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Management must be analyzed with different aspects in terms of Management as a science and art to know the essential nature of management. Also, Management in reference to administration, and as a profession must be understood to understand the true nature of management. 

Controversy: Management is a Science or Art?

Before we discuss, why management is considered science, art, and profession? and how accurate this statement is. We have to understand, this question comes under the nature of management.

This controversy with reference to the nature of management, on whether it’s a science or an art, is extremely old.

Specification of the precise nature of management as a science or art or both is important to specify the method of learning management.

We aren’t going into the details of the nature of management in every aspect.

But before we start our discussion on Management as a science or art, take a glance at the subsequent bullet points on the nature of management.

Nature of Management 

• Management is Multidisciplinary.
• Management is a Dynamic Process.
• Management is a Science as well as an Art.
• Management is a Universal Process.
• Management is a Continuous Process.
• Management is a Social Process.
• Management is a Goal-Oriented.

So now we’ll discuss the nature of Management only in terms of why it’s called science, art, and profession.

This topic is extremely important because it’s often asked in assignments and academic examinations of management studies.

Topics discussed in this article are as follows: 

• Management as a Science
• Management as an Art
• Management as both Science and Art
• Management as a Profession
• Summary (For Assignment and Answer Writing)
• Detailed Discussion (For Research Purpose)

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⦿ Management as a Science 

Management is considered as a science because it has an organized body of knowledge which contains certain universal truth.

Definition of science in management;

“Science is a systematic body of knowledge of data concerning a selected field of study that contains general facts which explain a phenomenon.”

Science is the study and knowledge about the physical world and natural laws.

It establishes cause and effect relationship between two or more variables and underlines the principles governing their relationship.

These principles are developed through the scientific method of observation (experiments) and verification through testing.

Features of Management as a science

Management as a Science is characterized by the subsequent main features:

▶ Universally acceptance principles –

Scientific principles represent basic truth about a few particular fields of inquiry. These principles may be applied in all situations, at all times & at all places.

For Example, the law of gravitation can be applied in all countries in the world irrespective of time.

Management also contains some fundamental principles which may be applied universally like the Principle of Unity of Command i.e. one man, one boss. This principle is applicable to all or any sort of organization (business or non-business).

▶ Experimentation & Observation –

Scientific principles are derived through scientific investigation & research experiments. i.e. they are based on facts and logic.

For Example, the universal principle of “Earth goes around the sun” has been scientifically proved.

Management principles are also based on scientific theory & observation and not only on the opinion of Henry Fayol. They have been developed through experiments & practical experiences of a large no. of managers and organizations.

For Example, it is observed that fair remuneration to personal helps in creating a satisfied workforce environment.

▶ Cause & Effect Relationship –

Principles of science lay down cause and effect relationships between various variables.

For Example, when metals are heated, they’re expanded. The cause is heating & the result is expansion.

The same is true for management, therefore it also establishes cause and effect relationship.

For Example, Disparity between authority & responsibility will lead to ineffectiveness. If you know the cause of lack of balance, then ineffectiveness can be ascertained easily.

Similarly, if workers are given bonuses and fair wages then they will work hard. But the productivity of the organization will be reduced if they are not treated in a fair manner. 

It can’t be denied that management is a systematic body of knowledge but it is not considered as that of other physical sciences such as physics, chemistry, biology, Geology.

The main reason for this ignorance of management as physical science is that it deals with human beings and groups of people. It is very difficult to predict their behavior in an organization accurately.

All these factors denote that it is a social process, Hence management falls in the area of social sciences.

It is a flexible science & that is why its theories and principles may produce different results at different times. Therefore, sometimes it is considered behavioral science.

Business Management Professor, Ernest Dale has called Management a Soft Science.

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⦿ Management as an Art

Management is an art because, in management, a manager applies his skills to manage and coordinate the effort of their people to perform his duties within the organization.

Definition of Art in Management

Art refers to the application of knowledge (methods and principles) & skill to get desired results.

According to the definition of management, Management is the art of getting things done through and with people in an organization.

• This art may be defined as a personalized application of principles (accepted universally) for achieving the best possible results.
• Managerial art is the activity or skill of managing functions such as planning, organizing, leading, staffing, and controlling. 
• The manager develops this art through his knowledge and experience of working in the organization. 

Features of Management as an Art

Management as an Art is characterized by the subsequent main features:

▶ Practical Knowledge:

Every art requires practical knowledge therefore learning of theory isn’t sufficient. it’s vital to understand the practical application of theoretical principles.

For Example, A good painter is a person who may not only be knowing different colors and brushes but different designs, dimensions, and situations to use them appropriately.

A manager can never achieve success just by obtaining a degree or diploma in management. He must have also know how to apply various principles in real situations by functioning within the capacity of a manager.

▶ Personal Skill:

Although the theoretical base may be the same for every artist (Manager), each one has his own style and approach towards his job (Skill).

This is the reason why the level of success and quality of performance differs from one person to another.

For Example, there are several qualified painters in the world but painters like Leonardo da Vinci, Pablo Picasso, and M.F. Hussain have their own legacy. They are recognized for their style.

Similarly, management as an art is also personalized and every manager has his own way of managing things based on his knowledge, experience, and personality.

That’s why some managers are known as good managers (like Aditya Birla, Rahul Bajaj) whereas others as just average or bad.

▶ Creativity: 

Every artist has a component of creativity in line. That’s why he aims at producing something that has never existed before which requires a mixture of intelligence & imagination.

Management is also dynamic and creative in nature like any other art.

It combines human and non-human resources in a useful way so as to achieve desired goals.

▶ Perfection through practice: 

Practice makes a man perfect is a well-known proverb that simply means every artist becomes more and more proficient through constant practice.

Similarly, managers learn through the art of trial and error initially.

But the application of management principles over the years makes them perfect in the job of managing and problem-solving.

▶ Goal-Oriented: 

Every art is result-oriented as it seeks to achieve desired results.

In the same manner, management is also directed towards the accomplishment of pre-determined goals of the organization.

Managers use various resources like manpower, money, material, machinery & methods to promote the growth of an organization.

Thus, we can say that management is an art therefore it requires the application of certain principles.

It’s an art of the highest order because it deals with molding the attitude and behavior of people at work towards desired goals.

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⦿ Management as both Science and Art

It’s true, Management is a science as well as an art.

The above-mentioned points in this article clearly reveal that management combines features of both sciences as well as art.

• It is considered as a science because it has an organized body of knowledge (principles) which contains certain universal truth.
• It is called an art because managing requires certain skills which are the personal ability of managers.
• In Management, Science provides knowledge & art deals with the application of knowledge and skills.
• Skilled or talented managers can be considered an intangible asset of the organization.

Any manager can be successful in his job role if he must acquire the knowledge of science (management principles) & the art of applying it.

Management is a perfect blend of science as well as art,

In view of the fact that science proves the principles and the way these principles are applied is a matter of art.

Science simply teaches us to ’know’ (Theory) and art teaches us to ’do’ (Practical).

For Example, a person can’t be a good singer unless he has knowledge about various melodic frameworks (raga) and he also applies his personal skill in the art of singing.

In the same way, it is not enough for the manager to first know the principles but he must also apply them in solving various managerial problems in real situations.

Science and art with respect to management, are not mutually exclusive but they are complementary to each other. (like tea and biscuit, bread and butter, etc.).

There is an old old saying, “Managers are Born” which has been rejected in favor of “Managers are Made” by various management authors.

It has been aptly remarked by many researchers that management is the oldest of art and the youngest of science. In short, we can say that science is the root and art is the fruit.

⦿ Summery

To understand quickly again, Here is the summary of the above discussion;

Management as an Art:

A Manager applies his knowledge (study/experience) & skills (practice/talent) to manage the effort of their people to perform his duties in the organization. The main elements are as follows:

• Personal Skill
• Application of knowledge
• Result Orientation
• Creativity
• Practical knowledge

Management as a Science:

• It comprises a systematized body of knowledge which have practicability.
• Universal acceptability is there.
• Management is considered Social Science because not only it brings profits to the organization but also serves as a helpful tool for our society.
• Principles & theories developed by continuous research experiments, and observations.

Management as a Profession:

• Learning Ability
• Post Learning Experience
• Ethical code of Conduct
• National Recognition
• Working Principles

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⦿ Detailed Discussion (For Research Purpose)

The following discussion on “Management as a science/art/profession” is taken from various books, described by management authors and researchers.

Let’s start the discussion. 

🔹 Management as a Science and Art

First of all, It is clear that the learning process in science differs from that of art.

• Learning science basically involves the assimilation of principles and theories.
• Learning of art involves its continuous practice in real situations.

The controversy of “Management as a science or art” is on account of the fact that the earlier industrialist, business owners, and managers have used intuition, hunches, commonsense, and experience in managing organizations.

They never got professional training like today’s managers to get.

Although they were very skilled and had developed commonsense through which they managed their work efficiently.

▶ Commonsense Vs Science

Commonsense and Science both have a relation to management. And we can understand the major differences between Commonsense and science are as follows;

• Commonsense is vague (not definite) as compared to scientific knowledge.
• Commonsense is based on flagrant inconsistency whereas Science is based on logical consistency.
• Science systematically explains the events with proper explanation whereas commonsense ignored the need for explanation.
• The scientific method reveals claims to the critical evaluation of experimental analysis. And the commonsense method fails to test the outcome in any scientific fashion.

Science is logically consistent, critical evaluation, systematic explanation, and experimental analysis. Thus, the general definition of science can be defined as follows;

Science is a body of systematic knowledge accumulated and accepted with reference to the understanding of general truths concerning a particular object, subject, phenomenon, or field of study. Thus, we can say that science is a systematized body of knowledge.

The process of formulation of scientific theory and its confirmation can be viewed as involving the following steps:

• First, we formulate a problem or complex of problems based on observation:
• According to inductions from observation, we construct a theory to provide answers to the problems;
• scientific hypotheses being produced from the theory;
• To test the hypothesis, we recast the hypotheses in terms of specific measures and do required operations;
• Prepare actual situation to test the theorem;
• Finally, the actual test in which confirmation does or does not occur conducted. 

🔹 Management as Science (With Examples)

If we compare the above features of formulation theory in science with management. Then it is clear that management regarded as science halfway only.

Management may be called pseudoscience or inexact science. Perhaps this is true management is a branch of all social sciences.

Management is not as exact as physical sciences are because of so many reasons discussed below.

This phenomenon (Management as a science) can be explained as follows:

■ 1. Science may be viewed in terms of making structure, and methods of achieving goals.

The scientific structure is referred to a number of scientific disciplines such as physics, biology, psychology, economics, management, and many others.

All these sciences attempt to provide a set of internally consistent hypotheses, principles, theories, and laws dealing with an aspect of total knowledge of that field of study.

Such internal consistency may be attained but there are many young sciences like economics and management that only approximate in nature.

■ 2. Another rule of science is that concepts have to be defined clearly in terms of the procedures involved in their measurement and backed by experiments.

Every particular term has its meaning and while studying a concept, one should have to know its meaning exactly.

Meaning has to be clearly defined to avoid confusion and erroneous classification.

However, in management, various terms are not used in the same way all the time.

For Example, major terms like management and organization are used in different ways.

This phenomenon is quite normal because, since the 1920s, a number of disciplines have claimed to contribute to human knowledge of managing. These disciplines and etiquette have been immature to be a science.

■ 3. Science observations must be done in a controlled manner so that causation may be attributed correctly.

The most common method of eliminating a given factor as a possible cause of an event is to hold it constant and avoid variation so that it cannot operate as a source of change.

This is a difficult rule to follow while studying organizational phenomena.

Many times research studies in management have suffered a lot just because of the bias of researchers.

for Example, In many studies, a variable that was thought to be irrelevant was found to be very influential.

However, the effort to identify factors that must be controlled, and to develop procedures to accomplish this is a continuous process.

The explanation is only possible when this effort is successful, reliability of perception and reasoning, and hence valid.

■ 4. Scientific theories are based on experiments that permit empirical confirmation. The abstract of any research is testable and the testes are capable of repetition with the same result.

That’s why the rationality of the total scientific system is preserved. However, this does not happen in management in the same manner.

Many of the management principles lack experimental evidence and this is because these principles do not give similar results under varying conditions.

Management on the basis of scientific observations may and may not be universal application. because still, the process is in an evolutionary stage. 

Until the principles are not evolved in a way that they accepted universally in varying situations also, management cannot be called a science in its true sense.

All the above factors suggest that management is not pure science but it can be simply called inexact science.

Considering the fact that the management also makes use of scientific methods in evolving principles. Therefore, we can say that it bears partial characteristics of science.

In fact, many authors have said that with greater we use of mathematics and statistics in management, the more and more use of true science in management.

This is true but it must be noted that management is not becoming mathematics, rather mathematics is being used to explain, calculating, and helps decision making in management.

Mathematics is just a basic abstract science because it is fundamental to other sciences.

For Example, maths is necessary to the study of physics. Similarly, it is not mathematics that is the science of management but the use of mathematics helps in relating and understanding the management operations.

Science may contribute to the solution of managerial problems in two ways;

(i) Existing research and theory relevant to the problem may be brought to bear on its solution.

(ii) Research may be conducted to provide information not previously available and to guide solutions accordingly, where sufficient time is available.

As scientific knowledge of the management process increases, the first approach may receive a wider application.

However, the second approach may have limited application because of the widespread time pressure on decision-making for problem solutions.

🔹 Management as an Art (With Examples)

Management can be regarded as art also. The meaning of art is related to the bringing of the desired result through the application of skills.

Whereas under science, one learns the why of a phenomenon (Theory), under art, one learns the how of it (Practical).

Art is concerned with the ability to know how particular work can be accomplished. that is, art has to do with applying knowledge/science and expertness in performance.

Art is necessary for management because, in many instances, much creativity and skills are required. The adequate consideration of people involved in managerial action is vital and adds to the concept of the art of managing.

Science and art are complementary fields of endeavor when it comes to management.

Doctors require knowledge of the science of chemistry, biology, and anatomy. But good marks in their studies do not make them excellent physicians.

They have to apply their wealth of knowledge expertly. The doctor’s skill in perceiving how and when to use his knowledge is essential to his success in preventing and controlling the disease of mankind. Thus, we can say that knowledge is not the sole qualification.

Similarly, For Example, in management, if one student scores an ‘A’ grade and another scores B grade, it does not mean that the former would be a better manager than the latter.

This is so because management is an art and a better manager is one who knows how to apply the knowledge in solving managerial problems.

Management is an art and the main facts of it are as follows:

1. The process of management does involve the use of know-how and skills like any other art such as music, painting, sculpture, etc.
2. The process of management is work towards achieving certain better results as other fields of art do.
3. Management is creative like any other art. Creativity is a major dimension in managerial success. It creates new situations for further improvements.
4. Management is personalized meaning thereby that there is no ‘one best way of managing. Every person in his profession has an individual approach and technique in solving the problems.

The success of the managerial tasks is related to the personality of the person apart from the character and quality of the general body of knowledge.

🔹 Management both science and art

A successful manager is a person who requires the knowledge of management principles and also the skills of how the knowledge can be applied.

The absence of either will result in inefficiency. A comparison between science and art is presented in the image below, which suggests that a manager requires both aspects of management to be successful.

Comparison between science and art as used in management.

• Science is Advance by knowledge and it mainly Proves, Predicts, Defines, Measures, and Impresses. 
• Art is Advance by practice and it Feels, Guesses, Describes, Opines, and Expresses.

It can be seen that management uses both scientific knowledge and art in managing an organization.

As the science of management increases so should the art of management. A balance between the two is needed. Neither should be overweighed or slighted.

Some feel that further gains in the science of management will restrict art more and more.

This statement is true to a limited extent only but the fact remains that to be useful, knowledge of science must be applied, that is, art must be present.

There is an old saying that “knowledge is power” which is partially true. The correct saying should be “Applied knowledge is power” seems more appropriate here.

People having so much knowledge may have little use if they don’t know how to use knowledge.

This is particularly true at least for management which is a situational phenomenon.

🔹 Management as Profession

Management is considered a profession by many experts, although it doesn’t have all the features of a profession.

Therefore, it is desirable to find out whether management is a profession or not.

A profession is an occupation that required specialized knowledge, skills, and training.

The use of these skills is not meant for personal use but these are used for larger interests of the society. The measurement of success of the use of these skills is measured not in terms of money alone.

Professions are occupations in the sense that they provide a livelihood.

But remember, all occupations are not professions because some of them lack certain characteristics of a profession.

The main characteristics of a Profession are as follows;

• There must be an existence of a systematized body of knowledge.
• Must have a formal method of acquisition of knowledge.
• Must have an existence of an association with professionalization as its goals.
• There should be ethical codes and service motives.

Let’s discuss all these characteristics are found in management to determine whether it is a profession or not.

▶ Existence of knowledge

A profession emerges from the establishment of fact that there is a systematic body of knowledge that has to be studied for being a successful professional.

This fact applies to management also.

Management has been developed as a distinct body of knowledge over the last 50 years.

The development of management studies has been due to the need for managing complex and large organizations in a better way.

Therefore, Management satisfies the requirement of a profession in the form of particular knowledge.

However, management concepts are still evolving and continuously new principles are being developed. But this does not affect its status as being a profession.

▶ Acquisition of knowledge

It is essential that an individual can enter a profession only after acquiring knowledge and skills through formal training.

For Example, only law graduates with valid licenses can enter the profession of legal practice.

Definition of Professional,

“A professional is one who practices a profession and regarded as an expert in his field.”

professional has mastery of a specific branch of learning upon which his occupation is based. He is a legally authorized person and may offer service to his client.

But as we have emphasized earlier it is mandatory to get acquisition of knowledge through some formal method.

From this point of view, management can’t be regarded as a profession because anybody can enter the managerial cadre in an organization. Because it is not limited to management graduates only.

However, we can say that management graduates can perform better performance in the organization because of their familiarity with the various managerial techniques.

▶ Professional Association 

It is compulsory that an occupation that claims to be a profession, should have an association with an official regulatory body.

This type of association consists of firms and individuals whose membership is based on common professional, scientific, or technical purposes.

These representative bodies regulate and develop professional activities and liable to make standards and norms.

The body also prescribes the eligibility for individuals who want to enter the profession.

There are associations at various levels in the field of management.

For Example, in India, there is the All India Management Association (AIMA) with its local chapters in most of the cities.

Similarly, there are associations of managers in foreign countries like the United States, the United Kingdom, Australia, etc. also.

However, managers do not belong to a single, unified professional group like the MCI (Medical Council of India). It is a statutory body that regulates medical practitioners and medical education in India.

Another example is the Bar Council of India for legal practitioners.

Apart from these regulatory bodies, individuals and firms also affiliated with trade associations. This system of association is true throughout the world.

On the basis of the feature of the profession, management cannot be termed as a true professional.

▶ Ethical Codes

Some ethical standards are provided in every profession, and every individual of the profession is expected to maintain conformity with these standards.

Ethical codes are necessary because of the fact that occupations whose practitioners have mastery over an area of knowledge have a degree of power by virtue of their expertise.

This power can be used for the benefit of the professionals at the cost of society.

As a result, In many occupations issuing a code of ethics of professional practice so that clients may know the standards and commitment that they should receive from a professional.

In management also, a code of conduct (Etiquette) has been formulated to suggest the behavioral pattern for professional managers.

Though there is a lack of universally accepted ethical codes for managers throughout the world.

Managers are supposed to be socially responsible in most countries. And it is their duty to protect the interest of all parties associated with an organization.

These parties may be customers, suppliers, investors, employees, creditors, government, and the general public.

However, the ethical codes in management are not much prevalent in the absence of any regulatory body.

The management association is not fully representative of the professional managers.

In fact, in India, many managers are not even aware of the code of conduct formulated by All India Management Associations.

▶ Service Motive

Ethical code provides the behavioral pattern for a professional person. And the service motive concept suggests that professionals should keep social interest in their mind while charging fees for their professional services.

The monetary value of professional service cannot be measured easily in the absence of a market mechanism. And except the competition among the professionals themselves.

Professionals are in a position to charge higher fees by virtue of their expert knowledge.

The success parameter of any profession is evaluated not in terms of money it earns but by the amount of social service it provides. This is equally true for the management profile also.

Management is an integrating agency that contributes to society by way of integrating various resources into productive units.

It is very essential for the stability and welfare of society.

Management contribution cannot be measured in terms of money alone because without the integrating effort of management, resources worth millions of rupees may be useless.

Managerial skills can be defined as certain abilities that a manager/executive should possess in order to fulfill specific tasks in an organization.

From the very beginning of the development of management thought, both management practitioners and researchers have emphasized different skills for managers.

Therefore, the list of managerial skills is very long. And various management authors and researchers have categorized managerial skills on the basis of levels of management and many other factors also. 

In this article, we have shared what are managerial skills? and the detailed discussion about the type of managerial skills with examples.

So let’s start with the definition of Managerial Skills.

Managerial Skills Definition

Managerial skills are Simply, Knowledge and expertise to fulfill some activities or tasks.

Managers must possess certain skills in order to perform management functions effectively. Skill refers to practical ability or expertness in a specific action or doing something.

This knowledge can be learned. However, it also can be acquired through practice fulfillment of these activities. Therefore, skills can be acquired through the learning and experience of individuals.

There are many definitions of skills that define it as some type of talent. Talent is something personal in an individual and represents a native gift from nature about something in that individual. All individuals cannot be artists. Usually, artists are born with the gift of art and after that, they develop their talent in quality art skills through educational systems.

Managerial Skills by Robert L. Katz

According to Robert L. Katz,

“if managers have the necessary management skills then they will probably perform well and be relatively successful.

On the other hand, if managers do not have the necessary management skills, they will probably perform poorly and be relatively unsuccessful in their careers.

There are three types of primary skills that are important for successful management performance.”

In 1955, Robert L. Katz published a book named “Skills of an Effective Administrator”. 

Managerial Skills Types

Katz has grouped various managerial skills into three broad categories in his book;

1. Conceptual skills,
2. Human skills,
3. Technical skills.

Conceptual skills – A conceptual skills are Manager’s ability to work with ideas and concepts.

These skills enable executives to understand and better decide the actions that have to be taken in a particular field of work.

For example, managers use conceptual skills to take decisions and formulate strategies.

Human skills – This is a manager’s ability to work with people, understand and motivate them.

For example, managers use human skills to get along with people and to communicate and work within teams.

Technical skills – This is a manager’s ability to use tools, procedures, or techniques in his specialized area.

For example, using certain computer software packages (like; MS Excel or Access) is an advanced technical skill.

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Importance of Managerial Skills 

Managerial skills are very important in order to be an effective manager. Today’s business world is very competitive, hence it’s imperative that you possess much more skills than ever before.

Not every executive has all the skills that would make them highly effective managers. As the technological trend moves forward and the demand for grouped software and faster hardware increases, the skills that will be needed by managers will change rapidly.

In every business, there are different departments with different types of managers. With different managers come different protocols and required skills.

For example, the HR manager should have proper knowledge of how to conduct the recruitment process as well as he/she should have enough skills to select the best candidate for the vacant position. 

HR Candidate should have all three types of managerial skills to perform his duties. 

⦿ To formula policies, conceptual skills are required.

⦿ To taking interviews, human skills are required.

⦿ While filtering resumes of suitable candidates, good technical skills are required.  

If a Manager has good managerial skills then he influences and motivates his subordinates in every manner.

By developing good managerial skills, Managers will provide effective training to their employees and make proper coordination among their team. These managerial skills are equally important for all types of managers.

Let’s discuss all 3 managerial skills in detail. 

• Conceptual skills
• Human skills
• Technical skills

Conceptual Skills

Conceptual skills are related to concepts and mental conception. It is a conceptual framework intended to develop a new product and or idea.

Since conceptual skills are in the form of imagination. – chimerical, fantasy, or vision. Boulton has called these soft skills and is hardly visible in a person. 

Conceptual skills are also known as general management skills in an organization. It refers to the ability to see the whole picture to recognize significant elements in a situation.

For managers, conceptual skills are required for the following managerial job roles:

➤ Decisional Roles: Conceptual skills are required for making decisions, particularly non-programmed or strategic decisions. Non-programmed decisions are relevant for solving sudden problems in which various alternatives cannot be decided in advance.

For example, launching a new product, business expansion, and so on.

For making non-programmed decisions, various factors such as the business environment have to be taken into account. Environmental factors are quite dynamic and changes in these cannot be predicted easily.

Therefore, managers have to use their conceptual skills for broadly defining the likely change in contextual variables affecting decision-making.

➤ Entrepreneur: Conceptual skills are relevant for planning and building models. From an entrepreneurship mindset, a model is an abstraction of reality. It is a simplified representation of some real-world phenomenon.

Models are used in different fields, for example, economic models, business models, transport models, etc.

In management, models are used for difficult activities like business models. It shows how different business activities will contribute to revenue generation.

For constructing a model, information remains available partially and the gap is fulfilled by the model creator using his conceptual skills.

There are various examples of using conceptual skills in making non-programmed decisions.

Conceptual Skills Examples

In the 1980s, Hero Group of Ludhiana considered some new products in the personal transport product. They chose to add a four-stroke motorcycle which is not considered highly lucrative at that time as compared to the scooter.

Many professional people questioned the efficacy of this decision from Brij Mohan Lall (Founder of Hero Group). On this, Lall, the chairman of Hero Honda Motors replied that future personal transport will be dominated by motorcycles and not by scooters.

In the age of increasing fuel prices and speed-oriented transport, motorcycles would have an edge over scooters. 

We can see very easily how much true this perception has been. Presently, motorcycles have overtaken scooters by a big margin. And Hero Honda company has become the number one motorcycle manufacturer.

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Human Skills 

Human Skills also referred to as human relations skills or interpersonal skills.

Human Skills can be defined as one’s ability to work effectively with others on a person-to-person basis and to build up cooperative group relations to accomplish organizational objectives.

Management in process of getting things done with and through people and no manager can be effective without suitable human skills irrespective of his being technically and conceptually competent.

Human skills are required for the effective performance of the following Managerial Roles:

➤ Disseminator: Every manager disseminates and interacts on a daily basis with his superior, subordinate, and outsider. To make this communication effective, the manager must have good interpersonal skills so that he can understand others and make himself to be understood by others.

➤ Group Communication: Managers interact with others as a member of groups. Such groups may be constituted either formally by the organization in the form of various committees and workgroups.

A manager will be effective as a group member only when he has the ability to understand other group members and to make himself understood by these members.

➤ Empathy Monitoring: Every manager communicates with others frequently. These people may be from within the organization or from outside.

Every manager must have the ability to be ’empathic to understand others’ views in the right perspective as a good listener besides a good orator. This ability is very important for making communication effective.

➤ Leader: When a manager directs his subordinates, he does not only use his formal authority because of its obvious limitations but relies more on his leadership ability. By doing this he gets the willing and enthusiastic efforts of his followers for achieving organizational objectives.

Therefore, It is essential for a manager to must have emotional stability, empathy, objectivity, and the ability to influence others.

➤ Negotiator and Motivator: It is essential that managers motivate their subordinates properly, so the best result can be achieved. It is the responsibility of a manager to create such an environment in which people may have the perception that they will be able to satisfy their needs by working in the organization.

Therefore, the manager should be capable to understand the needs of his people and the way these needs may be satisfied.

➤ Disturbance Handler: Conflicts may arise in the organization between two persons, in the group, or between two groups. If such conflicts are not resolved amicably and within the given time frame, these may disturb organizational inefficiency.

Therefore, a manager must have the ability to resolve conflicts and disturbances appropriately. For this purpose, the manager must be a good compromiser, smoother and negotiator.

All the above human skills can be learned and developed by an individual or Manager by going through appropriate literature and practicing accordingly.

Must Read ➜ Management by Objective (MBO)

Technical Skills

Technical Skills are concerned with what is done, it shows an ability to use tools, procedures, or techniques in a specialized area.

These skills pertain to knowledge and proficiency in procedures, methods, and techniques which are used in doing work.

Matthew Boulton has called these skills hard skills and is easily visible in a person.

Technical skills learned by Accountants, Engineers, Managers, Operators, and other persons are developed by the actual practice on the job.

For example, the person who is responsible to maintain files and records in an organization must have technical skills relating to how files are maintained and he learns this through practice.

For managers, technical skills are required for the effective performance of the following managerial roles:

➤ Managers are responsible to maintain workflow in the organization. The workflow involves the initiation of actions, that is, who will initiate action and who will receive it.

For example, in an organization, one person gives materials to another person, initiation of action, and other people receive it. For directing workflow, managers must have technical knowledge of the work concerned.

➤ Managers are responsible to maintain order in the work system. that is there should be a place for everything and everything should be in its place. For maintaining an effective order system, the manager must have knowledge of the work systems and workflow.

Managerial Skills Summary

• Technical skills deal with things,
• Human skills deal with people, and
• Conceptual skills deal with ideas.

Every person has all these skills in varying proportions depending on the structure of his brain and the environment he lives in the case with managers.

Every manager is required to possess these skills in varying proportions depending on the nature of his functions.

Since managers at different levels perform different types of functions, as discussed earlier, managers at different levels require different skills. Generally, as one goes up higher in the organization level, one needs conceptual skills more.

Besides these three skills, various writers and researchers have provided other skillsets for various levels of management.

Top Management Skills

In the competitive world, much attention has been focused on the skills and their development in top-level management because it is the major driving force in an organization.

Osmond has identified 8 specific skills required for a top-level manager.

These are skills relating to; 

1. Balancing,
2. Integrating,
3. Setting priorities,
4. Setting and developing standards,
5. Conceptualizing,
6. Leading,
7. Matching oneself with one’s job,
8. Delegating.

A recent survey of 90 global chief executives, conducted by Anderson Consulting, a US-based consultancy firm, shows that the chief executives require 14 skills.

Accordingly, a chief executive 

1. Thinks globally,
2. Anticipates opportunity creates a sharped vision,
3. Develops and empowers people,
4. Appreciates the cultural diversity,
5. Teamwork
6. Partnership,
7. Embraces changes,
8. Technological savvy,
9. Encourage constructive challenges,
10. Ensures customer satisfaction,
11. Achieves competitive advantages,
12. Demonstrates personal mastery,
13. Shares leadership and,
14. Lives the values.

In the Indian context, one such study of 125 chief executives has identified various relevant personal skills like 

• Analytical skills,
• Creativity, sense of high achievement,
• Risk-taking aptitudes,
• Business aptitudes,
• Leadership;
• Job-related skills such as corporate perspective,
• knowledge of the external environment,
• Outside contracts,
• Planning process,
• Accuracy in work

Middle Management Skills

In the middle management group, there may be managers at different levels placed between the top management and supervisors.

Usually, they are concerned with a particular functional area of the organization.

There is a tendency for faster movement of this group of managers.

Therefore, they require a variety of skills that must be relevant for their entire career. while at the lower end of the middle management, more technical and human skills are required.

Thus, the managers in middle management require

• Human relations skills,
• Leadership skills,
• Motivating skills, and
• Integrative skills.

Supervisory Management skills

Supervisors may also be further classified into front-line, intermediate, and senior.

Since they are directly concerned with operatives where the actual operations of the organization take place, supervisors should possess skills that help them to get things done by operatives.

Every supervisor in the organization should have sound technical knowledge of his field to provide;

• Proper instructions and guidance to operatives,
• Interpersonal skills to develop cohesive operative-management relations,
• Accuracy in work,
• Motivational skills for creating a proper work environment,
• Communication skills for interacting with higher management.

Assess Your Managerial Skills

Given below are the skills relevant for effective managers. Find out the extent to which you possess these skills. Degree of skill possession has been indicated by 3, 2, 1 for high, medium, and low respectively.

Management Skills Checklist For a Successful Manager

• Analytical Skill
• Creativity
• Ability to withstand pressure
• Initiative
• Empathy
• Emotional stability
• Communication skill
• Interpersonal skill
• Integrity
• Judgment
• Hardworking
• Leadership
• Sense of high achievement
• Risk-taking aptitude
• Business aptitude

Roles of Manager refers to the responsibilities of managerial position, Mintzberg has defined the roles of managers to identify what managers do in the organization. The role is defined as the behavior which is defined for different positions.

Today we have discussed the topic Roles of a Manager in this article. We will cover all important aspects related to the roles and responsibilities of a Manager in an organization.

Managerial Roles by Henry Mintzberg

Managerial roles are well defined by Mintzberg in his book “The Nature of Managerial Work”. This book dedicated to roles and characteristics of managerial work, based on his doctoral thesis (study of five managers).

Henry Mintzberg is a management author and Professor at McGill University, Canada. He has written more than 30 books and publications on Business and Management. 

Mintzberg introduced some basics concepts of management that are known as the Management Theory by Henry Mintzberg.

He identified organizational types, the basic structure of an organization, and the role of the manager in an organization. 

According to Mintzberg, the Roles of a manager refers to the expected behavior of the occupant of a position – not all their behavior, but to what he does as the occupant of that position. 

These roles of manager applicable to all type of managers whether he is product manager, case manager, account manager, finance manager, nurse manager, general manager, sales and marketing manager.

Roles of Manager

Managerial roles depend on the formal authority which is delegated to the manager in an organization. The degree of authority determines his position and different roles.

Mintzberg has pointed out that there are three broad categories of roles that a manager performs in each category of roles. These three categories consist total of 10 different roles of a manager.

The manager uses his managerial skills and other characteristics while performing a particular role.

The three main categories of roles of a manager are interpersonal, informational, and decisional.

• Interpersonal Roles (Figurehead, Leader, Liaison)
• Informational Roles (Monitor, Disseminator, Spokesperson)
• Decisional Roles (Entrepreneur, Disturbance handler, Resource allocator, Negotiator)

10 Roles of Manager are as follows;

1. Figurehead
2. Leader
3. Liaison
4. Monitor
5. Disseminator
6. Spokesperson
7. Entrepreneur
8. Disturbance Handler
9. Resource Allocator
10. Negotiator

Must Read ➜ 14 Principles of Management

Let’s discuss all these roles and responsibilities of managers according to their categories one by one. 

Interpersonal Roles of Manager

The interpersonal role is all about interacting with people inside and outside the organization.

There are three types of interpersonal roles of a manager in an organization;

• Figurehead role,
• Leader role
• Liaison role

⦿ Figurehead

A manager plays a figurehead role when he performs activities such as attending ceremonial functions which have symbolic nature. 

Sometimes managers greet visitors, attend social functions involving employees, and handling out merit certificates and other awards to outstanding employees. 

⦿ Leader 

The leader role of a manager involves leading and motivating his subordinates for willing contribution. Managers perform leader roles when they perform activities such as Hiring, Training, motivating, and guiding subordinates.

⦿ Liaison

In the Liaison role, the manager act as a mediator between the organization and the outsider.

He serves as a connecting link between his units and organizational units, and sometimes with people from the external environment.

Managers perform liaison roles while interacting with other managers outside the organization to obtain favors and information.

Must Read ➜ Human Resource Planning (HRP)

Informational Roles of Manager

The informational role of a manager is like serving as a focal point for the exchange of information. It includes communication, giving, and receiving information, both within and outside the organization. Information is required at every level in an organization to make decisions effective.

There are three types of informational roles of a manager in an organization.

• Monitor role
• Disseminator role
• Spokesperson role

⦿ Monitor 

The manager seeks and receives information about those factors which affect his activities. These factors may be within the organization as well as outside it.

By playing a monitor role, Managers gain an understanding of the Organization and its environment. 

⦿ Disseminator

In the disseminator role, the manager transmits information to subordinates, peers, and superiors within the Organization. 

The manager has to act as a disseminator and distributes the information to his subordinates because they may not be in a position to collect it.

⦿ Spokesperson

In the spokesperson role, the manager represents his organization or unit while interacting with outsiders. 

More precisely, the Spokesperson Speaks on behalf of the Organization and transmits information on Organization plans, policies, and actions to outsiders.

Must Read ➜ Management by Objectives (MBO)

Decisional Roles of Manager

Decisional roles of a manager involve choosing the most appropriate and best alternative out of the available ones so that the organization achieves its objectives when the chosen alternative is put into action.

In his decisional roles, the Manager performs four different roles as follows;

• Entrepreneur role
• Disturbance handler role
• Resource allocator role
• Negotiator role

⦿ Entrepreneur

Manager as an Entrepreneur role, take initiative and make changes or improvements in the activities of the Organization. 

The manager assumes certain risk which is involved in terms of the outcomes of action because these are affected by a variety of external factors. 

External factors are dynamic and change constantly. And manager is required to bring suitable changes in the organizational processes to align these with the requirement of the environment. 

⦿ Disturbance handler

As a role of disturbance handler, the manager has in charge and takes corrective action when Organization faces unexpected crises.

The manager is required to tackle those forces and events which tend to disturb the organizational equilibrium and normal functioning.

These forces and events may be strikes by Employees and the Trade/Labor Union, shortage of raw material, employee complaints and grievances, etc. 

⦿ Resource allocator

A manager as the resource allocator role must divide work and delegate authority among his subordinates. He must decide who will get what work.

The manager allocates resources such as human, physical and financial among his subordinates.

⦿ Negotiator

the manager represents the organization in bargaining and negotiations with outsiders as well as insiders.

In the negotiator role, the manager negotiates with various interest groups in the organization. Such interest groups are shareholders, employees, and outside agencies.

Must Read ➜ Steps in Planning Process

Validity of Role Approach

Mintzberg’s role approach is based on the close observation of the activities performed by five chief executives. Therefore, the question arises of its validity so far as managerial activities are concerned.

Though some research studies have supported the views of Mintzberg, this approach suffers from two illustrations.

First, the type of roles that have been identified by Mintzberg is not applicable to all types of managers particularly those at the lower levels.

Second, there are many other managerial roles that have not been included in this list, for example, manager as a controller, as a coordinator, nevertheless, Mintzberg has given a new insight into what managers do.

Reconciling Managerial Roles and Functions

Management functions and roles do not exist opposite to each other but there are two ways of interpreting what managers do. Most of the managerial roles prescribed by Mintzberg can be integrated with the earlier classification of management functions.

The key points of reconciliation between function and role approaches of managerial jobs are as follows –

In planning, a manager performs informational and decisional roles as he collects various relevant information on the basis of which he makes decisions.

In Organising, he performs decisional roles by allocating resources to organizational units and makes way for coordinating these units.

In Directing, the manager performs interpersonal and informational roles by interacting with his subordinates, leading motivating, and communicating with them.

In Controlling, he shares informational roles.

The Staffing function has not been included in the role approach though managers at every level perform this function.

Thus, the functional approach of managerial jobs is more comprehensive as compared to Mintzberg’s role approach.

Human Resource Planning, in short HRP, basically deals with forecasting additional human resources required in an organization in the future. HR planning is required for all business and non-business organizations. 

HRP stands for Human resource planning, it is also known as Manpower planning. It is a starting point in the staffing function of management. 

In this article, we have shared complete notes about Human Resource planning and its definition, Importance, and HRP process in the easiest way possible. 

Although HR planning means different things to different individuals, general agreement exists on its ultimate objectives, the most effective use of scarce talent in the interest of the labor and the organization.

This statement suggests that there is a lack of agreement on the contents of HRP. Therefore, in order to conceptualize HRP and its contents, let’s go through some definitions.

Definition of Human Resource Planning

Human Resource Planning can be defined as foreseeing the human resource requirement of an organization and the future supply of the human resources.

According to Eric W. Vetter,

‘HR / Manpower Planning is the process by which management determines how the organization should move from its current manpower position to its desired manpower.’

Mr. Coleman has defined human resource planning as,

‘The process of determination of HR/manpower requirements and means of meeting the requirements in order to carry out the integrated plan of the organization.’

Thus, HR planning is a strategy for the acquisition, utilization, improvement, and preservation of the manpower resources of the company.

Human Resource planning in HR Management strives to have the right number and right kind of people at the right places at the right time.

HR Managers perform Human resource planning that results in both the organization and the individual receiving the maximum long-run benefit.

Objectives of Human Resources Planning

The important objectives of manpower planning in an organization are as follow;

• To recruit and retain the manpower of required quantity and quality.
• To make the arrangements for minimizing turnover in the future and filling up of consequent vacancies.
• To meet the needs of the program of expansion and diversification.
• To foresee the impact of technology on work, existing employees, and future requirements.
• To improve the standard of skill. knowledge, ability, and discipline.
• To analyze the surplus or shortage of human resources and take measures accordingly.
• To maintain congenial industrial relations by maintaining the optimum structure of human resources.
• To minimize imbalances caused due to non-availability of human resources of the right kind, right number at the right time, and right place.
• To make the best use of its human resources.
• To estimate the cost of human resources.

Must Read ➜ Roles of Managers

All human resource and staffing activities start with human resource planning. So we can say that human resource planning is the first and foremost activity of human resource management.

Importance of Human Resource Planning

Manpower planning or HR Planning plays a very important role in the organization.

It is very important for an organization to conduct HR planning from time to time as per the requirement. Because without Human resource planning, an organization may become the victim of excessive manpower or a deficient supply of manpower.

In particular, manpower planning contributes in the following ways in managing human resources in an organization;

• Defining Future Personnel Needs
• Coping with Changes
• Providing Base for Developing Talents
• Increasing Investment in Human Resources
• Forcing Top Management to involve in Staffing

Process of Human Resource Planning (HRP)

Human Resource Planning is a process it proceeds through interrelated activities. HRP process is quite comprehensive and covers many functions related to staffing besides human resource planning.

Must Read ➜ Levels of Management

The actual process of human resource planning has been given below.

HRP Process

1. Determining organizational objectives
2. Forecasting Human Resource Requirements
3. Preparing Manpower inventory
4. Identification of manpower gap
5. Designing Action plans
6. Training and Development
7. Evaluation and Monitoring of manpower

Organizational objectives and plans provide a base for manpower planning so that it is linked with the former.

Let’s discuss HRP Process in a detailed manner;

1. Determining Organisational Objectives and plans

The first activity at the beginning of an organization is setting objectives that generate various plans and policies that provide direction for future course of action. 

Organizational Policies with regard to effective utilization of human resources should be identified and incorporated into the planning process.

2. Forecasting Manpower Requirement

The first essential ingredient of human resource planning is forecasting the needs for human resources in an organization over a period of time.

In one way,  we can say that it depends on the scale of operations of the organization over a period of time.

To a great extent, it is true, However, total human resource needs do not have a completely linear relationship with the volume of operation.

This happens because there are factors that affect this relationship such as a change in the machine-man ratio, a change in productivity.

Forecasting of human resource or manpower requirements serves the following purposes;

• To identify what staff mix is desirable in the future.
• To prevent shortages of skilled people where and when they are needed most.
• To monitor compliance with the legal requirements with regard to reservation of jobs.
• To assess appropriate staffing hierarchy in different parts of the organization.

3. Preparing Manpower Inventory

Inventory is a term that is normally used for the counting of tangible objects like stocks and raw materials, finished goods, etc. In the same way, an inventory of human resources can also be prepared.

However, human resources inventory is not simply counting heads that are presently available but cataloging their present and future potential.

Total human resources of an organization are classified as managerial and non-managerial inventories.

• A skills inventory is related to non-managerial personnel and
• A management inventory is related to managerial personnel. 

Skills Inventory: usually, in a skill inventory, the following types of information are included;

• Employee’s personal data
• Skills – education, job experience, training
• Special achievement if any
• Salary, Job history
• Potential of the employee

Management Inventory: A management inventory includes the following information;

• Personal data
• Work history
• Strengths and weaknesses,
• Career plan
• Promotion potentials,
• Number and types of employees managed

Must Read ➜ Management Definitions and Basics

4. Identification of Human Resource Gap

The manpower gap is the difference between manpower required at a particular time and the personnel being available at that particular time.

This gap can be identified on the basis of the forecast for human resources needs and supply.

This gap should be measured in respect of various types of personnel because a more aggregate quantitative gap would not serve many purposes.

This gap may be of two types;

• Surplus human resources and
• Shortage of human resources

Based on analysis action plan must be developed to overcome this gap.

5. Action plans

Various action plans are devised to bridge the human resource gap.

If there is a surplus of human resources either because of improper manpower planning in the past. And it may be because of changes in the organizational plans such as divestment of business or closing down some businesses because of various reasons.

Action plans may be devised to prune their size through a layoff, voluntary retirement, etc.

if there is a shortage of human resources, action plans may be devised to recruit additional personnel.

6. Training and Development

Training helps to improve the skills of all employees according to the various job roles and positions.

This program is designed in such a way so that the current skills of employees can match the requisite skills for the achievement of objectives.

7. Evaluation and Monitoring of manpower

The final step in Human resource planning is monitoring and evaluation of this whole HRP process. In this parameter, the effectiveness of whole human resource planning is checked.

This evaluation ensures that whether the deficiency and surplus of employees are fulfilled or not. In case of any unfavorable situation, appropriate steps are taken time to overcome them.

It helps in determining performance standards against which the actual job performance is measured.

Must Read ➜ Management by Objectives (MBO)

Benefits of Human Resource Planning

Here are the advantages or benefits of Human Resource Planning;

• Create Reservoir of Skills and Talent,
• Preparation for future HR requirements,
• Promote employees in a systematic manner,
• Provide the basis for HRD,
• Heps in career and succession planning,
• Helps in planning job assignments,
• Helps cope with fluctuations in staffing,
• Identifies recruiting needs,
• Provides other useful information

As we have shared in our previous articles, Planning is the primary function of management. Planning refers to that activity when we decide in advance what actions and resources are required to reach a goal. Today we have shared the details on steps in the planning process in management and how to formulate strategic planning for businesses. 

Steps in the planning process may differ from one organization to another because there are many factors that may affect the planning of a big organization but at the same time, that factor may not affect the small organization.

Therefore, the planning process in a small organization may not be taken in the same ways as in a large organization or MNC’s (Multi-National Companies).

► Understanding Steps in Planning Process

First of all, we need to understand that Formal planning is a systematic process.

The sequences of various steps in the planning process are in such a way that they lead to the translation of an idea into the course of action.

The planning process helps in decision making and it is applicable for a major program like the opening of a new product line or the acquisition of a major plant. The same process is applicable to all types of plans with minor modifications according to the respective goals.

Planning is required at every level of management, but the process of planning remains the same while formulating plans and determining the best alternatives. 

According to some renowned management books like Principles and Practice of Management, the planning process comprises the following stages; 

Perception of opportunities ➜ Establishing objectives ➜ Planning premises ➜ Identification of alternatives ➜ Evaluation of alternatives ➜ Choice of alternative plans ➜ Formulation of supporting plans ➜ Establishing a sequence of activities

If you read the sequences of stages mentioned above, it might be difficult to understand because it is a bookish language and sequence. So we have written all the steps of the planning process in the easiest way possible.

Our motive is to make it simple to understand for everyone. So let’s enjoy reading and understand the process of planning.

► Steps in Planning Process

The steps involved in the strategic planning process are;

Step 1 – Being Aware of Opportunity
Step 2 – Establishing Objectives or Goals
Step 3 – Developing Planning Premises
Step 4 – Determining Alternatives
Step 5 – Evaluating Alternatives
Step 6 – Selecting the Best Alternative
Step 7 – Formulation of Supporting Plan
Step 8 – Establishing Sequence of Activities

Each step in the planning process contributes to planning formulation. The planning leads us to the state of establishing sequences of activities.

Must Read ➜ 14 Principles of Management

Let’s discuss all the steps of the planning process in detail.

✔ Step 1: Being Aware of Opportunity

Awareness of possible opportunities is very important for the planning process. It leads to the formulation of plans by providing clues whether opportunities exist for taking up a particular plan.

Perception of opportunities includes a preliminary look at possible opportunities and the ability to see them clearly and completely. 

During this stage, managers create a foundation from which they will develop their plans to achieve goals. They examine the current state of where the organization stands in the light of its strength and weaknesses.

This analysis gives them a preliminary look at possible future opportunities. Once the opportunities are identified, the other steps of planning are undertaken.

✔ Step 2: Establishing Objectives

The second step in the planning process is to establish objectives for the entire organization and then for each subordinate work unit.

Organizational goals provide direction to and control the objectives of subordinate departments. 

The organizational goals and objectives should be specified in all key result areas.

Key result areas are those which are important for an organization in achieving its objectives. KRA can be identified on the basis of organizational objectives.

For example, for an organization KRA’s (key result areas) may be profitability, sales, research and development, manufacturing, and so on. 

Once organizational objectives are identified, the objectives of front-line units and sub-units can be identified in that context.

Organizational objectives give direction to the nature of all major plans. These plans reflect the organizational objectives and define the objective of major departments.

General interest or organizational interest is superior to individual interest. This is one of the important principles from the 14 principles of Management given by Henry Fayol.

This principle controls the objectives of subordinate departments and so on down the line.

Thus, there will be a hierarchy of objectives in the organization.

✔ Step 3: Developing Premises

After establishing goals and objectives, the next step is to develop planning premises, that is, the conditions under which planning activities will be undertaken.

Planning premises are assumptions about the environment in which the plan is to be carried out. Planners need to do realistic forecasting to develop planning premises.

The forecasting process involves;

(i) calculation of probable future events.
(ii) analyzing changes in consumer attitude, technology, competitive forces, government policies, etc.
(iii) developing the basis for decision making and planning by systematic investigations.

Managers use these premises to evaluate future events and to develop ‘action statements’ and alternative courses of action.

Because future events are complex, premises must be limited to assumptions that are critical to a plan.

Premises must be monitored and updated throughout the planning process.

✔ Step 4: Determining Alternative Courses

The next step is determining available alternative ways of achieving objectives.

Alternatives can be identified based on the planning premises and objectives of the firm.

It is important to note that the number of alternatives should be reduced to the most promising and fruitful ones by preliminary analysis.

Managers should search for and examine alternative courses of action. Alternatives can be discovered through research, experimentation, and experience.

Must Read ➜ Management by Objectives (MBO)

✔ Step 5: Evaluating Alternative Courses

The planner must evaluate the alternatives in the light of premises and goals. Evaluation can be done by finding out the available alternatives and having made an analysis of their strong and weak points.

Evaluation is not an easy process because alternatives have so many variables and limitations.

Some alternatives can be compared easily, some may appear to be the most profitable and will be too expensive. Some may be less desirable or efficient than others. the best one is which better suits the organization’s immediate goals.

Hence, the effective manager should evaluate these alter­natives against the considerations for both feasibility and consequences.

The statistical methods and software have greatly helped the evaluation process.

✔ Step 6: Selecting the Best Alternative

This is the point at which the plan is adopted – the point of decision-making. Selecting the most appropriate alternative involves choosing the plan.

Normally, managers will select the alternative that, in their judgment, will best enable the organization to accomplish its goals.

✔ Step 7: Formulation of Supporting Plan

After formulating the main plan/basic plan, various sub-plans (derivative plans) are derived so as to support the main plan.

Derivative plans are specific plans which are departmental specific.

In an organization, there can be various derivative plans like planning for buying equipment, collecting raw materials, recruiting and training personnel, developing a new project, etc.

These derivative plans are formulated out of the main plan. Therefore, they are meant to support the main plan.

✔ Step 8: Establishing Sequence of Activities 

After formulating basic and derivative plans, the sequence of activities is determined so that plans are put into action efficiently and effectively.

Based on plans at various levels, it can be decided who will do what and at what time so plans can be implemented in the right way.

The finance and account department prepare budgets for the various period so plans get more concrete meaning for implementation.

Must Read ➜ Human Resource Planning

► Other Planning Process Models

There are various models of the Planning process, such as;

• 4 Steps in Planning Process,
• 5 Steps in Planning Process,
• 6 Steps in Planning Process,
• 7 steps in Planning Process

4 Steps Model in Strategic Planning Process

Step 1:  Determine Position (Prepare SWOT data)
Step 2: Develop Strategy (Mission, Values, Vision, Forecast)
Step 3: Build the Plan (Using SWOT analysis, Department goals)
Step 4: Manage Performance (Rollout)

5 Steps Model in Strategic Planning Process

Step 1: Define the goals.
Step 2: Determine where you are relative to the goals.
Step 3: Determine barriers and aids in the environment.
Step 4: Develop a set of actions to reach the goals.
Step 5: Develop methods to control the operation of the plan.

6 Steps Model in Strategic Planning Process

Step 1 – Identifying problems and opportunities.
Step 2 – Inventorying and forecasting conditions.
Step 3 – Formulating alternative plans.
Step 4 – Evaluating alternative plans.
Step 5 – Comparing alternative plans.
Step 6 – Selecting a plan.

7 Steps Model in Strategic Planning Process

Step 1 – Review or develop Vision, Values & Mission.
Step 2 – Business and operation analysis (SWOT Analysis etc).
Step 3 – Develop and Select Strategic Options.
Step 4 – Establish Strategic Objectives. 
Step 5 – Strategy Execution Plan.
Step 6 – Establish Resource Allocation.
Step 7 – Execution Review.

Must Read ➜ Importance of Planning

► Which model is in Planning Process?

It is not mandatory that a particular planning process is applicable for all organizations and for all types of plans.

We have shared 8 steps of the planning process in detail in this article. This is the ideal and traditional approach for the process of strategic planning.

It is the most appropriate and systematic planning process that is suitable for most organizations. Apart from this many other models are also available according to different types of planning.

Management by objectives, in short, MBO is a popular managerial approach used by organizations to facilitates their daily operations and task so that the objectives can be achieved effectively and efficiently. Here we have shared short notes and important topics like meaning definition, process, advantages, and disadvantages of MBO – management by objectives.

What is Management by Objectives – MBO

Management by Objectives (MBO) is a personnel management technique or we can say approach where managers and employees work together to set, record, and monitor goals for a specific period of time.

Organizational goals and planning flow top to lower management through the organization and are translated into personal goals for organizational members.

Management by objectives is a systematic and organized approach. MBO aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization.

Meaning of MBO – Management by Objectives

Management by Objectives is a full form of MBO, it is also known as Management by results (MBR). MBO is a popular term among academicians and practitioners because of two reasons.

First, it focuses on objectives or results that are very crucial for managers to achieve them in a specific time period.

Second, it is based on participative management, an approach that provides high motivation to individuals in an organization.

Definition of MBO – Management by Objectives

The MBO technique was first outlined by the father of management Peter Drucker in 1954 and became commonly used in the 1960s. Since then, many businesses and non-business organizations adopted the MBO technique in some form or other.

MBO can be defined as follows,

MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner.

It consciously directed towards the effective and efficient achievement of organizational objectives.

Other Definition

MBO defined as a management system in which specific performance goals are jointly determined by employees and their managers, progress toward accomplishing those goals is periodically reviewed and rewards are allocated on the basis of this progress.

Management by objectives (MBO) allows management to focus on achievable goals and make the best possible result from available resources.

Must Read ➜ Roles of Manager

Important Concepts of MBO

The core concept of MBO is planning. It means that an organization and its members are not merely reacting to events and problems but are instead being proactive.

It is necessary for MBO that the employees set measurable personal goals based upon the organizational goals.

One more concept of Management by objectives (MBO) is that all managers should participate in the strategic planning process for better implementation of plans.

It includes ongoing tracking and feedback in the progress to reach objectives.

Feature of MBO – Management by Objectives

• MBO is an approach & philosophy for management and not merely a technique.
• The main focus of MBO is on objectives.
• MBO is bound to have some relation with every other management technique.
• Periodic review/feedback of performances is an important feature of MBO.
• MBO provides more freedom to subordinates.
• MBO is results-oriented.
• MBO facilitates Participative management.

Element of Management by Objectives (MBO)

There are some major elements or Prerequisites for installing an MBO Program.

➤ Goal specificity (Purpose of MBO)

➤ Training for MBO

➤ Top Management Support

➤ Participation (Decision Making)

➤ Performance feedback.

Understand MBO With an Example

For Example, Hotels and Restaurants often use comment cards and ask customers to rate the servers. If a server is lacking in customer service skills or maybe he is not aware of how his working style can affect the organizational objectives. Then it can harm the business.

You could give that employee an objective to increase his customer service skills and interact better with the customers.

MBO is a supervised and managed activity so that all of the personal or individual goals can be coordinated to work towards the overall organizational goals and objectives.

The essence of MBO is participative goal setting (Smart goals), choosing a course of action, and the decision-making process.

An important part of the MBO is the measurement and comparison (Evaluation) of the employee’s actual performance with the standards set.

Smart Goals are set down in writing annually and are continually monitored by managers to check progress. Rewards are based upon goal achievement by individuals.

Must Read ➜ Human Resource Planning

MBO Process

Management by objectives or MBO is a system for achieving organizational objectives, increasing employee participation. Therefore, its process and method should facilitate the translation of basic concepts into management practices.

The MBO process is characterized by the emphasis on rigorous analysis, clarity, and balance of objectives. The participation of the manager with the accountability of results.

The process of Management by objectives is not as simple as it appears to be. All managers need training and experience for developing the required skills.

The MBO process has many steps that are as follows;

• Step 1 ➔ Setting Organisational Purpose and Objectives
• Step 2 ➔ Setting Subordinates Objectives
• Step 3 ➔ Key Result Areas (Monitoring)
• Step 4 ➔ Matching Resources with Objectives (Evaluating)
• Step 5 ➔ Appraisal (Reward)
• Step 6 ➔ Recycling (Setting MBO for next operating period)

1. Setting Organisational Purpose and Objectives:

The first basic step in MBO is to define organizational purpose and objectives.

Objectives can be determined by answering a few basic questions like why the organization exists? What business domain are we belong to? What will be the product and services?

These types of questions provide guidelines for the statement of purpose (SOP). These objectives in interaction with external factors determine the long-range strategic objectives like ;

• whether to achieve growth through expansion in the single business or diversify.
• What should be the blending of manufacturing activities; and
• what should be a degree of vertical integration and so on.

Usually, the objective setting starts from the top level of the organization and moves downward to the lowest managerial level. This will go in sequence like

➤ Defining the purpose of the organizational firm.

➤ Long-range and strategic objectives

➤ Short term organizational objectives

➤ Departmental/Divisional objectives

➤ Individual manager’s objectives.

2. Setting Subordinates Objectives:

The organizational objectives are achieved through individuals. Therefore, each individual manager must know clearly what he is expected to achieve.

Every manager in the managerial hierarchy is both superior and subordinate except for the person at the top level and the lowest level. Therefore there are superior and subordinate relationships at every level.

The process of objective setting begins with the superior’s proposed recommendations for his subordinates’ objectives.

3. Key Result Areas : (Monitoring)

Organizational objectives and planning premises together provide the basis for the identification of key result areas ((KRA).

It may be emphasized that Key Results Areas are derived from the expectations of various stakeholders and indicate the priorities for organizational performance.

KRAs also represent the present state of an organization’s health and top management perspective for the future of the organization.

Example of KRAs applicable to most business organizations are;

• Profitability
• Market Standing
• Innovation
• Productivity
• Worker Performance
• Financial and Physical resources
• Manager Performance and
• Public Responsibility

4. Matching Resources with Objectives: (Evaluating)

When objectives are set carefully then they also indicate the resource planning requirement. In fact, resource availability becomes an important aspect of objective setting because it is the proper application of resources that ensures objective achievement.

5. Performance Appraisal : (Feedback and Reward)

The performance appraisal aspect of MBO tries to measure the subordinate is achieving his objective or not. If not, then what are the problems, and how these problems can be overcome.

The purpose of Performance appraisal is to ensure that everything is going as planned and the organization is able to achieve its objectives.

6. Recycling : (Set MBO for New Objectives)

Performance Appraisal is the last aspect of the MBO process but Recycling is used as an input for recycling objectives and other actions.

New objectives are neither start the top and communicated to the bottom nor are they set at the bottom and go up.

Setting Objectives is a joint process through interaction between superiors and subordinates. Therefore, activities of each level may affect other levels also.

The three aspects involved in the recycling process are;

➤ Setting Corporate Objectives at various level

➤ Action planning

➤ Performance Review.

Must Read ➜ 14 Principles of Management

Advantages of MBO (Benefits)

MBO has a wide range of advantages and benefits for the organization, Such as;

• Making planning effective,
• Development of personnel,
• Increase Team Spirit,
• Better Utilization resources,
• Facilitates Coordination,
• Boost Employee Morale
• The clarity in Organizational Action

Disadvantages of MBO (Limitations)

• Time and Cost
• Failure to Teach MBO Philosophy
• Problems in Objectives Setting
• Emphasis on Short term Objectives
• Inflexibility
• Frustration