Notes of Ch 1 Nature and Significance of Management| Class 12th Business Studies

Summary and Notes of Ch 1 Nature and Significance of Management| Class 12th Business Studies

Concept

Definition of Management (According to Harold Koontz and Heinz Weihrich)

"Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims."

Effectiveness Versus Efficiency

Effectiveness and efficiency are two sides of the same coin. Effectiveness refers to complete the job on time, no matter whatever is the cost and on the other hand, efficiency refers to do the job in a cost-effective manner.

Characteristics of Management

• Management is goal-oriented process.
• Management is all-pervasive.
• Management is Multidimensional .
• Management is a continuous process.
• Management is a group activity.
• Management is a dynamic function.
• Management is an intangible force.

Objective of management

1. Organisational objectives: While fixing these objectives, management keeps in to consideration the benefit of all the related parties like (shareholder, employees, customers and the government). This also fulfils organisational economic objectives which are survival, profit and growth.

2. Social objectives: It refers to the consideration of the interest of the society during managerial activities. Organisation runs through the resources made available by the society. That is why it becomes the responsibility of every organisation to account for social benefits.
Main social objectives of management are included in the following list:
• To make available employment opportunities.
• To save the environment from getting polluted.
• To contribute in improving living standard.

3. Personal objectives: Organisations are made up of people who have different personalities, background, experiences and objectives. They all become part of the organisation to satisfy their diverse needs. These vary from financial needs such as competitive salaries and perks, social needs such as peer recognition and higher level needs such as personal growth and development.

Importance of Management 

• Management helps in achieving group goals.
• Management increases efficiency.
• Management creates a dynamic organisation.
• Management helps in achieving personal objectives.
• Management helps in the development of society.

Management as Science, Art and Profession.

Management as an art

• Existence of theoretical knowledge: Management is an art as a lot of literature is available in various areas of management.

• Personalised application: The use of this basic knowledge varies from individual to individual for example two dancers, two actors, two speakers or two writers will always differ in demonstrating their art.

• Based on practice and creativity: Just as art can be embellished with the help of practice, in the same way managerial skill also improves with practice.

Management as a science

Science refers to that systematic body of knowledge which is acquired on the basis of observation and experiments and verification of this knowledge is possible

• Systematised Body of knowledge: Science is a systematic body of knowledge because its principles are based on a cause and effect relationship.

• Principle based on experimentation: Scientific principles are first developed through observation and then tested through repeated experimentation under controlled conditions.

• Universal validity: Scientific principles have universal validity and application.

The management cannot be treated as a perfect science, but as its principles are subject to change with time, situation and human nature, it is better to call it applied science or inexact science.

Management as a Profession

Well- defined Body of knowledge: All profession are based on a well- defined body of knowledge that can be acquired through instruction.

• Restricted Entry: The entry to a profession is restricted through an examination or educational degree. For example charted accountant in India a candidate has to clear a specified examination. But as for management is concerned there is no such condition for being a manager. Hence, on this basis management cannot be accepted as a profession.

• Professional association: All professions are affiliated to a professional association which regulates entry, grants certificate of practice and formulates and enforces a code of conduct for Example Bar council of India for lawyers, medical council of India for doctors etc. on this basis management cannot be accepted as a profession.

• Ethical code of conduct: All professions are bound by a code of conduct which guides the behaviour of its members for example when doctors take a oath of ethical practice at the time they enter the profession. On this basis management cannot be accepted as a profession.

• Service motive: The main motive of profession is to serve the society and this feature is same as management.

Levels of Management

• Top-level Management: In top level management, Board of Directors, Chief Executive officer, etc are included. Management has all the authorities, and because of these authorities officers of these levels are accountable to owners or shareholder of the company.
• They formulate overall organisation goals and strategies for their achievement.
• They are responsible for all the activities of the business and for its impact on society.
Determining objectives, determining policies, determining activities, assembling resources, controlling the work performance, approving budget etc are the function of the top level management.

• Middle-level Management:  It lies between top-level and lower –level management. Under this divisional head, departmental head, deputy departmental heads, plant superintendents, and operations managers are included.
The main work of middle level management:
• Interpret the policies framed by top management.
• Ensure that their department has the necessary personnel.
• Assign necessary duties and responsibilities to them.
• Co-operate with other departments for smooth functioning.

• Lower-level Management: It is also known as supervisory management or operational management. Supervisors directly oversee the efforts of the workforce. Their authority and responsibility is limited according to the plans drawn by the top management. Supervisory management interact with their actual work force and pass on instructions of the middle management to the workers.

Function of Management

1. Planning: It means setting a goal in advance and developing a way of achieving them efficiently and effectively. Planning cannot prevent problems, but it can predict them and prepare contingency plans to deal with them if and when they order.

2. Organising: It refers to harmonious adjustment of various parts to achieve common objectives. It is the function of assigning duties, grouping tasks, establishing authority and allocating resources.
Staffing: it means appointing competent persons according to the importance of the post in the organisation. This is also known as the human resource function and it involves activities such as recruitment, selection, placement, and training personnel.

3. Directing: It refers to instructing, guiding, communicating, and inspiring people in the organisation. Under directing following four activities are included:
• Supervision
• Communication
• Leadership
• Motivation

4. Controlling: It is the management function of monitoring organisational performance towards the attainment of organisational goal. The task involved is:
• It involved establishing standards of performance.
• Comparing this with established standards and taking corrective action where any deviation found.

5. Coordination: It is a process to establish harmony among the different activities of an organisation, so that the desired objectives can be achieved.
Characteristics of coordination
• Coordination Integrates Group effort.
• Coordination Ensures unity of action.
• Coordination is a continuous process.
• Coordination is an all- pervasive function.
• Coordination is the responsibility of All Managers.
• Coordination is a Deliberate Function.

Importance of coordination

Coordination is important as it integrates the efforts of individuals, departments and specialists. The primary reason for coordination is that departments and individuals in the organisation are interdependent.

• Growth in size: As organisations grow in size, the number of people employed by the organisation also increases. Therefore, for organisation efficiency it is important to harmonise individual goals and organisational goal through coordination.

• Functional Differentiation: organisation divided in to separate departments for each function. All these departments may have their own objectives, policies. And each unit and department is performing activities in isolation from others and barriers between departments are becoming more rigid. So, the activity of each department needs to be focused on attainment of common organisational goals.

• Specialisation: Specialists usually think that they only are qualified to evaluate, judge, and decide according to their professional criteria. They do not take advice from others in serious matter. This often leads to conflict amongst different specialists as well as others in the organisation.

NCERT Solutions of Chapter 1 Nature and Significance of Management

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