RAAK ARTS AND SCIENCE COLLEGE

(Affiliated to Thiruvalluvar University)

Perambai

Department of Commerce

REGULATION CBCS 2017

Third Year – Fifth Semester

BCM 53 – BUSINESS MANAGEMENT

Unit - 1
BY

A.SUGANTHY, Assistant Professor &

R.DEVAKI, Assistant professor

Department of Commerce

June 2021
 RAAK ARTS & SCIENCE COLLEGE

PREFACE OF THE COURSE FILE

DEPARTMENT OF COMMERCE

Batch : 2019-2022

Branch : COMMERCE

Year & Semester : III Year & V Semester

Regulation : CBCS-2017

Subject code : BCM 53

Name of the subject : BUSINESS MANAGEMENT

Unit : I

Faculty in-charge : A.SUGANTHY & R.DEVAKI

Approved by
Prepared by

HOD VICE - PRINCIPAL

Signature

A.SUGANTHY &
Name R.DEVAKI J.AROKIYANATHAN
R.DEVAKI

Designation ASSISTANT
PROFESSORS

TCF COORDINATOR PRINCIPAL

 BCM53 BUSINESS MANAGEMENT UNIT I

CONTENTS

UNIT - 1
PAGE
SL.NO TOPIC
NO
1 INTRODUCTION TO MANAGEMENT 1

1.1 MEANING 1

1.2 DEFINITION 1

1.3 NATURE / FEATURES / CHARACTERISTICS OF MANAGEMENT 1

1.4 IMPORTANCE OF MANAGEMENT 2

DISTINCTION BETWEEN MANAGEMENT AND

1.5 3
ADMINISTRATION
1.6 SCOPE OF MANAGEMENT 4

1.7 PRINCIPLES OF MANAGEMENT 6

1.8 FUNCTIONS OF MANAGEMENT 8

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1. INTRODUCTION TO MANAGEMENT
Management is a specialized branch of knowledge. It is an important factor of production and
it combines and co-ordinates all other resources. It is what the managers do at different levels
of authority. Management offers a very rewarding and challenging career.

1.1. MEANING
Management is basically concerned with the performance of planning, organising, directing, co-
ordinating and controlling, which, in fact, are its main functions. Management is also regarded as the
art of getting things done through others. It is not possible for any individual to do all the work
by himself.

1. 2. DEFINITION
“Management is the art of getting things done through and with people in formally organized
groups.”- Harold Koontz.
“Management is a multipurpose organ that manages a business and manages managers and
manages workers and work.”- Peter Drucker.

1.3. NATURE / FEATURES / CHARACTERISTICS OF MANAGEMENT

1.Invisible Force
Management is an invisible force. Its existence can be felt through the enterprise or institution
it is managing.
2. Goal Oriented
Management is goal oriented as it aims to achieve some definite goals and objectives.
According to the Haimann, "Effective management is always management by objectives".
3. Accomplishment through the efforts of Others
Managers cannot do everything themselves. They must have the necessary ability and skills to
get work accomplished through the efforts of others.
4. Universal activity
Management is universal. Management is required in all types or organizations.

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5. Art as well as Science

Management is both an art and a science. It is a science as it has an organized body of
knowledge which contains certain universal truths and an art as managing requires certain
skills which apply more or less in every situation.
6. Multidisciplinary Knowledge
Though management is a distinct discipline, it contains principles drawn from many social
sciences like psychology, sociology etc.
7. Management is distinct from ownership
In modern times, there is a divorce of management from ownership. Today, big corporations
are owned by a vast number of shareholders while their management is in the hands of paid
qualified, competent and experienced managerial personnel.
8. Needed at all levels
According to the nature of task and scope of authority, management is needed at all levels of
the organization, i.e., top level, middle and lower level.
9.Integrated process
Management is an integrated process. It integrates the men, machine and material to carry out
the operations of the enterprise efficiently and successfully. This integrating process is result
oriented.

1.4. IMPORTANCE OF MANAGEMENT

According to Peter Drucker,” Management is the crucial factor in economic and social
development.”
The importance of management can be summarized as below:
1.Formulate objectives and goals: - Management determines the objectives and main goals
for the organization.
2.Innovation: - Management encourages to using new technology and ideas. Innovation
makes the organization more efficient.
3.Guidance: - Management provides guidance to the workers to work properly and efficiently.
4.Motivation: - Management motivates the workers to work hard by providing them various
incentives. They also solve their personal problems. In this way they can boost the productivity
and profitability of the organization.
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5.Reducing cost by increasing output: -Management does work through planning,

organizing and controlling; thus, it reducing the cost and increasing the output.
6.Optimum utilization of resources: - Management utilizes all the physical and human
resource effectively; this leads to efficiency in organization. Management provides maximum
utilization of scare resources by selecting its best possible alternate. It avoids wastage to utilize
proper resources.
7.Selection of well qualified human power: -Management selects well qualified and expert
human power for different works.
8.Establishes Equilibrium:- Management helps in serving an organization in its dynamic
environment. It enables the organization to survive in changing environment. The environment
of organization changes due to external complexities and hence management has to deal with
it. To establish sound organizational structure is one of the objectives of management.
9.Useful for society: - Management provided good standard of living to his workers. And
management provides useful and quality products to the consumers.
In the words of Peter Druker,
“Management is the dynamic life giving element in every business without it the resources of
production remains resources and never become production”.

1.5 DISTINCTION BETWEEN MANAGEMENT AND ADMINISTRATION

Management Administration

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Definition Art of getting things done through others Formulation of broad objectives,
by directing their efforts towards plans & policies.
achievement of pre-determined goals.

Nature Executing function, doing function Decision-making function, thinking

function

Scope Decisions within the framework set by the Major decisions of an enterprise as a
administration. whole.

Level of Middle level activity Top level activity

authority

Status Group of managerial personnel who use Consists of owners who invest capital
their specialized knowledge to fulfill the in and receive profits from an
objectives of an enterprise. enterprise.

Usage Used in business enterprises. Popular with government, military,

educational, and religious
organizations.

Influence Decisions are influenced by the values, Influenced by public opinion,

opinions, beliefs and decisions of the government policies, customs etc.
managers.

Main Motivating and controlling Planning and organizing

functions

Abilities Handles the employees. Handles the business aspects such as

finance.

1.6 SCOPE OF MANAGEMENT

The field of management is very wide. The operational areas of business management
may be classified into the following categories:

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1.6.1.Production Management: Production management implies planning, organizing,s

directing and controlling the production function so as to produce the right goods, in right
quantity, at the right time and at the right cost. It includes the following activities:
(a) Designing the product
(b) Location and layout of plant and building
(c) Planning and control of factory operations
(d) Operation of purchase and storage of materials
(e) Repairs and maintenance
(f) Inventory cost and quality control
(g) Research and development etc.

1.6.2.Marketing Management: Marketing management refers to t he indification of

consumers needs and supplying them the goods and services which can satisfy these wants.
It involves the following activities:
(a) Marketing research to determine the needs and expectation of consumers
(b) Planning and developing suitable products
(c) Setting appropriate prices
(d) Selecting the right channel of distribution, and
(e) Promotional activities like advertising and salesmanship to communicate with the
customers.

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1.6.3.Financial Management: Financial management seeks to ensure the right amount and
type of funds to business at the right time and at reasonable cost. It comprises the following
activities:
(a) Estimating the volume of funds required for both long-term and short-term needs of
business
(b) Selecting the appropriate source of funds
(c) Raising the required funds at the right time
(d) Ensuring proper utilization and allocation of raised funds so as to maintain safety and
liquidity of funds and the creditworthiness and profitability of business.
1.6.4.Personnel Management: Personnel management involves planning organising and
controlling the procurement, development, compensation, maintenance and integration of
human resources of an organization. It consists of the following activities:
(a) manpower planning
(b) recruitment,
(c) selection,
(d) training
(e) appraisal,
(f) promotions and transfers,
(g) compensation,
(h) employee welfare services,
(i) personnel records and research, etc.

1.7.PRINCIPLES OF MANAGEMENT
Management is a science consisting of certain principles. A principle is a fundamental statement of truth
that provides a guide to talk and action. The Principles of Management lay down guidelines for
improving Management practices. The list of fourteen principles of Management given by
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Henry Fayol is widely accepted. These principles are given below.

1.7.1.Division of Work.
Total work of an organisation is divided into small manageable units and assigned to particular
individuals. It helps to increase efficiency. The principle of division of work can be applied at all levels
in the organisation.
1.7.2.Authority and Responsibility
In an organisation the authority and responsibility should go together. The Manager gives his order
directly to the subordinate after that he should take the responsibility for the work done by them. So
the person receiving the authority should be ready to bear the responsibility for the same.
1.7.3.Discipline
Discipline should be followed by all the employees. Obedience, behaviour, discipline, flexibility
and human consideration are together called discipline.
1.7.4.Unity of Command
Every subordinate should receive orders and be accountable to only one superior. Dual or multiple
command is a perpetual source of conflict. Unity of command avoids conflicting orders and ensures
order and stability in the organisation. It is also helpful in fixing responsibility.
1.7.5.Unity of Direction
According to this principle, each group of activities having the same objective must have one head
and one plan. The principle of unity of direction seeks to ensure unity of action. Unity of direction
should not be confused with the unity of command.
1.7.6. Subordination of individual interest to general interest
Every employee should forget their individual interest and they should work for common purpose.
when there is conflict between the two, interest of the organisation should prevail over individual
interest.
1.7.7. Remuneration
The amount of remuneration and the methods of payment should be just and fair and should provide
maximum possible satisfaction to both employees and employers.
1.7.8 .Centralisation
The degree of concentration of authority should be based upon optimum utilisation of all faculties of
the personnel. It should be determined on the basis of individual circumstances in each case.
1.7.9.Scalar Chain
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It refers to the chain of superiors ranging from the highest authority to the lowest level in the
organisation. There should be a clear line of authority ranging from top to bottom of the organisation.
All upward and downward communications should flow through each position of authority along
the scalar chain.
1.7.10.Order
In material order, there should be a place for everything and everything should be in its proper place.
Similarly in social order, there should be an appropriate place for everyone and everyone should be
in his or her appointed place.
1.7.11.Equity
Equity implies that employees should be treated with justice and kindness. Managers should be fair and
impartial in their dealings with subordinates.
1.7.12.Stability of tenure of personnel
Employees cannot work efficiently unless job security is assured to them. An employee can not
render worth while service if he is removed from the job before he gets accustomed to it.
1.7.13. Initiative
Employees at all levels should be given the opportunity to take initiative and exercise judgement
in the formulation and execution of plans. Initiative refers to the freedom to think for oneself and use
direction in doing work
1.7.14.Espirit de corps
This refers to harmony and mutual understanding among the members of an organisation. Unity
among personnel can be developed through proper communication and coordination.

1.8. FUNCTIONS OF MANAGEMENT

Generally, the managers have to perform certain functions in the organisation to get the things done
by others. Different authors have given different functions. Henry Fayol has classified managerial
functions as Planning, Organizing, Directing, Co-ordinating and Controlling.

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Gullick and Urwick have described, the duties of an executive as POSDCORB ie. Planning, Organising,
Staffing, Directing, Co-ordinating, Reporting and Budgeting. Koontz.O Donnel consider
Planning. Organising, Staffing, Directing and Controlling as main functions.

MANAGEMENT PROCESS

The Main functions of the management are given below:

1.8.1.Planning
Planning is the most basic or primary function of management. Planning involves determining the
objectives and selecting a course of action to achieve them. It implies looking ahead and deciding in
advance what is to be done, when and where it is to be done, how and by whom it is to be done. It is
helpful in more effective achievement of goals. Planning helps an organisation to face uncertainty and
change.
1.8.2.Organising
Once plans are formulated, the next step is that of organising. Organizing is the process of
establishing authority-responsibility relationships among the members of the enterprise.
1.8.3.Staffing
Staffing is the process of filling all positions in the organization with adequate and qualified
personnel. Staffing consists of manpower planning, recruitment, selection, training, compensation,
integration and maintenance of employees.
1.8.4.Directing
Directing is the managerial functions of guiding, supervising, motivating and leading people towards
the attainment of planned targets of performance. Directing is the executive function of management
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because it is concerned with the execution of plans and polices.

1.8.5.Motivating
Motivating is the process of inspiring people to strive for the accomplishment of common goals by
providing stimuli that satisfy their needs and motives. Motivation is an important determinant of
job performance. Several types of incentives and rewards are used to motivate employees.
1.8.6. Communication
Communication implies exchange of facts, ideas, opinions or emotions among two or more
persons with the aim of creating mutual understanding and co-operation among them. It is a
continuous process of telling, listening and understanding several methods.
1.8.7. Co-ordination
Co-ordination refers to harmonising and integrating the activities and efforts of different individuals
into teamwork. It requires integration of diverse and specialized activities towards the achievement of
common goals. Manager integrates the efforts of different employees to ensure that they work as a
team.
1.8.8.Controlling
Controlling is the process of ensuring that the organisation is moving in the desired direction and
that progress is being made towards the achievement of goals.

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UNIT-I – ORGANIZING
Type: 100% THEORY
QUESTIONS
UNIT I:

Management-Meaning–Definition-Nature-Importance-Distinction between
Administration and Management-Scope-Principles and functions of Management

Section A

1. What is meant by management? / Define management. (April/may 2018) (April/may

2019) (Nov/Dec 2015) (Nov/Dec 2013) (Nov/Dec 2011)(Nov 2014)
2. Is management is art? (April/may 2019)
3. Give any two importance of management. (Nov/Dec 2018) (April/may 2018)
(Nov/Dec 2016)(April/may 2015)
4. What is middle level management? (Nov/Dec 2018) (Nov/Dec 2017)
5. How the management differ from administration? (Nov/Dec 2017)
6. State any two functions of management. (Nov/Dec 2016) (Nov/Dec 2015) (April/may
2015)
7. What is unity of command? (Nov/Dec 2013)
8. What do you mean by administration? (April/may 2014) (Nov/Dec 2011) (Nov 2014)
9. What is Esprit de corps? (April/may 2014)
10. What is long range –planning? (Nov 2014)
11. What is mean by optimum utilization of resources?
12. What is mean by economic growth?
13. What is mean by stability?
14. How you meet the challenge of change?
15. Define social obligations.
16. What is mean by order?
17. What is mean by division of work?
18. Define the term equity.
19. What is mean by unity of direction?

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Section B
1. Explain the nature of management. (April/may 2019) (Nov/Dec 2018) (Nov/Dec
2016) (Nov/Dec 2015)
2. What are the difference between the administration and management? (April/may
2019) (Nov/Dec 2018) (April/may 2018) (Nov/Dec 2016) (Nov/Dec 2015)
(April/may 2015) (Nov/Dec 2011) (Nov 2014)
3. Discuss the principle of management. (Nov/Dec 2018) (April/may 2018) (April/may
2015) (Nov/Dec 2013)
4. What are the benefits of scientific management? (Nov/Dec 2017)
5. Describe the limitations of management. (Nov/Dec 2017)
6. Discuss briefly management as an Art. (Nov/Dec 2016)
7. State the characteristics of management. (Nov/Dec 2013) (Nov/Dec 2011) (Nov 2014)
8. What are the objectives of management? (Nov 2014)
9. Explain the various levels of management. (Nov/Dec 2013) (April/may 2014)
10. Discuss the arguments for the universality of management concepts. (April/may 2014)

Section C
1. Discuss the importance of management. (April/may 2019) (April/may 2018)
(Nov/Dec 2015) (Nov 2014)
2. Explain the functions of management. (Nov/Dec 2017) (April/may 2015) (April/may
2014) (Nov 2014)
3. How will you classify the levels of management?Briefly describe the functions of
different levels of management. (Nov/Dec 2011) (Nov 2014)
4. Briefly explain the principles of management.
5. Explain the scope of management.

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