BUSINESS STUDIES

Chapter-1
Nature and Significance of
Management
 Management
Management is the process of getting things done with the aim of achieving goals
effectively and efficiently

Process
— Series of interconnected functions

Effectively
— Concerned with doing the right task on time

Efficiency
-Concerned with cost

Handling Men + Things with tactics

Effectiveness Effeciency

ItRefers to completing the task on time no Refers to doing the task with minimum
matter what the cost is cost ,optimum utilisation of resources
and in effective manner
CHARACTERSTICS
OF
MANAGEMENT
 Management is a goal-oriented process
> An organisation has a set of basic goals which are the basic reasons for its existence
• Management integrates the efforts of different individuals in the organisation towards
the achieving of these goals.

Management is all pervasive

> Management is a universal phenomenon. The use of management is not restricted to
business firms only, it is applicable to profit-making, non-profit-making, business or
non-business organizations; even a hospital, school, hostel, club and even house has to
be managed properly

Management is an intangible force

> Management is an intangible, unseen force. Its functioning is not visible but its results
are felt.
 Management is a continuous process
• The process of management includes planning, organizing, directing, staffing and
controlling. These functions are performed simultaneously and continuously by all the
managers all the time for the achievement of the goals

Management is a group activity

> An organisation is a collection of 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 organizational
goals

Management is a dynamic function

Management is a dynamic function and has to adapt itself to the changing or dynamic
environment.
 Management is multidimensional / multifaceted
Management of work:
• All organizations exist for the performance of some work or goals. Management
activities aim at achieving goals or work/tasks that are to be accomplished.

Management of people:
* The task of management is to make people work towards achieving the
organization's goal, by turning their strengths effective and their weakness
irrelevant.
Management of operations :
* Organisation of any nature, for its survival, has to produce and provide
services. This is done by a production process, where raw material, technology
etc. are transformed into desired output or produce.
 Management

Management of work Management

Management of operations
of
Planning people
Production
Staffing
Organising Sales
Directing
Controlling
Controlling Purchase
 OBJECTIVES OF MANAGEMENT

Organisational objectives Social objectives

Personal objectives

a) Survival 1. To provide employment opportunities

1. Adequate reward to employees
2. To prevent environmental pollution
b) profit 2. To provide healthy atmostphere
3. To contribute in raising standard of living
C) Growth
3. To provide participation in profits
 Organisational objectives
Management has to achieve a variety of objectives in all areas considering the interest
of all stakeholders including shareholders, employees, customers and the government.
These are:
Survival: Every business wants to survive or continue for a long. Management must
make efforts to ensure long run survival by generating sufficient revenues to cover its
costs.

Profit: Management has to ensure that the organisation makes a profit. Profit provides a
vital incentive for the continued successful operations of the enterprise. Profit is
essential for covering costs and risks of the business.

Growth: A business needs to add to its prospects in the long run, for this it is important
for the business to grow. Growth of a business can be measured in terms of sales
volume, increase in the number of employees, the number of products or the increase
in capital investment etc.
 Social objectives
• To perform various activities which are useful and beneficial for the society like quality
goods at reasonable price, creating employment opportunities and all other activities
which bring prosperity to the society.

Supply of good quality product at reasonable price

Environmental friendly method of production

Cruches to employment

Generation of economic wealth

 Personal or individual objectives

Providing best opportunities for the development and well being of employees working
in the organisation like training and development of workers, proper salaries, healthy
working conditions etc.

Competitive salary
promotion
peer recognition
self respect of employees
IMPORTANCE
OF
MANAGEMENT
 Management helps in achieving Group Goals:
• The task of a manager is to guide and to give a common direction to the various activities,
individuals and group efforts in achieving the overall goals of the organisation.
Management increases efficiency :
• The aim of a manager is to reduce costs and increase productivity through better planning,
organizing, directing, staffing of controlling the activities of the organisation.
Management creates a dynamic organisation:
• Management helps people adapt to these changes so that the organisation is able to maintain
its competitive edge.
. 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 organizational objective.
Management helps in the development of Society :
> It helps in development of the society by providing quality goods & services, creating
employment opportunities, incorporating new technologies and always striving for growth and
development.
 Nature of Management

Management as science

Management as an Art

Management as Profession
 Management as Science

Systematized body of knowledge :

> Principles of Science can be understood because of availability of
systematic and organized knowledge.
principles based on experimentation :
Scientific principles are first developed through observations and
then tested through repeated experimentation under controlled
conditions.
Universal Validity :
> Scientific principles have universal validity.
 Management as a Science
Science is a systematized body of knowledge that explains certain general
truths or general laws. Management is a science but not an exact science

Management has systematic body of knowledge and its principles are developed
over a period of time based on repeated experiments and observations in
different types of but since the management deals with human beings and human
behaviour, the outcome of these experiments are not capable of being accurately,
predicted or replicated. Since the principles of management are not as exact as
the principles of science, their application and use is not universal and have to be
modified according to the given situation. Therefore, management can be called
as an exact size. The prominence of human factor in management makes it a social
science
 Management as an Art
Art has following essential features:
Existence of theoretical and Practical Knowledge :
In every art, systematic and organisation study material is
available to acquire theoretical knowledge
Personalised Application :
The use of basic knowledge differs from person to person, thus
art is a very personalised concept

based on practises and creativity

Art involves consistent and creative practice of existing
theoretical knowledge
 Management as an Art
Art refers to skilful and personal application of existing knowledge to achieve desired
results. It can be acquired through observation and experience

In management also huge volume of literature and books are

available of different aspects of management. Every manager
has his own unique style of managing things and he uses his
creativity in applying management techniques and his skill
improves with regular application. Since all the feature of art are
present in management so it is called an art.
 Management as a Profession
The following are the main features of profession :
Well-defined body of knowledge :
All professions are based on a well-defined body of knowledge that can be acquired through
instruction and training.
It is based on tested and experimented principles on various business situations.
2. Restricted Entry:
• The entry to a profession is restricted through an examination or through acquiring an educational/
professional degree.
3. Professional Association:
> All professions are associated to a professional association which regulates entry, grants certificate of
practice and formulates and enforces a code of conduct.
4. Ethical Code of Conduct:
All professions are bound by a code of conduct which guides the behaviour of its members.
> The code of conduct means rules and regulations framed to guide the behaviour of professionals.
5. Service Motive:
> The basic motive of a profession is to serve their client's interests by rendering dedicated and
committed service.
The task of a lawyer is to ensure that his client gets justice.
 Management as profession
Management is a profession, but not a full fledged profession like legal, accounting or
medical profession because it does not need the exact criteria of profession

Like profession management is also based on the systematic body of

principles. That is why we can see management as a profession. However,
there is no restriction on anyone being appointed as a manager. There is
no compulsion for managers to be member of any association like AIMA .
therefore, there is no code of conduct to be followed by managers
universally the basic purpose of management is to achieve organisational
goals (earn profit) Providing good quality products (nowadays). So service
motive is partly present in management nowadays.
 Levels of Management
It means different categories of manager, the lowest to the highest on the
basis of their relative responsibility, authority and status. Every division in
the hierarchy is responsible for success, completion of a particular task to
be able to fulfil that responsibility. He is a author is a certain amount of
authority or the right to take a decision. The authority responsibility,
relationship binds individual superior and subordinate and give rise to
different level in organisation.

Authority- power
Responsibility-obligation to work
Functions of levels of
Management
 Top Level Management
Determining objectives of the enterprise,
Framing of plants and policies.
activities to be performed by persons working at middle level.
assembling all the resources, such as finance, fixed assets, et
cetera.
Responsible for welfare and survival of the organisation.
Liasion with the outside world for eg- meeting government
officials.
To integerate diverse elements and co-ordinaye the activities .
Analyse business environment and its implications.
 Middle level Management
Interpretation of policies framed by top managers to lower
managers
Organising the activities of their department
Finding out or recruiting or selecting and appointing the
required employees
Motivating the persons to perform their best ability

Co-operate with other departments for smooth functioning

Responsible for all the activities of first line managers

 Lower level Management
Represents the problems or grievances of workers
maintaining good working conditions and develop developing
healthy relations between superior and subordinate
looking to the safety of Workers
try to maintain precise standard of quality
responsible for motivating the workers
minimising the wastage of materials
maintaining safety standards

interact with workers and guide them what to do

responsible for quality, quantity of output and loyalty of workers
Co-ordination/ The Essence of
Management
The process by which manager synchronises the activities of different department
is called coordination. Coordination is not a separate function of management. It is
the force that defines all other function and does called essence of management.
the process of coordinating the activities begins at the planning stage in this top
management plans for the entire organisation
as per the organisational structure is developed at the organising stage
the sharpening is performed to fill the role designed in the organisational
structure
To ensure that the plans are executed. Accordingly, directing is required

any deviations/discrepancies between actual and planned performance are taken

care at controlling stage
 the coordination is not a separate function of
management, but it is very essence for an
organisation to effectively and efficiently achieve
its objectives coordination is required .
like a thread in the garden. Coordination is a part
of all management functions
 Features of coordination
Integerates group efforts
By unifying diverse interest into purposeful activity, it gives a focus group effort to see
the work is done as it was planned

Ensures unity of action

By acting as a binding force between departments and ensuring that all action is aimed
at achieving goals of the organisation

Continuous process
It is not a one-time function as it discharge of the planning stage and continuous
tillcontrolling
 Pervasive function
It is required in all types of organisation in all the departments and at all the levels due
to the interdependent nature of activities of various departments
Responsibility of all managers
It is the function of every manager in the organisation. Top level manager coordinate
with their subordinate to see the carrying out of process of policies. Middle level
managers coordinate with the both top and lower level. Operational level manager
coordinates their workers activities to see that they work as per plans.
Deliberate function
Every manager has to coordinate the efforts of different people in a conscious and
deliberate manner
 Importance of coordination
Growth in Size
As organisations grow in size, the number of people employed by the organisation also
increases.
At times, it may become difficult to integrate their efforts and activities.
All individuals differ in their habits of work, background, approaches to situatic
relationships with others.
It becomes necessary to ensure that all individuals work towards the commor
organisation.
But employees may have their own individual goals also.
Therefore, for organisational efficiency, it is important to harmonise individe
organisational goals through coordination.
 Functional differentiation

The functions of an
organization are divide into
different department sections and each
department work individually
experts feel that they are
by giving more importance to its objective.
 Specialisation

In large and modern

organization there is high
degree of specialization
and the specialists or
experts feel that they are the only qualified people.
and they always take right
decision in right direction.

Essence of Management