NCERT Solutions for Class 12 Business Studies Chapter 1 Nature and Significance of Management

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Short Answer Type Questions

Q1. Define management.

Answer: Management is defined as a process of getting things done with the aim of achieving goals effectively and efficiently.
or
It is a process of designing and maintaining an environment in which individuals working in groups, can achieve selected objectives efficiently and effectively.

Q2. Name any two important characteristics of management.

Answer: Pervasive and Multidimensional.

Q3. 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. Her basic functions are (number of functions should be given according to the marks allotted for the question).
(i) Interpreting the policies formed by the top level management and acting as a link between top level management and operative management.
(ii) Assigning necessary duties to the employees.

Q4. Why is management considered a multi-faceted concept?

Answer: Management is considered as a multi-faceted concept because it is a complex activity that has three main dimensions. These are
(i) Management of Work All organisations perform some work e.g., producing or selling. A work is defined as the goals to be achieved.
(ii) Management of People The main asset of an organisation is the human resources. This resource has to be managed in such a manner that it helps to achieve the goals of the organisations.
(iii) Management of Operations All organisations either produce a product or provide a service. This requires a production process which means using an operation to convert the inputs into the output, dt is interlinked with both management of work and management of
output.

Q5. Discuss the basic features of management as a profession.

Answer: Basic features of management as a profession management as a profession has the following features which are as follows
(i) Well-defined Body of Knowledge All professionals are based on a well-defined body of knowledge that can be acquired through instruction.
(ii) Professional Association There are several associations of practicing managers in India, like the AIMA (All India Management Association) that has laid the code of conduct to regulate the activities of their members.
(iii) Service Motive All business organisations aim to provide good quality product or service at a reasonable price thus serving the society.
Thus, we can say management does not meet the exact criteria of a profession but it has some features as a profession.


Long Answer Type

Q1. Management is considered to be both an art and science. Explain.

Answer: Management as art:

→ Art and management both requires the existence of certain theoretical knowledge. Just like art where many literature on dancing, public speaking, acting or music are available, there is a lot of literature available in various areas of management like marketing, finance and human resources which the manager has to specialise in.

→ Art is a very person-alised concept as basic knowledge varies from individual to individual. For example, two dancers will always differ in demonstrating their art. Also in management, a manager applies his scientific methods and body of knowledge to a given situation, an issue or a problem, in his own unique manner depending on how creative they are.

→ Art involves the creative practice of existing theoretical knowledge. All music is based on seven basic notes but a musician unique or different is his use of these notes in a creative manner that is entirely his own interpretation. In management, a manager applies his acquired knowledge in a personalised and skillful manner to different situations as per his own creativity and formulates his
own theories which gives rise to different styles of management.

Management as Science:

→ Science is a systematic body of knowledge. Its principles are based on a cause and effect relationship. Similarly management has its own theory and principles that have developed over a period of time. Also, it has its own vocabulary.

→ Scientific principles are first developed through observation and then tested through repeated
experimentation under controlled conditions over a period of time. Also, principles of management have evolved over a period of time based on repeated experimentation and observation in different types of organisations. However, since management deals with human beings and human behaviour, the outcomes of these experiments are not capable of being accurately predicted or replicated. Despite this, management fulfills this criterion of science to some extent as the scholars have been able to identify certain theories and principle that act as guidelines in management.

→ Scientific principles have universal validity and application. In management, the theories and principles are valid to some extent but not universal. Their application and use is not universal. They have to be modified according to a given situation.

Q2. Do you think management has the characteristics of a full fledged profession?

Answer:Management does not meet the exact criteria of a profession. However, it does have some of the features of a profession:

→ Management is based on a systematic body of knowledge comprising well- defined principles based on a variety of business situations. This knowledge can be acquired at different colleges and professional institutes and through a number of books and journals. The subject of management is taught at different institutions For example, Indian Institute of Management (IIM) in India in which entry to different institutes is usually through an examination.

→ The professionals require an educational degree through an examination. However, there is no restriction on anyone being designated or appointed as manager in any business enterprise. But professional knowledge and training is considered to be a desirable qualification, since there is greater demand for those who possess degrees or diplomas from reputed institutions.

→ All professions are affiliated to a professional association which regulates entry, grants certificate of practice and formulates and enforces a code of conduct. In management also, there are several associations of practising managers in India, like the AIMA (All India Management Association) that has laid down a code of conduct to regulate the activities of their members. However, no compulsion for managers to be members of such an association nor does it have any statutory backing.
→ All professions are bound by a code of conduct which guides the behaviour of its members. The basic motive of a profession is to serve the clients by rendering dedicated and committed service. In management also, have a specific Code of Conduct but, it is not obligatory for the managers to abide by them. The basic purpose of management is to help the organisation achieve its stated goal. A good management team that is efficient and effective automatically serves society by providing good quality products at reasonable prices.

Q3. Coordination is the essence of management. Do you agree? Give reasons.

Answer:Yes, Coordination is the essence of management. It is the force that binds all the other functions of management. It is the common thread that runs through all activities such as purchase, production, sales, and finance to ensure continuity in the working of the organisation. The process of coordinating the activities of an organisation begins at the planning stage itself. Top management plans for the entire organisation. According to these plans the organisational structure is developed and staffed. The functions of directing and controlling must also be coordinated with each other so as to achieve the desired goals. Its importance can be understood by the following reasons:

Growth in size: When an organisation grow in size the number of people employed by the organisation also increases where each person differ in their habits of work, background, interests and individual goal also. It may become difficult to integrate their efforts and activities towards the common goals of the organisation. Therefore, for organisational efficiency, it is important to harmonise individual goals and organisational goals through coordination.

Functional differentiation: Functions of an organisation are divided into departments, divisions and sections such as finance, production, marketing or human resources. All these departments may have their own objectives, policies and their own style of working. All departments and individuals are interdependent and they have to depend on each other for information to perform their activities. The activity of each department needs to be focused on attainment of common organisational goals. The process of linking the activities of various departments is accomplished by coordination.

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

Q4. ”A successful enterprise has to achieve its goals effectively and efficiently.” Explain.

Answer:Management has been defined as a process of getting things done with the aim of achieving goals effectively and efficiently.
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. Completing task efficiently is also important. 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 more benefits are derived then efficiency has increased. Efficiency is also increased when for the same benefit or outputs, fewer resources are used and less costs are incurred. Management is concerned with the efficient use of the available resources, because they reduce costs and ultimately lead to higher profits.
For management, it is important to be both effective and efficient. Effectiveness and efficiency are two sides of the same coin.
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.

Q5. Management is a series of continuous interrelated functions. Comment.

Answer:The process of management is a series of continuous and interrelated functions to achieve targeted goals. There are various activities that are done by management in given series:

Planning: This is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively. It helps in predicting the situations and choosing the best out of various alternatives to deal with the situation.

Organising: This is the management function of assigning duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. After a specific plan has been established for the accomplishment of an organisational goal, the organising function examines the activities and resources required to implement the plan. It determines what activities and resources are required, who will do a particular task, where it will be done, and when it will be done. Proper organisation leads to both effectiveness and efficiency in the organisation.

Staffing: This means finding the right people for the right job. It make sure that the right people
with the right qualifications are available at the right places and times to accomplish the goals of the organisation. It involves activities such as recruitment, selection, placement and training of personnel.

Directing: This involves leading, influencing and motivating employees to perform the tasks assigned to them. Motivation and leadership are two key components of direction.Motivating
workers means simply creating an environment that makes them want to work. Leadership is influencing others to do what the leader wants them to do. A good manager directs through praise and criticism in such a way that it brings out the best in the employee.

Controlling: This is the management function of monitoring organisational performance towards the attainment of organisational goals. It involves establishing standards of performance, measuring current performance, comparing this with established standards and taking corrective action where any deviation is found. This helps in finally achieving the goals in time, effectively and efficiently.


Multiple Choice Questions

Q1. Which is not a function of management of the following
(a) planning
(b) staffing
(c) cooperating
(d) controlling

Answer: (c) cooperating

Q2. management is
(a) an art
(b) a science
(c) both art and science
(d) neither

Answer: (c) both art and science

Q3. the following is not an objective of management
(a) earning profits
(b) growth of the organisation
(c) providing employment
(d) policy making

Answer: (d) policy making

Q4. policy formulation is the function of
(a) top level managers
(b) middle level managers
(c) operational management
(d) all of the above

Answer:(a) top level managers

Q5. coordination is
(a) function of management
(b) the essence of management
(c) an objective of management
(d) none of the above

Answer: (b) the essence of management


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