Objectives of Management

Management attempts to accomplish specific objectives which are the solicited outcome of any action. They must be received from the fundamental view of the business. In any business, there are several objectives and the administration has to complete all objectives in an efficient and effective manner. Objectives can be categorised into organisational objectives, social objectives and personal or individual objectives.

Vital Objectives of Management:

  • Organisational Objectives: Management is accountable for establishing and attaining objectives for the company. It has to deliver a variety of objectives in all operations contemplating the interest of all shareholders including, stakeholders, consumers, the government and employees. The principal objective of any company must be to use material and human resources to the maximum potential benefit, i.e., to meet the financial objectives of a firm. And, they are survival, profit and growth.
    • Survival: The essential objectives of any industry is survival. Management must attempt to assure the continuation of the business. In order to survive, an industry must gain enough funds to meet the costs that would be incurred.
    • Profit: Poor survival is not sufficient for the industry. Management has to make sure that the company earns the profit. Profit contributes to a necessary catalyst for the sustained successful performance of the firm. Profit is crucial for meeting the costs and uncertainties of the business concern.
    • Growth: A firm requires to add to its chances, in the long run, for this it is necessary for the concern to develop. To prevail in the business, management must utilise adequately the growth potential of the firm.

Also Read: Class 12 Business Studies Syllabus

  • Social objectives: It includes the establishment of benefit for the community. As a part of the community, every business whether it is a trade or non-trading concern has a social responsibility to meet. This applies to consistently generating financial value for many components of society. This includes using environmentally beneficial technologies of production, providing job opportunities to the disadvantaged sections of the community and furnishing the primary facilities like crèches and schools to employees.
  • Personal Objectives: Establishments are made up of resources who possess different backgrounds, experiences, objectives and personalities. They all become part of the establishment to meet their several demands. These differ from economic necessities such as ambitious perks and salaries, social obligations such as equal attention and higher level demands such as individual growth and progress.
5-6 MARKS QUESTIONS
Q1. AN ORGANISATION SETS DIFFERENT OBJECTIVES FOR ITSELF AND OTHER STAKEHOLDERS. EXPLAIN SUCH OBJECTIVES BRIEFLY.
ANSWER:

AN ORGANISATION SETS AND ACHIEVES THE FOLLOWING OBJECTIVES:

(a)ORGANISATIONAL OR

ECONOMIC OBJECTIVES

  • These objectives are set on the basis of the goals of the organisation.
  • These objectives are set by keeping in mind the interests of various stakeholders like owners, employees, shareholders, employees etc.
  • The purpose of setting these objectives is to ensure optimum use of all available resources.
  • Management is responsible to set and achieve such objectives.

These objectives are classified as:

(1)SURVIVAL:

  • The basic objective of any organisation is survival.
  • For this, an organisation must earn sufficient revenues to cover the cost.

Example:

If Ram is running a shop and incurring a cost of Rs.50,000 per month then he has to collect minimum revenue of Rs.50,000 to cover all his costs otherwise his business won’t survive.

(2)PROFIT:

  • Mere survival is not enough for any organisation
  • An organisation needs to earn profit to face unforeseen or contingent situations.

Example:

If the revenue of the shop is more than Rs.50,000, than Ram is earning a profit. The more the gap between the cost of production and revenue collected, the better the profit. It will help him in reducing business risk.

(3)GROWTH:

  • Regular earning of profits makes it possible for an organisation to expand and stay in the industry and face competition.

Growth of an organisation can be measured by:

  • Increase in revenue.
  • Increase in the number of employees.
  • Increase in the number of products.
  • Increase in the number of branches.

Example:

Patanjali is growing as it is dealing in a variety of products and opening megastores in multiple cities.

(b) SOCIAL OBJECTIVES
  • Survival of any organisation whether it is private or government, depends upon its commitment towards society.
  • The organisations which care for society enjoy long term growth.

Some of the social objectives are:

  • Using environment-friendly methods of production.
  • Producing quality products at reasonable rates
  • Employment generation in society.
 

(c) PERSONAL OR INDIVIDUAL OBJECTIVES

  • These objectives are related to the growth of the employees working in an organisation.

Some of these objectives are:

  • FINANCIAL NEEDS–Providing competitive salaries and perquisites.
  • SOCIAL NEEDS-Self-respect, peer recognition, respect for colleagues.
  • HIGHER END NEEDS or SELF DEVELOPMENT NEEDS.
Q.2 M LTD. WAS MANUFACTURING HEATERS. IN THE FIRST YEAR OF ITS OPERATIONS, THE REVENUE EARNED BY THE COMPANY WAS JUST ADEQUATE TO MEET ITS COSTS. TO INCREASE THE REVENUE, THE COMPANY ANALYSED THE REASONS OF LESS REVENUE. AFTER ANALYSIS THE COMPANY DECIDED:

(I) TO LESSEN THE LABOUR COST BY MOVING THE MANUFACTURING UNIT TO A BACKWARD LOCALITY WHERE LABOUR WAS AVAILABLE AT A VERY LOW COST.

(II) TO START MANUFACTURING SOLAR HEATERS AND REDUCE THE PRODUCTION OF ELECTRIC HEATERS SLOWLY. THIS WILL NOT ONLY HELP IN COVERING THE RISKS BUT ALSO HELP IN MEETING OTHER OBJECTIVES TOO.

(A) RECOGNIZE AND EXPLAIN THE AIMS OF MANAGEMENT DISCUSSED ABOVE.

(B) STATE ANY 2 VALUES WHICH THE COMPANY WANTED TO COMMUNICATE TO THE SOCIETY.

(OUTSIDE DELHI 2014)

ANSWER:
(A) OBJECTIVES OF MANAGEMENT
  • Organisational Objectives: These objectives are set on the basis of goals of the organisation and management is responsible to set and achieve such objectives.

These objectives are Survival, Profit and Growth of an organisation.

  • Social Objectives: Survival of any organisation whether it is private or government, depends upon its commitment towards society.

The organisations which care for society enjoy long term growth.

Example:

Using environment-friendly methods of production, generating employment opportunities etc.,

(B) VALUES COMMUNICATED TO THE SOCIETY
  • Generation of employment opportunity.
  • Balanced regional development.
1 MARK QUESTIONS
Q.1 HOW DOES MANAGEMENT HELP IN ACHIEVING PERSONAL OBJECTIVES? STATE. (DELHI 2015)
ANSWER:

The management of any organisation achieves personal objectives of employees by focusing on and fulfilling the personal needs of the individual employees.

Q.2 LIST ANY TWO SOCIAL OBJECTIVES OF MANAGEMENT.
ANSWER:

Social Objectives of management:

  • Using environment-friendly methods of production.
  • Community services like opening of schools and crèches.

The above mentioned is the concept, that is elucidated in detail about the Objectives of Management for the class 12 Commerce students. To know
The above mentioned is the concept, that is elucidated in detail about the Objectives of Management for the class 12 Commerce students. To know more, stay tuned to BYJU’S.

Leave a Comment

Your email address will not be published. Required fields are marked *