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Nature and Significance of Management

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Business Studies I

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Business Studies

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CBSE Gujarat Board Haryana Board

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Class 10 Class 12

Aman, Ahmad and Ally are partners in a firm engaged in the distribution of dairy products in Maharashtra state. Aman is a holder of Senior Secondary School Certificate from Central Board of Secondary Education with Business Studies as one of his elective subjects. Ahmad had done his post-graduation in History and Ally in dairy farming. One day there was a serious discussion between Ahmad and Ally regarding the nature of management, Ahmad argued that management was a profession. Whereas Ally argued against it saying that the legal and medical profession are the only professions because they fulfill all the conditions of profession.
Aman on the basis of his knowledge of business studies explained the nature of management as a profession to Ahmad and Ally.
Explain, how Aman would have satisfied both Ahmad and Ally?


Aman would have satisfied Ahmad and Ally with the following points.
1) The existence of a body of knowledge: 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.

2) Acquisition of knowledge, training and experience: Like profession managerial skill and knowledge can only be enhanced through training and experience. Though in small business firms, management training may not be provided formally but gained through experience.

3) Establishment of professional association: Like professional associations there are several associations of practising managers in India, like the AIMA (All India Management Association) that regulate the activities of their members.

4) Ethical code of conduct: The professional associations have also laid down their code of conduct to regulate activities of their members.

5) Service motto. If an organisation has a good management team that is efficient and effective it automatically serves society by providing good quality products at reasonable prices.


What is meant by ‘Efficiency’ in management?


The ability of a management to achieve the organisational goals with minimum resources is called the efficiency of management.


XYZ Power Ltd. set up a factory for manufacturing solar lanterns in a remote village as there was no reliable supply of electricity in rural areas. The revenue earned by the company was sufficient to cover the costs and the risks. The demand of lanterns was increasing day by day, so the company decided to increase production to generate higher sales. For this, they decided to employ people from nearby villages as very few job opportunities were available in that area. The company also decided to open schools and crèches for the children of its employees.
(i) Identify and explain the objectives of management discussed above.
(ii) State any two values which the company wanted to communicate to the society.

The objective of management referred here is their social objectives. It includes:
1) Providing quality goods at reasonable cost.
2) Creating employment opportunities.
3) Environmental protection.
4) Providing education etc.

The values which the company want to communicate to the society are:
1) Increasing employment opportunity in rural and backward areas,
2) Community development through opening schools and crèches for the children of employees.


What is meant by ‘management of people’?

Management of people implies to make people work towards achieving the organisation’s goals, by making their strengths effective and their weaknesses irrelevant. Managing people has two dimensions (i) it implies dealing with employees as individuals with diverse needs and behaviour; (ii) it also means dealing with individuals as a group of people. 


How does co-ordination integrates group efforts? State. 

Coordination integrates group efforts by combining unrelated or diverse interests into purposeful work activity. It gives a common focus to group effort by ensuring that the performance and the objective goes in the same direction.