Nature and Significance of Management – Class 12 Business Studies Chapter 1 Notes & NCERT PDF

Introduction

The chapter opens with Management at Tata Steel. The Tata Group was founded in 1868 by Jamsetji Nusserwanji Tata and today operates in over 100 countries. Jamsetji had four goals — an iron and steel company, a world-class learning institution, a unique hotel and a hydro-electric plant — but only the Taj Mahal Hotel (opened at Colaba, Mumbai on 3 December 1903) became reality in his lifetime. He paid workers gratuity and provident fund long before they were mandatory, planned the whole city of Jamshedpur, and his values live on in the Tata Code of Conduct (TCOC). The point: huge enterprises are built and sustained only through effective and efficient management and co-ordination at all levels.

A second example follows Smita Rai, an entrepreneur from Namchi, South Sikkim, who with help from NEDFI turned her hobby of making wax candles into Namchi Designer Candles, employing 100 per cent women. Her day — planning a Diwali collection, raising funds, recruiting, coordinating suppliers, meeting customers — shows that management is a series of interrelated, continuous functions.

Key Concepts

Concept of management

Management is the process of getting things done with the aim of achieving goals effectively and efficiently.

Effectiveness vs efficiency (book's example): a company must produce 5,000 units. Power failures force double shifts; the target is met but at a higher cost — effective but not efficient. Cutting costs so hard that goods never reach the market is efficient but not effective. Good management balances both.

Definitions quoted in the book come from Koontz and Weihrich, Trewelly and Newport, and Kreitner.

Characteristics of management

Objectives of management

Importance of management

Management as an art, science and profession

Levels of management

Functions of management

Coordination — the essence of management

Coordination is the process by which a manager synchronises the activities of different departments; it is the force that binds all the functions.

Characteristics: (i) integrates group efforts, (ii) ensures unity of action, (iii) is a continuous process, (iv) is all pervasive, (v) is the responsibility of all managers, (vi) is a deliberate function.

Importance (why it is needed): (i) growth in size, (ii) functional differentiation between departments, (iii) specialisation — specialists think they alone are qualified to judge their work. The book's box on Mumbai's Dabbawallas shows excellence through coordination.

Case Examples from the Text

Key-Facts Sheet

Board Exam Focus

Key Terms

Common Mistakes