Importance of Management

The word ‘management’ is derived from the Latin word ‘Manus’ which means hands. Thus, management refers to handling a particular activity.

Management refers to the process of setting certain pre-determined objectives and achieving them through optimum utilization of resources.

According to Drucker, management is the dynamic life-giving element in every organization. It is the activating force that gets things done through people. Without management, an organization is merely a collection of men, machines, money, and material. In its absence, the resources of production remain resources, and never become production.

The importance of management can be studied under the following heads:

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1. Optimum Use of Resources 2. Effective Leadership and Motivation 3. Establishes Sound Industrial Relations 4. Achievement of Goals 5. Improves Standard of Living 6. Creates Prosperity

7. Motivates Employees 8. Fulfilling Social Objectives 9. Coordinates Activities 10. Cost Reduction 11. Maintains Dynamic Equilibrium and Others.

Importance of Management

Importance of Management – 6 Points

The importance of management can be understood from the following points:

1. Optimum Use of Resources:

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Management ensures optimum utilization of resources by attempting to avoid wastage of all kinds. It helps in putting the resources to the best advantage within the limitations set by organization and its environment. A right climate is created for workers to put in their best and show superior performance.

2. Effective Leadership and Motivation:

In the absence of management, the working of an enterprise will become random, and haphazard in nature. Employees feel a sense of security when they find a body of individuals working day and night for the continued growth of an organization. Proper management makes group effort more effective. It enables the employees to move cooperatively and achieve goals in a coordinated manner. Management also creates teamwork and motivates employees to work harder and better by providing necessary guidance, counselling, and effective leadership.

3. Establishes Sound Industrial Relations:

Management minimizes industrial disputes and contributes to sound industrial relations in an undertaking. Industrial peace is an essential requirement for increasing productivity. To this end, managers try to strike a happy balance between the demands of employees and organizational requirements. They initiate prompt actions whenever workers express dissatisfaction over organizational rules, methods, procedures, and regard systems.

4. Achievement of Goals:

Management plays an important role in the achievement of objectives of an organization. Objectives can be achieved only when the human and non-human resources are combined in a proper way Management is goal oriented. With a view to realize the pre-determined goals—managers plan carefully, organize the resources properly, hire competent people, and provide necessary guidance. They try to put everything on the right track. Thus unnecessary deviations, overlapping efforts, and waste motions are avoided. In the final analysis, all these issues help in realizing goals with maximum efficiency.

5. Change and Growth:

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A business concern operates in a constantly changing environment. Factors such as changes in technology, government policy, competition, etc., often threaten the survival of a firm. Failure to take note of customer’s needs regarding fuel efficiency has spelt doom for ‘Ideal Java’ in the two-wheeler market in India. An enterprise has to take note of these changes and adapt itself quickly.

Managers help an organization by anticipating these changes (careful planning, forecasting combined with efficient use of resources) and taking appropriate steps. Successful managers are the ones who anticipate and adjust to changing circumstances rather than being passively swept along or caught unprepared. Employers today are hiring managers who can take unfamiliar situations in their stride. At AT&T, people remark, ‘if you are hiring people who do not like surprises, you are probably not hiring the right people’.

6. Improves Standard of Living:

Management improves the standard of living of people by – (i) using scarce resources efficiently and turning out profits; (ii) ensuring the survival of the firm in the face of continued changes; (iii) exploiting new ideas for the benefit of society as a whole; and (iv) developing employee talents and capabilities while at work and prompting them to display peak performance.

The great economist, Schumpeter, referred to management, and entrepreneurs as the engine of growth. Drucker called management ‘the life blood’ of an enterprise. According to him, management is ‘the crucial factor in economic and social development’. Admittedly, firms can fail because of inadequate funds, improper marketing, incompetent product design, along with many other reasons.

They often fail because the basic management functions are performed poorly or not at all. Management is ‘the single most critical social activity in connection with economic progress. Physical, financial and manpower resources are, by themselves, only passive agents – they must be effectively combined and coordinated through sound and effective management if a country is to experience a substantial level of economic growth and development.’

Importance of Management – Goal Achievement, Optimisation, Innovation, Change and Stability, Creates Prosperity

Most of us would have observed that two organisations with identical resources but different management techniques churn out different results. Henry Mintzberg, a famous management guru, considered management as the most vital job in our society because it deals with the deployment of resources. This function makes management important.

Let us understand the importance of management in detail:

1. Goal Achievement:

Precision Connectors hired people from Uttar Pradesh and gave them not only jobs but also accommodation and facilitated schooling for their children. The employees, in turn, worked hard and the company had high retention and flexible labour, giving it competitive advantage.

The employees too prospered and were able to send their children to good schools. Here, the management achieved not only organisational goals but also individual goals and aspirations. Equally, it satisfied the goals of various stakeholders such as the nearby school and the local community. The ability to satisfy the goals of individuals, organisation, and other stakeholders simultaneously makes management a potent weapon.

2. Optimisation:

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Optimisation can take place in the structure, input, processes, and practices. Two important aspects of optimisation are cost reduction and creating an organisation without any overlap. Cost reduction implies reducing the input in terms of raw material, effort, planning, or any other component of cost of a product. Creating an organisation without any overlap means creating flexibility in labour, removing process duplication or job duplication and so on.

3. Innovation, Change, and Stability:

If you carefully analyse the vision of Precision Connectors, you will realise that it has to innovate and change rapidly. Every change affects stability. Management recreates stability by structural redesigning, creating new systems, and fine-tuning processes. Stability does not imply status quo; it is the ability to remain in equilibrium while moving and changing much like a car’s stability is assessed not when it is parked in the garage, but when it is moving.

4. Creates Prosperity:

This term encompasses economic and social prosperity. Management leads to better economic prosperity through production. It also creates social prosperity by making tasks easier, avoiding waste, and following sustainable practices such as use of renewable energy and recycling, and enhancing education of the employees and their social status.

From these features, it is evident that life is driven by organisations and management whether it is a business, entertainment (e.g., football club), worship (e.g., religious centres), or charity (e.g., homes for the destitute).

Importance of Management – (With Significance)

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Management is required in every field of activity. It may be concerned with hospitals, industry, commerce, education or government. The manager is a person, who in addition to working in his own field of specialisation, coordinates and directs efforts of others in the accomplishment of organisational objectives with optimum efficiency. He makes definite contribution by way of a higher standard of living, increased profit and productivity of resources placed under his control.

In short, the importance or the significance of management can be listed as follows:

1. It is required in every field of activity

2. It aims at achieving pre-determined group goals

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3. It adopts the organisational environment

4. It provides the functional support planning, directing and controlling the organisational activities.

5. It gives effective leadership and motivation

6. It establishes definition, authority and responsibility

7. It integrates formal and informal activities in the organisation

8. It explores the ways for development of personnel

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9. It initiates constructive changes in organisation, as and when needed, and

10. Management provides suitable climate for result-oriented behaviour of people in the organisation.

Importance of Management

The word ‘management’ is derived from the Latin word ‘Manus’ which means hands. Thus, management refers to handling a particular activity. Management refers to the process of setting certain pre-determined objectives and achieving them through optimum utilization of resources.

The importance of management is as follows:

i. Helps to Achieve Goals:

Management is done for the achievement of certain pre-determined goals. Knowledge of management helps the managers to work systematically. They make plans and frame policies which help them to achieve the goals on a timely basis.

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ii. Ensures Optimum Use of Resources:

Resources are scarce and therefore they need to be used optimally. This can be done through effective management. Management aids in utilizing the resources properly by way of proper planning, supervision, coordination, etc.

iii. Motivates Employees:

One of the important tasks of management is to motivate employees to perform the task effectively. It can do so by developing cordial relations with them. This creates a sense of belonging among the people working in the organization. Due to which, they start working resourcefully. Other ways of motivating are – giving them awards, financial rewards, incentives, appreciation etc. All these ensure that the staff performs better which eventually leads to the success of the organization.

iv. Establishes a Sound Organization:

A sound organization refers to that organization which is solvent and where all the functions run smoothly. To ensure sound organizational structure, a good management is very important. This can be done by applying management principles effectively.

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v. Fulfilling Social Objectives:

Every organization gets the resources for its operations from the society such as manpower, transport and communication, infrastructure, etc. The organization, in return should fulfill its responsibility towards the society by paying proper taxes, giving fair wages, controlling wastage and pollution, giving good quality products and services, avoiding unfair trade practices etc. This can be done with the help of effective and efficient management.

vi. Co-Ordinates Activities:

Generally, the total work is segregated into various small activities. These activities are to be co-ordinated properly. Management, here, harmonizes all such activities to get fruitful results. Also, such co-ordination is required for different things and at different levels.

vii. Helps in the Economic Development:

Along with the development of the organization, management also helps in the economic development of the nation. It provides employment to the citizens, helps to improve the life style and infrastructure of the country. It also helps to create good trade relations of the country with other foreign countries thereby contributing to an increase in the foreign exchange reserves.

Importance of Management

According to Urwick and Brech, ‘no ideology, no ‘ism’, no political theory can win a greater output with lesser effort from a given complex of human and material resources except sound management. And it is on such greater output that a higher standard of life, more leisure, more amenities for all must necessarily be found’. The late president Roosevelt of America had once remarked that a government without good management is like a house built on sand. Management provides life to what would otherwise remain only potentialities.

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The importance of management can be described as follows:

1. Maximum Production at Minimum Cost:

The necessity for an efficient management is achieving maximum of production at minimum cost cannot be overemphasized specially in the developing countries. Without a well-organized management, it may be difficult to secure the structure of a welfare state.

With ever increasing growth of capital intensive industry, the role of expert management has become indispensable. A class of managerial personnel with prestigious and privileged position is fast growing. Besides increasing productivity, good management also tries to reduce the cost of production.

2. Optimum Utilization of Resources:

Management has become a factor of production for better use of other factors. It functions both as an economic resource as well as a system of authority. It increases productivity by better utilization of existing resources and develops a system of authority by framing rules and giving them effect. It stimulates the forces of economic growth.

3. Cost Reduction:

In the competitive era, management plays a very important role. No business enterprise can face the competition without the help of highly efficient management and cost reduction techniques. Better planning, control and organisation alone can help an enterprise in reducing costs and ensuring its survival in the face of severe competition.

4. Maintains Dynamic Equilibrium:

Good management always helps business to maintain a dynamic equilibrium with the organisation and a harmonious relation with the complex and ever changing external environment. Different groups of people such as accountants, engineers, statisticians, etc. look at the management from their own limited angles. In reality, management may be considered as a discipline all rolled into one with an overall detached view of things.

5. Beneficial to Business and Society:

For the overall benefit of organisation and society, management brings about cooperation between conflicting organisational behaviors, organisation and individual objectives, long term and short term objectives, economic, cultural and social considerations, freedom and control, growth and stability, organisational social values, etc.

Directly, it leads to greater, better and economical production. Indirectly, it lends a helping hand to the increased welfare of the people. Good management techniques make difficult tasks easier and unprofitable jobs more profitable. By eliminating wastes and encouraging maximum utilization of scarce resources, management causes improvement in the standard of living of people.

Importance of Management – 5 Reasons

Management is necessary for the survival of a business. Without proper management, resources will remain resources and shall never become products.

Management is important for the following reasons:

(i) Helps in achieving group goals- Management coordinate the efforts of organisational members.

(ii) Management increases efficiency- The aim of a manager is to reduce costs and increase productivity through better planning, organising, directing, staffing and controlling.

(iii) Management creates a dynamic organisation-Management helps people adapt to environmental changes so that the organisation is able to maintain its competitive edge.

(iv) Management helps in achieving personal objectives- A manager motivates his team so that individual members are able to achieve personal goals while contributing to the overall organisational objective.

(v) Management helps in the development of society- An organisation has multiple objectives to serve the purpose of the different groups that constitute it.

Importance of Management – 6 Contexts

In the present business scenario which is characterized by intense competition, importance of management may be found in the following contexts:

1. Achieving Organisational Goals:

Management is relevant in the context of organizations and all organizations are purposive creations and strive for achieving certain goals. Management helps in achieving these goals by developing and effectively utilizing organizational resources, both human and non-human.

2. Increasing Efficiency:

Management attempts at increasing efficiency in an organization through reducing costs and increasing productivity by using suitable management process involving planning, organizing, staffing, directing, and controlling and achieving coordination among these functions.

3. Inculcating Creativity:

Management inculcates creativity in organization’s people. Creativity involves generating a unique combination or unusual association of ideas. Creativity helps in bringing innovation which is the process of creating or doing new things like developing new products, introducing new ways of serving customers and so on. Innovation is important to face competition effectively.

4. Building Dynamic Organization:

Management builds dynamic organization by bringing changes on continuous basis. A dynamic organization is one which continuously interacts with its environment and brings necessary changes in it to meet environmental needs.

5. Integrating Various Interest Groups:

An organization may be termed as a coalition of different interest groups: owners, employees, customers, suppliers, financiers, government, and society. Each group has its own goals which it tries to achieve through organizational functioning. Many times, these goals are mutually conflicting.

Management integrates the goals of various interest groups in such a way that every group is able to achieve its goals without putting undue pressure on achievement of goals of other groups.

6. Developing Society:

Management helps in developing society in three ways. First, management helps in developing resources of the society, more particularly human resources. Second, management uses resources of the society at those places where their contributions are the most. Third, management undertakes various projects to develop backward areas of society resulting in overall development of the society.

Importance of Management

Group action and joining efforts are very important in every aspect of life. Management is required wherever two or more people work together to achieve common objectives. The success of the people depends upon mutual co-operation. Management creates teamwork and coordination among the people. Management is indispensable in all organisations whether business for government, hospital, college, club etc.

It is a creative force which helps in optimum utilization m resources. Competent managerial leadership can convert the disorganised resources of men, money materials and machinery into a productive enterprise. It is a catalyst without which no organisation can survive and grow.

Management is required to plan, organise, direct and control the group efforts. It provides leadership and motivation to individuals. As an innovative force management performs the same role in an organisation which a brain does in a human body. It is the fundamental co-ordinating mechanism that underlies organised endeavour. Sound management helps in maximising output and minimizing costs. It maintains a dynamic equilibrium between an organisation and its exchanging environment. It is responsible for the creation, survival and growth of organisation.

Its significance has grown tremendously due to following challenges:

1. Growing size and complexity of business

2. Increasing specialization of work

3. Cut-throat competition in the market

4. Growing unionisation of labour

5. Sophisticated and capital intensive technology

6. Increasing complexity of business decisions

7. Growing relation of business of the government

8. Need for research and development

9. Turbulent environment of business

10. Need for reconciling the interest of various group owners, workers, customers and the public

11. Need for optimum utilisation of scarce resources.

Management is equally important at the national level. It is an agent of change and economic growth. The prosperity power and prestige of the nation depends upon the competence and dedication, office managers and administrators. According to Urwick and Breach “No ideology, no ism no political theory can even a greater output with less effort form a given complex of human and material resources except sound management and it is on such greater output that a higher standard of life, more leisure, more amenities for all must necessarily be founded”.

John F. Kennedy:

The role of management in the society is critical in human progress. It serves to improve standard of living of all people, through effective utilisation of human and material resources by designing job structures that provide opportunities for self-expression and initiative which provides human satisfaction. Management makes all difference in the quality of life between nations and thus it is an essential instrument of human progress and keystone of modern society.

Importance of Management

So does management really matter? Benefits can be transformational. Managers assist the organisation, the customer, the economy and society; they do not just improve organisational efficiency.

Good Management:

i. Improves business performance;

ii. Improves employee performance;

iii. Makes people healthier and happier;

iv. Improves the survival rates of business as; and

v. Improves society in terms of ethical and sustainable benefits.

Organisations that invest effectively in management and leadership performed on average 20—25% higher than those that do not. This can mean the difference between success and failure.

Global studies also show the difference good management makes. A single point improvement in management practice (on a five-point scale) is associated with the same increase in output as a 25% increase in the labour force or a 65% increase in invested capital. In other words, good management is like having more people (i.e., effective work force) or having more money. The opposite is also true, as incompetent management by company directors causes over half of company failures (or corporate collapse).

More importantly, good management improves people’s performance, both in terms of their engagement and their well-being. And people in growing companies are more likely to be managed well, whereas people in declining companies and organisations are less likely to benefit from good management.

People who are well managed are happier and healthier than those who are not. By contrast, people who are poorly managed are often poor themselves, suffering from stress and other illnesses.

Finally, good management makes a similar difference everywhere. Across the world in twenty countries firms that applied best practices were more profitable, grew faster and survived longer than those who did not in every country looked at.

Importance of Management – 7 Points

Management is that dynamic ability of a business organisation that brings together various resources of production, converts the raw materials into goods and generates revenue.

The importance of management is brought forth in the below mentioned points:

1. Helps in Achieving Group Goals:

Management arranges the various factors of production, assembles and organises the resources and integrates the resources in order to achieve goals. It directs group efforts towards achievement of pre-determined goals. Management converts resource like men, machines, money, etc. into useful enterprise and coordinates as well as directs these in such a manner that result is attainment of business goals.

2. Optimum Utilisation of Resources:

Management utilises all physical and human resources productively, thereby, leading to efficiency. It provides maximum utilisation of scarce resources by selecting their best possible alternate use.

3. Reduces Costs:

It aims at getting maximum benefits, though minimum input to get maximum output by proper planning. Management uses physical, human and financial resources in such a combination that minimizes the cost.

4. Establishes Sound Organisation:

Establishing sound organisational structure is one of the main objective of 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. This streamlines the functioning of a business organisation.

5. Establishes Equilibrium:

It enables the organisation’s survival in a changing environment. It keeps in touch with the changing environment. So, it enables the organisation to adapt the changing demand of market/changing needs of societies. It is responsible for growth and survival of organisation.

6. Prosperity of Society:

Efficient management leads to better economical production following which the welfare of people increases. Good management makes a difficult task easier by avoiding wastage of scarce resources. It also improves standard of living and profit which is beneficial to business.

7. Employment Generation:

By expanding business and contributing to the growth of business management creates employment opportunities, which in turn, generate income in hands and lead to satisfaction of human wants and needs.

Importance of Management

Management is considered to be the brain of business. It makes all efforts to be more productive and meaningful. It is the directing force that moulds all the affairs and make the best utilisation of the resources to achieve the organisational goals and be the foundation of the modern society and the key to success.

The importance of management is stated as under:

1. Coordinating Force:

The ultimate success or failure of the business depends on the Management. It is the management who binds and activates the 7 Ms or elements in business – Men, Money, Materials, Machinery, Methods, Motive and Markets.

2. Achievement of Group Goals:

Management makes group efforts more effective. It creates team work and inculcates team spirit in the organisation by developing a sound organisation structure that balances a variety of needs and goals.

3. Best and Fullest Utilisation of Resources:

The available resources are put to use in such a manner that all sorts of wastages and inefficiencies are reduced to a minimum. Through the fullest possible use, management accelerates the process of economic growth.

4. Minimisation of Cost:

In this era of intense competition, every business should minimise their cost of production and distribution. Only those concerns endure the test of time which can produce quality goods at minimum cost.

5. Provides Innovation:

Continuous research work in the field of management brings in new ideas and vision to an enterprise in order to diversify and expand its business.

6. Improvisation in the Standard of Living:

Management supplies goods and services of adequate qualities and ensures customers’ satisfaction, arranges for new employment opportunities and creates conducive working environment. These provisions ensure better standard of living through increase in productivity and increasing income of employees.

7. Establishment of Industrial Peace:

By establishing cordial relations between various social groups, by developing a spirit of co-operation and mutual understanding and by creating congenial working atmosphere, management promotes peace and prosperity in the society.

8. Sound Organisation Structure:

Management establishes proper organisation structure and avoids conflict between superiors and subordinates. Every position is well defined and every job is clearly demarcated. Through this, it establishes a comprehensive organisational structure.

9. Co-Ordination:

Management tries to co-ordinate between old methods and new and also among different managerial levels of the organisation. It bridges the gap between the different departments and persons.

10. Generation of Employment Opportunities:

Management creates employment scopes by creating new business houses, by diversifying and by expanding existing business. Thus, the economic and security needs of the employees are gratified.

Importance of Management

Management is an all-pervasive function since group action is essential in every walk of life. Group activity has become a universal phenomenon. Without management, an organisation is merely a collection of men, money and materials. “The Manager is a dynamic life-giving element in every business. Without it, the resources of production remain resources and never become production” (Drucker).

It is beyond controversy that Management is a factor of production today whose contribution is so significant that it does not require too much elucidation. It is self-evident.

To achieve the objectives, to carry on the production process of a big organisation, group efforts are a necessity and indispensable. These group efforts need direction with complete co-ordination which can only be expected from an efficient Management.

Management is a group of personnel, Management is a series of functions, and Management is a process that is with an organisation from its beginning till its end. Raw materials would have remained as such had there been no Management to direct the group efforts to process the raw materials into finished products.

We cannot conceive of any organisation be it a club, educational institution, charitable institution or a business organisation where group activity is not required. It has become, so to say, a universal phenomenon, and Management has become an all-pervasive function. In any organised human activity, Management is a must.

The resources of an organisation have to be organised and it is Management that does it. It is no exaggeration to say that with all the resources at our disposal and having no Management to look after, our effort to utilise the resources will be a futile exercise.

Collection of men, money and materials without Management is a fruitless effort; Management is the motivating force and it can only direct the whole affair and make the collection of men, money and materials a manifested combination of the desired objectives of an organisation.

Peter F. Drucker rightly points out- “The manager is the dynamic life-giving element in every business. Without it, the resources of production remain resources and never become production.”

Management plans, organises, directs, co-ordinates, controls and motivates the personnel to achieve the goals of the organisation. It is a catalyst that optimises output and makes development.

With the growth in the size of business units, the significance of Management is increasing. A big organisation needs Management on bigger scale equipped with full-fledged efficiency. The complexities of modern business organisation due to increasing Government interference and the emergence of the concept of social responsibility have necessitated the Management of an organisation to be more efficient, effective and alert.

Every decision the Management of an organisation takes has a far-reaching effect, every function that the Management does, goes to add up an element of stability to the entire structure of an organisation.

In the productive process, Management is the most vital and strategic factor. It is the quality of the Management that ultimately determines the success of an enterprise. “The role of Management is critical in human progress. It serves to identify a great need of our time; to improve standards of living of all people through effective utilisation of human and material resources.” (John F. Kennedy)

Of the five Ms of business – Management, Manpower, Money, Machinery and Materials – the most important ingredient is Management because, without it, no other ingredient can contribute to realise the objective of the organisation. It is Management that will direct, organise and coordinate; then only the assembling of the factors of production will be effective.

The productivity and profitability of an organisation is very much dependent on its managerial efficiency. Management is one of the most important areas of human activity as it is concerned with getting things done through other people. Management has a significant social contribution; because it is through the Management’s endeavour that a business organisation realises its objectives and serves the society.

All sections of people of the society – the consumers, the employers, the suppliers of raw materials, the Government – all stand to gain from business activities which, on their part, are a direct contribution of Management. As a driving force, Management inspires people, knits them into one entity and creates conditions for the optimum use of resources.

To quote Drucker, “The emergence of Management as a distinct and leading institution is a pivotal event in social history. Hardly if ever has a new basic institution, a new leading group emerged as fast as has Management since the turn of the century.” President Roosevelt observed that a Government without good Management is like a house built on sand.

Management, meaning thereby the function of a manager, can be well described as very much powerful and purposeful in the creation of utilities that can help people to lead meaningful lives and also can save men and women from the pangs of poverty as observed by an eminent author on Management.

Peter Drucker further observed- “Management is the crucial factor in economic and social development. It was obvious that the economist’s traditional view of development as a function of savings and capital investment was not adequate. Indeed, savings and capital investment do not produce Management and economic development. On the contrary, Management produces economic and social development and with it savings and capital investment. It became apparent that the developing countries are not under-developed, they are under-managed.”

Efficient Management is imperative for converting disorganised resources of men, machine and money into a purposeful enterprise. Managers mobilise the required means of production, co-ordinate activities both within the enterprise and with the outside world. They inspire people associated with the enterprise to work towards common objectives.

It is being realized increasingly that neither accumulation of capital, nor high rate of investment nor even the technological advancement can accelerate the rate of economic growth of the developing countries unless it is matched by managerial skills.

Management is viewed as “the single most critical social activity in connection with economic progress. Physical, financial and manpower resources are, by themselves, but passive agents; they must be effectively combined and coordinated through sound, active management if a country is to experience a substantial level of economic growth and development” this is the observation of two prominent scholars of Comparative Management.

It was the considered opinion of Peter Drucker that wherever rapid economic and social development took place after World War II, it occurred as a result of systematic and purposeful work on developing managers and management.

The significance of management in a country like ours, where a vast number of people are living below poverty line, cannot be over-emphasised. It will not be out of place to mention here that once in a convocation address Mrs. Indira Gandhi, the then Prime Minister, emphasised the need for the trained managerial mind in a developing economy like India.

She said, “The old concept of an entrepreneur-owner hiring a few technicians for his plant but running it himself, became obsolete long ago. As technology has grown increasingly complex and as the size of operations has expanded, the manager with leadership qualities has come to the fore.” Higher efficiency and higher productivity is the only hope of people; it can be achieved through efficient managerial functions.

The poor performance of our public enterprises can mainly be ascribed to the managerial inefficiency. J. L. Lundy, in his Effective Industrial Management, has stated, The managers of an organisation are concerned with the maximisation of output obtainable from a given amount of input or similarly the minimisation of input for a given level of output.

Fulfillment of such a purpose is the only justification for the existence of a managerial function. Management designs job structure and provides opportunities for self-expression and initiative. Management provides human satisfaction and thus acts as an essential instrument of human progress and keystone of modern society.

With the growing complexities in the business world, business executives are called upon to innovate new and newer management techniques to meet the challenge of time. The contribution of Management to the overall performance of an organisation has been universally accepted as of great significance. To develop future managers, management training has been recognised as an essential tool.

Importance of Management – Identified by Management Experts

The performance and survival of a business organisation depends upon its management. As a matter of fact, it is the backbone of the business. Smart management makes the business smarter whereas poor management can ruin a business. The importance of management can be described as every positive things like expansion, diversification and prosperity enjoyed by the business due to an efficient management.

But Management experts have identified the following points which justify the importance of management in a business:

i. Management helps in increasing the productivity and profitability of an organisation.

ii. An efficient management minimize the cost of production due to mechanisation, automation, computerisation and large scale production.

iii. Management leads to the achievement of organisational, mission, goals and objectives.

iv. An efficient management ensures optimum utilisation of different components of production like men, machinery, money, materials and methods.

v. Management ensures the smooth and progressive running of the business.

vi. It leads to innovations through research and development which is very essential for advancement.

vii. Management brings social development by generating and directing human energies towards basic society needs e.g., health, education and environment etc.

viii. A strong management provides full support to face high competitions of the present 21^st century.

ix. It facilitates managers in developing their analytical and conceptual ability.

x. It facilitates payment of handsome salary and Bonus to employees and higher dividends and share value to the shareholders.

Importance of Management

The importance of management is as follows:

(i) Helps in Achieving Group Goals:

It arranges the factors of production and organises the gathered resources, integrates them in an efficient manner to achieve the organisational goals. Management makes full utilisation of men, machines, money, etc. These resources are coordinated, directed and controlled in such a manner that the business organisation achieves its desired goals.

(ii) Reduces Costs:

Management helps in utilising the resources in an efficient manner. It gets the maximum results through minimum input by proper planning. Adequate planning and organising of resources help in cost reduction.

(iii) Optimum Utilisation of Resources:

Management utilises all the physical and human resources productively. Management provides maximum utilisation of scarce resources by selecting its best possible alternate use. If employees and machines are producing the maximum, there is no wastage of any resources. Management helps in optimum utilisation of these resources by implementing all the management functions.

(iv) Establishes Sound Organisation:

To establish a sound organisational structure is one of the most important objectives of management. Management helps in hiring the right persons, having right skills, training and qualifications. Management helps in clearly defining authority and responsibility across all functions of a business organisation.

(v) Establishes Equilibrium:

Management enables the organisation to survive in changing environment. It keeps pace with the changing environment. Management helps the organisation to adapt itself according to the changing needs of the environment. It helps maintain an equilibrium between the organisation and the dynamic environment which leads to growth and survival of the organisation.

(vi) Leads to Prosperity:

Good management helps in avoiding wastage of scarce resources. It maximises the profit which is essential for the success and survival of any business. At the same time, it brings out good quality products/services to the society. It improves the standard of living. It brings prosperity to the business organisation as well as to the society.

Importance of Management – In the Process of Development

Management plays a key role in the process of development. It is the essence of cooperative endeavour. It is so pervasive that it is essential for all types of organisations—business and no-business. In this connection, McFarland has to say, “Management is a universal process in all organised living.” In fact, management permeates in all our endeavours where we want to achieve success with the help of men and other resources.

Without it nothing concrete could be achieved particularly through group efforts. Management is necessary not only for economic development but also for social development. Koontz and O’Donnell have stated, “Perhaps there is no more important area of human activity than managing.” According to George R. Terry, “Management touches and influences the life of nearly every human being. Management makes us aware of our potentials, shows the way toward better accomplishment, reduces obstacles, and causes us to achieve goals that we probably would not otherwise attain.”

In the present complex world which is shrouded in competition, specialisation, automation, technological advancement, resource shortage, etc. management has become much more significant. In business world, nothing can be achieved without planning, organising, staffing, directing and controlling. Management performs these basic functions of business.

Explaining the significance of management Peter F. Drucker has stated, “Rarely, if ever, has a new basic institution, a new leading group, emerged as fast as has management since the turn of this century. Rarely in human history has a new institution proven indispensable so quickly; and even less often has a new institution arrived with so little opposition, so little disturbance, so little controversy.” Besides, there are certain important reasons which make management very important and indispensable.

These are as follows:

1. Effective Utilization of Physical Resources:

Physical resources are limited and scarce. Reckless and unplanned use of these would lead to their quick depletion. It also amounts to waste and inefficiency. Hence, since the emergence of industrial revolution efforts have been going on to use these vital resources carefully and wisely so that these could last longer. There is no other way except effective management in this direction. It is the management which helps the society to obtain maximum benefits with the rational use of these resources.

2. Providing Effectiveness to Human Efforts:

Management is a dynamic force; it is a life-giving force in a business enterprise. According to Peter F. Drucker, “Without his (manager) leadership the ‘resources of production’ remain resources and never become production.” Management assists in obtaining better products or services. It also helps in achieving better human relations and effective coordination. Terry has said, “Management provides effectiveness to human efforts…. It keeps abreast of changing conditions, and it supplies foresight and imagination.”

3. Growth of Large-Sized Enterprises:

Modern business enterprises tend to grow and grow bigger. With the increase in the size of enterprise, the need for more resources becomes a serious problem. Besides, the big enterprise has to comply with several legal and technical requirements which cannot be handled effectively without efficient manager. An efficient manager performs all these jobs and helps establish better coordination.

4. Distance between Labour and Capital:

Gone are the days when there existed a close link between the labour and the capital, i.e. the owner. The problems were used to be solved by the owner through direct contact. Now, the situation has changed significantly. The establishment of large enterprises has created wide distance between the labour and the capital. The labour conflicts now need to be solved at management level. This has made effective management essential.

5. Development of New Technologies:

According to Theo Haimann, “Changing technology has created complexities which call for improved managerial practices. The age of specialisation poses problems of coordination.” This has made the business much more complicated and difficult. The emergence of internet, computer, and other electronic systems needs efficient management of business.

6. Growing Competition:

With the initiation of economic reforms, liberalisation and globalisation, the world of business has become a global village. The structure and pattern of competition has changed. Now, the enterprise has to face competition not only with the domestic enterprises, but also with the multinational companies. In such a situation, survival and growth depend much more on competent manager than anything else. It is the efficient management which can coordinate the resources and activities in such a manner which may make it possible to offer better products or services at reasonable prices to consumers.

7. Research and Development:

Innovation has become a key to success. Now-a-days, only such enterprises grow fast which are involved in research and development, innovation and new idea generation. This requires efficient management. According to Peter F. Drucker, “Innovation goes through all phases of business. It may be innovation in design, in product, in marketing techniques. It may be innovation in price or in service to customer. It may be innovation in management organisation or in management methods.” Hence, the gigantic task of innovation calls for research and development which, in turn, calls for effective management.

8. A Critical Factor of Economic Development:

Economic growth of a nation depends upon several factors, such as, availability of physical and manpower resources, level of technology, attitude of people and government, etc. One of the most important and critical factors of growth is management. Without managerial know-how resources could not be used properly and effectively.

According to George R. Terry, “An under-developed nation usually lacks adequate management know-how. National development is not solely one of transforming capital, technology, and education to citizens of an under developed nation. It is also supplying or developing management which provides the generation and direction of effective human energies.”

Apart from the above, there are other reasons too which make management indispensable. In fact, there is no substitute for effective and efficient management. The jobs of planning, organising, staffing, directing and controlling could not be performed by any other means than management. Terry has remarked, “Nothing takes the place of management.”

Importance of Management

The success of any business depends heavily on the effectiveness of its managers. Good managers need to make the right decisions and ensure the business is able to exploit any opportunities open to it. In this management conscious age, the significance of management can hardly be over emphasized. It is said that anything minus management amounts to nothing. There is no more important area of human activity than management since its task is that of getting things done through others.

Business is basically a group activity. The group as a whole cannot realize its objectives unless and until there is mutual cooperation and coordination among the members of the groups. Management helps to do this work of coordination. The input of the labour, capital and raw materials can never become production without the catalyst of management.

Management forecasts and make plans to determine where the business is going. Management creates teamwork and team spirit in an organization by developing a sound organizational structure. It commands people to do the work in rightful manner. It coordinates the different activities and uses the available resources of production in such a way that all sort of wastages and inefficiencies are reduced to a minimum.

In its absence, the resources of production remain underutilized and can never become production. Not only manager’s employ right people at right post they increase the motivation of employees to reach achieve the objective of the organisation. Sound management makes it possible that an enterprise runs with efficiency in a continuously changing environment. In every organization profitability is dependent on its employees and the manager’s role in motivating the employees is key.

Importance of Management – With Significance

A business cannot survive without management. Business is primarily group activity and management is essential whenever group efforts are required for achieving the common goals. There is no substitute for management, as it is rightly said “Good management is the exercise of common sense”.

The following points bring about the significance of management:

1. Helps in achieving goals – Management brings together the human, physical and financial resources for the accomplishment of common goals. These resources are integrated, directed and controlled in a manner that the organisation achieves its pre-determined goals.

2. Efficient use of resources – Management makes productive use of human and physical resources which results in efficiency in operations. Management makes use of the skills and knowledge of experts and professionals provides for maximum utilisation of scarce resources.

3. Economic welfare – The efficiency in management functions leads to better productivity resulting in improving the welfare of the people. It reduces wastage and thereby increases efficiency and profitability. All this leads to growth and expansion of an organisation.

4. Helps in meeting challenges – The management successfully manages to make changes in the organisation with the changes taking place in business environment. Management keeps in touch with the developments taking place in the environment and develops the changes in the right direction.

5. Co-ordinates human efforts – Management motivates workers and helps to establish team spirit among the group members. Co-ordination is very important for accomplishing the group goals. This lead to efficiency and improvement in the productivity of the organisation.

Importance of Management – For the Organisation as Well as Society

Management play very vital and crucial roles for the organisation as well as society. The well-being of society is largely dependent upon the quality of management. As per opinion of Peter Drucker, “management is a dynamic life giving element in an organisation, without it the resources of production remain mere resources and never become production”.

Some important and necessary managerial roles are:

(a) The Figure head Role – A manger is the head of group of subordinates.

(b) The Liaison Role – A manager maintain relationship between organisation and outside parties of the organisation.

(d) The Negotiator Role – A manager acts as negotiator for the settlement of terms and conditions with various parties especially trade union.

The competent manager alone can get the work done through the employees of the organisation. He achieves the effective coordination between human and non-human resources for the accomplishment of organisational objectives.

The following points are high-lighted clearly the importance of management:

(i) Establishment of Goals – It is morale duty of management to set fair and achievable individual goals, group goals and organisational goals in the organisation.

(ii) Accomplishment of Goals – Management creates team work and coordination in the group. It organises all available and unexploited resources for the accomplishment of the goals of the organisation.

(iii) Optimum Utilisation of Resources – On the basis of planning and forecasting the management ensures optimum utilization of resources with proper guidance and training to the employees. The managers apply knowledge, experience and skills to get better results.

(iv) Minimization of Cost – Due to globalisation of world market the neck-to-neck competitions is universal phenomena of any business. “Good quality with minimum cost” is necessary for survival of business. Therefore, by reducing costs and improving efficiency managers enable an organisation to be competent to face competitors and earn profit.

(v) Generation of Employment – By diversification, expansion and growth of the organisation Managers create new jobs for the society.

(vi) Meeting Challenges – The modern business environment is dynamic in nature. An organisation has to adapt itself to the changing demands of the market and society. In this way managers help the continuity and prosperity of business.

(vii) National Development – The development of a country depends on the development of the management because as per views of Peter Drucker, “Management is the crucial factor in economic and social development of the country.”

By producing wealth, management increases the national income and quality of life of people. Thus it can be concluded that efficient management is a key to the growth of country as per views of late president Roosevelt apply, “a government without good management is a house built on sand.”

In nutshell management is an essential accomplishment of all social, economical, political and legal organisation and everywhere it is found as a distinct separate and dominant activity.