Chapter

1
Nature and Significance
of Management
NCERT Question

Very Short Answer Type Questions work in the organisation? What are her basic
1. What is meant by management? functions?
OR Ans. Ritu is working at the middle level of
Define management. management. Her basic functions are (number
of functions should be given according to the
Ans. The management is a single or group of
marks allotted for the question).
individuals who challenges and oversees a
1. Conveying the policies formed by the
person or collective group of people in efforts to
top level management and acting as a
accomplish desired goals and objectives.
link between top level management and
2. Name any two important characteristics of
operative/lower/supervisory management.
management.
2. Assigning duties to the subordinates.
Ans. Continuous and Pervasive.
2. State the basic features of management as a
3. Identify and state the force that binds all the
profession.
other functions of management.
Ans. Coordination is a binding force that integrates OR
the individuals’ efforts for the accomplishment Discuss the basic features of management as a
of the common organisational goals. It is a profession.
process by which the activities of different Ans. Basic features of management as a profession
departments and units get synchronized for the are as follows:
achievement of the organisation’s goals. (i) Well-defined Body of Knowledge: All
4. List any two indicators of growth of an professionals focus on well defined body of
organisation. knowledge as they contain some rules and
Ans. Indicators of Growth of an organisation are: regulations.
1. Growth in sales volume (ii) Professional Association: They are
2. Increment in the capital investment associated with various associations for
5. Indian Railways has launched a new broad practicing managers in India, like the AIMA
gauge solar power train which is going to be (All India Management Association) that
a path breaking leap towards making trains has laid the code of conduct to regulate
greener and more environment friendly. The the activities of their members. It is not
solar power DEMU (Diesel Electric Multiple compulsory for managers to become a part
Unit) has 6 trailer coaches and is expected to of these associations.
save about 21,000 liters of diesel and ensure a (iii) Service Motive: All business organisations
cost saving of `12, 00,000 per year. aim to provide good quality product or
Name the objectives of management achieved service at a reasonable price thus serving
by Indian Railways in the above case. the society and focusing on welfare.
Ans. The objective achieved by the Indian Railways Thus, we can say management does not meet
in the given case is Social objective. Social the exact criteria of a profession but it has some
objectives involve creation of benefit by features as a profession.
assuring health, safety and price control to the 3. Why is management considered to be a multi-
society. This involves creating economic value dimensional concept?
consistently for the society as a whole. Ans. Management is considered as a multi-
Short Answer Type Questions dimensional concept because it is a complex
1. Ritu is the manager of the Northern division of activity that has three main dimensions. These
a large corporate house. At what level does she are:

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2 | CBSE NCERT Question Business Studies– XII
(i) Management of Work: Every organization In such a case, there may arise a conflict between
focuses on work and how the work will be the two departments. Coordination is needed to
processed e.g., producing or selling. A work synchronise the activities of each department
is defined as the goals or objectives which towards the achievement of common goals of the
needs to be achieved. organisation. For instance, in the given situation,
the various departments rather than blaming
(ii) Management of People: The main element
each other should work by coordinating with
of the organisation is the people who will
each other and work collectively to improve
work and accommodate the process. This
company’s position with regard to profit
resource has to be managed in such a
margins and market share.
manner that it helps to achieve the goals and
objectives of the organisations. The following steps can be taken by the
management to bring the company back on
(iii) Management of Operations: All organisa-
track:
tions either produce a product or provide a
service. This requires a production process 1. The market should be analysed carefully
which means using an operation to convert and the demand must be analysed such that
the inputs into the output, therefore is the products can be amended accordingly.
interlinked with both management of work 2. The quality of the products must be
and management of operations. improved.
4. Company X is facing a lot of problems these 3. The various products and their features
days. It manufactures white goods like washing should be marketed well.
machines, microwave ovens, refrigerators 4. Customer satisfaction should be worked
and air conditioners. The company’s margins upon through measures such as customer
are under pressure and the profits and care services and feedback.
market share are declining. The production 5. Each of the departments must be motivated
department blames marketing for not meeting to work collectively towards the common
sales targets and marketing blames production goals of the organisation rather than
department for producing goods, which indulging in a blame game.
are not of good quality meeting customers’ 5. Coordination is the essence of management.
expectations. The finance department blames Do you agree? Give reasons.
both production and marketing for declining Ans. Coordination is a function that is inherent
return on investment and bad marketing. State and pervasive. Coordination is not a separate
the quality of management that the company is function of management. It is the essence of
lacking? What quality of management do you management. The coordination is needed to
think the company is lacking? perform all the functions of management. They
Explain briefly. What steps should the company are:
management take to bring the company back (i) Coordination in planning: Coordination
on track? is needed between overall plan of the
Ans. As per the given situation, the quality of organisation and the departmental plans. It
management lacking in the organisation is is needed between objectives and available
coordination. This can be determined from the physical and human resources.
example that various departments blame each (ii) Coordination in organising: Coordination
other for the fall off in profits and market share is required between resources of an
of the company. Coordination refers to a path by organisation and activities to be performed
which the group functions get interconnected. and among authority, responsibility and
It binds the people of the organisation and accountability.
their activities to make a functioning of the (iii) Coordination in staffing: In staffing,
work smooth. It is that force which unites
coordination is needed between the skills of
the working and efforts of the people of the
the workers and the jobs assigned to them
organisation towards the common objective and between the efficiency of the workers
of the organisation. It links the interrelated and the compensation, etc.
functions of management. Every organisation
(iv) Coordination in directing: Coordination
has various departments and sub-departments
is required among orders, instructions,
such as production, sales, finance, etc. There is
guidelines and suggestions. Coordination
an independent working of each department
is required between superiors and
according to their own policies and objectives.

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 Nature and Significance of Management | 3
subordinates, e.g. a manager instructs the available on management and its branches
subordinates, motivates them and also – finance, marketing, human resource, etc.
supervises their work. (ii) Personalised Application: The use of
(v) Coordination in controlling: Coordination knowledge differs from one particular
is required between the standard and individual as it is based on theories and
the actual performance. Coordination is behaviour. Two painters, two dancers or
required between correction of deviations two singers all use their knowledge and
and achievement of objectives. creativity in their own way. Same way two
Management function revolves around managers who have acquired the same
making, arranging things, moving things knowledge may use it in their own different
in an organisation in relation to overall ways to get the work done.
objective of the organisation. Thus, (iii) Based on Practice and Creativity: All art is
coordination can be considered as the core practical. It involves creative practice and
function of management which ensures that regular consistency. The more we practice
all the factors in the business work together it, better we become at it. Without practice
smoothly. artists lose their perfection. It also requires
creativity.
6. Ashita and Lakshita are employees working
in Dazzling enterprises dealing in costume Same way a manager applies his gained
jewellery. The firm secured an urgent order for knowledge in a unique manner. More practice
1,000 bracelets that were to be delivered within makes him a better manager and he also
4 days. They were assigned the responsibility develops his own style of management.
of producing 500 bracelets each at a cost of `100 Management is an In-exact Science:
per bracelet. (i) Systematic Body of Knowledge: Science
Ashita was able to produce the required is a systematised body of knowledge. Its
number within the stipulated time at the principles are based on cause and effect
cost of `55,000 whereas, Lakshita was able to relationship, and it is universal in nature
produce only 450 units at a cost of `90 per unit. as these are the principles which focus on
experiments and they are proven to be truth
State whether Ashita and Lakshita are efficient
e.g., water evaporates on being heated. Same
and effective.
way management is a body of systematized
Give reasons to justify your answer. knowledge. All managerial principles have
Ans. Ashita is effective, but not efficient because cause and effect relationship.
Ashita completed the task on time but at a (ii) Principles Based on Experimentation:
higher cost. Effectiveness involves completing a Scientific principles are first developed
given work in the required time with a focus on through observation and then tested
the end results. through repeated experimentation. Same
Whereas, Lakshita is neither efficient nor way management principles are also
effective because Lakshita did not complete the propounded after observation and repeated
target at all. Even though she produced the units experimentation as they also have a
at a lower cost, but not achieving the target will database for representing a particular type
make her inefficient and ineffective. of behaviour.
Long Answer Type Questions (iii) Universal Validity: All scientific principles
1. Management is considered to be both an art have universal validity, as they are
and science. Explain. propounded by certain elements of
Ans. Art is the skillful and personal applications of behaviour and condition. They give same
existing knowledge to achieve desired goals and result wherever applied.
objectives. Principles of management do not have
Management is considered as an art due to the universal validity. They have to be adjusted
following reasons: and applied according to the need and
(i) Existence of Theoretical Knowledge: All art behaviour of the situation.
subjects are based on theoretical knowledge, Thus, management is an in-exact science.
as their exists number of theories and 2. Do you think management has the
principles and conventions. For e.g., various characteristics of a full fledged profession?
books on ‘ragas’ are available in music. Ans. No, management doesn’t have all the
In the same way, there is lot of literature characteristics of a full fledged profession.

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4 | CBSE NCERT Question Business Studies– XII
The reasons are as follows: task on time or within the stipulated time frame.
It is concerned with end result, it is achieved
(i) Well-defined Body of Knowledge: All
or not. Efficiency means doing the work
professions are characterised as a well-
correctly and with minimum cost. If by using
defined body of knowledge that can be
less resources more benefits are derived then
acquired through adapting teaching–
efficiency has been increased. It is thus essential
learning process. This feature of a profession
for any organisation to focus on efficiency as
is possessed by management as well. There
well as effectiveness. It is not only important
is vast knowledge available in management
to complete the work correctly but equally
in the form of definitions, concepts, theories,
important to complete it with minimum cost.
principles but that too can be adapted with
In the same manner, it is not only important to
regular practice and functioning etc.
reduce cost but equally important to complete
(ii) Restricted Entry: All professions have a
the work correctly.
restriction on the entry of its practitioners, as
Thus, in real work situations, it is important for
they have to bear the specialised knowledge.
a manager to be both efficient and effective.
They have to acquire a specific degree to be
professional e.g., LLB for a lawyer, MBBS for 4. Management is a series of continuous inter-
a doctor, etc. But a manager can be an MBA related functions. Comment.
qualified or not therefore it cannot be fully Ans. Management is a series of continuous inter-
organized. related functions. Each one of them is performed
(iii) Professional Association: All professions to guide and direct the efforts of others.
are affiliated to a professional association The functions are:
which regulates entry, grants certificate of (i) Planning: Planning is the primary function
practice and formulates a code of conduct of management which runs through all
e.g., all lawyers to get registered with Bar of other functions. It is the process of thinking
Council to practice law. It is not compulsory before doing. It creates a benchmark or
for all managers to be a member of AIMA.’ blueprint to proceed further. It focuses
(iv) Ethical Code of Conduct: All professions are on more wider concept of objective which
bound by an ethical code of conduct which needs to be fulfilled. As it bridges the gap
likely guides the behaviour of members. But between where we are in the present and
as it is not compulsory for all managers to where we want to go in the future.
be members of AIMA, they all may not be (ii) Organising: It is the process of defining
aware of the prescribed code of conduct of the formal relationship among people and
AIMA. resources to accomplish the desired goals, it
(v) Service Motive: Basic motive to serve makes planning execution. It involves:
their client’s interest is welfare, it is the (a) Identification and division of work
most important aspect of management e.g., (b) Departmentalisation
lawyers to get justice for their clients, doctors (c) Assigning of duties
to treat the patients etc. All managers also (d) Establishing reporting relationships
work in a manner through which they show (iii) Staffing: Human resources make goal to
their effectiveness and efficiency in the be achieved only through human efforts.
form of good quality goods provided to the It is the duty of management to make the
customer at a reasonable price. best possible use of this resource. Thus,
Thus, management possesses some placing the right person on the right job at
characteristics of a profession but not all. right time is very important. Staffing helps
3. “A successful enterprise has to achieve its goals management to motivate, select and place
effectively and efficiently” Explain. the right person on the right job.
Ans. “A successful enterprise has to achieve its goals (iv) Directing: Directing involves leading,
effectively and efficiently”. Thus, management influencing, supervising, communicating
has to see that tasks are completed and goals are and motivating employees to perform
achieved with the minimum resources. the tasks assigned to them. It requires
Management is thus getting things done with establishing an atmosphere that encourages
the aim of achieving objectives effectively employees to do their best. Directing
and efficiently. Being effective or doing work comprises of four elements; supervision,
effectively basically means finishing the given motivation, leadership and communication.

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 Nature and Significance of Management | 5
(v) Controlling: Controlling function which 2. It must ensure quality of the work while
focuses on monitoring organisational minimising the wastages.
performance towards the attainment of 3. It must motivates the workers to work
organisational goals. It means comparing towards the achievement of the common
actual performance with planned perfor- objectives.
mance. The task of controlling involves. 6. A firm plans in advance and has a sound
(a) Establishing standards of performance, organisation structure with efficient
(b) Measuring actual performance, supervisory staff and control system but on
(c) Comparing it with established several occasion it finds that plans are not
standards, being adhered to. It leads to confusion and
(d) Taking corrective action. duplication of work. Advise remedy.
5. A company wants to modify its existing Ans. The main aspect that needs to be worked upon
product in the market due to decreasing sales. in the organisation is coordination.
You can imagine any product about which you Coordination is the force which synchronise all
are familiar. What decisions/steps should each the functions of management and activities of
level of management take to give effect to this different departments.
decision? Coordination means linking the functions of
Ans. In order to modify the existing product in the groups and individuals. It binds the activities of
market, the following decisions/steps should be employees to ensure the smooth functioning of
taken by each level of management. the organisation.
Top Level Management: 1. The various management functions must
1. The top level managers must analyse the be linked with strong coordination to avoid
market and modify the product accordingly. any confusion in the work.
2 It should work by coordinating the activities 2 Every level of management from the
of the various departments towards the planning stage, where the objectives are set
common goal by modifying the product. must be coordinated with each other. Next,
3. It must organise various resources that are it is required between the planning stage and
required for the achievement of the objective the staffing stage, so that the right people
of modification of the product. are hired. After that, functions of directing
Middle Level Management and controlling must be coordinated with
1. The middle level managers must work each other.
towards executing the plans framed by the 3. It must be ensured that interdepartmental
top level management. conflicts are avoided. The wok of each of the
2. They must organise the personnel required departments, must be synchronised.
for implementing the plans and strategies. 4. It must be ensured that the proper
3. The personnel must be assigning the duties direction and motivation are being given
according to the plan and it must be ensured to the workforce to avoid any chaos and
that the work is being done accordingly. duplication of the work.
Operational Level: 5. It must be focused that the personal goals
1. The operational level management must of the individuals are synchronised with the
provide instructions properly to the workers overall objectives of the organisation and
and provide guidelines to them to work the plans are properly adhered to or not.
smoothly.
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