BST Class XII Ch.1

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UNIT 1

NATURE AND SIGNIFICANCE OF MANAGEMENT


Synopsis
Management is an art of getting things done through others.
Management can be defined as, the process of getting things done effectively and efficiently with the
aim of achieving organizational goals.
Process: it means the primary functions or activities that management performs to get things done. These
functions are planning, organising, staffing, directing and controlling. None of the functions can be
performed in isolation.
Effectiveness: Completing a given work in the required time with a focus on the end results.
Efficiency: Completing a task with the minimum possible cost and resources.
Efficiency and Effectiveness
These two terms are different, but they are interrelated. For management, it is important to be both
effective and efficient. Effectiveness and efficiency are two sides of the same coin and they need to be
balanced.
Example: A business producing targeted 1000 units at a higher cost is effective but not efficient.
Therefore, if the business wants to be effective and efficient then it has to produce 1000 units within cost.
Characteristics/Features of Management
1. Goal oriented Process: Every organisation has a set of goals which are the basic reason for its
existence. Management unites the efforts of different individuals in the organisation towards
achieving these goals.
2. All pervasive: The activities involved in managing an enterprise are common to all organisations
whether economic, social or political irrespective of their geographical location, size, and nature.
3. Multidimensional: Management is a complex activity that has three main dimensions, management
of Work, People and operations.
(a) Management of work: All organizations exist for the performance of some work. Management
translates this work in terms of goals to be achieved and assigns the means to achieve it.
(b) Management of people: Human resources or people are an organization’s greatest asset.
Managing people involves, dealing with employees as individuals with diverse needs and behavior
and also dealing with individuals as a group of people.
(c) Management of operations: Operations involves a process which involves in the flow of input
material and the technology for transforming this input into the desired output for consumption. This
is interlinked with both the management of work and the management of people.
4. Continuous: The process of management is a series of continuous, composite, but separate
functions. These functions of management are always performed by all managers simultaneously.
5. Group Activity: Management is a group activity which ensures teamwork and coordination of
individual effort in a common direction. Management coordinates the activities of different people
with different needs as a team to attain the desired objectives and enable them to grow and
develop.
6. Dynamic function: Management is a dynamic function since it must adapt to the changing
environment. To be successful, an organization must change itself and its goals according to the
needs of the environment.
7. Intangible Force: Management is an intangible force that cannot be seen but its presence can be
felt in the way the organization functions and in the form of results.
Objectives of management
(A) Organizational (economic) objectives: Organisational or economic activity involves optimal
utilisation of the material and human resources available. The following are the objectives involved:
Survival: The overall revenue must be adequate to cover the costs.
Profit: Profits must be earned such that the risks and costs are covered.
Growth: To continue in the long run, an organisation should focus on growth in terms of sales,
production, number of employees, etc.
(B) Social Objectives: They include social obligations such as adoption of environment-friendly
production methods, contribution to social causes such as imparting education to children and
providing employment to the unemployed, etc.
(C) Personnel Objectives: Diverse personal objectives of people working in the organization have to be
reconciled with organizational objectives for harmony in the organisation.
Importance of management
(1) Achieving Group Goals: Management helps in achieving group goals. Manager gives common
direction to the individual effort in achieving the overall goal of the organisation.
(2) Increases Efficiency: Management increases efficiency by using resources in the best possible
manner to reduce cost and increase productivity.
(3) Creates Dynamic Organisation: Management helps in creating a Dynamic organisation which
could adopt changing situations easily.
(4) Achieving Personal Objectives: Management helps in achieving objectives of individuals working
in the organisation by motivating and leading them.
(5) Development of Society: Management helps in the development of society by producing good
quality products, creating employment opportunities and adopting new technology.
Nature of Management
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 are as follows:
a) Existence of theoretical knowledge: In every art systematic & organised study material should be
available compulsorily to acquire theoretical knowledge.
• Management has its own literature for theoretical knowledge and learning, such as Henry
Fayol’s principles of management and Taylor’s scientific management theory.
b) Personalised application: The use of basic knowledge differs from person to person and thus, art is
a very Personalised concept.
• Managers mold the theories and principles of management as per situations and the need of
the hour.
c) Based on practice and creativity: Art involves the creative practice of existing theoretical
knowledge.
• Managers use creativity and imagination to apply the theories and principles of management
to different situations.
All the features of art are present in management so it can be called an art.
Management as a science
Science is a systematised 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 systematised body of knowledge based on
principles and experiments.
• Management has its own body of theories, principles and vocabulary that were developed
over the years.
(2) Principles based on experiments & observation: Scientific principles are developed through
experiments and observations.
• The principles of management have developed over the years based on repeated
observations and experiments. However, since management deals with human behaviour, no
exact cause-and-effect relationship can be established.
(3) Universal Validity: Scientific principles have universal validity and application.
• Theories and principles of management are not valid universally and need to be modified.
They can be used to impart basic knowledge and managerial skills to budding managers.
As the principles of management are not as exact as the principles of pure science, it can be called an
Inexact Science.
Management as a profession:
Profession means an occupation for which specialised knowledge and skills are required. The main
features of profession are as follows:
(1) Well defined body of knowledge: All the professions are based on a well-defined body of
knowledge.
• Knowledge of management can be attained by studying in various management colleges and
institutes and by reading management books.
(2) Restricted entry: The entry in every profession is restricted through examination or through some
minimum educational qualification.
• There is no restriction on anyone being designated or appointed as manager in any business
enterprise. No specific qualification or degree is required to be a manager.
(3) Professional Associations: All professions are affiliated to a professional association which
regulates entry and frame code of conduct relating to the profession.
• Managers are affiliated to professional associations, such as the All India Management
Association (AIMA), which regulate the functions of their members. However, such association
is not mandatory.
(4) Ethical code of conduct: All professions are bound by a code of conduct which guides the
behaviour of its members.
• Managers have a specific code of conduct. However, it is not obligatory for them to abide by
the code.
(5) Service Motive: The main aim of a profession is to serve its clients.
• The basic purpose of management is to help the organisation achieve its stated goal by
serving society with good quality products at reasonable prices, but there is no explicit
service motive involved.
Management does not fulfill all the features of a profession and thus it is not a full-fledged profession.

Levels of Management:
Top Level
Ex: Chairperson, Chief Executive Officer, Chief Operating Officer, President, Vice-president or
their equivalent.
• Coordinates different activities of the organisation for the accomplishment of the common goals
• Works towards the welfare and survival of the organisation
• Formulates overall organisational goals and strategies for their achievement.
• Takes responsibility for all the activities of the business
Middle Level
Ex: divisional heads, Plant Superintendent and Operations Manager, etc.
• To interpret the policies framed by the top management,
• To ensure that their department has the necessary personnel,
• To assign necessary duties and responsibilities to the employees.
• To motivate them to achieve desired objectives,
• To co-operate with other departments for smooth functioning of the organisation.
• Responsible for all the activities of first line managers.
Lower Level / Supervisory Level
Ex: Foremen and supervisors etc.
• To acts as a link between the middle management and the workforce and pass on instructions of
the middle management to the workers.
• To supervise the tasks of the workers so that quality of output is maintained, wastage of materials
is minimised and safety standards are maintained.
• To ensure that the tasks are carried out as per the plans and policies.
• To directly interact and oversee the efforts of the workforce.
Functions of Management:
Planning is deciding what is to be done, who is to do it and how it is to be done—that is, setting the
goals and devising the means for achieving them.
Organizing is assigning 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.
Directing is instructing, leading, guiding, influencing and motivating employees to perform the tasks
assigned to them.
Controlling is measuring and comparing the actual work done against the set standards and the
plans.
Coordination:
Meaning: It is a process through which the activities of various departments and units are
synchronised for the achievement of the organisation’s goals.

Coordination is the force which synchronizes all the functions of management and activities of
different departments.
Nature/Features/Characteristics of Coordination
It integrates group effort: Coordination unifies unrelated or diverse interests of individuals into
purposeful work activity. It gives a common focus to group efforts.
It ensures unity of action: The purpose of coordination is to secure unity of action through the
realisation of a common purpose. It acts as the binding force between departments and ensures that
all actions are aimed at achieving the goals of the organisation.
It is a continuous process: Coordination is not a one-time function but rather a continuous process.
It begins at the planning stage and continues till controlling.
It is all pervasive function: Coordination is required at all levels of management due to the
interdependent nature of activities of various departments. It integrates the efforts of different
departments and different levels.
It is the responsibility of all managers: Coordination is the function of every manager in the
organisation. Top level needs to coordinate with middle level to implement plans & policies. Middle
level management coordinates with both the top level and first line. Operational level coordinates the
activities of its workers.
It is a deliberate function: A manager has to coordinate the efforts of different people in a
conscious and deliberate manner, even where the members of a department willingly cooperate and
work.
Coordination is the essence of management:
It is the essence of management because:
A. It is needed at all management functions
• Planning - Coordination between the overall plan and departmental plan.
• Organising - Required between authority, responsibility and accountability.
• Staffing – Is required for achieving balance between job requirement and qualities of personnel
• Directing - Required between orders, instructions and suggestions.
• Controlling - Ensures actual results conform to expected results.
B. Needed at all levels of Management-
• Top level - needs coordination to integrate activities of the organisation for accomplishing the
organisational goal
• Middle level - Coordination of efforts of different sections and subsections
• Lower level - Coordination in the activities of workers to ensure that work progresses as per
plans.
Importance of Coordination
1) Growth in size: With growth in size of an organisation, the number of employees increases. These
employees differ in habits of work, background and attitude. Coordination synchronises the personal
goals of the individuals and the overall goals of the organisation.
2) Functional Differentiation: Different departments in the organisation have their own objectives,
policies and styles of working. Coordination is needed to synchronise their activities for the
achievement of the common goals.
3) Specialisation: Organisations employ several specialists who usually think, evaluate and judge
according to their professional criteria. Coordination integrates the opinions and thoughts of various
specialists and departments of an organisation to avoid diversion and conflict among them.

IMPORTANT QUESTIONS
1 Mark Questions (To be answered in one word or one sentence)
1. In order to be successful, an organization must change its goals according to the needs to the
environment. Which characteristic of management is highlighted in the statement? (Answer: It is a
dynamic function).
2. To meet the objectives of the firm the Management of Angora Limited offers employment to
Physically Challenged persons. Identify the organizational objective it is trying to achieve. (Answer :
Social Objective.
3. Management of any organization strives to attain different objectives. Enumerate any two such
objectives.
4. Give any two characteristics of management.
5. Management is multidimensional. Enumerate any two dimensions of management.
6. Managerial activities are performed in all types of organizations in all departments at all levels.
Which management characteristic is highlighted here? (Answer : It is all pervasive)
7. Mr. Ravi has retired. He is responsible for implementing the plans developed by the top
management. Which level of management was he working in? State one more function of this level
of management. (Answer: Middle level management) (Write any one function of this level).
8. List any two social objectives of management.
9. Mr. Alok is working as a Director of a manufacturing company. At which level of management was
he working? Different functions are performed at this level. State any one such function. (Answer :
Top level of management) (Write any one function of this level).
10. What is meant by management ?
3/4 Marks Questions (To be answered in about 50 to 70 words)
1. There are different Business Objectives, and Economic Objectives are one among them. Explain
these economic objectives.
2. Explain how management is an art
3. Explain why management is not considered a full-fledged profession.
4. Explain how management is science.
5. Coordination is the essence of management. Explain.
5/6 Marks Questions (To be answered in about 150 words)
1. Management is a Profession like Accounting, Medicine and Law as it also has a well-defined body
of knowledge. Yet management does not qualify to be a full-fledged profession. Why? (Hint: No
formal qualification is prescribed to enter management, no code of conduct is prescribed).
2. Success of an organization largely depends upon its management. Explain any five reasons to justify
this statement. (Hint: Give five points of Importance of management).

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