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Business Studies Class 12 Chapter 1 Notes
Business Studies Class 12 Chapter 1 Notes
CHAPTER 1
Efficiency refers to doing the task in right ways, i.e., with minimum cost and optimum
utilization of resources. It refers to the relationship between inputs and outputs. If we
produce more from the given inputs, our efficiency is increased. Or if we produce the same
from less input, again our efficiency is increased. And it is possible when the manager
avoids the wastage of resources. Management is concerned with efficient use of resources
because reduction in cost leads to higher profit.
Effectiveness refers to doing the right task, completing activities and achieving goal. When
a manager attains goals, we can say he/she is effective. It means effectiveness is adjudged
merely on the basis of the attainment of goals irrespective of the fact how much cost is
incurred in their fulfillment.
Effectiveness and efficiency are the two sides of a same coin; one without other is of
no significance. It is easier to be effective if we ignore efficiency.
Effectiveness and efficiency together lead to higher profit and prosperity of an
organization. And failure of an organization is due to inefficiency and ineffectiveness.
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Definition of management:
“Management is the art of knowing what you want to do and then seeing that they do
it in the best and the cheapest way.”
F.W.Taylor
“Management is the art of getting things done through others and with formally
organized groups.”
Harold Koontz
CHARACTERISTICS OF MANAGEMENT:
Goal
oriented
process
Intangible Pervasive
Characteristics of
management
Dynamic Multi-
function dimensional
Group
Continous
activity
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MANAGEMENT
CONTROLLING ORGANISING
DIRECTING STAFFING
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7. Intangible force: management is such a force which cannot be seen, only its presence
can be felt. When the goals of an organization are being realized in accordance with its
plans, we can say that the management of the organization is good.
OBJECTIVES OF MANAGEMENT:
OBEJCTIVES OF MANAGEMENT
Organisational Personal
Social objectives
objectives obejctives
Quality
Survival Adequate salary
products
Employment
Growth Peer recognition
opportunity
Eco-friendly
methods of
production
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ii. Social objectives: it involves the creation of benefit for society. Business organizations
are the part of the society. They earn by using the resources of society so they must do
something for society also. This includes:
Supply of quality products at reasonable prices.
Contribution towards desirable civic activities.
Generation of economic wealth.
Generation of employment opportunities.
Financial support to community.
Organizing educational, health and vocational training programmes.
Participating actively in social service projects of government and NGOs.
Using environmental friendly methods of productions.
Providing employment opportunities to weaker section of society.
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IMPORTANCE OF MANAGEMENT:
Helps in
achieving group
goals
Helps in
development of Increases
society efficiency
Importance of
management
1) Management helps in achieving group goals: management creates team work and
coordination in the group. Managers give common direction to individual efforts in
achieving the overall goals of the organization.
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NATURE OF MANAGEMENT:
Management as an art
Management as a science
Management as a profession
ii) Personalized application: In the field of art only theoretical knowledge is not
enough. Every artist must have personal skill and creativity to apply that
knowledge. For example, all musicians learn same ragas but they apply these
ragas according to their personal skill and creativity which makes them different.
in management also all managers learn same management theories and
principles. But their efficiency depends on how well they use these principles
under different situations by applying personal skills and creativity. So this
feature of art is also present in management.
iii) Based on practice and creativity: the artist requires regular practice of art to
become more fine and perfect. Without practice artists lose their perfection. Art
requires creative practice, i.e., artist must add his creativity to the theoretical
knowledge he has learned.
Same way with experience managers also improves their managerial skills and
efficiency. So this feature of art is also present in management.
Since all the features of art are present in management so it can be called as an
Art.
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iii. 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.
Since one feature of science is present in management and two are partly
present. So management cannot be considered pure or exact science. It is
called inexact or social science.
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companies prefer to appoint managers only with MBA degree. So presently this
feature of profession is not present in the management but very soon it will
be included with statutory backing.
IV. Existence of ethical codes: For every profession there is set of ethical codes fixed
by professional organizations and are binding on all the professionals of that
profession.
In management there is growing emphasis on ethical behavior of managers. AIMA
has devised a code of conduct for Indian managers but legally it is not compulsory
for all the managers to get registered with AIMA.
So presently this feature of profession is not present in management but
very soon it will be included.
V. Service motive: the basic motive of every profession is to serve the clients with
dedication.
The basic purpose of management is achievement of profit maximization. But
nowadays only profit maximization cannot be the sole goal of an enterprise. A
businessman must give due importance to social objectives along with economic
objectives.
So presently this feature of profession is not present but very soon it will be
included.
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LEVELS OF MANAGEMENT:
BOARD OF
DIRECTORS,CHAIRMAN,
GENERAL MANAGER,
PRESIDENT,CHIEF
EXECUTIVE OFFICER
TOP LEVEL
DEPARTMENTAL MANAGER,
FUNCTIONAL MANAGER,
EXECUTIVE OFFICER, DIVISIONAL
HEADS, PLANT
SUPERINTENDENT
MIDDLE LEVEL
SUPERVISOR, SUPERINTENDENT, FOREMAN,
SECTION OFFICER, CLERK, SUB-DEPARTMENT
EXECUTIVE, ETC.
LOWER/ SUPERVISORY LEVEL
ii. MIDDLE LEVEL MANAGEMENT: They act as linking pin between top and lower level
management. They consists of departmental heads such as purchase manager, sales
manager, etc. People of this group are responsible for executing the plans and policies
made by top level. They are responsible for all the activities of first line managers.
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FUNCTIONS OF MANAGEMENT:
ii) ORGANISING: After setting up the plans next function is to organize the activities
and establishing an organization structure to execute the plan. Organizing is
assigning duties, grouping tasks, establishing authority, and allocating resources
required to carry out a specific plan. It examines the activities and resources
required to implement the plan. It determines what activities and resources are
required. It decides who will do a particular task, where it will be done, and when
it will be done.
iii) STAFFING: It id finding the right people for the right job. It refers to recruiting,
selecting, appointing the employees, assigning them duties, maintaining cordial
relations and taking care of grievances of employees. It also includes training and
development of employees.
PLANNING
CONTROLLING ORGANISING
DIRECTING STAFFING
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COORDINATION:
Characteristics of coordination:
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e) Coordination is the responsibility of all managers: It is not the task of only top
level managers but managers working at different levels try to coordinate the
activities of organization.
IMPORTANCE OF COORDINATION:
i) Growth in size: the need of organization increases with the increase in size of
organization because in large organization there are more number of persons
working, each individual has his own needs and objectives, so there is more need
to bring together or synchronizes the efforts of these employees towards common
goal.
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