CLASS 12 BUSINESS STUDIES_CHAPTER_1_NATURE AND SIGNIFICANCE OF MANAGEMENT

Chapter 1: Nature and significance of management

Meaning of management:

Management is an art of getting things done with and through others. 

Definition of management:

Management can be defined as, the process of getting things done with the aim of achieving organizational goals effectively and efficiently. 

Meaning of Efficiency and Effectiveness:

Efficiency means doing the task correctly at minimum cost 

through optimum utilization of resources.

Effectiveness is concerned with end result means completing the task correctly within stipulated time. 

Both the terms efficiency and effectiveness are different yet they are inter related. So, it is important for management to 

maintain a balance between the two. 

Characteristics of Management: 

1. Goal oriented Process: 

It is a goal oriented process, which is undertaken to achieve already specified and desired objectives by proper utilization of available resources. 

2. Pervasive:

Management is universal in nature. It is used in all types of organizations whether economic, social or political irrespective of its size, nature and location and at every 

level. 

3. Multidimensional: 

It is multidimensional as it involves management of work, people and operations. 

4. Continuous: It consists of a series of function and its functions are being performed by all managers simultaneously. The process of management continues till an organization exists for attaining its objectives. 

5. Group Activity:

It is a group activity since it involves managing and coordinating activities 

of different people as a team to attain the desired objectives. 

6. Dynamic function: 

It is a dynamic function since it has to adapt according to need, time and situation of the changing environment. 

For example, McDonalds made major changes in its ‘Menu’ to survive in the Indian market. 

7. Intangible Force: 

It is intangible force as it can’t be seen but its effects can be felt in the form of results like whether the objectives are met and whether people are motivated or not and there is orderliness and coordination in the work environment. 

Objectives of Management: 

(a) Organizational objectives of Survival ; profit & Growth :

1. Survival (Earning enough revenues to cover cost): 

Management by taking positive decisions with regard to different business activities ensures survival of business for long. 

2. Profit (To cover cost and risk); 

Profit plays an important role in facing business risks and successful running of business activities.

3. Growth (To improve its future prospects):

Management must ensure growth which can measured by increase in sales no. of employees, product, investment etc. 

(b) Social objectives of giving benefits to society like using environmental friendly practices 

and giving employment to disadvantaged sections of society etc. Example: TISCO, ITC, and Asian Paints. 

(c) Personal Objectives because diverse personal objectives of people working in the 

organization have to be reconciled with organizational objectives. 

Importance of Management: 

1. Achieving Group Goals: Management creates team work and coordination in the group. 

Managers give common direction to individual efforts in achieving the overall goals of 

the organization.

2. Increases Efficiency: Management increases efficiency by using resources in the best possible manner to reduce cost and increase productivity. 

3. Creates Dynamic organization: 

Management helps the employees overcome their 

resistance to change and adapt as per changing situation to ensure its survival and growth. 

4. Achieving personal objectives:

Management helps the individuals achieve their 

personal goals while working towards organizational objectives. 

5. Development of Society: Management helps in the development of society by 

producing good quality products, creating employment opportunities and adopting new 

technology. 

Management as an Art: 

# Art refers to skillful and personal application of existing 

knowledge to achieve desired results. 

# It can be acquired through study, observation and 

experience. 

# The features of art as follows: 

(1) Existence of theoretical knowledge: 

In every art systematic and organized study material should be available compulsorily to acquire theoretical knowledge. 

(2) Personalized application: The use of basic knowledge differs from person to person and thus, art is a very personalized concept. 

(3) Based on practice and creativity: 

Art involves the creative practice of existing theoretical knowledge. 

In management also a huge volume of literature and books are available on different 

aspects of management. Every manager has his own unique style of managing things and 

people. He uses his creativity in applying management techniques and his skills improve with regular application Since all the features of art are present in management so it can called an art. 

Management as a Science: # Science is a systematized body of knowledge that is based on general truths which can be tested anywhere, anytime. 

# The features of Science are as follows: 

(1) Systematized body of knowledge: Science has a systematized body of knowledge based on principles and experiments. 

(2) Principles based on experiments and observation: Scientific principles are developed through experiments and observation. 

(3) Universal validity: Scientific principles have universal validity and application. 

√ Management has systematic body of knowledge and its principles are developed over a 

period of time based on repeated experiments & observations which are universally applicable but they have to be modified according to given situation.

√ As the principles of management are not as exact as the principles of pure science, so it may be called-an

inexact science. 

√ The prominence of human factor in the management makes it a Social Science. 

Management as Profession: # Profession means an occupation for which specialized knowledge and skills are required and entry is restricted. 

# The main features of profession are as follows: 

(1) Well-defined body of Knowledge: All the professions are based on well-defined body of knowledge. 

(2) Restricted Entry: The entry in every profession is restricted through examination or through some minimum educational qualification. 

(3) Professional Associations: All professions are affiliated to a professional association 

which regulates entry and frames code of conduct relating tothe profession. 

(4) Ethical Code of Conduct: All professions are bound by a code of conduct which guides 

the behaviour of its members. 

(5) Service Motive: The main aim of a profession is to serve its clients. Management does 

not fulfill all the features of a profession and thus it is not a full-fledged profession 

because anybody can proclaim to be a manager; prescribed compulsory educational 

degree or license is required. Besides there are not any formal ethical codes which are 

required to be observed. 

Levels of Management: 

(Top, Middle and Operational Levels) 

“Levels of management” means different categories of managers, the lowest to the 

highest on the basis of their relative responsibilities, authority and status. 

1. Top Level consists of Chairperson, Chief Executive Officer, Chief Operating Officer or equivalent and their team. 

Their chief task is to integrate and to coordinate the various activities of the business, framing policies, formulating organizational goals & strategies. 

2. Middle Level consists of Divisional or Departmental heads, Plant Superintendents and Operation Managers etc. 

Their main tasks are to interpret the policies of the top management to ensure the availability of resources to implement policies, to coordinate all activities, ensure availability of necessary 

personnel & assign duties and responsibilities to them. 

3. Lower Level/Supervisory Level consists of Foremen and supervisor etc. Main task is to 

ensure actual implementation of the policies as per directions, bring workers’ grievances 

before the management & maintain discipline among the workers. 

Functions of Management:

The main functions of management include Planning, Organizing, Staffing, Directing and Controlling.

Planning is deciding in advance what to do in future and how to do it. 

Organizing is to assign duties, grouping tasks, establishing authority and allocating 

resources required to carry out a specific plan. 

Staffing is finding the right people for the right job by following a series of steps and includes training and development. 

Directing is leading, influencing and motivating employees to perform the tasks assigned to 

them. 

It includes four activities: 

1. Supervision 

2. Communication 

3. Leadership 

4. Motivation 

Controlling is monitoring the organizational performance towards the attainment of the 

organizational goals. 

Coordination (The Essence of Management): 

Coordination is the force which 

synchronizes all the functions of management and activities of different departments. 

Lack of coordination results in overlapping, duplication, delays and chaos. 

It is concerned with all the three levels of management as if all the levels of management are looked at together, they become a group and as in the case of every group, they also require coordination among themselves. 

So, it is not a separate function of management, rather it is the essence of management.

(1) Coordination integrates group efforts: It integrates diverse business activities into 

purposeful group activity ensuring that all people work in one direction to achieve 

organizational goals. 

(2) Coordination ensures unity of action: It directs the activities of different departments 

and employees towards achievement of common goals and brings unity in individual 

efforts. 

(3) Coordination is a continuous process: It is not a specific activity matter it is required at 

all levels, in all departments till the organization continues its operations. 

(4) Coordination is all pervasive function: It is universal in nature. It synchronizes the 

activities of all levels and departments as they are interdependent to maintain 

organizational balance. 

(5) Coordination is the responsibility of all managers: It is equally important at all the three- top, middle and lower levels of management.

Thus it is the responsibility of all managers that they make efforts to establish coordination. 

(6) Coordination is a deliberate function: Coordination is never established by itself rather 

it is a conscious effort on the part of every manager. 

Cooperation is voluntary effort of employees to help one another. Effective coordination cannot be achieved without cooperation of group members.

Thanks  

KISHORSHIH CHAUHAN

PGT COMMERCE