This page contains the NCERT Business Studies class 12 chapter 1 Nature and Significance of Management from Part 1 Principles and Functions of Management. You can find the solutions for the chapter 1 of NCERT class 12 Business Studies, for the Short Answer Questions, Long Answer Questions and Projects/Assignments Questions in this page. So is the case if you are looking for NCERT class 12 Business Studies related topic Nature and Significance of Management question and answers.
Very Short Answer Type:
1. What is meant by management?
Management is the process of planning, organising, staffing, directing, and controlling the enterprise resources efficiently and effectively for achieving the goals of the organisation.
2. Name any two important characteristics of management.
The two important characteristics of management are that it is goal-oriented process and it is all pervasive.
3. Identify and state the force that binds all the other functions of management.
The force that binds all the other functions of management is Coordination. It ensures unity of action among interdependent activities and departments within an organisation.
4. List any two indicators of growth of an organisation.
Two indicators of growth of an organisation are
an increase in sales revenue and
expansion in market share.
5. Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure a cost saving of ₹ 12,00,000 per year. Name the objectives of management achieved by Indian Railways in the above case.
The objectives achieved by Indian Railways in the mentioned scenario are
Organisational Objectives (by ensuring cost savings and adopting innovative technologies) and
Social Objectives (by launching a greener and more environment-friendly train).
Short Answer Type:
1. Ritu is the manager of the northern division of a large corporate house. At what level does she work in the organisation? What are her basic functions?
Ritu works at the Middle Management level in the organisation. As a middle manager, her main tasks include:
Interpreting the policies framed by top management.
Ensuring that her department has the necessary personnel.
Assigning necessary duties and responsibilities to them.
Motivating them to achieve desired objectives.
Cooperating with other departments for the smooth functioning of the organisation.
2. State the basic features of management as a profession.
Management as a profession has certain distinct features, but the document does not provide a direct list of these features. Based on my knowledge:
Well-defined Body of Knowledge: Management has its own theory and principles that have evolved over time.
Professional Association: There are several associations, like the AIMA (All India Management Association), which regulate the activities of their members.
Ethical Code of Conduct: Professionals are expected to follow a certain code of conduct which is enforced by the professional association.
Formal Education & Training: There are numerous institutes and universities offering degree and diploma courses in management.
However, it’s worth noting that while management has many characteristics of a profession, it may not fulfill all the criteria to be termed as a full-fledged profession.
3. Why is management considered to be a multi-dimensional concept?
Management is considered a multi-dimensional concept because it involves managing work, people, and operations. Specifically:
Management of Work: Every organization has some basic product or service to provide, which requires a production process.
Management of People: Human resources are an organization’s greatest asset. Management deals with employees as individuals with diverse needs and behavior and also as a group to achieve the organization’s goals.
Management of Operations: This pertains to the production process, which entails the flow of input material and the technology for transforming this input into the desired output for consumption.
These dimensions highlight the diverse nature of tasks and responsibilities that come under the umbrella of management, making it a multi-dimensional concept.
4. Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwave ovens, refrigerators, and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production department blames marketing for not meeting sales targets and marketing blames the production department for producing goods, which are not of good quality meeting customers’ expectations. The finance department blames both production and marketing for declining return on investment and bad marketing. State the quality of management that the company is lacking? What quality of management do you think the company is lacking? Explain briefly. What steps should the company management take to bring the company back on track?
The quality of management that Company X is lacking is **Coordination**. Coordination is essential to ensure that different departments and units of an organization work harmoniously towards the achievement of the company’s goals. The absence of coordination is evident from the blame game being played by the different departments. To bring the company back on track, the management should:
Organize regular inter-departmental meetings to facilitate communication and understanding.
Set clear and achievable targets for each department.
Implement a feedback mechanism where departments can constructively communicate their challenges and requirements.
Provide training sessions to improve the quality of products and align the objectives of all departments.
5. Coordination is the essence of management. Do you agree? Give reasons.
Yes, I agree that coordination is the essence of management for the following reasons:
Unity of Action: Coordination ensures that diverse resources and efforts are aligned towards the achievement of common objectives.
Harmonious Functioning: It helps in achieving harmony among interdependent activities and departments, preventing potential conflicts and overlaps.
Resource Optimization: Coordination ensures that resources are used efficiently and effectively, avoiding wastage.
Achievement of Organizational Goals: Without coordination, different departments might work at cross-purposes, hindering the achievement of organizational goals.
All these points highlight the importance of coordination in ensuring the smooth and effective functioning of an organization.
6. Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume jewellery. The firm secured an urgent order for 1,000 bracelets that were to be delivered within 4 days. They were assigned the responsibility of producing 500 bracelets each at a cost of ₹ 100 per bracelet. Ashita was able to produce the required number within the stipulated time at the cost of ₹ 55,000 whereas, Lakshita was able to produce only 450 units at a cost of ₹ 90 per unit. State whether Ashita and Lakshita are efficient and effective. Give reasons to justify your answer.
Ashita is both efficient and effective. She not only produced the required 500 bracelets within the given time but also did so at a cost less than the stipulated ₹ 100 per bracelet (₹ 55,000 for 500 bracelets means ₹ 110 per bracelet).
On the other hand, Lakshita is efficient but not effective. She produced the bracelets at a cost less than the stipulated amount (₹ 90 per unit) indicating efficiency, but she failed to produce the required 500 bracelets within the stipulated time, producing only 450, which indicates a lack of effectiveness.
Long Answer Type:
1. Management is considered to be both an art and science. Explain.
Management as a Science:
Organized Body of Knowledge: Management is based on a systematic and organized body of knowledge comprising well-defined concepts, principles, and theories. This knowledge is based on logical reasoning and critical analysis.
Universal Validity: The principles of management are of universal nature. They can be applied to different types of organizations, irrespective of their size or nature of activities.
Cause and Effect Relationship: Management studies the relationship between cause and effect. It identifies the reasons for a particular occurrence and predicts the possible outcomes of a certain decision or action.
Test of Experimentation: The principles of management can be tested in real-world scenarios. Their validity can be checked through practical application.
Management as an Art:
Personalized Application: Art requires a personalized touch. Similarly, in management, the application of principles varies with individuals and situations. No two managers apply the same principle in an identical manner.
Based on Practice and Creativity: Just as art requires continuous practice, management also requires constant application and creativity. Managers learn through experience and apply their unique skills to different situations.
Existence of Theoretical Knowledge: While art requires a base of theoretical knowledge, its major emphasis is on personal skills and creativity. Similarly, managers use their theoretical knowledge and apply it creatively to achieve desired results.
Result-Oriented Approach: Just as an artist’s work is evaluated based on the final masterpiece, management is also judged by its final outcomes. The effectiveness of management is determined by the results achieved.
In conclusion, management is both a science and an art. While it is a science because it has an organized body of knowledge, it is an art because it requires personal skills and creativity for its application.
2. Do you think management has the characteristics of a fullfledged profession?
Management as a Profession:
Management exhibits certain characteristics of a profession as specified below.
Well-defined Body of Knowledge: Every profession is based on a well-defined body of knowledge that can be acquired through instruction. Management also has its own theory and principles that are systematically formulated.
Professional Association Professions are usually associated with professional associations that regulate entry, grant a certificate of practice, and ensure that the conduct of members is in line with the prescribed ethical code. For management, there are several associations like the All India Management Association (AIMA) that play a similar role.
Ethical Code of Conduct Every profession is bound by a code of conduct which guides the behavior of its members. Managers also adhere to a certain code of conduct set by the organization and society at large.
Formal Education and Training Professions require formal education and training. There are numerous institutes and universities worldwide that offer formal courses in management, ensuring a systematic study and specialization.
Restriction to Entry In any profession, entry is restricted through examinations and other forms of evaluation. In management, while there isn’t a strict restriction, certain positions require specific qualifications and experience.
Service Motive The main motive of a profession is to serve their clients in the best possible manner. Managers also aim to serve the organization and its stakeholders, ensuring growth and sustainability.
However, it’s worth noting that while management does exhibit several characteristics of a profession, it does not fulfill all the criteria of a full-fledged profession. For instance, there isn’t a universally accepted and standardized process for certification or licensing of managers, and the ethical code is not as strictly enforced as in professions like law or medicine.
3. “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.
Effectiveness and Efficiency in Management:
Effectiveness: It refers to the achievement of goals. An organization is said to be effective if it achieves the goals it has set for itself. For instance, if a company’s goal is to increase its market share by 10% within a year and it achieves that, it is considered effective. Effectiveness ensures that the organization is moving in the right direction and is fulfilling its purpose.
Efficiency: While effectiveness is about achieving goals, efficiency is about achieving these goals with minimum cost and resources. It is the ability of the organization to produce the desired result with the least amount of effort, expense, or waste. For example, if a company produces 100 units of a product using less raw material or time than its competitors, it is considered efficient.
For a successful enterprise, it is crucial to strike a balance between effectiveness and efficiency. While it is essential to achieve the set goals (effectiveness), it is equally important to achieve them in the best possible manner, utilizing resources judiciously (efficiency). An organization that is only effective but not efficient may achieve its goals but may also exhaust its resources in the process. On the other hand, an organization that is efficient but not effective may use its resources optimally but may not achieve its goals. Thus, for holistic success, both effectiveness and efficiency are pivotal.
4. Management is a series of continuous interrelated functions. Comment.
Functions of Management:
Management is not just a single activity but a series of continuous, composite, and interrelated functions. These functions are integral to the management process and are performed by managers at all levels to ensure the smooth functioning of an organization. The primary functions of management include:
Planning: This is the foundational step in the management process. Planning involves setting objectives and determining the best course of action to achieve those objectives. It provides direction to the organization and lays the groundwork for the subsequent functions.
Organising: Once the plan is in place, organizing involves arranging resources and tasks to implement the plan. It entails defining roles, assigning tasks, and establishing relationships to ensure smooth execution.
Staffing: This function involves recruiting, training, and retaining the employees required to achieve the organization’s objectives. It ensures that the organization has the right number of employees with the necessary skills.
Directing: Directing involves leading and motivating the team to execute the plan. It ensures that employees work in a coordinated and focused manner.
Controlling: This function ensures that the organization is moving in the right direction to achieve its goals. It involves monitoring and evaluating the ongoing activities to ensure that the organization is on track and making any necessary adjustments.
All these functions are interrelated and overlap with each other. For instance, the planning function lays the foundation for organizing and staffing. Similarly, directing is closely linked with controlling as managers need to ensure that tasks are being executed as planned. The continuous nature of these functions means that they are performed simultaneously and in a cyclical manner, ensuring that the organization remains adaptive and goal-oriented.
5. A company wants to modify its existing product in the market due to decreasing sales. You can imagine any product about which you are familiar. What decisions/steps should each level of management take to give effect to this decision?
Managerial Levels and Their Decisions/Steps:
1. Top Management:
Strategic Decision Making: The top management, consisting of the chairman, CEO, president, and vice-president, should focus on determining the broader organizational goals and strategies for the product modification.
Analysis: They should analyze the business environment and its implications for the survival of the firm, especially in the context of the product’s declining sales.
Policy Formulation: Formulate overall organizational policies that guide the modification and relaunch of the product.
2. Middle Management:
Operational Planning: Middle management, such as division heads or production managers, is responsible for implementing and controlling the plans developed by top management.
Coordination: Ensure that their department has the necessary personnel and assign necessary duties and responsibilities to them.
Inter-departmental Cooperation: Cooperate with other departments for the smooth functioning of the organization, ensuring that the product modification is in line with the set objectives.
3. Supervisory or Operational Management:
Direct Oversight: Supervisors directly oversee the efforts of the workforce, ensuring that the modifications are implemented at the ground level.
Quality Maintenance: Through their efforts, ensure that the quality of output is maintained and wastage of materials is minimized.
Safety Standards: Ensure that safety standards are maintained during the modification process.
By ensuring that each level of management plays its role effectively, the company can successfully modify its product and potentially revive its sales in the market.
6. A firm plans in advance and has a sound organisation structure with efficient supervisory staff and control system but on several occasion it finds that plans are not being adhered to. It leads to confusion and duplication of work. Advise remedy.
Coordination – The Essence of Management:
The firm’s issue primarily stems from a lack of coordination among its various departments and levels. Coordination is the essence of management and ensures that all efforts are directed towards the achievement of organizational goals. It is the process of achieving unity of action among interdependent activities and departments of an organization.
Continuous Process: Management should understand that it is a continuous process consisting of a series of interrelated functions. Regular monitoring and feedback mechanisms should be in place to ensure that plans are being followed.
Management of People: The firm should focus on managing its human resources effectively. This involves dealing with employees as individuals with diverse needs and behaviors, as well as managing them as a group. Ensuring that their strengths are utilized effectively and their weaknesses are addressed can lead to better adherence to plans.
Management of Operations: The firm should ensure that there’s a clear understanding of the production process among all employees. This involves understanding the flow of input material and the technology used. A clear understanding of operations can reduce confusion and ensure that plans are followed accurately.
Regular Training and Workshops: Organize regular training sessions and workshops for employees to reinforce the importance of adhering to plans and the consequences of deviations.
Open Communication Channels: Encourage open communication where employees can voice their concerns or challenges they face in adhering to plans. This can help in identifying bottlenecks and addressing them promptly.
By implementing these remedies, the firm can ensure better adherence to its plans, reduce confusion, and eliminate duplication of work.