Welcome dear students! Today we are going to learn about Management_of_Business from Class 9 Social_Science. In this chapter, we will explore the meaning of management, the principles of management, the importance and process of decision making, and the functional areas of management. Let us begin by understanding the core concept of this chapter.
Generally, the term management refers to the principles of managing the activities of an enterprise. It is also used to refer to a field of learning or a branch of knowledge. In the words of J.L. Haynes, Management is an art of getting things done through other people. It is the process of getting pre-determined things done through others by directing their efforts in an integrated and co-ordinated objectives of business. Management is the sum total of the principle functions namely Planning, Organising, Staffing, Directing, Co-ordinating and Controlling. Note this definition carefully for your examinations.
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Now let us move on to the principles that guide effective management. For smooth and efficient management of a business concern, certain principles are necessary to be followed. The following fourteen principles are suggested by Henry Fayol. First is Division of Work. Work has to be divided among the employees. The division of work leads to specialization and efficiency. It minimizes the wastage and maximises the production and profit. This principle can be adopted at all levels of the organisation. Second is Authority and Responsibility. This principle refers to the authority and responsibility, which are the combination of official authority and personal responsibility. Both are compounded with intelligence, experience, past experience, moral worth and so on. Third is Discipline. This principle refers to the managerial authority and constructive discipline among the officials and subordinates at all levels. It guarantees the fulfillment of objectives set by the management. The discipline required by the superiors should be clear and fair. It also includes the judicious application of penalties.
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Fourth is Unity of Command. This is the principle that an employee should receive orders from one superior only. Fifth is Unity of Direction. This principle means that each group of activities, having the same objective must have one head and one plan. Sixth is Sub-ordination of Individual Interest to General Interest. This principle tells that the management should minimize the individual differences and should not allow differences to block the fulfillment of general goals of the organisation. Seventh is Remuneration of Personnel. The remuneration and methods of payment should be fair and afford to maximum satisfaction to the employees. Eighth is Centralisation. This principle refers to the extent to which authority is concentrated, so that it gives the overall yields. Ninth is Scalar Chain. This principle means that every enterprise should have graded authority or superior-subordinate relationship. The range of authority and responsibility of superiors in relation to the subordinates at various levels should be clearly defined.
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Tenth is Order. According to this principle human and material resources must be in the right place at the right time. Eleventh is Equity. It means that there must be fair dealing, accommodation or co-operative attitude among the common employees and managers. Twelfth is Stability of Security to Personnel. The management must assure security of job to the personnel. Instability of job has both cause and effect of the bad management. The quick labour turnover will result in bad management. Thirteenth is Initiative. The initiative is one of the keen satisfactions. The management should have the capacity to think out original plans and execute them with full discretion. Fourteenth is Esprit de Corps. It is based on the principle Unity is strength. It emphasizes the need for team work and importance of communication in obtaining it. Memorize these fourteen principles thoroughly as they form the foundation of business management.
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Next, we will study Decision Making and its process. Decision making is the mental process, of selecting a course of action among several activities. Each business organisation has its own goals and objectives. In order to achieve these objectives and goals the business organisation has to take decision. There are number of choices available even in a small matter. Suppose a businessman has to transport goods, he has to take a decision about the mode of transportation, whether to send the goods through a truck, tempo, train or by air. He has to choose one among the several alternatives and that alternative should be best suited and economical. It is based on the decision which the businessman has taken. Thus the decision making plays a very significant role in the business. Today India has a very diverse set of successful business institutions. In the coming years India will probably deliver more premium to a combination of institutional planning with analysed decision taking styles and organizational cultures. It may operate from one end of the spectrum to the other end.
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Decision making can be broadly divided into two types. They are individual decisions and group decisions. In small business organisations like sole trading concerns, it is the individual who takes the decision. They are called individual decisions. These decisions are based on the capability of the individual. Decision making by a group of people as in the case of Partnership firms and Board of Directors as in the case of Joint Stock Companies or Co-operative Societies are called Group decisions. Here, a number of people take part in taking a decision. Decision making solves many problems in the business organisation. While an appropriate decision can bring profit to the organisation, a wrong decision can result in loss. The following points are to be kept in mind while making decisions. They are time factor, experience, wise decision which means wisdom, firmness, boldness and clarity. Solving a problem is directly linked with decision. The following factors are to be kept in mind while taking decisions. They are analysing the problem, planning of course of action, maintaining courage and patience, farsightedness, and ability to take quick and wise decision.
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Now let us examine the functional areas of management. Management is concerned with getting things done through the efforts of others. To get the work done through others, the management has to undertake a number of activities in a systematic manner. These systematic activities are called managerial functions. The managerial functions may be classified into different areas. Some of them are Planning, Organising, Staffing, Directing, Co-ordinating and Controlling. First is Planning. It is one of the important functional areas of management. It involves the future course of operation for a given period. The process of planning includes determination of organizational objective and formulation of plans, policies, strategies, programmes, procedures and schedules. Second is Organising. It is the process of bringing together the man power and material resources. Some of the material resources are machines and materials. Putting the material resources and man power together into working order to achieve the objectives is the main purpose of the organizing area of managerial function.
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Third is Staffing. It is the function concerned with the recruitment, selection, placement, training, growth and development of all members of the organization. Fourth is Directing. It is the area of functional management where instructing, guiding, supervising and leading the people of an organization towards accomplishment of the organizational goals. Fifth is Co-ordination. It is the harmonious blending of the activities of the different departments for the achievement of the desired goals. Sixth is Controlling. The main objectives of controlling area are to create an atmosphere of order and discipline in the organization to ensure proper co-ordination of activities, and to ensure confirmation of actual performance with the pre-determined plans. These six areas work together to ensure business success.
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Let us now move to the exercises to reinforce your understanding and prepare for your exams. I will answer each question completely based on the textbook. Exercise One, Answer the following questions in a sentence. Question one, What is management? Answer: Management is an art of getting things done through other people, and it is the process of getting pre-determined things done through others by directing their efforts in an integrated and co-ordinated objectives of business. Question two, What do you mean by decision making? Answer: Decision making is the mental process of selecting a course of action among several activities. Question three, What is individual decision and what is collective decision? Answer: Individual decisions are taken by a single person in small business organisations like sole trading concerns based on individual capability, while collective or group decisions are taken by a group of people as in partnership firms, boards of directors of joint stock companies, or co-operative societies where multiple people participate. Question four, What is the principle of authority and responsibility in principles of management? Answer: The principle of authority and responsibility refers to the combination of official authority and personal responsibility, both compounded with intelligence, experience, past experience, and moral worth.
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Exercise Two, Answer each of the following questions in about four to five sentences. Question five, What are the principles of management suggested by Henry Fayol? Answer: Henry Fayol suggested fourteen principles: Division of Work, Authority and Responsibility, Discipline, Unity of Command, Unity of Direction, Sub-ordination of Individual Interest to General Interest, Remuneration of Personnel, Centralisation, Scalar Chain, Order, Equity, Stability of Security to Personnel, Initiative, and Esprit de Corps. These principles ensure smooth and efficient management of a business concern. Question six, Which are the functional areas of management? Answer: The functional areas of management are Planning, Organising, Staffing, Directing, Co-ordinating, and Controlling. These systematic activities are undertaken by management to get work done through others in an organized manner. Question seven, Write about the authority and responsibility, scalar chain and centralization in principles of management. Answer: Authority and responsibility refers to the combination of official authority and personal responsibility, compounded with intelligence, experience, and moral worth. Scalar chain means every enterprise should have graded authority or superior-subordinate relationship with clearly defined ranges of authority and responsibility at various levels. Centralisation refers to the extent to which authority is concentrated so that it gives the overall yields.
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Question eight, What is the need for decision making in management of business? Answer: Decision making is needed because every business organisation has its own goals and objectives, and to achieve them, decisions must be taken. There are numerous choices available even in small matters, and selecting the best suited and economical alternative is crucial. Appropriate decisions bring profit while wrong decisions cause loss, making decision making highly significant. Question nine, What are the important elements of decision making? Answer: The important elements to keep in mind while making decisions are the time factor, experience, wise decision or wisdom, firmness, boldness, and clarity. These elements ensure that the chosen course of action is well-considered and effective. Question ten, What factors are to be kept in mind while taking a decision? Answer: The factors to be kept in mind while taking a decision are analysing the problem, planning of course of action, maintaining courage and patience, farsightedness, and the ability to take quick and wise decisions. Solving a problem is directly linked with these decision-making factors.
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Question eleven, What do you mean by planning and organisation in functional areas of management? Answer: Planning is an important functional area that involves determining the future course of operation for a given period, including the determination of organizational objectives and formulation of plans, policies, strategies, programmes, procedures, and schedules. Organising is the process of bringing together manpower and material resources like machines and materials, putting them together into working order to achieve the objectives. Question twelve, How is controlling an important area of managerial function? Answer: Controlling is important because it creates an atmosphere of order and discipline in the organization to ensure proper co-ordination of activities. It also ensures that actual performance matches the pre-determined plans, allowing management to correct deviations and maintain efficiency. Question thirteen, What are the main objectives of controlling areas? Answer: The main objectives of the controlling area are to create an atmosphere of order and discipline in the organization to ensure proper co-ordination of activities, and to ensure confirmation of actual performance with the pre-determined plans. Question fourteen, Directing and co-ordinations are very important functions in business management. How? Answer: Directing is important because it involves instructing, guiding, supervising, and leading people toward accomplishing organizational goals. Co-ordination is vital because it ensures the harmonious blending of activities across different departments to achieve desired goals. Together, they align human efforts and synchronize departmental functions for business success.
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Exercise Three, Activities. Activity one instructs you to meet a sole trader in your area and request him to give you particulars regarding how he takes decisions regarding day to day affairs of his business. You should observe how individual decisions are made based on personal capability, time constraints, and experience in a small enterprise. Activity two instructs you to visit a co-operative society near your place and find out the particulars of the meetings regarding Agenda, Quorum and minutes. You will notice that decision making here is a group process where multiple members participate, following formal procedures to reach collective decisions. Complete these activities to gain practical insight into business management.
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We have now covered the complete chapter on Management of Business, including the meaning and definition, all fourteen principles of Henry Fayol, the process and importance of decision making, the six functional areas of management, and all exercise questions with complete answers. Review these concepts regularly, practice the definitions verbatim, and apply the principles to real-world business scenarios for your examinations. Thank you for listening! Keep revising and practicing. Goodbye! [CHAPTER_COMPLETE]