Notes : Nature & Significance of Management Class 12 Notes | EduRev

Class 12 : Notes : Nature & Significance of Management Class 12 Notes | EduRev

 Page 1


6  XII –  Business Studies 
AK 
UNIT   1 
NATURE AND SIGNIFICANCE OF 
MANAGEMENT 
Management is an art of getting things done through others. Management can 
be defined as,  the process of getting things done with the aim of achieving 
goals effectively and efficiently. 
Efficiency and Effectiveness 
Efficiency means doing the task correctly at minimum cost while effectiveness 
means completing the task correctly. Although Efficiency and effectiveness are 
different but they are interrelated. It is important for management to be both 
i.e. effective and efficient. 
Example :  A business produces targeted 1000 units but at a higher cost is 
effecitive but not efficient. Therefore if the business has to be effective and 
efficient then it has to produce 1000 units within cost. 
Characteristics of Management 
1. Goal oriented Process : It is a goal oriented process, which is undertaken 
to achieve already specified and desired objectives. 
2. Pervasive : Management is pervasive in nature. It is used in all types of 
organizations whether economic, social or political and at every level. 
3. Multidimensional : It is multidimensional as it involves management of 
Work, People and operations. 
4. Continuous : It is a continuous process i.e. its functions are being 
performed by all managers simultaneously. The process of management 
continue till an organisation exist for attaining its objectives. 
5. Group Activity : It is a group activity since it involves managing and 
coordinating activities of different people as a team to attain the desired 
objectives. 
6. Dynamic function : it is a dynamic function since it has to adapt to the
Page 2


6  XII –  Business Studies 
AK 
UNIT   1 
NATURE AND SIGNIFICANCE OF 
MANAGEMENT 
Management is an art of getting things done through others. Management can 
be defined as,  the process of getting things done with the aim of achieving 
goals effectively and efficiently. 
Efficiency and Effectiveness 
Efficiency means doing the task correctly at minimum cost while effectiveness 
means completing the task correctly. Although Efficiency and effectiveness are 
different but they are interrelated. It is important for management to be both 
i.e. effective and efficient. 
Example :  A business produces targeted 1000 units but at a higher cost is 
effecitive but not efficient. Therefore if the business has to be effective and 
efficient then it has to produce 1000 units within cost. 
Characteristics of Management 
1. Goal oriented Process : It is a goal oriented process, which is undertaken 
to achieve already specified and desired objectives. 
2. Pervasive : Management is pervasive in nature. It is used in all types of 
organizations whether economic, social or political and at every level. 
3. Multidimensional : It is multidimensional as it involves management of 
Work, People and operations. 
4. Continuous : It is a continuous process i.e. its functions are being 
performed by all managers simultaneously. The process of management 
continue till an organisation exist for attaining its objectives. 
5. Group Activity : It is a group activity since it involves managing and 
coordinating activities of different people as a team to attain the desired 
objectives. 
6. Dynamic function : it is a dynamic function since it has to adapt to the
7  XII –  Business Studies 
AK 
changing environment. 
7. Intangible Force : It is an intagible force as it cannot be seen but its effect 
are felt in the form of results like whether the objectives are met and 
whether people are motivated or not. 
Objectives of management 
(A) Organizational objectives of Survival (Earning enough revenues to cover 
cost); Profit (To Cover cost and risk); & Growth (To improve its future 
Prospects). 
(B) Social Objectives of giving benefits to society like using environmental 
friendly practices and giving employment to disadvantaged sections of 
society etc. 
(C) Personal Objectives because diverse personal objectives of people working 
in the organization have to be reconciled with organizational objectives. 
Importance of management 
(1) Achieving Group Goals : Management helps in achieving group goals. 
Manager give common direction to the individual effort in achieving the 
overall goal of the organisation. 
(2) Increases Efficiency : Management increases efficiency by using resources 
in the best possible manner to reduce cost and increase productivity. 
(3) Creates Dynamic Organisation : Management helps in creating Dynamic 
organisation which could adopt changing situations easily. 
(4) Achieving Personal Objectives : Management helps in achieving 
objectives of individuals working in the organisation. 
(5) Development of Society : Management helps in the development of 
society by producing good quality products, creating employment 
opportunities and adopting new technology. 
Management as an Art 
Art refers to skillful and personal application of existing knowledge to achieve 
desired results. It can be acquired through study, observation and 
experience. The features of art are as follows. 
(2) Existence of theoretical knowledge : In every art systematic & organised 
study material should be available compulsorily to acquire theoretical 
knowledge.
Page 3


6  XII –  Business Studies 
AK 
UNIT   1 
NATURE AND SIGNIFICANCE OF 
MANAGEMENT 
Management is an art of getting things done through others. Management can 
be defined as,  the process of getting things done with the aim of achieving 
goals effectively and efficiently. 
Efficiency and Effectiveness 
Efficiency means doing the task correctly at minimum cost while effectiveness 
means completing the task correctly. Although Efficiency and effectiveness are 
different but they are interrelated. It is important for management to be both 
i.e. effective and efficient. 
Example :  A business produces targeted 1000 units but at a higher cost is 
effecitive but not efficient. Therefore if the business has to be effective and 
efficient then it has to produce 1000 units within cost. 
Characteristics of Management 
1. Goal oriented Process : It is a goal oriented process, which is undertaken 
to achieve already specified and desired objectives. 
2. Pervasive : Management is pervasive in nature. It is used in all types of 
organizations whether economic, social or political and at every level. 
3. Multidimensional : It is multidimensional as it involves management of 
Work, People and operations. 
4. Continuous : It is a continuous process i.e. its functions are being 
performed by all managers simultaneously. The process of management 
continue till an organisation exist for attaining its objectives. 
5. Group Activity : It is a group activity since it involves managing and 
coordinating activities of different people as a team to attain the desired 
objectives. 
6. Dynamic function : it is a dynamic function since it has to adapt to the
7  XII –  Business Studies 
AK 
changing environment. 
7. Intangible Force : It is an intagible force as it cannot be seen but its effect 
are felt in the form of results like whether the objectives are met and 
whether people are motivated or not. 
Objectives of management 
(A) Organizational objectives of Survival (Earning enough revenues to cover 
cost); Profit (To Cover cost and risk); & Growth (To improve its future 
Prospects). 
(B) Social Objectives of giving benefits to society like using environmental 
friendly practices and giving employment to disadvantaged sections of 
society etc. 
(C) Personal Objectives because diverse personal objectives of people working 
in the organization have to be reconciled with organizational objectives. 
Importance of management 
(1) Achieving Group Goals : Management helps in achieving group goals. 
Manager give common direction to the individual effort in achieving the 
overall goal of the organisation. 
(2) Increases Efficiency : Management increases efficiency by using resources 
in the best possible manner to reduce cost and increase productivity. 
(3) Creates Dynamic Organisation : Management helps in creating Dynamic 
organisation which could adopt changing situations easily. 
(4) Achieving Personal Objectives : Management helps in achieving 
objectives of individuals working in the organisation. 
(5) Development of Society : Management helps in the development of 
society by producing good quality products, creating employment 
opportunities and adopting new technology. 
Management as an Art 
Art refers to skillful and personal application of existing knowledge to achieve 
desired results. It can be acquired through study, observation and 
experience. The features of art are as follows. 
(2) Existence of theoretical knowledge : In every art systematic & organised 
study material should be available compulsorily to acquire theoretical 
knowledge.
8  XII –  Business Studies 
AK 
(2) Personalised application : The use of basic knowledge differ from person 
to person and thus, art is a very personalised concept. 
(3) Based on practice and creativity : Art involves the creative practice of 
existing theoretical knowledge. 
All the features of art are present in management so it can be called an 
art. 
Management as a science 
Science is a systematised body of knowledge that is based on general truths 
which can be tested anywhere, anytime. The features of science are as follows 
(1) Systematized body of knowledge : Science has a systematised body of 
knowledge based on principles and experiments. 
(2) Principles based on experiments & observation : Scientific principles are 
developed through experiments and observations. 
(3) Universal Validity : Scientific principles have universal validity and 
application. Management has systematic body of knowledge and its 
principles are developed over a period of time based on repeated 
experiments & observation, which are universally applicable. 
As the principles of management are not as exact as the principles of pure 
science, so it may be called inexact science. 
Management as a profession : 
Profession means an occupation for which specialised knowledge and skills are 
required. The main features of profession are as follows. 
(1) Well defined body of knowledge : All the professions are based on well 
defined body of knowledge. 
(2) Restricted entry : The entry in every profession is restricted through 
examination or through some minimum educational qualification. 
(3) Professional Associations : All professions are affiliated to a professional 
association which regulates entry and frame code of conduct relating to 
the profession. 
(4) Ethical code of conduct : All professions are bound by a code of conduct 
which guides the behaviour of its members 
(5) Service Motive : The main aim of a profession is to serve its clients. 
Management does not fulfill all the features of a profession and thus it is not 
a full pledged profession.
Page 4


6  XII –  Business Studies 
AK 
UNIT   1 
NATURE AND SIGNIFICANCE OF 
MANAGEMENT 
Management is an art of getting things done through others. Management can 
be defined as,  the process of getting things done with the aim of achieving 
goals effectively and efficiently. 
Efficiency and Effectiveness 
Efficiency means doing the task correctly at minimum cost while effectiveness 
means completing the task correctly. Although Efficiency and effectiveness are 
different but they are interrelated. It is important for management to be both 
i.e. effective and efficient. 
Example :  A business produces targeted 1000 units but at a higher cost is 
effecitive but not efficient. Therefore if the business has to be effective and 
efficient then it has to produce 1000 units within cost. 
Characteristics of Management 
1. Goal oriented Process : It is a goal oriented process, which is undertaken 
to achieve already specified and desired objectives. 
2. Pervasive : Management is pervasive in nature. It is used in all types of 
organizations whether economic, social or political and at every level. 
3. Multidimensional : It is multidimensional as it involves management of 
Work, People and operations. 
4. Continuous : It is a continuous process i.e. its functions are being 
performed by all managers simultaneously. The process of management 
continue till an organisation exist for attaining its objectives. 
5. Group Activity : It is a group activity since it involves managing and 
coordinating activities of different people as a team to attain the desired 
objectives. 
6. Dynamic function : it is a dynamic function since it has to adapt to the
7  XII –  Business Studies 
AK 
changing environment. 
7. Intangible Force : It is an intagible force as it cannot be seen but its effect 
are felt in the form of results like whether the objectives are met and 
whether people are motivated or not. 
Objectives of management 
(A) Organizational objectives of Survival (Earning enough revenues to cover 
cost); Profit (To Cover cost and risk); & Growth (To improve its future 
Prospects). 
(B) Social Objectives of giving benefits to society like using environmental 
friendly practices and giving employment to disadvantaged sections of 
society etc. 
(C) Personal Objectives because diverse personal objectives of people working 
in the organization have to be reconciled with organizational objectives. 
Importance of management 
(1) Achieving Group Goals : Management helps in achieving group goals. 
Manager give common direction to the individual effort in achieving the 
overall goal of the organisation. 
(2) Increases Efficiency : Management increases efficiency by using resources 
in the best possible manner to reduce cost and increase productivity. 
(3) Creates Dynamic Organisation : Management helps in creating Dynamic 
organisation which could adopt changing situations easily. 
(4) Achieving Personal Objectives : Management helps in achieving 
objectives of individuals working in the organisation. 
(5) Development of Society : Management helps in the development of 
society by producing good quality products, creating employment 
opportunities and adopting new technology. 
Management as an Art 
Art refers to skillful and personal application of existing knowledge to achieve 
desired results. It can be acquired through study, observation and 
experience. The features of art are as follows. 
(2) Existence of theoretical knowledge : In every art systematic & organised 
study material should be available compulsorily to acquire theoretical 
knowledge.
8  XII –  Business Studies 
AK 
(2) Personalised application : The use of basic knowledge differ from person 
to person and thus, art is a very personalised concept. 
(3) Based on practice and creativity : Art involves the creative practice of 
existing theoretical knowledge. 
All the features of art are present in management so it can be called an 
art. 
Management as a science 
Science is a systematised body of knowledge that is based on general truths 
which can be tested anywhere, anytime. The features of science are as follows 
(1) Systematized body of knowledge : Science has a systematised body of 
knowledge based on principles and experiments. 
(2) Principles based on experiments & observation : Scientific principles are 
developed through experiments and observations. 
(3) Universal Validity : Scientific principles have universal validity and 
application. Management has systematic body of knowledge and its 
principles are developed over a period of time based on repeated 
experiments & observation, which are universally applicable. 
As the principles of management are not as exact as the principles of pure 
science, so it may be called inexact science. 
Management as a profession : 
Profession means an occupation for which specialised knowledge and skills are 
required. The main features of profession are as follows. 
(1) Well defined body of knowledge : All the professions are based on well 
defined body of knowledge. 
(2) Restricted entry : The entry in every profession is restricted through 
examination or through some minimum educational qualification. 
(3) Professional Associations : All professions are affiliated to a professional 
association which regulates entry and frame code of conduct relating to 
the profession. 
(4) Ethical code of conduct : All professions are bound by a code of conduct 
which guides the behaviour of its members 
(5) Service Motive : The main aim of a profession is to serve its clients. 
Management does not fulfill all the features of a profession and thus it is not 
a full pledged profession.
9  XII –  Business Studies 
AK 
Levels of Management : T op, Middle and operational levels. 
Top Level 
  Consists of Chairperson, Chief Executive Officer, Chief Operating Officer 
or equivalent and their team. 
  Chief task is to integrate and to coordinate the various activities of the 
business, framing policies, formulating organisational goals & strategies. 
Middle Level 
  Consists of divisional heads, Plant Superintendent and Operations 
Manager etc. 
  Main tasks are to interpret the policies of the top management, to ensure 
the availability of resources to implement Policies & to coordinate all 
activities, ensure availability of necessary personnel & assign duties & 
responsibilties to them. 
Lower Level / Supervisory Level 
  Consists of Foremen and supervisors etc. 
  Main task is ensure actual implementation of the policies as per directions, 
bring workers grievances before the management & maintain discipline 
among the workers. 
Functions of Management : Planning, Organizing, Staffing, Directing and 
Controlling. 
  Planning is deciding in advance what to do in future and how to do it. 
  Organizing is to assign duties, grouping tasks, establishing authority and 
allocating resources required to carry out a specific plan. 
  Staffing is finding the right people for the right job. 
  Directing is leading, influencing and motivating employees to perform the 
tasks assigned to them. 
  Controlling is monitoring the organizational performance towards the 
attainment of organizational goals. 
Coordination : The essence of Management :  Coordination is the force which 
synchronizes all the functions of management and activities of different 
departments. 
  It integrates the group efforts. 
  It ensure unity of action.
Page 5


6  XII –  Business Studies 
AK 
UNIT   1 
NATURE AND SIGNIFICANCE OF 
MANAGEMENT 
Management is an art of getting things done through others. Management can 
be defined as,  the process of getting things done with the aim of achieving 
goals effectively and efficiently. 
Efficiency and Effectiveness 
Efficiency means doing the task correctly at minimum cost while effectiveness 
means completing the task correctly. Although Efficiency and effectiveness are 
different but they are interrelated. It is important for management to be both 
i.e. effective and efficient. 
Example :  A business produces targeted 1000 units but at a higher cost is 
effecitive but not efficient. Therefore if the business has to be effective and 
efficient then it has to produce 1000 units within cost. 
Characteristics of Management 
1. Goal oriented Process : It is a goal oriented process, which is undertaken 
to achieve already specified and desired objectives. 
2. Pervasive : Management is pervasive in nature. It is used in all types of 
organizations whether economic, social or political and at every level. 
3. Multidimensional : It is multidimensional as it involves management of 
Work, People and operations. 
4. Continuous : It is a continuous process i.e. its functions are being 
performed by all managers simultaneously. The process of management 
continue till an organisation exist for attaining its objectives. 
5. Group Activity : It is a group activity since it involves managing and 
coordinating activities of different people as a team to attain the desired 
objectives. 
6. Dynamic function : it is a dynamic function since it has to adapt to the
7  XII –  Business Studies 
AK 
changing environment. 
7. Intangible Force : It is an intagible force as it cannot be seen but its effect 
are felt in the form of results like whether the objectives are met and 
whether people are motivated or not. 
Objectives of management 
(A) Organizational objectives of Survival (Earning enough revenues to cover 
cost); Profit (To Cover cost and risk); & Growth (To improve its future 
Prospects). 
(B) Social Objectives of giving benefits to society like using environmental 
friendly practices and giving employment to disadvantaged sections of 
society etc. 
(C) Personal Objectives because diverse personal objectives of people working 
in the organization have to be reconciled with organizational objectives. 
Importance of management 
(1) Achieving Group Goals : Management helps in achieving group goals. 
Manager give common direction to the individual effort in achieving the 
overall goal of the organisation. 
(2) Increases Efficiency : Management increases efficiency by using resources 
in the best possible manner to reduce cost and increase productivity. 
(3) Creates Dynamic Organisation : Management helps in creating Dynamic 
organisation which could adopt changing situations easily. 
(4) Achieving Personal Objectives : Management helps in achieving 
objectives of individuals working in the organisation. 
(5) Development of Society : Management helps in the development of 
society by producing good quality products, creating employment 
opportunities and adopting new technology. 
Management as an Art 
Art refers to skillful and personal application of existing knowledge to achieve 
desired results. It can be acquired through study, observation and 
experience. The features of art are as follows. 
(2) Existence of theoretical knowledge : In every art systematic & organised 
study material should be available compulsorily to acquire theoretical 
knowledge.
8  XII –  Business Studies 
AK 
(2) Personalised application : The use of basic knowledge differ from person 
to person and thus, art is a very personalised concept. 
(3) Based on practice and creativity : Art involves the creative practice of 
existing theoretical knowledge. 
All the features of art are present in management so it can be called an 
art. 
Management as a science 
Science is a systematised body of knowledge that is based on general truths 
which can be tested anywhere, anytime. The features of science are as follows 
(1) Systematized body of knowledge : Science has a systematised body of 
knowledge based on principles and experiments. 
(2) Principles based on experiments & observation : Scientific principles are 
developed through experiments and observations. 
(3) Universal Validity : Scientific principles have universal validity and 
application. Management has systematic body of knowledge and its 
principles are developed over a period of time based on repeated 
experiments & observation, which are universally applicable. 
As the principles of management are not as exact as the principles of pure 
science, so it may be called inexact science. 
Management as a profession : 
Profession means an occupation for which specialised knowledge and skills are 
required. The main features of profession are as follows. 
(1) Well defined body of knowledge : All the professions are based on well 
defined body of knowledge. 
(2) Restricted entry : The entry in every profession is restricted through 
examination or through some minimum educational qualification. 
(3) Professional Associations : All professions are affiliated to a professional 
association which regulates entry and frame code of conduct relating to 
the profession. 
(4) Ethical code of conduct : All professions are bound by a code of conduct 
which guides the behaviour of its members 
(5) Service Motive : The main aim of a profession is to serve its clients. 
Management does not fulfill all the features of a profession and thus it is not 
a full pledged profession.
9  XII –  Business Studies 
AK 
Levels of Management : T op, Middle and operational levels. 
Top Level 
  Consists of Chairperson, Chief Executive Officer, Chief Operating Officer 
or equivalent and their team. 
  Chief task is to integrate and to coordinate the various activities of the 
business, framing policies, formulating organisational goals & strategies. 
Middle Level 
  Consists of divisional heads, Plant Superintendent and Operations 
Manager etc. 
  Main tasks are to interpret the policies of the top management, to ensure 
the availability of resources to implement Policies & to coordinate all 
activities, ensure availability of necessary personnel & assign duties & 
responsibilties to them. 
Lower Level / Supervisory Level 
  Consists of Foremen and supervisors etc. 
  Main task is ensure actual implementation of the policies as per directions, 
bring workers grievances before the management & maintain discipline 
among the workers. 
Functions of Management : Planning, Organizing, Staffing, Directing and 
Controlling. 
  Planning is deciding in advance what to do in future and how to do it. 
  Organizing is to assign duties, grouping tasks, establishing authority and 
allocating resources required to carry out a specific plan. 
  Staffing is finding the right people for the right job. 
  Directing is leading, influencing and motivating employees to perform the 
tasks assigned to them. 
  Controlling is monitoring the organizational performance towards the 
attainment of organizational goals. 
Coordination : The essence of Management :  Coordination is the force which 
synchronizes all the functions of management and activities of different 
departments. 
  It integrates the group efforts. 
  It ensure unity of action.
1 0  XII –  Business Studies 
AK 
  It is a continuous process. 
  It is an all pervasive function. 
  It is a deliberate function. 
  It is the responsibility of all managers 
IMPORTANT QUESTIONS 
1 Mark Questions (To be answered in one word or one sentence) 
1. In order to be successful an organization must change its goals according 
to the needs to the environment. Which characteristic of management is 
highlighted in the statement? (Answer: It is a dynamic function). 
2. To meet the objectives of the firm the Management of Angora Limited 
offers employment to Physically Challenged persons. Identify the 
organizational objective it is trying to achieve (Answer : Social Objective. 
3. Management of any organization strives to attain different objectives. 
Enumerate any two such objectives. 
4. Give any two characteristics of management. 
5. Management is multidimensional. Enumerate any two dimensions of 
management. 
6. Managerial activities are performed in all types of organizations in all 
departments at all levels. Which management character is highlighted 
here? (Answer : It is all pervasive) 
7. Your grandfather has retired where he is responsible for implementing 
the plans developed by the top management at which level of 
management was he working? State one more function of this level of 
management. (Answer: Middle level management) (Write any one 
function of this level). 
8. List any two social objectives of management. 
9. Your grandfather has retired as a Director of manufacturing company. At 
which level of management was he working? Different functions are 
performed at this level. State any one such function. (Answer : Top level 
of management) Write any one function of this level). 
10. What is meant by management ?
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