Nature and Significance of Management

Management is the process of getting things done with an aim of achieving goals effectively and efficiently. Characteristics:
•    pervasive in nature,
•    goal oriented,
•    continuous process,
•    multi-dimensional like management of work, management of people and management of operations,
•    group activity,
•    dynamic function, etc.
Objectives of management are defined as ends that management seeks to achieve through its activities and operations and are classified into organisational, social and personal objectives. Management is important as it helps in achieving group goals, increasing efficiency, creating dynamic organisation and development of human talent, development of society, proper utilisation of resources, achieving business objectives, producing better quality of goods, growth and development of business, minimising element of risk and innovations. Factors increasing the importance of management in modern times:
•    growth in size and complexities,
•    increasing competition,
•    need for specialisation,
•    use of capital-intensive technology,
•    scarcity of resources,
•    government interference,
•    increasing social obligations and
•    development of trade unions.
Management is an art, science and profession. It qualifies as an art because it fulfills features of ‘Art’ like practical application of theoretical knowledge, personal skills, result oriented approach and practice and creativity. It replicates essential features of science such as systematised body of knowledge, principle based on experimentation and continuous observation, universal validity of principles, cause and effect relationships and predictions. It fulfills criteria of a profession: specialised knowledge, restricted entry, professional association, ethical code of conduct and service motive.

 

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  • Q1

    (a) Explain any three types of training that can be given to an employee. [3]

    (b) What is Branding? Give any three advantages of branding to the marketers.[4]

    (c) Explain the various steps involved in the process of organising. [5]

    Marks:12
    Answer:

    (a) Three types of training that can be given to an employee are:

    (b) Vestibule Training –Vestibule training is an off the job training method where employees are trained in an actual work environment in a class room where employees use the same materials and equipment. Employees learn their jobs on the equipment they would be using, but the training is conducted away from the actual work floor. Though expensive, vestibule training allows employees to get a full feel of doing their task without the real world pressures.
    This is usually done when the employees are required to handle expensive machinery and equipment.

    (c) Internship Training – Internship is an opportunity to integrate career related experience into undergraduate education by participating in a planned, supervised work. It is a joint programme of training in which educational institutions and business firms join together to impart training.
    Candidates while carrying on their studies also work in factory or office to acquire practical knowledge.
    d) Induction Training – This training is given to a new employee for a few hours or a few days. Its purpose is to help a new employee settle down quickly into the job by becoming familiar with the people, the surroundings, the job and the business. An effective induction programme includes organisation’s goals, mission, vision, rules, procedures, policies such as promotion, health etc., terms and conditions of employment.

    (b) Branding refers to the process of creating and assigning a distinctive identity to a product through a name or symbol so that it is imprinted on the minds of a consumer.

    Following are the advantages of branding to marketers:
    i. Product Differentiation – It acts as means of distinguishing a product from the rival products and helps a firm in securing and controlling the market for its product.
    ii.Ease of introduction of a new product – A new product introduced under an already established and known brand is likely to get a good response from customers.

    iii.Wider market: Branding helps to widen the market. Product can be sold by description.

    (c) Organising is a process of bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals. Organising is concerned with building up a stable framework or structure of various interrelated parts of an enterprise, each part having its own function and being centrally regulated.

    Organising involves following steps:

    1. Division of work – The first step in organising is to divide the total work to be done into specific jobs. Each job consists of certain related tasks which can be carried out by an individual.

    2. Grouping jobs and departmentation – The second step in organising is to combine or group similar or related jobs into larger units called departments, divisions or sections. This grouping process is called departmentation

    3. Establishing authority relationships – The third step in the process of organising is the creation of authority relationships among the job-holders or job positions. The various members of the organisation, who perform the jobs are linked by authority responsibility relations through the process of organising.

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  • Q2

    (a) Explain the need for consumer protection. [3]

    (b) ‘Planning is not a guarantee of success.’ In this context, explain the limitations of Planning. [4]

    (c) Explain the following Principles of management, as advocated by Henry Fayol: [5]

    (i) Stability of tenure

    (ii) Discipline

    (iii) Unity of command

    (iv) Unity of Direction

    (v) Order

    Marks:12
    Answer:

    (a) Protection of consumers is necessary due to the following reasons:
    i. Consumer is the purpose of business: Customer is the foundation of the business and keeps it in existence. In order to satisfy and retain customers business must provide goods and services of right quality and at right prices.

    ii. Business is a means of human welfare: Business exists to serve society and is not an end in itself.

    iii. Stakeholder approach: The cooperation and support of several groups is involved in the functioning and success of business. Business must protect the interest of all stakeholders including customers.

    iv. Theory of trusteeship: Businessmen are trustees of society wealth. They should use this wealth for the benefit of society.

    v. Self interest: Since Indian firms are exposed to competition from MNCs , they must provide quality goods and become consumer oriented to survive the competition.

    (b) The limitations of planning which lead to its failure are as follows –
    i. Time consuming- Planning is time consuming process as it involves a lot of time in identifying, analysing and selecting the alternatives which sometimes lead to delay in decision making.
    ii. Creates rigidity- Planning involves the determination of a course of action in advance. It may lead to internal inflexibility and procedural rigidity. In other words, with planning a business or organisation may achieve certain goals, however, planning creates rigidity or locks the business into certain goals & procedures.
    iii. Involves huge cost- Formulation of plans involves too much cost which is in the form of time spent, money spent etc. but sometimes there is little benefit from planning, instead it becomes a burden for the institution. If the plan is not useful then the amount or time spent in its formulation is a waste.
    iv. May not work in dynamic environment- Business environment is dynamic as there are continuous changes in economic, political and legal environment. It becomes difficult to forecast the future changes. Plans may fail, if the changes are frequent.

    (c)

    (i) Stability of tenure:

    Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed. Employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served.

    (ii) Discipline:

    This principle implies obedience, respect of authority and following the rules and regulations. Acceding to Fayol, supervision is required at all levels and built-in system of penalties will help to maintain discipline.

    (iii) Unity of command:

    According to this principle, an employee should receive orders from one boss only. Each participant in a formal organisation should receive orders from and be responsible to only one superior. The presence of many superiors at the same level or over them affects the efficiency of the subordinates.

    (iv) Unity of Direction:

    According to this principle , each group of activities having the same objective must have one head and one plan. It aims at coordinating group efforts and brings uniformity in the work.

    (v) Order:

    The principle of ‘Order’ is concerned with the proper and systematic arrangement of things and people. It states that there should be safe, appropriate and specific place for every article and person in an organisation.

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  • Q3

    (a) Give three points of difference between a product and a service. [3]

    (b) What are the different types of short term financial assistance provided by the commercial banks to business houses? [4]

    (c) Explain any five tyes of debentures through which a company can collect borrowed capital from the public. [5]

    Marks:12
    Answer:

    (a):

    Basis

    Product

    Service

    Tangibility

    Can be see and touched

    Cannot be seen or touched

    Inseparability of seller & buyer

    Fully separable

    Cannot be separated

    Replacement

    Product can be replaced

    Service once delivered cannot be replaced

    (b) Short term financial assistance provided by the commercial banks to business houses are:

    Loans & advances:Loans are paid in lumpsum credited to separate loan account in the name of borrower. It can be secured or unsecured.

    Cash Credits: It is a credit arrangement in which a borrower is allowed to borrow upto a certain limit.

    Overdraft: Under this, a customer having current account with bank is allowed to overdrew his account upto a certain limit.

    Discounting of bill: Commercial bank provides short term finance to business by discounting bills, promissory notes, etc.

    (c) The different types of debentures allowed in India are:

    i. Secured and Unsecured: Secured debentures are such which create a charge on the assets of the company, thereby mortgaging the assets of the company.

    Unsecured debentures on the other hand do not carry any charge or security on the assets.

    ii.Registered and Bearer: Registered debentures are those which are recorded in the register of debenture holders maintained by the company. These can be transferred only through a regular instrument of transfer.

    Debentures which are transferable by mere delivery are called bearer debentures.

    iii. Convertible and Non-Convertible: Convertible debentures are those debentures that can be converted into equity shares after the expiry of a specified period.

    Non-convertible debentures are those which cannot be converted into equity shares.

    iv. First: Debentures that are repaid before other debentures are repaid are known as first debentures.

    v. Second debentures are those which are paid after the first debentures have been paid back

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  • Q4

    (a) Discuss three advantages of ploughing back of profit, from the company’s point of view. [3]

    (b) Explain why management is considered to be a science. [4]

    (c) What is labelling? Explain four advantages of labelling. [5]

    Marks:12
    Answer:

    (a) Ploughing back of profit is the process of retaining a part of net profit year after year and reinvesting the same in the business.

    Advantages to the company:

    • Convenient and economical source of finance that does not require legal formalities
    • No charge is created on the assets of the company
    • Can be used to redeem debts or replace obsolete assets

    (b) Science is a systematic body of knowledge pertaining to a specific field of study which establishes cause and effect relationship.

    Management to be regarded as science needs to satisfy the characteristics of science. The characteristics of science, which Management satisfies, are:

    a)Existence of systematized body of knowledge-In science, organized and systematic study is available which is used to acquire the knowledge of science. Similarly, in management also there is availability of systematic and organized study material. It has its own set of basic principles and concepts.

    b)Use of scientific methods of observation- Science performs logical observation before deriving any principle or theory. Continuous observations and experiments have helped in development of management knowledge. Management principles are also based on scientific methods.

    c)Cause and effect relation- Scientific principles are based on cause and effect relationship. Similarly, management principles establish a cause and effect relationship between various factors.

    d)Universal validity of principles- Scientific principles have universal application and validity. Fundamental principles of management have universal applicability, but unlike science the degree of their applicability differs as they deal with human beings.

    (c)

    Labelling refers to designing of label required to be put on the package to provide information regarding the product’s nature, contents, price, manufacturer’s details etc.

    Following are the advantages of ‘Labelling’:
    i. Describing the Product – It specifies the product features, its usage, cautions in use, etc. as well as specifies its contents.
    ii. Product Identification – It helps in easy identification of the product or brand. It provides information such as name & address of the manufacturer, net weight when packed, manufacturing date, maximum retail price and batch number.
    iii. Grading – It facilitates marketers in assigning different grades to indicate different features or quality of the product.

    iv. Statutory Warning: Labelling provides information required under law.

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  • Q5

    (a) Explain any three barriers to Communication. [3]

    (b) Explain any four features of Business Environment. [4]

    (c) Discuss the need for the principles of management. [5]

    Marks:12
    Answer:

    (a) Barriers to Communication are:

    • Badly expressed message: Intended meaning of a message is not conveyed by a manager. It could be due to unsuitable words, inadequate vocabulary, etc.
    • Unclarified assumption: Underlining assumptions of a message, if not clarified, may cause problem.
    • Consistency: Communication shall be consistent with goals and policies of an enterprise.

    (b) The features of business environment are as follows:
    Dynamic – Business environment keeps on changing in terms of technology up gradation, consumer preferences and consumer behavior.
    Totality of external forces – Business environment consists of all the forces, institutions and factors which directly or indirectly affect the business organisation.
    Uncertainty – Business environment is uncertain as it is difficult to predict future happenings.

    Relativity: Business environment differs from country to country and even from region to region.

    (c) Principles of management are required for the following reasons:
    a) To increase efficiency: Principles of management have been developed from experiments and observations. These provide necessary guidelines to managers as to how they should function in different situations.
    b) To attain social goals: Principles of management enable managers to make optimum use of human and material resources. Management coordinates efforts of people so that individual objectives get translated into social attainments.
    c) To train managers: Formal methods of training managers in institutes and universities are possible only when there are fundamental principles and concepts.

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