Importance, Function and Differences of Management and Administration

Importance of management


In today’s world, Management is essential in every organization. Management is one of the key reason for modernization and industrialization. The basic function of management is to integrate the efforts of human resources and to utilize them to achieve the desired result. So it is very essential aspect of human existence as a whole. Some of the major importances of management are:

  1. Successful Operation: An organization can successfully run only if it has a good management mechanism. A good management helps to maintain a unity of direction to all its actions and thus helps to gain the organizational goals and requirements effectively and efficiently.
  1. Co-ordination: An organization needs a large number of people working in various departments. So Management helps an organization by making good coordination among all the departments and directs them towards the success of the business or attainment of organizational goals. There is a co-ordination of man, machine, money, and material by the management.
  1. Optimum utilization of resources: An organization can gain maximum profit if there is an efficient use of the raw materials and human resources. Most of the time in any organization if a management is not effective there is no efficiency. So Management helps to reduce the waste and cost of operation for the organization.
  1. Minimization of cost: One of the most important aspects of management is cost efficiency. The cost of operation of the organization reduces the profit or revenue which hampers the performance of the organization. Hence, management introduces techniques which help to minimize the cost of the operation of the organization.
  1. Personality development: Management involves not just performing activities but also grooming the skills and personality of workers. Many seminars, workshops educational meetings etc. are held in order to make the workers more competent and capable. In this way, Management aids in personality development of people.
  1. Fulfillment of Social and Economic needs: Any organization is run for earning a profit and providing services to the general people. Thus, Management helps to fulfill this objective of meeting the requirement of the society. An organization is socially as well as economically liable to the society and government. Thus, Management helps the organization to meet all these needs of the society.
  1. Development and growth: An organization’s basic long-term need are development and expansion. An organization can develop and grow only if there is a good management system in the organization. Hence, in the highly competitive market, a good management helps to sustain and expand the scale of operation of the organization.

Hence, these are the importance/significance of Management. Besides these other objectives of management are encouraging innovation, improvement of a lifestyle of workers, developing a brand or image of an organization, improving relations with others etc.

(Neupane Surendra; Parajuli, Ram prasad; Jha , Deepak Kumar; Chhetri, Tuk Bahadur; Dulal, Gopal Prasad Pg.15-19)

Function of management

As we have previously discussed Management is a process of activities. There are some distinct Managerial functions. As there are many definitions of management, experts have classified management functions differently.

From different studies of organizations and from different point of view experts have given some important functions in the following manner:

  • Henry Fayol- planning, organizing, commanding, coordinating, controlling
  • Koontz and Weihrich - planning, organizing, staffing, leading, controlling
  • R Terry- planning, organizing, staffing, controlling

So, from the above classifications, it is clear that the functions of Management vary from experts to experts. But all of the above classifications have unanimity in terms of planning, organizing and controlling. But all of these things will work only if there is proper dealing with the human resources in any organization. Here comes the role of other functions such as commanding, motivating, communicating, directing, leading etc.


So some experts have suggested staffing function as a function of facilitating human element of an organization. Thus, broadly we can understand that managerial functions are:

  • Planning: Planning is the most basic managerial function in an organization. Planning means to set goals and objectives and design the policies and game plan to achieve them. It is a decision taken in advance on what to do, how to do, when to do and who would do a particular task. So planning is thinking in advance before doing. Planning is a key function as it helps to achieve efficiency and growth. So a manager’s ability to forecast the upcoming situation precisely is very crucial. Thus, forecasting is an inseparable aspect of planning.
  • Organizing: Organizing can be defined as identification of activities to be performed, grouping the activities and then assigning those activities to subordinates, giving them certain authority and making them accountable to the immediate supervisor. Organizing is to manage the m4 which means Man, Material, Machines and Money in the best possible manner in order to achieve the desired output of an organization. Hence, organizing utilizes human and other resources to achieve organizational goals and objectives.
  • Staffing: This function of Management is concerned with the management of human resources. The basic aim of staffing is to make sure right man is given a right job. An organization can operate well only if a competent and well-qualified person are given the right job. If a person who has a keen interest in finance is set in marketing department then they might not be able to perform to their standard. Hence, staffing is all about managing the organizational structure through proper selection of the right person for right job. The process of staffing involves screening, recruitment, selecting, training, grooming and development and appraising.
  • Directing: All the above functions have provided a guideline for an action and set a structure for the organization. So the next step is directing or leading the organization to achieve the desired goals and objectives. This step involves influencing the employees to perform to their highest capacity. Directing involves many functions such as motivating, supervising and leadership. This function of management deals with how to channel the human resources to achieve the goals and objectives of the organization. An organization is a formation of people having a different perception, attitude, and behavior. So in order to achieve the organizational goals and objectives all of the human resource must perform together to get the desired output. So in this function, an effective leadership is a must as a leader is a person who directly influences the subordinates.
  • Controlling: Controlling is the process of measuring the results of an organization and comparing the results with the desired results or pre-determined results of the organization. Controlling involves checking whether there is a deviation in the level of performance or not and if found then finding solutions to rectify the problems as soon as possible. So we can say that controlling is checking the performance of the organization and making sure that goals and objectives are achieved. So planning and controlling are inter-related.

So these functions of management can be seen in any organization in the world and can be universally accepted.

(Shrestha :pg-17)

Management and administration


Management and Administration are taken as the same thing by many people. But there is a controversy as some people regard management and administration as separate things. There are three points of views related to Management and Administration. They are:

  • Administration and Management are different (American concept):

The American concept of management and administration regard Administration as a higher level of activity compared to Management. The administration is only concerned with the formulation of the major goals and objectives and policies of the organization whereas Management is the body which operates to achieve those goals and objectives by following the policies and plans formulated by the administration. So the administration is taken as a body to formulate the plans and policies and management is taken as a body to implement those plans and policies. Hence, Management is the operating body and Administration is the thinking body.

  • Administration is a part of Management (British Concept):

Some experts have focused on Management as a wider term than administration. They claim that management includes administration and entrepreneurship. So Administration is a body which implements the policies formulated by the entrepreneurs. So Administration is taken as a part of management to carry out the programs designed and communicated by the entrepreneurs of the management. So Administration comes under Management as one of its part.

  • Administration and Management are same:

This is a modern concept which includes management and administration as the same thing with only different term. In practice the functions of both management and administration are same. Experts such as Koontz and O’Donnell and Henry Fayol regard management and administration as the same thing. They have kept Management as a term used in the field of Business and Administration in social organizations and Government. But the basic function is no different.

Now, as we have analyzed all the point of views so we have the following differences in Administration and Management. They are tabulated below:

Basis of Differences Administration Management

Nature of Function

Administration is linked as thinking function

Management is taken as operating or executing function

Basic Function

Formulation of policies and determination of objectives.

Implementing the plans and policies to achieve desired goals

Area of use

Used in mostly Government, educational and social organizations

Used in mostly profit motive or business organizations

Level of Authority

Top level authority: Strategic,Policy Making and decision-making

Operating level authority: executive administrative decisions

Ability required

Requires high level of administrative ability to analyze and make decisions

Requires technical abilities to perform the actions

Status of the members

They are mostly owners who invest in the organization and gain huge profits.

They are mostly employees working under salaries and wages.

Basis of Decisions

Social norms and values, Government policies, public opinions are bases to make decisions

Values and opinions of managers and meetings are the bases of decisions

Major function

Planning and Organizing

Directing, Leading and controlling

(Sharma , Surendra raj; Jha, Surendra Kumar;pg- 18)


Neupane Surendra; Parajuli, Ram prasad; Jha , Deepak Kumar; Chhetri, Tuk Bahadur; Dulal, Gopal Prasad;. "Business Studies class: XII." Kathmandu: Nawakala Publications, 2011. 28-40.

Sharma , surendra raj; jha, surendra kumar;. "Business Studies Grade XII." Sukunda Pustak Bhawan, 2011 A.D. 31-40.

Shrestha, Kul Narsingh. "Business Organization and Management ." Kathmandu: Nabin Prakashan, 2065 B.S. 30-46.

1. Management is important in every organization for smooth operation, development and growth, co-ordination, optimum use of resources etc.

2.Functions of management include Planning, organizing, staffing, directing and controlling. 

3. One point of view says that Administration is the thinking body whereas Management is the operating body. Another suggests Administration is a part of Management and the third take both management and administration as same thing.


Any Questions on Importance, Function and Differences of Management and Administration ?

Please Wait...

No discussion on this note yet. Be first to comment on this note