Nature and Significance of Management

This page contains the CBSE Business Studies class 12 chapter Nature and Significance of Management notes. You can find the questions/answers/solutions for the chapter 1 of CBSE class 12 Business Studies in this page.

What is management?

Management is defined as the process of

  1. Planning
  2. Organizing
  3. Staffing
  4. Directing
  5. and Controlling

the organization’s resources in an efficient as well as effective manner so as to realize the goals of the organization.

What are the characteristics of management?

The following are the characteristics of management.

  1. Continuous
  2. Dynamic function
  3. Goal oriented
  4. Group activity
  5. Intangible force
  6. Multi-dimensional
  7. Pervasive

What is the managerial level of Mona who is working as a manager of the southern division of an electric company in India?

As Mona is the manager at the divisional level, she will come under Middle management level.
What are the basic functions handled by people working at managerial levels?

The basic functions performed by people working at managerial level are

  1. Planning
  2. Organizing
  3. Staffing
  4. Directing
  5. and Controlling

Which multi-faceted activities does the management tackle?

Management tackles the following multi-faceted activities.

  1. Management of work: The management translates the work to be done into the goals of the organization. The management also assigns all the necessary means to accomplish it.
  2. Management of people: Management makes the people work towards realizing the organization’s goals. They accomplish this by making the people’s strengths more effective and their not letting their weaknesses affect the work.
  3. Management of operations: The process to convert the input into final output is achieved by interlinking both the management of work and the management of people.

Which characteristics does the management exhibit as a profession?

Management partially (not fully) exhibits the following characteristics as a profession. So we can say that management nearly (not fully) exhibits these characteristics of a profession.

  1. Well-defined body of knowledge: Management exists as a systematic body of knowledge and consists of a number of well defined principle formed according to various business scenarios. It is taught of different educational institutions and a number of books and journals are available on this topic.
  2. Professional association: A number of professional associations like AIMA lay down the code of conduct and also regulate the activities of their member. However, it is not mandatory for a manager to join in such professional associations.
  3. Service motive: Management servers the organization so as to realize the organization’s goals. The goal could be profit maximization. However in contemporary times, the efficient and effective management can serve the society by making the high quality products at affordable prices.

Do you perceive management as an art or science or both or none?

Management is both art and sciences.
It exhibits the following features of art:

  1. Existence of theoretical knowledge: There is lot of study material available for the managers to get acquainted with the theoretical knowledge in various concerns like finance, human resources, marketing and production. This knowledge is applied by the managers while performing their functions.
  2. Personalised application: Managers use the various available theories of management to carry out their day to day functions in their own style which is unique for each of them. They add their creativity, imagination, initiative, innovation and practice while applying these principles and form their own style. After prolonged practice they achieve perfection in this.
  3. Based on practice and creativity: The managers study the prevailing conditions in the organizations and applies their acquired knowledge in a creative manner to various situations. Through continuous practice they acquire their own style.

Management also exhibits the features of science:

  1. Systematised body of knowledge: Management is a systematized body of knowledge comprising the theory and principles that are specific to it. These are developed over a span of time. However it also comprises the other subjects like economics, mathematics, psychology and sociology. It it an organized activity and has its own vocabulary of terms and concepts.
  2. Principles based on experimentation: The principles of management are formed over a span of time through continuous experimentation and observation in different types of organizations. However, as human nature is not always the same the end result of these experiments can not be accurate/predicted always. Due to this fact, management is considered as inexact science. However, despite these limitations, there are certain general principle identified by the management scholars.
  3. Universal validity: As management is an inexact science, its principles are not as accurate as the principles of science. These need to be changed depending on the situation. However they provide the manager few standardized techniques that can be applied to different situations. These principles are also used for teaching the theoretical aspects while training and developing the managers.

Can we call management as a pure profession?

Management only partially qualified to be called as a true profession because it satisfies few characteristics of a profession and only partially or optionally satisfy the other characteristics, as explained in the details below.

  1. Well defined body of knowledge: The subject of management has evolved tremendously over time. It is based on a systematic body of knowledge and consists of well defined principles based on different business scenarios. It is taught in various educational institutions and also can be learned though books and journals and online references.
  2. Restricted entry: This characteristic is not truly met by management as there is no restriction on someone becoming a manager. People with any educational qualification can become a manager. However, professional knowledge and training is needed. Moreover, when a person earns a degree or diploma from a reputed instituation, he will be in great demand.
  3. Professional association: Associations like AIMA enforces the code of conduct to regulate the activities of their member. However, having a membership in these associations and follow their code of conduct is not mandatory. Thus management optionally qualifies this characteristic of profession.
  4. Ethical code of conduct: It is not mandatory fo rthe managers to take an oath of ethical practices when they take up the role as a manager.
  5. Service motive: Managers serve the organization to achieve its goal. Profit maximization was their motive in the earlier days. However, if the management team is efficient and effective it automatically serves the society by providing good quality products at affordable price and improve the standard of living.
State reasons regarding why you think that the coordination is the essence of management.

Coordination does not exist itself as a separate function. However, it is integral to the rest of the functions of management namely Planning, Organizing, Staffing, directing and controlling. It has great significance in management through the following activities.

  1. Integrates the group efforts: It unifies the group efforts into meaningful tasks and ensures that the performance is delivered as planned and scheduled.
  2. Ensures unit of action: It serves as a binding force between different departments and ensures that all the actions are united towards the realization of the goals of the organization.
  3. Continuous process: Coordination is a continuous process that starts at the planning stage and will prevail through the organizing, staffing controlling, directing and till the end of controlling.
  4. Pervasive: Coordination exists through all the levels of management. As the work performed by different department is specific to that department, coordination integrates the activities of various departments at various levels. Coordination thus avoids the overlapping and chaos between various departments and brings in harmony and integration of their activities.
  5. Responsibility of all the managers: Coordination is the responsibility of managers at all levels.
    1. Top level managers should coordinate with their subordinates to ensure that all the policies of the organization are being implemented
    2. Middle managers coordinate with the top level managers and first line managers.
    3. Operational level managers coordinate with the workers to get the tasks completed as per the planning.
  6. Deliberate function: Coordination should be done in a deliberate manner. Even in places there is lot of cooperation, coordination shows the direction to take. It is observed that when there cooperation without coordination it might result in wasted effort and when there is coordination without cooperation, it might result in dissatisfaction of employees.

The effective and efficient achievement of the goals makes an enterprise successful. Discuss.

Bot effectiveness and efficiency are interrelated to each other. So, the management should be both effective and efficient and ensure that business operations are balanced out evenly between effectiveness and efficiency.
Being less effective might at times help the managers to achieve efficiency but the targets will not be met. Thus the organization might risk losing the business to the competitors.
Other times being less efficient results in achieving the targeted output but the cost of product will increase and there by reducing the income and profits.
Thus in either case where in either efficiency is compromised or the effectiveness is compromised, the business will not be able to meet its goals. For this reason, organizations strive to achieve goals(effectiveness) with least possible resources. In other-words, as efficiently as possible. This can only happen if good balance is maintained between effectiveness and efficiency.
It is observed that high efficiency associated with high effectiveness. Giving priority to high efficiency ignoring the effectiveness is not desirable. On the other hand poor effectiveness and poor efficiency leads to poor management.

Thus we can say that for an organization to be successful, it should both highly effective and efficient.

How do you define management as a series of continuous functions that are closely related to each other.

Management is a series of continuous functions that are closely related to each other. Each of them is described below.

  1. Planning: Planning refers to the setting of goals well in advance and developing a way to realize the goals both effectively and efficiently. Planning in advance helps in predicting the risks, if any, and take measures to migtigate the risks.
  2. Organising: Organising is done after planning is done. Organising deals with
    1. Assigning duties: It examines the tasks to be done and the resources needed to implement the plan. After examining, it decides the required tasks and resources. Once this is decided it identifies who will do which task and when.
    2. Grouping the tasks: The tasks are then grouped into manageable departments or work units.
    3. Establish authority: The authorities are allocated to individuals. The organizational hierarchy is determined making it clear about who will be reporting to whom.
    4. Allocate the resources needed to execute a plan: Sutable organizational techniques are used to complete a given tasks while maintaining both efficiency and effectiveness.
  3. Staffing: Staffing is also known as human resources function. Staffing deals with the employment of right people with right qualification to the appropriate job and at the right time. This will help in the realization of the goals of the organization. It comprises of the activities like
    1. Recruitment
    2. Selection
    3. Placement
    4. and training of personnel
  4. Directing: Directing which deals with
    1. leading
    2. influencing
    3. and motivating

    the employees to get their job done. To achieve this, it is essential to create the appropriate atmosphere to make the employees more productive. The two essential components of directing

    1. Motivation: Motivation means to establish an environment where in the employees want to work with enthusiasm.
    2. Leadership: Influencing the others to do what the leader want them to do.

    It also requires effective communication and supervision of the employees. It is managers’ responsibility to provide constructive criticism and appreciate the employees to bring out the best in them.

  5. Controlling: Controlling requires
    1. Establishing the standards of performance.
    2. Measuring the current performance
    3. Compare the current performance with the established standards
    4. Take corrective measures when a deviation is noticed.

    so that the organization’s goal is realized. In the controlling phase, the management should be clear about

    1. which activities and output are critical for the success
    2. How are they measured
    3. where are they measured
    4. Who is responsible for taking corrective measures

    and how and where they can be m

All these functions are not exactly implemented in the order they are defined. In practice managers will rarely be carrying out these functions one at a time. Managers will be simultaneously dealing with two or more of these functions at any point of time. So, we can say that these functions are interrelated to each other.

Is cooperating a function of management?

No. Cooperating is not a function of managment
Is management an art or a science?

Management is both science and art.
Is policy making an objective of management.

No. Policy making is not an objective of management.
Managers at which level deal with the policy formulation?

Managers at the top level deal with the policy formulation.
What is the essence of management?

Coordination is considered as the essence of management.