The word “management” has its origin in the Greek word ‘nomos’ which means ‘management’. It is concerned with human beings whose behavior is highly unpredictable. Ever since people have begun forming groups to achieve individual goals, management has become the essence of coordinating individual efforts. It involves not only a function but also the people who discharge it. A group of people, who accept the responsibility to run an organization and direct its activities, form the management of that organization.
Management denotes not only a special position and a rank but also a discipline and field of study. It is management that provides planning, organization, and direction which are necessary for business operations. In a more important sense, management is a vital function concerned with all aspects of the working of an enterprise. Management, in this sense, may be defined as the art of getting things done.
For-Profit Organisations (Businesses) businesses tend to develop their employees (human assets) in the pursuit of financial goals (profit), they benefit society by creating both material and human wealth. Material wealth is usually in the form of financial profit and human wealth through the professional development of their employees.
Not-For-Profit Organisations (Institutions) create both material and human wealth, but profits are used for charitable purposes. Typically, institutions such as charities, provide physical and emotional support for the disadvantaged and less fortunate members of society, by helping them manage their problems, creating learning opportunities, helping children grow and develop, healing the sick, providing stability and a sense of belonging.
Management is the process of getting things done by coordinating the activities of people throughout an organization. The objective of management practice is to get things done efficiently and effectively.
– Efficiently (in the least time and at the least cost – usually measured as the output divided by inputs; both inputs and output may be measured in units of quantity, money, or time).
– Effectively (doing the right things to a required standard of quality).
The competent manager evaluates any completed or planned course of management action by asking the following questions:
– Has it or will it increase efficiency and effectiveness?
– Has it or will it add value?
Ultimately, the quality of management is reflected in measurable (quantitative) terms such as:
– Well-managed, for-profit organizations improve or maintain their share price,
– Well-managed, not-for-profit organizations improve or maintain their membership,
– Well-managed governments are re-elected by voters,
– Well-managed countries experience improved living standards.
However, it needs to be noted that an improvement in either efficiency or effectiveness does not automatically lead to an improvement in the other. For example, a car repair shop might reduce the time spent on repairing items but if the repairs are not done properly and the repairer gets a reputation for poor quality, the shop may quickly lose customers.
Similarly, a car manufacturer may be producing cars efficiently (at the right price), however, if rising petrol prices cause consumers to want different types of cars, efficiency alone may not be enough for the manufacturer to remain profitable if its products (cars) are no longer seen to be effective in the eyes of consumers.