FUNDAMENTALS OF ECONOMICS AND MANAGEMENT
In this article we give introduction to one of the subjects of CMA Foundation, i.e., Fundamentals of Economics and Management. Let’s understand the topic at a glance;
Fundamentals of Management is the introduction of management which describe how the management plays vital role in the organisation as the organisation needs a proper level of management for achievement of the goals and objectives of the organisation.
There are so many authors who describe the management in their perspectives and the best one will be consider understanding the management. Management categorizes in three level i.e., Top Level management, Medium Level management and Lower Level management. Top-level management of a company consists of the board of directors, chief executive officer, and Managing Director. Operative level consists of middle level and lower Management. Lower level management includes supervisor and foreman.
There is a controversy that whether management is a science or an art or the profession. This controversy is very old and need yet to be settled. All the factors to be considered while analyzing whether management is a science or an art or the profession, it is finalized that management is playing all the roles as it relates to science or an art or the profession.
The principles of management are statements of fundamental truth which can be used by managers as guidelines for decision-making and action under different situations. Three different authors describe the management principles as one author Fredrick Winslow Taylor has been accepted as the father of scientific management who clarified the scientific management principles with their objectives as well as criticism too. Another author Henri Fayol perhaps is unhesitatingly mentioned as the pioneer of comprehensive thinking on the philosophy of management. The Henri Fayol explained 14 principles of management. As per German Scientist, Max Weber, a bureaucracy is a highly structured, formalized and impersonal organization. The bureaucratic management principles explained their objectives, its 6 major principles as well as criticism too.
Management is the process of planning, organizing, leading and controlling the efforts of organization members and of using all other organizational resources to achieve stated organizational goals.
Planning is an important function of management. Planning is an activity by which
Present conditions are analyzed by the manager to determine ways of reaching a desired future state. Planning is both an organizational necessity and a managerial responsibility.
As planning function explained its characteristics with their limitations as well, also the planning provide its prerequisites which will give effective planning procedure. For analyzing the planning provides proper steps through which the judgments can be making. There are so many approaches and types of planning for which guidance can be provided to the managers.
The Basic assumption of planning premises is about the environment in which plans are expected to be implemented. Under the three heads Planning premises can be categorized – Internal and external premises, Controllable, semi controllable and uncontrollable premises and Tangible and intangible premises
Organizing is defined as the dividing and subdividing up of duties and responsibilities which are necessary to any purpose and arranging them in groups which are assigned to individual.
As a process organizing includes the following steps Identifying the work i.e., Grouping the work, Establishing formal reporting relationships, Providing for measurement evaluation, and control, Delegation of authority and responsibility and Coordination. The process of obtaining and maintaining the capable and competent people to fill all positions from top to operative level is defined as staffing.
The organization providing the Staffing process is concerned with the right number of people at the right place, and at the right time so that the organisation would be able to achieve its goals effectively. The important sources of recruitment are internal and external sources. Staffing process is the selection.
In the organization one very crucial task is selection as any errors in selection may prove to be costly to the organisation itself. It consists of the following steps i.e., Application blank, Preliminary interview, Employment tests, Final interviews, Background Investigation, Medical examination and Final selection and placement.
Training and development programmes are one of the important managerial activities in modern organisation. Normally organisation first recruits and select the employees and then provide them some of training to increase their versatility, knowledge, adaptability skills so that the jobs they perform becomes appreciable.
In the organization there are several methods for Training and development programmes. In the organization Leading is the basic function within the management process “Leading is the use of influence to motivate employees to achieve organizational goals”. While achieving the organization’s goal the managers must be able to make employees want to participate.
For make up the leading functions there are three components i.e., Motivating employees, Influencing employees and Forming effective groups. For the goal attainment the organization needs to lead the process.
Controlling is aimed at monitoring the outcome of activities, reviewing feedback information about this outcome, and if necessary takes corrective action.
The Control Process is Establishment of Standards, Measurement of actual performance, Comparing the actual performance with standards and Taking corrective action.
Prerequisites of an Effective Control System are to be considered on timely basis. Some principles of control summarize the substantive parts of the controlling function. Communication is vital to all managerial actions.
Communication is the important for an organisation through which the decisions and instructions of the management flow down to the lowest levels. It helps to conducts upward the pulse of workforce in organisations. Passing information and understanding from one person to another is the Communication process.
The basic elements in the communication process are The Communicator or Sender, Encoding, Message, Medium, Decoding, The receiver, feedback and noise. Communicator may take great care in sending the message to the receiver properly, there may exist some barriers to communication. A poorly transmitted message often leads to misunderstanding.
To ensure a proper interplay functions and forces of all the different component parts of an organisation is the effort of Coordination. The purpose of coordination will be realized with a minimum of friction and a maximum of collaborative effectiveness. Some Principles are followed for achieving effective coordination.
Another important function of management is directing. Directing is that managerial function which imitates organized action. While issuing orders to subordinates and supervise how these orders are carried out by them is involved in directing. It helps to motivate the employees for higher performance and to the accomplishment of the organizational objectives effectively. Some Principles are followed for providing direction.
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