What is Management - Functions, Principles, and Importance
Updated on 18th Jan, 24 9.3K Views

This comprehensive article sets the stage to delve deeper into the vast domain of management, shedding light on its significance, underlying principles, and profound impact on the success of any enterprise.

Table of Contents

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What is Management?

Management is the art and science of efficiently coordinating and directing human and material resources toward attaining organizational goals. It comprises a wide range of activities, including planning, organizing, leading, and controlling, collectively forming the pillars of effective management. 

Through careful planning, managers set objectives and outline strategies to accomplish them. They organize resources, allocate tasks, and create structures that foster collaboration.

Management plays a crucial role in organizations by offering guidance, coordination, and oversight. It necessitates a wide range of skills, such as strategic cognition, effective decision-making, leadership abilities, and the capacity to adapt, enabling professionals to navigate the intricate landscape of contemporary business and attain enduring achievements.

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Objectives of Management

As an attachment to management comes several objectives, which encompass organizational, social, and personal aspects. They are considered essential for bringing forth effective management skills in the organization. Let’s explore some objectives of management:

Objectives of Management

Organizational Objectives

Management aims to achieve the goals and objectives set by the organization. This involves actively participating in planning, setting clear targets, and formulating strategies to accomplish them. Through active decision-making, management ensures that the organization’s resources are allocated efficiently to achieve these goals.

Social Objectives

Management recognizes the impact of its decisions and actions on society and strives to fulfill social responsibilities. It involves engaging in ethical business practices, being environmentally conscious, and contributing positively to the communities in which the organization operates. Management also promotes diversity, inclusivity, and social justice within the organization.

Personnel Objectives

Management focuses on the development and well-being of employees. It involves recruiting and selecting qualified individuals, providing training and development opportunities, and creating a conducive work environment that promotes job satisfaction and employee engagement. Management also emphasizes fair compensation, recognition, and opportunities for career growth to motivate and retain talented employees.

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Functions of Management

Functions of Management

Five primary areas together make up management functions. These functions of management are well connected and cycle through each other as required. Functions are carried out by various organizational management levels and are essential for ensuring effective management processes.


Planning involves setting objectives and determining the best action to achieve them. Managers analyze the current situation, anticipate future challenges, and develop strategies and action plans. This management function helps establish direction and ensures that resources are allocated efficiently.


Organizing involves arranging resources and tasks to achieve defined objectives. Managers divide work among team members, establish relationships, and create a structure that promotes coordination and collaboration. This function ensures that everyone knows their roles and responsibilities within the organization.


Staffing is a crucial function of management that focuses on acquiring, developing, and retaining a competent workforce. Managers actively identify the organization’s staffing needs and take proactive measures to recruit and select qualified individuals. They also prioritize providing ample training and development opportunities to enhance the skills of their employees. 


Leading helps in guiding and motivating fellow employees to achieve organizational objectives. Managers provide direction, inspire, communicate, and facilitate teamwork. They act as role models and create an environment that encourages employee participation and engagement. This function aligns individual and team efforts toward the organization’s goals.


Controlling involves monitoring progress, comparing it to established goals, and taking corrective action when necessary. Managers establish performance standards, measure actual performance, analyze variances, and implement necessary adjustments. This function ensures that activities are on track and deviations are addressed promptly.

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Characteristics of Management

The characteristics of management describe the key attributes and qualities that effective managers possess. Here, we have pointed out a few characteristics of management, including the following:

  • Goal-Oriented: Managers are driven by goals and work toward achieving them. They set clear and specific objectives for themselves and their teams, ensuring that their actions align with the organization’s goals. They prioritize tasks and allocate resources to maximize productivity and progress toward achieving the desired outcomes.
  • Decisive: Managers make timely and informed decisions. They gather relevant information, analyze it, and weigh the pros and cons before deciding. They are unafraid to take risks when necessary and can adapt and adjust their decisions as circumstances change.
  • Communicative: Good managers are excellent communicators. They have strong verbal and written communication skills and can effectively convey their expectations, provide feedback, and resolve conflicts. They actively listen to their team members and foster open and transparent communication within the organization.
  • Adaptable: A good manager stays flexible and adapts to the dynamic nature of the business environment. They must be open to new ideas, embrace change, and be willing to modify their plans and strategies as needed. They must have a good presence of mind so that they can quickly respond to challenges and find innovative solutions.
  • Empowering: Successful managers empower their team members by delegating tasks and responsibilities. They trust their employee’s abilities and provide them with the necessary resources and support to succeed. They encourage autonomy, foster a sense of ownership, and recognize and reward achievements.
  • Problem Solvers: Managers are skilled problem solvers. They can identify issues, analyze root causes, and develop effective solutions. They approach problems positively and encourage their team to think critically and creatively to find solutions.
  • Result-Oriented: Able managers are focused on achieving results. They set clear goals, establish performance metrics, and hold themselves and their team accountable for meeting objectives. They constantly monitor progress and take corrective measures when necessary.
  • Leadership: Managers exhibit strong leadership skills to inspire and motivate their teams. They provide guidance, direction, and support, empowering employees to reach their full potential. They lead by example, fostering a positive work culture and promoting teamwork and collaboration. Effective managers understand the strengths and weaknesses of their team members and provide opportunities for their growth and development.
  • Continuous Process: Management is an ongoing and continuous process. Managers understand that the business environment constantly evolves and adapt their strategies and approaches accordingly. They engage in continuous planning, organizing, staffing, leading, and controlling to manage and navigate the ever-changing landscape effectively.

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Levels of Management

Levels of Management

Levels of management refer to the various hierarchical positions within an organization and encompass different roles and responsibilities. Here are the levels of management:

Top-Level Management

Top-level managers, such as CEOs or presidents, are responsible for setting the overall direction and strategy of the organization. They make high-level decisions, represent the organization externally, and establish policies and goals. They also coordinate with other top executives and communicate the organization’s vision to the middle and lower levels of management.

Below are some examples of Top-Level Management:

  • Chief Executive Officer (CEO)
  • President
  • Chief Operating Officer (COO)
  • Chief Financial Officer (CFO)
  • Chief Marketing Officer (CMO)

Middle-Level Management

Middle-level managers, including department heads and regional managers, bridge the gap between top-level management and lower-level employees. They translate the organization’s strategy into specific objectives and plans for their departments or divisions. Middle-level managers oversee the implementation of these plans, allocate resources, and coordinate activities within their respective areas.

Below are some examples of Middle-Level Management:

  • Regional Manager
  • Department Manager
  • Division Head
  • Project Manager
  • Operations Manager

Frontline Management

Frontline managers, also known as first-line or supervisory managers, directly oversee the work of non-managerial employees. They have a hands-on role in day-to-day operations and ensure that tasks are carried out efficiently and effectively. Frontline managers provide guidance, support, and feedback to employees, handle routine issues, and report to middle-level managers.

Below are some examples of Frontline Management:

  • Team Leader
  • Supervisor
  • Shift Manager
  • Foreperson
  • Office Manager

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Importance of Management

The following points shed further light on the importance of management:

  • Goal Achievement: Effective management helps organizations set and achieve their goals. It involves planning, organizing, and controlling the resources to ensure that objectives are clearly defined and progress is monitored.
  • Resource Optimization: Management efficiently utilizes human capital, materials, and finances. By allocating and coordinating these resources, management maximizes productivity and minimizes waste.
  • Decision Making: Management plays a crucial role in making informed decisions. It involves gathering relevant information, analyzing options, and selecting the most suitable action. Good management decisions can lead to improved outcomes and organizational success.
  • Teamwork and Collaboration: Management promotes teamwork and collaboration within an organization. It puts in place clear roles and responsibilities, furthers effective communication, and fosters employee cooperation. This paves the way for a positive work environment and enhances productivity.
  • Monitoring and Control: Management establishes control systems to monitor progress, identify deviations from plans, and take corrective actions when necessary. This includes setting performance standards, measuring actual performance, and comparing it against established targets. Management uses this information to evaluate performance, identify areas for improvement, and make necessary adjustments.
  • Adaptability and Innovation: In a dynamic business environment, management helps organizations adapt to changes and embrace innovation. It involves scanning the external environment, identifying trends, and implementing strategies to stay competitive and seize opportunities.
  • Employee Development: Management plays a crucial role in the development and growth of employees. It involves providing training, mentoring, and performance feedback to enhance skills and competencies. A well-managed organization invests in its employees, increasing job satisfaction and retention.
  • Organizational Efficiency: Proper management practices improve overall efficiency within an organization. It streamlines processes, eliminates bottlenecks, and enhances coordination. This paves the way for reduced costs, increased productivity, and improved customer satisfaction.
  • Effective Communication: Management facilitates effective communication across all levels of an organization. It ensures that information flows smoothly, encourages feedback, and minimizes misunderstandings. Clear communication enhances coordination and fosters a collaborative work culture.

Principles of Management

Principles of Management

The father of modern management, Henri Fayol, provided 14 management Principles, providing a comprehensive framework for effective organizational management. Here is a brief explanation of each principle:

  1. Division of Labor: The principle surrounding the concept of division of labor suggests that work should be divided among individuals and groups to increase efficiency. Rather than one person trying to complete all tasks, work gets allocated based on specialization and expertise. It is understood that organizations can benefit from their efficiency and effectiveness by assigning specific tasks to employees who are skilled in those areas. This principle also allows specialized skills and knowledge to be developed within the workforce.
  2. Authority and Responsibility: Managers should have the right to give orders and make decisions while being responsible for the outcomes. This principle emphasizes the manager’s need to have the authority to carry out their roles effectively. It also highlights the importance of holding managers accountable for their actions and decisions. Organizations can maintain a transparent chain of command and decision-making process by ensuring that managers have power and responsibility.
  3. Discipline: The principle of discipline suggests that employees should follow established rules and regulations to maintain order in the workplace. Discipline ensures that employees behave professionally, comply with organizational policies, and respect authority. It is essential for creating a harmonious work environment where individuals understand their roles and responsibilities and where non-compliance has consequences. Discipline helps maintain consistency, productivity, and overall organizational efficiency.
  4. Unity of Command: The principle of unity of command proposes that each employee receive orders from only one supervisor rather than reporting to multiple managers. Unity of command ensures that employees have a clear line of communication and a single point of accountability. It promotes effective coordination and facilitates efficient decision-making. This principle allows organizations to maintain a structured, streamlined chain of command.
  5. Unity of Direction: The principle of unity of direction emphasizes that teams with similar objectives must work together under a single plan to achieve common goals. Aligning the efforts of different departments and individuals toward a shared purpose is crucial. Organizations can avoid conflicting goals and work collaboratively toward success by establishing a unified direction.
  6. Subordination of Individual Interests to General Interest: This principle highlights the importance of prioritizing the overall interests of the organization over individual interests. Employees should understand that the organization’s collective goals precede its objectives. Employees can work toward shared success by aligning personal goals with organizational objectives. This principle promotes teamwork, collaboration, and a focus on the organization’s greater good.
  7. Remuneration: Fayol believed that employees should be fairly compensated for their efforts. This principle suggests that employees should receive adequate and equitable compensation for their work. Fair remuneration motivates employees, increases job satisfaction, and enhances organizational commitment. It includes financial compensation and non-monetary rewards such as recognition, promotions, and opportunities for growth and development.
  8. Centralization: Centralization talks about the decision-making authority and the degree to which it is concentrated at the top levels of the organization. According to this principle, the extent of centralization should be based on the nature of the tasks, the capabilities of employees, and the organization’s goals. In highly centralized organizations, decision-making authority rests with a few top-level managers. 
  9. Scalar Chain: The principle of scalar chain highlights the importance of maintaining a clear and uninterrupted chain of command within an organization’s hierarchical structure. It suggests that there should be a well-defined line of authority where instructions and communication flow smoothly from top-level management to the lowest level. By adhering to the scalar chain principle, organizations can ensure efficient decision-making, effective coordination, and accurate transmission of instructions. This facilitates timely responses to organizational challenges and minimizes the chances of miscommunication, leading to increased operational effectiveness.
  10. Order: The principle of order emphasizes the significance of establishing a well-organized work environment. It helps in arranging resources, information, and materials in a systematic and structured manner. An orderly workplace reduces confusion, saves time, and enhances overall efficiency. It involves maintaining cleanliness and safety, implementing clear procedures and systems, and ensuring that necessary resources are readily available when required. By adhering to the principle of order, organizations can optimize their operations, promote a productive work atmosphere, and streamline workflows.
  11. Equity: According to this principle, managers should treat employees fairly, justly, and equally. Equity means that similar situations should be treated similarly, and differences in treatment should be based on objective factors such as performance, qualifications, and experience. Fair treatment fosters a positive work culture, promotes employee morale, and enhances loyalty and commitment. Organizations can build trust, reduce conflicts, and create a harmonious work environment by practicing equity.
  12. Stability and Tenure of Personnel: This principle emphasizes the importance of providing stability and job security to employees. Organizations should strive to create a stable work environment where employees can develop their skills, build relationships, and contribute to the organization’s success over the long term. High employee turnover can be disruptive and costly for organizations. By promoting stability and providing job security, organizations can effectively decrease turnover, enhance morale, and retain valuable talent.
  13. Initiative: Fayol believed that employees should be free to exercise their initiative and creativity. This principle encourages employees to take independent action, make suggestions, and contribute to improve processes and outcomes. By promoting initiative, organizations tap into the knowledge and expertise of their employees, foster innovation, and create a culture of continuous improvement. It empowers employees, enhances their job satisfaction, and encourages a sense of ownership and responsibility.
  14. Esprit de Corps: Esprit de corps refers to an organization’s unity, harmony, and teamwork spirit. This principle emphasizes fostering a positive work culture and strong team spirit. Employees working together in a supportive and collaborative environment are more motivated, engaged, and productive. Esprit de corps encourages open communication, mutual respect, and a shared sense of purpose. It creates a sense of belonging, loyalty, and commitment among employees.

Differences Between Management and Administration

In the below points, we will be distinguishing between management and administration in a tabular form:

Focuses on achieving organizational goals through the effective utilization of resources.Focuses on establishing policies, procedures, and guidelines for the overall functioning of the organization.
Involves planning, organizing, leading, and controlling various activities within the organization.Involves making decisions, setting objectives, and providing guidance for the organization’s operations.
Concerned with the implementation and execution of plans and strategies to achieve desired outcomes.Concerned with establishing rules and regulations to ensure compliance and smooth functioning.
Emphasizes efficient allocation of resources, effective communication, and achieving results.Emphasizes maintaining order, discipline, and adherence to established policies and procedures.
Primarily deals with the operational aspects of the organization and supervises employees.Primarily deals with the strategic aspects of the organization and focuses on long-term planning and policy-making.
Often involves leading and motivating teams to accomplish specific objectives and drive performance.Often involves formulating and implementing policies that govern the organization as a whole.
Managers are accountable for the success and performance of their teams or departments.Administrators are accountable for the overall functioning and success of the organization.


As technology continues to advance at an unprecedented pace, managers will need to adapt to emerging trends and leverage innovative tools and strategies to stay competitive. The role of managers will continue to evolve, requiring them to embrace change, develop new competencies, and leverage emerging opportunities to navigate the complex and dynamic landscape of the future.

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