BUSINESS STUDIES NOTES CBSE

1. Nature and Significance of Management

SummaryIn general terms, ‘management’ is concerned with seeing that the job gets done. A manager is one who does his work by getting other people to do theirs. In today’s world of growing size and complexities there is a need for effective management not only in business enterprises but also in non-profit enterprises like clubs, hospitals, schools, families, etc. Management may be good or bad, but it is universal and of great importance.

Meaning of management: - Management is the process of adopting a systematic and coordinated approach to achieve individual and organizational goals through efficient use of resources.

Features of Management

•Management is a goal-oriented activity, as all human efforts are directed towards attaining the predetermined goals of an organisation.
•It integrates human and material resources in a productive manner.
•It is a continuous ongoing activity, as it involves constant identification, analysis and solution of management problems.
•It is pervasive in nature, as it exists in all types of and at all levels of organisation.
•It is a group activity, as it involves the coordinated efforts of all the people in an organisation to achieve the objectives of that enterprise.
•It is intangible, as it cannot be seen but its presence or absence is reflected in the day-to-day working and success or failure of an organisation.
•It is considered to bo dynamic in nature as managers need to constantly review and revise techniques,methods and approaches due to the rapidly changing business environment.
•It is considered to be a composite process consisting of several interrelated and interdependent functions to be performed in close coordination.

Objectives of Management

•Management aims at achieving maximum results with minimum effort by following a focused approach.
•It helps to increase the efficiency of factors of production by eliminating duplication of human efforts and wastage of material resources.
•It ensures maximum prosperity for employers and employees by integrating the goals of individuals with the goals of the organisation.
•Management brings about human betterment and social justice, as efficient use of resources leads to the growth of the organisation, its employees, and society at large.

Types of Objectives

•The objectives of management can be categorized as individual, social and organizational objectives.
•Individual objectives are lucrative salary or wages, good growth prospects, peer recognition, personal training and development, etc.
•Social objectives include regular contribution towards society for development, health, labour welfare, price regulation, etc.
•Organizational goals signify market standing, innovation, productivity, profitability, workers performance and attitude, social responsibility, etc.

Importance of Management

•It helps in achieving group goals.
•It helps in optimum utilisation of resources.
•It helps to reduce cost of business operation.
•it facilitates establishment of a sound organisation.
•It helps to maintain equilibrium in a dynamic environment.
•It leads to prosperity of the society.
•It helps to maintain equilibrium by integrating an organisation internally with its employees and externally with its environment.

Dimensions of Management

Management as an activity As an activity, management refers to work undertaken by managers in the process of management. It includes informational activities, decisional activities and interpersonal activities.

Management as a process As a process management includes series of functions, i.e., planning, organizing, staffing, directing and controlling, undertaken to achieve the objectives of an enterprise. Management is considered to be a social, integrating and continuous process.

Management as a discipline Management is considered to be a discipline, as it is a systematized body of knowledge, which can be imparted to people through instructions and teaching and is gaining acceptability worldwide.

Management as a group Management as a group may be looked upon in two ways—(a) all managers taken together and (b) only top level management.

Nature of Management

Management as a science   Science   is   a   systematized   body   of   knowledge pertaining to a specific field of study, and contains general facts that explain a phenomenon. Science is characterized by certain features such as the existence of a systematized body of knowledge, use of scientific methods of observation, principles based on experiments, and universal validity.Management may be called an inexact science or a social science, as the application or use of its principles has to be modified according to the given situation. The degree of inexactness in case of management is quite high, as it deals with the behaviour of human beings, which is subject to constant changes and cannot be predicted on the basis of absolute laws and experiments.

Management as an art Art refers to the application of knowledge and personal skills to achieve the desired results. The main features of art are existence of theoretical knowledge, personalized application, and involvement of practice and creativity.Management possesses all the features of art. It is a full-fledged art, as the application of its principles depends on the experience and skill of the managers.

Management is both science and art Effective management is the result of judicious blend of art as well as science. As a science, management provides principles and theories which form the basis for management in practice. But the application of these principles in the light of a given situation is an art and depends greatly on the skill of the managers.

Management as a profession : Profession is concerned with rendering specialized services. Management as a profession is a systematic body of knowledge but neither the entry to management courses is restricted nor is there a universal code of conduct for managers. Thus, management cannot be considered to be a full-fledged profession; however efforts are being made to give it the status of profession due to the growing need of professional management in the complex, competitive and rapidly changing corporate world of today.

Management and administration Administration means the overall determination of policies, setting of major objectives, identification of the general purpose and laying out of broad programmes and major projects.The terms ‘management’ and ‘administration’ are broadly viewed in three different ways by different experts in context of usage, (a) Administration is a part of management, (b) administration is a wider term and includes management, (c) both the terms are synonymous.

Levels of Management

• Top-level management: The top management in an organisation consists of managers at the highest level in the management hierarchy. This level consists of the board of directors, the chief executive, the chairman, and the department heads.
•Middle-level management: The middle management in an organisation consists of departmental managers such as the sales manager, the purchase manager, the plant manager, the business manager, etc.

•Lower-level management: The lower-level management in an organisation consists of first-line supervisors. They generally have such designations as superintendent, section officer, supervisor, foreman, etc.

Functions of management The various functions of management, which are interrelated and interdependent, are as follows:

•Planning: Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. It bridges the gap between where we are and where we want to go.
•Organizing: Organizing is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships to enable people to work most effectively together in accomplishing objectives.
•Staffing: Staffing may be defined as the managerial function of hiring the appropriate personnel and developing them to fill in various positions in the organisation.
•Directing:   Directing  as  a   function  of  management  is  concerned  with instructing, guiding and inspiring people in the organisation to achieve its objectives.
•Controlling: Controlling is the process through which the management ensures that the actual activities conform to the planned activities.
•Coordination: Coordination as a function of management refers to the task of integrating the activities of separate units of an organisation to achieve the organizational goals efficiently. Coordination is, therefore, the essence of management.

Elements of coordination The three key elements of coordination are integration, balancing, and timing.

Nature of Coordination

•Coordination is regarded as the essence of management.
•It is a deliberate and conscious effort of the manager to integrate diverse organizational activities.
•It is a continuous and ongoing process.
•It is pervasive in nature.
•It relates to group efforts and not individual efforts.

Need for coordination Coordination is required in an organisation due to its large size, complex organizational structure, functional differentiation and specialization.