NCERT Solutions Class 12 Business Studies Chapter 1

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

NCERT solutions of Business Studies Class 12 Chapter 1 by Extramarks combine all of the principles of Business Studies. They provide a fundamental grasp of management principles and policies in Business Studies. This will be really beneficial to students. All of the crucial aspects are explained thoroughly. After reading the concept, all points are clear and easy to comprehend, and there is no room for uncertainty. Students who are unfamiliar with the topic can study the fundamentals of management concepts and approaches. While classroom teaching helps with only so much of this knowledge transfer, students are accountable for the remaining. Extramarks specialists created the Class 12 Business Studies Chapter 1 NCERT Solutions to help students absorb this information.

NCERT Solutions for Class 12 Business Studies Chapter 1- Nature and Significance of Management are written in simple language with point-by-point explanations. Students can access a variety of additional study tools on the Extramarks website in addition to the NCERT Solutions. Students get access to all materials, including NCERT books, CBSE revision notes, CBSE sample papers, CBSE previous year question papers, and so on.

Key Topics Covered In NCERT Solutions Class 12 Business Studies Chapter 1

Following are the key topics covered in NCERT Solutions Class 12 Business Studies Chapter 1- Nature and Significance of Management. 

Introduction to Management
Basic features/characteristics of management
Functions of management
Levels of management
Code of Conduct
Management as a multi-faceted concept
Management as Art and Science
The essence of management – Coordination
Management as a full-fledged profession

To go smoothly with all the Chapters of NCERT Class 12 Business Studies, students need to grasp Chapter 1- Nature and Significance of Management. Students should utilise the NCERT Solutions Class 12 Business Studies Chapter 1 supplied by Extramarks to assist them in preparing for their examinations if they want to gain more insights into this chapter. To help students comprehend the ideas, the principles are discussed in great depth. Students will gain a thorough understanding of all of the chapters with the help of these solutions. 

Here’s the detailed information on each subtopic in NCERT Solutions Class 12 Business Studies Chapter 1 Nature and Significance of Management.

Introduction to Management

Management is the process of effectively and efficiently planning, organising, staffing, directing, and regulating corporate resources in order to achieve the organisation’s goals. Doing the proper task, finishing tasks, and attaining goals are aspects of managerial effectiveness. Efficiency refers to doing a task correctly and at a low cost.

Basic features/characteristics of management

Some characteristics/basic features of management are

  • Goal-oriented process
  • Tangible force
  • Dynamic function
  • Group activity
  • All pervasive
  • Multidimensional
  • Continuous processes

Functions of management 

The functions of planning, organising, staffing, leading, and managing are all part of management. Despite the fact that they are separate, they are usually performed at the same time. Let’s understand them in detail:

  • Planning: It consists of developing organisational objectives, commercial targets, and the procedure for achieving them in the most effective and efficient manner possible. Planning requires selecting ahead of time what you want to do and how you want to accomplish it. It is a crucial management function.
  • Organising: It involves coordinating human and physical resources in order to carry out decisions made at the planning stage. Organising is the process of identifying, classifying, and coordinating work to be done by establishing reporting relationships between people, establishing their responsibilities, and establishing their authorities in order to integrate human efforts collectively for the successful achievement of organisational goals.
  • Staffing: Staffing is a management activity that comprises evaluating the skills of applicants and assigning them particular jobs based on their skill set to hire people who are a suitable match for the firm. It is engaged in fulfilling the human resource needs of an organisation.
  • Directing: The process of directing is when a superior gives instructions, direction, and counseling to a subordinate in order to encourage and lead them to attain their goals.
  • Controlling: Controlling is a procedure that involves comparing actual performance to the expected output in order to verify that goals are met. The managerial responsibility of the controlling function includes setting standards, assessing actual performance, and taking remedial action in the event of discrepancies.

Levels of management 

The measures that each level of management takes to boost product sales in the marketplace are mentioned under NCERT Solutions Class 12 Business Studies Chapter 1:

Top Level Management:

  • They must assess the company environment and make judgments about the necessary changes.
  • They must define the modification’s goals and the strategies and policies that will be used to carry out the change.
  • They must organise all of the necessary physical and human resources for the alteration.
  • Notify all departments of the change and coordinate their efforts.

Middle-Level Management:

  • They must notify top-level management about the possible modifications and the market demand and expectations that must be met to execute the changes.
  • They must interpret plans and policies and provide implementation instructions to lower-level management.
  • To be able to take on modification, they must recruit, select, and train individuals.
  • They must delegate tasks and responsibilities to lower-level managers.

Lower Level Management:

  • They may express their opinions on the type of alteration or technology that is necessary before a choice is made.
  • They must give commands and instructions to the workforce in order to put plans into action.
  • To carry out industrial operations, they must train or lead the personnel.
  • They must monitor work on a regular basis to ensure that it is completed successfully and efficiently.

Code of Conduct

There will be rules and regulations addressing work style and practices at a firm. This will be constructed in such a way that no difficulties with behaviour will arise. This will assure the company’s proper operation and discipline. If any procedure is broken, there will be policies in place that will dictate the measures that should be taken. All personnel involved in the restructuring will adhere to the guidelines and ensure that no one in the firm has any problems.

Management as a multi-faceted concept

Management is seen as a multidimensional term due to the following reasons: 

  • Every organisation has tasks to complete. The work is translated into goals and the methods employed to attain them by management.
  • Human resource isa company’s most valuable asset. The duty of management is to create an environment where people can interact with each other and work together, The management should know the strengths and weaknesses of the employees and should give the employees an opportunity to work upon their weaknesses 
  • Every organisation must supply certain essential products and services in order to stay afloat. This necessitates a transformation of the input elements into the required output.

Management as Art and Science

Management is viewed as both an art and science since it meets all of the criteria for art and just a few of the requirements for being a science.

MANAGEMENT AS AN ART:

  • Existence of Theoretical Knowledge: It is a collection of pre-existing fundamental ideas that may be applied to any sort of organisation. A successful manager bases his daily operations on a few studies, experiences, and observations.
  • Personalised Application: A manager applies universal principles in his or her own unique way, depending on the situation, which might change from time to time and case to case.
  • Based on Practise and Creativity: A skilled manager uses a variety of theories and moulds them to fit the needs of the company.

MANAGEMENT AS A SCIENCE:

  • Systemised Body of Knowledge: Management, like science, is a systematised body of knowledge. It has developed its own set of theories over time. It also has a common lexicon that managers utilise all throughout the world.
  • Principles based on Experimentation: Management principles have evolved over time and are tailored to the needs of managers on a case-by-case basis, whereas scientific principles are established by observation, testing, and repeated experimentation.
  • Universal Validity: Theories in science are set and generally valid. However, in management, just a few fundamentals are employed to teach managers. Although they may need to be tweaked to fit a specific circumstance, these are applicable to all organisations.

When we compare the characteristics of science to those of management, we may infer that management is not an accurate science like physics or chemistry. However, we might refer to it as “soft science” or “inexact science.”

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The essence of management – Coordination

Coordination is a procedure that begins with the planning stage. To achieve a shared goal, every action in an organisation must be carefully coordinated. It connects the organisation’s efforts in order to reach a single aim.

The following are some of the reasons why cooperation is so important in management:

  • Unity of Action ensured by Coordination: All of the departments are bound together via coordination. It makes all departments aware of the shared goal that must be met.
  • Coordination involves Group Efforts: It brings various interests of all the departments together to achieve a similar purpose.
  • Coordination is a Continuous Process: The coordination of activities begins with the organisation’s planning and continues until it is controlled.
  • Coordination is an All-Pervasive function: Because all activities are dependent on one another, it is essential at all levels of management.
  • Coordination is a Responsibility of all the Managers: Managers at all levels of management, whether at the top, middle, or bottom, must guarantee that work is completed according to the plan.

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Management as a full-fledged profession

Management does not have all of the characteristics of a full-fledged career due to the following reasons:

  • Well defined body of Knowledge: Every business has a defined body of information that may be learnt by the following instructions. This characteristic of the profession may be found in management since it entails a methodical understanding of concepts, theories, and principles.
  • Restricted Entry: Although a professional degree is required to become a professional, an individual with managerial talents can become a manager without one. As a result, this attribute of the profession does not apply to management, as management is available to anybody who wants to master management skills.
  • Professional Association: All professions are members of their respective professional societies, which govern admittance, issue practice certifications, and set behaviour codes. This characteristic does not apply to management because membership of a manager in a management association is not required.
  • Ethical Code of Conduct: Every profession has a rigid code of behaviour. Because there is no explicit code of conduct for managers, this feature does not exist in management.
  • Service Motive: Both a professional and a manager strive to give focused and committed services in order to expand the number of clients they serve. However, in the case of management, profit maximisation is usually the primary goal.

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By referring to Extramarks NCERT Solutions Class 12 Business Studies Chapter 1, students can easily understand the Nature and Significance of Management.

Key Features of NCERT Solutions Class 12 Business Studies Chapter 1

Students must study all previous concepts in order to do well in the exam. As a result, NCERT Solutions Class 12 Business Studies Chapter 1 provides a detailed answer to all questions. Some of the major reasons you must choose Extramarks include:

  • They cover all the solutions to the chapter related questions in the NCERT textbook as well as additional important questions. 
  • The solutions are prepared by experts in the field of Business Studies.
  • By laying a foundation and explaining the chapter’s fundamental principles, the answers help in eliminating the student’s questions and hurdles.
  • All solutions are formed keeping in mind the guidelines laid by NCERT.

Q.1 What is meant by management?

Ans. According to Harold Koontz, “Management is an art of getting things done through others and with formally organised groups.”

Management is the coordination of all resources through the process of planning, organising, directing, staffing and controlling in order to attain stated objectives effectively and efficiently.

Q.2 Name any two important characteristics of management.

Ans. Characteristics of management are as follows:
i. Goal Oriented: Management aims at achieving organisational objectives by uniting the efforts of different individuals in an organisation towards common goal.
ii. Pervasive: Management is universal. It is applicable in profit making, non-profit making, business or non-business organisations.

Q.3 Identify and state the force that binds all the other functions of management.

Ans. Coordination is the force that binds all the other functions of management. .

  1. It begins right from the stage of planning where we goals and objectives are set for the organisation till controlling to realise the achievement of desired goals.
  2. Inter department conflicts must be avoided and proper direction must be provided to all the departments.
  3. Coordination is the main requirement to avoid confusion and duplication of work.

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

Ans. Growth of an organisation can be measured in terms of

  • sales volume,
  • increase in the number of employees,
  • the number of products or
  • The increase in capital investment, etc.

Q.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 ₹12, 00,000 per year.

Name the objectives of management achieved by Indian Railways in the above case.

Ans. The management of Indian Railways is efficient, as the task was done correctly and with minimum cost. The management used resources in efficient manner.

Social objectives involve creation of benefit for the society.

This involves creating economic value consistently for society as a whole.

Q.6 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 works at ‘Middle level’. She is a link between top and lower level managers. Her primary role is to implement and control plans and strategies developed by top management.
Her basic functions are:
a) Interpretation of policies framed by top level management.
b) Organising the activities of her department for executing the plans and policies.
c) Recruiting/selecting and appointing the required employees for her department.
d) Assigning necessary duties and responsibilities to the employees .
e) Motivating employees to perform the best of their ability.

Q.7 State the basic features of management as a profession.

Ans. Features of management as a profession are:

  1. Management is based on a systematic body of knowledge comprising well defined principles based on variety of business situations.
  2. No restriction on anyone being designated or appointed as manger in any business enterprise.

A profession has following characteristics:

  1. Well defined body of knowledge.
  2. Restricted entry.
  3. Professional association.
  4. Ethical code of conduct.
  5. Service motive.

Q.8 Why is management considered to be a multi-dimensional concept?

Ans. Management is a complex activity that has three main dimensions namely management of work, management of people and management of operations.

Management of work: Management translates the work in terms of goals to be achieved and assigns the means to achieve it.

Management of people: Managing people has two dimensions, dealing with employees as individuals with diverse needs and behavior and dealing with individuals as group of people.

Management of operations: It is interlinked with both management of work and management of people.

Q.9 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 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 quality that is lacking in management is coordination. Various departments blame each other for declining profits and market share. Coordination is the force that binds all the other functions of management

It is required at every stage of management. Steps the management should take to bring the company back on track are:

  1. Production department should focus on quality of the goods.
  2. Sales department should focus more on customer satisfaction.
  3. All the departments shall be motivated to focus on organisational goals.
  4. All the departments shall cooperate and coordinate for achieving the objectives effectively and efficiently.

Q.10 Coordination is the essence of management. Do you agree? Give reasons.

Ans. Yes, coordination is indeed the essence of management. Coordination is the process by which a manager synchronises the activities of different departments. It is the force that binds all the other functions of management. It begins right from the stage of planning where we goals and objectives are set for the organisation. It is then required between stage of planning and staffing so that right kind of people are hired for the execution of plan. The function of directing and controlling must be coordinated with each other so as to realise the achievement of desired goals.

The importance of coordination can be highlighted from following points:

  1. Integrates group activity: Coordination gives a focus to group effort to ensure that performance is as it was planned and scheduled.
  2. All pervasive function: It is important and it exists at all the levels of management. It integrates the efforts of different departments at different levels.
  3. Responsibility of all managers: It is a function which is performed by every manager as a responsibility.
  4. Promotes unity of action: Coordination acts as a binding force among departments and ensures that all action is aimed at achieving the goals of the organisation.

Continuous process: Coordination is not a one-time function but a continuous process. It starts at the time of planning and continues till controlling.

Q.11 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 ₹ 100 per bracelet.

Ashita was able to produce the required number within the stipulated time at the cost of ₹ 55,000 whereas, Lakshita was able to produce only 450 units at a cost of ₹ 90 per unit. State whether Ashita and Lakshita are efficient and effective.

Give reasons to justify your answer.

Ans. Ashita is effective, but not efficient. This is because Ashita completed the task on time but a higher cost of 5,000.

Effectiveness implies completing a given work in the required time with a focus on the end results.

Whereas, Lakhita is either efficient not effective. Lakshita did not complete the target at all.

Even though she produced the units at a lower cost, but not achieving the target will make her inefficient and ineffective.

If you are not effective than efficiency is meaningless.

Q.12 Management is considered to be both an art and science. Explain.

Ans. Art means personal application of knowledge and skills for the achievement of desired goals. Management can be regarded as an art if it fulfills following characteristics of art:
a) Theoretical body of knowledge: Systematic theoretical knowledge is required for every art. Every artist has to follow certain principles and guidelines at the time of performance.

b) Personal Skills: In art every artist has his own styles and ways of performing. Similarly, every manager has his own ways of decision making and getting the work done.

c) Practice and creativity based: For being a good artist a person has to practice a lot and for becoming different from others he has to be more creative and innovative in his expressions.

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 following characteristics of science:

  1. Existence of systematised body of knowledge: In science, organised and systematic study is available which is used to acquire the knowledge of science. Similarly, in management also there is availability of systematic and organised study material. It has its own set of basic principles and concepts.
  2. 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.
  3. 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.

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.

Q.13 Do you think management has the characteristics of a full-fledged profession?

Ans. A profession has the following characteristics:

a) well defined body of knowledge.

b) restricted entry.

c) professional association.

d) ethical code of conduct.

e) service motive.

Management does not meet the exact criteria of a profession. However it does have some of the features of management:

  1. Management is based on a systematic body of knowledge comprising well defined principles based on variety of business situations.
  2. No restriction on anyone being designated or appointed as manger in any business enterprise. But professional knowledge and training is considered to be a desirable qualification.
  3. There are several associations of practicing managers such as AIMA, that has laid down a code of conduct to regulate activities of their members.

Service motive: Like other professional managers are expected to serve the society rather than simply earning profits for the owners.

Q.14 “A successful enterprise has to achieve its goals effectively and efficiently.” Explain.

Ans. Effectiveness means completing the given task in the required time. In other words, it means doing the right things with focus on the end result. It is very important as it helps in reaching the goals. Efficiency on the other hand, means completing the task with minimum possible cost and resources. Efficiency is said to increase if greater benefits are achieved using lesser resources or even same benefits can be derived on cutting down on resources. For an organisation, both effectiveness and efficiency is required to achieve desired goals. Being effective means achieving goals whereas being efficient will reduce the cost.

For example, to complete the given task if manager employs more people, then the cost of completion will be more but the work will be completed on time. On the other hand if the work is continued to be done by existing people, than it may not be completed in the given time frame.

Therefore, it is necessary to maintain a balance between effectiveness and efficiency.

Q.15 Management is a series of continuous interrelated functions. Comment.

Ans. Management is defined as the process of planning, organising, actuating, and controlling an organisations’s operations to achieve coordination of human and material resources essential in effective and efficient attainment of objectives. Various functions of management are:

  1. Planning: It involves thinking in advance what and how the work is to be done in future. It anticipates opportunities and threats in the environment.
  2. Organising: It is a process of bringing together physical, financial and human resources and establishing productive relations among them for the achievement of specific goals.
  3. Directing: It is regarded as the management in action because it puts plans into action for the achievement of organisational objectives.
  4. Staffing: It may be defined as the managerial function of hiring and developing the required personnel to fill in various positions in the organisation. Staffing injects into the organisation which is otherwise an empty shell of job positions
  5. Controlling: It is the process of comparing the actual performance with the standards and taking corrective action, if required.

Q.16 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. To modify the existing product line, different levels of management are required to take different decisions. These are:

  1. Top level management: It consists of CEO, CFO, president and vice president. They are required to formulate overall organisational goals and strategies, formulate policies and procedures.
  2. Middle level management: They are responsible for implementing the policies framed by top management, interpret the policies, ensure that departments has the necessary personnel, etc.
  3. Operational level management: Their responsibility is limited according to the policied drawn by top management. They must give proper instructions to workers, ensure the right quality in work, motivate workers to work towards achievement of common objectives.

Q.17 A firm plans in advance and has a sound organisation structure with efficient supervisory 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 aspect that is missing in the firm is coordination. Coordination is the force that binds all the other functions of management. .

  1. It begins right from the stage of planning where we goals and objectives are set for the organisation till controlling to realise the achievement of desired goals.
  2. Inter department conflicts must be avoided and proper direction must be provided to all the departments.
  3. Coordination is the main requirement to avoid confusion and duplication of work.

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FAQs (Frequently Asked Questions)

1. What does it mean by the phrase 'management of people’?

There will be three tiers of management in an organisation. Middle-level management will complete the task assigned to them by high-level management. The task of low-level management will be completed by middle-level management. The procedure will entail breaking down the task into smaller chunks and assigning it to qualified persons for the job. There will be managers who, in turn, will have group managers who will report to them and ensure that the task is completed as required. To complete the task, all management teams will collaborate. For a detailed explanation of the topic, refer to NCERT Solutions Class 12 Business Studies Chapter 1.

 

2. What does the code of conduct mean?

There are rules and regulations in place at a firm addressing work style and practices. This will be constructed in such a way that no difficulties with behaviour will arise. This will assure the company’s proper operation and discipline. If any rule is ignored or neglected, policies will be in place that will dictate the measures that should be taken. All personnel involved in the restructuring will adhere to the guidelines and ensure that no one in the firm faces any issue.