Nature and Significance of Business-Notes


CHAPTER 1: Notes on Nature and Significance of Management

Management is defined as a process of getting things done, with and through others, with the aim of achieving goals effectively and efficiently.

Characteristics/Features of Management:

  1. The ultimate aim of management is to achieve the goals. These goals should be simple & clearly stated.
  2. Management is pervasive.
  3. Management is multi-dimensional.
  4. Management is a continuous process.
  5. Management is a group activity.
  6. Management is a dynamic function.

Objectives of Management

  1. Organizational objectives: The main objective of an organization should be to fulfill the economic objectives – survival, profit and growth.
    1. Survival: Management must strive to ensure the survival of the organization. For this, it must earn enough revenues to cover costs.
    2. Profit: Profit provides a vital incentive for the success of enterprise. It is essential to cover costs and risks.
    3. Growth: Management must ensure growth of business. Growth can be measured by sales, no. of employees, products etc.
  2. Social Objectives
    As a part of society every organization should create benefit for the society.
  3. Personal Objective
    Organizations consist of people who have different personalities, background etc. Management has to reconcile personal goals with organizational objectives.

Importance of Management

  1. Helps in achieving group goals.
  2. Increases efficiency.
  3. Creates a dynamic organization.
  4. Helps in achieving personal objectives.
  5. Helps in the development of society.

Nature of Management

The nature of management can be understood in three ways – as an art, as science and as profession.

Levels of Management:

  1. Top Management: It consists of the senior most executives of the organisation.
    Functions of Top Management:
    1. To formulate overall organisational goals and strategies.
    2. To integrate diverse elements and coordinate the activities of different departments.
    3. To be responsible for welfare and survival of the organisation.
    4. To be responsible for overall activities of business and its impact on the society.
    5. To approve the Budgets.
  2. Middle Management: It is the link between top and lower level managers. It includes division heads operations manager, plant superintendent etc.
    Functions of middle Management:
    1. To interpret the policies framed by top management.
    2. To ensure that their departments has the necessary staff.
    3. To assign duties & responsibilities to various members.
    4. To motivate the members to achieve desired objectives.
    5. To cooperate with other departments for smooth functioning.
  3. Supervisory or operational management: It directly monitors the efforts of the work force. Their authority and responsibility is limited according to the plans. It includes foremen & supervisors.
    Functions of Supervisory Management:
    1. To pass on the instructions of the middle management to the workers.
    2. To maintain quality of output.
    3. To minimize wastage of material.
    4. To ensure safety standards in the organisation.
    Functions of Management:
    1. Planning
    2. organizing
    3. Staffing
    4. Directing
    5. Controlling