Management is a must for every organization. The existence of management allows the proper functioning of the organization. Moreover, management plans the activities to achieve the objectives and optimize the available resources at minimum cost. In this article, we will look at objectives as well as the importance of management.
Objectives of Management
1. Economic objectives
(a) Earning Profit
Every business organization is established with a motive to sell or make goods and services to earn a substantial profit. Hence, it is easy for the organization to face the uncertainties in a business cycle. It includes a change in demand pattern, fluctuation in money markets, changing the outlook of customers, etc.
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(b) Production of Goods
For an organization to earn profits, it has to produce goods by optimal utilization of resources like men, money, material, and machinery. All these resources can lead to an increase in efficiency and getting higher productivity with minimum effort. Moreover, the goods so produced are sold in the market.
(c) Creating Markets
Firstly, every organization wishes to sell its complete produce. Hence, for doing so an organization need to open up new markets, spread into existing markets, increase the market share, etc.
(d) Technological Development
In this current era, technology plays an important role in determining the position of the organization. Hence, it becomes extremely important for the concerns to upgrade their technologies. Moreover, through this, they would be able to get additional benefits of cost reduction also.
2. Human Objectives
(a) Employees Welfare
Though the basic objective of earning profit could be possible only when the employees are hard working. It is because they help in increasing the profit of the firm. So, the management should work towards the employ’s welfare by providing all relevant benefits.
(b) Satisfaction of customers
All the organizations should provide goods to consumers at a reasonable price. The needs and perceptions of the customers should be important as the business is meant for consumers. Hence, their satisfaction should be the major objective of the business.
(c) Shareholders satisfaction
As the organization grows in size it is difficult to finance the working of the organization individually. Hence, these organizations have shareholders who invest money in companies. So, for this, the management should give a reasonable return on the money which the shareholders invest.
3. Social objectives
(a) Availability of goods
Business organizations should maintain an adequate supply of products to fulfill the needs of society. The firm should study the demand of the market. And according to that, they should decide the production and supply of goods.
(b) Quality of goods and services
One of the basic responsibilities of the organization is to supply quality goods and services to customers at fair and adequate prices.
(d) Creating job opportunities
Every organization can serve society by creating a large number of job opportunities. The business expansion helps the firm in getting more profits. Moreover, it provides employment to the unemployed.
(e) Natural resources
Efforts should be made by the businessmen to use the resources in the most productive and optimum way. Wastage of any such resource is a loss to the organization and to the society.
Solved Question on Importance of Management
Question: State any 3 importance of Management.
Answer: Following are the importance or advantage of Management:
1. Reduces Costs – It gets maximum output through least input by proper planning. Moreover, management uses physical, human and financial resources in such a way which results in the best combination. Hence, one of the importance of management is that it helps in cost reduction.
2. Establishes Equilibrium – Another Importance of management is that it enables the organization to sustain in a dynamic environment. Hence, with the change in the dynamic environment, the initial coordination of the concern must change.
3. Establishes Sound Organization – Lastly, to set-up sound organizational structure is one of the objectives of management which is in relation to the objective of the company. Moreover, for the fulfillment of this, it sets up effective authority.