Everything you need to know about the importance and significance of management. The significance of management in business activities is relatively greater.
The inputs of labour, capital and raw material never become productive without the catalyst of management. It is now widely recognized that management is an important factor of growth of any country.
Management is essential wherever group efforts are required to be directed towards achievement of common goals. In this management conscious age, the significance of management can hardly be overemphasized. It is said that, anything minus management amounts to nothing.
Koontz and O’ Donnel have rightly observed “there is no more important area of human activity than management since its task is that of getting things done through others.”
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The importance of management includes:-
1. Optimum Utilization of Resources 2. Economic Growth 3. Achievement of Group-Goals 4. Fulfillment of Social Obligations 5. Meet the Challenges of Change 6. Human Development 7. Stability
8. Sound Organization Structure 9. Optimum Utilization of Resources 10. Minimization of Cost 11. Change and Growth 12. Efficient and Smooth Running of Business 13. Higher Profits 14. Provide Innovation and a Few Others.
Learn about the Importance and Significance of Management in Modern Business
Importance of Management – With Significance
Management is a must for every enterprise. The existence of management ensures proper functioning and running of an enterprise. Management can plan the activities to achieve the objectives and utilise the available resources at minimum cost.
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Every business needs a direction. This direction is given by the management. The resources of production are converted into production. The resources will remain as resources in the absence of management. The conversion process is performed through the coordination of management.
The significance of management is briefly explained below:
1. Management meets the challenge of change – In the modern business world, there are frequent changes. The changes place the business in a dangerous position. Only an efficient management can save the business from the dangers brought in by the challenges.
2. Accomplishment of group goals – The achievement of objectives of a business depends upon three factors. The proper planning of available resources, adjusting possibility of business unit with existing business environment and the quality of decision taken and control made by the business unit are the factors responsible for achieving objectives.
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3. Effective utilisation of business – There are eight M’s in the business. These are said to be man, money, materials, machines, methods, motivation, markets and management. Management is the topmost of all other ‘M’s. Management has control over other remaining ‘M’s.
4. Effective functioning of business – Ability, experience, mutual understanding, coordination, motivation and supervision are some of the factors responsible for the effective functioning of business. Management makes sure that the abilities of workers are properly used and co-operation is obtained with the help of mutual understanding. Besides, management can know the expectation of workers and the expectation is fulfilled through motivation techniques.
5. Resource development – Efficient management is the life boat of any developed business. The resources of the business may be identified and developed by the management. The term ‘resources’ includes men, money, material and machines.
6. Sound organisation structure – Management lays down the foundation for sound organisation structure. Sound organisation structure clearly defines the authority and responsibility relationship – who is responsible to whom, who will command whom and who is responsible for what. Care is taken in appointing qualified persons to the right job by the management.
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7. Management directs the organisation – The human mind directs and controls the functioning of human body. Similarly, the management directs and controls the functioning of an organisation.
8. Integrates various interests – Each person has his own interests. These interests are different in nature. Management takes steps to integrate various interests to achieve the objectives of an organisation.
9. Stability – The fluctuations of business are stabilised by the management. The fluctuations of business are caused by the changing policy of the government, pressures on the part of competitors and changing preferences of customers. The efficient management can run the business as per the policy framed by the government, face the competitors in the market and produce the articles as per the preferences of customers.
10. Innovation – New ideas are developed by the management and implemented in the organisation. Better performance is achieved through new ideas.
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11. Co-Ordination and team-spirit – All the activities of business are grouped department-wise. Management co-ordinates the activities of different departments and establishes team-spirit to achieve the objectives.
12. Tackling problems – Good Management acts as a friend or a guide of workers while tackling problems. When workers get over confidence of solving the problems for effective performance of a job, they fail in tackling the problems efficiently.
13. A tool for personality development – Management gives direction to workers for effective performance of a job. Besides, new methods or techniques are taught to workers. The training facilities are arranged by the management. In this way, management is a tool to develop the personality of workers to raise their efficiency and productivity ability.
Importance of Management – Optimum Utilization of Resources, Economic Growth, Achievement of Group-Goals, Fulfillment of Social Obligations and a Few Others
Competence and character of management are two gradients on which the survival and growth of an organization depends largely. Management is the process who converts the resources of production into the output. The quality of management ensures the organizational excellence.
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The importance of management is as follows:
1. Optimum Utilization of Resources:
The factors of production are Money, Machine, Material and Men. Management tries to ensure the optimum utilization of these resources with the help of efficient and motivated workers. The efficient training, supervision and inspiring leadership by management ensures the optimum utilization of resources.
The guidance and motivation of workers is ensured by management. Management directs workers to do the jobs in right way. A sprit of mutual cooperation and sense of responsibility is also developed by managers. This ensures the optimum utilization of resources.
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2. Economic Growth:
Economic growth of the Nation’s are ensured by better management practices. Management is the critical ingredient in the Nation’s growth because it provides the plan and strategy to ensure the growth. Management also ensures the supervision, direction and control of the plans and strategies to achieve the goals and objectives. Thus, management is important for the Economic growth.
3. Achievement of Group-Goals:
Management enables an organization to achieve its pre-determined objectives through efficient planning and control. The organizational goals are group goals. The organizational members differ in their, values, qualifications and backgrounds but management maintains unity in such diversity. This unity is maintained by order and coordination to achieve the group-goals.
4. Fulfillment of Social Obligations:
Management also fulfils the social obligations towards different section of society. After monitoring the business environment management makes necessary changes in business policies and practices, so as to keep the workers and customers satisfied. These policies also make the provisions for other section of society. In this manner management fulfill its obligations towards different section of society.
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5. Meet the Challenges of Change:
Management makes an organization able to meet the challenges of change. The environment of business become very dynamic and the organization faces challenges every day. Management maintains a dynamic equilibrium through innovation and creativity between an organization and its environment.
6. Human Development:
Management is not only an activity or process but the development of men. Managerial activities are helpful to improve the personality and caliber of people to raise their efficiency and productivity. A good manager provides the vision and confidence to his subordinates. Such practices ensure the Human development.
7. Stability:
Not only is the survival of an organization but, growth and stability in a fast changing environment ensured by the management. Team spirit amongst personnel and coordination between the activities of different department in an organization enhances the stability. The management direct control the organization to keep it on right track of stability.
Importance of Management – Achievement of Group Goals, Sound Organization Structure, Optimum Utilization of Resources, Minimization of Cost and a Few Others
Management is concerned with attaining maximum success with a minimum effort. Management is essential wherever group efforts are required to be directed towards achievement of common goals. In this management conscious age, the significance of management can hardly be overemphasized. It is said that, anything minus management amounts to nothing. Koontz and O’ Donnel have rightly observed “there is no more important area of human activity than management since its task is that of getting things done through others.”
The significance of management in business activities is relatively greater. The inputs of labour, capital and raw material never become productive without the catalyst of management.
It is now widely recognized that management is an important factor of growth of any country.
The following points further highlight the importance of management:
Importance # 1. Achievements of Group Goals:
Management makes group efforts more effective. The group as a whole cannot realize its objectives unless and until there is mutual cooperation and coordination among the members of the group. Management creates teamwork and team spirit in an organization by developing a sound organization structure. It brings the human and material resources together and motivates the people for the achievement of the goals of the organization.
Importance # 2. Sound Organization Structure:
Management establishes proper organization structure and avoids conflict between the superiors and subordinates. This helps in the development of spirit of cooperation and mutual understanding, and a congenial environment is provided in the organization.
Importance # 3. Optimum Utilization of Resources:
Management always concentrates on achieving the objectives of the enterprise. The available resources of production are put to use in such a way that all sort of wastage and inefficiencies are reduced to a minimum. Workers are motivated to put in their best performance by the inspiring leadership. Managers create and maintain an environment conducive to highest efficiency and performance. Through the optimum use of available resources, management accelerates the process of economic growth.
Importance # 4. Minimization of Cost:
In the modern era of intense competition, every business enterprise must minimize the cost of production and distribution. Only those concerns can survive in the market, which can produce goods of better quality at the minimum cost. A study of the principles of management helps in knowing certain techniques used for reducing costs. These techniques are production control, budgetary control, cost control, financial control, material control, etc.
Importance # 5. Change and Growth:
A business enterprise operates in a constantly changing environment. Changes in business environment create uncertainties and risk and also produce opportunities for growth. An enterprise has to change and adjust itself in the ever-changing environment. Sound management moulds not only the enterprise but also alters the environment itself to ensure the success of the business. Many of the giant business corporations of today had a humble beginning and grew continuously through effective management.
Importance # 6. Efficient and Smooth Running of Business:
Management ensures efficient and smooth running of business, through better planning, sound organization and effective control of the various factors of production.
Importance # 7. Higher Profits:
Profits can be enhanced in any enterprise either by increasing the sales revenue or reducing costs. To increase the sales revenue is beyond the control of an enterprise. Management by decreasing costs increases its profits and thus provides opportunities for future growth and development.
Importance # 8. Provide Innovation:
Management gives new ideas, imagination and visions to an enterprise.
Importance # 9. Social Benefits:
Management is useful not only to the business firms but to the society as a whole. It improves the standard of living of the people through higher production and more efficient use of scarce resources. By establishing cordial relations between different social groups, management promotes peace and prosperity in society.
Importance # 10. Useful for Developing Countries:
Management has to play a more important role in developing countries, like India. In such countries, the productivity is low and the resources are limited. It has been rightly observed, “There are no under-developed countries. They are only under-managed ones”.
Importance of Management – 6 Reasons why Management is Viewed as a Very Significant Tool
Management is viewed as a very significant tool for the following reasons:
1. It Facilitates the Achievement of Goals through Limited Resources:
An organisation, if well managed, can accomplish its goals even though its resources are limited. The resources are scarce, and hence, they have to be effectively allocated and utilised in an optimum manner. This is possible only through management.
2. It Ensures Smooth Sailing in Case of Difficulties:
Manager guides the organisation, especially in trouble. As long as things go normal, that is, everybody is doing his/her own function diligently; they may not feel the need for a manager. In case of a crisis, it is the manager who ensures a smooth sailing. How does he do this? He anticipates and makes necessary changes in the organisation to achieve the targeted results.
3. It Ensures Continuity in the Organisation:
Continuity is very important in the organisations. Where there are no proper guidelines for decision-making continuity cannot be guaranteed. It is quite natural that new people join while some others retire or leave the organisation. It is only management that keeps the organisation continuing.
Modern organisations are based on systems and procedures. Thus, continuity is ensured. Organisations do not just collapse when some key people leave them. Yes, there could be a change in the focus or priorities in the organisation.
4. It Ensures Economy and Efficiency:
Without managers, it may be difficult to get the job performed efficiently. It is the manager who plans, coordinates, and monitors the progress of work and suggests whether the work is satisfactorily done or not. In case of shortfall, it is the manager who helps the employees to perform better. Thus, organisational costs can be minimised through sound management practices.
5. It Focuses on Group Efforts:
If each individual is allowed to plan and organise independently of what others are doing, there will be nothing but chaos. Therefore, management is needed to guide and direct group efforts.
6. It is the Key to the Economic Growth:
Efficient management is equally important for the nation in terms of social and economic development. The economic development of a country largely depends on the quality of management of its resources. Capital investment or latest technology alone cannot lead the nation to economic growth.
The wealth and production resources in the country also have to be managed efficiently. By producing wealth, managers facilitate the increase in national income, and thus, the living standard of the people. Management is, thus, the key to the economic growth.
Importance of Management – Helps in Achieving Group Goals, Increases Efficiency, Creates a Dynamic Organisation, Helps in Achieving Personal Objectives and a Few Others
By now, all of you must have realized that management has a great role to play while achieving the business objectives and goals. An organisation may have appropriate resources and efficient work force but if they are not properly managed and directed it would be impossible to meet business goals.
The way a teacher through her interesting way of teaching makes a child a learner, same way management converts opportunities into business. It is the effective and efficient management which can convert resources into production and ultimately into profits.
Let us understand the importance of management in the success of a business enterprise:
1. Management Helps in Achieving Group Goals:
Organisation sets goals and management accomplishes them. Positive direction of a manager unites the efforts of individuals and helps to achieve the targets effectively and efficiently.
Example – Director of Smriti Lights Mr. Raman has set a target to export 80% of its production capacity. To achieve the target Mr. Raman has to provide opportunities to his sales director to visit overseas markets and in turn, the sales director will prepare the strategies, train, and guide and direct his sales team so that the target is achieved.
2. Management Increases Efficiency:
A manager can maximize the productivity and minimize the cost with better planning, organising, directing, staffing, and controlling business activities. Effective process of management improves efficiency.
Example – The purchase manager of Dayal Medicos does stock taking every week. It helps him to place orders well in advance. This way he is able to save on delivery cost and maintain his stock levels. He is always ready to meet customers’ demand well in time.
3. Management Creates a Dynamic Organisation:
Being dynamic is one of the important functions of management. With the changing business environment, management reviews its goals, changes its business strategies and adopts new technologies. It provides opportunities to its employees to adapt to the changes. A dynamic management is able to maintain competitive edge and meet its customers’ demand at all times.
Example – Ultra-Fast, a Pvt. Ltd. company introduced mobile chargers. Soon they realized that there was tough competition in the market. The production head Mr. Luthra made changes in the basic design and offered them in the form of stuff toys to attract young girls and boys. The sales team focused on selling the product to young generation and in no time, the product became popular. Few changes helped business to earn huge profits. Thus, being dynamic always pays.
4. Management Helps in Achieving Personal Objectives:
A manager’s main aim is to achieve the maximum productivity from his/her team members. A good manager delegates work to his/her team members as per their ability, provides them opportunities for growth and development, recognizes each member’s contribution and motivates them to do their best. He/she ensures that the financial and social needs of individuals are met. A happy, motivated and financially satisfied workforce works with team spirit, cooperation and commitment.
Example – High Spirits Ltd., at the end of each financial year organises a review meet. In this meet, they discuss the next year’s business targets, hold motivational and team building workshops and at the end, they announce awards for the high achievers of the company. Continuous development and recognition motivates workers to perform better.
5. Management Helps in the Development of Society:
Management of an organisation directly and indirectly works towards development of society. While fulfilling the aim of greater profits and bigger market share, it provides good quality products at reasonable prices. Business expansions create employment opportunities, use of latest technology leads to growth and development. Big Business enterprises also divert share of their profits towards social causes like education, medical services, child care etc.
Example – Azim Premji chairman of Wipro runs Azim Premji Foundation a non-profit organisation with an aim to provide quality and equity of education in India.
Importance of Management – As Stated by Franklin, Harbison and Myers
Modern era is of knowledge explosion and Technology improvisation. This is, naturally, adopted by business, industry and all other organisations including Government. Added to this is Globalisation and thereby cut throat competition. This has to be managed efficiently. “Survival of the Fittest” has become a symbol of efficiency.
If new technologies are not adopted by industries, competitive goods, consumer demand globally spread over, automation, computerisation and specialisation have become very important. One cannot eliminate the behavioural psychology of human element involved throughout this process. Marketing of the consumer goods has also become very complex. Therefore it will not be exaggeration if we say that complexity at all levels of business, industry and any other field has become their characteristic.
Naturally, one, who is at the helm of the situation and who is responsible to look after efficient and profitable conduct of all operation in business, industry or elsewhere, must be efficient and profitable conduct of all operations in business, industry or elsewhere, must be efficient and intelligent enough to pave a smooth way through this specialised but complex and ticklish situation.
Person or group of persons responsible for this is “Manager” and all his activities towards fulfillment of predetermined goals taken together is “Management.” In this discussion lies the importance, role and scope of “Management.” A Government and /or any organisation without good and efficient management is a structure build on hollow foundation.
In short, management is an essential accompaniment of all social organisations and it is to be found everywhere as a distinct, separate and dominant activity.
Importance of management in developing, under developing and underdeveloped countries is more. Only the experienced, capable and efficient managers would be able to shoulder the responsibilities of future. Increased productivity and output is the goal of countries like ours having mixed economy. Developing country like India and others have a dream of higher productivity.
Management organises the factors of production for better performance, greater productivity and increased supply of goods as well as services. Indirectly it gives a helping hand to the development of society and better welfare of the public. It is by efficient management that limited resources can be utilised more effectively to meet the demands of growing population.
During the last three decades countries like US and Canada doubled their industrial output and increased their agricultural production by 50%, through application of better technology and introduction of new managerial methods. There are a number of instances in the history of industrial development in which managers with outstanding abilities had revolutionised the conditions of business firms and made them prosperous.
The higher the degree of managerial skill, the faster will be the economic growth. Management is the one and perhaps the only resource of production which generates life and momentum in the enterprises as a whole and makes its impact by improving the competitive position and the scale in operation. It helps to manufacture better production at reasonable cost and enables to bring greater returns to shareholders and the society.
The role of management has been pin-pointed by Franklin more in the following words:
“We look to the managers of our business companies to make most of the changes which are to improve our well-being, we expect management to preserve and add to the nation’s supply of capital, industrial know-how and productive capacity. We expect management to increase the nation’s supply of goods and services, year by year and to maintain widespread employment, good wages so that all of us will have jobs and more and more leisure, more conveniences and less drudgery.”
And how is management to produce more goods? By getting rid of all kinds of waste, by becoming ever more efficient, by making products with fewer manicure by bringing out new products and by getting products distributed to customers at reasonable price.
Harbison and Myers have analysed this role from three aspects:
1. An economic resource
2. A system of authority and
3. A class or an elite.
Management is itself an economic resource or a factor of production and as such it is similar to capital, labour or natural resources. Managerial skill like capital must be acquired and effectively employed or invested in productive capacity. Capital-intensive industrial development is inconceivable without talented manpower. In many instances management is even more critical factor in industrialisation than capital and almost more essential to development than either labour or natural resource.
Management is a “system of authority” It is ineffective as a resource unless it can operate effectively as a “system of authority” in industrial society. Within the managerial hierarchy itself there are lines of command and patterns of authority at all levels of decision-making. In a very real sense, management is a rule making and rule-enforcing body. The exercise of authority by it is indispensable to industrial development. Management is a class or an elite.
In any industrial society the members of management are a small in number but are usually aggressive minority. In varying degrees indifferent countries they enjoy a measure of prestige, privilege and power as an elite. This particular perspective has also been prominently emphasized by James Burnham in the managerial revolution (1941). According to him, capitalist, society is undergoing rapid transformation.
The actual managers are not the capitalist, within the new social structures a different social groups or class the managers will be the dominant or ruling class. Co-ordination of human effort for better production is another important contribution of management. It does this by adopting practices and procedures through which the rewards of labour can be increased without reducing the returns of risk-taking enterprise.
Management is not just building factories, dams or highways, employing skilled workmen, training supervisors or using mechanical devices. It is also playing with the aspirations, feelings and reactions of people and getting more work from them through willing effort. There cannot be any impressive improvement of industry or agriculture without the motivation or greater productivity or workers engaged in it.
Drucker has gone a step ahead. He regards management not merely as a basic institution, a dealing group but as link with the survival of Western Civilization. “Management “, he wrote, “is not only grounded in the nature of the industrial system and in the heads of the modern business enterprise to which an industrial system must entrust its productive resources both human and material. Management also expresses basic beliefs of modern western society. It expresses the belief that economic changes can be made the most powerful engine for human betterment and social justice. Management reflects the basic spirit of the modern age. It is in fact indispensable.” (Management organisation and practice – by Harper and Row)
Importance of Management – Development of Resources, Directs the Organisation, Provides Stability, Innovation, Tackles Business Problem and a Few Others
Proper outcome of all the management areas and their functions can lead the organisation to the Everest of all round success.
Following points will elaborate the importance:
Importance # 1. Management Meets the Challenges of Change:
In the era of globalisation, liberalisation, computerisation, privatisation multinationals, fast and growing changes are taking place. In recent years the challenge of change has become intense and critical. This challenge of changes can be met by professional and efficient management only. Complexities of modern business can be overcome only by scientific management.
Importance # 2. Effective, Efficient and Profitable Utilisation of the Seven M’s:
In this era two M’s (Methods, Markets,) are added to traditional M’s i.e. men, materials, money, machines and management. Among all these seven, management stands at the top. It determines and controls all other factors of business, and manages them for achieving the predetermined objectives and goals of the organisation.
Importance # 3. Development of Resources:
Good management always tries for development of other resources. It produces good business by creating a vital, dynamic and life giving force in the organisation.
Importance # 4. Management Directs the Organisation:
Role of management as a director is very important. For instance, mind directs and controls the body to fulfill its desires, like wise management directs and controls all the organs of organisation to achieve the desired goals.
Importance # 5. Management Integrates Various Interests:
Business organisation activities are carried out by working groups, involving a number of individuals. There are various interest groups and they put pressure over other groups for maximum share in the total output. Management balances these pressures and integrates various interests.
Interest of the business organisation and that of the individuals is integrated by the management in such a way, that interests of both the parties are achieved. As a result both the parties are satisfied and work together happily in the organisation.
Importance # 6. Management Provides Stability:
Smooth and continuous running of business organisation depends upon the efficiency of management. Degree of stability of any organisation is positively correlated with the degree of efficiency shown and adopted by the management. It is necessary to change and modify the resource in accordance with the changing environment of the society.
If the business enterprises do not change according to the changing environment, their stability may be in danger.
Importance # 7. Management Provides Innovation:
Innovation is a must for business and industry. Otherwise it becomes rigid and outdated. Innovation requires new ideas, improved or new suggestions, new dimension, new vision, excellent imagination etc. All this is provided by management, which makes the business and industry modern, live and dynamic.
Importance # 8. Management Provides Co-Ordination Establishes Team Spirit:
In an organisation, different activities are performed by different departments. A large number of activities are going on continuously and / or simultaneously in a business enterprise. The management only, has to coordinate all these activities and establish team-spirit among the working groups. Coordination in activities, maintaining and establishing team spirit, is a great task to be done by management alone.
Importance # 9. Management Tackles Business Problems:
Management is the only instrument with the enterprise to tackle all sorts of problems of business enterprises. Management possesses the skill for tackling the variety of problems. It very well knows how to face the critical problems of the organisation like competition of technology, problem of marketing, problem of human resources, physical resources, and financial resources and so on. It provides a tool for the best way of doing a task.
Importance # 10. Management is a Tool of Personality Development:
Management attempts to improve the personality of personnel. Management is not only for the things but the development of men also. Management is always searching new ways and means for developing the personality of the employees. It tries to develop all-round personality of employees through education training. It also attempts how to raise their efficiency and productivity. Management contribution in personality development of employees is indispensable.
Importance of Management in India’s Developing Economy:
Our country is a developing country. Role of management in such situations and circumstances is very important. Total economics of a nation depends upon how the managers are giving their honest and loyal contribution for it. We have a small number of managers. Added to this is scarcity of professional managers as well as experienced managers. There is a great demand for professional managers, business executives to successfully run business enterprises.
History of business reveals the fact that the complexity and sophistication of a business need professional management. There is a direct co-relation between the sophistication of business / industry and the kind of management needed. For fast development of economy after industrial revolution, we are required to establish industries like machines, tools equipments, electronics, engineering petrochemicals, chemicals, iron and steel, pharmaceuticals, cement, fertilisers, computers, etc. and to manage these industries we need the managers with the ability to manage them successfully.
These managers must have the knowledge of technical and scientific know-how, professional and administrative competence and dynamic personality. It is universally admitted that scientific training can build good managers. The managerial skills have to be acquired by training and education and the scientific managerial approach calls for initiative, entrepreneurship, goal setting drive and dynamism.
Professional managers must have necessary training and ability to spot the problem areas and bring in together all the diffused talents of the various technical and professional experts such as engineers, scientists, economists’ psychologists, and sociologists etc. to tackle the problem spots with confidence. If business administration and management is founded upon a science, if its practice is a profession, then in the near future we must expect its exponents to be men of high ability and perfect knowledge.
Men who have graduated in their profession and are qualified thereby be entrusted with the responsibilities which its practice imposes. Thorough knowledge of the principles, and practice of business administration is needed for developing more good managers. Thus in short management is an essential accompaniment of all social organisations and it is to be found everywhere as a distinct, separate and dominant activity. Management is the custodian of the economic welfare of the community.
Importance of Management – Helps in Achieving Group Goals, Reduces Costs, Establishes Sound Organisation, Optimum Utilization of Resources and a Few Others
The importance of management has increased tremendously in recent years due to increase in the size and complexity of organizations, turbulent environment and growing responsibilities of business.
The following points discussed below bring out the importance of management:
1. It Helps in Achieving Group Goals:
Management directs group efforts towards achievement of pre-determined goals. By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and controlled in such a manner that enterprise work towards attainment of goals.
2. Reduces Costs:
It gets maximum output by using minimum input by proper planning. Management uses physical, human and financial resources in such a manner which results in best combination. This results in cost reduction.
3. Establishes Sound Organization:
No overlapping of efforts (smooth and coordinated functions). Management it establishes effective authority and responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors and who are subordinates. Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to everyone.
4. Optimum Utilization of Resources:
Management utilizes all the physical and human resources productively. This leads to efficacy in management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of various uses. It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids wastage.
5. Essentials for Prosperity of Society:
Efficient management leads to better economical production which helps in turn to increase the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches beneficial for society.
6. Establishes Equilibrium:
It enables the organization to survive in changing environment. It keeps in touch with the changing environment. With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing demand of market/changing needs of societies. It is responsible for growth and survival of organization.
Importance of Management – Accomplishment of Goals, Effective Utilisation of Resources, Sound Organisation, Providing Vision and Foresight and a Few Others
1. Accomplishment of Goals – It is the management which determines the goals of the organisation and of various departments and functional groups. The goals are communicated to the employees to seek their cooperation. All organisational activities are directed towards the organisational objectives. Clear-cut definition of goals is essential for the success of any organisation.
2. Effective Utilisation of Resources – Management ensures optimum utilisation of resources. Through planning and organisation, management eliminates all types of wastages and achieves efficiency in all business operations. Management motivates workers to put in their best performance. This would lead to the effective working of the business.
3. Sound Organisation – Management establishes sound organisation for the accomplishment of the desired objectives. It clarifies authority responsibility relationships among various positions in the enterprise. It fills various positions with persons having the right qualifications and training. Management also provides the workers with proper environment and encourages the spirit of cooperation.
4. Providing Vision and Foresight – Management keeps itself in touch with the external environment and supplies vision and foresight to the enterprise. It helps in predicting what is going to happen in future which will influence the working of the enterprise. It also takes steps to ensure that the enterprise is able to meet the demands of changing environment.
5. Harmony in Work – In an organisation employees come from different backgrounds, they have different attitudes and different styles of working and if everyone start following his own style, it can lead to chaos and confusion in the organisation. By giving directions managers bring uniformity and harmony in the action of employees.
6. Helping the Employees in Achieving Personal Objectives – Every 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 management helps individuals to develop team spirit, cooperation and commitment to group success.
7. Development of Society and Nation – Management plays a pivotal and crucial role in economic and social development of a country. The development of a country lies on the quality of management and available resources. Management can increase the national income and standard of living of the people by producing maximum cost. Thus management is important at national level and is regarded as a key for the economic growth of a country.
Importance of Management – In an Organization
(1) Management Turns Organization Resources into Production Engine:
No business runs on itself, even on momentum. Every employee of an organization needs continuing stimulus and it can only be provided by management. Thus, management motivates human resources of organization to make them operate inanimate physical and financial resources and convert them into engine of growth and development. Without it, the resources will merely remain resources and not become production.
(2) Management Helps Create Sound Organization Structure:
Management is instrumental in setting up a sound organization structure to help accomplishment of organizational goals and objectives. It establishes a pattern of authority-responsibility relationships— which position will command and control which resources, and which positions will be accountable for doing what, and when.
It then fills these positions with the right people, properly qualified and trained, and monitors their individual performance, even replacing those whose performance is not found to be up to the standard.
But even the best organization structure and the most skilled and able personnel may remain idle if there is no proper environment to work. Management provides them with just such an environment. It encourages the spirit of co-operation, fellow-feeling and mutual understanding among workers. This breeds a sense of responsibility among workers who work on their own, and do not need someone else to force them to work.
(3) Management Helps Accomplishment of Group Goals:
Management converts diverse resources—workers, materials, machines, money, time and space—into means of production of socially useful goods and services at affordable price. To be able to do this, it has to act on three fronts-
First, it must do sound resource planning; it must accurately estimate the present and future availability of human, financial and physical resources. Second, it should be ready to adjust and adapt to changes in external environment. In early nineties, for example, there was significant change in government’s economic policy.
The government adopted neo-liberal policies, and globalization, liberalization and privatization became buzz words. Open invitation to foreign investors to produce goods and services in India made it necessary for Indian companies to match the quality, price and ‘after-sale service’ standards of foreign companies. Most of them did it creditably; they met the change by adjusting and adapting to changed conditions.
For example, earlier one had to wait for years to get delivery of car; today the customer is spoilt for choice and his/her favorite car is just one phone-call away. Another example, there were few institutions earlier offering home-loans; for public sector banks it was a firm ‘no-no’; and it was a tough job getting loan from a few that did lend. Today, there are several lenders, including public-sector banks, falling over one another to lure home-buyers with offers of easy home loans.
Third, management provides effective direction and control of day-to-day activities and operations. This ensures efficiency everywhere and also enables quick modification or alteration of a policy or program, if any shortcoming or weakness is noticed anywhere.
(4) Management Helps Efficient Performance of Operations:
Efficiency of an organization will depend on alert supervision and attractive incentives to superiors and subordinates at all levels—competitive wages and perks, job security, stability, and limitless opportunities for growth. Leadership is the most important function of management at all levels. It means influencing each subordinate’s work behavior and motivating him to efficiently perform the tasks assigned to him.
It does so by- (a) Explaining to him the purpose behind organizational objectives and why it is necessary to achieve them; (b) Clarifying the duties assigned to him; (c) Urging him to treat his duties as a challenge, aiming to make him ego-involved, rather than merely task-involved, which would motivate him to give his all to his performance; and (d) Providing him regular feedback and suggesting to him how he could avoid shortcomings and make his performance still better.
And yes, the superior at every level should lead his subordinates from the front, sometimes himself performing their duties to set an example before them.
Importance of Management – Importance to the Organization and the Economy
The importance of management can be discussed under two heads viz.:
(I) Importance to the organization, and
(II) Importance to the economy.
(I) Importance to the Organization:
1. Goal Accomplishment:
All establishments are goal driven. A team of managers drive the organization towards the goals. Without applying management concepts, goal accomplishment of any organization will be only a figment of imagination.
2. Resources Mobilization:
The second important managerial function namely resource mobilisation enables the organization to assemble men, money, material and technology. The process of determining the total activities, grouping them on a logical basis, determining a structure to execute work, manning the structure with people, and granting authority and fixing responsibility are all done under organizing function of management. Without organization, no resources mobilization is possible.
3. Systematic Approach to Work:
Under planning function, the entire blueprint of an action to be undertaken is drawn. Meticulous planning avoids last minute rush, chaos, confusion and disorderliness in the organization. The various forms of plan i.e., policies, procedures, rules, budgets, programmes, schedules, etc., provide a sound basis for any action.
4. Division of Work:
The process of departmentation in terms of specialisation facilities, greater productivity, creation of expertise, higher accountability, healthy competition, efficient use of resources etc., are among the various divisions of an organization.
5. Engagement of Right Person:
The function of staffing enables an organization to identify and persuade the potential candidates to apply for a job vacancy. The various types of selection tests help the organization to filter out die right personnel for the right job. The preparation of job description, and job specification provides clarity to the job incumbent as to job performance.
6. Human Resources Development:
Employees are exposed to the latest development in their respective fields and their skill competence and capability, are updated in response to changes in different areas of specialization under staffing functioning. Employees across the levels are periodically appraised for various awards, promotion and remedial training.
7. Motivation of Employees:
The morale and motivation of employees are kept at a high plane through directing function. The employees are provided various monetary and non-monetary incentives to keep up their commitment level at a high plane.
8. Communication:
One of the important roles of management is to keep the flow of communication going horizontally, vertically and diagonally so as to elicit right action to accomplish the goals of the organization.
9. Leadership:
Managers across the levels influence the subordinates in such a way that they come forward to accomplish the goals.
10. Control Function:
This function of management makes it possible to verify whether all actions and operations aimed at goal accomplishment are proceeding as per the planned schedule. If there is any shortfall in the performance, corrective actions can be taken.
11. Integration of Diverse Functions:
This function of management empowers it to mobilize the divergent functional performance and systematically directs it towards the accomplishment of overall goals of an organization. This function aids in various departments working in close coordination with one another in attaining the overall goals of the organization.
(II) Importance to Economy:
i. Efficient utilization of resources – Resources available in the economy are effectively and efficiently harnessed by application of management concepts.
ii. Wealth creation – Managers who are regarded as captains of an enterprise, create tangible wealth for the nation in the form of goals and services and other resources.
iii. Healthy competition – The successful application of management concepts aid in professionalizing the operations of business enterprise and it promotes healthy competition among them thereby, benefiting the final consumers.
iv. Improving standard of living of people – Application of management concepts facilitates saving in material and labour cost. This makes the product cost effective. It reduces cost of goods. All these positive aspects improve the standard of living of the people.
v. Generation of employment opportunity – Manager’s undying quest for growth and development of an organization generates employment opportunities to people.
Importance of Management – With Significance: Determination and Attainment of Objectives, Integration of Physical and Human Resources and a Few Others
Management is regarded as a prime mover of an organization and a critical variable for its survival, growth, prosperity and development. Managers can act as catalyst to make productive use of various resources for the accomplishment of organizational objectives. Managers provide the life force and make the organization a productive unit.
Management force is used for directing and coordinating activities of the members effectively and efficiently. The survival and stability of an organization depends largely on the competence and character of its management. Only management employs the human and other resources according to the priority of the organization, and achieves the stated objective effectively.
The significance of the management will be clearer by going through the following points:
(i) Determination and Attainment of Objectives:
The goals and objectives are determined by the management. No organization can succeed in its mission unless its objectives are identified and well-defined. Management enables an enterprise to achieve its desired objectives through proper planning and control. It decides what should be done and how.
Management maintains order and coordination and without it there will be chaos. Management facilitates an efficient accomplishment of pre-determined goals. Activities and functions performed by various individuals are properly directed and coordinated towards the goals by managers.
(ii) Integration of Physical and Human Resources:
Management integrates physical and human resources for realizing objectives. An effective and optimum utilization of resources can be secured by applying managerial knowledge. Management continuously strives for reducing inefficiency, wastage and spoilage in the use of resources, through enhancing productivity.
Professional managers can ensure the efficient use of resources to increase the productivity. Managers guide and motivate workers towards best performance. They tell workers what to do and how to do their jobs.
(iii) Maintain Stability and Growth:
Management remains a critical variable in an organization because survival, profitability and growth of an organization, to a large extent, depend on professional approach and abilities of managers. Management is the catalyst of economic growth and stability. Management is the mover and development is the consequence. Management maintains stability in the organization and works as a catalyst for growth and development.
(iv) Meeting Challenges:
Management finds the way to face the challenges and changes which have been faced by every organization. Management keeps itself in touch with the current environment and supplies foresight to the enterprise. Management helps in prediction of future, what is going to happen? And what type of strategies the organization should have been taken up? It takes steps to ensure how organization is able to meet the challenge easily, Management maintains equilibrium.
(v) Fulfillment of Social Obligation:
It is the responsibility of business also to fulfill obligation of its part. Management is also aware of the social-responsibility of the organization. Management monitors the environment and makes necessary changes in business policy and practices, so as to keep the customers and workers satisfied. Management helps to fulfill its obligation towards different sections of the society.
(vi) Other Factors:
Management became more important to handle the activities of the organization more carefully.
One can analyze the importance of management from the following factors also:
(a) Liberalization of the industrial environment,
(b) Specialization of jobs,
(c) Focus on research and development,
(d) Expectation of society,
(e) Consumer orientation,
(f) Uncertain business environment,
(g) Competition,
(h) Entrance of new technology,
(i) Complexity of organizations,
(j) Utilization of resources, and
(k) Changing facts of business.
Managers are charged with the responsibility of taking actions that will make it possible for individuals to make their best contribution to group objectives. The growth of the organization depends upon the viability of the resources used efficiently through management.
Management clearly outlines the objectives of the organization and at last management makes the effort to achieve the pre-determined objective. It is only the management who does everything for the attainment of stated objectives.