Business Studies 2004 CBSE [ All India ] Set III

Management as a GROUP refers to the Board of Directors or Executive Directors who are responsible for effectively managing the affairs of the business by guiding and controlling the work of other managers such as production, sales, finance, personnel, quality control managers, etc.
This approach focuses on a team rather than individuals.
This is because it is believed that management as a team can contribute more effectively and efficiently than an individual.

Directing consists of supervision, motivation, leadership & communication (SMCL) .It involves issuing orders and instructions by managers to subordinates. It also guides and inspires them. Leading and motivating them to efficiently achieve the desired goals of the organisation  is also an important part of directing.

The product concept of marketing implies that consumers favour those products that offer the most quality, performance and features. Managers also believe that consumers appreciate quality features and shall be willing to pay ‘higher’ price for the ‘extra’ quality in the product or service made available to them. Those companies which believe in product concept, concentrate on product and its improvement.

Management is a human activity that  plans, controls, directs and organises the efforts of all employees in the best interest of the organisation and society.  For this the human and physical resources should be integrated in such a way that there is minimum waste of material, time and energy.

Three advantages of formal communication are:
1.      Formal Communication ensures systematic and orderly flow of information and ideas.
2.      Formal Communication provides support to the authority of superior over subordinates.
3.      The source of Formal Communication can be easily located.
Three advantages of formal communication are:
1.      Formal Communication is slow.
2.      Formal Communication is impersonal in nature.
3.      Formal Communication provides bottlenecks in the flow of information.

Following are the three factors that are considered while fixing the price of a product:
1. Cost: It is an important factor that is to be considered before fixing the price of a product. The price must enable the businessman to cover his total cost including a reasonable profit.
2. Competition: Competition is another important factor. If there is no competition the business firm can fix the price freely. But if there are competitors in the market the firm must consider the factor before fixing the price.
3.Government Control: Sometimes the government may announce a policy about pricing of goods or may specifically fix and control the prices of goods. Under such circumstances, a seller has little or no control over the prices.

Following are the three techniques of sales promotion:
1. Sample: A sample is the small quantity of a product given to a customer in order to promote the sales of the product. This helps a consumer to verify the quality of the product. Free samples are distributed to promote the sales of soap, medicines, tooth paste etc.
2. Coupons: A coupon is a certificate that enables the customer to a specified saving on the purchase of a product. Coupons are given directly to the customers.
3.Price-off Offers: Under this offer the products are offered for sale at a price lower than the normal price of the product. This offer is intended to stimulate the sales during a slump period.

Following are the important features of Advertising:
1)    Non-Personal: Advertising is a non-personal form of presenting information regarding a product, service or idea. There is no face to face contact.
2)    Identified Sponsor: Advertising is done by an identified sponsor i.e. seller or the manufacturer.
3)  Mass Communication: The advertisement is directed to a large number of persons simultaneously.

Management principles are needed for the following reasons:
Effective use of resources:
The management principle of “science, not rule of the thumb” suggest that every task should be done with minimum effort and energy and additional work can be done with the saved energy. By saving time, efforts and energy activities can be made economical and enhance the productivity of the resources.
Change in technology:
The management principle of “division of labour” helps management in identifying in which activity technology has changed. If there is no division of labour then confusion may prevail about what and how much to change and the firm might find it difficult to face competition and might in extreme case run out of business.
Effective Administration:
The principle of ‘scalar chain’ helps the enterprise to communicate with people at different levels
‘Unity of direction’ removes confusion in minds of employees; and ‘Unity of command’ avoids dual subordination. 

Thus these principles help management in managing their organisations effectively.