CLASS 12

BUSINESS STUDIES

CHAPTER – I

NATURE AND SIGNIFICANCE OF MANAGEMENT

-----------------------------------------------------------------------------------------------------------------

Concepts of Organization, Resources, Management:

Before discussing about management, we need to understand what an organization is and what is

meant by ‘resources’.

Think of your house. There are rooms, furniture, food articles, kitchen-accessories, stationery

goods, clothes, medicines, money, people etc. People are your family-members. They are human

elements of your house. But only people can’t make your house run. Your mother needs to cook

and for that she needs so many things like vegetables, rice, food-grains, spices, edible oils, gas

stove and other kitchen accessories. Both human (mother) and non-human (all other items) are

needed to get a work done at the kitchen, i.e. to cook a dish or food for the family-members.

Similarly, to do your studies, you yourself need to be present and need your books, pens and

other stationery items. All the works done on this earth anywhere and everywhere, be it your

home, your father’s office or business centre, your school, your coaching classes etc. require

both one or more human element(s) who will do the work and non-human or non-living articles

through which the work would be done. These human and non-human elements help in getting a

work or task done, hence are assets as they provide utilities or benefits. Since these articles are of

value, hence can’t be availed free. These are costly and beneficial, hence are called

‘RESOURCES’ and one who needs to get these resources, requires spending money to get these.

Any place where people and non-human resources get together for inter-functioning and for

completing specific tasks driven by pre-defined goals and objectives, are called

ORGANIZATIONS. In this sense, a house, office, business establishment, shop, club, school,

coaching centre and even an NGO is called an organization. Organization refers to a system or

arrangement involving a group of people who work for a specific objective together dealing with

other resources. It is not essential that an organization should be a profit-oriented or commercial

organization only. An organization can be a business or non-business entity owned by private or

public sector and located anywhere in the world. Only it is needed for a group of people coming

together to join hands for doing some works together with resources.

Management:

Management is required for an established life and essential to managing all types of

management. Sound management is the ABSOLUTE NECESSITY for sustainable growth. Any

organization dealing with resources of human and non-human (materials, capital, technology

etc.) need to handle these resources with due care and cautiousness. The reason behind such

practice is the scarcity of resources which makes them worthy and valuable, hence organizations

need to pay for availing these resources. Since these resources involve costs and expenditure for

their procurement, deserve to be taken care of and not wasted anyway. The resource-

requirements are needed to be estimated in the appropriate (right) quantity so that neither there is

a shortage nor excess of resources that leads to wastage. Once the resources are estimated on

their required units/quantities, the resources are needed to be acquired from the best and cost-

effective sources and also to be utilized in a bets possible way so that they can deliver the

optimum output [Optimum means BEST POSSIBLE]. Waste of resources due to misutilization

or mishandling adds to the unnecessary expenditure for the organization as these resources were

purchased by paying money. Due to this particular reason resource-dealing process should be

properly planned and executed. The process through which these activities dealing with valuable

resources are done, is called the process of MANAGEMENT of resources.

How organization is related to resources and management?

Organization involves people (human) and non-human resources like machines, materials,

money, process, methods etc. Resources need to be managed for best utilization and deriving

best possible or optimum benefits. This is management which help and organization grow and

flourish. It means where there is organization, there are resources and where there are resources,

there is management of those resources.

Process: Functions like planning, organizing, staffing, directing and controlling performed by

the management to get things done.

Effectiveness: Completing the right task to achieve the deputed goal within the time frame.

Efficiency: Completion of task using minimum resources

1. DEFINITION OF MANAGEMENT:

Management is process of working with and through others (people) to effectively achieve

the organizational objectives by efficiently using limited resources in the changing environment.

It is the process of getting things done in a systematic and synchronized manner with the aim of

achieving set goals effectively and efficiently, i.e. within limited time and cost margins.

2. EFFECTIVENESS VS EFFICIENCY

• Effectiveness is about doing the right task, completing the assigned job on time, no matter

whatever the cost.

• Efficiency is about doing the job in cost effective manner i.e. getting maximum output with

minimum input/resources/cost. Due to wastage of resources, efficiency gets affected since costs

go high. Whenever cost increases, efficiency decreases. Profit increases with higher efficiency

backed by reduction in costs.

EFFECTIVENESS EFFICIENCY

It refers to completing the task on time It refers to completing the task with minimum cost

Its objective is to reach the end result on

time

Its objective is to complete the task with minimum

possible resources

It considers time constraints It considers cost-budget

It is indirectly related to profitability It directly related to profitability

There is an inverse proportional relationship in between effectiveness and efficiency. Whenever

efficiency is to be increased by reducing cost, generally more time is needed to complete the task

due to which effectiveness is compromised with. Reversely, whenever efficiency is decreased by

increased cost, more investment can be done on the work-process which lead the work to get

completed faster, which ensures higher effectiveness.

HIGH

HIGH LOW

LOW

EFFICIENCY EFFECTIVENESS

EFFECTIVENESS EFFICIENCY

OPTIMISATION

4. CHARACTERISTICS OF MANAGEMENT:

Management is a goal-oriented method: An establishment has a predefined set of fundamental

goals which are the primary basis for its being. These must be easy and explicitly mentioned.

Different establishments have various goals. For instance, the aim of a retail market may be to

improve sales, but the purpose of The Spastics Society of India is to allow education to children

with specific requirements. Management strengthens the energies of different individuals in the

company towards accomplishing these goals.

Management is all common or pervasive: The activities associated with managing a firm are

familiar to all companies whether financial, cultural or civic. The managerial functions and

principles are identical across the globe, only the difference lies in their application which is

influenced by the concerned manager’s personal and the environmental traits. How the goals are

achieved may be considerably diverse across different places, times and situations but the basis

of management lies in its functions and principles which are universally applied and pervasive in

nature. Management is common to all organizations whether economic, social or political,

government company, school, private company or a NGO.

Management is a perpetual and continuous process: The method of management is a set of

consecutive, composite, but distinct purposes (organising, planning, staffing, controlling and

directing). These operations are concurrently executed by all managers. The responsibility of a

manager comprises a continuous series of duties. Management as a process sustains as long as

the organization sustains having roles and duties carried out.

Management is intangible energy: It is an intangible strength that can’t be seen but its

proximity can be felt in the form of the business operations. The outcome of management is

remarkable in an industry where targets are reached according to procedures, employees are

comfortable and content and there is arrangements rather than confusion.

Management is multidimensional:

(a) Management of work

(b) Management by people

(c) Management by operation

The above dimensions signify the scope of management. Management is applied to manage

people or human resources, works and jobs involving various duties and responsibilities and

overall operations of various departments and the organizations at large.

Management is a group activity: It implies that it is not a single person’s job to do all the tasks

alone. Management is executed through the team of people and their supervisor(s).

Management is a dynamic function: Organizations work in the ever-changing environment

and need to respond to environmental stimuli and signals. Management needs to be dynamic,

flexible and adaptable to the changing environment to help the organization run its operations

smoothly.

5. MANAGEMENT OBJECTIVES:

Organisational Objectives: Organizational Objectives can be divided into Survival (Earning

enough revenues to cover cost); Profit (To cover cost and risk); Growth (To improve its

future prospects) and Development (To sustain with growth).

(a) Survival: Survival is the initial level of organizational objectives. It is achieved by being

solvent enough to meet up own costs and expenses. Initially, for a newly born entity, survival

becomes a challenge since it’s new to the environment and not yet immunized with the risks and

business stresses involved. It needs time to get the appetite to digest risks of losses and deal with

the challenges strategically. The period required to get this appetite to get adjusted to the system

is called gestation period which is extremely crucial stage of survival. Earning enough revenues

to cover cost after a certain period of existence ensures durable-survival. Management

attempts to take positive decisions with regard to different business activities to achieve survival

of business for long term.

(b) Profitability: Earning adequate profit is the primary economic goal of a business entity. After

achieving survival assurance in the market, the business grows and gains experience which leads

to generation of profits. Profit is the must to survive and grow.

(c) Growth: Growth indicates how well it exploits the potential opportunities. Growth of a

business can be measured in terms of sales volume increase, number of employees,

products etc. With due increase in income or profit, business reinvests the earned money to

amplify its operations.

(d) Development: The stage of sustainable growth over a considerable period of time brings

development. Growth once achieved in terms of profit, productivity, operations and scale, should

be persistent and perpetual. Continuous growth leads to the stage of business development and

the organization can aspire to set high visions and strive to reach out to the same.

SURVIVAL

PROFITABILITY

GROWTH

DEVELOPMENT

Social Objectives:

This reflects corporate social responsibilities and aims at providing satisfaction to the

stakeholders. A business organization is a social entity, uses social resources to survive. Hence,

it is the moral obligation for the business to pursue its duties to the society for the welfare and

development of the same. The people, institutions and authorities (Govt.) who come in direct or

indirect contact with the business are called stakeholders. ‘Stake’ means interest and

stakeholders mean the parties who have interest on the business’s existence and are effected by it

and vice versa. By doing all its legitimate tasks sincerely towards the stakeholders, a business

can become socially responsible and this ensures its long term sustainability.

Some of the socially responsible acts of business are providing quality products at reasonable

prices, generating employment opportunities for disadvantaged sections of society, providing

basic amenities like schools and crèches to employees, providing justifies remunerations to

the employees and workers, paying all dues on time to the parties like investors, suppliers,

Government, using environmental friendly methods of production, contributing for charitable

purposes etc. to name a few.

Personal Objectives:

It refers to the individual objectives related to the employees of the organization. It intends to

create a harmonious and congenial working environment having satisfactory and satisfied

workforce. It includes meeting the financial needs through provision of competitive salaries

and perks , incentives etc., provision of proper leave facilities, healthy and hygienic work-

environment, provision of career development opportunities and scope for learning and personal

growth through trainings, assignments etc. It also takes care of the social and safety needs of the

employee like basic amenities, peer recognition etc.

For the holistic growth of an organization, only commercial needs are not to be met through

achieving organizational objectives, rather the social and developmental needs are also to be

considered which can only be achieved if social and personal objectives are pursued with due

diligence. Personal objectives are needed for the internal health of the firm and aims at having

loyal, sincere and happy manpower. It helps creating a sound organizational culture and develops

a work environment supportive to the organizational productivity and profitability. Employees

are humans having individual needs and expectations. If organization can recognize and satisfy

their needs to the best possible extent, the employees become happy. Happy and satisfied

employees are loyal who perform better having higher productivity which proves beneficial to

the organization.

6. Importance of management:

a. Management helps in achieving group goals: Management creates teams and coordinates

with individuals to achieve individual goals along with organizational goals. Management

involves getting works done by people or a group/team of people who work under the

supervision of a manager and drive individual task-goals that contribute to the overall work of

the team. Each team-member’s work contributes to the achievement of the group-goal.

b. Increases efficiency: Management increases efficiency by using resources in the best possible

manner to reduce cost and increase productivity. With management, costs and wastages can be

minimized which adds to the profitability.

c. Creates dynamic organization: Management helps the employees overcome their resistance to

change and adapt as per changing situation to ensure its survival, growth and its competitive

edge. This can be done with proper training, orientations, communication, motivation and

leadership which are the elements of management.

d. Achieving personal objectives: Since each individual has certain personal goals it becomes

difficult to align their individual goals with the team or group goals. Management having

processes of motivation and leadership, this can be done and then only people voluntarily

contribute towards the accomplishment of the team/group goals.

e. Development of society: Management helps in the development of society by producing good

quality products, creating employment opportunities and adopting new technologies.

7. NATURE OF MANAGEMENT

1. Management as an Art

Art refers to skillful and personal application of existing knowledge acquired through study,

observation and experience. The features of art are as follows:

a) Existence of theoretical knowledge: In every art, Systematic and organized study material is

available to acquire theoretical knowledge and experts in the respective fields apply these

principles to their respective art forms.

b) Personalized application: In the field of art, mere theoretical concepts are not enough. It is

needed for the artist to apply his/her own creativity and skills into the work to make it unique

from those of others’. No two artists’ works are alike in a way as the ideas, ideals, skills and

knowledge levels of two managers are non-identical. The way a manager interprets a situation

and then attempts to deal with the same applying own skills and ideas, creates differentiation in

his/her credibility and worthiness as compared to others in the same field of work.

c) Based on practice and creativity: Art involves creativity and practice of the experts. For e.g.

the music created by musicians are different though the musical notes used are the same. An

artist acquires perfection and improved quality of work through regular practice. Similarly,

management professionals also are in a continual process of managing situations and driving

deadlines or targets. Experience acquired with time makes a professional more credible and

confident in his/her field of work.

Every manager has his own unique style of managing things and people. He/she uses his

creativity in applying management techniques and his skills improve with regular application.

Since all the features of art are present in management, it can be called an art.

2. Management as a Science

Science is a systematized body of knowledge that is based on general truths, which can be tested

anywhere, anytime. The features of Science are as follows:

a) Systematized body of knowledge: Science has a systematized body of knowledge based on

cause and effect relationship. Like Science has theories and concepts of Physics, Chemistry,

Biology, Botany, Mechanics, Mathematics etc., management also has own set of theories,

doctrines and principles quoted in management literature involving set of organized study-

materials.

b) Principles based on experiments and observation: Scientific principles are developed

through experiments and observations carried on in science-laboratories and specified places.

Management principles and theories are also the results of repetitive experimentations and

observations involving empirical studies done by the theorists at different factories,

organizational contexts across the world. This feature of science is present in management.

c) Universal validity: Scientific principles have universal validity and application. Management

principles are also universal and all pervasive in nature and learned all over the world. However,

the difference lies in their applications which is purely relative to the situational context, hence

can be modified as and when needed. The manager applies the principles as per his decision and

according to given situation.

Therefore, management principles are not as rigid as pure science principles, hence management

is also considered as Soft Science or Flexi-Science. This feature of science is also partially

present in management. As the principles of management are not as exact as the principles of

pure science, so it may be called-an inexact science. The prominence of human factor in the

management makes it a Social Science.

3. Management as Profession

Profession means an occupation for which specialized knowledge and skills are required and entry

is restricted. The main features of profession are as follows:

a) Well-defined body of Knowledge: Professionals need to acquire intense knowledge over their

specific areas of expertise and needs to study complete set of principles, concepts, terms and

activities that make up a professional domain. Therefore, every professional study involves

study-materials which make profession a well-defined body of knowledge.

Management also involves theories, doctrines, concepts and principles which are properly

organized in management theories and literature. A person may be born with managerial

aptitudes but acquires improvement and mastery through studying management courses. Hence,

managers also possess individual skills, abilities and expertise which distinguishes one manager

from the other in terms of his abilities which get nurtured and developed by management studies.

Hence, this feature of profession is also present in management.

b) Restricted Entry: The entry in every profession is restricted through examination or through

educational degree. Without a valid degree and certificate, no professional is allowed to enter

into his specified field of work. In case of management, no such educational qualification has

been made mandatory for possession to qualify as a manager, however, a minimum graduation

and now-a-days a post graduation degree is sought by the employers. Yet, in case a person

possesses a management degree, it becomes more appealing for the job-role to be handled,

hence, employers tend to prefer a management degree for holding the post of a manager in an

organization.

c)Professional Associations: All professions are affiliated to a professional association, which

regulates entry and frames code of conduct relating to the profession. Eg. IMA, ICAI, Bar

Council of India etc. A manager may also voluntarily associate himself with management

associations such as AIMA and others, however it is not compulsory as in case of any other

mainstream profession.

d)Ethical Code of Conduct: All professions are bound by a code of conduct, which guides the

behavior of its members. These ethical codes are prescribed by the authority who certifies the

professional and to be strictly complied with. However, in case of management, the

organizational behaviors and work-ethics are guided by the personalized ideologies and moral

structure of the manager concerned. However, on violation of the basic ethics which are

expected to be complied with in the business, the organization loses its credibility and supports

from its stakeholders which is deterrent to the organizational sustenance and may also invoke

Government intervention and imposition of penalties. Hence, it is important to remain ethical in

business and management.

e)Service Motive: The main aim of a profession is to serve its clients. The professionals earn fee

in return of the service delivered to the clients. A manager also needs to provide service to its

employer from whom he/she is drawing remuneration and also need to provide required services

to the people and stakeholders concerned.

Management is not a full-fledged profession.

8. LEVELS OF MANAGEMENT

As discussed earlier, management is a group

effort, since organization constitutes a group

of people who work into sub-groups or

departments and levels and contribute to the

overall performance of the organization.

The smaller pyramids indicate

Departments/functions. The intensity of color

indicates the concentration of staffs involved.

Departments/

Functions

Levels

Framework of hierarchical positions reflecting the reporting relationships in between different

job roles is called organizational structure. It is in a pyramidal shape or like a reverse-tree,

where the root is at the top and having a spread of branches at the below, having the maximum

number of branches at the bottom most area.

It means there is a top position at the extreme peak point which depicts the position of either the

Chairman or CEO. There are few designated posts

at the top area which is called the top level

management. Board of directors constitute the

top level management, who are involved in

strategic decision-making.

At the next subordinating stage,

there is increase in the number of job-positions

and this generally involve the roles of

functional or departmental heads.

This stage is called middle level management.

Figure: Top level and Middle level management

Finally the below-most supervisory level

involves the jobs of superintendants, foremen

or lower-level managers who are involved

with the execution of tasks by maintaining direct

touch with the workers who are involved in the

final production or execution process. This level is called lower level management.

The structure of managerial levels ends here, however, organizational structure involves one more

level at the bottom-most position of the reverse-tree framework.

This stage in non-managerial in nature as there is no more stage below this stage to supervise or

manage. This last stage involves workers and laborers who are supervised by the lower level

management peoples. Hence, this structure is of a pyramidal shape having narrower span of

management at the top and wide span of management at the bottom. There are different job-

positions involved in all the organizational levels, both managerial and non-managerial. The

following illustrations depict the various job-positions involved at different levels connecting

them with the authority-responsibility flow. Authority means the empowerment and the right to

take decisions. In an organization, senior-level people can only take decisions, make policies and

strategies, and the lower level people are required to follow the rules, decisions etc. framed at the

top level. But when there is delegation of authority, then supervisors allot the decision-making

right to some desired extent to the subordinates which would help them to perform better. Hence,

the authority should be delegated by the superiors to the subordinates and is downward-flowing in

nature. On the other hand, responsibility denotes the duty of fulfillment of a given task making

someone in charge of executing the same accountable to his/her supervisor, who had assigned the

task. Subordinates need to show responsibility to their supervisors for accomplishing a given task,

hence responsibility is having an upward-flow from the subordinates to the superiors. As shown in

the diagram below, authority flows from the top to the bottom and responsibility flows in the

reverse order, i.e. bottom to the top.

Top Management: Designations and Functions

Comprises of the Chairman, CEO, Board of Directors, Managing Directors, General Manager,

President, Vice Presidents, COO (Chief Operating Officer) etc. They are involved in the board of

directors.

Main tasks of this level are:

Determining organizational goals,

Making master-plans to achieve the set goals,

Policy and strategy formulation,

Organizing, coordinating and controlling the activities and resources of various

departments. Establishing liaison with authorities and organizations such as Government

agencies, NGOs, media, business associations etc.

Approving budgets.

Middle Management : Designations and Functions

This level comprises of departmental, sub‐departmental and divisional heads. There are different

functions carried on in an organization such as marketing, human resource, finance, accounting,

administration, sales, operations, quality, production, customer care etc. There are individuals who

are kept in charge of each of the functions depending on their area of expertise and knowledge.

For example, a finance graduate or a chartered accountant might be offered the role as the head of

finance department and likewise. These departmental heads and their immediate assistants as sub-

departmental heads fall under middle level management. They supervise and control the works

done by the lower level managers.

Its main tasks are:

Execution of plans, policies framed by the top level management and preparing

organizational set up.

Interpreting and explaining the plans, policies to the lower level managers.

Staffing of lower level people and providing training to them,.

Cooperating with other departments in order to establish coordination, which is required

for smooth functioning of the activities.

Establishing a link between the top and the lower level management.

Recommending ideas to the top level managers and assisting in decision-making.

Supervisory and operational Level : Designations and Functions

This level consists of supervisors to the non-managerial level workers, foremen and accountants,

sales executives, office and factory supervisors etc. They are directly in contact with the execution

level and assist the bottom-level peoples to carry out their tasks and duties.

Main tasks of this level are:

Ensure actual implementation of the policies as per directions of top & middle level.

Bringing workers’ grievances before the management

Maintaining discipline among the workers.

Supervising and motivating the workers.

Arranging for a proper and safe working condition for the workers.

Planning day-today work and training the workforce for the execution.

Learn with Fun: See and guess: Which level of organization they indicate?

a)

b)

c)

d)

9. Functions of Management:

There are seven management functions which are commonly performed by all the managers in a

more or less intensive manner. Managers from any place, organization or level are required to

perform these functions.

Management functions are the core activities involved in the process of management. There are

seven (7) functions of management. They are planning, organizing, staffing, directing, controlling,

reporting and budgeting. These functions have been explained in short under:

a) Planning : Once an objective is established, it is needed to make a detailed blueprint of the

future actions. These projected actions are estimated beforehand so that the work can

proceed smoothly towards the achievement of the pre-determined goals. This blueprint of

the prospective future actions is called a plan and the process of making it is called

planning. This is the first function of management. In short it is about deciding in advance

what to do, how to do, when to do and by whom an activity is to be done. Planning bridges

the gap between where we are and where we want to reach by deciding the future course of

actions.

Management Functions

Planning Organizing Staffing Directing Controlling Reporting Budgeting

b) Organizing: It involves assigning duties, grouping of tasks, establishing authority and

responsibility relationships, allotment of job-roles etc. It also involves arrangement and

allocation of the resources required to perform a specific plan. Organizational structure is

prepared incorporating the job positions so that staffing can take place.

c) Staffing: Once, the organizational structure is formulated, it is clear about the total

number of job-positions available in each level and the required qualities to be fetched. It

involves processes like manpower planning (already started in organizing stage),

recruitment, selection, placement, orientation, and training (involved in directing). It aims

at finding the right person for the right job at the right time.

d) Directing: It involves supervising the people who are selected and placed in the stage of

staffing. It involves instructing, guiding, mentoring, training, communicating, leading,

influencing & motivating the subordinates by the manager so that the assigned tasks can be

performed by them efficiently and effectively.

e) Controlling: Refers to monitoring organizational activities performed by the subordinates

and ensuring that these activities are performed in a desired way towards the attainment of

organizational goals. It involves setting standards and measuring the current performance

as per the set standards or norms (targets) by comparing with the standards and taking

corrective action for any deviations.

f) Reporting: It involves the process of collecting relevant information and sending the same

in the form of reports to the concerned persons and departments across the organization to

enable sound decision-making on the basis of those reports.

g) Budgeting: Budgeting is needed to develop an understanding about the availability of

scarce resources according to which the required decisions can be made and executed.

Budgeting helps in planning and also in controlling as the performance can be made and

controlled according to the budget.

Top level management is more involved with the task of planning and strategizing, however

middle level managers are more involved with organizing, staffing and directing. The lower level

managers are more involved with the task of supervising and directing the non-managerial level

workers.

10. COORDINATION

An organization comprises of several persons, each of whom have been assigned with specific

job-duties and tasks to perform. Organization is a bigger group that incorporates individuals and

who are assembled formally into smaller groups or clusters, called departments or functions.

Each person in each functional area has been

allotted with specific targets which bear a

contribution to the overall organizational

objectives, hence every person and every job

mentioned in the organizational structure is

important. Common action can be obtained

when all the people in a group can be lined

up with same objectives and motives.

However, since people have different ideas and mental structure and also they are lined up into

different functional areas, it becomes difficult to get all of them aligned with the same objectives

which can guide their actions proceed towards a common path leading to the overall

organizational success. Therefore, it is a challenging task for the managers to harmonize and

synchronize dissimilar motives and actions of the team (subordinates) and integrate their efforts

to achieve the group goals and team-spirit.

Coordination is the force which synchronizes

all the efforts and motives of a group of people

and guide them proceeding towards a desired

common direction. Similarly, there is immense

necessity for all the departments/functions to

have proper communication and understanding

in between them because, their actions are

interrelated and interdependent.

Moreover, working in a common organization with individual expertise needs a proper system

through which each of the functions can stay connected and share necessary information at the

time of necessity.

Apart from that all the seven functions of management are also interlinked as without performing

one function, the next one can’t be started.

SYNCHRONIZATION COMMUNICATION COOPERATION = COORDINATION

Therefore establishing synchronization, cooperation and communication in between

individuals, departments and management functions is the must for organizational functioning.

Coordination is the binding force that includes the above three sub-forces or systems which

enables management to achieve the above-mentioned objectives.

FEATURES OF COORDINATION:

Coordination Integrates Group Effort: There is no need of coordination when there is

only one person involved. In order to manage a group of people and their efforts,

coordination is required. It is an orderly arrangement of group effort to ensure that

performance is at par with the plans and schedules.

Coordination Ensures unity of action: Coordination unifies the efforts of different

individuals working in a group. It is a binding force between various departments and

ensures that all efforts are focused towards achieving the organizational goal.

Coordination is a Continuous Process: It is a never-ending process as its needs are felt at

all levels and in all activities in the organizations. It begins at the planning stage and

continues until controlling.

Coordination is the responsibility of all managers: coordination is equally important at

all levels of management. It is the responsibility of all the individuals in an organization to

carry out their work in a responsible manner and coordinate with each other to achieve

organizational goals. Hence, managers of all the departments and levels are responsible for

maintaining coordination within their individual teams and in between the teams as well.

Coordination is a deliberate function: A manager has to coordinate the efforts of

different people in a conscious and deliberate manner. In other words, coordination is

never established by itself rather it is a conscious effort on the part of every manager.

Coordination is all pervasive function: It is needed in all departments and at all levels. It

is the job of every manager to get the work done by his/her team of people or subordinates.

Without coordination group efforts can’t be achieved and hence coordination is the heart of

the process of management and all pervasive in nature,

IMPORTANCE OF COORDINATION:

The reasons that bring out the importance or the necessity for coordination are

Growth in the Size: The need of coordination increases along with the size of

operations. An organization’s growth results in the increase in the number of people

with varied individual aspirations, background and culture. Integrating their effort in

a team requires a binding force to unify their minds removing all dissimilarities. So it is

important to harmonize individual goal with the organizational goals through

coordination.

Functional Differentiation: All the departments and divisions may have their own,

objective, policies and their own style of working. However all departments and

individuals are interdependent and cannot work in isolation. Thus, coordination is

necessary for linking the activities of various departments.

Specialization: Mostly specialists have a feeling of superiority and prioritize their zone

of activities. Coordination seeks to sequence and integrate all the specialists’ activities

into a wholesome effort.

Interlinking management functions: Management functions ranging from planning to

reporting are interconnected and inter-dependent. Without the completion of one

function, the other can’t be started with. All the functions are bound together through

coordination.

It is needed to avoid confusion and ambiguity so that a clear communication can be established

in between the peoples and groups to make everyone conscious and aware of their individual sets

of duties and responsibilities and also to understand their roles in the organization as individual

performance is aligned with the organizational performance. Coordination is also needed to

prevent overlapping & duplication of actions resulting in delay in completion. Communication is

the essence of coordination whereas coordination is the essence of management.

Difference between Coordination and Cooperation:

***************