The factors of production consists of many factors such as land, labour, capital, entrepreneurship and management in which management is a vital factor of production, an entrepreneur may establishes the organization as its owner , but it is management that make various resources productive.they simply require the catalyst of management to produce results because it is management that coordinates various factors of production.
therefore, management occupies a central place among all the factors of production.
there are other factors of production too,which are money, manpower, materials, machinery and methods known as the five m's of management. these are known as the five m's of management because of there initials which is 'M'.
The five M's of management are analyzed below:
1. Money: money is the most critical and all purpose resource because it is used to acquire or hire other resources. In organization , money is employed to generate more money in the form of profits or surplus. A business firm or enterprise requires money in the form of fixed capital and working capital.
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2. Manpower : manpower refers to the managerial and non-managerial personnel employed I an organization.other resources cannot act by themselves and have to be utilised by human beings. Therefore ,human resources mobilize, allocate and utilize the physical and financial resources of an organization.
3. Materials : materials represent the physical raw materials and intermediate products (semi-finished goods ) which are converted and/or assembled into finished products with the help of certain processes and technology.
4. Machinery: machines are the equipment used to process the materials into finished or semi-finished products. Employment of modern machinery helps to reduce costs and to improve the quality of output.technology has therefore become an important ingredient in the efficient management of organizations.
5. Methods: methods refer to the normal and prescribed ways of doing things various operations are performed according to certain systems and procedures. Use of right methods helps to increase efficiency of operations and contributes to effective management.
every other factor which is a part of the five M's has it's own dynamics. it is the duty of management or managers to understand or analyze the basic nature and the functions of each M and the source of its availability. Managers must clearly know the purposes for which the other factors are employed and coordinate them in such a way as to optimize their combined productivity.
