Class 12 Business Studies 2025 26 Notes Chapter 1 Nature and Significance
Class 12 Business Studies 2025 26 Notes Chapter 1 Nature and Significance
Resource Material
For Session 2025-26
Best Notes
CBSE
CLASS 12 Business Studies
Management:
“Management is defined as the process of planning, organizing, actuating and controlling an
organization’s operations in order to achieve coordination of the human and material resources
essential in the effective and efficient attainment of objectives.”
Concept of Management:
Management is a process that aims to bring the efforts of the people working in the organization to
achieve a common objective effectively and efficiently.
1. Traditional Concept Management is the art of getting things done through others.
2. Modern Concept Management is defined as the process (refers to the basic steps) to get the
things done with the aim of achieving goals effectively and efficiently (effectiveness refers to
achievement of task on time and efficiently implies optimum use of resources).
Process: The term process refers to the primary activities performed in an organization by the
management to achieve the objective. It includes planning, organizing, staffing, directing and
controlling.
Effectively: The term effectively refers to completion of the given task in the allotted time frame.
Efficient: The term efficient means completing the task within minimum cost as well as optimum
utilization of resources.
Characteristics of Management:
1. Management is a Goal Oriented Process Organisation’s existence is based on objectives and
management is the process which unites the efforts of every individuals to achieve the goal.
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2. Management is All Pervasive The use of management is not restricted, it is applicable in all
organisations big or small, profit or non-profit making.
⮚ Management of house.
⮚ Management of people.
⮚ Management of operations.
6. Management is an Intangible Force It cannot be seen or touched only it can be felt in the way
the organisation functions.
Functions of Management:
1. Planning: Planning is a process of setting goals and objectives and formulating a strategy and
an action plan to achieve it. It bridges the gap between our current position and desired
position. This is the basic function of an organization and is the first step of management.
2. Organizing: Organizing is the process of establishing authority and responsibility
relationships. It involves assigning tasks to individuals and allocating resources for the same.
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3. Staffing: Staffing is a process of placing the right person on the right job at the right time. It
includes recruitment, selection, placement, induction and training of employees. It can be
called as the Human Resource function of the organization.
4. Directing: Directing refers to the process of leading, influencing and motivating the
individuals working in the organization to complete the assigned task effectively and
efficiently. The employees need to be constantly motivated to perform better. Leadership
and motivation are the key components of directing as a function. It tends to bring out the
best in an employee.
5. Controlling: Controlling is the process of keeping a check on the performance of the
organization and comparing it with the standards set. Also, corrective actions are taken, in
case any deviation is found between the actual and desired results.
Importance of Management:
1. Management helps in achieving group goals: Management creates teams and coordinates
with individuals to achieve individual goals along with organizational goals.
2. Increases efficiency: Management increases efficiency by using resources in the best possible
manner to reduce cost and increase productivity.
3. Creates dynamic organization: Management helps the employees overcome their resistance
to change and adapt as per changing situation to ensure its survival, growth and its
competitive edge.
4. Achieving personal objectives: Through motivation and leadership management helps the
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Levels of Management:
1. Top Management: Designations and Functions Comprises of CEO, Board of Directors, MD,
GM, VP. Main task is conceptualizing of organizational goal, policy and strategy formulation
and organising, controlling, and monitoring activities and resources. Controlling the work
performance of individuals and approving Budgets.
3. First-line Management: Designations and Functions Consists of Foremen and supervisor etc.
Main task is to ensure actual implementation of the policies as per directions of top and
middle level managers and also to Bring workers’ grievances before the management &
maintain discipline among the workers.
Co-ordination:
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The Essence of Management Co-ordination means binding together all the activities such as
purchase, production. sales finance to ensure continuity in the working of the organisation. It is
considered as a separate function of management, in order to achieve harmony among individual.
efforts towards the accomplishment of goods.
Characteristics of Co-ordination
1. It integrates group efforts.
2. It ensures units of action.
3. It is a continuous process.
4. It is an all pervasive function.
5. It is the responsibility of all managers.
Features of Coordination:
1. Coordination Integrates Group Effort: It is an orderly arrangement of group effort to ensure
that performance is at par with the plans and schedules.
3. Coordination is a Continuous Process: It is a never-ending process as its needs are felt at all
levels and in all activities in the organisations. It begins at the planning stage and continues
until controlling.
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Coordination is equally important at all levels of management. It is the responsibility of all the
individuals in an organisation to carry out their work in a responsible manner and coordinate with
each other to achieve organizational goals.
2. Coordination is all pervasive function: It is needed in all departments and at all levels. Lack
of coordination can lead to overlapping of activities.
Importance of Coordination:
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1. Growth in Size: Coordination harmonizes individual goals with the organizational goals. This
results in the growth of the organization which results in an increase in the number of people
employed with it.
2. Functional Differentiation: The various departments of the organization have their own
objectives, policies and their own style of working. But to achieve organizational objective
coordination is important so as to link the activities of all departments.
3. Specialization: Coordination integrates all the specialists activities into a collective effort.
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Important Questions
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Management is concerned with “getting things done through people”, which is a very
difficult task. All the employees have different personalities, needs backgrounds and
methods of work. Thus, it becomes management’s job to make them work as a group by
giving common direction to their efforts.
iii) Management of operations.
In order to survive, each organization has to provide certain goods or services. This involves
production process thus, management of operations is inter linked with both the above
dimensions viz., management of work and the management of people.
4. Ans. Personal objectives refer to the objectives which are related to the employees of an
organization. They are as follows:
i) Financial needs like competitive salaries, incentives and other monetary benefits.
ii) Social needs like recognition in the organization.
iii) Higher level need which includes personal growth and development.
5. Ans. Following points are the importance of management.
i) Management helps in achieving group goals.
ii) Management increase efficiency
iii) Management creates a dynamic organization.
iv) Management helps in achieving personal objectives.
v) Management helps in development of society.
6. Ans. Levels of management means the hierarchy of organization representing the
relationships among managers and subordinates on the basis of their relative authority,
status and responsibility. There are three levels in the hierarchy of an organization viz.
(i) Top management (ii) Middle management and (iii) Supervisory or operational
management.
7. Ans. Coordination is an orderly arrangement of group efforts to maintain harmony among
individuals’ efforts towards the accomplishment of common goals of an organization.
Features of co-ordination
i) It integrates group efforts.
ii) It unifies the action.
iii) It is a continuous process.
iv) It is an all-pervasive function
v) It is the responsibility of all managers.
vi) It is a deliberate function.
8. Ans.
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Co-ordination Cooperation
1. It is an orderly arrangement of a
1. It is a voluntary desire to help each
group effort to provide for unity of
other
action.
4. It is a technique. 4. It is an attitude.
9. Ans.
Characteristics The key features of management are –
1. Goal-oriented process,
2. all-pervasive,
3. multidimensional,
4. Continuous process,
5. group activity
6. dynamic function,
7. tangible force.
1. Management is a goal-oriented process: An organization has a set of basic goals which
are the basic reason for its existence. These should be simple and clearly stated.
2. Management is all-pervasive: The activities involved in managing an enterprise are
common to all organizations whether economic, social, or political Thus it is all-
pervasive.
10. Ans.
Yes, the above-mentioned statement holds true as the reasons are as follows.
1. Means to accomplishing goals: Management is important because it helps in achieving
group goals, increases efficiency, and creates a dynamic organization.
2. Unified direction: Management motivates and directs the workforce by unifying goals
with the group goals.
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3. Establishes sound industrial relations: The success of any organization depends upon its
workforce. It is the only factor of production which is movable in nature. Effective
management tries to build a feeling of team and loyalty towards the organization.
4. It looks after for future uncertainties: An effective management prepares the
organization for future contingencies and paved the way for its survival and growth. In
the ‘ absence of this foresightedness, an organization may be forced to wind up its
operations resulting in wastage of time, efforts, and resources.
Long Answers –
1. Ans. Following are the features of management:
(i) Management is a group activity
Management consists of a number of persons who work as a group.
Their efforts are directed towards the common goals. Members initiate,
communicate, coordinate and join their hands for the achievement of
organizational objectives.
(ii) Management is a goal-oriented process
Management aims at common goals through a process of series of
continuous functions via planning, organizing, directing, staffing and
controlling. These composite functions of management are separately
performed by all managers all the time simultaneously to realize
organizational goals
(iii) Management is all pervasive
Whether it is a commercial organization or noncommercial
organization, big or small all require management to handle their operations
effectively and efficiently.
(iv) Management is a continuous process
Management is a continuous process consisting of a series of
functions viz., planning, organizing, directing and controlling. All the managers
perform these functions regularly.
(v) Management is a dynamic function
The environment in which a business exists keeps on changing. Thus in
order to be successful, management must change its goals, plans and politics
according to the needs of its environment.
2. Ans. The organizational objectives of management refer to the main objectives required
to fulfill the economic goals of the business organization. The main objective of
management is to utilize the human and material resources in such a manner that it
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should give maximum advantage to the organization. Every management group strives
to accomplish these objectives for its organization.
These objectives of every organization are survival, profit and growth:
(a) Survival: The basic objective of every business is to survive for a longer
period in the market. The management must ensure survival of the
organization by earning enough revenue to cover its costs.
(b) Profit: Only survival is not sufficient for business. Profit earning is essential for
meeting the expenses and for the successful operation of the bus’ Thus
management must ensure earning of sufficient profit.
(c) Growth: The next important objective of the management is to ensure
future growth and development of the business.
3. Ans. Each organization is a part of society and thus it has certain social obligations to
fulfill.
Some of them are as follows:
(i) To supply quality goods and services
(ii) Providing basic amenities to the employees like schools and creches for their children,
medical facilities etc.
(iii) To generate employment opportunities especially for the backward classes.
(iv) To provide environment friendly methods of production.
(v) To provide financial support to society by donating for noble causes.
(vi) To organize educational, health and vocational training programmes.
(vii) To participate in social service projects of Government and Non – Governmental
Organizations (NGOs).
4. Ans. Personal Objectives refer to the objectives which are related to the individual needs
of the employees of an organization. All organizations are made up of people with
different values, experiences and objectives. People join an organization to satisfy their
different needs. These are as follows:
i) Financial needs like competitive salaries, incentives and other monetary benefits.
ii) Social needs like recognition in the organization.
iii) Higher level need which includes personal growth and development.
5. Ans. Top management performs the following functions.
i) Develops long-term objectives: Top-level managers develop the long – term objectives like
expansion of business, manpower planning etc.
ii) Framing of policies: They lay down guidelines for departmental head i.e., policies relating
to production, marketing, personnel, finance public relation etc.
iii) Organizing : Top management organizes the business into various sections and
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They consist of the senior-most executives of the organization by whatever name they are
called. They are usually referred to as the chairman, the chief executive officer, chief
operating officer, president, and vice-president. Top management is a team consisting of
managers from different functional levels. Their basic task is to integrate diverse
elements and coordinate the activities of different departments according to the overall
objectives of the organization. They are responsible for the welfare and survival of the
organization. Their job is complex and stressful.
2. Middle Management:
It is the link between top and lower-level management. They are subordinate to top
managers and superior to the first-line managers. They are usually known as division
heads, operation managers, or plant superintendent. They are responsible for
implementing and controlling plans developed by top management. At the same time,
they are responsible for all the activities of first-line management. Their main task is to
carry out the plans formulated by the top management and at the same time, they are
responsible for all the activities of first-line managers.
3. Operational Management:
Foreman and supervisors comprise the lower level in the organization. Supervisors
directly oversee the efforts of the workforce. Their authority and responsibility are
limited according to the plans drawn by the top management. They play a very important
role in the organization since they interact with the actual workforce and pass on
instructions of the middle management to the Workers. Through the quality of their
efforts of output is maintained. Wastage of materials is minimized and safety.
Case Study Answer-
1. Answer:
The various characteristics of management involved here are:
Goal Oriented: The main motive is to tell the employees to keep the target of 20%
increase in sales as the main objective when they work throughout the year.
Multidimensional: Various plans are made to harness the potential of the employees and
streamline the processes. Employees—People and Streamline the process—Operations.
Dynamic: However with the passage of a few days the external business environment
checks the capability of the organization to adapt to the situations.
2. Answer:
The importance of management highlighted here are:
Development of personnel: They are also given incentives both financial as well as non
financial. The result is employees see their development in the organisation.
Development of society: The organisation tries to behave as a responsible constituent of
society and always creates good quality products.
Helps in becoming dynamic organisation: The training modules are superb and the
employees always try to find unique ways of providing solutions in the context of rapidly
changing business environment.
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