SIGNIFICANCE OF MANAGEMENT 1.1 Introduction 1.6 Nature of Management 1.2. Meaning of Management 1.7. Levels of Management 1.3. Characteristics of Management 1.8 Functions of Management 1.4 Objectives of Management 1.9. Coordination 1.5. Importance of Management 1.1 INTRODUCTION Management is a universal concept. It is needed in every organisation, whether it is a business organisation or non-business organisation (like schoo!, hospital, etc ). The success of an organisation depends on the successful functioning of management. For example, HCL has become a leader in global technology and IT services due to managerial efficiency of Shiv Nadar and b staff. managerial Con: * A school without a principal * Acricket team + Acountry er the following cases: thout a captain ithout a government Inall these ea: So, Management is essential for all organisations big or small, profit or non-profit, services or manufacturing. Management és necessary so that individuals make their best contribution towards group , situation is likely to be disorganised and chaotic because there is no management objectioes. anagement is always needed whenever human and non-human resources work together | toa objective, With increase in size and complexities of modern organisations, | Management has gained immense importance. tn short, Successful organisations do not achieve their goals by chance but by following a deliberate process called/Management. 13 ‘Scanned wh Camscanet=, Business Studies for Cass yy 7 formed by all ions that are performed by all manage ies of interrelated functions i 7 ofa series of ifferent functions is different. For example, managers ng and organising than managers at lower levels of the Management consi sof However, time spent by managers is di the top level spend more time in planni organisation. 1.2_ MEANING OF MANAGEMENT = whawver theresa groep of pose WT Management is an activity which is necessary wherever there is a group of people worl ing in aaa vreation People perform diverse tasks in the organisations, but they all are working reuneicthesnme geal Management aims a guiding ther efforts towards achieving a commee cxjecive: a ‘Goat’ So, management has to ensure that tasks are completed and goals are achiewed z-Filectiveness) with the least amount of resources ata minimum cost (ie, Efficiency). Thus, Litesconet can be defined as a ‘Process’ of getting things done with the aim of achieving goals | Effectively’ and ‘Efficiently’ PEs cuca + Management is the creation of an internal environment where individuals working in a group can perform effectively and efficiently for the achievement of organisational goal. —Koontz and Donnell *+ Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims. * 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 Tesources essential in the effective and efficient attainment of objectives, —Trewelly and Newport —Koontz and Weinrich The concept of management insists on(three essential clements: che 1. Managements A Process'| Management is such as planning, organising, functions to achieve goa a proc Sas it involves a series of inter-related functions, Salfing, directing and controlfing) AML managers perform these . NCL A oO 2. Management requires|Effectiv mance: Efsrtiveness inmandehseA corvernet-with doing the right task and achicoine ey efit disse Jr ifa fi i ig and achieving goals qu time fit difss/at end result) For example, if a firm achieves its target production within time, thei the firm is’said to be effective. Being effective or doing work effective! the fact how they are achieved, ly basi 3. Management needs Efficiency’ EPency ‘Yes, we are Effective as well aS means doing the Lusk correcthy ee With Etficint and twill help us to minimum cosif It is not enough to just e Sehieve epanigational obfocdies complete the tasks, OLtitconey harden = icenc -benefit analysisjand tionship between {npuls.and-outputs. 2ims to achieve optimum ulilisatieg ulilisat resources, i.e. the maximum benefits (ie., the the target on Time. That output) by using Tess resources means, wo are Etfectve,. ‘Scanned wh CamscanetChapter 1 ¢ Nature and Significance of Management like money, materials, equipment and persons. Efficiency also increases when ficiency also increases wher output, fewer resources are used and less costs are incurred. Management aims at efficient use of resources as it reduces cost and ultimately leads to higher profits. (Epkin Commmem) (3 mar ls ’) ee —O- + AA o [ fos Functions achieving goals on time and with minimum cost Relation bi een Effectiveness and Efficiency The two terms ‘Effectiveness’ and ‘Efficiency’ mean different but they are related to each other. © ‘Effectiveness’ aims to achieve the goals within time. * ‘Efficiency’ focuses on optimum use of resources to achieve the goal Ka Oo (Effectiveness and Efficiency are two sides of the same a those two aspects need to Be balanced and management at times, has to compromise WITeH ficiency. For instance, it is easier to be effective if one ignores efficiency. For example, some government organisations. get their jobs done but at avery high cost. “722 Usually, high efficiency is associated with high effectiveness, whichis the aim of all managers. However, undue emphasis on high efficie:wy without being effective is also not desirable. agement is due to both inefficiency and ineffectivenesd So, Management should beboth fecive netic] due to both inefficiency. Let us understand this through an example: * Suppose, management of a company concentrates on effectiveness (i.e. achieving goal on time), irrespective of cost (i. ignores efficiency). Following this policy, the prodiicion managers able to achieve the target of 500 units within the time, but alter high wastage and mishandling, of resources. In this case, the manager was effective but not so efficient. + On the other hand, if the management concentrates more on efficiency (i.e. cutting down cost by producing more goods with fewer resources) and is unable toachieve the target production of 500 units, then the required goods will not reach the market and hence the demand for goods will decline and competitors will enter the market. This isa case of being efficient but not effective since the goods did not reach the market ia ement must be effective as well as efficient to make the enterprise successful. Effectiveness Gueeus! Meaning It refers to achieving the goals on time. It refers to doing the task correctly and with —— aninimum cost. Focus Trfocuses at the end result of the task. It focuses at cost benefit analysis, -e. getting = maximum output with minimum resources, Concern itis concerned with doing the right task. itis concerned with doing the taskright. ‘Scanned wh CamscanetBusiness Studies for Class x 1. Ahiconinternational leading shoes manufacturers) requires less labour hours and inputs to manufacture a pair of shoes as compared to its competitors. However, the company always fails to achieve its target production. Whether the Ahicon International s effective and efficient in its working? Can the company be successful in the long run? Q.2. Mukeshisa salesman ina company engaged in manufacturing of Water Purifiers. He has been given atarget of selling 70 Water Purifiers in a month and he has been empowered to offer a maximum of 12% discount ‘on MRF to his customers. On the last working day of the month, he offered 18% discount to his customers to meet the sales target. Is Mukesh effective & efficient in his work? Give reason in support of your answer, 0.3. Ramesh, Manager of Blue Bells Ltd. always gives more importance to optimum use of resources and reduction in costs. Due to his efforts, company is always able to save considerable resources and money. However, targets always delayed due to careful handling of resources. is the performance of the company efficient and effective? (Answers atthe end of the Chapter) ‘Scanned wh Camscanet