Class 12-commerce NCERT Solutions Business Studies Chapter 1 - Nature and Significance of Management

The quality of management that is lacking in the organisation is coordination which can be identified with the instance that various departments blame each other for the declining profits and market share of the company. Coordination refers to a path through which the group functions are linked up. It binds the people of the organisation and their activities to ensure a smooth functioning of the work. It is that force which unites the working and efforts of the people of the organisation towards the common objective of the organisation. It links the interrelated functions of management. Every organisation has various departments and sub-departments such as production, sales, finance, etc. Each of the departments works independently and with its own policies and objectives. In such a case, there may arise a conflict between the two departments. Coordination is needed to synchronise the activities of each department towards the achievement of common goals of the organisation.

Following steps can be taken by the management to bring the company back on track.

1.  Improve the quality of the products.

2. Study the market carefully and analyse the demand so that the products can be modified accordingly. 

3.  Adopt good marketing practices.

4.  Ensure customer satisfaction through measures such as customer care services and feedback.

5. All departments should work collectively towards the common goals of the organisation rather than blaming other any other department.

In the given situation, Ritu is at the middle level of management. The managers at the middle level are the ones who link the top management with the operational management. Their main responsibility is to ensure the implementation of the plans as formulated by the top-level management. This is done by appropriately directing and supervising the operational management. Basic functions of Ritu as the division manager:

1. Interpretation of the plans and policies as framed by the top-level management
2. To ensure that various departments have the required personnel and resources for smooth operations
3. To suitably assign the required tasks and duties to various personnel
4. To continuously motivate the personnel to work towards the achievement of common goals and objectives of the organisation
5. Coordinating the functions of the division with the functions of other divisions or division heads 

Management is considered to be multi-dimensional as it involves numerous dimensions which render complexity to the process of management.

Three main dimensions of management:

1. Managing work: An organisation exists with the objective of performing a defined work. Management helps in translating this work in terms of the objectives and goals which are to be achieved. It also defines how they are to be achieved.
2. Managing people: It is the people in the organisation who work towards the goals and objectives defined by the organisation. Accordingly, managing people forms another important dimension of management. Managing people further involves two dimensions:
   • Managing employees as individual units
   • Managing individual units in the organisation as a group

   Management aims at carefully utilising the strengths of the people in the organisation to achieve the desired objectives.

3. Managing operations: In every organisation, there is a production process wherein the inputs are converted to the desired product or service. Management is required to ensure that production operations are carried out smoothly. 

Basic features based on which management can be regarded as a profession:

1. Systemised knowledge: Management can be called a discipline in the sense that it has a systemised and well-defined body of knowledge. One can gain this knowledge through colleges, institutes and books. Nowadays, various institutions are set up primarily with the objective of providing education for management.
2. Professional association: Similar to other professions, management is also affiliated to a professional association which regulates the functions of its members. They define the ethical code of conduct for managers and regulate their activities. For example, in India, AIMA (All India Management Association) regulates the functioning of its member managers. However, it is not mandatory for a manager to be a member of the association.
3. Restriction to entry: Unlike other professions, no specific qualifications or degrees are mandatorily required to be a manager; however, preference is always given to those who possess professional knowledge in terms of degrees and diplomas. In a way, this helps in restricting the entry of people in management as a profession.
4. Code of conduct: For management as a profession, there is an ethical code of conduct which guides the behaviour of its members. The code of conduct ensures that the production takes place in an effective and efficient manner such that consumers are provided with quality goods and services at a fair price. 

Management fulfils the criteria of both an art and a science. The following points explain the features of management as an art and as a science.

Management as an Art 

Criteria for management to be called an art:

1. Existing literature: Similar to various other art forms such as music and dance, management also has an existing body of knowledge in the form of various theories and principles. For example, Henry Fayol's Principles of Management and Taylor's Scientific Management Theory.
2. Dynamic application: Art is the application of the knowledge in a personalised and creative manner. For example, the basic steps in a dance form are performed by each dancer in a unique creative manner. Similarly, managers apply the basic principles and theories of management in a creative manner according to the need of the situation.
3. Practice and creativity: Under art, there is continuous practice and innovation on the part of the artists. This gives rise to unique interpretations of similar situations. Similarly, in management, with continuous practice, the manager uses his own creativity and imagination to formulate new and unique ways to deal with a situation. 

 Management as a Science 

As a science, management fulfils the following criteria:

1. Systematic body of knowledge: Various disciplines of science are based on a specified and defined body of knowledge which is based on the cause and effect relationship. Similarly, management has a host of theories and principles which were developed over years. In addition, similar to other disciplines, management has its own unique vocabulary.
2. Theories based on experimentation: The principles and theories of science are developed with continuous observation and experimentation over the years. Similarly, the principles of management have also been developed by continuous observations and experiments over the years in varied situations. However, unlike science, no exact cause and effect relationship can be established in management. This is because management primarily deals with human behaviour which is dynamic and cannot be predicted. So, the outcome of the theories and principles cannot be predicted accurately.
3. Universal validity: The principles of science are universally valid. Similarly, the theories and principles of management are also valid to some extent (if not universally valid). The theories and principles act as guidelines for managerial actions in different situations.  

Management satisfies some characteristics for it to qualify as a profession as follows:

1. Systemised knowledge: Management can be called a discipline in the sense that it has a systemised and well-defined body of knowledge. One can gain this knowledge through colleges, institutes and books. Nowadays, various institutions are set up primarily with the objective of providing education for management. For example, in India, the Indian Institute of Management (IIM) is one of the premier institutes of management.
2. Restriction to entry: This criterion is satisfied by management only to a limited extent. Unlike other professions such as a doctor or lawyer, no specific qualification or degree is required to be a manager. However, preference is always given to those who possess professional knowledge in terms of degrees and diplomas. In a way, this helps in restricting the entry of people in management as a profession. 
3. Professional association: A professional must be a member of a statutory body which is responsible for stating the laws and regulating the activities of its members. For example, a chartered accountant must be a member of the Institute of Chartered Accountants of India. Similar to other professions, management is also affiliated to a professional association which regulates the functions of its members. They define the ethical code of conduct for managers and regulate their activities. For example, in India, AIMA (All India Management Association) regulates the functioning of its member managers. However, it is not mandatory for a manager to be a member of the association.
4. Code of conduct: Every professional must abide by the rules and regulations as developed by the apex authority which regulates the activities and behaviour of the professionals. In management also, there is a defined Code of Conduct. Similar to other professions, management aims to serve society by ensuring that quality products and services are provided at reasonable prices.

However, unlike other professions, no penalising is done in case of violation of standards as set by the AIMA. 

Thus, to some extent, management satisfies the criterion for it to be called a profession.

Yes, coordination is said to be the essence of management. Coordination refers to the process through which the various functions of management are synchronised towards the common goals and objectives of the organisation. Coordination acts as a binding force in the organisation in the sense that it unifies the efforts of various individuals in the organisation towards the achievement of common goals and objectives of the organisation. It must be there at every stage of management. It begins right from the stage of planning, wherein goals and objectives are defined. Next, it is at the stage of staffing so as to ensure that right personnel are hired who work towards the execution of the plan. At the next stage, directing and controlling functions must also be coordinated with each other such that the desired goals are successfully achieved. Points highlighting the importance of coordination in management:

1. Harmonised goals: Growth is the most important goal of any organisation. However, with growth, the size of the organisation and the number of personnel increase. More personnel in turn implies varied thoughts and work habits which may lead to a loss of harmony. Also, every individual would have their personal goals which may be at variation with the organisational goals. So, coordination is required for the synchronisation of personal goals of the individual with the common goals of the organisation.
2. Allotted work: For effective completion of tasks, specialisation is required. For this, the organisation hires specialised experts. However, every specialist has a unique way to approach a task. Moreover, he may even be reluctant to entertain any advice or suggestions from others. This in turn leads to conflict among various specialists in the organisation. Thus, coordination is required to integrate opinions and thoughts of various personnel and specialists in the organisation.
3. Interdependence of divisions: Every organisation has numerous departments and divisions such as production, sales and finance which have their own set of policies and objectives and work independently with each other. For instance, while the sales department may want to give greater monetary incentives for its personnel, the finance department may not approve of it. In such a scenario, there arises a conflict between the two departments. So, coordination is required to synchronise their activities.  

According to Robert L. Trewelly and M. Gene Newport, ‘Management is the process of planning, organising, actuating and controlling an organisation’s operations to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives.’ The definition comprises of 3 important concepts:

• Process refers to the performance of various functions of the management, namely planning, organising, staffing, directing and controlling.
• Effectiveness implies successfully completing the given task in the stipulated time. It focuses on the end result. On the other hand, efficiency implies completing the task with minimum possible resources or more benefits can be derived with the use of the given resources. For an organisation, both effectiveness and efficiency are equally important.
• While effectiveness implies actual achievement of goals, efficiency implies reduction in cost. However, in the achievement of one, the organisation has to often compromise on the other. In other words, if it aims at effectiveness, it may have to compromise on efficiency to some extent and vice versa.

Following are the two important characteristics of Management:

1)     Goal-oriented process: Management always aims at achieving the goal of the organisation. For example, if the plan of a company is to sell 100 flats in a month, then the company will chalk out a plan, motivate its employees and organise its resources keeping in mind its goals.

2)     Pervasive: Management is pervasive in the sense that various functions of management are performed by every organisation irrespective of its nature, size, characteristics and geographical location. In other words, every organisation needs management. For example, a corporate firm must be managed as much as a non-profit organisation. Similarly, an organisation in India must be managed as much as an organisation in Japan. The only difference lies in the way the management is practised by different organisations.

Co-ordination acts as a binding force in the organisation in the sense that it unifies the efforts of various individuals in the organisation towards the achievement of common goals and objectives of the organisation. It refers to the process through which the various functions of management are synchronised towards the common goals and objectives of the organisation. It is said to be the essence of management.

Following are the indicators of Growth of an organisation:

1. Increase in sales volume
2. Increase in the capital investment

The objective of management achieved by Indian Railways in the above case is Social Objective. It is the creation of benefits for society or doing something for society. Organisation being a part of society must give back to it in the sense that it creates economic value for it. 

Social objectives include

• Providing quality products at reasonable prices
• Using eco-friendly methods of production
• Giving employment opportunities to the weaker section of society
• Providing basic facilities to employees
• Avoiding unfair trade practices such as charging higher price and selling adulterated goods
• Creating various social amenities such as schools, hospitals etc.

Management is a process wherein various activities and functions are performed to achieve the various goals and objectives of an organisation in an effective and efficient manner.

The definition of the term management comprises three important concepts-process, effectiveness and efficiency.

Process refers to the performance of various functions of the management, namely planning, organising, staffing, directing and controlling.

Effectiveness implies successfully completing the given task in the stipulated time. It focuses on the end result. On the other hand, efficiency implies completing the task with minimum possible resources or more benefits can be derived with the use of given resources. For an organisation, both effectiveness and efficiency are equally important. While effectiveness implies actual achievement of goals, efficiency implies reduction in cost. However, in the achievement of one, the organisation has to often compromise on the other. In other words, if it aims at effectiveness, it may have to compromise on efficiency to some extent and vice versa.

This can be better understood with the help of an example. Suppose to complete a task, the manager decides to hire additional workers. However, this would mean giving additional salary, which in turn would increase the total cost. Here, effectiveness is achieved in the sense that the task would be completed, but efficiency is compromised. On the other hand, if the manger decides not to hire additional personnel so as to save cost, then this may result in delay in completing the project. Thus, the manager would have to compromise on effectiveness if he focuses on efficiency.

Hence, it is important that managers maintain a balance between the two while not placing undue emphasis on either of the two.

According to Robert L. Trewelly and M. Gene Newport, "Management is the process of planning, organising, actuating and controlling an organisation's operations to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives."

The terms planning, organising, directing, staffing and controlling are the primary functions of management which every manager performs. It must be remembered that these functions are performed simultaneously, the only difference being the priority given to each function at a particular point of time. Moreover, these functions are interrelated in the sense that one cannot be completed without the other. For example, for the organising to be appropriate, it is necessary that the required planning is done. Similarly, for the direction to be successful, correct staffing is necessary.

Various functions of management:

1. Planning: Planning means taking decisions regarding what is to be done, by whom and how. In other words, it involves setting of goals and objectives and devising suitable means of achieving them in an effective and efficient manner. Planning forms the stepping stone for effective management.
2. Organising: After planning, the next step in management is organising. It involves identifying the various tasks and resources which would be required for the implementation of the plans framed. Under the organising function, the manager assigns the duties and tasks to various groups and departments. Authority relationships are also defined.
3. Staffing: Staffing refers to hiring appropriate personnel according to the requirements of the work. Staffing includes functions such as hiring, training and development of people.
4. Directing: Directing involves guiding the people in various tasks and activities in the organisation. It comprises two important aspects-motivation and leadership. Motivation involves providing the right encouraging environment for the personnel to work towards the goals and objectives of the organisation. Leadership, on the other hand, implies effectively getting the work done by appropriately praising and providing criticism.
5. Controlling: It is very important to ensure that the work is carried out in the right direction towards the set goals and objectives. It involves setting standards for the tasks and measuring the actual performance against the set standards. It ensures that there is minimum diversion from the set targets. In addition, it involves taking appropriate corrective measures in case of any deviation from the standards. 

According to the given situation, the organisation lacks coordination. This is evident from the fact that various departments put blame on others for the decline in profits and market share. Coordination refers to the process through which the various functions of management are synchronised towards the common goals and objectives of the organisation. Coordination acts as a binding force in the organisation in the sense that it unifies the efforts of various individuals in the organisation towards the achievement of common goals and objectives of the organisation. Every organisation has numerous departments and divisions such as production, sales and finance which have their own set of policies and objectives and work independently with each other. For instance, while the sales department may want to give greater monetary incentives for its personnel, the finance department may not approve of it. In such a scenario, there arises a conflict between the two departments. So, coordination is required to synchronise their activities. For instance, in the given situation, the departments should work together towards improving the company's profit margins and market share.

Steps which can be taken by the management to bring the company back on track:

1. A careful study of the market demand must be done and the products of the organisation must be modified accordingly.
2. The organisation should work towards improving the quality of the products.
3. Attention should be paid towards marketing the products.
4. Customer satisfaction should be accorded priority.
5. The departments must be motivated to work collectively rather than against each other. 

To modify the existing product in the market, the following decisions/steps should be taken by each level of management:

Top-Level Management

1. A careful analysis of the market must be done by managers and accordingly steps must be taken to modify the product according to the market demand.
2. Emphasis should be laid on coordination between the various departments towards the common objectives of the organisation (modification of the product).
3. The necessary resources must be identified and organised properly.  

Middle-Level Management

1. Managers at this level must ensure that the plans as framed by the top-level managers are appropriately implemented.
2. The required personnel must be organised for the implementation of the plans.
3. Duties must be appropriately assigned to the personnel according to their skills and other requirements.

Operational Level

1. It is the task of the operational level management to provide proper instructions to workers so that work goes on smoothly.
2. It must ensure that there is minimum wastage of resources, while quality products are being produced.
3. It must continuously motivate and encourage workers towards the common goals and objectives of the organisation.

The organisation needs to work on coordination:

Quoting for coordination: On several occasions, it finds that plans are not being adhered to. It leads to confusion and duplication of work. 

Coordination refers to the process through which the various functions of management are synchronised towards the common goals and objectives of the organisation.

1. There must be strong coordination among various departments such that there is no confusion with regard to work.
2. It must be there at every stage of management. It begins right from the stage of planning wherein goals and objectives are defined. Next, it is at the stage of staffing so as to ensure that the right personnel are hired who work towards the execution of the plan. At the next stage, directing and controlling functions must also be coordinated with each other such that the desired goals are successfully achieved.
3. Managers must ensure that there are no interdepartmental conflicts. The work of various departments must be synchronised with each other.
4. Proper direction must be provided to the personnel so that there is no chaos in work.
5. Managers must provide appropriate motivation to employees so that the personal goals of employees are in alignment with the organisational goals.