Importance of Management: An Overview
Management can be defined as the process of designing and nurturing an environment in an organization in which individuals, usually working in a group/groups, accomplish defined objectives efficiently. The functioning and success of an organization depend upon the existence of good management. The management architects the ways to achieve the goals and ultimate optimization of resources at a minimal cost. The following article aims to describe the importance of management, objectives of management in business studies, the answer of ‘explain the importance of management’, aims and objectives of management, and what is the importance of management, etc. in a vivid manner.
What is Meant by Management? Explain the Importance of Management.
Management is the total of all the activities that ensure the smooth and efficient running of a business or non-profit organization. The importance of management is that it arranges all the four factors of production, i.e., men, materials, money, and machines, assembles and organizes them, and effectively integrates them to achieve group goals that are usually pre-determined.
Explain the Importance of Management
To explain the importance of management in the present business scenario, the following points have to be taken into account:
The management coordinates different factors of production in an optimum manner to produce goods or services.
It directs and unifies group efforts towards a common organizational goal.
The managers foster a good organizational climate by establishing an effective grievance handling system, reward system, and problem-solving system, etc.
The ultimate function of the management is to maximize the organization’s profit by reducing the cost of production. This is nothing but productivity enhancement.
It faces competition strategically.
It makes proper use of scientific and technological advancements to devise an appropriate growth strategy for the enterprise.
The management creates and maintains a good organizational structure and adapts to exciting new opportunities from time to time.
It acts as a creative force and adds value to every element of organizational functioning.
Therefore, a dynamic, learning-centric organization is only created with the help of efficient management. All the above points summarized the answer to what is the importance of management.
Management is a wide and endless concept. But, it has some levels which make it even easier to be understood. Below are the different levels of management :
Levels of Management
1. Top Management: It is related to setting basic goals or objectives and Expanding or contracting activities. Top management include Owners, Shareholders, Chief
executives etc.
2. Upper Middle management: It contributes to activities like
Installing different departments
Designing operating policies and routines
Assigning duties to their subordinates
Upper middle management includes Production executives, sales executives, etc.
3. Middle Management: Middle management works on
achieving coordination between different parts of the organization
conducting training for employee development
building an efficient company team spirit
Middle management includes Branch Managers, Superintendent, etc.
4. Lower Management: The role of lower management is to supervise workers, impart instruction and develop/improve work methods operations.
Lower management includes Foramen, Supervisors or charge-hands, etc.
5. Operating Force of Rank and file workmen: Its role is to work independently or under the guidance of a 'supervisor'.
The Operating Force consists of Rank and file workmen, Skilled and Semi-skilled workers, etc.
Along with this, different areas of the management field require differently characterized management. So, management has various characteristics.
Characteristics of Management
Setting goals for organizations and firms
Management is a transformation process
Management is decision making
Management is a profession
Objectives of Management in Business Studies
There is a huge importance of management in business studies. Broadly, the objectives of management in business studies can be divided into three categories- organizational, social, and personal.
Organizational Objectives
To ensure the survival of the organization
Revenue generation
To plan the growth of the organization
Social Objectives
To operate in an environmental-friendly manner
To produce quality goods at reasonable rates
To create employment and generate income
Personal Objectives
Financial requirements
Social requirements
Higher-end requirements or self-development requirement
Overall, management aims to uplift the work quality and utilization of resources and assets in an efficient way to get the maximum output out of it.
Taking a micro view at the objectives of business management, they can be explained as below:
1. Surplus Creation: In the event of production, the management must aim towards surplus creation which then can be used to increase profitability.
2. Optimum Utilisation of Resources: All the resources of an enterprise- men, machines, materials, and money- must be utilized in an economic way to earn profits that are sufficient to fulfil the interest of stakeholders- proprietor, employees, customers, associates, government and society.
3. Market Creation: A stable market has to be created by the organization to sell the produced goods or services.
4. Ensuring the Sustainability of the Business: The business model must be devised in such a way that it can sustain itself on its own. It is then up to the management to plan its growth and long-term profitability.
The other objectives of business management are producing more value for customers by ensuring a regular supply of goods and services, maintaining discipline and morale of the employees, mobilizing the right talent within the organization, improving overall performance, and minimizing all elements of risk.
Styles of Management
Also, different 'styles' of management can also be understood as their types. Management styles are the ways by which a manager works to fulfil the task. Management style can depend on management, industry, country, culture, etc.
Some of the management styles are:
Autocratic management styles follow a one-way approach i.e, 'from bosses to employees. It has some subtypes named authoritative, persuasive, and paternalistic.
Persuasive management style - In this, the manager convinces and motivates the team to work on the plan and makes them believe that the plan is worth working on. In this, there is no order given from the manager or workers. This style is good to build and maintaining trust between the company employees. This style requires good communication skills and convincing ability.
Democratic management styles - In this, the manager motivates and encourages employees or workers to give input during decision-making and planning processes, but the final decision still remains in the hands of the manager. This communication goes both ways, and it increases team comprehensiveness.
Laissez-faire management styles - In this, the staff is trusted to do their work without any supervision, and the decision-making and problem-solving related to their work are done by themselves. Hence, in this style of management, every employee or worker acts as their own manager and manages their work.
Skills Required for Management
Management skills refer to those qualities and abilities that a person should acquire while working for an organization of managing a task.
Some of the common management skills include :
Planning: Planning is the ability to organize an event within a given limit of time and within a given limit of resources or money. Planning consists of understanding the task and setting achievable goals and that too within the deadline.
Communication: Communication means the exchange of thoughts and ideas. Hence, it is a significant part of management because good communication is beneficial for strategy making and planning the tasks.
Decision-making: A good manager should have excellent and bold decision-making skills. It is because management is the core that decides the output or benefit after doing any task. Hence, one should have an intelligent and good decision-making mentality to be a good manager.
Problem-solving ability: While managing a task, things don't work out as planned most of the time. During this course of time, problem-solving skills are a must for being a good manager.
Motivation and good leadership quality
Therefore, management skills are a set of abilities that include delegation, smart working, and punctuality. Management skills make a manager stand out professionally.
Importance of Management in Society
The importance of management in society can be explained by the very fact that society forms the external environment of the enterprise. Therefore, it has certain responsibilities towards it. These are:
Creating employment and generating income
Not causing harm to the environment
Ensuring the upliftment of society by indirectly fostering a learning environment.
Facilitating infrastructure development
Meeting the demands of society by producing value-added products/services
Contributing to the efficiency and reputation of the firm.
Management provides stability in the society by evolving and modifying resources according to change in environmental and social activities.
Management provides efficiency to any process by which a task is done.
The importance of business management in management studies is immense. It furnishes the students with the knowledge of management science and trains them to take critical responsibilities of running a business when they join an organization.
FAQs on Objectives and Importance of Management
1. What are the main objectives of management as per the CBSE syllabus for 2025-26?
According to the syllabus, management has three primary objectives that any organisation must achieve:
- Organisational Objectives: These are focused on the prosperity and growth of the organisation. They include survival (earning enough revenue to cover costs), profit (ensuring a return on investment), and growth (expanding business operations in the long run).
- Social Objectives: This involves the commitment of the business towards society. Key goals include producing quality products at fair prices, using environmentally friendly production methods, and generating employment opportunities.
- Personal Objectives: These relate to satisfying the diverse needs of the employees, such as competitive salaries, a good working environment, peer recognition, and opportunities for personal growth and development.
2. Why is management so important for a business to succeed?
Management is crucial for success because it harmonises individual efforts towards a common goal. Its importance can be seen in several ways:
- It helps in achieving group goals by giving a common direction to individual efforts.
- It increases efficiency by reducing costs and increasing productivity through the optimal use of resources.
- It creates a dynamic organisation, allowing the business to adapt to changing market conditions and competition.
- It helps in achieving personal objectives of employees, which leads to higher motivation and commitment.
- It contributes to the development of society by providing quality goods, creating jobs, and adopting new technology.
3. What is the key difference between ‘effectiveness’ and ‘efficiency’ in management?
Effectiveness and efficiency are two sides of the same coin but are not the same. Effectiveness means completing the given task or achieving the goal on time, regardless of the cost. It is concerned with the end result. In contrast, efficiency means performing the task correctly with minimum cost and optimal utilisation of resources. For example, if a company's target is to produce 1000 units and it produces them, it is effective. If it produces them with minimal waste and cost, it is also efficient. Good management aims for both.
4. How does good management contribute to the development of society?
Management plays a vital role in societal development by fulfilling its social objectives. It does this by:
- Creating Employment: By expanding its operations, management creates jobs, which helps reduce poverty and raises the standard of living.
- Providing Quality Goods: It ensures a steady supply of quality products and services at reasonable prices to the community.
- Protecting the Environment: Responsible management uses eco-friendly production methods and technology, contributing to a cleaner environment.
- Improving Standard of Living: By making new technology and better products available, management helps improve the overall quality of life in a society.
5. Explain the main organisational objectives of management.
Organisational objectives are the primary goals that management focuses on to ensure the organisation thrives. They are broken down into three key areas:
- Survival: This is the most basic objective. An organisation must earn enough revenue to cover its operational costs to continue existing in the market.
- Profit: Merely surviving is not enough. The business must earn a profit, which is essential for covering risks and is a reward for the business owner's investment.
- Growth: For long-term success, a business must grow. Growth can be measured by an increase in sales, the number of employees, capital investment, or the number of products offered.
6. Why is coordination known as the 'essence of management' rather than just another function?
Coordination is considered the essence of management because it is the force that binds all other functions together. It is not a separate function but an inherent part of Planning, Organising, Staffing, Directing, and Controlling. For example:
- While planning, coordination is needed between the master plan and the departmental plans.
- While organising, coordination is required between different resources and departments.
- While directing, there must be coordination between orders, instructions, and suggestions.
Without this synchronisation at every step, the organisation's efforts would be chaotic, making it impossible to achieve its objectives efficiently.
7. Is management considered an art, a science, or a profession? Explain your reasoning.
Management has features of all three, making it a unique discipline:
- As a Science: Management has a systematised body of knowledge with its own principles and theories developed over time. However, since it deals with human behaviour, it is considered an inexact or social science.
- As an Art: Management is an art because it requires the personalised application of knowledge, creativity, and skill to achieve desired results. A manager uses their experience and intuition to solve unique problems.
- As a Profession: It has some features of a profession, like a well-defined body of knowledge and the goal of service. However, it does not fully meet all criteria, such as a mandatory ethical code or a statutory governing body like those for doctors or lawyers. Therefore, it is on the path to becoming a full-fledged profession.
8. How do an employee's personal objectives align with the overall goals of the organisation?
Effective management understands that organisational and personal objectives are not conflicting but complementary. When an organisation helps employees achieve their personal objectives—such as a competitive salary, career advancement, and a sense of belonging—it leads to higher job satisfaction and motivation. A motivated and satisfied employee is more productive and committed, which directly helps the organisation achieve its own organisational objectives of higher profits and growth. Therefore, good management creates a work environment where both individual and company goals can be met simultaneously.
