BUSINESS STUDIES XII

CHAPTER 1 Nature & Significance of Management

Q1. Define management and explain characteristics of Management?
Ans. Management is the process of working with and through others for achieving organisational
objectives effectively and efficiently. Characteristics of Management are:-
(i) Management is a goal-oriented process: Different organisations have different goals.
Management unites the efforts of different individuals in the organisation towards achieving
these goals.
(ii) Management is all pervasive: It means that management is required in all organisations.
That is activities involved in managing an enterprise are common to all organisations whether
economic, social or political.
(iii) Management is multidimensional: Management is a complex activity that has three
main dimensions. These are:
(a) Management of work: Management process solution of various work related problems, taking
decisions, making plans, budgets, assigning authority & responsibility to employees etc.
(b) Management of people: Human resources or people are an organisation's greatest asset.
The task of management is to make people work towards achieving the organisation’s goals, by
making their strengths effective and their weaknesses irrelevant.
(c) Management of operations: No matter what the organisation, it has some basic product or
service to provide in order to survive. This requires a production process in which inputs are
converted into output. This is interlinked with both the management of work and the management
of people.
(iv) Management is a continuous process: The process of management is a series of continuous,
but separate functions (planning, organising, directing, staffing and controlling). These functions are
simultaneously performed by all managers all the time.
(v) Management is a group activity: An organisation is a collection of different/diverse
individuals with different needs. Every member of the group has a different purpose for joining
the organisation but as members of the organisation they work towards fulfilling the common
organisational goal. This requires team work and coordination of individual effort in a common
direction.
(vi) Management is a dynamic function: Management is a dynamic function and has to adapt
itself to the changing environment. An organisation interacts with its external environment which
consists of various social, economic and political factors. In order to be successful, an
organisation must change itself and its goals according to the needs of the environment.
(vii) Management is an intangible force: Management is an intangible force that cannot be seen
but its presence can be felt in the way the organisation functions. The effect of management is
noticeable in an organisation where targets are met according to plans, employees are happy and
satisfied, and there is orderliness instead of chaos.Q2. Explain Objectives of Management.
Ans. (i) Organizational Objectives: The main objective of any organization should be to utilise
human and material resources to fulfill the economic objectives of a business. These are survival,
profit and growth.
Survival: In order to survive, an organization must earn enough revenues to cover costs.
Profit: Profit is essential for covering costs and risks of the business.
Growth: Growth of a business can be measured in terms of sales increase, increase in number of
employees, products etc.
(ii) Social objectives: As a part of society, every organization whether it is business or non-
business, has a social obligation to fulfil like using environmental friendly methods of
production, giving employment opportunities to disadvantaged sections etc.
(iii) Personal objectives: Personal Objectives refer to the objectives which are related to
the individual needs of the employees of an organization like competitive salaries, facilities
etc , recognition etc

Q3. Explain importance of management?

Ans. (i) Management helps in achieving group goals: The task of a manager is to give a common
direction to the individual effort in achieving the overall goal of the organization.
(ii) Management increases efficiency: The aim of a manager is to reduce costs and increase
productivity through better planning, organizing, directing, staffing and controlling the activities
of the organization. Thus it increases efficiency.
(iii) Management creates a dynamic organization: It is generally seen that individuals in an
organization resist change. So management helps people adapt/adjust to these changes so that
the organization is able to face the competitors easily.
(iv) Management helps in achieving personal objectives: A manager motivates and leads his
team in such a manner that individual members are able to achieve personal goals (like
competitive salaries, facilities, promotions etc) while contributing to the overall organizational
objective.
(v) Management helps in the development of society: Management enables the organization to
provide good quality products and services, creating employment, adopting new technology, thus
helping in the development of society.

Q4. Explain Management as an art. (V. IMPT)

Ans. Art is the skill ful and personal application of existing knowledge to achieve desired results. The
basic features of an art are
(i) Existence of theoretical knowledge: Art requires some theoretical knowledge. In management
also a lot of literature is available in various areas marketing, finance and human resources etc .
(ii) Personalized application: The use of this basic knowledge varies from individual to
individual. In management a manger studies situations and makes his own theories for use in such
situations.
(iii) Based on practice and creativity: Art involves the creative practice of existing theoretical
knowledge. A good manager works through a combination of practice, creativity, initiative and
innovation. A manager achieves perfection after long practice.
Thus we can say that management is an art as it fulfills all the requirement of Art.

Q5. Is management an exact science? Give reasons (V. IMPT)

Ans. Science is a systematized body of knowledge that explains certain general truths or the operation
of general laws. Features of science are:-
(i) Systematic body of knowledge - Like science, management is a systematic body of
knowledge with its own theories and principles that have developed over a period of time. So, this
feature of science is present in management.
(ii) Principles based on experimentation - Like science, management principles are derived
through observation and repeated experimentation. So, this feature of science is present in
management. However since management deals with human beings the outcome of these
experiments are not capable of being accurately predicted.
(iii) Universal validity: Principles of management like principles of pure science provide
managers with certain standardized techniques that can be used in different situations. Since they
have to be modified according to a given situation, their application and use is not universal. So,
this feature of science is not fully present in management.
Thus we can say that management is not exact science but it is soft science.

Q6. Is management a full fledged profession? Give reasons (V. IMPT)

Ans. Features of profession are:-
(i) Well-defined body of knowledge: All professions are based on a well-defined body of knowledge
that can be acquired through instruction. Management too is based on a systematic body of
knowledge comprising well-defined principles. This feature of profession is present in management.
(ii) Restricted entry: The entry to the above stated profession is restricted through a
prescribed qualification. But there is no restriction on anyone being appointed as a manager in
any business enterprise. So, presently this feature of profession is not present in management
(iii) Professional association: Legal and medical professions are affiliated to a professional
association like bar council and medical council which regulates entry, grants certificate of
practice and formulates and enforces a cod of conduct. There are several associations of
practising managers in India, like the AIMA that has laid down a code of conduct to regulate the
activities of their members. There is, however, no compulsion for managers to be members of
such an association. So, presently this feature of profession is not present in management
(iv) Ethical code of conduct: Legal and medical professions are bound by a code of conduct which
guides the behaviour of its members. AIMA has devised a code of conduct for Indian managers
but there is no statutory backing for this code. So, presently this feature of profession is not
present in management.
(v) Service motive: The motive of legal and medical profession is to serve their client’s interests by
rendering dedicated and committed service. The basic purpose of management to help the
organization achieve its goals by providing good quality products at reasonable prices, thereby
serving the society is being increasingly recognized. So, presently this feature of profession is not
fully present in management. The above discussion shows that management does not satisfy all the
criteria of a profession.
Thus Management is not a full-fledged profession.

Q 7. Explain three levels in the hierarchy of an organization with their functions.

Ans. (i)Top Management (ii)Middle Management
(iii)Supervisory or Operational or lower Management
(i) Top Management: They consists of the senior-most executives of the organisation by
whatever name they are called. They are usually referred to as the CHAIRMAN, THE CHIEF
EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, PRESIDENTAND VICE-PRESIDENT,
BOARD OF
DIRECTORS, MANAGING DIRECTORS, GENERAL MANAGER etc. These top level managers are
responsible for the welfare and survival of the organisation.
Main functions are (V. IMPT.)
(a) Determining objectives
(b) Framing policies
(c) Organizing activities to be performed.
(d) They assemble required resources
(e) They control and monitor planned performance.

(ii) Middle Management: is the link between top and lower level managers. They are subordinate
to top managers and superior to the first line managers. They are usually known as DIVISION
HEADS, OPERATIONS MANAGER OR PLANT
SUPERINTENDENT, FUNCTIONAL MANAGERS, PURCHASER MANAGER, SALE MANAGER, FINANCE
MANAGER etc.
Functions:
(a) They interpret ate the policies framed by top management.
(b) They find out suitable operative and supervisory persons and assign them duties
and responsibilities for execution of plans. .
(c) They make detailed instructions regarding operations and issues them to the assistants and
operatives so that they can guide their efforts accordingly. They Motivate personnel for
higher productivity and reward efficient employees. They cooperate with other departments.
so as to maintain smooth functioning in the organization .
(d) They collect reports, statistical information and other records about the work done in
various departments and they forwards these reports to top management.
(e) They recommend new or revised policies, to top management, for better performance.

(iii) Supervisory or Operational Management: FOREMEN, SUPERVISORS, SUPERINTENDENTS,

SECTION OFFICERS & SUB DEPARTMENT EXECUTIVES, FIRST LINE MANAGERS etc comprise
the
lower level in the hierarchy of the organisation. Supervisors directly oversee the efforts of the
workforce.
Functions:-
(a) They represent workers grievances before the management.
(b) They ensure adequate lighting ventilation. Orderliness in working area and provides other
amenities to workers.
(c) They ensure safety of workers arid avoid accidents
(d) They help management in selecting training placement and promotion of workers.
(e) They welcome suggestions from workers for better production techniques.
(f) They prevent wastage of materials by negligent workman.
(g) They look after the safety of machines and equipment's.
(h) They increase morale and team spirit in workers.

Q8. Define coordination and explain importance of coordination (V. IMPT)

Ans. The process by which a manager harmonize the activities of different departments is known as
coordination. Coordination is the force that binds all the other functions of management. It is the
common thread that runs through all activities such as purchase, production, sales, and finance to
ensure continuity in the working of the organisation
Importance:-
(a) Size of organization:- As organisation grows the number of people employed by the
organisation also grows. Every individual in a firm is unique and has his own habits of doing work,
has his own background, approaches to situations etc. The behaviour is not always predictable. In
large organizations large number of employees creates difficulty in integrating their activities.
Therefore coordination is required for integrating their activities.
(b) Functional differentiation:- There are different functions in an organization , which are
divided into different departments like sales, production, finance, marketing etc. Each function
may try to work without taking care of other functions and this may create problem in achieving
overall group goals. So coordination is essential in the organization.
(c) Specialization:- Because of complexities of modern technology and different tasks to be
performed, organization has to employ number of specialists . But specialists think that they only
are qualified to evaluate, judge and decide according to their professional criteria. They have the
view that others are not competent and qualified for doing any particular work and so they do not
take advice or suggestions from others. So conflicts may arise if specialists are allowed to work
without coordination. SO coordination is required to integrate the efforts of various specialists.

Q9 Explain features/characteristics of
coordination. Ans. Main features of coordination are :
(i) Coordination integrates group efforts: Coordination integrates unrelated or diverse
interests into purposeful work activity. It gives a common focus to group effort to ensure that
performance is as it was planned and scheduled.
(ii) Coordination ensures unity of action: The purpose of coordination is to achieve unity of
action in the realisation of a common purpose. It acts as the binding force between departments
and ensures that all action is aimed at achieving the goals of the organisation.
(iii) Coordination is an 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. The finance, production and sales departmental
efforts have to be coordinated by a manager for achieving organisational objectives. For example,
sales manager has to inform production manager that how much production should be done.
Production manager has to inform finance manager to arrange for required funds for production
and so on. In the absence of coordination there is chaos instead of harmony of activities.
(iv) Coordination is the responsibility of all managers: Coordination is the function of every
manager in the organisation. Top level managers need to coordinate with their subordinates to
ensure that the overall policies for the organisation are duly carried out. Middle level management
coordinates with both the top level and first line managers. Operational level management
coordinates the activities of its workers to ensure that work proceeds according to plans.
(v) Coordination is a deliberate function: A manager has to coordinate the efforts of different
people in a deliberate manner. Even where members of a department willingly cooperate and
work, coordination gives a direction to that willing spirit. Cooperation in the absence of
coordination may lead to wasted effort.
(vi) Coordination is a continuous process: Coordination is not a one-time function but a continuous
process. It begins at the planning stage and continues till controlling. Coordination, therefore, is not a
separate function of management, but its very essence. If an organization wants effective and efficient
use of its resources then coordination is required. In all management functions coordination acts like
a thread in a garland