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Chapter 1 Nature and Significance of Management
‘Management is the art of getting this done through other people’. Explain the importance of management in light of the statement. 5 marks OR Explain the significance of management in running a modern enterprise. 7 marks
Management is very essential for successful running of a business. It ensures proper utilization of physical and human resources and derives best results. It leads to higher productivity and prosperity. The importance of management can be outlined as follows:
i) It helps in achieving group goals Management assembles and coordinates group efforts in achieving organizational goals. It adds effectiveness to the goals of the enterprise.
ii) Optimum utilization of resources Management helps to derive maximum result from minimum resources. In other words it brings out the best out of the available resources. This leads to increased productivity and higher profitability.
iii) Reduces cost Efficiency in utilizing the physical resources directly result in reduced cost. Management prepares the program for utilization of resources and monitors the utilization of such resources. It continuously strives to keep cost under control to generate maximum profit out of it.
iv) Establishes a sound organization Management ensures soundness of the organizational structure. All departments are coordinated to ensure smooth flow of work. It is the function of management to ensure the process of communication, implementation and feed back comes automatically. Thus the organization remains lively, active and efficient.
v) Maintains equilibrium Management maintains the right balances every factor in a business. Application of any factor of production beyond proportion will result in inefficiency. Unused resources put pressure on the available revenue and bring down the overall performance of the organization. It is the management that keeps an eye on the application of resources efficiently in the organization.
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