Chapter 01 – Nature and Significance of Management

➢ Home Assignment
1. How can you say Management is a series of continuous on going functions?
2. Discuss the basic features of Management as a profession.

➢ Very Short Answer Type

1. What is meant by management?
Ans: The process of getting things done with the purpose of achieving goals efficiently and
effectively is called as management. In other words, management can be defined as the process
of planning, organising, staffing and controlling so as to achieve the goal of the organisation
with minimal resource usage.
2. Name any two important characteristics of management.
Ans: The two characteristics of management are as follows:
• Management is a Goal-Oriented Process: Each and every organisation has a set of
goals to be achieved in a certain period of time. Different organisations have different
types of goals depending upon the reason for its existence.
• Management is a Dynamic Function: The world is changing at a very fast pace and has
become very dynamic. Management has to adapt itself as per the changing environment.
Various external factors like social, political, economic factors have to be taken into
consideration in order to survive.

3. Identify and state the force that binds all the other functions of management.
Ans: Coordination binds all the other functions of management. It is also considered as the
essence of management. Coordination as a process begins from the first step of management i.e
planning. This is the process through which all the activities are lined up and put to action.

4. List any two indicators of growth of an organisation.

Ans: The two indicators are:
• Increase in the sales volume of an organisation.
• Increase in number of employees over a period of time.

5. Indian Railways has launched a new broad gauge solar power train which is going to be
a path breaking leap towards making trains greener and more environment friendly. The
solar power DEMU (Diesel Electric Multiple Unit) has 6 trailer coaches and is expected to
save about 21,000 liters of diesel and ensure a cost saving of Rs 12, 00,000 per year. Name
the objectives of management achieved by Indian Railways in the above case.
Ans: Social objectives of the management of Indian Railways have been achieved in the above
case, as the organisation succeeded in saving diesel and costs, by making the trains environment
friendly.

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➢ Short Answer Type
1. 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?
Ans: Ritu is functioning as the middle level management in the organisation. She works as a
link between the top-level management and workers. The following will be her basic functions:
1. Understanding the policies set by the top management.
2. Communicating with the top and low level of management.
3. Motivate employees to achieve productivity
4. Coordinate with cross functional heads to maintain transparency
5. Assigning tasks to various departments under control

2. State the basic features of management as a profession.

Ans: Following are the basic features of management as a profession
1. Management is a systematic and well-defined body of knowledge which consists of various
theories and guiding principles. Such knowledge can be obtained through books, enrolling in
management courses.
2. Management is regulated by a professional association which looks at the functions of its
members. In India AIMA or All India Management Association is the governing body for
managers. Joining the organisation is not compulsory.
3. Professional knowledge is required criteria and is given preference over degrees. The lack of
professional experience is a deterrent for people looking to choose as a profession.
4. Only through proper management the business will grow. The guiding principles will help in
ensuring smooth functioning of the organisation. Quality goods and services can be made
available with management.

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

Ans: Management is regarded as a multi-faceted concept due to the following reasons:
1. It involves managing the work, which is meeting the objectives over a period of time. It can
also be said to be the goals that need to be achieved.
2. Work is done by the people therefore managing the people is a very important part of
management which can be in the form of teams or group of individuals. Management helps in
identifying the strengths and weaknesses of the people.
3. An organisation will be involved in production where inputs get transformed into products or
some kind of service. There needs to be continuous monitoring of such production processes to
ensure proper output. Here management is required.

4. Company X is facing a lot of problems these days. It manufactures white goods like
washing machines, microwave ovens, refrigerators and air conditioners. The company’s
margins are under pressure and the profits and market share are declining. The
production department blames marketing for not meeting sales targets and marketing
blames production department for producing goods, which are not of good quality
meeting customers’ expectations. The finance department blames both production and
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marketing for declining return on investment and bad marketing. State the quality of
management that the company is lacking? What quality of management do you think the
company is lacking? Explain briefly. What steps should the company management take to
bring the company back on track?
Ans: The given situation of declining market share and profits is a clear indication of lack of
coordination in the organisation. As each of the departments are blaming each other rather than
taking the responsibility of acting in a better way.
Coordination is a factor or the force that binds all other functions of the management. The
coordination as a process has to be implemented in all the departments of the organisation like
the production, sales, marketing, finance, etc to bring a good result.
The steps that the management of the company should undertake to bring back the company on
track are:
• Interdependency between the department needs to be maintained.
• The company has to recognise its weakness and improve upon the quality of the products.
• The goals of an individual needs to be matched with the needs of the organisation.
• Efforts should be made to settle the differences, and change the outlook of the different
departments.
• All the departments must be motivated to work hand-in-hand in order to reach the
common objective as well as achieve their departmental goals.
• Proper communication and guidance needs to be provided in order to avoid any scope of
misunderstanding.
• A 360° analysis of the environment has to be done to recognise the potential threats in the
market.
• The investment decision of the company has to be improved and the investments has to
be done in an effective manner so that it can fetch maximum return on investment.

5. Co-ordination is the essence of management. Do you agree? Give reasons.

Ans: Co-ordination is essential in management as it helps in binding together all other functions
of the management. All the activities such as sales, purchase and production is based on
coordination with management. Following points will help establish coordination as the essence
of management.
1. The combination of efforts of all the groups increases the productivity and also provides a
common focus to all the group efforts.
2. It is a continuous process and is not a one-time effort. Coordination begins at the planning
stage and is concluded at the controlling stage.
3. Coordination is a pervasive function as it is required in all levels of management. As all
management activities are interdependent, coordination improves the efforts at various levels
among all departments.
4. It ensures that all the combined efforts of the departments act as unity which binds all actions
together and helps organisation achieve goals in a better way.

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 5. It is a deliberate function as everyone is performing it deliberately. The tasks are done with
an objective of achieving the objectives and goals of the organisation.
6. All the departments come together and communicate regarding the work to be done in an
organisation, These communication requires coordination among employees.

6. Ashita and Lakshita are employees working in Dazzling enterprises dealing in costume
jewellery. The firm secured an urgent order for 1,000 bracelets that were to be delivered
within 4 days. They were assigned the responsibility of producing 500 bracelets each at a
cost of Rs 100 per bracelet. Ashita was able to produce the required number within the
stipulated time at the cost of Rs 55,000 whereas, Lakshita was able to produce only 450 units
at a cost of Rs 90 per unit. State whether Ashita and Lakshita are efficient and effective.
Give reasons to justify your answer.
Ans: According to the above case:
Akshita: Ashita was effective but not efficient as she completed her task within the set time frame
but couldn't maintain the cost. Hence, she is inefficient, but effective.
Lakshita: Lakshita was neither effective nor efficient as she wasn’t able to complete her target
on time.
Effectiveness means completing the given work in the required time, whereas, Efficiency means
completing work with minimum cost and resources.

➢ Long Answer Type

1. Management is considered to be both an art and science. Explain.
Ans: Management can be regarded as both an art as well as science from the following points
A. Management as Art
1. Management has a well-defined literature which is required for gathering knowledge in the
theories and accelerate learning. There are many examples of management literature which is
available such as Taylors Scientific Management Theory and Henry Fayol’s 14 principles of
Management. These theories help in understanding the various concepts of management.
2. Management knowledge can be utilized by everyone in their own way, very much like arts
where words can be expressed in form of writing differently by different poets, and music notes
arranged by musicians to perform a musical piece, or the use of colours by a painter to draw
vivid paintings. Similarly, managers use the various theories and principles in trying situations
to make use of management knowledge.
3. Arts is all about expressing and innovating using creativity such as two artists will enact the
same scene in two different ways. Similarly, two different managers will be managing the
situation differently. Sometimes managers can come up with an innovative and fresh ideas to
address the situation.
B. Management as Science

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1. Science is a systematic discipline and management also shares similar characteristics. Like
science, management also relies upon theories and principles to address issues that arise.
Management has a separate vocabulary and terms which it uses to define certain processes.
2. Theories in science have been developed after a prolonged observation and repeated
experiments, similarly to some extent management also bases its theories on regular observation
and experiments, such theories will act as guidelines for management in the long run.
3. Scientific theories have universal validity, and in management also we see the principles are
to some extent universally valid, and some can change as per situation. Such theories and
principles can be used as basic information for training the managers.
2. Do you think management has the characteristics of a full-fledged profession?
Ans: Management does not have the characteristics of a full-fledged profession but it does have
some qualities which makes it eligible to be called as profession. These are mentioned below.
1. Management is a systematic and well-defined body of knowledge which consists of various
theories and guiding principles. Such knowledge can be obtained through books, enrolling in
management courses.
2. Management is regulated by a professional association which looks at the functions of its
members. In India AIMA or All India Management Association is the governing body for
managers. Joining the organisation is not compulsory.
3. Professional knowledge is required criteria and is given preference over degrees. The lack of
professional experience is a deterrent for people looking to choose as a profession.
4. Only through proper management the business will grow. The guiding principles will help in
ensuring smooth functioning of the organisation. Quality goods and services can be made
available with management.
5. All the business organisations look to provide the best services to the people at the best
quality. Thereby serving the society.
3. “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.
Ans: Management is defined as the process of getting things done with the purpose of
achieving goals efficiently and effectively. The terms effective and efficient are key terms in
management and play an important role in the functioning of management.
Effectiveness refers to the process of completion of a given work in the time provided. It is the
process of doing a task with primary focus on end result. It is considered a very important
aspect of management which helps in achieving goals. Efficiency is the process of completing a
given task with minimal use of resources and cost.
For an organisation to be successful, both these factors play a critical role to meet the objectives
of the organisation. Effectiveness helps in achieving the defined goals while efficiency helps in
achieving that with minimum resources and cost. Reducing the cost and resources brings profits
for the organisation and also increases it. Therefore, it is very essential for an organisation to
focus on both effectiveness and efficiency. It is important to complete the work in time along
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with minimum resources. Similarly, it is essential to reduce cost of production and finish the
production at the decided time. Hence, successful companies need to be both efficient and
effective at the same time in order to gain profits in the long run.

4. Management is a series of continuous inter-related functions. Comment.

Ans: Management is a series of continuous inter related functions. It can be explained with the
help of following points
Management comprises of the following functions that work together
1. Planning: It is the process of determining what works needs to be done, who will do it and
how it should be done. It involves setting up goals which need to be achieved and determining
the ways in which it can be achieved. It helps in laying down a framework based on which the
activities can be implemented. It is often said to be the most important step in management.
2. Organising: Planning is followed by Organising. It is the process of identifying tasks and the
appropriate resources that are required for executing the plan. Organising allots separate tasks to
different departments with a defined plan. The hierarchy is well established which leads to work
being carried out with efficiency and effectiveness.
3. Staffing: Staffing is the process of allotting specialised personnel for specialised work. In
other words, hiring the right person for the job. It is a part of human resource and involves
hiring and training of the people.
4. Directing: It is one of the important functions of a manager which involves directing the
human resources to work in an effective manner. It also involves providing motivation to the
workers so as to drive productivity.
5. Controlling: Controlling is necessary as it checks if the assigned work is progressing in the
right direction or not. It generally involves assessing the work done with the goals of the
organisations. By measuring the extent of work, managers ensure that there is no error or
discrepancy. If any such errors surface, then appropriate steps will be undertaken so as to rectify
the issue.
So, all these makes us understand that management functions are interdependent on each other
in order to function properly.
5. A company wants to modify its existing product in the market due to decreasing sales.
You can imagine any product about which you are familiar. What decisions/steps should
each level of management take to give effect to this decision?
Ans: The following are the steps that the each level of the management can perform to increase
the sale of product in the market:
A. Top Level Management
• They need to analyse the business environment and take decisions regarding the
modification to be done.
• They need to establish objectives of modification, formulate plans and policies to implement
the modification.
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• They need to organise all physical and human resources required for modification.
• Inform all departments about modification and coordinate their activities.

B. Middle Level Management

• They must inform top level management about the possibilities of modification, market
demand or expectations required to implement modification.
• They must interpret plans and policies and instruct lower level management for their
implementation.
• They must recruit, select and train personnel to be able to take up modification.
• They must assign responsibilities and duties to lower level managers.

C. Lower Level Management

• Before the modification decision is taken, they may give their views about the kind of
modification or technology is required
• They must issue orders and instructions to the workforce to implement plans.
• They must train or guide the workforce to carry out production activities.
• They must supervise work closely to ensure that work is done effectively and efficiently.

6. A firm plans in advance and has a sound organisation structure with efficientsupervisory
staff and control system but on several occasion it finds that plans are not being adhered to.
It leads to confusion and duplication of work. Advise remedy.
Ans: The firm’s planning is good, but there is a problem in implementation. The firm should take
the following actions in the case above:
• Interdependency between the department needs to be maintained.
• The goals of an individual needs to be matched with the needs of the organisation.
• Efforts should be made to settle any differences between the departments, if there exists any.
• All the departments must be motivated to work hand-in-hand in order to reach the common
objective as well as achieve their departmental goals.
• Proper communication and guidance need to be provided in order to avoid any scope of
misunderstanding.
• Timely and proper follow up and feedback should be encouraged from the lower level to the
higher level of management.
• Transparent, organized and clear work patterns should be fostered to avoid any
miscommunication.
• Meetings should be held at periodic and regular intervals to ensure the smooth flow of
operations.
• Proper training, both on the job and off the job should be provided to the employees, so that
they could perform the work with utmost efficiency and effectiveness.
Unity of command and unity of direction should be maintained