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Class 12 Nature and Significance of Management: cheat sheet
CBSE Business Studies. What management is, effectiveness and efficiency, its objectives and features, whether it is an art, a science or a profession, its levels and functions, and coordination.
Key ideas
- Management is getting things done to achieve goals effectively (on time) and efficiently (at the least cost of resources).
- It is goal-oriented, pervasive, multidimensional (work, people, operations), continuous, a group activity, dynamic and intangible.
- Its objectives are organisational (survival, profit, growth), social (benefit to society) and personal (the needs of employees).
- Management is an art (personal skill and creativity) and an inexact science (principles about human behaviour), but not a full profession, because entry is not restricted to holders of a set degree.
- Top management sets goals and policies, middle management carries them out through departments, and supervisory management oversees the workers.
- Its functions are planning, organising, staffing, directing and controlling.
- Coordination binds all the functions and departments together; it is the essence of management, deliberate, continuous, pervasive and every manager’s job.
Remember
| Cost per unit | total cost ÷ units made; the lower cost per unit is the more efficient |
| Effective? | the target is met on time (units made ≥ target) |
| Efficient? | the cost stays within the budget (cost ≤ budget) |
| Top management | board of directors, chief executive |
| Middle management | departmental heads |
| Supervisory management | foremen and supervisors |
| Why coordination is needed | growth in size, functional differentiation and specialisation |
Watch out
- Swapping effectiveness (done on time) and efficiency (done at least cost).
- Calling coordination a separate function of management: it is the essence of all of them.
- Saying management is a full profession.
Worked example
Two units make the same product. Varun’s unit made 4,000 units for ₹3,120,000; Dev’s unit made 5,000 units for ₹2,550,000. Find the cost per unit of each. Which unit is more efficient?
Working: 3,120,000 ÷ 4,000; 2,550,000 ÷ 5,000
Answer: ₹780 and ₹510; Dev’s unit
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