Introduction to Management | Principles of Management MGT 213

This unit covers the meaning and characteristics of management, managerial functions and principles, managerial hierarchy, types of managers, skills and roles, management careers, and emerging challenges.

What is management?

Management is the process of getting things done through and with people in an organized way. It's about designing and maintaining an environment where individuals work together in groups to efficiently achieve chosen objectives. In simple terms, management decides how best to use a business's resources — human, financial, physical, and informational — to produce goods or provide services.
Think of a wedding (bibaha) in a Nepali household. Someone has to decide the budget, book the party palace, assign relatives to handle catering, guests, and decoration, and then make sure everything runs on time. That coordinating role is essentially management at work, even outside a business.
According to Ricky W. Griffin: Management is a set of activities like planning, organizing, leading, and controlling, directed at an organization's resources (human, financial, physical, and information) with the aim of achieving organizational goals effectively and efficiently in a changing environment.
Two important words here are effective and efficient. Being effective means doing the right things (achieving the goal), while being efficient means doing things the right way (with minimum waste of resources). A momo shop that sells out daily but throws away half its ingredients is effective but not efficient — good management needs both.

Characteristics of Management

Major characteristics

Goal-oriented: Management exists only to achieve predetermined goals — without a goal, there's nothing to manage. Its aim is to maximize efficiency and economy of human effort, and its success is judged by how far the set goals are reached. The goals can be profit, survival, growth, service, market share, or leadership.
Universal and pervasive: Management is needed everywhere — in a family, a business, an NGO, or a government office — and at every level from top to bottom.

Wherever there is human activity working toward a goal, management is present. A small kirana store and Nepal Telecom both need management, just at different scales.

Continuous process: Organizations are "going concerns" meant to run indefinitely, so management never really stops. As long as the organization exists, the cycle of planning, organizing, leading, and controlling keeps repeating.
Group activity / social process: Management works through and with people, so it's always about group effort rather than one person acting alone. Individual efforts are coordinated into groups like the Board of Directors and departments to get better results.
Multi-dimensional activity: Management isn't just about handling people. It also involves managing systems, processes, and operations — so a manager handles work, workers, and the way work flows all at once.
Dynamic function: Organizations live in a constantly changing environment, so management must adjust to maximize opportunities and minimize threats. A business that ignored digital wallets like eSewa and Khalti would lose customers — good management adapts.
Integrating process: The real essence of management is bringing together men, materials, machines, and money (the "4 Ms") so they work as one toward the goal. Resources sitting separately achieve nothing; management integrates them into useful performance.
Both a science and an art: Management is a science because it has a systematic body of knowledge based on principles and facts, and it's an art because applying that knowledge with skill to get real results requires personal judgment and creativity. A manager who knows the theory but can't motivate a real team has the science but lacks the art.

Principles of Management

What are management principles?

Principles of management are broad guidelines for managerial action — they're best seen as flexible guides to action rather than rigid laws. They were developed mainly by Henri Fayol, a French mining engineer, and are still widely used today. Because they're flexible, managers can bend and adapt them to fit their own situation.

The fourteen principles

Division of labour: Work should be divided among people so each develops expertise through specialization. In a tailoring shop, one person cutting cloth and another stitching produces better, faster results than one person doing everything.
Authority and responsibility: Authority (the right to give orders) and responsibility (the duty to perform) should always be balanced. If you make someone responsible for sales targets, you must also give them the authority to make sales decisions.
Discipline: Obedience and respect for rules and agreements is essential for the smooth running of any organization. Without basic discipline, even a well-planned office descends into chaos.
Unity of command: Each employee should receive orders from only one boss. If a junior staff member gets conflicting instructions from two managers, confusion and frustration follow.
Unity of direction: Activities with the same objective should have one plan and one head — "one department, one boss." The whole marketing team should follow a single marketing plan, not several competing ones.
Subordination of individual interest to general interest: The interest of the organization comes before the interest of any single individual. Only when the organization earns can rewards be shared with everyone.
Fair remuneration: Employees should be paid fairly and equitably for their work, which keeps them satisfied and committed. Underpaying staff leads to resentment and high turnover.
Centralization and decentralization: There must be a proper balance between decisions made at the top (centralization) and decisions pushed down to lower levels (decentralization). A small shop can centralize everything with the owner, but a large company must decentralize to function.
Scalar chain: This is the unbroken line of authority from the top level down to the lowest level, forming a clear chain of communication. Everyone knows who reports to whom, so messages and orders flow in an orderly way.
Order: There should be a proper place for everything and everyone — "a place for everything and everything in its place." Materials, tools, and people should all be where they're most useful.
Equity: All employees should be treated with justice, fairness, and kindness across every level. Fair treatment builds loyalty and trust.
Stability of tenure: Employees need job security; frequent turnover is costly and disruptive. When people feel their jobs are stable, they work better and stay longer.
Initiative: Managers should encourage employees to come up with and carry out their own ideas. Letting workers start things themselves builds motivation and ownership.
Esprit de corps: This means team spirit and cooperation — "union is strength." Promoting harmony and a sense of togetherness builds a stronger, more unified organization.

Process and Functions of Management

Functions of management

Management is a process made up of a series of connected functions. The main functions are:

Planning: Deciding in advance what goals to achieve and what course of action to follow. Planning discovers alternatives and chooses the best future course among them, guiding managers to focus on what's important. A café deciding to open a second branch next year and mapping out how is planning.
Organizing: Grouping and assigning activities, then providing the authority needed to carry them out. It's the act of collecting and coordinating human, financial, physical, and informational resources — specifying responsibilities, grouping jobs into units, and allocating resources so people and things work together.
Staffing: Planning manpower needs and filling them — the human resource function. It determines how many and what kind of people the organization needs, then recruits, selects, trains, and develops the right people for the right jobs.
Directing (Leading): Motivating, communicating with, and guiding employees so they perform their tasks toward the goal. It deals with the interpersonal side of management and is essentially the act of stimulating people to become high performers.
Controlling: Monitoring progress, measuring actual performance against the plan, and making corrections where results deviate. Planning, organizing, and leading don't guarantee success on their own — controlling acts as the check-and-balance that keeps things on track.

How the functions are interrelated

These functions aren't separate boxes; they form a connected cycle. Planning comes first — without it, no other function can begin because there's nothing to organize or control toward. Once goals are set, organizing and staffing put the right people and resources in the right jobs.
Leading then mobilizes those people to actually perform, while controlling measures whether the results match the plan. Interestingly, controlling loops right back to planning, because you need the plan's standards to judge performance, and the gaps you find feed into the next round of planning. So the cycle keeps turning: plan → organize → staff → lead → control → plan again.

Managerial Hierarchy

The three levels of management

Managers exist at different levels, and their jobs change depending on where they sit in the hierarchy.

Top-level managers: This includes the Board of Directors, chairman or president, vice-presidents, and the CEO or managing director. They formulate the mission, vision, goals, strategic plans, and major policies, issue instructions for departmental budgets, and appoint middle-level (and sometimes lower-level) executives. They focus on the long-term direction of the whole organization.
Middle-level managers: These are heads of departments, divisions, or branches. They implement the plans and policies set by top management, make plans for their own units, and ensure coordination between different departments. They act as a bridge connecting the top and the lower levels.
Lower-level managers (supervisory / first-line): This includes supervisors, foremen, account officers, and sales officers. They plan and carry out the day-to-day activities of their unit to meet short-term goals, and they provide workers with the tools, materials, and working environment needed to get the job done. They deal directly with the operating staff.

Types of Managers

Different ways managers are classified

Beyond hierarchy, managers can be grouped by the nature and scope of their work:

Generalist managers: These managers oversee a broad area covering several functions at once, like a branch manager who looks after sales, accounts, and staff together. They need a wide, all-round understanding rather than deep expertise in one field.
Functional managers: These are responsible for a single specialized area such as marketing, finance, production, or human resources. A finance manager in a company who handles only money matters is a functional manager.
Staff managers: These managers head support or advisory units that assist the main line of work — for example, legal, HR advisory, or IT support. They don't directly produce the product but help those who do.

Managerial Skills

The three core skills

Skills are specific abilities that come from knowledge, information, and practice. All managers need them, but the mix changes by level.

Technical skills: The ability to perform a specialized task using particular tools, techniques, and procedures. This skill matters most at the lower level, where supervisors must actually know how the work is done. A workshop supervisor who can fix a machine himself is using technical skill.
Human (interpersonal) skills: The ability to understand, communicate with, motivate, coordinate, lead, and control other people and groups. It's most crucial at the middle level, where managers spend their time persuading, negotiating, and getting work done through people. These are the skills of "getting along with people."
Conceptual skills: The ability to see the organization as a whole, identify and resolve complex problems, and spot opportunities in the environment to build strategic plans. This is most important at the top level, where long-range forecasting and big-picture thinking matter most.

How skills shift across levels

Level	Most needed skill	Why
Top level	Conceptual skills	Focus on strategy, forecasting, and the big picture
Middle level	Human skills	Spend time coordinating people and linking departments
Lower level	Technical skills	Must know exactly how the operational work is done

Managerial Roles

Mintzberg's three role categories

In the 1970s, Henry Mintzberg defined a "role" as the expected behaviour for a certain position and grouped a manager's roles into three categories.

Interpersonal roles: These deal with coordinating and interacting with people. They include the figurehead role (ceremonial duties like greeting visitors or chairing meetings), the leader role (directing, motivating, and coordinating staff), and the liaison role (maintaining relationships inside and outside the organization to build image and gather resources).
Informational roles: These involve obtaining and passing on information. They include the monitor role (watching over activities in and around the organization), the disseminator role (passing information down to subordinates), and the spokesperson role (representing the unit and explaining its issues to outsiders).
Decisional roles: These are about making things happen through decisions. They include the entrepreneur role (planning that involves risk-taking and experimentation), the disturbance handler role (maintaining stability and a good working environment), the resource allocator role (deciding where limited resources should go), and the negotiator role (settling major contracts and resolving disputes inside and outside the organization).

Emerging Challenges for Management

The major challenges managers face today

These challenges mostly arise from big changes in the outside world.

Globalization: Free trade in goods and services now offers customers worldwide choice, and management is no longer limited by national borders. The rise of regional trade agreements and the WTO brings both opportunities and tough new competition — a Nepali handicraft business now competes with and sells to the whole world online.
Technological development: Rapid advances in computers, the internet, and data processing have transformed how decisions are made. Nepalese organizations depend heavily on international technology, so managers must constantly keep up with and adapt to these changes.
Quality and productivity: Customers now expect higher quality — attractiveness, reliability, fewer defects, durability — and quality is closely linked to productivity. Managers face growing pressure to get better results out of every resource (human, financial, material, informational) they use.
Ethics and social responsibility: Scandals involving bribery and illegal dealings have made the public demand that businesses act responsibly. Society expects organizations to contribute to quality of life, and growing consumerism and environmental awareness push businesses toward ethical behaviour.
Innovation and change: In a highly competitive market, change and innovation are now unavoidable. Managers must be able to adapt to new assignments, new industries, and shifting customer needs, replacing traditional methods with modern ones to survive.
Learning organization: A learning organization continuously adapts to its environment by creating, acquiring, and transferring knowledge and adjusting its behaviour to new insights. Managers must keep cultivating new ideas and finding better methods of working.
Workforce diversity: Organizations are becoming more diverse in gender, race, religion, nationality, age, class, and education. Employees bring their own cultural values and lifestyles to work, so the challenge for managers is to understand and accommodate these diverse groups.
Empowerment and knowledge management: Beyond the above, managers increasingly need to empower employees by giving them more authority over their own work, and to manage organizational knowledge as a valuable asset that drives performance.

Scope of Management Careers

Why management careers are expanding

Management used to be limited to a few large organizations, but today the scope is enormous. Every business needs managers at different levels, and as businesses grow and owners juggle multiple ventures, they simply cannot control and coordinate everything alone. This has made management one of the most active and in-demand career choices.
The need for managers has spread beyond business into social and non-profit organizations too. Managers are valued because they bring new ideas, handle competition, conduct market research, guide employees, and create the strategies that drive an organization toward success.
Management is also a multidisciplinary field, so careers exist across many sectors — entrepreneurship, finance, healthcare, education, transportation, and more. The flip side is that because so many people study commerce, management has become a highly competitive career where only the strongest candidates get selected.

Important Questions and Solutions

Exam-style questions with solutions for this unit.

1. Describe the emerging challenges of management. (2083)

Management today works in a rapidly changing environment, and most of its new challenges come from major changes in the outside world. The emerging challenges of management are described below:

Globalization: free trade gives customers worldwide choice, and management is no longer limited by national borders. Regional trade agreements and the WTO bring both opportunities and tough competition. For example, a Nepali handicraft business now sells to, and competes with, the whole world online.
Technological development: rapid advances in computers, the internet and data processing have transformed decision making. Nepalese organizations depend heavily on foreign technology, so managers must constantly keep up and adapt.
Quality: customers now expect attractive, reliable, durable products with fewer defects, so managers must continuously improve quality.
Productivity: quality is closely linked to productivity, and managers are under pressure to get better results from every human, financial, material and informational resource.
Ethics: scandals involving bribery and illegal dealings have made the public demand ethical behaviour from businesses.
Social responsibility: society expects organizations to improve quality of life, and growing consumerism and environmental awareness push firms to act responsibly.
Innovation and change: in a highly competitive market, change is unavoidable. Managers must replace traditional methods with modern ones and adapt to new assignments, industries and customer needs.
Learning organization: organizations must continuously create, acquire and transfer knowledge and adjust their behaviour to new insights, so managers must keep cultivating new ideas and better methods.
Workforce diversity: employees now differ in gender, religion, age, nationality, class and education, and bring their own values and lifestyles. Managers must understand and accommodate these diverse groups.
Empowerment and knowledge management: managers must give employees more authority over their own work, and manage organizational knowledge as a valuable asset that drives competitiveness.

These challenges demand that managers be flexible, innovative, ethical and globally minded. Managers who respond well to these challenges can turn them into opportunities for organizational success.

2. Highlight two characteristics of management. (2083)

Management is the process of getting things done through and with people to achieve organizational goals effectively and efficiently.

Two of its characteristics are:

Goal-oriented: management exists to achieve predetermined goals such as profit, growth or service, and its success is judged by how far those goals are reached.
Universal and pervasive: management is needed in every organization, whether a family, a kirana store, an NGO or Nepal Telecom, and at every level from top to bottom.

3. What is managerial skill? What skills are necessary for a successful manager? (2082)

A managerial skill is a specific ability, developed through knowledge, information and practice, that enables a manager to perform managerial work effectively. Every manager needs skills, but the mix changes with the level of management.

A successful manager needs core skills.They have given :

Technical skill: the ability to perform a specialized task using particular tools, techniques and procedures.
Importance of technical skill: it matters most at the lower level, where supervisors must know exactly how the work is done in order to guide workers and solve operational problems.
Example of technical skill: a workshop supervisor who can repair a machine himself, or an accounts officer who can prepare ledgers and reconcile accounts.
Human (interpersonal) skill: the ability to understand, communicate with, motivate, coordinate, lead and control people and groups. In short, it is the skill of getting along with people.
Importance of human skill: it is most crucial at the middle level, where managers spend much of their time persuading, negotiating and linking departments.
Human skill at all levels: since management is a group activity, every manager at every level needs human skill to get work done through others.
Conceptual skill: the ability to see the organization as a whole, understand how its parts relate, identify and solve complex problems, and spot opportunities in the environment.
Importance of conceptual skill: it is most important at the top level, where long-range forecasting, strategic planning and big-picture thinking are the key activities.
Example of conceptual skill: a CEO deciding whether the company should enter the digital payment business, after studying competition, technology and government policy.
Skill mix across levels: the importance of each skill changes with the level.

4. What is unity of command? (2082)

Unity of command is one of Henri Fayol’s 14 principles of management. It states that each employee should receive orders from only one superior.

Purpose: it avoids confusion, conflicting instructions and frustration, and it makes accountability clear.

Example: if a junior clerk in a bank gets different instructions from the branch manager and the operations manager, the work suffers. Under unity of command, the clerk reports to and takes orders from one boss only.

5. Describe the characteristics of management. (2081)

Management is the process of getting things done through and with people in an organized way, by designing and maintaining an environment where individuals work together in groups to efficiently achieve chosen objectives.

According to Ricky W. Griffin, management is a set of activities like planning, organizing, leading, and controlling, directed at an organization's resources with the aim of achieving organizational goals effectively and efficiently in a changing environment. The true nature of management is best understood through its main characteristics, which are described below.

Goal-oriented: Management exists only to achieve predetermined goals, because without a goal there is nothing to manage. Its success is judged by how far the set goals are reached, whether those goals are profit, survival, growth, service, or market leadership.
Universal and pervasive: Management is needed everywhere, in a family, a business, an NGO, or a government office, and at every level from top to bottom. A small kirana store and Nepal Telecom both need management, only at different scales.
Continuous process: Organizations are "going concerns" meant to run indefinitely, so management never really stops. As long as the organization exists, the cycle of planning, organizing, leading, and controlling keeps repeating.
Group activity / social process: Management works through and with people, so it is always about group effort rather than one person acting alone. Individual efforts are coordinated into groups like the Board of Directors and departments to get better results.
Multi-dimensional activity: Management is not just about handling people; it also involves managing systems, processes, and operations. A manager therefore handles the work, the workers, and the way the work flows all at once.
Dynamic function: Organizations live in a constantly changing environment, so management must adjust to maximize opportunities and minimize threats. A business that ignored digital wallets like eSewa and Khalti would lose customers, so good management adapts.
Integrating process: The real essence of management is bringing together men, materials, machines, and money (the "4 Ms") so they work as one toward the goal. Resources sitting separately achieve nothing until management integrates them into useful performance.
Both a science and an art: Management is a science because it has a systematic body of knowledge based on principles and facts, and it is an art because applying that knowledge with skill requires personal judgment and creativity. A manager who knows the theory but cannot motivate a real team has the science but lacks the art.
Effective and efficient: Good management means being both effective, that is doing the right things to achieve the goal, and efficient, that is doing things the right way with minimum waste of resources. A momo shop that sells out daily but throws away half its ingredients is effective but not efficient.
Multidisciplinary in nature: Management draws knowledge from many fields such as economics, psychology, sociology, and statistics, and applies it to real situations. This wide base is what allows managers to handle people, resources, and decisions together in a balanced way.

6. State any two managerial skills. (2081)

Skills are specific managerial abilities that come from knowledge, information, and practice, and all managers need them. Two of these managerial skills are:

Technical skills: This is the ability to perform a specialized task using particular tools, techniques, and procedures. It matters most at the lower level, where a supervisor must actually know how the work is done, such as a workshop supervisor who can repair a machine himself.
Human (interpersonal) skills: This is the ability to understand, communicate with, motivate, coordinate, and lead other people and groups. It is most crucial at the middle level, where managers spend their time persuading, negotiating, and getting work done through people.

7. Note down two functions of management. (2080)

Management is a process made up of a series of connected functions carried out to achieve organizational goals. Two of these functions are:

Planning: This is the function of deciding in advance what goals to achieve and what course of action to follow. It discovers the available alternatives and chooses the best future course among them, guiding managers to focus on what is important.
Organizing: This is the function of grouping and assigning activities and then providing the authority needed to carry them out. It collects and coordinates the human, financial, physical, and informational resources so that people and things work together toward the goal.

8. State any two characteristics of management. (2079)

Management has several defining characteristics. Two of them are:

Goal-oriented: Management exists only to achieve predetermined goals, because without a goal there is nothing to manage. Its success is judged by how far the set goals are reached, whether those goals are profit, survival, growth, or market leadership.
Universal and pervasive: Management is needed everywhere, in a family, a business, an NGO, or a government office, and at every level from top to bottom. A small kirana store and Nepal Telecom both need management, only at different scales.

9. State and explain the functions of management. (2078)

Management is a process made up of a series of connected functions performed to achieve organizational goals effectively and efficiently. According to Ricky W. Griffin, management involves planning, organizing, leading, and controlling an organization's resources, and in practice these are carried out through five closely linked functions. These functions are stated and explained below.

Planning: This is the function of deciding in advance what goals to achieve and what course of action to follow.
a. Nature: It discovers the available alternatives and chooses the best future course among them, guiding managers to focus on what is important.
b. Position in the process: It comes first, because without a plan there is nothing to organize, lead, or control toward. For example, a café deciding to open a second branch next year and mapping out how is planning.
Organizing: This is the function of grouping and assigning activities and then providing the authority needed to carry them out.
a. Nature: It collects and coordinates the human, financial, physical, and informational resources of the organization.
b. Work involved: It specifies responsibilities, groups jobs into units, and allocates resources so that people and things work together toward the goal.
Staffing: This is the human resource function of planning manpower needs and filling them.
a. Nature: It determines how many and what kind of people the organization needs.
b. Work involved: It recruits, selects, trains, and develops the right people so that the right jobs are handled by the right persons.
Directing (Leading): This is the function of motivating, communicating with, and guiding employees so they perform their tasks toward the goal.
a. Nature: It deals with the interpersonal side of management and is essentially the act of stimulating people to become high performers.
b. Importance: Since people actually carry out the plans, good directing is what turns organized resources into real performance.
Controlling: This is the function of monitoring progress, measuring actual performance against the plan, and making corrections where results deviate.
a. Nature: It acts as the check-and-balance of management, because planning, organizing, and leading do not guarantee success on their own.
b. Link back to planning: It loops right back to planning, since the plan's standards are needed to judge performance, and the gaps found feed into the next round of planning.

These five functions are not separate boxes but form a connected cycle, moving from plan to organize to staff to lead to control, and then back to plan again as the control stage feeds the next round of planning.

10. Put Light on the ‘scalar chain’ principle of management? (2077)

The scalar chain is one of Henri Fayol's fourteen principles of management. It refers to the unbroken line of authority that runs from the top level of the organization down to the lowest level, forming a clear chain along which communication and orders flow. Because of this chain, everyone in the organization knows who reports to whom, so messages and instructions move in an orderly, step-by-step manner rather than in a confused way.

For example, in a company a message from the general manager reaches a junior staff member by passing down through the department head and the supervisor along this defined line.

Principles of Management

Principles of Management