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CBSECommerce (English Medium) Class 12
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Syllabus

Overview of Nature and Significance of Management

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Topics

Estimated time: 62 minutes
CBSE: Class 12

Key Points: Concept of Management

  • Management is necessary for all types of organisations – business and non-business.
  • Successful organisations achieve goals through proper management, not by chance.
  • Management is the process of getting work done through people to achieve common goals.
  • It involves five main functions – planning, organising, staffing, directing and controlling.
  • Management aims at achieving goals effectively (doing the right work).
  • It also focuses on efficiency (doing the work with minimum cost and resources).
  • Good management ensures better use of money, materials and manpower, leading to higher profits and growth.
CBSE: Class 12

Definition: Management

  • “Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.” - Harold Koontz and Heinz Weihrich
  • “Management is defined as the process of planning, organising, actuating and controlling an organisation’s operations in order to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives.” - Robert L. Trewelly and M. Gene Newport
  • “Management is the process of working with and through others to effectively achieve organisational objectives by efficiently using limited resources in the changing environment.” - Kreitner
CBSE: Class 12

Effectiveness versus Efficiency

Basis Effectiveness Efficiency
Meaning Achieving organisational goals or targets Achieving goals with minimum cost and resources
Focus Doing the right task Doing the task in the right manner
Result Targets are completed Resources are used properly
Problem May increase cost May fail to achieve target
Example Producing 5000 units at high cost Reducing cost but not producing 5000 units
Relationship Must be balanced with efficiency Must be balanced with effectiveness
Importance Ensures goal achievement Ensures cost control and better utilisation of resources
CBSE: Class 12

Key Points: Characteristics of Management

  • Management is goal-oriented. It aims to achieve specific organisational objectives.
  • Management is all pervasive. It is required in all types of organisations.
  • Management is multidimensional. It manages work, people and operations.
  • Management is a continuous process. It involves planning, organising, staffing, directing and controlling regularly.
  • Management is a group activity. It coordinates the efforts of individuals towards common goals.
  • Management is a dynamic function. It adapts to changes in the business environment.
  • Management is an intangible force. It cannot be seen but its results can be observed.
  • Management ensures growth and development of both the organisation and its members.
CBSE: Class 12

Key Points: Objectives of Management

  • Management aims to achieve objectives derived from the basic purpose of the business.
  • Objectives are of three types: organisational, social and personal.
  • Organisational objectives include survival, profit and growth.
  • Survival means earning enough revenue to cover costs and continue operations.
  • Profit is necessary for covering risks and ensuring long-term success.
  • Social objectives focus on welfare of society through ethical and responsible practices.
  • Personal objectives aim at satisfying employees’ financial, social and growth needs.
CBSE: Class 12

Key Points: Importance of Management

  • Management helps in achieving group goals by giving common direction to all members.
  • It increases efficiency by reducing costs and improving productivity.
  • It makes the organisation dynamic by helping it adapt to changes.
  • It motivates employees to achieve both personal and organisational goals.
  • It develops team spirit, cooperation and commitment among workers.
  • It ensures better use of resources through proper planning and control.
  • It contributes to the development of society by providing quality goods, employment and growth.
CBSE: Class 12

Key Points: Nature of Management

  • Management is as old as civilisation. It existed even in ancient times.
  • Early management developed from rules and experiences in trade and government.
  • Growth of commerce led to development of management principles.
  • Management has evolved over time with modern organisations.
  • It is a dynamic subject and has features of both art and science.
 
CBSE: Class 12

Key Points: Management as an Art

  • Art means skilful and practical application of knowledge. Management also requires skill.
  • Art is based on theoretical knowledge. Management has its own theories and principles.
  • Art involves personalised application. Every manager has a different style.
  • Art is based on practice and creativity. Management improves with experience.
  • A manager uses knowledge creatively according to the situation.
  • Success in management depends on ability and practice.
  • Therefore, management is considered an art.
CBSE: Class 12

Key Points: Management as a Science

  • Science is a systematised body of knowledge based on cause–effect relationship, experimentation and universal validity.
  • Management has a systematised body of knowledge with its own principles and concepts, and it also uses ideas from Economics, Sociology and Psychology.
  • Management principles are developed through observation and practical experience, but results cannot be predicted exactly because it deals with human behaviour.
  • The principles of management are not universally applicable in the same way as science; they must be adjusted according to situations.
  • Therefore, management is an inexact science and also an art, as it combines theoretical knowledge with practical application.
CBSE: Class 12

Key Points: Management as a Profession

  • A profession has features like specialised knowledge, restricted entry, professional association, ethical code and service motive.
  • Management has a systematic body of knowledge and is taught in institutes like IIMs.
  • There is no compulsory degree required to become a manager, so entry is not restricted.
  • Associations like AIMA exist, but membership is not compulsory.
  • Management is not a full profession, but it has some professional features.
CBSE: Class 12

Key Points: Levels of Management

  • Levels of management arise due to authority–responsibility relationships in an organisation hierarchy.
  • Top Management – Includes senior executives like CEO, Chairman, etc. They set overall goals, frame policies and strategies, and are responsible for the survival and success of the organisation.
  • Middle Management – Acts as a link between top and lower levels. They implement policies, assign duties, coordinate departments and ensure plans are carried out properly.
  • Supervisory/Operational Management – Includes supervisors and foremen who directly guide workers. They ensure quality work, discipline, safety and minimum wastage.
  • All three levels work together to achieve organisational objectives efficiently and smoothly.
CBSE: Class 12

Key Points: Functions of Management

  • Planning – Deciding in advance what to do, how to do it and who will do it. It involves setting goals and preparing plans to achieve them.
  • Organising – Arranging tasks, grouping activities, assigning duties and allocating resources to implement the plans effectively.
  • Staffing – Selecting the right people for the right jobs. It includes recruitment, selection, training and placement of employees.
  • Directing – Leading, motivating, supervising and communicating with employees to ensure that work is done as planned.
  • Controlling – Checking whether work is progressing according to plans, comparing actual performance with standards and taking corrective action if needed.
  • All functions are interrelated and work together to achieve organisational goals efficiently.
CBSE: Class 12

Key Points: Coordination - Essence of Management

  • Coordination is the essence of management.
  • It links all functions—planning, organising, staffing, directing and controlling.
  • It unites different departments towards common goals.
  • It ensures unity of action and proper timing of activities.
  • It helps achieve objectives with minimum conflict and maximum efficiency.
CBSE: Class 12

Key Points: Characteristics of Coordination

  • Coordination integrates group efforts by uniting different activities towards common organisational goals.
  • It ensures unity of action by acting as a binding force between departments and aligning their work.
  • Coordination is a continuous process that begins at planning and continues till controlling.
  • It is required at all levels of management and in all departments due to the interdependence of activities.
  • Coordination is the responsibility of every manager, from top level to operational level.
  • It is a deliberate and conscious function performed by managers to guide cooperative efforts.
  • Coordination is the essence of management, as it links all management functions and ensures smooth and efficient achievement of objectives.
CBSE: Class 12

Definition: Coordination

  • Coordination is balancing and keeping together the team by ensuring suitable allocation of tasks to the various members and seeing that the tasks are performed with harmony among the members themselves. - E.F.L. Brech
  • Coordination is the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secures unity of action in the pursuit of common purpose. - McFarland
  • Coordination is the orderly synchronising of efforts of subordinates to provide proper amount, timing and quality of execution so that their united efforts lead to the stated objectives, namely, the common purpose of the enterprise. - Theo Haimann
CBSE: Class 12

Key Points: Importance of Coordination

  • Coordination integrates the efforts of individuals, departments and specialists in an organisation.
  • It is necessary because different departments and employees depend on each other for information and resources.
  • As the size of the organisation increases, coordination helps in uniting individual efforts towards common goals.
  • It harmonises individual goals with organisational goals for better efficiency.
  • Functional differences between departments (like finance and marketing) may cause conflicts, which coordination helps to resolve.
  • Specialisation in modern organisations creates differences in opinions and approaches.
  • Coordination helps in reducing conflicts and ensures smooth working towards organisational objectives.
CBSE: Class 12

Key Points: Management in the Twenty-first Century

  • Modern organisations work globally due to better communication and technology.
  • Managers need both technical (hard) skills and soft skills.
  • Cultural understanding is very important in global management.
  • A global manager must be flexible and adaptable.
  • 21st century management requires technical knowledge and strong people skills.
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