Nature & Significance of Management Class 12 Notes

Management is a process of getting things done to achieve goals effectively and efficiently. Here are the Nature & Significance of Management Class 12 Notes.

In other words, “Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”

Difference between Effectiveness and Efficiency

Features/Characteristics of Management

Management has the following features:

• Goal Oriented: Management combines the efforts of different individuals in the organization for achieving the goals.
• Pervasive: Management is pervasive as it is required in all organization, in all department and at all levels.
• Multi-Dimensional: Management is a complex activity that has three dimensions:
  a) Management of Work
  b) Management of People
  c) Management of Operations
• Continuous Process: Management is a never-ending function. All the functions of management are performed simultaneously.
• Group Activity: Every member of the organization has a different purpose for joining the organization. But as a member of the organization, they work towards fulfilling the common organizational goal.
• Dynamic Function: Management must make changes in goals, objectives, and other activities according to changes taking place in the environment.
• Intangible: Management function cannot be physically seen but its presence can be felt.

Objectives of Management

Objectives are ends towards which the activities of an organization are directed. The managerial objectives of an organization can be classified into three major categories:

1. Organizational Objectives
2. Social Objectives
3. Personal Objectives

1) Organizational Objectives

These objectives aim at the prosperity and growth of the organization. Generally, it is assumed that profit maximization is the main objective of every organization, but it is not true.

Three important organizational objectives of a manager are:

• Survival: The basic purpose of every organization is to survive and exist in the competitive market for a long period of time and it is possible only when it can cover its cost.
• Profit: The most important objective of every organization is earning an adequate amount of profit. Profit is essential for covering the costs and risks of the business.
• Growth: The business organization must grow and expand its activities. The success of any organization is measured by the growth rate and growth is measured in terms of sales, number of branches, number of products, number of employees, etc.

2) Social Objectives

Social objectives of the organization deal with the commitment of the organization towards the society. The major social objectives are:

1. Supply of good quality products at reasonable prices.
2. Contribution towards desirable civic activities. Providing basic amenities like schools and creches to employees.
3. Generation of economic wealth.
4. Providing employment opportunities to the weaker section of the society.
5. Using environmentally friendly methods of production.
6. Organizing educational, health, and vocational training programs.

3) Personal Objectives

Employees are the most important resources of every company and satisfied and motivated employees contribute maximum to the organization.

The main individual objectives of management are:

1. Competitive salary
2. Personal growth and development
3. Peer recognition (self-respect and respect for colleagues)
4. Social recognition
5. Good and healthy working conditions

Importance of Management

1) Management Helps in Achieving Group Goals

Management tries to integrate the objectives of individuals along with organizational goals. Management directs the efforts of all the individuals in the common direction of achieving organizational goals.

2) Management Improves Efficiency

Management insists on efficiency and effectiveness in the work through planning, organizing, staffing, directing, and controlling.

3) Management Creates a Dynamic Organization

Organizations must survive in a dynamic environment, so managers keep making changes in the organization to match the environmental changes. The employees in the organization are generally resistant to change.

4) Management Helps in Achieving Personal Objectives

The manager leads the people in such a manner that along with the organizational goa, the individual goal of employees is also achieved. As organizational goals and individual goals are in one direction only.

5) Management Helps in the Development of Society

Efficient management always has multiple objectives, they give due importance to social obligations, towards different groups of people such as employees, customers, suppliers, etc.

Planning Notes Class 12 Business Studies

Nature of Management

If this question comes up in the exam, we have to write Management is both science and art. Here we will see management’s nature as an Art, Science, and Profession.

Management as a Science

Science can be defined as a systematic and organized body of knowledge based on logically observed findings, facts, and events.

The main Characteristics of Science are:

1. Systematic Body of Knowledge: In science, an organized body of study material is available which is used to acquire the knowledge of science.
   Like science, in management also there is the availability of systematic and organized study material. So, the first feature of science is present in management.
2. Principles are Based on Experimentation: Scientific principles are developed through observations and then tested through repeated experiments.
   Management principles are also developed through observations and experiments but since management deals with human beings and their behavior cannot be accurately predicted.
   So, management can be called an inexact science. This feature is partially presented.
3. Universal Validity: Scientific principles have universal application and validity. Management principles are not exact like scientific principles, so their application and use are not universal.

On comparing the features of science with management, we find that one feature of science is present in management whereas two features are not present.

So, management cannot be considered pure or exact science, but we can call it an inexact science or social science.

Management as an Art

Art can be defined as a systematic body of knowledge that requires skill, creativity, and practice to get perfection.

The main features of art are:

1. Systematic Body of Knowledge: In every art, there is a systematic and organized study available to acquire theoretical knowledge of this art.
   In management also there is a systematic and organized body of knowledge available which can help in acquiring managerial studies.
   So, this feature of art is present in management also.
2. Personalized Application: In the field of art, only theoretical knowledge is not enough. Every artist must have personal skill and creativity to apply that knowledge.
   In management also all managers learn from the same management theories and principles.
   But their efficiency depends on how well they use these principles under different situations by applying personal skills and creativity so this feature is also present in management.
3. Based on Practice and Creativity: The artist requires regular practice of art to become finer and more perfect. Art requires creative practice.
   Same way experienced managers also needs to improve their managerial skills and efficiency. So, this feature of art is also present in management.

On comparing the features of art with management we find all the features of art are present in management so we can call management as an art.

Management as a Profession

A profession can be defined as an occupation backed by specialised knowledge and training, in which entry is restricted.

The main features of profession are:

1. Well-defined Body of Knowledge: In every profession, there is a practice of a systematic body of knowledge of that profession.
   In the case of management also there is the availability of a systematic body of knowledge. So, presently this feature of the profession is present in management also.
2. Restricted Entry: Entry to a profession is restricted through an examination or degree.
   Whereas there is no legal restriction on the appointment of a manager, anyone can become a manager irrespective of educational qualification.
   So, presently this feature of the profession is not present in management.
3. Presence of Professional Association: For all professions, special associations are established like ICAI for CA, AIMA for MBBA, etc.
   But in the case of management, currently there is no professional association. So, this feature is also not present in management of profession.
4. Existence of Ethical Codes: For every profession, there are a set of ethical codes fixed by professional organizations that are binding on all the professionals of that profession.
   In the case of management, there is growing emphasis of ethical codes for managers but not fixed currently. So, this feature of profession is also not present.
5. Service Motive: The basic motive of every profession is to serve clients with dedication. Whereas the basic purpose of management is the achievement of management goals.
   So, presently this feature of the profession is not present but very soon it will be included.

On comparing the features of the profession with management we can conclude that presently all the features of the profession are not present in management, but management is on the path of becoming a profession.

Levels of Management

The authority-responsibility relationship binds individuals as superiors and subordinates and gives rise to different levels of management in an organization.

There are mainly three levels of management as follows:

1. Top Level Management
2. Middle-Level Management
3. Supervisory Level Management

Top Level Management

• Top-level managers are responsible for the welfare and survival of the organization.
• They analyze the business environment and its implications for the survival of the firm.
• They formulate overall organizational goals and strategies for the achievement of goals.
• They are responsible for all the activities of the business and their impact on society.

Middle-Level Management

• They interpret the policies framed by top management to lower-level management.
• They ensure that their department has the necessary personnel.
• They assign necessary duties and responsibilities to them.
• Motivate them to achieve the desired objective.
• Co-operate with other departments for the smooth functioning of the organization.

Supervisory Level/Operational Level

• They interact with the actual workforce and pass on the instructions of the middle management to the workers.
• Supervisors directly oversee the efforts of the workforce.
• Through their efforts quality of output is maintained and the wastage of materials is minimized.
• They ensure that safety standards are maintained.

Functions of Management

We will study more about each function of management in the next chapters. These are the following functions of management:

1. Planning: Planning is the bridge between where we are and where we want to go.
2. Organizing: Organizing refers to assigning duties, grouping tasks, establishing authority, and allocating resources required to carry out a specific plan.
3. Staffing: Staffing simply means the right people for the right job.
4. Directing: Directing involves leading, influencing, and motivating employees to perform the tasks assigned to them.
5. Controlling: Controlling is the management function of monitoring organizational performance towards the attainment of organizational goals.

These are the Nature & Significance of Management Class 12 Notes. If you have any doubts, you can ask in the comments section.