Page 1
After studying this
chapter, you should
be able to:
n Describe the
characteristics of
management and
its importance in
an organisation;
n Explain the nature
of management
as an art, science
and profession;
n Explain the
functions of
management; and
n Appreciate
the nature and
importance of
coordination.
NATURE AND SIGNIFICANCE
OF MANAGEMENT
LEARNING
OBJECTIVES
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group
is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of
innovation and entrepreneurship are a legacy that continues to
guide Tata companies till date. He had four goals in life: setting
up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a
reality during his lifetime, with the inauguration of the Taj Mahal
Hotel at Colaba waterfront in Mumbai on 3 December 1903 at
the cost of 11 million (worth 11 billion in 2015 prices). At that
time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and
in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management
skills were clearly evident when minute details were chalked in
planning and building the entire city of Jamshedpur. The values
and principles that have governed the business for a century are
enshrined in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying
abreast of the latest technologies, the Tata Group today has
29 publicly-listed Tata enterprises, which include Tata Steel,
Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata T eleservices, Titan, Tata
Communications and Indian Hotels. The group has a combined
market capitalisation of around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance
economic prosperity, environmental responsibility and social
benefits for the community. In India, they are a partner in progress
with Odisha, and believe in taking its stakeholders forward in
its journey of growth. Tata Steel Thailand is one of the first 30
companies that joined UNICEF in Child Friendly Business in
“The Children Sustainability Forum” to make a commitment
in protecting children’s rights. Tata Steel Europe’s Community
Partnership Programme- ‘Future Generations’, with sub-themes
of education, environment, health and Well-being works across
1
Management at T ata Steel
CHAPTER
Ch_01.indd 1 24-09-2019 12:15:10 PM
Rationalised 2023-24
Page 2
After studying this
chapter, you should
be able to:
n Describe the
characteristics of
management and
its importance in
an organisation;
n Explain the nature
of management
as an art, science
and profession;
n Explain the
functions of
management; and
n Appreciate
the nature and
importance of
coordination.
NATURE AND SIGNIFICANCE
OF MANAGEMENT
LEARNING
OBJECTIVES
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group
is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of
innovation and entrepreneurship are a legacy that continues to
guide Tata companies till date. He had four goals in life: setting
up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a
reality during his lifetime, with the inauguration of the Taj Mahal
Hotel at Colaba waterfront in Mumbai on 3 December 1903 at
the cost of 11 million (worth 11 billion in 2015 prices). At that
time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and
in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management
skills were clearly evident when minute details were chalked in
planning and building the entire city of Jamshedpur. The values
and principles that have governed the business for a century are
enshrined in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying
abreast of the latest technologies, the Tata Group today has
29 publicly-listed Tata enterprises, which include Tata Steel,
Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata T eleservices, Titan, Tata
Communications and Indian Hotels. The group has a combined
market capitalisation of around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance
economic prosperity, environmental responsibility and social
benefits for the community. In India, they are a partner in progress
with Odisha, and believe in taking its stakeholders forward in
its journey of growth. Tata Steel Thailand is one of the first 30
companies that joined UNICEF in Child Friendly Business in
“The Children Sustainability Forum” to make a commitment
in protecting children’s rights. Tata Steel Europe’s Community
Partnership Programme- ‘Future Generations’, with sub-themes
of education, environment, health and Well-being works across
1
Management at T ata Steel
CHAPTER
Ch_01.indd 1 24-09-2019 12:15:10 PM
Rationalised 2023-24
2 Business Studies
the UK, assisting job and wealth creation by supporting small and
medium businesses with finance and business premises.
They also play a constructive role in addressing climate change –
both by reducing carbon footprint, and by creating high performance
steels that lead to fuel-efficient vehicles and energy-efficient buildings.
Their Environmental Management Systems meet the ISO 14001
standards at all of their main manufacturing sites.
Shaped by a lineage of sound and straightforward business
principles, the Tata Group is built on a foundation of trust and
transparency. Building such huge enterprises, sustaining and running
them profitably are possible only through effective and efficient
management and co-ordination at all levels.
Source: www.tatasteel.com; Accessed June, 2018
IntroductIon
The above case is an example of
a successful organisation which
is amongst the top companies in
India. It has risen to the top because
of its quality of management.
Management is required in all
kinds of organisations — those
manufacturing handlooms, trading
in consumer goods or providing
hairstyling services and even in
non-business organisations. Let us
take another example.
Smita Rai is a 38-year old
entrepreneur who grew up in a
rural district called Namchi, South
Sikkim. She was very good in art
and craft particularly, Wax moulds.
She loved to make candles, often she
make into toys and small pieces of art
with wax and used it as a gift for her
friends and relatuves. She was loved
and appreciated for these. Smita
was never happy with the conditions
of the women in her district as
most were poor and jobless, so she
planned to do something to solve
their problems because she knew
that imparting skills for livelihood is
needed but she had no idea of how to
implement her idea.
In August 2012, she met Abishek
Lama, the Branch Manager of
NEDFI, Namchi Branch, a financial
corporation which support local
people with skills development
programs and also channelize
them into revenue generating
activities. Smita got interested. “I
love making candles, then, why not
convert my hobby into a venture
and involve these rural women
also”, she thought. This led to the
establishment of Namchi Designer
Candles with the help of NEDFI,
some financial institutions and
support from different stakeholders
in various dimensions.
Since then, the women have never
looked back, despite challenges. The
Ch_01.indd 2 24-09-2019 12:15:10 PM
Rationalised 2023-24
Page 3
After studying this
chapter, you should
be able to:
n Describe the
characteristics of
management and
its importance in
an organisation;
n Explain the nature
of management
as an art, science
and profession;
n Explain the
functions of
management; and
n Appreciate
the nature and
importance of
coordination.
NATURE AND SIGNIFICANCE
OF MANAGEMENT
LEARNING
OBJECTIVES
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group
is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of
innovation and entrepreneurship are a legacy that continues to
guide Tata companies till date. He had four goals in life: setting
up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a
reality during his lifetime, with the inauguration of the Taj Mahal
Hotel at Colaba waterfront in Mumbai on 3 December 1903 at
the cost of 11 million (worth 11 billion in 2015 prices). At that
time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and
in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management
skills were clearly evident when minute details were chalked in
planning and building the entire city of Jamshedpur. The values
and principles that have governed the business for a century are
enshrined in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying
abreast of the latest technologies, the Tata Group today has
29 publicly-listed Tata enterprises, which include Tata Steel,
Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata T eleservices, Titan, Tata
Communications and Indian Hotels. The group has a combined
market capitalisation of around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance
economic prosperity, environmental responsibility and social
benefits for the community. In India, they are a partner in progress
with Odisha, and believe in taking its stakeholders forward in
its journey of growth. Tata Steel Thailand is one of the first 30
companies that joined UNICEF in Child Friendly Business in
“The Children Sustainability Forum” to make a commitment
in protecting children’s rights. Tata Steel Europe’s Community
Partnership Programme- ‘Future Generations’, with sub-themes
of education, environment, health and Well-being works across
1
Management at T ata Steel
CHAPTER
Ch_01.indd 1 24-09-2019 12:15:10 PM
Rationalised 2023-24
2 Business Studies
the UK, assisting job and wealth creation by supporting small and
medium businesses with finance and business premises.
They also play a constructive role in addressing climate change –
both by reducing carbon footprint, and by creating high performance
steels that lead to fuel-efficient vehicles and energy-efficient buildings.
Their Environmental Management Systems meet the ISO 14001
standards at all of their main manufacturing sites.
Shaped by a lineage of sound and straightforward business
principles, the Tata Group is built on a foundation of trust and
transparency. Building such huge enterprises, sustaining and running
them profitably are possible only through effective and efficient
management and co-ordination at all levels.
Source: www.tatasteel.com; Accessed June, 2018
IntroductIon
The above case is an example of
a successful organisation which
is amongst the top companies in
India. It has risen to the top because
of its quality of management.
Management is required in all
kinds of organisations — those
manufacturing handlooms, trading
in consumer goods or providing
hairstyling services and even in
non-business organisations. Let us
take another example.
Smita Rai is a 38-year old
entrepreneur who grew up in a
rural district called Namchi, South
Sikkim. She was very good in art
and craft particularly, Wax moulds.
She loved to make candles, often she
make into toys and small pieces of art
with wax and used it as a gift for her
friends and relatuves. She was loved
and appreciated for these. Smita
was never happy with the conditions
of the women in her district as
most were poor and jobless, so she
planned to do something to solve
their problems because she knew
that imparting skills for livelihood is
needed but she had no idea of how to
implement her idea.
In August 2012, she met Abishek
Lama, the Branch Manager of
NEDFI, Namchi Branch, a financial
corporation which support local
people with skills development
programs and also channelize
them into revenue generating
activities. Smita got interested. “I
love making candles, then, why not
convert my hobby into a venture
and involve these rural women
also”, she thought. This led to the
establishment of Namchi Designer
Candles with the help of NEDFI,
some financial institutions and
support from different stakeholders
in various dimensions.
Since then, the women have never
looked back, despite challenges. The
Ch_01.indd 2 24-09-2019 12:15:10 PM
Rationalised 2023-24
Nature and Significance of Management 3
women also faced a lot of harassment
but they could overcome all
those troubles.
Namchi Designer Candles has
100 per cent women as employees
and they also produce varieties of
candles. During Diwali, they produce
customized candles meant for the
occasion. These Diwali themed candle
has been a success in Sikkim as its
demand increases on a yearly basis.
Namchi Designer Candles has been
receiving numerous awards such as
North East Women Entrepreneur
of the year 2015-2016 for Sikkim
and Sreemanta Shankar Mission
of Guwahati on 26th April 2018 at
New Delhi.
A typical day in Smita’s life
consists of a series of interrelated
and continuous functions. She has
to plan a special festive collection
for Diwali. This means organising
more funds and recruiting more
workers. She also has to regularly
communicate with her suppliers
to ensure that deadlines regarding
delivery of goods are met. In the
course of the day, she meets
customers for a general feedback
and any suggestions that they
may have.
Smita is managing Namchi Designer
Candles. So is the Principal managing
your school. They all manage
organisations. Schools, hospitals,
shops and large corporations are all
organisations with diverse goals that
are aimed at achieving something.
No matter what the organisation is or
what its goals might be, they all have
something in common-management
and managers.
You have observed that Smita’s
work as a manager consists of
a series of different activities or
functions aimed at achieving the
goals of the organisation. These
interconnected and interdependent
functions are part of management.
Successful organisations do not
achieve their goals by chance but
by following a deliberate process
called ‘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 t he 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. T rewelly 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
Definitions of Management
Ch_01.indd 3 24-09-2019 12:15:10 PM
Rationalised 2023-24
Page 4
After studying this
chapter, you should
be able to:
n Describe the
characteristics of
management and
its importance in
an organisation;
n Explain the nature
of management
as an art, science
and profession;
n Explain the
functions of
management; and
n Appreciate
the nature and
importance of
coordination.
NATURE AND SIGNIFICANCE
OF MANAGEMENT
LEARNING
OBJECTIVES
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group
is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of
innovation and entrepreneurship are a legacy that continues to
guide Tata companies till date. He had four goals in life: setting
up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a
reality during his lifetime, with the inauguration of the Taj Mahal
Hotel at Colaba waterfront in Mumbai on 3 December 1903 at
the cost of 11 million (worth 11 billion in 2015 prices). At that
time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and
in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management
skills were clearly evident when minute details were chalked in
planning and building the entire city of Jamshedpur. The values
and principles that have governed the business for a century are
enshrined in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying
abreast of the latest technologies, the Tata Group today has
29 publicly-listed Tata enterprises, which include Tata Steel,
Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata T eleservices, Titan, Tata
Communications and Indian Hotels. The group has a combined
market capitalisation of around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance
economic prosperity, environmental responsibility and social
benefits for the community. In India, they are a partner in progress
with Odisha, and believe in taking its stakeholders forward in
its journey of growth. Tata Steel Thailand is one of the first 30
companies that joined UNICEF in Child Friendly Business in
“The Children Sustainability Forum” to make a commitment
in protecting children’s rights. Tata Steel Europe’s Community
Partnership Programme- ‘Future Generations’, with sub-themes
of education, environment, health and Well-being works across
1
Management at T ata Steel
CHAPTER
Ch_01.indd 1 24-09-2019 12:15:10 PM
Rationalised 2023-24
2 Business Studies
the UK, assisting job and wealth creation by supporting small and
medium businesses with finance and business premises.
They also play a constructive role in addressing climate change –
both by reducing carbon footprint, and by creating high performance
steels that lead to fuel-efficient vehicles and energy-efficient buildings.
Their Environmental Management Systems meet the ISO 14001
standards at all of their main manufacturing sites.
Shaped by a lineage of sound and straightforward business
principles, the Tata Group is built on a foundation of trust and
transparency. Building such huge enterprises, sustaining and running
them profitably are possible only through effective and efficient
management and co-ordination at all levels.
Source: www.tatasteel.com; Accessed June, 2018
IntroductIon
The above case is an example of
a successful organisation which
is amongst the top companies in
India. It has risen to the top because
of its quality of management.
Management is required in all
kinds of organisations — those
manufacturing handlooms, trading
in consumer goods or providing
hairstyling services and even in
non-business organisations. Let us
take another example.
Smita Rai is a 38-year old
entrepreneur who grew up in a
rural district called Namchi, South
Sikkim. She was very good in art
and craft particularly, Wax moulds.
She loved to make candles, often she
make into toys and small pieces of art
with wax and used it as a gift for her
friends and relatuves. She was loved
and appreciated for these. Smita
was never happy with the conditions
of the women in her district as
most were poor and jobless, so she
planned to do something to solve
their problems because she knew
that imparting skills for livelihood is
needed but she had no idea of how to
implement her idea.
In August 2012, she met Abishek
Lama, the Branch Manager of
NEDFI, Namchi Branch, a financial
corporation which support local
people with skills development
programs and also channelize
them into revenue generating
activities. Smita got interested. “I
love making candles, then, why not
convert my hobby into a venture
and involve these rural women
also”, she thought. This led to the
establishment of Namchi Designer
Candles with the help of NEDFI,
some financial institutions and
support from different stakeholders
in various dimensions.
Since then, the women have never
looked back, despite challenges. The
Ch_01.indd 2 24-09-2019 12:15:10 PM
Rationalised 2023-24
Nature and Significance of Management 3
women also faced a lot of harassment
but they could overcome all
those troubles.
Namchi Designer Candles has
100 per cent women as employees
and they also produce varieties of
candles. During Diwali, they produce
customized candles meant for the
occasion. These Diwali themed candle
has been a success in Sikkim as its
demand increases on a yearly basis.
Namchi Designer Candles has been
receiving numerous awards such as
North East Women Entrepreneur
of the year 2015-2016 for Sikkim
and Sreemanta Shankar Mission
of Guwahati on 26th April 2018 at
New Delhi.
A typical day in Smita’s life
consists of a series of interrelated
and continuous functions. She has
to plan a special festive collection
for Diwali. This means organising
more funds and recruiting more
workers. She also has to regularly
communicate with her suppliers
to ensure that deadlines regarding
delivery of goods are met. In the
course of the day, she meets
customers for a general feedback
and any suggestions that they
may have.
Smita is managing Namchi Designer
Candles. So is the Principal managing
your school. They all manage
organisations. Schools, hospitals,
shops and large corporations are all
organisations with diverse goals that
are aimed at achieving something.
No matter what the organisation is or
what its goals might be, they all have
something in common-management
and managers.
You have observed that Smita’s
work as a manager consists of
a series of different activities or
functions aimed at achieving the
goals of the organisation. These
interconnected and interdependent
functions are part of management.
Successful organisations do not
achieve their goals by chance but
by following a deliberate process
called ‘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 t he 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. T rewelly 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
Definitions of Management
Ch_01.indd 3 24-09-2019 12:15:10 PM
Rationalised 2023-24
4 Business Studies
Management is essential for all
organisations big or small, profit or
non-profit, services or manufacturing.
Management is necessary so that
individuals make their best contri-
bution towards group objectives.
Management consists of a series
of interrelated functions that are
performed by all managers. Later in
this chapter you will understand that
although both of them are managers,
they function at different levels in
the organisation. The time spent
by managers in different functions
however is different. Managers at the
top level spend more time in planning
and organising than managers at
lower levels of the organisation.
c oncept Management is a very popular term
and has been used extensively for
all types of activities and mainly for
taking charge of different activities in
any enterprise. As you have seen from
the above example and case study
that management is an activity which
is necessary wherever there is a group
of people working in an organisation.
People in organisations are performing
diverse tasks but they are all working
towards the same goal. Management
aims at guiding their efforts towards
achieving a common objective — a
goal. Thus, management has to see
that tasks are completed and goals
are achieved (i.e., effectiveness) with
the least amount of resources at a
minimum cost (i.e., efficiency).
Management, has therefore, been
defined as a process of getting things
done with the aim of achieving goals
effectively and efficiently. We need
to analyse this definition. There
are certain terms which require
elaboration. These are (a) process, (b)
effectively, and (c) efficiently.
Process in the definition means the
primary functions or activities that
management performs to get things
done. These functions are planning,
organising, staffing, directing and
controlling which we will discuss later
in the chapter and the book.
Being effective or doing work
effectively basically means finishing
the given task. Effectiveness in
management is concerned with doing
the right task, completing activities
and achieving goals. In other words,
it is concerned with the end result.
But it is not enough to just
complete the tasks. There is another
aspect also, i.e., being efficient or as
we say doing work efficiently.
Efficiency means doing the task
correctly and with minimum cost.
There is a kind of cost-benefit
analysis involved and the relationship
between inputs and outputs. If
by using less resources (i.e., the
inputs) more benefits are derived
(i.e., the outputs) then efficiency has
increased. Efficiency is also increased
when for the same benefit or outputs,
fewer resources are used and less
costs are incurred. Input resources
are money, materials, equipment and
Ch_01.indd 4 24-09-2019 12:15:10 PM
Rationalised 2023-24
Page 5
After studying this
chapter, you should
be able to:
n Describe the
characteristics of
management and
its importance in
an organisation;
n Explain the nature
of management
as an art, science
and profession;
n Explain the
functions of
management; and
n Appreciate
the nature and
importance of
coordination.
NATURE AND SIGNIFICANCE
OF MANAGEMENT
LEARNING
OBJECTIVES
Founded in 1868, by Jamsetji Nusserwanji ,Tata the Tata Group
is a global business conglomerate operating in over 100 countries
across 5 continents. His strong sense of values and spirit of
innovation and entrepreneurship are a legacy that continues to
guide Tata companies till date. He had four goals in life: setting
up an iron and steel company, a world-class learning institution, a
unique hotel and a hydro-electric plant. Only the hotel became a
reality during his lifetime, with the inauguration of the Taj Mahal
Hotel at Colaba waterfront in Mumbai on 3 December 1903 at
the cost of 11 million (worth 11 billion in 2015 prices). At that
time it was the only hotel in India to have electricity.
He believed that satisfied workers create satisfied workers and
in lieu to this principle he paid all his workers gratuity, provident
fund well before it was made mandatory. His management
skills were clearly evident when minute details were chalked in
planning and building the entire city of Jamshedpur. The values
and principles that have governed the business for a century are
enshrined in the Tata Code of Conduct (TCOC).
From an early foray into steel and automobiles, to staying
abreast of the latest technologies, the Tata Group today has
29 publicly-listed Tata enterprises, which include Tata Steel,
Tata Motors, Tata Consultancy Services, Tata Power, Tata
Chemicals, Tata Global Beverages, Tata T eleservices, Titan, Tata
Communications and Indian Hotels. The group has a combined
market capitalisation of around $103.51bn (2016-17).
Tata has a strong sense of social responsibility. They balance
economic prosperity, environmental responsibility and social
benefits for the community. In India, they are a partner in progress
with Odisha, and believe in taking its stakeholders forward in
its journey of growth. Tata Steel Thailand is one of the first 30
companies that joined UNICEF in Child Friendly Business in
“The Children Sustainability Forum” to make a commitment
in protecting children’s rights. Tata Steel Europe’s Community
Partnership Programme- ‘Future Generations’, with sub-themes
of education, environment, health and Well-being works across
1
Management at T ata Steel
CHAPTER
Ch_01.indd 1 24-09-2019 12:15:10 PM
Rationalised 2023-24
2 Business Studies
the UK, assisting job and wealth creation by supporting small and
medium businesses with finance and business premises.
They also play a constructive role in addressing climate change –
both by reducing carbon footprint, and by creating high performance
steels that lead to fuel-efficient vehicles and energy-efficient buildings.
Their Environmental Management Systems meet the ISO 14001
standards at all of their main manufacturing sites.
Shaped by a lineage of sound and straightforward business
principles, the Tata Group is built on a foundation of trust and
transparency. Building such huge enterprises, sustaining and running
them profitably are possible only through effective and efficient
management and co-ordination at all levels.
Source: www.tatasteel.com; Accessed June, 2018
IntroductIon
The above case is an example of
a successful organisation which
is amongst the top companies in
India. It has risen to the top because
of its quality of management.
Management is required in all
kinds of organisations — those
manufacturing handlooms, trading
in consumer goods or providing
hairstyling services and even in
non-business organisations. Let us
take another example.
Smita Rai is a 38-year old
entrepreneur who grew up in a
rural district called Namchi, South
Sikkim. She was very good in art
and craft particularly, Wax moulds.
She loved to make candles, often she
make into toys and small pieces of art
with wax and used it as a gift for her
friends and relatuves. She was loved
and appreciated for these. Smita
was never happy with the conditions
of the women in her district as
most were poor and jobless, so she
planned to do something to solve
their problems because she knew
that imparting skills for livelihood is
needed but she had no idea of how to
implement her idea.
In August 2012, she met Abishek
Lama, the Branch Manager of
NEDFI, Namchi Branch, a financial
corporation which support local
people with skills development
programs and also channelize
them into revenue generating
activities. Smita got interested. “I
love making candles, then, why not
convert my hobby into a venture
and involve these rural women
also”, she thought. This led to the
establishment of Namchi Designer
Candles with the help of NEDFI,
some financial institutions and
support from different stakeholders
in various dimensions.
Since then, the women have never
looked back, despite challenges. The
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Nature and Significance of Management 3
women also faced a lot of harassment
but they could overcome all
those troubles.
Namchi Designer Candles has
100 per cent women as employees
and they also produce varieties of
candles. During Diwali, they produce
customized candles meant for the
occasion. These Diwali themed candle
has been a success in Sikkim as its
demand increases on a yearly basis.
Namchi Designer Candles has been
receiving numerous awards such as
North East Women Entrepreneur
of the year 2015-2016 for Sikkim
and Sreemanta Shankar Mission
of Guwahati on 26th April 2018 at
New Delhi.
A typical day in Smita’s life
consists of a series of interrelated
and continuous functions. She has
to plan a special festive collection
for Diwali. This means organising
more funds and recruiting more
workers. She also has to regularly
communicate with her suppliers
to ensure that deadlines regarding
delivery of goods are met. In the
course of the day, she meets
customers for a general feedback
and any suggestions that they
may have.
Smita is managing Namchi Designer
Candles. So is the Principal managing
your school. They all manage
organisations. Schools, hospitals,
shops and large corporations are all
organisations with diverse goals that
are aimed at achieving something.
No matter what the organisation is or
what its goals might be, they all have
something in common-management
and managers.
You have observed that Smita’s
work as a manager consists of
a series of different activities or
functions aimed at achieving the
goals of the organisation. These
interconnected and interdependent
functions are part of management.
Successful organisations do not
achieve their goals by chance but
by following a deliberate process
called ‘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 t he 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. T rewelly 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
Definitions of Management
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4 Business Studies
Management is essential for all
organisations big or small, profit or
non-profit, services or manufacturing.
Management is necessary so that
individuals make their best contri-
bution towards group objectives.
Management consists of a series
of interrelated functions that are
performed by all managers. Later in
this chapter you will understand that
although both of them are managers,
they function at different levels in
the organisation. The time spent
by managers in different functions
however is different. Managers at the
top level spend more time in planning
and organising than managers at
lower levels of the organisation.
c oncept Management is a very popular term
and has been used extensively for
all types of activities and mainly for
taking charge of different activities in
any enterprise. As you have seen from
the above example and case study
that management is an activity which
is necessary wherever there is a group
of people working in an organisation.
People in organisations are performing
diverse tasks but they are all working
towards the same goal. Management
aims at guiding their efforts towards
achieving a common objective — a
goal. Thus, management has to see
that tasks are completed and goals
are achieved (i.e., effectiveness) with
the least amount of resources at a
minimum cost (i.e., efficiency).
Management, has therefore, been
defined as a process of getting things
done with the aim of achieving goals
effectively and efficiently. We need
to analyse this definition. There
are certain terms which require
elaboration. These are (a) process, (b)
effectively, and (c) efficiently.
Process in the definition means the
primary functions or activities that
management performs to get things
done. These functions are planning,
organising, staffing, directing and
controlling which we will discuss later
in the chapter and the book.
Being effective or doing work
effectively basically means finishing
the given task. Effectiveness in
management is concerned with doing
the right task, completing activities
and achieving goals. In other words,
it is concerned with the end result.
But it is not enough to just
complete the tasks. There is another
aspect also, i.e., being efficient or as
we say doing work efficiently.
Efficiency means doing the task
correctly and with minimum cost.
There is a kind of cost-benefit
analysis involved and the relationship
between inputs and outputs. If
by using less resources (i.e., the
inputs) more benefits are derived
(i.e., the outputs) then efficiency has
increased. Efficiency is also increased
when for the same benefit or outputs,
fewer resources are used and less
costs are incurred. Input resources
are money, materials, equipment and
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Nature and Significance of Management 5
persons required to do a particular
task. Obviously, management is
concerned with the efficient use
of these resources, because they
reduce costs and ultimately lead to
higher profits.
Effectiveness versus
Efficiency
These two terms are different but they
are interrelated. For management,
it is important to be both effective
and efficient. Effectiveness and
efficiency are two sides of the same
coin. But these two aspects need
to be balanced and management
at times, has to compromise with
efficiency. For example, it is easier
to be effective and ignore efficiency
i.e., complete the given task but at
a high cost. Suppose, a company’s
target production is 5000 units in
a year. To achieve this target the
manager has to operate on double
shifts due to power failure most of the
time. The manager is able to produce
5000 units but at a higher production
cost. In this case, the manager was
effective but not so efficient, since for
the same output, more inputs (labour
cost, electricity costs) were used.
At times, a business may con-
centrate more on producing goods
with fewer resources i.e., cutting
down cost but not achieving the
target production. Consequently, the
goods do not reach the market and
hence the demand for them declines
and competitors enter the market.
This is a case of being efficient but
not effective since the goods did not
reach the market.
Therefore, it is important for
management to achieve goals
(effectiveness) with minimum
resources i.e., as efficiently as possible
while maintaining a balance between
effectiveness and efficiency. Usually
high efficiency is associated with
high effectiveness which is the aim of
all managers. But undue emphasis
on high efficiency without being
effective is also not desirable. Poor
management is due to both ineffi-
ciency and ineffectiveness.
c haracterIstIcs of
ManageMent After going through some of the
definitions we find some elements
that may be called the basic
characteristics of management:
(i) Management is a goal-oriented
process: An organisation has a
set of basic goals which are the
basic reason for its existence.
These should be simple and
clearly stated. Different organ-
isations have different goals. For
example, the goal of a retail store
may be to increase sales, but the
goal of The Spastics Society of
India is to impart education to
children with special needs.
Management unites the efforts
of different individuals in the
organisation towards achieving
these goals.
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