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Business Studies NCERT Notes, Solutions and Extra Q & A (Class 11th & 12th)
11th 12th

Class 12th Chapters
1. Nature And Significance Of Management 2. Principles Of Management 3. Business Environment
4. Planning 5. Organising 6. Staffing
7. Directing 8. Controlling 9. Financial Management
10. Financial Markets 11. Marketing 12. Consumer Protection

Content On This Page
Concept of Management Characteristics of Management Objectives of Management
Importance of Management Nature of Management Levels of Management
Functions of Management Coordination — The Essence of Management
NCERT Questions Solution

Chapter 1 Nature And Significance Of Management Notes, Solutions and Extra Q & A

Management is the art and science of getting work done through others to achieve organisational goals both effectively and efficiently. It is a universal, goal-oriented, and continuous process that is essential for all types of organisations. The core of management lies in performing a series of interrelated functions: Planning, Organising, Staffing, Directing, and Controlling. These functions are performed by managers at all levels—top, middle, and operational—though the time spent on each function varies by level. Management is multi-dimensional, involving the management of work, people, and operations.

The very essence of management is Coordination, which acts as the binding force that synchronises the diverse efforts of all individuals and departments towards the common objectives. It ensures unity of action and prevents chaos. The significance of management lies in its ability to achieve group goals, increase efficiency, create a dynamic organisation that can adapt to change, help in achieving personal objectives of employees, and contribute to the development of society as a whole.

Concept of Management

Management is a fundamental activity essential for any organised effort. Whether it's a large global corporation like the Tata Group, a small entrepreneurial venture like Namchi Designer Candles, a school, or a hospital, management is the process that steers the organisation towards its goals. It involves guiding the efforts of a group of people to achieve a common objective. People in organisations perform diverse tasks, and management's role is to direct these efforts towards achieving a common goal.

The core idea of management is to ensure that tasks are completed and goals are achieved (effectiveness) with the minimum possible resources and cost (efficiency). Therefore, management is defined as a process of getting things done with the aim of achieving organisational goals effectively and efficiently.

Key Terms in the Definition

1. Process: Management is a 'process' because it involves performing a series of interrelated functions to get things done. These primary functions provide a structured framework for organisational activities and are performed continuously and simultaneously by all managers. The key functions are:

2. Effectiveness: Effectiveness is about doing the right thing. It is concerned with the end result – successfully finishing a given task or achieving a set goal. In other words, it focuses on the quality and success of the final outcome.

3. Efficiency: Efficiency is about doing the task correctly and with minimum cost. It focuses on the process and involves a cost-benefit analysis where the goal is to derive more benefits (outputs) from fewer resources (inputs like money, materials, and people). Reducing costs with the same output or getting more output for the same input are both signs of increasing efficiency.

Effectiveness versus Efficiency

Effectiveness and efficiency are two sides of the same coin; both are crucial for successful management. An organisation must achieve a balance between them. Focusing only on effectiveness without considering efficiency can lead to high costs, while focusing solely on efficiency can lead to not achieving the set goals.

Therefore, the aim of management is to achieve its goals (be effective) with minimum resources (be efficient). High efficiency is usually associated with high effectiveness, which is the aim of all managers.

Relationship between Efficiency and Effectiveness

High Efficiency Low Efficiency
High Effectiveness Ideal Situation: The organisation achieves its goals with minimum resource usage. (e.g., producing high-quality goods at a low cost). Effective but Inefficient: The organisation achieves its goals but wastes resources. (e.g., meeting a tight deadline by hiring expensive temporary staff).
Low Effectiveness Efficient but Ineffective: Tasks are done correctly and with few resources, but the goals are not achieved. (e.g., producing a product cheaply that nobody wants to buy). Worst Situation: The organisation fails to achieve its goals and wastes resources.

Example 1. A company’s target production is 5,000 units in a year. Due to frequent power failures, the manager decides to run the factory on double shifts to meet this target. The manager is able to produce the 5,000 units but at a much higher production cost (due to double labour cost, higher electricity bills etc.).

Answer:

In this case, the manager was effective because the target of 5,000 units was achieved. However, the manager was not efficient, as the same output required more inputs (labour cost, electricity cost), leading to a higher overall cost. This demonstrates a trade-off where effectiveness was prioritised over efficiency.


Characteristics of Management

Management has several distinct characteristics that define its nature.

(i) Management is a goal-oriented process

Every organisation exists to achieve certain basic goals. Management's primary function is to unite the efforts of all individuals within the organisation to achieve these common goals. For example, a retail store's goal might be to increase sales, while a non-profit's goal might be to provide education to underprivileged children. These goals should be simple and clearly stated to provide a sense of purpose and direction.

(ii) Management is all pervasive

Management is a universal phenomenon. The activities involved in managing an enterprise are common to all organisations, whether they are economic, social, or political. A school, a hospital, or a company in India, the USA, or Germany all require management. The way they manage might differ due to culture and history, but the fundamental activity of management is the same everywhere. Even at home, a homemaker manages household resources to achieve objectives like health and hygiene, demonstrating the pervasiveness of management.

(iii) Management is multi-dimensional

Management is a complex activity with three main dimensions:

(a) Management of Work: All organisations exist to perform some work (e.g., manufacturing a product, treating a patient). Management translates this work into goals to be achieved, defines the problems to be solved, establishes plans, and assigns responsibilities to accomplish the work. It is about deciding what is to be done.

(b) Management of People: An organisation's greatest asset is its human resources. "Getting work done through people" is a major task. This involves two dimensions: (i) managing individuals with diverse needs and behaviour and (ii) managing them as a group of people. The task of management is to leverage their strengths and make their weaknesses irrelevant to achieve the organisation's goals.

(c) Management of Operations: Every organisation has an operational aspect that involves a production process, transforming input materials into the desired output. This is interlinked with both the management of work and the management of people. It decides how the work will be done, involving the flow of technology and materials.

A diagram showing the three dimensions of management: Management of Work, Management of People, and Management of Operations, all interconnected.

(iv) Management is a continuous process

The process of management consists of a series of continuous, composite, but separate functions: planning, organising, directing, staffing, and controlling. These functions are performed simultaneously by all managers all the time. A manager's job is an ongoing series of functions, forming a cycle of continuous improvement and adaptation.

(v) Management is a group activity

An organisation is a collection of diverse individuals. As members of the organisation, they must work together towards fulfilling the common organisational goal. This requires teamwork and coordination of individual effort in a common direction. Management creates synergy, where the collective output of the group is greater than the sum of individual efforts. It channels the efforts of all individuals to achieve organisational objectives.

(vi) Management is a dynamic function

Management must adapt itself to the constantly changing external environment, which consists of social, economic, and political factors. To be successful, an organisation must change its goals and strategies according to the needs of the environment. For example, McDonald's made major changes to its menu to succeed in the Indian market by introducing items like the 'McAloo Tikki' burger. Similarly, companies in the technology sector must constantly innovate to keep up with rapid technological advancements.

(vii) Management is an intangible force

Management cannot be seen, but its presence can be felt. The effect of management is noticeable when targets are met according to plans, employees are happy and satisfied, and there is orderliness instead of chaos. Poor management, conversely, is evident through high employee turnover, missed deadlines, and general disarray. The positive results are the tangible evidence of this unseen force.


Objectives of Management

Management aims to achieve certain objectives, which are the desired results of its activities. These objectives must be derived from the basic purpose of the business and must be achieved effectively and efficiently. These can be classified into three categories.

(i) Organisational Objectives

These objectives aim to fulfill the economic goals of the business by utilising human and material resources to the maximum advantage. They consider the interests of all stakeholders, including shareholders, employees, customers, and the government. The main organisational objectives are survival, profit, and growth.

(a) Survival: The most basic objective of any business is to survive. To do so, an organisation must earn enough revenue to cover its variable and fixed costs. This is especially critical for new businesses in competitive markets.

(b) Profit: Mere survival is not enough. Management must ensure the organisation makes a profit, which is a vital incentive for continued successful operation. Profit is essential for covering costs, mitigating business risks, and serves as a crucial source of funds for future growth.

(c) Growth: A business must grow to succeed in the long run. Growth indicates that the business is performing well and is accepted by the market. Growth can be measured in terms of increased sales volume, a higher number of employees, an increase in the number of products, expansion into new geographical markets, or an increase in capital investment.

(ii) Social Objectives

As a part of society, every organisation has a social obligation to create benefits for society. This concept is often referred to as Corporate Social Responsibility (CSR). It involves consistently creating economic value for various constituents of society. This includes:

Example of Social Objective: ITC E-Choupal

ITC's E-Choupal initiative empowers farmers in rural India by providing them with a direct marketing channel through internet kiosks. This eliminates intermediaries, provides real-time information, and improves their decision-making ability, thereby fulfilling a significant corporate social responsibility. This initiative creates economic value for farmers while also benefiting the company through a more efficient supply chain.

(iii) Personal Objectives

Organisations are made up of people with diverse personalities, backgrounds, and objectives. Management must reconcile personal goals with organisational objectives for harmony in the organisation. These personal objectives can be understood through frameworks like Maslow's Hierarchy of Needs, which suggests that people are motivated to satisfy a hierarchy of needs. These include:

By helping employees achieve their personal objectives, management fosters a motivated and committed workforce, which ultimately contributes to organisational success.


Importance of Management

Management is crucial for the success of any organisation due to the following reasons. It acts as the backbone that supports and steers the entire structure, ensuring that all parts work together harmoniously towards a common destination.

(i) Management helps in achieving group goals

The primary purpose of management is to achieve organisational goals. An organisation is a collection of individuals, each with their own needs and objectives. Management's task is to give a common direction to these individual efforts. It integrates the activities of various individuals and groups, ensuring that they all work in a coordinated manner towards the overall goals of the enterprise. Without management, individual efforts might be misdirected, leading to chaos and failure to achieve desired outcomes.

(ii) Management increases efficiency

Efficiency means performing tasks correctly with minimum cost. A manager aims to reduce costs and increase productivity through the effective use of resources. This is achieved through better planning, organising, directing, staffing, and controlling the organisation's activities. For instance, proper planning avoids confusion and duplication of work, while sound organisation eliminates overlapping of responsibilities. This optimisation of resources (men, materials, money, machines) leads to higher profits and a stronger competitive position for the business.

(iii) Management creates a dynamic organisation

All organisations operate in a constantly changing environment. These changes can be social, economic, technological, or political. To be successful, an organisation must adapt itself and its goals to these changes. However, individuals within an organisation often resist change because it may create uncertainty or require them to learn new skills. Management helps its people adapt to these environmental changes by explaining the need for change, providing training, and motivating them to embrace new ways of working. This allows the organisation to maintain its competitive edge and thrive.

(iv) Management helps in achieving personal objectives

A good manager understands that a motivated employee is a productive employee. Through effective motivation and leadership, a manager helps individuals achieve their personal goals (such as financial security, social recognition, and personal growth) while they contribute to the overall organisational objective. Management fosters team spirit, cooperation, and commitment. By aligning personal goals with organisational goals, management creates a harmonious environment where both the employees and the organisation can prosper.

(v) Management helps in the development of society

An organisation is a part of society and has significant social obligations. By achieving its goals, an organisation contributes to society's development in multiple ways. It helps to provide good quality products and services at fair prices, which improves the standard of living. It creates employment opportunities, which helps reduce poverty. It often adopts new technology for the greater good of the people and leads the path towards growth and development. A profitable and efficient organisation also contributes to the national income through taxes, which the government can use for public welfare.


Nature of Management

The nature of management is complex and has been a subject of debate. It has evolved over time into a dynamic field with its own distinct characteristics. To understand its nature comprehensively, it is often examined from three perspectives: as an art, a science, and a profession.

Management as an Art

Art is the skillful and personal application of existing knowledge to achieve desired results. It involves using theoretical knowledge in a creative and ingenious way. Management is considered an art because it satisfies the following fundamental features:

  1. Existence of Theoretical Knowledge: Every art form, be it music, dance, or painting, is based on a body of theoretical knowledge. Similarly, management is a discipline with a vast amount of literature and well-defined principles developed by experts. A manager studies areas like marketing, finance, and human resources to understand the theoretical foundations of their work.

  2. Personalised Application: The use of this theoretical knowledge is not universal; it varies from one individual to another. Two managers with the same qualifications may apply the principles of management differently to the same situation, based on their personality, experience, and judgment. This personalised touch is the hallmark of art. A manager, like an artist, has their own unique style of performing their job.

  3. Based on Practice and Creativity: All art is practical and requires continuous practice to achieve perfection. A manager's skills also improve with practice over time. Furthermore, management is creative. A manager must often find innovative solutions to problems, combining known principles in new ways to deal with complex situations. A good manager works through a combination of practice, creativity, imagination, and initiative.

Therefore, since management involves the skillful application of knowledge, personalised approaches, and creative problem-solving, it is rightly called an art.

Management as a Science

Science is a systematised body of knowledge that explains general truths or the operation of general laws. It is based on logic, facts, and cause-and-effect relationships. Let's see how management measures up against the features of science:

  1. Systematised Body of Knowledge: Like science, management has a systematised body of knowledge with its own vocabulary, concepts, and principles that have been developed over time. These principles help in establishing a cause-and-effect relationship between different variables.

  2. Principles Based on Experimentation: Scientific principles are derived through observation and tested through repeated experimentation under controlled conditions. Management principles have also evolved through observation and experimentation in different types of organisations. However, since management deals with human beings and human behaviour, it is impossible to predict outcomes with absolute accuracy. Therefore, management is considered an inexact science or a social science.

  3. Universal Validity: Scientific principles have universal validity and can be applied in all situations. The principles of management are not as exact as the principles of pure science like physics or chemistry. Their application is not universal and has to be modified according to the given situation and the context. However, they provide managers with certain standardised techniques that serve as useful guidelines.

Conclusion: Management is a combination of both art and science. The principles of management constitute its science, while the skillful practice of these principles is its art. They are not mutually exclusive but complement each other. A manager needs both the knowledge of the science and the skill of the art to be successful.

Management as a Profession

A profession is an occupation backed by specialised knowledge and training, and to which entry is regulated. While management is moving towards becoming a profession, it does not currently satisfy all the criteria of a full-fledged profession.

Feature of a Profession Status in Management
1. Well-defined Body of Knowledge Fulfilled. Management is a recognised discipline with a systematic body of knowledge that can be acquired through formal education and training at colleges and professional institutes like the IIMs.
2. Restricted Entry Not Fulfilled. Unlike professions such as medicine or law which require a practicing professional to possess a valid degree and license, there is no legal restriction on who can be appointed as a manager. Educational qualifications are often preferred but not mandatory by law.
3. Professional Association Partially Fulfilled. While there are professional associations for managers in India, like the All India Management Association (AIMA), it is not legally compulsory for managers to be members of such an association to practice management.
4. Ethical Code of Conduct Partially Fulfilled. Professions are bound by a strict ethical code. AIMA has prescribed a code of conduct for its members, but it does not have statutory backing and is not universally applicable to all managers.
5. Service Motive Fulfilled. The basic motive of a profession is service to clients. While the primary objective of a business is often seen as profit maximisation, there is a growing emphasis on social responsibility and service to society. Efficient management automatically serves society by providing quality goods at reasonable prices.

Thus, management does not currently meet all the requirements of a full-fledged profession but is on the path to becoming one, as there is increasing demand for professionally qualified managers.


Levels of Management

In any organisation, the authority-responsibility relationship binds individuals as superiors and subordinates, giving rise to different levels in the hierarchy. This hierarchy of managerial positions is known as the levels of management. There are generally three levels of management.

A pyramid diagram showing the three levels of management. Top Management is at the apex, followed by Middle Management, and Supervisory or Operational Management at the base.

(i) Top Management

This level consists of the senior-most executives of the organisation, who are responsible for the overall management and direction of the company. They are usually referred to as the Chairman, Chief Executive Officer (CEO), Chief Operating Officer (COO), President, and Vice-President. Their primary tasks include:

(ii) Middle Management

This level acts as the crucial link between top and lower-level managers. They are subordinate to top managers and superior to the first-line managers. They are usually known as division heads, production managers, plant superintendents, or regional managers. Their main tasks are:

(iii) Supervisory or Operational Management

This level, also known as first-line management, includes foremen and supervisors who directly oversee the efforts of the workforce. Their authority and responsibility are limited according to the plans drawn by the top management. Their role is crucial because they interact directly with the actual non-managerial employees. Their responsibilities include:


Functions of Management

Management is described as the process of performing a series of interrelated functions to achieve organisational goals. These functions provide a systematic framework for managers to operate within. While they are discussed sequentially, in reality, they are performed simultaneously and are part of a continuous, cyclical process. The main functions are planning, organising, staffing, directing, and controlling.

A circular diagram showing the five functions of management: Planning, Organising, Staffing, Directing, and Controlling, indicating a continuous cycle.

1. Planning

Planning is the primary and most fundamental function of management. It is the process of deciding in advance what to do, how to do it, when to do it, and who is to do it. It bridges the gap between where we are and where we want to go. Planning involves setting objectives for a given time period and formulating various courses of action to achieve them. It is an intellectual process that requires creative thinking and foresight.

For Smita at Namchi Designer Candles, planning her special festive collection for Diwali would involve deciding on the quantities, variety, and colour of candles to produce, and then allocating resources for their purchase from different suppliers. Planning cannot prevent all problems, but it can help predict them and prepare contingency plans to deal with them if and when they occur.

2. Organising

Once the plans are laid down, the next logical step is organising. Organising is the management function of assigning duties, grouping tasks, establishing authority, and allocating resources required to carry out a specific plan. It involves creating an organisational structure and defining the roles and responsibilities of employees. The key steps in organising are:

Proper organisational techniques help in the accomplishment of work and promote both the efficiency of operations and the effectiveness of results.

3. Staffing

Staffing simply stated, is finding the right people for the right job. This function ensures that the organisation has the right number of people with the right qualifications available at the right places and times to accomplish its goals. It is also known as the human resource function and it involves a series of activities such as:

For example, a software company like Infosys needs to staff its projects with skilled systems analysts and programmers.

4. Directing

Directing is the heart of the management process. It is the function of leading, influencing, and motivating employees to perform the tasks assigned to them. While planning, organising, and staffing are preparatory functions, directing is the function that initiates action. It requires establishing an atmosphere that encourages employees to do their best. The key components of directing are:

A good manager directs through praise and constructive criticism in such a way that it brings out the best in the employee.

5. Controlling

Controlling is the management function of monitoring organisational performance towards the attainment of organisational goals. It is a backward-looking as well as a forward-looking function. It compares past performance with set standards and aims to improve future performance. The task of controlling involves:

  1. Establishing Standards of Performance: Setting clear benchmarks against which actual performance will be measured.

  2. Measuring Current Performance: Measuring the work done in an objective and reliable manner.

  3. Comparing this with Established Standards: Identifying the deviation between actual performance and the standard.

  4. Taking Corrective Action: Taking necessary steps to rectify any significant deviation and prevent its recurrence.

These five functions are deeply interrelated. A manager may be planning, organising, and controlling all at the same time for different tasks. The cycle of management begins with planning and ends with controlling, which in turn provides feedback to restart the planning process.


Coordination — The Essence of Management

Coordination is the process by which a manager synchronises the activities of different departments and individuals to achieve a common goal. It is not considered a separate function of management. It is, however, the very essence of management, for achieving harmony among individual efforts towards the accomplishment of group goals. It is the force that binds all the other functions together. Like a thread in a garland, coordination is implicit and inherent in all functions of an organisation, running through all activities like purchase, production, sales, and finance to ensure continuity in the working of the organisation.

Characteristics of Coordination

Importance of Coordination

Coordination is vital for reconciling differences in approach, timing, and effort among individuals and departments. Its importance arises from the following needs:

  1. Growth in Size: As organisations grow in size, the number of people employed also increases. It becomes difficult to integrate their efforts and activities, as individuals differ in their habits of work, backgrounds, and goals. Therefore, for organisational efficiency, it is important to harmonise individual goals and organisational goals through coordination.

  2. Functional Differentiation: The functions of an organisation are divided into departments, divisions, and sections. All these departments may have their own objectives, policies, and style of working. For example, the marketing department’s objective to increase sales by offering a 10% discount may not be approved by the finance department as it would mean a loss of revenue. These kinds of conflict arise in organisations because each unit is performing activities in isolation. The process of linking the activities of various departments is accomplished by coordination.

  3. Specialisation: Modern organisations are characterised by a high degree of specialisation. Specialists usually think that they only are qualified to evaluate, judge, and decide according to their professional criteria. They often do not take advice or suggestions from others in matters pertaining to their area of specialisation. This often leads to conflict amongst different specialists. Therefore, some coordination is required by an independent person to reconcile the differences in approach, interest, or opinion of the specialists.

Example of Excellence through Coordination: The Dabbawallas of Mumbai

The success of Mumbai's Dabbawallas lies in a complex yet well-coordinated exercise that is carried out on the streets of Mumbai day after day. What is the secret behind the efficiency with which their business is conducted? The first dabbawalla picks up the tiffin, the second sorts it at the station, the third travels with it, and the fourth delivers it. This entire process, involving multiple handovers and transportation modes, works with near-perfect accuracy. This system is a prime example of deliberate, continuous, and all-pervasive coordination that integrates the efforts of many individuals and groups to achieve a common goal with remarkable efficiency.

NCERT Questions Solution

Very Short Answer Type

Question 1. What is meant by management?

Answer:

Management is the process of getting things done with the aim of achieving goals effectively and efficiently. It involves designing and maintaining an environment in which individuals, working together in groups, accomplish selected aims.

Question 2. Name any two important characteristics of management.

Answer:

Two important characteristics of management are:

1. Management is a goal-oriented process: Every organisation has a set of basic goals for its existence. Management unites the efforts of different individuals in the organisation towards achieving these goals.

2. Management is all pervasive: The activities involved in managing an enterprise are common to all organisations, whether economic, social, or political. It is applicable to every type of organisation, big or small, profit or non-profit.

Question 3. Identify and state the force that binds all the other functions of management.

Answer:

The force that binds all other functions of management is Coordination.

Coordination is the process by which a manager synchronises the activities of different departments and individuals towards the achievement of a common goal. It is considered the essence of management because it is needed to perform all the functions: planning, organising, staffing, directing, and controlling.

Question 4. List any two indicators of growth of an organisation.

Answer:

Two key indicators of the growth of an organisation are:

1. Increase in Sales Turnover: A consistent increase in the sales volume or revenue over a period of time is a primary indicator of growth.

2. Increase in the Number of Employees: As an organisation grows, it needs more people to handle the increased volume of work, so an increase in the number of employees is a sign of expansion.

Question 5. Indian Railways has launched a new broad gauge solar power train which is going to be a path breaking leap towards making trains greener and more environment friendly. The solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to save about 21,000 liters of diesel and ensure a cost saving of Rs 12, 00,000 per year. Name the objectives of management achieved by Indian Railways in the above case.

Answer:

Indian Railways has achieved the following two objectives of management in this case:

1. Organisational Objective: The primary organisational objective is survival, profit, and growth. By ensuring a cost saving of $\textsf{₹ } 12,00,000$ per year, Indian Railways is focusing on reducing its costs and improving efficiency, which contributes to its financial health and long-term survival and growth.

2. Social Objective: By launching a solar-powered train to make travel greener and more environment-friendly, Indian Railways is fulfilling its social responsibility. It is contributing to a cleaner environment by reducing its reliance on diesel, which is a fossil fuel and a major pollutant.

Short Answer Type

Question 1. Ritu is the manager of the northern division of a large corporate house. At what level does she work in the organisation? What are her basic functions?

Answer:

Ritu is working at the Middle Level of management. As the manager of a division, she acts as a crucial link between the top management and the lower-level management.

Her basic functions at this level would include:

  • Interpreting Policies: She is responsible for interpreting the policies framed by the top management and communicating them to the employees in her division.
  • Assigning Duties: She assigns the necessary duties and responsibilities to the supervisory staff working under her.
  • Motivating Employees: She is responsible for motivating the employees in her division to achieve the desired objectives.
  • Cooperation and Coordination: She cooperates with other departments to ensure the smooth functioning of the entire organisation.

Question 2. State the basic features of management as a profession.

Answer:

A profession has certain well-defined features. Management, when compared to these features, exhibits the following characteristics:

1. Well-defined Body of Knowledge: Management has a systematised body of knowledge, comprising well-defined principles based on a variety of business situations. This knowledge can be acquired through instruction at universities and professional institutes.

2. Restricted Entry: The entry to a profession is restricted through an examination or an educational degree (e.g., a doctor needs an MBBS degree). While there is no legal restriction on the appointment of a manager, there is an increasing preference for individuals with professional management degrees like an MBA.

3. Professional Association: All professions are affiliated to a professional association (e.g., Bar Council of India for lawyers). While several management associations like the All India Management Association (AIMA) exist, it is not compulsory for managers to be members.

4. Ethical Code of Conduct: All professions are bound by a code of conduct which guides the behaviour of its members. AIMA has laid down a code of conduct for Indian managers, but it does not have legal backing.

5. Service Motive: The basic motive of a profession is to serve their client’s interests. While the primary goal of business is profit, good management also emphasizes serving society.

Question 3. Why is management considered to be a multi-dimensional concept?

Answer:

Management is considered a multi-dimensional concept because it is a complex activity that involves three main dimensions:

1. Management of Work: Every organisation exists to perform some work to achieve its goals. For example, a factory produces goods, and a hospital treats patients. Management translates this work into goals to be achieved and establishes the means to achieve them. It involves planning, organising, and controlling the work.

2. Management of People: An organisation's greatest asset is its human resources or people. Management has the task of getting work done through people. This involves two aspects: dealing with employees as individuals with diverse needs, and dealing with them as a group. The job of a manager is to make people's strengths effective and their weaknesses irrelevant.

3. Management of Operations: Every organisation has some basic product or service to provide. This requires a production process that transforms inputs into the desired output. Management of operations is interlinked with both the management of work and the management of people. It involves deciding what work needs to be done, how it will be done, and who will do it.

Question 4. Company X is facing a lot of problems these days. It manufactures white goods like washing machines, microwave ovens, refrigerators and air conditioners. The company’s margins are under pressure and the profits and market share are declining. The production department blames marketing for not meeting sales targets and marketing blames production department for producing goods, which are not of good quality meeting customers’ expectations. The finance department blames both production and marketing for declining return on investment and bad marketing. State the quality of management that the company is lacking? What quality of management do you think the company is lacking? Explain briefly. What steps should the company management take to bring the company back on track?

Answer:

The quality of management that Company X is clearly lacking is Coordination.

Explanation:

Coordination is the process of integrating the activities of separate departments to achieve organisational goals efficiently. In this case, all the departments—production, marketing, and finance—are working in isolation and blaming each other. There is a complete lack of synchronisation of efforts. The production department is not producing goods that the marketing department can sell, and the marketing department is not meeting targets, which in turn affects the financial performance. This disharmony is a classic sign of poor coordination.

Steps to bring the company back on track:

The company's management should take the following steps to re-establish coordination:

1. Integrate Efforts: The top management must intervene to integrate the efforts of all departments. They should ensure that the production department produces goods based on the market feedback provided by the marketing department.

2. Improve Communication: There is a clear communication gap. Regular meetings should be scheduled between the heads of all departments to discuss plans, problems, and progress. This will foster mutual understanding and resolve conflicts.

3. Clarify Goals and Roles: The management should clearly define the goals of the company and the specific roles and responsibilities of each department in achieving those goals. This will ensure that all departments are working towards the same objective.

4. Develop a Unified Strategy: The company needs a unified strategy that aligns the goals of production (quality, cost), marketing (sales, customer satisfaction), and finance (profitability, ROI). All departmental plans should be derived from this central strategy.

Question 5. Coordination is the essence of management. Do you agree? Give reasons.

Answer:

Yes, I strongly agree with the statement that "Coordination is the essence of management." It is not a separate function but the underlying force that connects all other managerial functions.

The reasons for this are as follows:

1. Coordination is needed in Planning: There must be coordination between the main plan of the organisation and the various supportive plans prepared by different departments.

2. Coordination is needed in Organising: When a manager groups activities and creates a departmental structure, there has to be coordination between the authority, responsibility, and resources assigned to different individuals and departments.

3. Coordination is needed in Staffing: The staffing function must be coordinated with the needs of the organisation to ensure that the right person with the right skills is placed in the right job.

4. Coordination is needed in Directing: Leadership, communication, and motivation must all be coordinated to ensure that the orders and instructions given to subordinates are consistent and that their efforts are directed towards the common goals.

5. Coordination is needed in Controlling: The standards of performance set must be coordinated with the actual performance achieved. If there is a deviation, corrective action must be coordinated across the responsible departments.

Without coordination, planning would be aimless, organising would be chaotic, and controlling would be ineffective. It is the thread that binds all activities together.

Question 6. Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume jewellery. The firm secured an urgent order for 1,000 bracelets that were to be delivered within 4 days. They were assigned the responsibility of producing 500 bracelets each at a cost of Rs 100 per bracelet. Ashita was able to produce the required number within the stipulated time at the cost of Rs 55,000 whereas, Lakshita was able to produce only 450 units at a cost of Rs 90 per unit. State whether Ashita and Lakshita are efficient and effective. Give reasons to justify your answer.

Answer:

To determine if Ashita and Lakshita are efficient and effective, we need to analyze their performance against the two key parameters of management: effectiveness (completing the task on time) and efficiency (completing the task with minimum cost).

Analysis of Ashita's Performance:

  • Effectiveness: Ashita produced the target of 500 bracelets within the stipulated 4 days. Therefore, she is effective.
  • Efficiency: The target cost was $\textsf{₹ } 100$ per bracelet, meaning a total cost of $500 \times 100 = \textsf{₹ } 50,000$. Ashita produced them at a cost of $\textsf{₹ } 55,000$, which is a per-unit cost of $\frac{55,000}{500} = \textsf{₹ } 110$. Since her cost was higher than the target cost, she is not efficient.

Analysis of Lakshita's Performance:

  • Effectiveness: Lakshita produced only 450 units, falling short of the target of 500 units. Therefore, she is not effective as she did not complete the assigned task.
  • Efficiency: Lakshita's per-unit cost was $\textsf{₹ } 90$, which is lower than the target cost of $\textsf{₹ } 100$. In terms of cost control for the units she did produce, she is efficient.

Conclusion: Neither employee is ideal. Ashita is effective but not efficient, while Lakshita is efficient but not effective. A good manager needs to be both.

Long Answer Type

Question 1. Management is considered to be both an art and science. Explain.

Answer:

The nature of management is often debated as being either an art or a science. In reality, it is a blend of both. Management has the characteristics of both a science and an art.

Management as a Science

Science is a systematised body of knowledge that explains general truths and is based on principles derived from observation and experimentation. Management can be considered a science because it has the following features:

1. Systematised Body of Knowledge: Like science, management has its own body of knowledge with its own theories, principles, and vocabulary that have been developed over time.

2. Principles based on Experimentation: Management principles have been developed through years of observation and experimentation in different types of organisations.

3. Universal Validity: The principles of management are universal in their applicability. They can be applied to all types of organisations in all situations. However, since management deals with human behaviour, these principles are not as exact as the principles of pure science and need to be modified according to the given situation.

Therefore, management is often called an 'inexact' or 'social' science rather than a pure physical science.

Management as an Art

Art is the skillful and personalised application of existing knowledge to achieve desired results. It can be acquired through study, observation, and experience. Management is considered an art due to the following reasons:

1. Existence of Theoretical Knowledge: Art presupposes the existence of certain theoretical knowledge. Similarly, a successful manager practices the art of management based on the principles and theories developed in the field of management.

2. Personalised Application: Like any artist, every manager has their own unique style of managing things and people, even though they may have learned the same management theories. The success of a manager depends on how skillfully they apply these principles to the situation at hand.

3. Based on Practice and Creativity: Art involves continuous and creative practice. Management is also learned and improved through practice. A good manager combines management principles with their own creativity and experience to find innovative solutions to problems.

Conclusion: Science teaches us to 'know' and art teaches us to 'do'. Management is a blend of both. A successful manager requires the knowledge of management principles (science) and the skill to apply them in real-life situations (art).

Question 2. Do you think management has the characteristics of a full-fledged profession?

Answer:

While management is moving towards professionalization, it does not currently meet all the rigorous criteria of a full-fledged profession like medicine or law. Let's evaluate management against the key characteristics of a profession:

1. Well-defined Body of Knowledge:
Status: This condition is met. Management has a systematised body of knowledge that can be taught and learned through books, journals, and educational institutions.

2. Restricted Entry:
Status: This condition is not met. The entry into a profession is restricted through a prescribed qualification or examination (e.g., an MBBS degree for a doctor). However, there is no such legal mandate for becoming a manager. Anyone, regardless of their educational background, can be appointed as a manager.

3. Professional Association:
Status: This condition is partially met. For a profession, it is mandatory to be a member of a professional association (e.g., the Bar Council for lawyers). While management associations like the All India Management Association (AIMA) exist, it is not compulsory for managers to be members of such bodies.

4. Ethical Code of Conduct:
Status: This condition is partially met. Professions have a legally enforceable code of conduct. While AIMA has a code of conduct for managers, it lacks legal backing and is not universally followed.

5. Service Motive:
Status: This condition is partially met. The primary motive of a profession is service. The main objective of a business is usually profit maximization. However, with the increasing emphasis on corporate social responsibility, there is a growing realization that profit should be earned while serving society.

Conclusion: Based on the above analysis, it is clear that management does not yet have all the characteristics of a full-fledged profession. However, it is on the path of becoming one as the demand for professionally qualified managers with ethical standards is increasing rapidly.

Question 3. “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.

Answer:

The statement "A successful enterprise has to achieve its goals effectively and efficiently" lies at the heart of the definition of management. For an organisation to be successful in the long run, it is crucial that management balances both effectiveness and efficiency.

Let's understand the two terms:

1. Effectiveness: This refers to completing the given task or achieving the goal on time. It is concerned with the end result. In other words, it means 'doing the right things'.

2. Efficiency: This refers to performing the task in the best possible manner, i.e., with minimum cost and wastage of resources. It is concerned with the means used to achieve the end result. In other words, it means 'doing things right'.

Interrelationship and Importance:

Effectiveness and efficiency are two sides of the same coin. One without the other is not enough for long-term success.

  • Being Effective but not Efficient: If a manager focuses only on completing the task on time (effectiveness) without considering the cost, the organisation might achieve its sales targets, but the high costs could lead to losses. For example, a company might complete a large order on time by hiring extra workers at double the wages. The goal is met, but profitability suffers.

  • Being Efficient but not Effective: If a manager focuses only on cutting costs (efficiency) and in the process, fails to achieve the target on time, the goods may not reach the market in time, and the company might lose its customers to competitors. For example, a company produces goods at a very low cost but with a delay, missing the festive season demand. The efficiency is useless as the goal was not met.

Conclusion: A successful enterprise must be both effective and efficient. It must achieve its goals (effectiveness) while using the minimum possible resources (efficiency). A poor manager might compromise one for the other, but a successful manager finds the right balance between the two, ensuring that the work is completed on time and at the lowest possible cost, leading to sustainable profitability and success.

Question 4. Management is a series of continuous interrelated functions. Comment.

Answer:

Yes, the statement that "Management is a series of continuous, interrelated functions" is entirely correct. Management is a dynamic process consisting of several key functions that are performed continuously and are deeply interconnected.

The main functions of management are Planning, Organising, Staffing, Directing, and Controlling.

Management Functions are Continuous:

Management is not a one-time activity. The functions of management are performed by all managers simultaneously and continuously. The process of management is a continuous cycle:

  • A manager plans for a particular period.
  • They then organise the resources, staff the positions, and direct the employees to execute the plan.
  • Finally, they control the performance to check for deviations from the plan.
  • The results of the controlling function then provide the basis for the next cycle of planning.

This cycle repeats itself, making management a never-ending process.

Management Functions are Interrelated:

All the functions of management are interdependent and influence each other. They cannot be viewed in isolation. For example:

  • The organising function depends on the goals set in the planning function. The organisational structure is designed to achieve the plan.
  • The staffing function is dependent on the organising function, as it involves filling the jobs created by the organisational structure.
  • The directing function, which involves leading and motivating people, can only be effective if the right people have been placed in the right jobs through the staffing function.
  • The controlling function measures performance against the standards set during the planning function. Without a plan, there is no basis for control.

In conclusion, the functions of management are like a circular flow. They are performed in a sequence, but they are also performed simultaneously and are dependent on each other to form the complete process of management.

Question 5. A company wants to modify its existing product in the market due to decreasing sales. You can imagine any product about which you are familiar. What decisions/steps should each level of management take to give effect to this decision?

Answer:

Let's assume the company is 'Smart Mobiles Ltd.' and the product to be modified is its popular smartphone model, the 'Zenon X', which is facing decreasing sales due to new competition.

The decisions and steps to be taken by each level of management would be as follows:

1. Top Level Management (e.g., CEO, Board of Directors):

The top level is responsible for the overall strategy and welfare of the organisation. Their steps would include:

  • Strategic Decision: They will make the final strategic decision to modify the 'Zenon X' model based on market analysis and sales reports.
  • Goal Setting: They will set the broad objectives for this modification, such as "to introduce the 'Zenon X Pro' with an improved camera and battery life to recapture a 15% market share within six months."
  • Budget Allocation: They will approve the overall budget for the entire project, including funds for research and development (R&D), production changes, and marketing campaigns.
  • Resource Planning: They will ensure that the major resources, like technology and key personnel, are available for the project.

2. Middle Level Management (e.g., Departmental Managers like Production Manager, Marketing Manager, R&D Manager):

The middle level acts as the link between the top and lower levels. They are responsible for implementing the plans set by the top management. Their steps would include:

  • Departmental Plans: The R&D Manager will create a plan for developing the new camera and battery. The Production Manager will plan the necessary changes in the assembly line. The Marketing Manager will devise a detailed marketing and launch strategy for the 'Zenon X Pro'.
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  • Organising Resources: They will assign duties and allocate the resources within their respective departments to carry out the plan.
    • -
  • Coordination: The middle managers will need to constantly coordinate with each other. For example, the marketing team needs to know the final features from R&D to design the ad campaign, and the production team needs the final design to retool the factory.
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  • Hiring Staff: They will identify if any new staff with specific skills are needed for the project.

3. Supervisory/Operational Level Management (e.g., Foremen, Sales Officers):

This level is in direct contact with the workforce. Their role is to execute the plans on the ground. Their steps would include:

    -
  • Supervision and Guidance: The production foreman will directly oversee the workers on the factory floor to ensure the new model is assembled correctly and meets quality standards.
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  • Task Allocation: They will assign the day-to-day tasks to the workers.
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  • Training: The sales officers will train the sales team about the new features of the 'Zenon X Pro' and the new sales pitch.
    • -
  • Reporting: They will provide regular feedback and reports to the middle management on the progress of the work and any problems being faced by the workforce.

Question 6. A firm plans in advance and has a sound organisation structure with efficient supervisory staff and control system but on several occasion it finds that plans are not being adhered to. It leads to confusion and duplication of work. Advise remedy.

Answer:

The problem faced by the firm, despite having good planning, organising, and controlling systems, indicates a significant weakness in the Directing function of management and a lack of overall Coordination.

Diagnosis of the Problem: The firm has the 'what to do' (planning), the 'how to do it' structure (organising), and the 'how to check' system (controlling). However, the execution part seems to be failing. This suggests that:

  • Employees may not be properly guided or motivated to follow the plans.
  • There is a lack of effective leadership to influence the workforce.
  • Communication gaps exist, leading to confusion.
  • The efforts of different departments and individuals are not being synchronized, leading to duplication of work.

Remedy and Advice:

The management should focus on strengthening the following areas:

1. Improve the Directing Function:

  • Leadership: Managers at all levels should provide effective leadership, guiding their subordinates and creating a positive work environment where employees are willing to follow the plans.
  • Communication: The management must establish clear and open channels of communication. Plans, instructions, and policies should be communicated clearly to avoid any ambiguity. A feedback mechanism should also be in place.
  • Motivation: The firm needs to understand the needs of its employees and use appropriate financial and non-financial incentives to motivate them to perform according to the plans.

2. Establish Effective Coordination:

  • Synchronize Activities: The top management must make a conscious effort to synchronize the activities of different departments. This can be done through regular inter-departmental meetings.
  • Focus on Unity of Action: All managers should ensure that the members of their teams are working in unison towards the common organizational goals, rather than pursuing individual departmental goals.
  • Integrate All Functions: The remedy is to treat management as a complete process. Directing must be seen as the function that activates the plans within the given organisational structure, and coordination must be seen as the essence that binds everything together.

By strengthening the directing and coordination functions, the firm can ensure that its well-laid plans are executed effectively and efficiently, eliminating confusion and duplication of work.