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

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

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Nature and Significance of Management

Chapter: 1

PART – Ⅰ  PRINCIPLES AND FUNCTIONS OF MANAGEMENT

EXERCISE

VERY SHORT ANSWER TYPE

1. What is meant by management?

Ans: “Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”  Management is essential for all organisations big or small, profit or non-profit, services or manufacturing. Management is necessary so that individuals make their best contribution towards group objectives.

2. Name any two important characteristics of management. 

Ans: The basic characteristics of management: 

(i) Management is a goal-oriented process: An organisation has a set of basic goals which are the basic reason for its existence. These should be simple and clearly stated. Different organisations have different goals.

(ii) Management is all pervasive: The activities involved in managing an enterprise are common to all organisations whether economic, social or political. A petrol pump needs to be managed as much as a hospital or a school.

3. Identify and state the force that binds all the other functions of management. 

Ans: Coordination is the force that binds all the other functions of management. It is the common thread that runs through all activities such as purchase, production, sales, and finance to ensure continuity in the working of the organisation. Coordination is sometimes considered a separate function of management. It is however, the essence of management, for achieving harmony among individual efforts towards the accomplishment of group goals. Each managerial function is an exercise contributing individually to coordination. Coordination is implicit and inherent in all functions of an organisation.

4. List any two indicators of growth of an organisation. 

Ans: The indicators of growth of an organisation are:

(i) Increase in Revenue and Profitability – A consistent rise in sales, revenue, and profit margins indicates financial growth and business expansion.

(ii) Expansion of Market Presence – Growth can be seen in the expansion of customer base, entry into new markets, or increased brand recognition.

5. Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure a cost saving of Rs 12, 00,000 per year. Name the objectives of management achieved by Indian Railways in the above case.

Ans: (i) Social objectives: It involves the creation of benefits for society. As a part of society, every organisation whether it is business or non-business, has a social obligation to fulfill. 

(ii) Economic Objective: The initiative helps in significant cost savings by reducing diesel consumption, leading to better financial efficiency and resource optimization.

1. Ritu is the manager of the northern division of a large corporate house. At what level does she work in the organisation? What are her basic functions? 

Ans: Ritu works at the middle level of management as she is the manager of the northern division of a large corporate house. They are subordinate to top managers and superior to the first line managers. They are usually known as division heads, for example production managers. Middle management is responsible for implementing and controlling plans and strategies developed by top management. At the same time they are responsible for all the activities of first line managers. 

Their main task is to carry out the plans formulated by the top managers.

For this they need to: 

(i) Interpret the policies framed by top management.

(ii) Ensure that their department has the necessary personnel.

(iii) Assign necessary duties and responsibilities to them. 

(iv) Motivate them to achieve desired objectives, and.

(v) Cooperate with other departments for smooth functioning of the  organisation. At the same time they are responsible for all the activities of first line managers. 

2. State the basic features of management as a profession. 

Ans: The basic features of management as a profession are:

(i) All over the world there is marked growth in management as a discipline. It is based on a systematic body of knowledge comprising well-defined  principles based on a variety of business situations. This knowledge can be acquired at different colleges and professional institutes and through a number of books and journals. The subject of management is taught at different institutions. Some of these have been set up with the specific purpose of providing management education such as the Indian Institutes of Management (IIMs) in India. Entry to different institutes is usually through an examination. 

(ii) There is no restriction on anyone being designated or appointed as manager in any business enterprise. Anyone can be called a manager irrespective of the educational qualifications possessed. Unlike professions such as medicine or law which require a practicing doctor or lawyer to possess valid degrees, nowhere in the world is it mandatory for a manager to possess any such specific degree. But professional knowledge and training is considered to be a desirable qualification, since there is greater demand for those who possess degrees or diplomas from reputed institutions. Therefore, as such the second criterion has not been strictly met. 

(iii) There are several associations of practising managers in India, like the AIMA (All India Management Association) that has laid down a code of conduct to regulate the activities of their members. There is, however, no compulsion for managers to be members of such an association nor does it have any statutory backing. 

(iv) The basic purpose of management is to help the organisation achieve its stated goal. This may be profit maximisation for a business enterprise and service for a hospital. However, profit maximisation as the objective of management does not hold true and is fast changing. Therefore, if an organisation has a good management team that is efficient and effective it automatically serves society by providing good quality products at reasonable prices.

3. Why is management considered to be a multi-dimensional concept? 

Ans: Management is a complex activity that has three main dimensions.

These are:

(i) Management of work: All organisations exist for the performance of some work. In a factory, a product is manufactured, in a garment store a customer’s need is satisfied and in a hospital a patient is treated.

(ii) Management of people: Human resources or people are an organisation’s greatest asset. Despite all developments in technology “getting work done through people” is still a major task for the manager. 

(iii) Management of operations: No matter what the organisation, it has some basic product or service to provide in order to survive.

4. Company X is facing a lot of problems these days. It 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 meeting customers’ expectations. The finance department blames both production and marketing for declining return on investment and bad marketing. State the quality of management that the company is lacking? What quality of management do you think the company is lacking? Explain briefly. What steps should the company management take to bring the company back on track? 

Ans: Coordination is missing in the management. Coordination is the force that binds all the other functions of management. It is the common thread that runs through all activities such as purchase, production, sales, and finance to ensure continuity in the working of the organisation. Coordination is sometimes considered a separate function of management. It is however, the essence of management, for achieving harmony among individual efforts towards the accomplishment of group goals. Each managerial function is an exercise contributing individually to coordination. Coordination is implicit and inherent in all functions of an organisation.

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 situations and relationships with others. It becomes necessary to ensure that all individuals work towards the common goals of the organisation. But employees may have their own individual goals also. Therefore, for organisational efficiency, it is important to harmonise individual goals and organisational goals through coordination.

5. Coordination is the essence of management. Do you agree? Give reasons. 

Ans: A manager has to link these diverse groups towards the achievement of a common goal. The process by which a manager synchronises the activities of different departments is known as coordination. Coordination is the force that binds all the other functions of management. It is the common thread that runs through all activities such as purchase, production, sales, and finance to ensure continuity in the working of the organisation. Coordination is sometimes considered a separate function of management. It is however, the essence of management, for achieving harmony among individual efforts towards the accomplishment of group goals. Each managerial function is an exercise contributing individually to coordination. Coordination is implicit and inherent in all functions of an organisation.

The process of coordinating the activities of an organisation begins at the planning stage itself. Top management plans for the entire organisation. According to these plans the organisational structure is developed and staffed. In order to ensure that these plans are executed according to plans, directing is required. Any discrepancies between actual and realised activities are then taken care of at the stage of controlling. It is through the process of coordination that a manager ensures the orderly arrangement of individual and group efforts to ensure unity of action in the realisation of common objectives. Coordination therefore involves synchronisation of the different actions or efforts of the various units of an organisation. This provides the requisite amount, quality, timing and sequence of efforts which ensures that planned objectives are achieved with a minimum of conflict.

6. Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume jewellery. The firm secured an urgent order for 1,000 bracelets that were to be delivered within 4 days. They were assigned the responsibility of producing 500 bracelets each at a cost of Rs 100 per bracelet. Ashita was able to produce the required number within the stipulated time at the cost of Rs 55,000 whereas, Lakshita was able to produce only 450 units at a cost of Rs 90 per unit. State whether Ashita and Lakshita are efficient and effective. Give reasons to justify your answer.

Ans: Ashita was efficient, meeting her production target of 500 bracelets, but not fully effective as her cost exceeded the budget. Lakshita was not efficient, producing only 450 bracelets, but was cost-effective per unit, though she failed to meet her overall production goal. Therefore, Ashita succeeded in quantity but failed in cost, and Lakshita failed in quantity but succeeded in per unit cost.

1. Management is considered to be both an art and science. Explain.

Ans: Art is the skillful and personal application of existing knowledge to achieve desired results. It can be acquired through study, observation and experience. Since art is concerned with personal application of knowledge some kind of ingenuity and creativity is required to practice the basic principles learnt. Science is a systematised body of knowledge that explains certain general truths or the operation of general laws. 

Management is considered both an art and a science because it combines systematic knowledge with creativity and practical application. As a science, management has a well-defined body of knowledge, principles, and cause-effect relationships. It is based on research, experiments, and universal concepts such as planning, organizing, and controlling, which apply to all organizations. At the same time, management is also an art because it requires personal skills, creativity, and practical experience for effective application. Every manager applies management principles differently, depending on their leadership style, intuition, and decision-making abilities. Management requires a specific skill set that requires managers’ personal possession, which is why it is also an art. Science gives knowledge, while art is the application of that knowledge and skills.

2. Do you think management has the characteristics of a full fledged profession?

Ans: No, management is not considered a full-fledged profession because it lacks some characteristics of a profession. While management has a well-defined body of knowledge, requires formal education, and follows ethical standards, it does not meet all the criteria of a profession like medicine or law. All professions are affiliated to a professional association which regulates entry, grants certificate of practice and formulates and enforces a code of conduct. To be able to practice in India lawyers have to become members of the Bar Council which regulates and controls their activities. 

Management does not meet the exact criteria of a profession. The subject of management is taught at different institutions. Some of these have been set up with the specific purpose of providing management education such as the Indian Institutes of Management (IIMs) in India. Entry to different institutes is usually through an examination. If an organisation has a good management team that is efficient and effective it automatically serves society by providing good quality products at reasonable prices. There is no restriction on anyone being designated or appointed as manager in any business enterprise. Anyone can be called a manager irrespective of the educational qualifications possessed. 

3. “A successful enterprise has to achieve its goals effectively and efficiently.” Explain. 

Ans: A successful enterprise must achieve its goals effectively and efficiently to ensure long-term growth and sustainability. Effectiveness refers to achieving organizational goals within the stipulated time, while efficiency means achieving these goals with optimal use of resources.

Planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively. In Smita’s organisation the objective is production and sale of candles. Smita has to decide quantities, variety and colour and then allocate resources for their purchase from different suppliers. Planning cannot prevent problems, but it can predict them and prepare contingency plans to deal with them if and when they occur. 

Directing involves leading, influencing and motivating employees to perform the tasks assigned to them. This requires establishing an atmosphere that encourages employees to do their best. Motivation and leadership are two key components of direction. Directing also involves communicating effectively as well as supervising employees at work. Motivating workers means simply creating an environment that makes them want to work. Leadership is influencing others to do what the leader wants them to do. A good manager directs through praise and criticism in such a way that it brings out the best in the employee. 

Coordination is the essence of management rather than a separate function. It ensures that all management functions, planning, organizing, staffing, directing, and controlling, work harmoniously, just like a thread binding flowers in a garland. Without coordination, achieving goals efficiently and effectively would be difficult.

4. Management is a series of continuous interrelated functions. Comment. 

Ans: Management consists of a series of interrelated functions that are performed by all managers. The time spent by managers in different functions however is different. Managers at the top level spend more time in planning and organising than managers at lower levels of the organisation. 

Planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively. In Smita’s organisation the objective is production and sale of candles. 

Organising is the management function of assigning duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. Once a specific plan has been established for the accomplishment of an organisational goal, the organising function examines the activities and resources required to implement the plan. 

Staffing simply stated, is finding the right people for the right job. A very important aspect of management is to make sure that the right people with the right qualifications are available at the right places and times to accomplish the goals of the organisation. This is also known as the human resource function and it involves activities such as recruitment, selection, placement and training of personnel. 

Directing involves leading, influencing and motivating employees to perform the tasks assigned to them. This requires establishing an atmosphere that encourages employees to do their best. Motivation and leadership are two key components of direction. 

Controlling is the management function of monitoring organisational performance towards the attainment of organisational goals. The task of controlling involves establishing standards of performance, measuring current performance, comparing this with established standards and  taking corrective action where any deviation is found. 

5. A company wants to modify its existing product in the market due to decreasing sales. You can imagine any product about which you are familiar. What decisions/steps should each level of management take to give effect to this decision? 

Ans: If a company wants to modify its existing product due to decreasing sales, all three levels of management,Top Level, Middle Level, and Lower Level,need to take coordinated decisions and actions. Suppose the product is a smartphone.

(i) Top Management: They consist of the senior-most executives of the organisation 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, heading finance, marketing etc. 

• Analyzing the reasons for declining sales and identifying necessary modifications in the product.

• Approving budgets for research, development, and marketing.

• Setting new objectives and policies for the modified smartphone.

(ii) Middle Management: Is the link between top and lower level managers. They are subordinate to top managers and superior to the first line managers. They are usually known as division heads, for example  production manager. Middle management is responsible for implementing and controlling plans and strategies developed by top management. At the same time they are responsible for all the activities of first line managers. Their main task is to carry out the plans formulated by the top managers.

• Implementing the strategies set by top management.

• Coordinating with the production department to integrate new features into the smartphone.

• Collaborating with the marketing team to design promotional campaigns.

(iii) Supervisory or Operational Management: Foremen and supervisors comprise the lower level in the hierarchy of the organisation. Supervisors directly oversee the efforts of the workforce. Their authority and responsibility is limited according to the plans drawn by the top management. Lower-level managers, such as Supervisors and Foremen, are responsible for the day-to-day execution of tasks.

Their key responsibilities include:

• Overseeing production processes and ensuring quality standards.

• Ensuring workers follow the new product design and specifications.

• Implementing marketing and sales strategies at the ground level. 

6. A firm plans in advance and has a sound organisation structure with efficient supervisory staff and control system but on several occasions it finds that plans are not being adhered to. It leads to confusion and duplication of work. Advise remedy.

Ans: The firm is facing issues of poor coordination and lack of proper implementation of plans, which is leading to confusion and duplication of work. The remedy for this problem is to improve the direction function of management.

(i) Better Communication: Effective communication is important in business because it helps build relationships, improve productivity, and achieve goals. It also helps avoid misunderstandings, manage conflicts, and build credibility. 

(ii) Proper Coordination: Strengthen interdepartmental coordination to align efforts and avoid duplication of tasks.

(iii) Stronger Supervision: Implementing a more rigorous and proactive approach to overseeing employees’ work, characterized by clear expectations, consistent monitoring, frequent feedback, and holding individuals accountable for meeting performance standards, often with a focus on quality.

(iv) Effective Feedback Mechanism: Implement a system where employees can report challenges in adhering to plans, allowing timely corrective actions.

(v) Regular Review and Control: Control management is a process as it helps your business to check errors and put the right corrections in place and keeps your project management on track.

Parimol

Hi! my Name is Parimal Roy. I have completed my Bachelor’s degree in Philosophy (B.A.) from Silapathar General College. Currently, I am working as an HR Manager at Dev Library. It is a website that provides study materials for students from Class 3 to 12, including SCERT and NCERT notes. It also offers resources for BA, B.Com, B.Sc, and Computer Science, along with postgraduate notes. Besides study materials, the website has novels, eBooks, health and finance articles, biographies, quotes, and more.