CBSE Class 12 Business Studies Nature And Significance Of Management Notes

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Revision Notes for Class 12 Business Studies Chapter 1 Nature and Significance of Management

Class 12 Business Studies students should refer to the following concepts and notes for Chapter 1 Nature and Significance of Management in Class 12. These exam notes for Class 12 Business Studies will be very useful for upcoming class tests and examinations and help you to score good marks

Chapter 1 Nature and Significance of Management Notes Class 12 Business Studies

Linking of Class XI syllabus:

1. In sole proprietorship business, the owner himself manages his business.

2. In Partnership business all partners or any one partner on behalf of other partners can manage the business.

3.In HUF ‘Karta’ manages the business.

4. But in a Joint Stock Company, it is managed by professionally qualified managers. So in this context, the need for management arises.


UNIT-1 NATURE AND SIGNIFICANCE OF MANAGEMENT
 
Management- Management is the process of working with and through others to achieve organizational objectives effectively by using limited resources efficiently in the changing environment.
Efficiency- Doing the right task correctly and using resources wisely in a cost-effective manner.
Effectiveness-Doing the right task and completing it within the given time period.
 
Characteristics/Features of the Management
 
a) Management is a Goal oriented process.
b) Management is all pervasive/Universal.
c) Management is Multidimensional.
d) Management is a continuous process.
e) It is a group activity.
f) It is a dynamic function
g) It is an intangible force.
 
Objectives of Management
 
a)Organizational objectives
● Survival
● Profit
● Growth
b) Social objectives
c) Personal objectives
 
Importance of management
 
a) Helps in achieving group goals.
b) Increases Efficiency.
c) Creates dynamic organization.
d) Helps in achieving personal objectives.
e) Helps in the development of society.
 
Nature of Management-
 
Management is both science and art- Management can be regarded as both science and art because it is a combination of an organized body of knowledge and skillfull application of this knowledge.
 
Levels of Management
 
a) Top level Management
b) Middle Level Management
c) Operative/Supervisory/Lower-Level Management.
 
Hierarchy of Management
The chain of command consisting of a series of managerial positions is called hierarchy of management.
 
Coordination
 
Coordination may be defined as orderly arrangement of group efforts to provide unity of action in the realization of a common purpose.
 
Nature/Features of Coordination
 
a)Integrates group efforts
b) Ensures unity of action
c) Continous process
d) Pervasive function
e) It is the responsibility of all the managers.
 
Need/Importance of Coordination
 
a) Size of the organization
b) Functional Differentiation

 

c) Specialization.
 

CONCEPT MAPPING

Concept: Management is the process of planning, organising, staffing, directing and controlling the resources efficiently and effectively for achieving the organisational goals.

Characteristics: (a) goal oriented process, (b) pervasive, (c) multidimensional (d) group activity, (e) continuous process, (vi) dynamic function, (vii) intangible force

Objectives : (a) organisational (b) social, and (c) personal objectives

Importance: (a) achieves group goals (b) increases efficiency (c) creates dynamic organization (d) helps
achieve personal goals (e) development of society

Management as Art: Theoretical knowledge, personal application, based on practice, creativity

Management as a Science : (a) Systematic body of knowledge (b) principles dpplication,
base on a(c) universal validity Management as a Profession: (a) well defined body of knowledge (b). restricted entry (c) professional association (d) ethical code of conduct Management fulfills
some but not all of these requirements

Levels of management: (a) Top Level management (b) Middle Level management (c) Supervisory or operational or lower level management

Functions of Maniagement: Planning, organising, staffng, directing and controlling

Coordination : The process of achieving unity of action among interdependent activities and departments of an organisation. It is the essence of management as it is required in all managerial functions.

KEY CONCEPTS IN NUTSHELL

1.MEANING/CONCEPT OF MANAGEMENT: Management is the process of getting things done with the aim of achieving goals effectively and efficiently.

• Process: refers to the primary function like planning, organising, staffing, directing and c.
ontrolling performed by the management to get things done

• Effectiveness: means completing the right task to achieve the deputed goal within the time frame.

• Efficiency: means completion of task using minimum resources

2.DEFINITION OF MANAGEMENT: “Management is the process of working with and through others to effectively achieve the organisational objectives by efficiently using limited resources in the changing environment.”

class_12_business_concept_2

 

3. Staffing ­ Finding and placing the right person at the right job at the right

4. Directing ­ Leading, influencing, motivating the staff chosen to perform the assigned task efficiently and effectively.

5. Controlling ‐ Ensuring/Monitoring the activities in an organisation are performed as per the plan.

4. Nature of Management: As an art, As a science and As a professio

5. MANAGEMENT OBJECTIVES­ Organisational Objectives:

Survival:­ Ensure that the organisation survives and exists in the future. Profitability:­ Earning adequate profit in order to survive and grow Growth:­ Growth indicates how well it exploits the potential opportunities.

SocialObjectives:

• Producing quality products at reasonable rates,

• generating employment opportunities,

• Community progress and development by providing schools and crèches to employees In fact most of the firms have taken upon themselves the concept of social responsibility as one of the basic element of business objectives .

• Environmental friendly method of production.

 

PersonalObjectives:

• Meeting the Financial needs like competitive salaries and perks

• Social and safety needs of the employee like peer recognition, self respect and respect for colleagues

• Higher level needs like implementation and monitoring of policies for personal growth and survival

• Reconcile personal goals with organisational objectives for harmony in the organisation.


6
. IMPORTANCE OF MANAGEMENT

• Aids in achievement of individual and organisational goals

• Increases efficiency

• Enhances optimum utilisation of resources

• Creates a dynamic organisation

• Promotes development of society

7. LEVELS OF MANAGEMENT

Top level: ­ Designations and Functions

• Comprises of CEO, Board of Directors, MD, GM, VP

• Conceptualising of organisational goal, policy and strategy formulation

• Organising , Controlling and Monitoring activities and resources

• Controlling the work performance

• Approving Budgets

MiddleLevel:­ ­ Designations and Functions

• Comprises of Departmental, Sub‐Departmental and Divisional heads.

• Execution of plans, policies framed by the top level management

• Preparing organisational set up & appointing employees

• Issuing instructions and motivating employees

• Ensuring interdepartmental cooperation

LowerLevel:­ ­ Designations and Functions

• Forwarding suggestions and feedback to the top level

• Comprise of Supervisors, Foremen and inspectors

• Maintain Morale, safety and discipline amongst the work force

• Oversee the work of the workers

• Assist the management in selection, training, placement & promotion of workers

8. NATURE OF MANAGEMENT As an art:

• Existence of theoretical knowledge.

• Developed through Practical and creative process.

• Personalised application and skill

Asa Profession:

• Well defined body of knowledge.

• Existence of code of conduct

• Professional association (AIMA)

• Restricted entry

• Fees as remuneration for their services

Asa Science:

• Arranged, organised systematic body of knowledge

• Universal validity

• Principles arrived at after experimentation

9. COORDINATION

It is the synchronisation of various activities and efforts in an organisation providing the required amount of quality, timing and sequence; thus ensuring the achievement of the planned goal with minimum content.

10. FEATURES OF COORDINATION: 

• Integrates Group Effort: It is an orderly arrangement of group effort and not individual effort

• Ensures unity of action: It is a binding force between departments and ensures that all efforts are focussed towards achieving the organisational goal

• It is a Continuous Process never ending process as its needs are felt at all levels and steps in the organisations. It begins at the planning stage and continues till controlling

• It remains the function and responsibility of every manager: the top level coordinates the overall plan, middle level coordinates the efforts of the different sections and subsections and lower level management coordinates the activities of the workers.


QUESTIONS FOR PRACTICE
 
Q1. Company X is facing a lot of problems these days. Its manufactures white goods like washing machines, microwave ovens, refrigerators and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production department blames marketing for not meeting sales targets and marketing blames production department for producing goods, which are not of good quality for meeting customers’ expectations. The finance department blames both production and marketing for declining return on investment and bad marketing. 
Which concept of management do you think the company is lacking? Explain briefly.What steps should be company the company management take to bring the company back on track?
 
Q2. Mega Ltd manufactured water-heaters. In the first year of its operations, the revenue earned by the company was just sufficient to meet its costs. To increase the revenue, the company analyzed the reason behind the less revenues. After analysis, the company decided.
 
• to reduce the labour costs by shifting the manufacturing unit to a backward area where labour was available at a very low rate.
• to start manufacturing solar water-heaters and reduce the production of electric water-heaters slowly.
This will not only help in covering the risks but also help in meeting other objectives.
Identify and explain the objectives of management discussed above.
 
Q3. Sooraj works as a salesman in a company selling pet accessories and food. He has been given a target of selling 1200 units of the food packets in a month by offering a maximum of 10% discount to his customers. In order to meet his monthly sales target, on the last two days of the month, he offers 15% discount to his customers.
In the context of the above case:
 
Is Sooraj effective in his work? Explain by giving a suitable reasons in support of your answer.
 
Q4. Kitchen king Enterprises are producers of hand operated grinders. Now with a lot of women in the society going out for job there is a greater demand for product which is more efficient and works at a great speed. On realizing this change the company decided to enter into the market for producing electronically operated mixers and grinders and food processors.
Which level of management will take this decision?
 
Q5. Ramarjuna joins an IT firm as a system analyst after completing his masters in Computer Science.As the nature of his work demands he has to work in very close coordination with all the departmental heads in the firm, very soon Ramarjuna realizes that each departmental head has own individual style of working. They differ greatly in their day-to day approach to work. They tend to deal with a given situation, an issue or a problem through a combination of their own experience, creativity, imagination, initiative and innovation.
In the context of the above case:
Identify and explain the nature of management highlighted in the above case.
 
Q6. XYZ power Ltd. set up a factory for manufacturing solar lanterns in a remote village as there was no reliable supply of electricity in rural areas. The revenue earned by the company was sufficient to cover the costs and the risks. The demand of lanterns was increasing day by day, so the company decided to increased production to generate higher sales. For this, they decided to employ people from the nearby villages as very few job opportunities were available in that area.The company also decided to open schools and crèches for the children of its employees.
a. Identify and explain the objectives of management discussed above
 
Q7. Arundhati has been promoted to the post of Marketing Division Head of a soft drink company.
Identify the level of management at which she will be working henceforth. State any four functions that she will have to perform at this level.
 
Q8. Ashutosh Goenka was working in ‘Axe Ltd’, a company manufacturing air purifiers. He found that the profits has started declining from the last six months. Profit has an implication for the survival of the firm, so he analyzed the business environment to find out the reasons for this decline.
Identify the level of management at which Ashutosh Goenka was working?
 
Q9. Geetika is working in a private sector bank. One of her function relates to the formulation of the overall organizational goals and strategies of the bank. Identify the level of management at which she is working? State any three other functions that she has to perform at this level.
 
Q10. A company’s target product is 5000 units in a year, to achieve this target the manager has to operate in double shifts due to power failure. The manager is able to meet the target but at a higher production cost.Is the manager efficient or effective?
 
Q11. The production manager at Smart Laptops Ltd., was assigned a target of producing 5000 laptops in a month. He had 10 workers under him. Each of these workers was allotted the task of producing 500 laptops each. During the course of the month, due to severe cold, two workers feel sick. The other workers refused to divide their work amongst them and concentrated only on the production of their own individual targets of producing 500 laptops. Thus, at the end of the month the group target of 5000 laptops could not be met.
Which characteristic of management is being ignored in the above case?
 
Q12. Anju and Manju are good friends. Considering the fact that the activities involved in managing an enterprise are common to all organization after completing their masters in business management,both of them take up a job at managerial level in different organizations as per their individual areas of interest. Anju takes up a marketing job in a retail company and strives to increase sales whereas Manju joins an NGO and works diligently to realize its objective related to providing employment to specially abled persons. Both of them have to perform a series of continuous,but separate functions. On some days, Anju may spend more time in planning a future display layout and on another day, she may spend time in sorting out an employee’s problem.Both Anju and Manju make conscious efforts to build a feeling of team spirit and coordination among diverse individuals with different needs who work under them. The effect of their management is noticeable in their respective departments as the targets are met according to plans, employees are happy and satisfied, and there is orderliness in its functioning rather than chaos.
In context of the above case:
Identify the various features of management highlighted in the above paragraph by quoting lines from it.
 
Q13. Identify the functions of the management.
a. Motivating employees and giving instructions to them to perform the tasks assigned to them.
b. Recruitment and selection of the personnel.
c. Finding out deficiencies in implementation of plans.

Q14. Amit and Kavya, complete their school education together. After that Amit appears and qualifies MBBS entrance examinations and joins a reputed Medical college to pursue a degree in medicine. After 4 years, he will get a degree from Medical council of India and start practicing as a doctor. Kavya had to take over her mother’s business as she passes away in a tragic accident. She assumes the post of Managing Director’ in the company. Kavya also joins National Open School to complete her graduation along side.

On the basis of above para identify and explain the main features of a profession. Also, share your views on whether management is a profession or not.

Q15. Prime Minister of India, launched the Swaach Bharat Abhiyan and urged all the citizens and business organizations to actively support it. Keeping this in mind, Armour Helments Pvt. Ltd. decided to contribute by installing 500 dustbins in and around major markets of the city.
Which objective of management is the company trying to fulfill by this act?

ANSWERS

Answer 1: The company is lacking an important aspect of management that is Coordination. Here production department, marketing department and finance department are not working in unity for achieving the goals of the organization due to which return on investment and market share is declining.
To bring company back on track proper coordination should be ensured. Coordination will help in integrating activities of separate units of an organization to accomplish the goals efficiently.
Favourable environment should be created where departments instead of blaming each other can work in harmony with each other for improving the current situation of the company.

Answer 4: Top level management

Answer 6: a. Social Objectives have been discussed in the given situation. The social objectives of an organisation basically involves the creation of benefit and development of the society. The
following are some of the social objectives of management that are being indicated in the given situation.
i. Producing environment friendly products such as solar lanterns.
ii. Setting-up a factory of solar lanterns in order to provide electricity in rural areas.
iii. Providing employment opportunities to the needy.

 

Answer 10: He is effective but not efficient

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