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Chapter 1 - Nature and significance of management Class 12th commerce

Meaning of Management:

Management is a process of getting things done. Process of management refers to Planning , organizing , Staffing , Directing , Controlling the available resources effectively and efficiently  for achieving the goal  of the organization


Following are different definition of management


“Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”

Harold Koontz and Heinz Weihrich



“Management is defined as the process of planning, organising, actuating and controlling

an organisation’s operations in order to achieve coordination of the human and material resources essential in the effective and efficient attainment of objectives.”

                            Robert L. Trewelly and M. Gene Newport


“Management is the process of working with and through others to effectively achieve organizational objectives by efficiently using limited resources in the changing environment.”





Let us understand how Tata used a management system to achieve set goals.


Founded and Originated

Founded in 1868, by Jamsedji Nusserwan ji ,Tata the Tata Group is a global business conglomerate operating in over 100 countries across 5 continents.


Vision and Values

Jamshed ji TATA Could visualize that Trust of customer can make organization successful last long , It is his visualization that Tata is selling every thing of our life. We are dependent on TATA product from morning to end of the day .



Jamshed ji was able foresee planning .

His  management  skills were clearly evident when minute details were chalked in planning and building the entire city of Jamshedpur.

He knew features and importance of planning . He knew that if planning is not done properly execution will be pathetics . He followed planning steps by steps in execution .He identified all types of planning and executed it .




Jamshed ji was bale to organsise  and channelize all resources of the business together. His system of organization still exist in the culture of TATA Groups.

Jamshed ij TATA  strong sense of values and spirit of innovation and entrepreneurship are a legacy that continues to guide Tata companies till date. He had four goals in life:

1.Setting up an iron and steel company,

2.a world-class learning institution,

3.a Unique hotel and4.a Hydro-electric plant


Staffing :

Jamshed ji t believed that satisfied workers create satisfied workers and in lieu to this principle he paid all his workers gratuity, provident fund well before it was made mandatory.

Jamshed ji TATA , Knew that human resources are most important resources in the organization . he knew importance , need , process, training and development , etc



Jamshed knew how to instruct and guide people to achieve the best . He knew how to counsel , motivate , and lead people in the organization to achieve its objectives.

Tata has a strong sense of social responsibility. They balance economic prosperity, environmental responsibility and social benefits for the community. In India, they are a partner in progress with Odisha, and believe in taking its stakeholders forward in   its journey of growth. Tata Steel Thailand is one of the first 30 companies that joined UNICEF in Child Friendly Business in “The Children Sustainability Forum” to make a commitment     in protecting children’s rights. Tata Steel Europe’s Community Partnership Programme- ‘Future Generations’, with sub-themes of education, environment, health and Well-being works across the UK, assisting job and wealth creation by supporting small and medium businesses with finance and business premises.




Jamshed ji used to ensure that activities in the organization are performed as per the plans , he knew that resources are to be  utised effectively and efficiently . as per the plan . he used to ensure that all plans made has to be implemented effectively and efficiently  .

They also play a constructive role in addressing climate change – both by reducing carbon footprint, and by creating high performance steels that lead to fuel-efficient vehicles and energy-efficient buildings. Their Environmental Management Systems meet the ISO 14001 standards at all of their main manufacturing sites.

Shaped by a lineage of sound and straightforward business principles, the Tata Group is built on a foundation of trust and transparency. Building such huge enterprises, sustaining and running them profitably are possible only through effective and efficient management and co-ordination at all levels.



Resources Utilization

Jamshed ji knew how to use resources in the best possible way. Resources are like man, money , machine, material ,Motivation .


Effective and Efficient

Effectiveness in Management refers to the capability of the management to achieve the desired targets in the specified time. It is concerned with doing what is right or what should be done. On the other hand, efficiency refers to doing the task correctly, timely and at minimum possible cost.


C0- 0rdination

Coordination is the process of integrating all activities and resources together . co –ordination brings unity in action .




Taj Mahal Hotel at Colaba waterfront in Mumbai on 3 December 1903 at the cost of 11 million (worth 11 billion in 2015 prices). At that time it was the only hotel in India to have electricity.

The values and principles that have governed the business for a century are enshrined in the Tata Code of Conduct (TCOC).

From an early foray into steel and automobiles, to staying abreast of the latest technologies, the Tata Group today has

29 publicly-listed Tata enterprises, which include Tata  Steel,  Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.

The group has a combined market capitalisation of around $103.51bn (2016-17).



Management is Pervasive : Management is relevant to all kind of organization :

Management is required in all  kinds of organizations — those manufacturing handlooms, trading in consumer goods or providing hairstyling services and even in non-business organisations. Let us take another case studies .


Founder and origin

Samll business women from Namchi :

Smita Rai is a 38-year old entrepreneur who grew up in a rural district called Namchi, South Sikkim. She was very good in art and craft particularly, Wax moulds. She loved to make candles, often she make into toys and small pieces of art with wax and used it as a gift for her friends and relatives. She was loved and appreciated for these. Smita was never happy with the conditions of the women in her district as most were poor and jobless, so she planned to do something to solve their problems because she knew that imparting skills for livelihood is needed but she had no idea of how to implement her idea.

In August 2012, she met Abishek Lama, the Branch Manager of NEDFI, Namchi Branch, a financial corporation which support local people with skills development programs and also  channelize  them into revenue generating activities.



Vision and values

Smita got interested. “I love making candles, then, why not convert my hobby into a venture and involve these rural women  also”, she thought. This led to the establishment of Namchi Designer Candles with the help of NEDFI, some financial institutions and support from different stakeholders in various dimensions.

Since then, the women have never looked back, despite challenges. The women also faced a lot of harassment but  they  could  overcome  all   those troubles.



Employee focused or people focused

Namchi Designer Candles has

100 per cent women as employees and they also produce varieties of candles. During Diwali, they produce customized candles meant for the occasion. These Diwali themed candle has been a success in Sikkim as its demand increases on a yearly basis.



Characteristics of Management

After going through some of the definitions we find some elements that may be called the basic characteristics of management:


GGM-India. & DCP


Goal-oriented process:


Group activity:




intangible force:


Dynamic function:


Continuous process:







Goal-oriented process:

An organisation has a set of basic goals which are the basic reason for its existence. These should be simple and clearly stated. Different organisations have different goals. For example, the goal of a retail store may be to increase sales, but  the goal of The Spastics  Society of India is to impart education to children with special needs. Management unites the efforts of different individuals in the organization towards achieving these goals.


The Management Mantra from GE

Jack welch


Jack Welch was appointed CEO of GE in 1981

November 19, 1935 – March 1, 2020.  He was Chairman and CEO of General Electric (GE) between 1981 and 2001.

He made GE from 13 billion dollar company to 5000 billion dollar company . But how


Create a vision and then ignite your organization to make this vision a reality.

Get people so passionate about what they are doing that they cannot wait to execute this plan. Have great energy, competitive spirit and the ability to spark excitement and achieve results. Search for leaders who have the same qualities.


Focus on Strategic issue

 Your job is to understand the vital issues within each of your businesses. Recognize the talent needed to win in those markets


Focus on the main issue

Your job is to see the big picture. Don’t manage every detail. Don’t get caught up in the minute details, but instead inspire others to execute some of your vision. Surround yourself with great people and trust them to do their job and contribute their best to the organization.


Involve everyone and welcome great ideas from everywhere.

Anyone can be a leader, just so long as they contribute, and the most meaningful way for anyone to contribute is to come up with a good idea. Business is all about getting the best ideas from everyone. New ideas are the lifeblood of the organization, the fuel that makes it run. “The hero is the person with a new idea.” There is simply nothing more important to an organization than expressing ideas and creating a vision.


Lead by example.


Energy, Energies, Edge, and Execution

To spark others to perform, you must lead by example. Jack Welch’s mastery of the four E’s of leadership – Energy, Energies, Edge, and Execution – was always in evidence. “He had great energy, sparked others, had incredible competitive spirit, and had a record of execution that was second to none. This is a key of the Welch phenomenon.



Group  activity:

An organisation is a collection of diverse individuals with different needs. Every member of the group has a different purpose for joining the organisation but as members of the organisation they work  towards  fulfilling  the common organisational goal. This requires team work and coordination of individual effort in a common direction. At the same time management should enable all its members to grow and develop as needs and opportunities change.




Management is a complex activity that has three main dimensions. These are:

((i)People , (ii)operated ,(iii) work )


Management of people

: Human resources or people are an organisation’s greatest asset. Despite all developments in technology “getting work done through people” is still a major task for the manager. Managing people has two dimensions

(i) it implies dealing with employees as individuals with diverse needs and behavior; It also means dealing with individuals as a group of people.

(ii). The task of management is to make people work towards achieving the organisation’s goals, by making their strengths effective and their weaknesses irrelevant.


Management of operations:

No matter what the organisation, it has some basic product or service to provide in order to survive. This requires a production process which entails the flow of input material and the technology for transforming this input into the desired output for consumption. This is interlinked with both the management of work and the management of people.



Management of work

All organisations exist for the performance of some work. In a factory, a product is manufactured, in a garment store a customer’s need is satisfied and in a hospital a patient is treated. Management translates this work in terms of goals to be achieved and assigns the means to achieve it. This is done in terms of problems to be solved, decisions to be made, plans to be established, budgets to be prepared, responsibilities to be assigned and authority to be delegated.



intangible force:

Management is an intangible force that cannot be seen but its presence can be felt in the way the organisation functions. The effect of management is noticeable in an organisation where targets are met according to plans, employees are happy and satisfied, and there is orderliness instead of chaos.


Dynamic function:

Management is a dynamic function and has to adapt itself to the changing environment. An organization interacts with its external envi- ronment which consists of various social, economic and political factors. In order to be successful, an organisation must change itself and its  goals according to the needs of the environment. You probably know that McDonalds, the fast food giant made major changes in its menu to be able to survive in the Indian market.

KFC – Veg Biryani.


Continuous process:

The process of management is a series of continuous, composite, but separate functions (planning, organizing, staffing directing, controlling).

These functions are simultaneously performed by all managers all the time.



The activities involved in managing an enterprise are common to all organisations whether economic, social or political. A petrol pump needs to be managed as  much as a hospital or a school. What managers do in India, the USA, Germany or Japan is the same. How they do it may be quite different. This difference is  due to the  differences in culture, tradition and history.


Objectives of Management –

In  any organization management have  three different objectives. Management has to achieve all objectives in an effective and efficient manner.

These three objectives of management are following :



Organisational Objectives:

Business have many function and each function has objectives . Different function could be:

Purchase department, storing department, production department, sales and marketing  department ,logistic department ,  finance department , Accounts department,  Human resources department. Management is responsible for setting and achieving objectives for the organisation. It has to achieve a variety of objectives in all function .

considering the interest of all stakeholders.



King fisher example  

The basic objectives of any business is survival. Management must strive to ensure the survival of the organisation. In order to survive, an organisation must       earn enough revenues to cover costs.




Mere survival is not enough for business. Management has to ensure that the organization makes a profit. Profit provides a vital incentive for the continued successful operation of the enterprise. Profit is essential for covering costs and risks of the business.




A business needs to add to its prospects in the long run, for this it is important for the business to grow. To remain in the industry, management must exploit fully the growth potential of the organization.

Growth  of a business can be measured in terms of:

SEC-P: These are growth indicators.

1.Sales volume increase

2. Employees increased

3. Capital investment increased etc

3. Products numbers increased 


Social objectives:

It involves the creation of benefit for society. As a part of society, every organisation whether it is business or non-business,  has a social obligation to fulfill. This refers to consistently creating economic value for various constituents of society. This includes using environmental friendly methods of production, giving employment opportunities to the underprivileged. sections of society and providing basic amenities like schools and healthcare, etc., for community.





Story of social objectives by JSPL in Raigadh tribal females . Maternity mobile hospitals.

Drug Addiction centered.


Case studies 2

ITC – Empowering Rural India

A quiet digital revolution is reshaping the lives of farmers in remote Indian villages. In these villages, farmers grow soyabeans, wheat and coffee in small plots of land, as they have done for thousands of years. A typical village has no reliable electricity and has antiquated telephone lines. The farmers are largely illiterate and have never seen a computer. But farmers in these villages are conducting e-business through an initiative called E-Choupal, created by ITC, one of India’s largest consumer product and agribusiness companies.

ITC’s E-Chaupal initiative is a fine example of a business organisation fulfilling corporate social responsibility. The basic aim of the programme is to provide farmers in rural India with the opportunity to make use of a direct marketing channel eliminating multiple intermediation and wasteful handling and unnecessary transaction costs. It is the single-largest information technology-based intervention by a corporate entity in rural India, transforming the Indian farmer into a progressive knowledge-seeking citizen, enriching him with knowledge and elevating him to a new order of empowerment.

E-Choupal delivers real-time information and customised knowledge to improve the farmer’s decision-making ability, thereby better aligning farm output to market demands; securing better quality, productivity and improved price discovery. Given the low levels of literacy in the rural sector, the role of the Choupal Sanchalak, the lead farmer of the village, in facilitating physical interface between the computer terminal and the farmers is central to the project. E-Choupal Smart Cards enable farmer identification to provide customised information on the E-Choupal website. Online transactions are captured to reward farmers for volume and value of usage.

The E-Chaupal initiative has found its way into the Harvard Business School as a leading case study illustarating the use of modern technology by a leading business house for the benefit of the rural poor.




Personnel objectives:

Organizations  are made up of people who have  different personalities, backgrounds, experiences and objectives.



They all become part of the organization to satisfy their diverse needs. These vary from financial needs such as competitive salaries and perks, social needs such as peer recognition and higher level needs such as personal growth and development. Management has to reconcile personal goals with organizational objectives for harmony in the organization.

MNC VS National Company.


Importance of Management

Having understood that management is a universal activity that is integral to any organization we now examine some of the reasons that have made management so important:



Efficiency Increases


Dynamic organization creation


Personal objectives of an individual achieved


Explanation :


Management increases efficiency:

The aim of a manager is  to reduce costs and increase productivity through better planning, organising, staffing directing,and controlling the activities of the organisation.


Management creates a dynamic organisation:

All organisations have to function in an environment which is constantly changing. It is generally seen that individuals in an organisation resist change as it often means moving from a familiar, secure environment into a newer and more challenging one. Management helps people adapt to these changes so that the organisation is able to maintain its competitive edge.

Example : resistance to change :



Management helps in achieving personal objectives:

A manager motivates and leads his team in such a manner that individual members are able to achieve personal goals while contributing to the overall organisational objective. Through motivation and leadership the management helps individuals to develop  team spirit, cooperation and commitment to group success.



Case studies

JSPL Values : Training for personal growth of the employee .


Nature of Management

Management is as old as civilization. The earliest management practices were a set of rules and regulations that grew out of the experiences of governmental and commercial activities. The development of trade and commerce gradually led to the development of management principles and practices


The study of management has evolved over a period of time along with the modern organisations. Management has grown into a dynamic subject with its own special characteristics. However, one question that needs to be addressed pertaining to the nature of management is whether it is a

1.An  art or 

2.Science or


In order to answer this let us examine the features ART, Science , And Profession and check that  management is meeting this criteria or not.

Nature of management is to manage: Management is Art, Science, Profession.


Management as an art

What is art? Art is the skillful and personal application of existing knowledge to achieve desired results. It can be acquired through (SOE)


2.Observation and


Since art is concerned with personal application of knowledge some kind of ingenuity and creativity is required to practice the basic principles learnt.

Feature of ART


The basic features  of  an  art  are  as follows:







Existence of principle

Art pre supposes the existence of certain theoretical knowledge. Experts in their respective areas have derived certain basic principles which are applicable to a particular form of art. For example, literature on dancing, public speaking, acting or music is widely recognized.



Personalized application:

The use of this basic knowledge varies from individual to individual. Art, therefore, is a very personalised concept. For example, two dancers, two speakers, two actors, or two writers will always differ in demonstrating their art.



Practice creativity:

Personalized and skillfully


All art is practical. Art involves the creative practice of existing theoretical knowledge. We know that all music is based on seven basic notes. However, what makes the composition of a musician unique or different is his use of these notes in a creative manner that is entirely his own interpretation.



Management As ART

Management can be said   to  be an art since it satisfies the following criteria:





Universal principles.

There are various theories of management, as  propounded by many management thinkers, which prescribe certain universal principles. A manager applies these scientific methods and body  of knowledge to a given situation, an issue or a problem, in his own unique manner. A good manager works through a combination of practice, creativity, imagination, initiative and innovation. A manager achieves perfection after long practice. Students of management also apply these principles differently depending on how creative they are.


Practices the art of management in the day-to-day  job

A successful manager practices the art of management in the day-to-day  job  of   managing  an enterprise based on study, observation and experience. There is a lot of literature available in various areas of management like marketing, finance and human resources which the manager has to specialise in. There is existence of theoretical knowledge.



Personlaised and skillfully

A manager applies this acquired knowledge in a  personalised and skillful manner in the light of the realities of a given situation. He is involved in the activities of the organisation, studies critical situations and formulates his own theories for use in a given situation. This gives rise to different styles of management


Conclusion :

The best managers are committed and dedicated individuals; highly trained and educated, with personal qualities such as ambition, self- motivation, creativity and imagination, a desire for development of the self and the  organisation  they belong to. All management practices are based on the same set of  principles;   what   distinguishes a successful manager from a less successful one is the ability to put these principles into practice.



Features of science

Science is a systematized body of knowledge that explains certain general truths or the operation of general laws. The basic features of science are as follows:






Principles based on experimentation:

Scientific principles are first developed through observation and then tested through repeated experimentation under controlled conditions.



Universal validity:

Scientific principles have universal validity and application.




Body  of  knowledge:

Systematized  body  of  knowledge:

Science is a  systematic  body of knowledge. Its principles are based on a cause and effect relationship. For example, the phenomenon of an apple falling from a tree towards the ground is explained by the law of gravity.



Management As Science:

Based on the above features, we can say that management has some characteristics of science.





Principles based on experimentation:

The principles of management have   evolved   over   a    period of time based on repeated experimentation and observation in different types of organisations. However, since management deals with human beings and human behaviour, the outcomes of these experiments are  not capable of being accurately predicted or replicated. Therefore, management can be called an exact science. Despite these limitations, management scholars have been able to identify general principles of management. For example, scientific management principles    by    F.W.    Taylor and Functional Management principles by Henri Fayol which you will study in the next chapter.



Universal validity:

Since the principles of mana- gement are not as exact  as  the principles of science, their application and use is not universal. They have to be modified according to a given situation. However, they provide managers with certain standardised techniques that can be used in different situations. These principles are also used for training and development of managers.






body of knowledge.

Management has a systematised body of knowledge. It has its own theory and principles that have developed over  a  period  of time, but it also draws on other disciplines such as Economics,Sociology, Psychology and Mathematics. Like all other  organised  activity, management has its own vocabulary of terms and concepts. For example, all  of  us discuss sports like cricket and soccer using a common vocabulary. The players  also use these terms to communicate with each other. Similarly managers need to communicate with one another with the help of a common vocabulary for a better understanding of their work situation.




You must have understood from the foregoing discussion that manage- ment has features of both art and science. The practice of management is an art. However, managers can work better if their practice is based on the principles of management. These principles constitute the science of management. Management  as  an art and a science are therefore not mutually exclusive, but complement each other.



Feature of profession :

And how can we say that management is profession .

 You have understood so  far  that  all forms of organized activity need to be managed. You would also  have observed that organizations look for individuals with specific qualifications and experience to manage them. Does it mean that management is a profession? To answer this question let us examine the salient features of a profession and see whether management satisfies them?


A profession has the following characteristics:



Body of know- ledge:

 All professions are based on a well-defined body of knowledge that can be acquired through instruction.



All professions are affiliated to a professional association which regulates entry, grants certificate of practice and formulates and enforces a code of conduct. To be able to practice in India lawyers have to become members of the Bar Council which regulates and controls their activities.


Purpose :

Service motive:

The basic motive of a profession is to serve  their  client’s  interests  by rendering dedicated and committed service. The task of  a lawyer is to ensure that his client gets justice.


Restricted entry:

Restricted entry: The entry to a profession is restricted through an examination or through acquiring an educational degree. For example, to become a chartered accountant  in  India  a  candidate  has   to clear a specified examination conducted by the Institute of Chartered Accountants of India.  


Ethical code of conduct

All professions are bound by a code of conduct which guides the behaviour of its members. All doctors, for example, take the oath of ethical practice at the time they enter the profession.


Management as profession:

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






Body of knowledge



All over the world there is marked growth in management as a discipline. It is based on a systematic body of knowledge comprising well-defined principles based on  a  variety  of business situations. This knowledge  can  be  acquired   at different colleges and professional institutes and through a number of books and journals. The subject of management is taught at different institutions. Some  of these have been set up with the specific purpose of providing management education  such  as the Indian Institutes of Management (IIMs) in India. Entry to different institutes is usually through an examination.



Association of practicing manager

There are several associations of practicing managers in India, like the AIMA (All India Management Association) that has laid down a code of conduct to regulate the activities of their members. There is, however, no compulsion for managers to be members of such an association nor does it have any statutory backing.


Purpose of management


The basic purpose of management is to help the organisation achieve its stated goal. This may be profit maximisation for a business enterprise and service for a hospital. However, profit maximisation as the objective  of management does not hold true and is fast changing. Therefore, if an  organisation has a good management team that is efficient and effective it automatically serves society by providing good quality products at reasonable prices.


Restriction for being manager

There is no restriction on anyone being designated or appointed as manager in any business enterprise. Anyone can be called a manager irrespective of the educational qualifications possessed.

Unlike professions such as medicine or law  which  require a practicing doctor or lawyer to possess valid degrees, nowhere in the world is  it  mandatory  for a manager to possess any such specific degree. But professional knowledge and training is considered to be a desirable qualification, since there is greater demand for those who possess degrees or diplomas from reputed institutions. Therefore, as such this criterion has not been strictly met.


Ethic and code of conduct

The institute of chartered accountants have its own code of conduct . But this is not practiced strongly as in law and in medical.


Some Interesting Cross-disciplinary Perspectives





मनुष्य जाति का विज्ञान



Anthropology is the study of societies, which helps us learn about human beings and their activities. Anthropologists’ work on cultures and environments, for instance, has helped managers to better understand differences in fundamental values, attitudes, and behavior between people in different countries and within different organisations.





Economics is concerned with the allocation and distribution of scarce resources. It provides us with an understanding of the changing economy as well as the role of competition and free markets in a global context. An understanding of free trade and protectionist policies is absolutely essential to any manager operating in the global marketplace, and these topics are addressed by economists.





 Case studies :Core values of JSPL


Philosophy courses inquire into the nature of things, particularly values and ethics. Ethics are standards that govern human conduct. These ethics have shaped today’s organisations by providing a basis for legitimate authority, linking rewards to performance, and justifying the existence of business and the corporate form.



Political Science :राजनीति विज्ञान




Political science is the study of the behavior of individuals and groups within a political environment. Management is affected by a nation’s form of government – by whether it allows its citizens to hold property, by its citizens’ ability to engage in and enforce contracts, and by the appeal mechanisms available to redress grievances. A nation’s stand on property, contracts, and justice, in turn, shapes the type, form, and policies of its organisations.



Psychology: मनोविज्ञान


Psychology is the science  that  seeks  to  measure,  explain,  and sometimes change the behaviour of humans and other animals. Today’s managers confront both a diverse customer base and a diverse set of employees. Psychologists’ efforts to understand gender and cultural diversity provide managers with a better perception of the needs of their changing customer and employee populations. Psychology courses are also relevant to managers in terms of gaining a better understanding of motivation, leadership, trust, employee selection, performance appraisals, and training techniques.




Sociology: नागरिक सास्त्र



Sociology is the study of people in relation to their fellow human beings. What are some of the sociological issues that have relevance to managers? Here are a few. How are societal changes such as globalisation, increasing cultural diversity, changing gender roles, and varying forms of family life affecting organisational practices? What are the implications of schooling practices and education trends on future employees’ skills and abilities? Answers to questions such as these have a major effect on how managers operate their businesses.



Levels of Management

Management is a universal  term used for certain functions performed by individuals in an enterprise who are bound together in a hierarchy of relationships. Every individual in the hierarchy is responsible for successful completion of a particular task. To be able to fulfill that responsibility he is assigned a certain amount of authority or the right to take a decision. This authority-responsibility relationship binds individuals as superiors and subordinates and gives rise to different levels in an organisation. Generally speaking there are three levels in the hierarchy of an organisation.


Top level

TATA HOUSE –Chairman ,MD,COO, Functional Director for all business

For survival of business



Middle management or Divisional level


Responsible for implementing and controlling the plans and strategies of the organisation


Supervisory or Operational Management

Functional Head of all department of a particular business


Explanation :


Top Management:

TATA House :

They  consist of the senior-most executives of the organisation by whatever name they are called. They are usually referred to   as   the  chairman, the chief executive officer, chief operating officer, president and vice-president. Top management is a team consisting of managers from different functional levels, heading finance, marketing etc. For example chief finance officer, vice president (marketing). Their basic task is to integrate diverse elements and coordinate the activities of different departments according to the overall objectives of the organisation. These top level managers  are  responsible for the welfare  and  survival  of the organisation. They  analyse the  business environment  and its implications for the survival of the firm. They formulate overall organisational goals and strategies for their achievement. They are responsible for all the activities of the business and for its  impact on society. The job of the top manager is complex and stressful, demanding long hours and commitment to the organisation.



Middle Management:

Middle Management:is the link between top and lower level managers. They are subordinate to top managers and  superior to the first  line managers. They are usually known as division heads, for example production manager. Middle management is responsible for implementing and controlling plans and strategies developed by top management. At the same time they are responsible for all the activities of first line managers. Their main task is to carry out the plans formulated by the top managers. For this they need to:



Policy study

interpret the policies framed by top management



Necessary personal

ensure that their department has the necessary personnel,



Duties and responsibilities

assign necessary duties and responsibilities to them,




motivate them to achieve desired objectives,and




Co- operate with other departments for smooth functioning of the organisation. At the same time they are responsible for all the activities of first line managers.



Supervisory or Operational Management:

Foremen and supervisors comprise the lower level in the hierarchy of the organisation. Supervisors directly oversee  the  efforts  of  the workforce. Their authority and responsibility is limited according to the plans drawn  by the top management. Supervisory management  plays a very important role in the organisation since they interact with the actual work force and pass on instructions of the middle management to the workers. Through their efforts quality of output is maintained, wastage  of materials is minimised and safety standards are maintained. The quality of workmanship and the quantity of output depends on the hard work, discipline and loyalty of the workers. Through their efforts quality of output is maintained, wastage  of materials is minimised and safety standards are maintained. The quality of workmanship and the quantity of output depends on the hard work, discipline and loyalty of the workers


Functions of  Management

Management is described as the process of planning, organizing, Staffing  directing and controlling the efforts of organisational members and of using organisational resources to achieve specific goals.




What to do , how to do and for whom to do .

Planning is the function of determining in advance what is to be done and who is to do it. This implies setting goals in advance and developing a way of achieving them efficiently and effectively.



What activities  to do , how to do and by whom it will be done .

Organizing is the management function of assigning duties, grouping tasks, establishing authority and allocating resources  required to carry out a specific  plan. Once a specific plan has been established for the accomplishment of an organisational goal, the organising function examines the activities and resources required to implement the plan. It determines what activities and resources are required. It decides who will do a particular task, where it will be done, and when it will be done. Organising involves the grouping of the required tasks into manageable departments or work units and the establishment of authority and reporting relationships within the organisational hierarchy. Proper organisational    techniques    help in the  accomplishment  of  work and promote both the efficiency of operations and the effectiveness of results. Different kinds of business require different structures according to the nature of work.  You will read more about this in a later chapter.




Right person at right place . Whom to recruit , select , where to place and how to train .Human resource function.

Staffing    simply stated, is finding the right people for the right job. A very important aspect of management is to make sure that the right people with the right qualifications are available at the right places and times to accomplish the goals  of the organisation. This is also known as the human  resource  function and it involves activities such as recruitment, selection, placement and training of personnel. Infosys Technologies which develops software needs systems analysts and programmers.




Directing involves leading, influencing and motivating  employees  to perform the tasks assigned to them. This  requires  establishing  an atmosphere that encourages employees to do their best. Motivation and leadership are two key components of direction. Directing also involves communicating effectively as well as supervising employees at work. Motivating workers means simply creating an environment that makes them want to work. Leadership is influencing others to do what the leader wants them to do. A good manager directs through praise and criticism  in such a way that it brings out the best in the employee.




Controlling is the management function of monitoring organisational performance  towards the attainment of  organisational  goals.  The   task of controlling involves establishing standards of performance, measuring  current performance,  comparing this with established standards and taking corrective action where any deviation is found. Here management must determine what activities and outputs are critical to success, how and where they can be measured and who should have the authority to take corrective action.

The various functions of a manager are usually discussed in the order given above, suggesting that a manager first plans, then organises, puts staff in position, then directs, and finally controls.  In reality, managers are rarely able to carry out these functions in

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