Chapter 2: Purpose and Importance of Management

1. Purpose and Importance of Management,
Features/ Characteristics of Management,
Distinction between Management,
Organization and Administration.
Chapter 2

2. Lesson Objectives
Upon completion of
this lesson you will be
able to:
1
Elaborate the purpose
and importance of
management
2
Describe the
features/characteristics
of management
3
Distinguish between
management,
organization and
administration
4

3. Purpose and
Importance
of
Management
• No enterprise can run without management.
Some people may say that the main purpose
of management is to make a profit. For most
business firms, an important purpose is the
creation of a surplus.
• Management is to establish an environment
in which people can accomplish
organizational goals with the least amount of
time, money, materials and personal
dissatisfaction or in which they can achieve
as much as possible of a desired goal with
available resources.

4. • Management makes human effort more productive. It brings better equipment, plant, offices,
products, services, and human relations to our society. Effecting improvements and progress is its
chief purpose.
• Management make it possible for individuals to make their best contributions to group
objectives.
• Management applies to small and large organizations, to profit and non-profit enterprises, to
manufacturing as well as service industries.
• Effective managing is the concern of the corporation president, the hospital administrator, the
government secretary, the football manager, the college principal and the university Vice-
Chancellor.

5. • Management is essential because it makes plans, directs employees and motivates them,
co-ordinates the activities of all and ensures performance through control. It may so
happen that an enterprise with a weak resource base may become successful with sound
management.
• Management is the most important of all resources. It is vital both at the micro and the
macro level. It is essential for every enterprise, for every society, for every country.

6. Features/Characteristics of
Management
1. Management is usually associated with
group efforts: Although people as individuals
manage many personal affairs, the group
emphasis of management is universal. It is
now established that goals are achieved more
readily by a group than by any one person
alone.
2. Management is accomplished through the
efforts of others: Management is sometimes
defined as “getting things done through
others’ efforts.” Thus it can well be said that
participation in management necessitates
relinquishing the normal tendency to perform
all things oneself and getting tasks
accomplished through group efforts.

7. 3. Management is purposeful: Wherever there is management there is a purpose.
Management deals with the achievement of something definite, expressed as a goal or
objective. Management success is commonly measured by the extent to which
objectives are achieved.
4. Management is action-oriented: Managers focus their attention and efforts on
bringing about successful action. Successful managers have an urge for
accomplishment. They know when and where to start, what to do for keeping things
moving, and how to follow through.

8. 5. Management is intangible: Management is often called the unseen force, its presence
being evidenced by the results of its efforts - motivation among employees, discipline
in the group, high productivity, adequate surplus etc.
6. Management is indispensable: Management can neither be replaced nor substituted
by anything else.
7. Management can ensure better life: A manager can do much to improve the work
environment, stimulate people to perform better, achieve progress, bring hope and
accomplish better things in life.

9. Organization,
Administration
and
Management
• The terms organization, administration and
management are often used interchangeably.
• By organization we simply mean the “collection,
preservation and coordination of the elements of an
enterprise in an integrated manner.”
• Organization signifies the bringing together of
various resources of an enterprise into a
harmonious whole.
• Organization ensures the employment of resources
for the accomplishment of enterprise goals. The task
of organization is performed by the promoters
and/or entrepreneurs themselves.

10. • Administration is the driving force of an enterprise which sets the objectives and
formulates plans to achieve them.
• Administration determines the principles for ensuring the effective performance of the
activities of different divisions and branches of the enterprise.
• In a nutshell, administration is entrusted with the responsibility of making plans and
providing leadership for achieving goals.
• Administration may be viewed as top-level management and the chief boss.

11. • Management is primarily entrusted with the responsibility of executing the plans and
policies set by the administration for achieving pre-determined goals and objectives.
• The success of an enterprise/institution is dependent on how efficiently the
management can execute plans and policies set by the administration.
• Administration cannot be successful without the cooperation of management. The job of
each manager is, therefore, to win the cooperation of all those who work under him so
that they work for enterprise goals set by administration.

12. Exercises

13. Write (T) for True and (F) for False for the
following statements:
• Management is essential for every enterprise, for every society, for every country. ( T )
• Management is accomplished through the efforts of others .( T )
• Management deals with the achievement of definite and expressed as a goal or objective. ( T )
• Management success is commonly measured by achieving objectives. ( T )
• Management is tangible .( F )
• Management can be replaced and substituted by anything else. ( F )
• Management does not ensure better life. ( F )

14. Fill in the Blank:
Social / Productive / Resources / Progress / Surplus /
Profit / Contributions
1. The main purpose of management is to make a profit.
2. The important purpose of any business is the creation of a. surplus.
3. Management makes human effort more productive.
4. Effecting improvements and progress is management chief purpose.
5. Management is an essential social process.
6. Management is charged with the responsibility of taking action that will make it
possible for individuals to make their best contributions to group objectives.
7. Management is the most important of all resources

15. Multiple Choice
Questions
The main purpose of management is to make
a) Profit
b) Loss
c) Both Profit and Loss
d) None
Management is to establish an environment in
which people can accomplish organizational
goals with the least amount of ------------------- in
which achieve desired goals.
a) Time
b) Money
c) Materials
d) All

16. The characteristic of management is---------------
a) Purposeful
b) Indispensable
c) Intangible
d) d) All
The terms organization, administration and
management are often used as
a) interchangeably
b) incompatible
c) both a & b
d) None
At which level the management is vital?
a) at the micro level only
b) at the macro level only
c) both at the micro and the macro
d) None of the above
The success of an enterprise/institution is
dependent on how ---------------- the
management can execute plans and policies
set by the administration.
a) Efficiently
b) Effectively
c) Both A and B
d) None

17. Essay Type
Questions
What are the purposes of
management?
Discuss the features/characteristics
of management?
Define organization and
administration.

18. What are the purposes of management?
• Some people may say that the main purpose of management is to
make a profit. For most business firms, an important purpose is the
creation of a surplus.

19. Discuss the features/characteristics of
management?
1. Management is usually associated with group efforts
2. Management is accomplished through the efforts of others
3. Management is purposeful
4. Management is action-oriented
5. Management is indispensable
6. Management is intangible
7. Management can ensure better life

20. Define organization and administration.
• Administration determines the principles for ensuring the effective
performance of the activities of different divisions and branches of
the enterprise.
• Organization signifies the bringing together of various resources of
an enterprise into a harmonious whole.