A central directing and controlling agency is indispensable for a business concern. The function of this agency is the same as that of mind and intelligence in the human body. Without the mind, the human body is nothing but a collection of flesh and bones, capable of achieving nothing. Exactly so it is with a business house.
The collection of physical equipment, materials, labor, and capital will, by themselves, lead to nothing. For the efficient and profitable functioning of small business administration, it is necessary that all these factors be put to work in a coordinated manner. Results and resources both exist outside the business, not inside. It is the function of a management to use resources for the realization of results in such a way that the business firm is not only able to pay its way but is also able to earn some surplus to meet the needs of growth and expansion.
It is the management that provides planning, organization and direction, which are necessary for business operations. Be it the manager of a small firm or the board of directors of a company, it is the function of the people responsible for management called the managers to chalk out the course that the business firm will follow, the activities it will undertake, the objectives it will strive for, the manner in which work and responsibility will be divided among the members of the organization and the manner in which the plans are to be implemented by the people constituting the organization.
This is only one sense in which the term “management” in small business administration is used. In a more important sense, management is a vital function concerned with all aspects of the working of an enterprise. In this sense, management is what management does.