BUSINESS ADMINISTRATION (833) class 12 | Unit 1- Introduction to Management | study material
BUSINESS ADMINISTRATION (SUBJECT CODE - 833) CLASS – XII (SESSION 2021-2022)
Unit 1- Introduction to Management
Here you will detail study material of business administration CBSE class 12.
1.1 Meaning of March nagement
Every human being has several needs & desires which can be satisfied only by working & living together in organized groups & institutions. In this way the people satisfy their economic & social needs. As a result there are several types of groups e.g. Family, school, government and business firm etc. Such groups achieve their goals by working in controlled & coordinated manner.
Management involves coordinating and overseeing the most activities of others so that their activities are completed effectively & efficiently. The 21st century economy has become knowledge based and is performance driven. It is driven by innovations & technology & organizations have to transform themselves to serve new customer expectations.
The manager of today must integrate management skills with new approaches that emphasize the human touch, enhance flexibility & involves employees. Management is needed in all types of organization, at all levels of organization, in all organization work areas throughout the world.
Management=Manage+men+t(tactfully)
1.2 Definitions
According To Harold Koontz "Management is the art of getting things done through others and with formally organised groups."
According to George R. Terry ''Management Is a distinct process consisting of planning, organising, actuating and controlling; utilising in each both science and art, and followed in order to accomplish pre-determined objectives.
" According to Massie & Douglas “Management is the process by which co-operative group directs actions towards common goals."
According to L. H. Haney “Business may be defined as human activities directed toward providing or acquiring wealth through buying and selling of goods.”
James Stephenson says that: “Every human activity which is engaged in for the sake of earning profit may be called business.”
In the words of B. W. Wheeler “An institution organized and operated to provide goods and services to the society, under the incentive of private gain” is business.
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1.3 Concept of Management
The term management has been interpreted in several ways –
1. Management as an Activity – Management is an activity just like playing, studying, teaching etc. It is an art of getting things done through efforts of other people. The management activities consist of
- Interpersonal activities
- Divisional Activities
- Informative Activities
2. Management as a process – Management is considered as process as it comprises of series of interrelated functions which lead to achievement of organization goals. Management as a process has following implications.
- Social Process
- Integrated Process
- Continuous Process
- Interactive Process
The elements of Management Process are Planning, Organising, Staffing, Directing and controlling.
3. Management as an academic discipline – Management has emerged as a specialized branch of knowledge. It comprises principles & practices for effective management of organization. There are many management institutes imparting education in various fields of management.
4. Management as a group – The term management is frequently used to devote a group of managerial personnel. All the managers i.e. Chief executive, departmental heads, supervisors are collectively called Management. So, management is concerned with all those who manage the affairs of an organization.
2.1 Characteristics of Management
1. Management is universal – The principles & techniques of management have universal application. They are not rigid. They can be modified & applied in different situations.
2. Management is goal oriented – The basic goal of management is to ensure efficiency & economy in the utilization of human, physical & financial resources. Managerial success is measured by the extent to which the objectives are achieved. Thus management is purposeful.
3. Management is an intangible force – Management is an unseen force which cannot be seen but its presence can be felt in the form of results, targets achieved according to plans, satisfied employees & orderliness in the organization.
4. Management is pervasive – Management is an essential element of every organised activity irrespective of the size or type of organization i.e. Government, business, sports, university or hospital. It is also prevalent in all the levels of the organisation, and in all the departments.
5. Management is a continuous process – Management functions are continuous & never ending. These functions are simultaneously performed by all managers all the time i.e. planning, organizing, staffing, directing & controlling.
6. Management is a dynamic function – Management is a dynamic function as it has to adopt the changes according to the need of the environment & growth of the business.
7. Management is multi-dimensional – It is multidimensional as it involves management of work, people & operations.
2.2 Importance of Management
The efficient management of human & material resources is essential for achievement of objectives of any organization. The success of any business lies in the quality of management. The significance of management will be more clear through the following points :-
1. Determination of objectives – Management helps in determining the objective of the organization. No organization can succeed in its operations unless its objectives are identified & well defined. These objectives have to be communicated to all the people working in the organization.
2. Achievement of the objectives – Management plays a vital role in accomplishment of organizational objectives & goals. The coordination & integration of material & human resources helps in achieving the pre-determined goals effectively & efficiently.
3. Efficient use of resources – An efficient management can lead a business towards growth & prosperity. Management reduces wastage of human, material & financial resources through proper planning & control.
4. Encourages innovation – Management encourage innovation in the organization. Innovation brings new ideas, new methods, new products & makes the organization more competitive.
5. Personal objectives – Personal objectives are concerned with satisfaction of financial & social needs of the employees. Through motivation & direction management helps the individuals to achieve their personal goals while working towards organizational objectives.
6. Economic development – Management helps in development of the society by producing good quality products, creating employment opportunities & adopting new technology.
7. Creates dynamic organization – Management helps the employees to overcome their resistance to change & adopt as per changing situation to ensure its survival & growth.
2.3 Functions of Management According to functions approach managers perform certain activities to effectively & efficiently coordinate the work of others. They are classified as –
Business Administration Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.
Different experts have classified functions of Business Administration.
According toGeorge & Jerry, “There are four fundamental functions of Business Administration i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting.
i.e. PLANNING, ORGANIZING, STAFFING, DIRECTING AND CONTROLLING.
1. Planning – It involves defining jobs, establishing strategies for achieving those goals & developing plans to integrate & coordinate activities.
2. Organising – Involves arranging & structuring work to accomplish the organization goals.
3. Staffing – Involves manning the organization structure through proper & effective selection.
4. Directing – Involves influencing, guiding supervising & motivating the subordinate.
5. Controlling – Involves monitoring, comparing & correcting work performance.
3.1 Levels of Management
In any organization all those who are responsible for the work of others are known as managers. Though their primary task remains the same – getting the things done by others. Wide variance exist with regard to authority & responsibility of managers. These differences are largely due to the differences in the levels of management. We normally visualize a company’s management as a pyramid.
3.2 Top level Management
Top management constitute the highest level in the management hierarchy. This level consists of small group of executives who are the senior most in the organization. Top management has the maximum source of authority & it establishes goals & policies for the enterprise.
Top Management consist of
1. CEO (Chief Executive Officer)
2. COO (Chief Operating Officer)
3. BOD (Board of Directors)
4. CFO (Chief Finance Officer)
5. Chairman
6. President
7. Vice President
8. M.D. (Managing Director)
Functions of Top Management
1. To lay down the objectives of the enterprise.
2. To prepare strategic plans & policies for the enterprise.
3. To assign jobs to different individuals working at middle level.
4. To arrange all the finance required to carry on day to day activities.
5. Top level management is responsible for the survival & growth of the organization.
6. It makes liaison with the outside world like government, suppliers, media, public etc.
7. It reviews the performance and controls the activities of all departments.
3.3 Middle level Management Middle level constitutes the execution level of the organization i.e. the departmental heads. They are responsible to the top management for the efficient function of their department & for executing the plans & policies made by top level.
Middle level consists of heads of the various departments.
- Purchase Manager
- Finance Manager
- Human Resource
- Executive Officer
- Plant Superintendent
Functions of Middle Level Management
1. They act as a linking pin between the top & lower level management.
2. They organize all the resources & activities of their department.
3. They execute & implement the plans of the organization in accordance with the policies of the top management.
4. They select, appoint & train employees of their department.
5. They evaluate the performance of their subordinates & prepare performance appraisal reports.
6. They offer various incentives to employees so that they perform to best of their ability & ensure higher productivity.
3.4 Lower Level management
Lower Level Management can also be termed as Supervisory Management/Operational Management/First-time Management. It refers to the lowest level in the hierarchy of the organization.
It is directly concerned with the control over the performance of the operative employees. They devote more time on the supervision of workers. Their authority & responsibility is limited. It consist of
- Foreman
- Supervisors
- Sub-department Executives
- Clerks Functions of Lower Level Management
- To represent the problems or grievances of workers before the middle level management.
- To plan & organize the activities of their unit.
- To provide training to workers.
- To maintain good working conditions & developing healthy relations between superior & subordinate.
- To communicate with workers, listen to their suggestions & motivate them to take initiative.
- To maintain discipline among the work force.
- To maintain standard of quality, ensure steady flow of output & minimize wastage.
4.1 Management & Administration
Management is the key function in any organization “It is the function of working with people & coordinating their efforts so as to accomplish the objectives of the organization”. Every institution requires making of decisions, handling people, evaluating their performance & achieve the objectives.
According to Newman “Administration means guidance, leadership & control of the efforts of the groups towards some common goal”. Administration lays down the fundamental framework of an organization, within which the management of the organization functions.
Administration is concerned with laying down of policies, determining goals and management is concerned with implementation of the policies for achievement of goals. Every manager spends a part of his time in performing administration function & remaining in management function.
As shown in the figure above Top level management devotes more time to administration function & less time to managerial function. But as we more down the hierarchy lower function managers spend more time in implementation of policies (i.e. management) rather than framing the policies & procedures (i.e. administration).
4.3 Conclusion
Theoretically both the terms are different but when put into practice the terms can be used interchangeably as all the levels of management are performing both administrative & functional activities.
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