Chapter 1

Management is an art or
a process of performing
activities through various
levels of management in
a coordinated manner
with an aim of achieving Nature & Significance
of Management
organisational objectives
effectively and efficiently.

Business Studies XII (2024) Chapter 01

 MANAGEMENT

Meaning
⚫ Management is defined as the process of planning, organising, staffing,
directing and controlling. It is also referred to as a body of knowledge,
a practice and a discipline.
⚫ Management is defined as a process of getting things done with the
aim of achieving organisational goals effectively and efficiently.
DEFINITION

“Management is the art of getting things done through people.”

—Mary Parker Follett
(1868–1933)
 TERMS OF MANAGEMENT
Process
Process means the primary functions or activities that management performs
to get things done. These functions are planning, organising, staffing,
directing and controlling.

Effectively / Effectiveness
It is concerned with doing the right task, completing the activities and
achieving the goals.

Efficiently / Efficiency
It refers to doing the task in the right way, i.e., with minimum cost and
optimum utilisation of resources.
For management, it is important to maintain Effectiveness Efficiency
a balance between the two, i.e., to achieve
goals(effectiveness)withminimumresources Doing the right
Doing things right
(efficiency). things
EFFECTIVENESSVSEFFICIENCY

Basis Effectiveness Efficiency

Meaning “Effectiveness means “Efficiency means doing
doing the
the right thing”. It means things right.” It means to
taking a correct decision ensure optimum utilisation
of
and action in every resources at reduced cost.
situation
to achieve the target.
Concern Completion of task on time. Completion of task correctly
at a minimum possible cost.
Focus Concerned with the end Concerned with cost-benefit
result. analysis.
Effectiveness + Efficiency = Achievement of Goals
(Completion of (Minimising the cost)
work)
CHARACTERISTICS / FEATURESOF MANAGEMENT
Management is a/an—

Goal-Oriented Process
All-Pervasive
Characteristics Multi-dimensional Activity
of Continuous Process
Management Group Activity
Dynamic Function
Intangible Force
 CHARACTERISTICS / FEATURESOF MANAGEMENT
1. Management is a Goal-Oriented Process
Management integrates the efforts of all the individuals towards achieving
the goals.

⚫ Goals should be simple and clearly stated.

⚫ Different organisations have different goals.
2. Management is All-Pervasive
The utilisation of management is not restricted to only profit-making firms
but is also applicable to non-profit organisations, viz., charitable trusts,
NGOs, etc.

EVERYWHERE
3. Management is a Multi-Dimensional Activity
Management is a complex activity which has three main
dimensions, viz.,
⚫ Management of Work—Management makes sure
that all required tasks and works are accomplished
effectively and efficiently.
⚫ Management of People—Management has to deal
with the people of two dimensions.
(a)Employees as individuals with diverse needs
and behaviour
(b) Employees as a group of people.
⚫ Management of Operations—Management
operations, viz., production, marketing, finance,
etc., are concerned with both the management of
work and management of people.
4. Management is a Continuous Process
Every activity is done to achieve a target. Once the target is achieved, a new
target is set. Hence, the management process is a cycle in nature.

⚫ It is the series of continuous, composite but separate functions.

⚫ Simultaneously performed by all the managers.
5. Management is a Group Activity
An organisation consists of diverse individuals with different needs. These
workers work together for a common goal.

⚫ Groups need team work and coordination of individual efforts.

⚫ Enables all the members to grow and develop as need and opportunity
changes.
6. Management is a Dynamic Function
An organisation interacts with external environment. In order to be successful,
an organisation must change itself and its goals according to the needs of the
environment.
7. Management is an Intangible Force
It cannot be seen or touched. But its presence can be felt and noticed when
employees are happy and satisfied and there is orderliness and coordination
in their works.
OBJECTIVES OF MANAGEMENT

OBJECTIVES OF MANAGEMENT

Organisational Objectives

Social Objectives

Personal Objectives
 OBJECTIVES OF MANAGEMENT
1. Organisational / Economic Objectives
An organisation should utilise human and material resources to the maximum
possible advantage. An organisation has to achieve its different economic
objectives—Survival, Profit and Growth.
ECONOMIC
OBJECTIVES OF OBJECTIVES
MANAGEMENT

Survival
Organisational Objectives

Profit
Social Objectives

Growth
Personal Objectives

• Survival—An organisation must earn enough revenues to cover cost.

• Profit—Profit is essential to cover costs and risks of the business.
• Growth—Management must exploit fully the growth potential of the
organisation in the long run.
2. Social Objectives
An business organisation has different social objectives towards different
groups of society like using environment-friendly methods of production,
following laws like GST, generating employment opportunities for weaker
sections of the society, etc.
⚫ Providing quality goods and services

⚫ Stop anti-social practices

⚫ Cooperation with Govt.

⚫ Reduce pollution

⚫ Welfare of employees
⚫ Consistently creating economic value for
various constituents of the society
3. Personal Objectives
An organisation strives to fulfill personal objectives of its employees with
diverse needs such as—
⚫ financial needs by giving them competitive salary and perks,
⚫ social needs such as peer recognition, and
⚫ higher level needs such as personal growth and development.
 IMPORTANCE / SIGNIFICANCE OF MANAGEMENT
“Management is a life-giving element in every business;
without it the resources of production remain resources
and shall never become production.”

Peter Drucker

IMPORTANCE OF MANAGEMENT
IMPORTANCE / SIGNIFICANCE OF MANAGEMENT
1. Management helps in the Achievement of Group Goals
The resources like men, machine, money, etc., are coordinated, directed
and controlled in such a manner that the organisation works towards the
attainment of goals.
2. Management increases Efficiency
Management directs day-to-day operations in such a manner that all wastages
are avoided. It helps in optimum utilisation
3. Management creates a Dynamic Organisation
By making the organisation adapt itself to the changing environment.
4. Management helps to achieve Personal Objectives
It motivates and leads the human force in such a manner that it results in
achieving personal goals along with overall organisational goals.
5. Management helps in the Development of Society
Efficient management leads to better utilisation of all the available resources
which in turn helps to increase the welfare of society. It improves the standard
of living by providing the quality goods and services.

Wealth Creation and Sharing

Community Create Jobs

Development

Balanced
Export Regional
Development

Entrepreneurship
Standard of GDP and Per
Living Capita Income
 NATURE—MANAGEMENT ASA SCIENCE
1. Systematic Body of Knowledge
Science—Science is a systematic body of knowledge based on cause-and-
effect relationship. May be used to predict the outcome of specific actions.
Management—Management is also a systematic body of knowledge, built
up by management practitioners over a considerable period of time.
2. Use of Scientific Method of Observation
Science—The method of observation is not influenced by the personal likes
and dislikes of the scientist. It is unbiased and objective.
Management—Methods of observation followed by management are not cent
per cent objective because the subjects are human beings whose behaviour
cannot be predicted with absolute accuracy.
3. Principles Based on Experiments
Science—Once an observation is confirmed by repeated experimentation
and testing, it becomes a principle.
Management—Management principles have been developed over a period
of time and are based on experiments in different situations.
4. Universal Validity
Science—The principles never fail if given conditions are satisfied.
Management—Principles are not exact as the principles of science, are
modified according to situation and condition.
Management cannot be considered as a pure or perfect science like Physics
or Chemistry but it is a social or soft science.
NATURE—MANAGEMENT ASAN ART
 NATURE—MANAGEMENT ASAN ART
1. Existence of Theoretical Knowledge
Art—The pursuit of art is based on certain basic principles derived from the
knowledge of experts.
Management—There is a lot of literature available in various areas of
management like marketing, finance and human resources which the
manager has to specialise in. There is existence of theoretical knowledge.
2. Personalised Application:
Art—General principles do exist in the manner, in which these are applied
or used is left to the practitioner.
Management—Every manager must have personal skills and creativity to
apply the acquired knowledge. Propounded by many thinkers, a manager
applies these scientific methods and body of knowledge to a given situation,
an issue or a problem, in his own unique manner.
3. Based on Practice and Creativity
Art—One must learn and practice and then infuse one’s creativity and
develop one’s own style or method.
Management—A manager also improves his skills and efficiency with
regular practice or application of management principles, studies critical
situations and formulates his own theories for use in a given situation.
 MANAGEMENT :BOTH A SCIENCEAND AN ART
They are not in contrast to each other. Rather, they are complementary to
each other, i.e., both are required in every management function.
Science provides the knowledge and Art deals with the application of
knowledge. One can not become an efficient manager only with knowledge
of principles. He must evolve creative results through practical knowledge
and skills. Management is a systematic body of knowledge, consisting of
inter-related principles which make it a science. It is also the skill and art of
applying that knowledge to a practical situation. So, it is an art as well.
⚫ Management is science because it uses certain principles.

⚫ Management is an art because it requires continuous practice and

personalised applications.
NATURE—MANAGEMENT ASA PROFESSION
 NATURE—MANAGEMENT ASA PROFESSION
1.Well-Defined Body of Knowledge
Profession—Every profession has a systematic body of knowledge relevant
to the area of specialisation, and it can be imparted through instructions.
Management—Management is based on a well-defined body of knowledge
that can be acquired through recognised institutions only. There is a
specialised knowledge which can be acquired from the universities or
management institutions.
2. Restricted Entry
Profession—Everybody cannot enter a profession. One must qualify
the prescribed examinations and acquire proficiency in practice through
apprenticeship or other means, to be called a professional.
Management—There is no restriction on appointment of managers,
irrespective of educational qualifications.
3. Professional Association
Profession—All professionals are affiliated to an officially recognised
association which can represent the profession and grant certificate of
practice.
Management—Most of the professional managers are affiliated to a statutory
association or institutions which regulates entry in the profession.
4. Service to Others
Profession—Every professional must aim at providing service to others.
Management—The basic motive of a manager is to serve the clients by
rendering, dedicated and committed service.
5. Ethical Code of Conduct
Profession—All professions have a code of conduct wherein due stress has
been given on integrity, good conduct and professional morality.
Management—There is no uniform code of conduct in management. This
feature of profession is not present in management.
LEVELSOF MANAGEMENT

POSITION FUNCTIONS
Board of Directors and Defining the objectives and
Chief Executives formulating the policies.
TOP LEVEL
Identifying the departmental
Departmental Heads and objectives and guiding the lower
Managers level towards the achievement
MIDDLE LEVEL of these objectives.

Supervisors and Carrying out the operations

Foremen LOWER and their supervisions.
LEVEL

WORKERS
TOP LEVEL MANAGEMENT
• Board of Directors (BOD)
• Chief Executive Officer (CEO)
• Chief Finance Officer (CFO)
• Chief Operating Officer (COO)
• Chairman
• President
• Vice-President
FUNCTIONS/ROLEOFTOP LEVEL MANAGEMENT
1. Overall Management
2. Development of Organisational Structure
3. Analysing the Business Environment
4. Ensuring Overall Control
5. Maintaining Public Relations.
MIDDLE LEVEL MANAGEMENT
Operating Functional Managers
⚫ Production Manager
⚫ Finance Manager
⚫ Human Resources Manager
⚫ Marketing Manager
FUNCTIONS/ROLEOF MIDDLE LEVEL MANAGEMENT
1. Acting as a Link between Top and Lower Level Management
2. Motivating Employees
3. Interpreting the Policies
4. Coordinating Smooth Functioning
5. Ensuring Proper Staffing.
OPERATIONAL / SUPERVISORY LEVELMANAGEMENT
Supervisory Management
⚫ Supervisor
⚫ Superintendent
⚫ Foreman
⚫ Section Officer
FUNCTIONS/ROLE OF OPERATIONAL/SUPERVISORY/
LOWERLEVEL MANAGEMENT
1. Ensuring Proper Communication
2. Maintaining Adequate Production
3. Maintaining Quality Standards
4. Formulating Plans
5. Maintaining Records
6. Human Resource Development.
FUNCTIONS OF MANAGEMENT

FUNCTIONS
OF
MANAGEMENT

Directing
 FUNCTIONS OF MANAGEMENT
1. Planning
It is the primary function of management. It refers to deciding in advance
what to do, how to do, who is to do it and developing an action plan to
achieve goal efficiently and effectively. Planning cannot prevent problems,
but it can predict them and help to prepare contingency plans to deal with
them if and when they occur.
2. Organising
It refers to the assigning of duties, grouping tasks into departments,
establishing authority and allocating of resources required to carry out a
specific plan. It decides who will do particular task, where it will be done,
and when it will be done.
3. Staffing
It is concerned with employing the right people into right positions and
developing their skills through training. It focuses on improving the
competence and performance of the employees.
4. Directing
It is concerned with instructing, guiding supervising and inspiring people
in the organisation to achieve the objectives. This requires establishing an
atmosphere that encourages employees to do their best.
5. Controlling
It involves establishing standards of performance, measuring current
performance, comparing this with established standards and taking
corrective action where any deviation is found. It aims to improve the future
performances.
 COORDINATION
“Coordination deals with the task of binding efforts in order to ensure successful
attainment of an objective. It is accomplished by means of planning, organising,
actuating and controlling.”
—George Terry
 COORDINATION: ESSENCEOF MANAGEMENT
Coordination is the essence of management because it implies in different functions of
management.
1. Planning—If plans are not properly made or implemented, objectives of the
organisation cannot be achieved.
2. Organising—Every manager while organising must ensure that all essential activities
required to accomplish objectives of the enterprise have been properly grouped and
assigned to people in the organisation.
3. Staffing—No enterprise can afford to work with inadequate staff or surplus staff.
Thus, different elements of staffing need to be effectively coordinated.
4. Directing—A manager guides and supervises the
work of his subordinates to ensure that the group
efforts are properly synchronised and that the unity
of action is brought about to accomplish defined
objectives.
5. Controlling—Controlling events to confirm to plans
which are properly coordinated. It implies that an
attempt is made to harmonise group efforts and
thus, bring about unity of action so that planned
targets and goals may be accomplished.
NATURE/CHARACTERISTICS/FEATURES OF COORDINATION
1. Coordination integrates group efforts of employees into purposeful act
2. Coordination ensures unity of action as all efforts are focused towards ach
organisational goals.
3. Coordination is a continuous process that starts from planning stage and
controlling.
4. Coordination is an all pervasive function due to interdependent na
various departments.
5. Coordination is the responsibility of all managers in the

organisation.
6. Coordination is a deliberate
function, as even where
members of a department
willingly cooperate and work,
it gives a direction to that
willing spirit.
IMPORTANCE AND NEED OF COORDINATION
1. Growth in Size—With the growth in size of organisation, coordination
is needed to unify the efforts of diverse individuals.
2. Functional Differentiation— Since all departments and individuals
are interdependent for information; coordination links the activities
of various departments.
3. Specialisation—Coordination is needed to reconcile the different
approaches, interests or opinions of the specialists employed in the
organisation.