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NIOS Class 12 Business Studies Chapter 10 Fundamental of Management
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Fundamental of Management
Chapter: 10
Module – 4 : BUSINESS MANAGEMENT: NATURE AND SCOPE
INTEXT QUESTIONS 10.1
Q. 1. Define the term ‘Management’ in your own words.
Ans: Management refers to the process of using men, money, machines, material and processes through proper direction, coordination and integration of several activities so as to produce desired results and attain predetermined goals. In other words, management consists of a series of activities classified into various functions like planning, organising, staffing, directing and controlling.
Q. 2. Complete the following incomplete words by taking clues from the statements given for each. Every blank represents one letter only. First one has been done for you.
(a) Management is U_______ V ______S ________ L _________ (UNIVERSAL)
(b) Management is____ N_____ GI____E
(c) Management is S_______ I ______ L process
(d) Management is S_______ U________ O_______ AL
(e) Management is a_________ O______ TI________O_________S process
Clues:
(a) It is required for every type of organisation.
(b) It is an unseen force.
Ans: INTANGIBLE.
(c) It deals with people organised in groups.
Ans: SOCIAL.
(d) There is no best way of managing, so it varies.
Ans: SITUATIONAL.
(e) It is an ongoing process.
Ans: CONTINUOUS.
Q. 3. List any three objectives of management.
Ans. (a) Optimum utilisation of resources.
(b) Increase in productivity of all factors of production.
(c) Fair return on capital.
(d) Credit Good will.
(e) Meet Challenges of changing environment.
INTEXT QUESTIONS 10.2
Q. 1. The following statements make the management an art, science or profession. Identify each statement and put their numbers in the box given below.
(a) There is a systematised body of knowledge that includes concepts, theories and people.
(b) It is creative in nature.
(c) It should have universal application.
(d) There is no best way of managing.
(e) There is always a formal method of acquisition of knowledge.
Ans: Art:
(b) It is creative in nature.
(d) There is no best way of managing.
Science:
(a) There is a systematised body of knowledge that includes concepts, theories and people.
(c) It should have universal application.and
Profession:
(e) There is always a formal method of acquisition of knowledge.
Q. 2. Match the expression given in Column-I with these given in Column-II.
| Column-I | Column-II |
| (a) Management as a discipline | (i) Team of managers |
| (b) Management as a process | (ii) Code of conduct for professionals |
| (c) Management as a group | (iii) Developed and grown through practice and research |
| (d) Management as a profession | (iv) Series of inter-related activities |
Ans:
| Column-I | Column-II |
| (a) Management as a discipline | (iii) Developed and grown through practice and research |
| (b) Management as a process | (iv) Series of inter-related activities |
| (c) Management as a group | (i) Team of managers |
| (d) Management as a profession | (ii) Code of conduct for professionals |
INTEXT QUESTIONS 10.3
Q. 1. The following table contains the function, position and different levels of management. Pick one from each column and make a meaningful combination.
| Levels of Management | Position | Functions |
| (A) Top | (a) Departmental heads and managers | (i) Identifying the departmental objectives and guiding lower level towards achievement of objectives. |
| (B) Middle | (b) Board of Directors and Chief Executives | (ii) Carrying out the operations and their supervisions. |
| (C) Lower | (c) Supervisors and Foremen | (iii) Defining the objectives and formulating the policies. |
Ans: (A) – (b)(iii)
(B) – (a) – (i)
(C) – (c) – (ii)
Q. 2. Given one word substitution of the following:
(a) Deciding in advance about the future course of action.
Ans: Planning.
(b) Guiding and supervising the subordinates towards the work.
Ans: Directing.
(c) It confirms that plans are properly carried out.
Ans: Controlling.
(d) It brings harmony in group.
Ans: Coordination.
(e) It ensures that right type of persons are in the right position.
Ans: Staffing.
Q. 3. Multiple Choice Questions
(i) Co-ordination is:
(a) an objective of an organisation
(b) goal of an organisation.
(c) the essence of management.
(d) none of the above.
Ans: (c) the essence of management
(ii) ________ force binds all other functions in management.
Ans: Co-ordination.
(iii) The process by which a manger synchronises the activity of different departments is _____________.
(a) planning.
(b) organising.
(c) staffing.
(d) co-ordination.
Ans: (d) co-ordination.
INTEXT QUESTIONS 10.4
Q. 1. What is meant by unity of direction”?
Ans: Each group of activities having the same objective must have one head and one plan of action. Otherwise, there may be wastage, over expenditure and useless rivalry among the managers.
Q. 2. From the following identify the general principles of management that each sentence simplies:
(a) A person should receive order from one person only.
Ans: Unity of command.
(b) Team spirit should be encouraged.
Ans: Esprit – de-corps.
(c) Managers should be kind and just to workers.
Ans: Discipline.
(d) Instructions should be passed through a well defined path only.
Ans: Equity.
Q. 3. Multiple Choice Questions
(i) Who is known as the father of Scientific Management?
(a) Peter F. Drucker.
(b) Henry Fayol.
(c) Fredrick Winslow Taylor.
(d) None of the above.
Ans: (c) Fredrick Winslow Taylor.
(ii) Name the technique of Scientific Management that lays down that there should be two types of rates of wage payment:
(a) Differential piece rate system.
(b) Standaralisation.
(c) Functional foremanship.
(d) Mental revolution.
Ans: (a) Differential piece rate system.
(iii) From the following identify the technique of Scientific Management which lays down that workers should have multiple accountability.
(a) Standarlisation.
(b) Functional foremanship.
(c) Differential piece rate system.
(d) Mental revolution.
Ans: (b) Functional foremanship.
TERMINAL EXERCISE
Very Short Answer Type Questions:
Q. 1. Define the term ‘Management’.
Ans: Management refers to the process of using men, money, machines, material and processes through proper direction, coordination and integration of several activities so as to produce desired results and attain predetermined goals. In other words, management consists of a series of activities classified into various functions like planning, organising. staffing, directing and controlling.
Q. 2. What do you mean by Co-ordination?
Ans: Co-ordination synchronises all the activities of an organisation to achieve the objectives of enterprise. Co-ordination is a continuous activity and it is the essence of management.
Q. 3. List different levels of management.
Ans: Management can be divided into three levels:
(i) Top level management.
(ii) Middle level management.
(iii) Lower level management.
Q. 4. State the meaning of Esprit de Corps.
Ans: These French words mean team spirit. Managers should infuse the spirit of team work and cooperation among the employees. It helps in developing an atmosphere of mutual trust and a sense of unity.
Q. 5. What is meant by subordination of individual interest to general interest?
Ans: While taking any decision, the collective good and collective interest of the organisation as a whole should be preferred to individual interests. The individual’s interest should be subordinated to the overall interest of the organisation. This ensures welfare of the organisation as well as its individual members.
Q. 6. Define the term ‘Equity’ as a principle of management.
Ans: This principle requires the managers to be kind and just to workers. This promotes a friendly atmosphere between superiors and subordinates and motivates them to perform their duties efficiently.
Q. 7. State any one principle of Scientific Management.
Ans: Mental Revalution: According to F.W Taylor, without complete mental revolution of workers and managers, scientific management will not be successful. The workers and managers should have a complete change of outlook with respect to their relations and work efforts. This is called mental revolution.
Q. 8. What is meant by motion study?
Ans: Under motion study, the movement of men. machines and materials are observed and analysed. Motion study eliminates wasteful motions and help to find the best method of doing a particular job.
Short Answer Type Questions:
Q.9. State any three objectives of management.
Ans: Objectives of management include –
1. Optimum Utilisation of Resources: Management should try to secure maximum outlay with minimum efforts and resources by utilising the human and material resources available in an organisation for deriving the best results.
2. Increase in Productivity of All Factors of Production: Management should minimise the wastage of time, money and efforts through proper utilisation of various factors of production like capital and labour. This will lead to increase in efficiency of all factors of production. It should also try to set higher standards of productions every year and should strive higher to reach these targets.
3. Fair Return on Capital: Management has to provide a fair return to the owners on the capital invested by them. Management must maintain the investment and should also attract further investments for growth and expansion.
Q. 10. Mention the different characteristics of management.
Ans: The various characteristics of management are:
(a) Management is Universal: It means that management is required for every type of organisation. It may be a business organisation or social or political. It may be a small firm or a large one. Management is required by a school or a college oruniversity or a hospital or a big firm like Reliance Industries Limited or a small variety store in your locality. Thus, it is a universal phenomenon and is common and essential element in all organisations.
(b) Management is Goal Directed: Every organisation is created to achieve certain gols. For example, for a business firm it may be to make maximum profit and/or to provide quality products and services. Management of an organisation is always aimed at achievement of the organisational goals. Success of management is determined by the extent to which these goals are achieved.
(c) Management is a Continuous Process: Management is an ongoing process. It continues as long as the organisation exists. No activity can take place without management. To perform all activities like production, sale, storage, operation etc.. management is required. So, as long as these activities continue the process of management also continues to operate.
(d) Management is an Integrating Process: All the functions, activities, processes and operations are intermixed among themselves. It is the task of management to bring them together and proceed in a coordinated manner to achieve desired result. In fact, without integration of men, machine and material and coordination of individual efforts to contribute successfully as a team, it will be difficult to achieve organisational goals.
(e) Management is Intangible: Management is not a place like a graphic showing Board meeting or a graphic showing a school Principal at her office desk which can be seen. It is an unseen force and you can feel its presence in the form of rules, regulation, output, work climate, etc.
Q. 11. Explain the meaning of ‘management as a discipline’.
Ans: Management as a discipline: Management is a systematised body of knowledge that has developed, grown and evolved over the years through practice and research. The knowledge so cumulated is disseminated to successive generations of managers and used by them in performing their jobs. Thus, it has become a separate field of study with its own principles and practices and thus, evolved as an independent discipline with its own techniques and approaches.
Q. 12. Can management be treated as a profession? Give reasons in support of your answer.
Ans: Profession is an occupation. To be precise. any occupation that satisfies the following requirements is called a profession:
(i) It must be an organised and systematised body of knowledge. Take for example professions like engineering or chartered accountancy. These require a specialised knowledge.
(ii) There is always a formal method of acquisition of such knowledge. In other words, individuals, to pursue a specific profession, must acquire the specialised knowledge through some institutions. For example, you need to get a degree in formal law or engineering to pursue the profession of a lawyer or engineer.
(iii) There exists an association to devise certain code of conduct for the professionals. This code of conduct lays down norms to be observed by the professionals while doing their job. Violation of the prescribed code can lead to derecognising the professional to practise.
(iv) A profession is no doubt an occupation to earn one’s livelihood but the financial reward is not the main measure of their success. The professional use their specialised knowledge to serve the long-run interests of the society and are also conscious of their social responsibility.
Q. 13. What is meant by scientific management?
Ans: Fredric Winslow Taylor identified that the existing management practices were based on trial and error method. F.W. Taylor is known as father of Scientific Management. Scientific management means the application of scientific methods of study and analysis the problems of management.
Q. 14. State any three characteristics of principles of management.
Ans: Characteristics of Principles of Management are:
1. Universal: The management principles are applicable to all types of organisations like government enterprises, educational institutions, business enterprises etc.
2. Flexible: Management principles are modified and applied according to the changing situations. For example, when an organisation started its functioning. it may have adopted principle of centralisation. When the organisation became a large enterprise, it will apply principle of decentralization.
3. Aimed to Influence Human Behaviour: Human behaviour is complex and unpredictable. Management principles influence human behaviour so that human resources give their best to an organisation. For example, principle of order is followed, so that wasteful movement of workers can be avoided.
Q. 15. Explain the importance of principles of management.
Ans: Management principles have considerable importance in all group efforts. Following are the points of importance of management principles:
1. Act as a Guide for Research in Management: The principles so far developed can be tested in new situations and management practices can be made more effective. For example, in earlier days workers were motivated by their remuneration. But now a days family health, education of the children etc. should be considered by the organisation in order to motivate and retain the workers.
2. Improve Understanding: The knowledge of principles of management help the managers to manage an enterprise properly. The principles of management help the managers for taking correct decisions. Managers can handle situations smoothly.
3. Identify the Areas for Training of Managers: The principles of manageraent help in identifying the areas where the managers should be trained.
4. Act as Reference for Managers: Principles act as reference for the managers and help to evaluate whether the decision taken by him are appropriate and accurate.
5. Increases efficiency: Principles are guidelines for managers for taking accurate decisions. Principles help the manager for solving problems of an enterprise.
Q. 16. What is meant by principles of management?
Ans: Principles are the basic truths generally stated in the form of cause effect relationship. Management principles are the broad guidelines for the managers for decision making.
Concept: Principles of management are derived on the basis of observation and experimentation I studies. Principles of management establishes cause and effect relationship and serve as a guide to thought and action. For example, according to the principle of division of work, specialization is the result of division of work. The cause (dividing the work) and effect (specialisation) can be clearly located.
Q. 17. What do you mean by Mental revolution?
Ans: According to F.W. Taylor, without complete f mental revolution of workers and managers, scientific management will not be successful. The workers and managers should have a complete change of outlook e with respect to their relations and work efforts. This is called mental revolution.
Long Answer Type Questions:
Q. 18. Explain Co-ordination as the essence of management.
Ans: Co-ordination is the orderly arrangement of group efforts to provide unity of action for the attainment of a common purpose. Co-ordination synchronises the activities of an organisation. It is the essence of management and is not a separate function of management. It is performed while performing all other functions of management.
Co-ordination is the essence of Management: Management objectives can be achieved only if there is unity of action among employees. This is possible if the organisation functions with proper harmony. If the activities of an enterprise are not integrated, there is lack of co-ordination. Lack of co-ordination may lead to duplication of work, over lapping of work, conflicts etc.
Q. 19. Describe the characteristics of management.
Ans: The various characteristics of management are:
(a) Management is Universal: It means that management is required for every type of organisation. It may be a business organisation or social or political. It may be a small firm or a large one. Management is required by a school or a college or university or a hospital or a big firm like Reliance Industries Limited or a small variety store in your locality. Thus, it is a universal phenomenon and is commonand essential element in all organisations.
(b) Management is Goal Directed: Every organisation is created to achieve certain goals. For example, for a business firm it may be to make maximum profit and/or to provide quality products and services. Management of an organisation is always aimed at achievement of the organisational goals. Success of management is determined by the extent to which these goals are achieved.
(c) Management is a Continuous Process: Management is an ongoing process. It continues as long as the organisation exists. No activity can take place without management. To perform all activities like production, sale, storage, operation etc. management is required. So, as long as these activities continue the process of management also continues to operate.
(d) Management is an Integrating Process: All the functions, activities, processes and operations are intermixed among themselves. It is the task of management to bring them together and proceed in a coordinated manner to achieve desired result. In fact, without integration of men, machine and material and coordination of individual efforts to contribute successfully as a team, it will be difficult to achieve organisational goals.
(e) Management is Intangible: Management is not a place like a graphic showing Board meeting or a graphic showing a school Principal at her office desk which can be seen. It is an unseen force and you can feel its presence in the form of rules, regulation, output, work climate, etc.
(f) Management is Multi-disciplinary: Management of an organisation requires wide knowledge about various disciplines as it covers handling of man, machine, material and looking after production, distribution, accounting and many other functions. Thus, we find the principles and techniques of management are mostly drawn from almost all fields of study like – Engineering. Economics, Sociology Psychology, Anthropology, Mathematics, Statistics etc.
(g) Management is a Social Process: The most important aspect of management is handling people organised in work groups. This involves developing and motivating people at work and taking care of their satisfaction as social beings. All managerial actions are primarily concerned with relations between people and so it is treated as a social process.
(b) Management is Situational: The success of management depends on, and varies from, situation to situation. There is no best way of managing. The techniques and principles of management are relative, and do not hold good for all situations to come.
Q.20. Explain the importance of coordination.
Ans: Importance of Co-ordination: The meaning and characteristics of cordination indicate that it is of great importance. Without proper co-ordination human efforts may get jeopardized and objectives may not be effectively achieved.
The importance of cordination can be explained with the help of the following points:
1. Co-ordinations helps in maintaining harmony among workers in an organisation.
2. Co-ordination prevents over lapping of work and conflict among workers so as to achieve unity of action.
3. In large organisations, various departments and it units are located at different places,close interaction s among people will be very difficult. So a conscious c effort of management is needed to co-ordinate the n activities of such organisations. Co-ordinate the a activities of such organisations. Co-ordination attempts of achieve cordial human relations.
4. Co-ordination helps to achieve ultimate o objective of the organisation by establishing direct n contact between management and employees.
5. Co-ordination helps in reducing time and cost of operations.
6. It increases efficiency and moral of the employees.
Q. 21. Explain the objectives of management.
Ans: Management helps in efficient and effective use of available resources of an organisation. Objectives are the end results, towards which all n managerial efforts and organisational activities are directed. Objectives of management include –
1. Optimum Utilisation of Resources: Management should try to secure maximum outlay with minimum efforts and resources by utilising the human and material resources available in an a organisation for deriving the best results.
2. Increase in Productivity of All Factors of Production: Management should minimise the wastage of time, money and efforts through proper utilisation of various factors of production like capital and labour. This will lead to increase in efficiency of all factors of production. It should also try to set higher standards of productions every year and should strive higher to reach these targets.
3. Fair Return on Capital: Management has to provide a fair return to the owners on the capital invested by them. Management must maintain the investment and should also attract further investments for growth and expansion.
4. Create Goodwill: Management should aim at building the reputation of the firm through various activities like popularising products by advertising. reasonable price, good quality products etc. Business environment is dynamic and is influenced by a number of factors.
5. Meet Challenges of the Changing Environment: Enterprises which are unable to adopt itself to the changing situations, will not be able to survive. Management should frame steps to meet the challenges of the changing environment. Thus, management can help an organisation for its survival and growth.
Q.22. Describe the importance of management.
Ans: The existence and success of any organisation largely depends on the kind of management it has. No amount of quality resources is going to help unless they are put to productive use by efficient management. It is because of this reason that management is studied as a subject in almost every discipline of study. In today’s scenario with globalisation, job specialisation, changing technologies, new responsibilities of business, consumerism, competition and emphasis on research and development, the role of management hasgrown multifold. Its importance is reflected in the positive result that the organisation can get in respect of the following:
(a) Attainment of Goals: Every organisation has a goal to achieve and each employee in the organisation also has his own goals that he wants to achieve. Even a to perational level each department, each unit or even each group has a goal that it wants to achieve. It is only through proper management – by well thought of planning, good direction and proper coordination and control that effectiveness to the efforts of each group to achieve given goals can be ensured.
(b) Stability and Growth: Management strives to utilise the available resources of the organisation effectively and efficiently. It controls the activities and operations, integrates the functions, motivates the employees, maintains the health of the organisation in the ever changing environment. It thus, ensures stability to the working of the organisation and contributes to its growth.
(c) Change and Development: Management keeps itself in touch with the changes in the environment and foresees development in the future. Accordingly, plans are made to keep the organisation ready to meet the challenges. The technologies, operations, process as human factors are developed on a continuous basis keeping an eye on the future.
(d) Efficiency and Effectiveness: By proper planning, staffing, organising, coordinating. directing, and its controlling activities, the management helps in achieving efficiency and effectiveness to human efforts and operations.
Q. 23. State the various functions of management.
Ans: Following are the various functions of management:
(a) Planning: Planning is deciding in advance what is to be done, when it is to be done, how it is to be done. It is basically concerned with the selection of goals to be achieved and determining the effective course of action from among the various alternatives. This involves forecasting, establishing targets, developing the policies and programming and scheduling the action, procedure, etc., Thus, planning requires decisions to be made on what should be done, how it should be done, who will do it, where it will be done, and why it is to be done. The essential part of planning consists of setting goals and programmes of activities.
(b) Organising: After the plans have been drawn, management has to organise the activities, and physical resources of the firm to carry out the selected programmes successfully. It also involves determining the authority and responsibility relationships among functions, departments and personnel at various levels to ensure smooth and effective function together in accomplishing the objective. Thus, the organising function of management is primarily concerned with identifying the tasks involved and grouping them into units and departments, and defining the duties and responsibilities of people in different positions within each department for well coordinated and cooperative effort in the organisation.
(c) Staffing: Staffing is concerned with employing people for the various activities to be performed. The objective of staffing is to ensure that suitable people have been appointed for different positions. It includes the functions of recruitment, training and development, placement and remuneration, and performance appraisal of the employees.
(d) Directing: The directing function of management includes guiding the subordinates, supervising their performance, communicating effectively and motivating them. A manager should be a good leader. He should be able to command and issue instruction without arousing any resentment among the subordinates. He should keep a watch on the performance of his subordinates and help them out whenever they come across any difficulty. The communication system, i.e., exchange of information should take place regularly for building common understanding and clarity. The managers should also understand the needs of subordinates and inspire them to do their best and encourage initiative and creativity.
(e) Controlling: This function of management consists of the steps taken to ensure that the performance of work is in accordance with the plans. It involves establishing performance standards and measuring the actual performance with the standards set. If differences are noticed, corrective steps are taken which may include revision of standards regulate operations, remove deficiencies and improve performance.
Q. 24. State the fourteen principles of management given by Henry Fayol.
Ans: Scientific management was primarily concerned with increasing the efficiency of individual workers at the shop floor. It did not give adequate attention to role of managers and their functions. However, around the same time Henry Fayol. Director of a coal mining company in France made a systematic analysis of the process of management. He strongly felt that managers should be guided by certain principles, and evolved 14 general principles of management which are still considered important in management.
These are:
1. Division of Work: This principle suggests that work should be assigned to a person for which he is best suited. Work should be divided into compact jobs to be assigned to individuals. This facilitates specialisation and improves efficiency.
2. Authority and Responsibility: Responsibility means the work assigned to any person, and authority means rights that are given to him to manage people and things to ensure performance. In other words, authority should go hand in hand with the responsibility for effective results.
3. Discipline: This principle emphasises that subordinates should respect their superiors and obey their orders. On the other hand, superiors’ behaviour should be such that they make subordinates obedient. If such discipline is observed, there will be no problem of industrial disputes.
4. Unity of Command: A subordinate should work under the supervision of one superior only from whom he gets instructions and to whom he is accountable. It avoids confusion in authority and instructions.
5. Unity of Direction: Each group of activities having the same objective must-have one head and one plan of action. Otherwise, there may be wastage, over expenditure and useless rivalry among the managers.
6. Subordination of Individual Interest to General Interest: While taking any decision, the collective good and collective interest of the organisation as a whole should be preferred to individual interests. The individual’s interest should be subordinated to the overall interest of the organisation. This ensures welfare of the organisation as well as its individual members.
7. Remuneration: Management should try to give fair wages to the employees so as to ensure reasonable satisfaction of workers and productivity for the organisation.
8. Centralisation: When a single person controls the affairs of an organisation, it is said to be complete centralisation. In small concerns, a single manager can supervise the work of the subordinates easily, while in a big organisation, control is divided among a number of persons to facilitate operational decision making at various levels. Fayol’s opinion was that there should be a proper balance between centralisation and delegation of authority in an organisation.
9. Scalar Chain: This is the chain of authority relationship from the highest to the lowest ranks. This implies that subordinates report to their immediate supervisors who, in turn, report directly to their own boss. The order of this chain should be maintained when some instructions are to be passed on or enquiries are to be made.
10. Order: Placement of men and materials should be properly made. Proper space should be made available where materials can be kept safely. Each man should be provided the work for which he is best suited.
11. Equity: This principle requires the managers to be kind and just to workers. This promotes a friendly atmosphere between superiors and subordinates and motivates them to perform their duties efficiently.
12. Stability of Tenure: Employees should be provided stability and continuity of their tenure of employment. There should not be frequent termination of employees. This could be achieved through attractive remuneration and honourable treatment of personnel.
13. Initiative: This implies encouraging initiative among its personnel to chalking out and execution of a plan to achieve the desired results.
14. Esprit de Corps: These French words mean team spirit. Managers should infuse the spirit of team work and cooperation among the employees. It helps in developing an atmosphere of mutual trust and a sense of unity.
