Revision Notes for Class 12 Business Studies Chapter 1 Nature and Significance of Management
Here we are providing Revision Notes for Class 12 Business Studies Chapter 1 Nature and Significance of Management. These are the important points related to the chapter. Students should remember these points.
CONCEPT OF MANAGEMENT
Management is the process of designing and maintaining an environment in which individuals working together in groups efficiently accomplish selected goals.
As a process, management contains a series of functions namely planning, organising, staffing, directing and controlling.
Effectiveness means taking correct decisions and actions in every situation in order to achieve the targets.
Efficiency means to reduce cost by ensuring optimum utilisation of resources.
OBJECTIVES OF MANAGEMENT
The various objectives of management can be broadly classified into three categories for better understanding as described below:
(a) Organisational objectives: An organisation strives to achieve multiple organisational objectives mainly (z) Survival (it) Growth (iii) Profit
(b) Personal objectives: These objectives relate to the needs of the employees of the organisation like fair remuneration, good working conditions, unbiased promotion policy etc.
(c) Social objectives: Every business should participate in various social and economic development programs initiated by the government like Swatch Bharat Abhiyan, Beti padao beti bachao, employment generation etc.
FEATURES OF MANAGEMENT
The key features of management which are described below:
(a) Management is goal oriented: Management is a purposeful activity as it is initiated and carried out consistently to achieve a predetermined end or a goal.
(b) Management is pervasive: Management in practice has universal applicability as it is relevant to all types of organisation, (economic, social, political), all sizes of organisation (small, medium, large) and at all levels of management (top, middle and lower).
(c) Management is multidimensional: Management is regarded as a multifaceted concept as it involves three dimensions namely:
(i) Management of work i.e. to translates the work in terms of goals to be achieved and assigns means to achieve it.
(ii) Management of people which implies dealing with employees as individuals with diverse needs and also as a group of people.
(iii) Management of operations i.e. in order to ensure the conversion of inputs into desired output for consumption.
(d) Management is a continuous process: The functions of planning, organising, staffing, directing and controlling which have to be performed simultaneously all the time non stop till an organisation exists.
(e) Management is a group activity: Since in an organisation no one individual is capable of carrying out all the organisational work single handedly, every organisation is represented by a group of people.
IMPORTANCE OF MANAGEMENT
The importance of management may be highlighted through the following points:
(a) Management helps in achieving group goals: Management seeks to provide directions to the individual efforts of employees so as to enable them contribute their individual efforts suitably towards accomplishment of the organisational goals.
(b) Management increases efficiency of the employees: Management is vital for ensuring profitability of a business as it curbs duplication of efforts and wastage of resources.
(c) Management creates a dynamic organisation: Management of activities of organisation is important for facilitating the smooth transitions within the organisations.
(d) Management helps in achieving personal objectives: An organisation which focuses only on satisfying the needs of its owners cannot exist for long. This can only be achieved only when due considerations is giving to individual goals of people employed therein.
(e) Management helps in the development of society: An enterprise should contribute effectively towards the betterment of the society by providing good quality products, improving the standard of living by developing technologically advanced products, generating employment opportunities etc.
FUNCTIONS OF MANAGEMENT
The process of management is embedded in its five main functions as described below:
(a) Planning: Planning relates to determining in advance what is to be done and who is to do it.
(b) Organising: Organising is the process of bringing together human, physical and financial resources and establishing productive relations among them for the purpose of achieving the desired goals efficiently and effectively.
(c) Staffing: Staffing involves manning the organisational structure in order to fill in the roles designed into the structure.
(d) Directing: Directing involves leading, influencing and motivating employees to perform the tasks assigned to them.
(e) Controlling: Controlling is the management function of ensuring that events conform to plans.
NATURE OF MANAGEMENT
Management as an Art
Art is the skillful and personal application of existing knowledge to achieve desired results.
The specific features of an art as outlined below:
(a) Existence of theoretical knowledge: Art presupposes the existence of certain knowledge. Management fulfills this criterion, as there exists a number of theories and principles on management.
(b) Personalised applications: Art is a personalised concept. Management fulfills this criteria as a good manager works through a combination of his own experience, creativity, imagination, initiative and innovation to carry out the assigned work.
(c) Based on practice and creativity: All art is practical. Management fulfills this criteria as a person becomes better manager with constant practice and experience. This also leads to emergence of different styles of management.
Conclusion: Management is a full-fledged art.
Management as a Science
Science is a systematised body of knowledge that explains certain general truths.
The specific features of an science as outlined below :
(a) Systematised body of knowledge: Management like Science, is also a well-defined body of knowledge containing a number of theories and principles formulated by various management experts. Management as science fulfills this criteria.
(b) Principles based on experimentation: Like, the principles of pure science the principles of management are also based on personal observation and tested through repeated experimentation. Management as science fulfills this criteria.
(c) Universal validity: Unlike, the scientific principles, the principles of management lack universal validity as it deals with human behaviour which is complex in nature.
Conclusion: Management is a social science/impure science or inexact science.
Management as both a Science and an Art
It goes without saying that management in practice is a judicious blend of both science and art.
Management as a Profession
Profession is an economic activity which requires specialised knowledge and skill.
The specific features of an profession as outlined below :
Features of profession/Evaluation of Management a Profession
(a) Well defined body of knowledge: Management full fills this criteria as it includes a set of theories and principles formulated by various management experts.
(b) Restricted entry: Unlike other profession management as profession does not full fill this criteria as anyone can be called a manager regardless of his/her academic qualifications.
(c) Professional association: Unlike other professions although there exist several management association like AIM A (All India Management Association). But it is not necessary for the practicing managers to be a member of such association. Management as profession does not full fill this criteria
(d) Ethical code of conduct: All professions are bound by a code of conduct which guides the behaviour of its members which is laid down by the concerned professional association. Management as profession does not full fill this criteria
(e) Service motive: Over the years, due to multi factors like sustainability, consumer awareness etc. corporate social responsibility has acquired new dimensions. Conclusion: Management is a not a considered to be a full fledged profession, but it is fast moving in that direction.
LEVELS OF MANAGEMENT
In the order of hierarchy there are three levels of management namely;
(a) Top level management
(b) Middle level management and
(c) Supervisory or Operational management (also known as first line managers)
LEVELS OF MANAGEMENT
• Top Level Management consists of Chairman, Managing Director, Board of Directors, Chief Executive Officer, Chief Operating Officer, President, Vice-President, General Manager etc.
• They formulate the overall organisational goals and strategies.
• They coordinate the activities of different departments.
• They maintain contact with outside world.
• They are responsible for the success and failure of the organisation.
• They are responsible for all the business activities and its impact on society.
• Middle Level Management consists of Divisional Head like, Factory Manager, Plant Superintendent, Marketing Manager etc.
• They serve as a link between the top level and lower level management.
> They are responsible for implementing and controlling plans and strategies developed by top management.
> Ensure that their department has the necessary staff.
> Assign duties and responsibilities to their personnel.
> Motivate the people in their department to achieve desired objectives.
> Co-operate with other departments for smooth functioning of the organisation.
• Lower Level Management consists of Supervisors, Foremen, Inspectors etc.
> They directly oversee the efforts of the workforce.
> They serve a link between the workers and middle level managers.
> They ensure availability of resources and good quality of output.
> They provide guidance and training to workers.
> They ensure to provide good working conditions.
COORDINATION
Coordinating function is the orderly arrangement of individual and group efforts to provide unity of action in the pursuit of a common goal.
The various features of coordination are stated below:
(a) Coordination integrates group efforts: Coordination provides direction to the group efforts and integrates them into a purposeful activity.
(b) Coordination ensures unity of action: Coordination ensures unity of action as it acts as a binding force between and among departments.
(c) Coordination is a continuous on-going process: Coordination is a continuous on-going process as it is required till an organisation exists.
(d) Coordination is all pervasive: Coordination is all pervasive as is required at all levels of management since all the activities within the organisation are inter related and inter dependent.
(e) Coordination is the responsibility of all managers: Coordination is the responsibility of all managers however the scope of their operations varies.
IMPORTANCE OF COORDINATION
(a) Growth in the size: With the growth in the size of an organisation there is a proportionate increase in the number of its employees.
(b) Functional differentiation: As a result of functional differentiation there is need to reconcile the goals persued by each of such department with the goals of the organisation as a whole.
(c) Specialisation: More number of specialists are deployed in the present-day organisations therefore in order to integrate the different approaches, interests or opinion of the specialists and resolve conflicts between them coordination is essential.
COORDINATION IS THE ESSENCE OF MANAGEMENT
Coordination is considered to be the essence of management because of the following reasons: • Although, sometimes coordination is considered a separate function of management, but it is essence of management.
• It is the force that binds all the other functions of management.
• It is the common thread that runs through all organisational activities.
• It prevails through all the functions of management starting from the planning stage itself.
• It facilitates the achievement of desired objectives with minimum of conflict by providing
the necessary amount, quality, timing and sequence of efforts.
COORDINATION PERMEATS THROUGH ALL THE FUNCTIONS AND LEVELS OF THE MANAGEMENT
(a) Coordination through Planning: Planning facilitates coordination by integrating the main plans with the objectives of the organisation.
(b) Coordination through Organising: The managerial function of organising establishes coordination between authority delegated and responsibility entrusted to each person. In the situations of any imbalance between the two it will be difficult to impose accountability on a subordinate.
(c) Coordination through Staffing: The very definition of staffing says putting the right person on the right job. This means that the work should be assigned to a person in accordance with his mental and physical capabilities in order to maximise his/her potential.
(d) Coordination through Directing: Since the process of directing involves giving instructing, guiding and inspiring to the subordinates. It is important that is a harmony between work & subordinates. Also, there needs to be coordination between the instructions given and work expected, between the needs of an employee and incentives offered to him/ her and so on.
(e) Coordination through Controlling: Through the process of controlling the managers ensure that there is coordination between actual performance and standard performance so as to achieve organisational goals.
COORDINATION AT DIFFERENT LEVELS OF MANAGEMENT
(a) Top level management: The success of an organisation greatly depends upon the competence of the top level management to coordinate its activities both externally with its business environment and internally by ensuring that an environment conducive to efficient and effective working is created.
(b) Middle level management: The prime responsibility of middle level management is to ensure coordination within and among departments.
(c) Lower level management: Since the lower level managers consists of operational managers they need to coordinate the day to day working of the workforce. They seek to maintain coordination between inputs and outputs.
MANAGEMENT IN 21st CENTURY
Over the years, management in practice has been redefined in a big way to include many new dimensions be it advancement in technology, environment sustainability, globalisation and liberalisation and so on.
