In the past, in all discussion of economic theory, emphasis was laid on capital and labour, as the factors necessary for the successful and profitable running of any industry and business. However, now it is realized that there is a third factor also, that of management or organisation. The functions of management is to synthesis or combine the other factors necessary for production such as capital, labour, technical knowledge, etc. According to Alfrad Marshall, the function of management is to synthesis the means of production so that a given effort may be most effective in supplying wants under complex conaitions of modern life and to bring together the capital and labour required for the work, “to engineer it’s general plan, and to superintend its minor details.”
Thus the duties of a complex and sophisticated modern industrial concern are difficult and manifold. He has to (a) provide the necessary resources in terms of money and material. (b) provide the manpower necessary for running the concern (c) arrange for the necessary technical experts and knowledge (d) formulate the policies and programmes, (e) ensure harmonious and co-operative working of the various factors. Any strikes and lock outs are, therefore, to be regarded as failures of management, (f) look to the minor details and supervise the day today work and (g) ensure that profits are earned as a result of his management of the concern.
The duties of a manager are difficult and manifold and, for the successful discharge of his duties, he must be a man of good natural ability and general education, a man of intelligence and initiative. In addition to this, he must also have a sound knowledge of the technical details of the business he has to manage and the market condition relevant to it. He must have undergone a period of practical training for the purpose. As one economist puts it, “Successful management consist of synthesizing experience with youth.” Both are required for successful management. Management also achieves his harmonization of the technologist and the professional with generalist; of the theoretician with the pragmatist, of the sociologist and psychologist with the professional and, above all, of the economist with the management.
An ideal manager must be capable of innovation, of thinking along new lines as well as of adapting the technical knowledge and skill acquired in other countries to the circumstances and atmosphere which he finds prevailing in his own country. He must have qualities of leadership, so that he may inspire the workers with enthusiasm for their work, and get their co-operation and goodwill. He must also have a sound store of legal knowledge for labor laws daily growth more and more complex and failure to interpret them correctly may entail much loss of prestige.
Business managers in India have, by and large, failed to meet the heavy demands made upon them. In the past, business and industry were privately owned, and the Managers were generally member of the family of the owners, or at least those who were closely connected with the proprietor and had acquired the necessary knowledge and experience at his feet. In other words, management in the past was largely a family affair. Such managers still continue to run private sector industries with great success. They have the necessary ability as well as the particular organizational knowledge of the industry concerned. That is what they still continue to show high profits, despite political interference, shortage of necessary raw materials, labour troubles and other averse environmental conditions.
The problem of business management has become acute with the increase in the importance of the public sector. Many industries have been nationalized, and many more new industries have set up in the public sector. The largest number of managers in public sector is drawn from senior Government officers. These administrative officers are, no doubt, men of great general ability. But they have not been successful as business managers. Their training and attitudes stress the importance of acting in accordance with an elaborate set of rules, such abilities were no doubt will suited to their earlier roles as government administrators.
In the changed context that calls for more creative attitudes, their dependence upon established precedents tends to kill there creativity and reduce their practical usefulness. They too frequency attempt to apply the rules and regulations meant for routine administration to the management of economic enterprise in the process of rapid change. Compliance with the rules seems to these people more important than getting results out output and profits.
The failure of the public sector undertaking in India is largely the failure of management. Other factors may also account for it, but this is the most important factor. The losses incurred by the three steel plants , by Air India International, by the State Trading Corporation, and by a host of other public sector undertaking, are caused by the failure of management to rise to the occasion and take initiative and provide leadership. The public sector can be worthwhile and useful only when it is more efficiently management.
The role of management in modern industry is crucial. But the ideal manager are different to find. We are happy to note that the government is fully alive to the problem and a number of universities have started course in business management to which only young men with brilliant academic records are admitted. Let us hope in the near future India would have a number of efficient managers with the required technical knowledge and general ability.