According to Peter Drucker,
"Management is what the modern world is all
about."
This statement means that all the development that has taken
place in the world is due to efficient management.
The points below bring out the significance or
importance of management.
1. Encourages
Initiative
Management encourages initiative. Initiative means to do the
right thing at the right time without being told or influenced by the superior.
The employees should be encouraged to make their own plans and also to
implement these plans. Initiative gives satisfaction to employees and success
to organisation.
2. Encourages
Innovation
Management also encourages innovation in the organisation.
Innovation brings new ideas, new technology, new methods, new products, new
services, etc. This makes the organisation more competitive and efficient.
3. Facilitates growth
and expansion
Management makes optimum utilization of available resources.
It reduces wastage and increase efficiency. It encourages team work and
motivates employees. It also reduces absenteeism and labour turnover. All this
results in growth, expansion and diversification of the organisation.
4. Improves life of
workers
Management shares some of its profits with the workers. It
provides the workers with good working environment and conditions. It also
gives the workers many financial and non-financial incentives. All this
improves the quality of life of the workers.
5. Improves corporate
image
If the management is good, then the organisation will
produce good quality goods and services. This will improve the goodwill and
corporate image of the organisation. A good corporate image brings many added
benefits to the organisation.
6. Motivates
employees
Management motivates employees by providing financial and
non-financial incentives. These incentives increase the willingness and
efficiency of the employees. This results in boosting productivity and
profitability of the organisation.
7. Optimum use of
resources
Management brings together the available resources. It makes
optimum (best) use of these resources. This brings best results to the
organisation.
8. Reduces wastage
Management reduces the wastage of human, material and
financial resources. Wastage is reduced by proper production planning and
control. If wastage is reduced then productivity will increase.
9. Increases
efficiency
Efficiency is the relationship between returns and cost.
Management uses many techniques to increase returns and to reduce costs. Higher
efficiency brings many benefits to the organisation.
10. Improves
relations
Management improves relations between individuals, groups,
departments and between levels of management. Better relations lead to better
team work. Better team work brings success to the organisation.
11. Reduces
absenteeism and labour turnover
Absenteeism means the employee is absent without permission.
Labour Turnover means the employee leaves the organisation.
Labour absenteeism and turnover increases the cost and causes
many problems in the smooth functioning of the organisation. Management uses
different techniques to reduce absenteeism and labour turnover in the
organisation.
12. Encourages Team
Work
Management encourages employees to work as a team. It
develops a team spirit in the organisation. This unity bring success to the
organisation.
