CBSE Class XII Business Studies Fundamental Concepts

Chapter 1

Nature and Significance of Management

Meaning Nature Objectives and Importance of Management

What is meant by management? - 2 marks

According to Harold Koontz, “Management is the art of getting things done through and with people in formally organized groups”. Management creates environment where individuals work together efficiently towards attaining the objectives. It brings together all the other factors of production in the right proportion and leads them to attain predetermined goals.

What are the objectives of management? - 5 marks

Optimum utilization of resources

The most important objective of management is the effective utilization of economic resources of the business. This will ensure maximum return or profit to the business

Fair return on investment

The primary goal of a business is to ensure that the investor gets a fair return. Without profit a business cannot survive long. The investors must derive adequate benefit out of their investment.

Adequate reward for employees

Efficiency of business will directly result in economic gain to employees. Efficient management utilizes all the resources effectively, which will enable them to offer best salaries and service conditions to the staff.

Human betterment and social justice

Business is an important organ of the society. The business goals cannot be attained disregarding the social expectations. When the business makes progress the benefit passes on to society by way of employment opportunities and increased purchasing power for people.