Class XII , Business Studies Notes

S.P.H.S

Chapter 1: Nature and Significance of Management

Topic - Modern Concept of Management: According to modern concept “management is a process of
getting things done with the aim of achieving goals effectively and efficiently”.

Definition: “Management is the coordination of all resources through the process of planning, organizing,
staffing, directing and controlling in order to attain stated objectives.” ----F.W. Taylor

Concept of
Management

Process: It means the Effectiveness: It refers to Efficiency: It refers to

primary function that the the process of completing the assigned
management performs to completing the assigned task with minimum
get things done. task within the time wastage and at a
frame. minimum cost.
These functions are
planning, organizing,
staffing, directing and
controlling.

Difference between Effectiveness and Efficiency

Basis of Difference Effectiveness Efficiency
Meaning It refers to the process of completing the It refers to completing the assigned task with
assigned task within the given time frame. minimum wastage and at a minimum cost.
Objective To achieve the targets on optimum time. Optimum use of resources and at a
minimum cost.
Main element Time Cost

Characteristics or features of management:

1. Management is Goal-oriented Process - Management always aims at achieving the organizational objectives.
The function and activities of manager lead to the achievement of organizational goals.
2. Management is Pervasive (Universal) - Managerial activities are performed in all types of organizations, in all
departments and at all levels. Concept of management is used in whole world.
3. Management is multi-dimensional – Management includes three main activities:
 Management of Work: Management activities aim at achieving goals or tasks to be accomplished. The task
or work depends upon the nature of Business, for example, work to be accomplished in a school is
providing education, in hospital is to treat patient, in industry to manufacture some products.
 Management of people: People refer to human resources. Management has to get task accomplished
through people by taking care of employee's individual needs and taking care of group of people.

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 Management of operations: Management of operations concentrates on mixing management of work with

management of people, i.e., deciding what work has to be done, how it has to be done and who will do it.
 Management of Work + Management of People = Management of Operation.
4. Management is a Continuous process: Management is a continuous or never ending function. All the functions
of management are performed continuously, for example, planning, organizing, staffing, directing and controlling
are performed by all the managers all the time.
5. Management is a Group Activity: Management always refers to a group of people involved in managerial
activities. Each individual performs his/her role at his/her department, and then only management function can be
executed.
6. Management is a Dynamic Function: Management has to make changes in goal, objectives and other activities
according to changes taking place in the environment. The external environment such as social, economic, technical
and political environment has great influence over the management.
7. Intangible: Management function cannot be physically seen but its presence can be felt.

Topic - Objectives of management:

O bjectives are the ends towards which the activities of an organization are directed. The managerial objectives of
an organization can be classified into 3 major categories:
1. Organizational objectives.
2. Social objectives.
3. Personal objectives.
1. Organisational Objectives: Generally it is assumed that profit maximization is the main objective of every
organisation but it is not true. The managers try to develop and attain variety of objectives in all management
areas. The three important organisational objectives of a manager are:
 Survival: The basic purpose of every organisation is to survive and exist in the competitive market for a long
period of time. It is possible only when it is able to cover its cost.
 Profit: The most important objective of every organisation is earning adequate amount of profit. Profit is
essential for survival, growth and expansion of business.
 Growth: Business organisation must grow and expand their activities. The success of any organisation is
measured by the growth rate and growth is measured in terms of sales, number of branches, number of
products, number of employees, etc.

2. Social Objectives: Social objectives of the organisations deal with the commitment of the organisation towards
the society. Business organisations are the part of society. They earn by using the resources of society so they must
do something for society also.
The major social objectives of organisations are:
 Providing good quality products at fair prices.
 Supporting community activities.
 Creating economic growth.
 Giving jobs to underprivileged people.
 Helping the community financially.
 Organizing education, health, and skill programs.
 Using eco-friendly production methods.
 Taking part in government and NGO social projects.

3. Personal/Human/Individual Objective: It Includes-

(a) Competitive salary to fulfill financial needs of employees.
(b) Promotion, training, personal growth

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(c) Peer recognition, self-respect, respect for colleague to fulfill social needs.
(d) Good and healthy working conditions for safety of employees.
Workers may lose interest in work if their objectives are neglected.
Topic - Importance of Management
1. Achievement of group objectives: Management helps people work together as a team with coordination and
motivation. It encourages everyone to give their best efforts to reach a common goal.
2. Optimum utilization of resources: Management brings together men, money, material, machine in the right
proportion to reduce cost and maximize production.
3. Minimization of Cost: Management helps a business work well and save money by planning well, organizing
properly, and keeping things under control. It reduces waste and cuts costs, helping the company stay strong in
tough competition.
4. Social development: Management increases the standard of living of the people by providing good quality
products and services at minimum cost. It also helps in generating employment opportunities.
5. Achievement of personal objectives: People join an organization for different reasons. Some want a good salary,
some seek recognition, and others just need a job to survive. Management helps understand these personal goals
and connects them with the company’s goals to keep everyone motivated and working together.

Topic - Nature of Management: Management has evolved over time. It has become very dynamic in
modern times. Earlier it was based on a set of rules and regulations or conventions. Gradually these rules have
changed as per the changing needs.

Management as a Science:
A systematized body of information that can be learned by observation and experimentation is referred to as
science. The following are the essential characteristics of science:
1. Systematic body of knowledge: Science has well-organized study materials that help people learn. Similarly,
management also has structured and systematic study materials. This means that management has the first feature
of science.

2. Principles are based on experimentation: Scientific principles are created by observation and experiments.
Management principles are also based on observation and experiments, but since they involve human behavior,
they cannot be predicted with full accuracy. This is why management is called an inexact science.

3. Universal validity: Scientific principles have universal application and validity. Management principles are not
exact like scientific principles so their application and use is not universal. They have to be modified according to
the given situation. So this feature of science is not present in management.

CONCLUSION: On comparing the features of science with management we find that one feature of science is
present in management whereas two are not present. So management cannot be considered pure or exact science
but we can call it as an inexact science or social science.

Management as an Art: Art refers to putting the knowledge and capabilities into practice so as to achieve the
desired results. It can be acquired through various methods like observation, study and experience.
The basic features are as follows:

1. Existence of theoretical Knowledge: In every art there is systematic and organized study material available to
acquire theoretical knowledge of the art. For example, various books are available to learn music. In the same way

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there are many systematic and organized study materials to learn management. So this feature of art is present in
management also.

2. Personalized application: The use of knowledge varies from person to person and hence management is
basically an individual skill. Two different people can perform the same type of work but will always differ in the
way they perform. For example: two singers will always perform differently. Similarly, two management teams will
manage the business differently. So this feature of art is present in management also.

3. Based on practice and creativity: Management is goal-oriented and result-oriented. Like art, management also
requires practice. Continuous practice sharpens the skills and creativity of an individual. So this feature of art is
present in management also.

Hence, management can be considered as an art, as both require skills, practice and creativity.

Management as a Profession: Profession can be defined as an occupation which can be carried only after
acquiring special knowledge.
The main features of profession are:

1. Well-defined body of knowledge: Every profession has a set of organized knowledge that helps professionals
gain expertise. Management also has systematic knowledge that people can learn. So, this feature of a profession is
present in management.
For example, doctors learn from medical books, and lawyers study law books. In the same way, managers learn
from management books and courses to make better decisions.

2. Restricted entry: To enter a profession, a person needs a degree or qualification. For example, doctors need an
MBBS degree to practice. But there is no legal rule that a manager must have a specific degree. However, many
companies now prefer to hire managers with an MBA. So, this feature of a profession is not fully present in
management.

3. Presence of professional associations: In every profession, people must register with a special association before
working. For example, doctors register with the Medical Council of India, and lawyers with the Bar Council of India.
In management, there are associations like AIMA (All India Management Association) in New Delhi and NIPM
(National Institute of Personnel Management) in Kolkata, but managers are not legally required to join them. So,
this feature of a profession is not fully present in management.

4. Existence of ethical codes: For every profession there are sets of ethical codes they need to follow. But legally it
is not compulsory for all the managers to follow the ethical codes.
So presently, this feature of profession is not present in management.

5. Service motive: The basic motive of every profession is to serve the clients with dedication. Whereas, the basic
purpose of management is to achieve organizational goal and profit maximization.
So presently this feature of profession is not present in management.

Hence, management is not a full-fledged profession at present but very soon it will be recognized as a full-fledged
profession.

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Topic – Levels of Management

Functions performed at top level of management are:

 Making strategies and goals for the organisation.
For example, a company sets a goal to increase sales by 20% in the next year and creates a marketing
strategy to achieve it.
 Taking decisions regarding activities to be performed.
For example, a restaurant decides to add home delivery services to reach more customers and increase
sales.
 Framing policies for the organisation.
For example, a school principal or director decides that students must wear uniforms to maintain discipline
and equality.
 Responsible for welfare and survival of the organisation.
For example, a business cuts unnecessary expenses and invests in new products to stay profitable during
tough times.

Functions performed at middle level of management are:

 Interpret the policies to lower management.
For example, a sales manager explains the company's new discount policy to the sales team so they can
apply it correctly.
 Taking decisions regarding the number of personnel in the department.
For example, the HR manager decides to hire three more customer service representatives to handle
increased customer queries.
 Assigning duties and responsibilities to employees in their department.
For example, a restaurant manager assigns waiters to different sections of the dining area to ensure
smooth service.

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 Convey suggestions and grievances of the supervisory level to the top level for the overall smooth
functioning of the organisation.
For example, a factory supervisor informs senior management that workers need better safety equipment
and suggests improvements.
 Liable for the ultimate production of respective departments.
For example, a production manager ensures that the manufacturing unit produces the required number of
products on time without defects.
 To act as a link between the lower level and the management.
For example, a team leader conveys employees’ concerns about workload and deadlines to senior
management for possible adjustments.

Functions performed at Supervisory or Lower level of management are:

 Providing on the job training to the workers.
 Providing good working condition for the workers.
 Ensuring the good performance of the workers.
 Giving feedback to the workers.
 Looking for the safety of the employees.
 Boosting the moral of the employees.
 Act as a link between the management and the workers.

Topic - Functions of Management

 Planning: Planning is a process of setting goals & objectives and formulating strategies, action plan to
achieve it. It bridges the gap between our current position (Where you are) and desired position (Where
you want to be). This is the basic function of an organization and is the first step of management.

 Organizing: Organizing is the process of establishing authority and responsibility relationships. It involves
assigning tasks to individuals and allocating resources for the same.

 Staffing: Staffing is a process of placing the right person on the right job at the right time. It includes
recruitment, selection, placement and training of employees. It can be called as the Human Resource
function of the organization.

 Directing: Directing refers to the process of leading, influencing and motivating the individuals working in
the organization to complete the assigned task effectively and efficiently. The employees need to be
constantly motivated to perform better. Leadership and motivation are the key components of directing as
a function. It tends to bring out the best in an employee.

 Controlling: Controlling is the process of keeping a check on the performance of the organization and
comparing it with the standards set. Also, corrective actions are taken, in case any deviation is found
between the actual and desired results.

Topic - Coordination - The Essence of Management

Coordination is a force which synchronizes all the five functions (POSDC) and levels of management (UML) in order
to achieve the goal of the organization. Coordination means making sure that all parts of a business work smoothly
together to achieve a common goal. It ensures that different departments, teams, and employees are aligned,
avoiding confusion, delays, or extra work.

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For example, in a company, the marketing team promotes a product, the production team manufactures it, and the
sales team sells it. If they don’t coordinate, the marketing team might promote a product that is not ready yet,
leading to customer complaints. But with good coordination, they will ensure that the product is available when
promoted, leading to smooth operations and satisfied customers.

Without coordination there are chances of overlapping, duplication, delays and chaos in the work. The function of
coordination starts from the planning function itself.

Characteristics of Coordination
 Coordination integrates group efforts: Coordination integrates group efforts and ensures that the
performance of the organization is as per the standards set.

For example, in a restaurant, the chefs, waiters, and cashiers must work together. If the chefs prepare food
on time, the waiters serve it quickly, and the cashiers handle payments smoothly, the restaurant runs
efficiently. This coordination ensures good service and customer satisfaction.

 Coordination ensures unity of action: Coordination is a force which binds the various departments and
ensures that all efforts are directed towards achieving the organizational goals.

For example, in a car manufacturing company, the design team, production team, and sales team must
work together. If the design team creates a new model, the production team manufactures it on time, and
the sales team promotes it properly, the company can successfully launch the car in the market.

 Coordination is a never-ending process: Coordination is a continuous and a never-ending process. It is

required from beginning to end, at all the levels of management as well as in all the functions of the
organization.

For example, in a restaurant, coordination is needed every day—from planning the menu, ordering
ingredients, cooking food, serving customers, and managing staff. If coordination stops at any stage, the
restaurant cannot run smoothly.

 Coordination is the responsibility of all managers: It is the duty of all the people working in the
organization to work in a responsible manner and coordinate with each other to achieve the objectives or
the goals of the organization.

For example, in a hospital, doctors, nurses, and administrative staff must coordinate with each other to
ensure patients receive proper treatment on time. If any manager fails to coordinate, it can create
confusion and delays in patient care.

 Coordination is a deliberate function: Management deliberately needs to coordinate the efforts of

different people working in the organization. Coordination cannot be established with itself rather it is a
deliberate and conscious effort on part of every manager.

For example, in a restaurant, the kitchen staff, waiters, and cashiers need to work together to serve
customers efficiently. The restaurant manager ensures that food is prepared on time, waiters serve it
quickly, and customers get their bills without delay. This coordination doesn’t happen on its own—it
requires proper planning and effort.

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 Coordination is an all pervasive function: Coordination is something which is required everywhere and in
every organization, be it big or small. It is needed at all levels and at every function of the management.

Importance of Coordination

1. Growth in Size: As a company grows, more employees join, and coordination helps everyone work towards
the same goal.
Example: A small shop expands into a supermarket. Proper coordination ensures that new staff work
efficiently and customers are served well.

2. Functional Differentiation: Different departments have their own way of working, but coordination
ensures they work together smoothly.
Example: In a mobile phone company, the design team, production team, and sales team must coordinate
to launch a new phone successfully.

3. Specialization: Experts in different fields must work together to achieve a common goal.
Example: In a hospital, doctors, nurses, and pharmacists coordinate to provide the best treatment to
patients.