ANGAD SINGH CLASSES

Tilak Nagar, New Delhi

CH-1
NATURE AND SIGNIFICANCE OF MANAGEMENT
IMPORTANCE OF MANAGEMENT:
1. Management helps in achieving group goals: Management is required not for itself but for achieving
the goals of the organisation. The task of a manager is to give a common direction to the individual
effort in achieving the overall goal of the organisation.
2. Management increases efficiency: The aim of a manager is to reduce costs and increase
productivity through better planning, organising, directing, staffing and controlling the activities of the
organisation.
3. Management creates a dynamic organisation: All organisations have to function in an environment
which is constantly changing. It is generally seen that individuals in an organisation resist change as it
often means moving from a familiar, secure environment into a newer and more challenging one.
Management helps people adapt to these changes so that the organisation is able to maintain its
competitive edge.
4. 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 while contributing to the overall
organisational objective. Through motivation and leadership, the management helps individuals to
develop team spirit, cooperation and commitment to group success.
5. Management helps in the development of society: An organisation has multiple objectives to serve
the purpose of the different groups that constitute it. In the process of fulfilling all these, management
helps in the development of the organisation and through that it helps in the development of society. It
helps to provide good quality products and services, creates employment opportunities, adopts new
technology for the greater good of the people and leads the path towards growth and development.

IMPORTANCE OF COORDINATION:
1. Growth in size: As companies develop in size, the number of employees employed by the company
also develops. Often, it may become challenging to unite their efforts and exercises. All people vary in
their customs of background, approaches, work to the conditions and association with others. It
becomes essential to guarantee that all individuals perform towards the pre-defined common goals of
the company. But employees may have their individual specific goals too.
2. Functional differentiation: Operations of an establishment are apportioned into divisions, sections
and departments. In a company, there may be distinct departments of production, marketing, finance
or human resources. All these units may have their own goals, strategies and their own technique of
working.
3. Specialisation: Contemporary organisations are defined by a high degree of specialisation.
Specialisation occurs out of the complexities of contemporary technology and the heterogeneity of
tasks to be executed. Companies, hence, must employ a number of experts. Specialists normally think
that they are equipped to assess, decide and judge according to their professional standards. They
usually do not take guidance or recommendations from others in matters concerning their field of
specialisation.

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CH-2
PRINCIPLES OF MANAGEMENT
IMPORTANCE OF PRINCIPLES OF MANAGEMENT:
1. Providing Managers with Useful Insights into Reality: The principles of management provide the
managers with useful insights into real world situations. Adherence to these principles will add to their
knowledge, ability and understanding of managerial situations and circumstances. It will also enable
managers to learn from past mistakes and conserve time by solving recurring problems quickly.
As such management principles increase managerial efficiency. For example, a manager can leave
routine decision-making to his subordinates and deal with exceptional situations which require her/his
expertise by following the principle of 'Centralisation and Decentralisation’.
2. Optimum Utilization of Resources & Effective Administration: Resources both human and material
available with the company are limited. They must be used optimally, i.e., in such a manner that they
should give maximum benefit with minimum cost. Principles of management help in optimum
utilisation of resources by equipping the managers to foresee the cause-and-effect relationships of
their decisions and actions. As such, the wastages associated with a trial-and error approach can be
overcome. Effective administration necessitates impersonalisation of managerial conduct so that
managerial power is used with due discretion. Principles of management help in effective
administration by limiting the boundary of managerial discretion so that their decisions may be free
from personal prejudices and biases. For example, in deciding the annual budgets for different
departments, rather than personal preferences, managerial discretion is bounded by the principle of
contribution to organisational objectives (i.e. Subordination of individual interest to general interest).
3. Scientific Decisions: Decisions must be based on facts, thoughtful and justifiable in terms of the
intended purposes. They must be timely realistic and subject to measurement and evaluation.
Management principles help in thoughtful decision-making.
• They emphasise logic rather than blind faith.
• Management decisions taken on the basis of principles are free from bias and prejudice.
• They are based on the objective assessment of the situation.
4. Meeting Changing Business Environment: Although the principles are in the nature of general
guidelines but they are modified and as such help manager, to meet changing requirements of the
environment. Management principles are flexible to adapt to dynamic, business environment. For
example, management principles emphasise division of work and specialisation. In modern times, this
principle has been extended to the entire business whereby companies are specialising in their core
competency and divesting non-core businesses. One may cite the decision of Hindustan Unilever
Limited in divesting non-core businesses of chemicals and seeds. Some companies are outsourcing
their non-core activities like, share-transfer management and advertising to outside agencies. Even
core processes such as R&D, manufacturing and marketing are being outsourced today ("Business
Process Outsourcing’ and ‘Knowledge Process Outsourcing)
5. Fulfilling Social Responsibility: The increased awareness of the public, forces businesses especially
limited companies to fulfil their social responsibilities. Management principles have also evolved in
response to the demands of the public. Moreover, the interpretation of the principles also assumes
newer and contemporary meanings with the change in time. So, if we talk of ‘equity’ today, it does not
apply to wages alone. Value to the customer, care for the environment, dealings with business
associates would all come under the purview of this principle.
6. Management training, education and research: Principles of management are at the core of
management theory. As such, these are used as a basis for management training, education and
research. Entrance to management institutes is preceded by management aptitude tests. These tests
could not have been developed without an understanding of management principles.

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Management principles provide basic groundwork for the development of management as a discipline.
Professional courses such as MBA (Master of Business Administration), BBA (Bachelor of Business
Administration) also teach these principles as part of their curriculum at the beginner's level.
Management principles enable refinement of management practices as well by facilitating the
development of new management techniques. The new management techniques like ‘Operations
Research (OR)’, ‘Cost Accounting’, ‘Just in Time’, ‘Kanban’ and ‘Kaizen’ have developed due to further
research on these principles.
CH-3
BUSINESS ENVIRONMENT
IMPORTANCE OF BUSINESS ENVIRONMENT:
1. It enables the firm to identify opportunities and getting the first mover advantage: Opportunities
refer to the positive external trends or changes that will help a firm to improve its performance.
Environment provides numerous opportunities for business success. Early identification of
opportunities helps an enterprise to be the first to exploit them instead of losing them to competitors.
2. It helps the firm to identify threats and early warning signals: Threats refer to the external
environment trends and changes that will hinder a firm’s performance. Besides opportunities,
environment happens to be the source of many threats. Environmental awareness can help managers
to identify various threats on time and serve as an early warning signal.
3. It helps in tapping useful resources: Environment is a source of various resources for running a
business. To engage in any type of activity, a business enterprise assembles various resources called
inputs like finance, machines, raw materials, power and water, labour, etc., from its environment
including financiers, government and suppliers. They decide to provide these resources with their own
expectations to get something in return from the enterprise.
4. It helps in improving performance: The final reason for understanding business environment relates to
whether or not it really makes a difference in the performance of an enterprise. The answer is that it
does appear to make a difference. Many studies reveal that the future of an enterprise is closely
bound up with what is happening in the environment. And, the enterprises that continuously monitor
their environment and adopt suitable business practices are the ones which not only improve their
present performance but also continue to succeed in the market for a longer period.
5. It helps in assisting in planning and policy formulation: Since business environment provides both
opportunities and threats for the firm, its understanding and analysis can be the basis for deciding the
future course of action (planning) or training guidelines for decision-making (policy). For instance, entry
of new players in the market, which means more competition may make an enterprise think afresh
about how to deal with the situation.
6. It helps in coping with rapid changes: Today’s business environment is getting increasingly dynamic
where changes are taking place at a fast pace. It is not the fact of change itself that is so important as
the pace of change. Turbulent market conditions, less brand loyalty, divisions and sub-divisions
(fragmentation) of markets, more demanding customers, rapid changes in technology and intense
global competition are just a few of the images used to describe today’s business environment. All sizes
and all types of enterprises are facing increasingly dynamic environment. In order to effectively cope
with these significant changes, managers must understand and examine the environment and develop
suitable courses of action.

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Tilak Nagar, New Delhi
CH-4
PLANNING
IMPORTANCE OF PLANNING:
1. Planning provides directions: By stating in advance how work is to be done, planning provides
direction to action. Planning ensures that objectives/goals are clearly stated so that they act as a guide
for deciding what action should be taken and in which direction. Since under planning, objectives/goals
are well-defined, employees are aware what the organisation has to do and what they must do to
achieve those goals.
2. Planning reduces the risks of uncertainty: Planning enables a manager to look ahead and anticipate
changes. By deciding in advance, the tasks to be performed, planning shows the way to deal with
changes and uncertain events. Thus, Planning helps to reduce the risks of uncertainty by preparing
forecasts.
3. Planning facilitates decision-making: A manager evaluates positive and negative aspects of each
alternative courses of action and select the most feasible and profitable plan, with least negative
consequences. Thus, planning facilitates decision making by making a choice from various alternative
course of action.
4. Planning reduces overlapping and wasteful activities: Planning ensures clarity in thought and action,
work is carried on smoothly without interruptions. Useless and redundant activities are minimized or
eliminated. It is easier to detect inefficiencies and take corrective action to deal with them.
5. Planning promotes innovative ideas: Planning is thinking in advance what to do and how to do it.
Therefore, new ideas can take the shape of concrete plans. Thus, planning is closely connected with
creativity and innovation.
6. Planning establishes standards for controlling: Planning provides the goals or standards against which
actual performance is measured. By comparing actual performance with some standards, managers
can know whether they have actually been able to attain the goal.
CH-5
ORGANISING
IMPORTANCE OF ORGANIZING
1. Benefits of specialisation: Organising leads to a systematic allocation of jobs amongst the workforce.
This reduces the workload as well as enhances productivity because of the specific workers performing
a specific job on a regular basis. Repetitive performance of a particular task allows a worker to gain
experience in that area and leads to specialisation.
2. Effective administration: Organising provides a clear description of jobs and related duties. Clarity in
working relationships enables proper execution of work. Management of an enterprise thereby
becomes easy and this brings effectiveness in administration.
3. Development of personnel: Delegation satisfies the subordinates’ need for recognition and provides
them opportunities to develop and exercise imitative. This helps them to realise their full potential.
4. Adaptation to change: Organising helps in adaptation to change by allowing the organization structure
to be suitably modified according to the changes in business environment.
5. Clarity in working relationships: The establishment of working relationships clarifies lines of
communication and specifies who is to report to whom. This removes ambiguity in transfer of
information and instructions. It helps in creating a hierarchical order thereby enabling (i) the fixation of
responsibility and (ii) specification of the extent of authority to be exercised by an individual.
6. Expansion and growth: Organising helps in the growth and diversification of an enterprise by allowing
a business enterprise to add more job positions, new departments and even new product lines. New
geographical territories can be added to current areas of operation and this will help to increase
customer base, sales and profit.

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7. Optimum utilisation of resources: Organising leads to the optimum utilisation of all material, financial
and human resources. The proper assignment of jobs avoids overlapping of work and also makes
possible the best use of resources.
SIGNIFICANCE/IMPORTANCE OF AN APPROPRIATE ORGANISATION STRUCTURE
1. An organization structure specifies the relationships between people, work and resources. In other
words, it specifies the lines of authority and the areas of responsibility.
2. An organization structure allows correlation and coordination among human, physical and financial
resources and this enables a business enterprise to accomplish desired goals
3. A proper organization structure is essential to ensure a smooth flow of communication and better
control over the operations of a business enterprise.
4. An effective structure will result in increased profitability of the enterprise.
IMPORTANCE OF DELEGATION
1. Effective management : Delegation reduces the workload of the managers. By passing on the routine
work to the subordinates, the manager gets more time to concentrate on important matters or high
priority activities. This increases his effectiveness.
2. Employee development: Delegation empowers the employees by providing them with the chance to
utilise their talent, develop skills to perform complex tasks, gain experience and develop themselves for
higher positions.
3. Motivation of employees: Delegation implies grant of authority to the subordinates. So, they have a
sense of recognition. They feel encouraged and are motivated to work for higher performance.
Delegation involves entrustment of responsibility.
4. Facilitation of growth: Delegation helps in the growth and expansion of an organization by providing a
ready, trained and experienced workforce to take up leading positions in new ventures.
5. Better coordination: Clarity in reporting relationships helps in maintaining effective coordination
amongst the departments, levels and functions of management.
6. Basis of management hierarchy: Delegation of authority establishes superior-subordinate
relationships, which are the basis of hierarchy of management.
IMPORTANCE OF DECENTRALISATION
1. Relief to top management: It leaves the top management with more time to concentrate on important
policy decisions rather than occupying their time with both policy as well as operational decisions.
2. Develops initiative amongst subordinates: When lower managerial levels at given freedom to take
their own decisions, they learn to depend on their own judgement. It develops initiative amongst
subordinates and helps to promote self-reliance and confidence in them.
3. Develops managerial for the future: Decentralisation gives subordinates a chance to prove their
abilities and creates a reservoir of qualified become dynamic leaders.
4. Facilitates growth: Decentralisation awards greater autonomy to the lower levels of management as
well as divisional or departmental heads. This allows them to function in a manner best suited to their
department and fosters a sense of competition amongst the departments. Consequently, with each
department doing its best in a bid to outdo the other the productivity levels increase and the
organisation is able to generate more returns which can be used for expansion purposes
5. Quick decision making: In a decentralised organization, since decisions are taken at levels which are
nearest to the points of action and there is no requirement for approval from many levels, the process
of decision making is much faster. There are also less chances of information getting distorted because
it does not have to go through long channels.
6. Better control: Decentralisation leads to better control by evaluating performance at each level of
management. Feedback from all levels helps to analyse deviations and improve operations.

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ANGAD SINGH CLASSES
Tilak Nagar, New Delhi
CH-6
STAFFING
IMPORTANCE OF STAFFING
1. Obtaining competent personnel: It helps in discovering and obtaining competent personnel for various
jobs.
2. Higher performance: It ensures high performance by putting right person on the right job.
3. Continuous survival and growth: It ensure continuous survival and growth of enterprise through
succession planning for managers.
4. Optimum utilisation of human resources: It helps to ensure optimum utilisation of human resources.
By avoiding over-staffing, it prevents underutilisation of personnel and high labour costs. At the same
time, it avoids disruption of work by indicating in advance the shortages of personnel.
5. Improves job satisfaction and morale of employees: It improves job satisfaction and morale of
employees through objective assessment and fair reward of their contribution.
CH-7
DIRECTING
IMPORTANCE OF DIRECTING
1. Initiates action: Directing helps to initiate action by people in the organization towards attainment of
desired objectives. For example, if a supervisor guides his subordinates and clarifies their doubts in
performing a task, it will help the worker to achieve work targets given to him.
2. Integrates employees’ efforts: Directing integrates employees’ efforts in the organization in such a way
that every individual effort contributes to the organizational performance. Thus, it ensures that the
individuals work for organizational goals.
3. Guides employees: Directing guides employees to fully realise their potential and capabilities by
motivating and providing effective leadership. A good leader can always identify the potential of his
employees and motivate them to extract work up to their full potential.
4. Facilitates introduction of changes: Directing facilitates introduction of changes needed in the
organization by reducing resistance to change and developing cooperation. Generally, people have a
tendency to resist changes in the organization. Effective directing through motivation, communication
and leadership helps to reduce such resistance and develop required cooperation in introducing the
changes in the organization.
5. Brings stability and balance: It fosters cooperation and commitment among the people and helps to
achieve balance among various groups, activities and the departments.
IMPORTANCE OF SUPERVISION/FUNCTIONS OF A SUPERVISOR:
1. Maintains day-to-day contact: Supervisor maintains day-to-day contact and maintains friendly
relations with workers. A good supervisor acts as a guide, friend and philosopher to the workers.
2. Link between workers and management: Supervisor acts as a link between workers and management.
He conveys management ideas to the workers on one hand and workers’ problems to the management
on the other. This role played by supervisor helps to avoid misunderstandings and conflicts between
management and workers/employees.
3. Helps in maintaining group unity: Supervisor plays a key role in maintaining group unity among
workers placed under his control. He sorts out internal differences and maintains harmony among
workers.
4. Ensures performance of work: Supervisor ensures performance of work according to the targets set.
He takes responsibility for task achievement and motivates his workers effectively.
5. Provides on-the-job training: Supervisor provides good on-the-job training to the workers and
employees. A skilled and knowledgeable supervisor can build efficient team of workers.

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6. Builds high morale amongst the workers: Supervisory leadership plays a key role in influencing the
workers in the organization. A supervisor with good leadership qualities can build up high morale
among workers.
7. Gives feedback: A good supervisor analyses the work performed and gives feedback to the workers.
He suggests ways and means of developing work skills.
CH-8
CONTROLLING
IMPORTANCE OF CONTROLLING:
1. Accomplishing organizational goals : The controlling function measures progress towards the
organizational goals and brings to light the deviations, if any, and indicates corrective action. Thus,
controlling guides the organization and keeps it on the right track so that organisational gaols are
achieved effectively and efficiently.
2. Judging accuracy of standards: A good control system enables management to verify whether the
standards set are accurate and objective. It keeps a careful check on the changes taking place in the
organization and in the environment and helps to review and revise the standards in light of such
changes.
3. Making efficient use of resources: By exercising control, a manager seeks to reduce wastage and
spoilage of resources. Each activity is performed in accordance with pre-determined standards and
norms. This ensures that resources are used in the most effective and efficient manner.
4. Ensuring order and discipline: Controlling creates an atmosphere or order and discipline in the
organization. It helps to minimise dishonest behaviour on the part of the employees by keeping a close
on their activities. For example, a company may track dishonest employees by using computer
monitoring (through CCTV) as a part of their control system.
5. Improving employee motivation: A good control system ensures that employees know well in advance
what they are expected to do and what are the standards of performance on the basis of which they
will be evaluated. Thus, it motivates them to give better performance.
CH-9
FINANCIAL MANAGEMENT AND FINANCIAL
PLANNING
IMPORTANCE OF FINANCIAL PLANNING
1. It helps in forecasting what may happen in future under different business situations. By doing so, it
helps the firm to prepare for the future.
2. It helps in avoiding business shocks and surprises
3. It helps in coordinating various business functions e.g. sales and production functions, by providing
clear policies and procedures.
4. It provides a link between investment and financing decisions on a continuous basis.
5. It helps in reducing waste, duplication of efforts
6. It serves as a control technique as it makes evaluation of actual performance easier by spelling out
detailed objectives for various business segments.
7. It tries to link the present with the future.

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WHY ARE INVESTMENT OR CAPITAL BUDGETING DECISIONS IMPORTANT?
1. Long term growth: These decisions have bearing on the long-term growth. The funds invested in long-
term assets are likely to yield returns in future. These will affect the future prospects of the business.
2. Large amount of funds involved: These decisions normally involve huge amounts of funds being
blocked in long-term projects.
3. Risk involved: Fixed capital involves investment of huge amounts. It affects the returns of the firm as a
whole in the long run. Therefore, investment decisions involving fixed capital influence the overall
business risk complexion of the firm.
4. Irreversible decisions: These decisions once taken, are not reversible without incurring heavy losses.
Abandoning a project after heavy investment is made is quite costly in terms of waste of funds.
CH-11
MARKETING MANAGEMENT
IMPORTANCE OF PACKAGING
1. Product differentiation: Packaging creates product differentiation. For example, by looking at the
package of a product, say, hair oil, one can make some guess about quality of the product contained in
it.
2. Rising standards of health and sanitation: Packaging helps in repenting adulteration as the product is
properly packed, e.g., Ashirwad Aata, Olive Oil etc.
3. Innovational opportunity: By developing innovative packages the marketer can capture new customer
segment. For example, by supplying shampoo in pouch, sales in rural areas can be enhanced. Family
pack of Colgate, Maggi 4 in one and 6 in one etc. also enhance the sale. Similarly, milk can now be
stored for 4-5 days without refrigeration in the recently developed packing materials.
4. Self Service outlets: The self-service retail outlets are becoming very popular, particularly in major
cities and towns. Because of this, some of the traditional role assigned to personal selling in respect of
promotion has gone to packaging.
CH-12
CONSUMER PROTECTION
IMPORTANCE OF CONSUMER PROTECTION:
FROM CONSUMERS’ POINT OF VIEW:
1. Widespread Exploitation of Consumers: Consumers might be exploited by unscrupulous, exploitive
and unfair trade practices like defective and unsafe products, adulteration, false and misleading
advertising, hoarding, black-marketing etc. Consumers need protection against such malpractices of
the sellers.
2. Consumer ignorance: In the light of widespread ignorance of consumers about their rights and reliefs
available to them, it becomes necessary to educate them about the same so as to achieve consumer
awareness. A consumer, who is well-informed about his rights and reliefs available to him, would be in
a position to raise his voice against any unfair trade practices of sellers.
3. Unorganized Consumers: Consumers need to organized in the form of consumer organizations which
would take care of their interests. Consumer organizations play an important role in educating
consumers about their rights and providing protection to them. These organizations can force business
firms to avoid malpractices and exploitation of consumers. Though, in India, we do have consumer
organizations which are working in this direction, adequate protection is required to be given to
consumers till these organizations become powerful enough to protect and promote the interests of
consumers.

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FROM THE POINT OF VIEW OF BUSINESSES
1. Business uses Society’s Resources: Business organizations use resources which belong to the society.
Thus, they have a responsibility to supply such goods and services which are in public interest.
2. Social Responsibility: A business has social responsibilities towards various interest groups. Business
organizations make money by selling goods and providing services to consumers. Thus, consumers
form an important group among the many stakeholders of business and like other stakeholders, their
interest has to be well taken care of.
3. Moral Justification: It is the moral duty of any business to take care of consumers’ interests and avoid
any form of their exploitation. Thus, a business must avoid unscrupulous, exploitative and unfair trade
practices like defective and unsafe products, adulteration, false and misleading advertising, hoarding,
black marketing etc.
4. Long-term Interest of Business: Enlightened business firms realise that it is in long-term interest to
serve and satisfy the customers. Satisfied customers not only lead to repeat sales but also provide good
feedback to prospective customers and thus, help in increasing the customer-base of business. Thus,
business firms should aim at long-term profit maximisation through customer satisfaction. Socially
responsible firms follow ethical standards and practices in dealing with their customers.
5. Government Intervention: A business engaging in any form of exploitative trade practices would invite
government intervention or action. This can impair and tarnish the image of the company. Therefore,
business organizations should voluntarily resort to such practices where the customers’ needs and
interests will be taken care of.

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