Significance of Management

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 organization.

2. Encourages Innovation

Management also encourages innovation in the organization. Innovation brings new ideas, new technology, new methods, new products, new services, etc. This makes the organization 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 organization.

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 organization will produce good quality goods and services. This will improve the goodwill and corporate image of the organization. A good corporate image brings many added benefits to the organization.

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 organization.

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 organization.

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 organization.

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 organization.

11. Reduces absenteeism and labour turnover

Absenteeism means the employee is absent without permission.

Labour Turnover means the employee leaves the organization.

Labour absenteeism and turnover increases the cost and causes many problems in the smooth functioning of the organization. Management uses different techniques to reduce absenteeism and labour turnover in the organization.

12. Encourages Team Work

Management encourages employees to work as a team. It develops a team spirit in the organization. This unity bring success to the organization.