieving things with the aim of achieving goals effectively and efficiently. Management is the process of working with people and other organizational resources and reaching organizational goals.

There are some important words in the definition of management which need to describe:

Process: Process means primary work or activities that do the management work. These are action plans, organizing, staffing, directing, and controlling.

Effectiveness: Effectiveness is related to the end result. Basically, it means fulfilling the given work. Thus effectiveness in management is related to doing the right thing, fulfilling activities and achieving goals.

Efficient: Efficiency means to do the job correctly and with minimal cost. Management is related to efficient utilization of input resources which ultimately reduces costs and gives rise to high profits.

It is important for management to achieve goals (effectiveness) with minimal resources, that is, efficiently while maintaining a balance between effectiveness and efficiency.

Management aims at guiding their efforts towards achieving a common objective — a goal. Thus, management has to see that tasks are completed and goals are achieved (i.e., effectiveness) with the least amount of resources at a minimum cost (i.e., efficiency).

Management, has therefore, been defined as a process of getting things done with the aim of achieving goals effectively and efficiently.

Process here means- the primary functions or activities that management performs to get things done. These functions are planning, organising, staffing, directing and controlling.

Being effective or doing work effectively basically means finishing the given task. Effectiveness in management is concerned with doing the right task, completing activities and achieving goals. In other words, it is concerned with the end result. But it is not enough to just complete the tasks.

Efficiency means doing the task correctly and with minimum cost. There is a kind of cost-benefit analysis involved and the relationship between inputs and outputs. If by using less resources (i.e., the inputs) more benefits are derived (i.e., the outputs) then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred.

Input resources are money, materials, equipment and persons required to do a particular task. Obviously, management is concerned with the efficient use of these resources, because they reduce costs and ultimately lead to higher profits.

Effectiveness versus Efficiency

These two terms are different but they are interrelated. For management, it is important to be both effective and efficient. Effectiveness and efficiency are two sides of the same coin. But these two aspects need to be balanced and management at times, has to compromise with efficiency.

For example, it is easier to be effective and ignore efficiency i.e., complete the given task but at a high cost. Suppose, a company’s target production is 5000 units in a year. To achieve this target the manager has to operate on double shifts due to power failure most of the time. The manager is able to produce 5000 units but at a higher production cost. In this case, the manager was effective but not so efficient, since for the same output, more inputs (labor cost, electricity costs) were used. At times, a business may concentrate more on producing goods with fewer resources i.e., cutting down cost but not achieving the target production. Consequently, the goods do not reach the market and hence the demand for them declines and competitors enter the market. This is a case of being efficient but not effective since the goods did not reach the market.

Therefore, it is important for management to achieve goals (effectiveness) with minimum resources i.e., as efficiently as possible while maintaining a balance between effectiveness and efficiency. Usually high efficiency is associated with high effectiveness which is the aim of all managers. But undue emphasis on high efficiency without being effective is also not desirable. Poor management is due to both inefficiency and ineffectiveness.

Difference between Efficiency and Effectiveness

Basis of Difference	Effectiveness	Efficiency
Meaning	It refers to completing the task or time, no matter whatever the cost.	It refers to completing the task with minimum cost, optimum utilization of resources and in cost effective manner.
Objective	To achieve the end result.	To conduct cost benefit analysis.
Main Consideration	Doing the right task.	Doing the task in right way.

The terms efficiency and effectiveness are thought to be the same and sometimes it is used in place of each other. However, both are different. Efficiency and effectiveness are two terms that are most commonly used in management.

Efficiency refers to the act of performing activities with minimum wastage of time and optimum usage of resources, so that the work done is faster and in an error free manner.

Effectiveness is a broader concept than efficiency and it is related to the extent to which work is done in order to achieve the desired or targeted outcomes. In other words, we can say it is the extent to which someone or something is successful towards meeting the desired outcome. Both these concepts are widely used for assessing the performance of the employees in an organisation.

Key Differences Between Efficiency and Effectiveness

• The ability to produce maximum output with limited resources is known as Efficiency. The level of the nearness of the actual result with planned result is Effectiveness.
• Efficiency is ‘to do the things perfect’ while Effectiveness is ‘to do perfect things’. Efficiency has a short run perspective. Conversely, the long run is the point of view of Effectiveness.
• Efficiency is yield-oriented. Unlike Effectiveness, which is result oriented.
• Efficiency is to be maintained at the time of strategy implementation, whereas strategy formulation requires Effectiveness. 
• Efficiency is measured in operations of the organisation, but Effectiveness of strategies is measured which are made by the organisation.
• Efficiency is the outcome of actual output upon given the number of inputs. On the other hand, Effectiveness has a relationship with means and ends.