Management has always held a central and an extremely important position in any activity. The success or failure of any business activity heavily depends on how it is managed.
If a business unit has best of the resources that too in all the required quantities and qualities but are not managed properly then they cannot be utilized with their full efficiency. This will lead to under-performance of the unit.
The importance of management can be understood in detail through the following points:
1. Necessary in every field:
- Use of management is not limited to business activities but also in each and every type of activities including religion, defence, society, politics, education, sports, etc.
- While managing an activity, the functions of management namely Planning, Organization, Direction and Control are put into use.
2. Optimum utilization of resources:
- Through management optimum utilization of business resources such as land, capital, raw materials, humans and machinery can be done.
- Proper management reduces wastage of resources and improves their efficiency.
3. Accomplishment of objectives:
- Management is necessary for accomplishing objectives.
- Management makes optimum utilization of resources which in turn helps to achieve business objectives.
4. Useful for the success of business:
- The contribution of management in the success of a business unit is more compared to other elements.
- Success or failure of a business largely depends on management.
- The entire credit of a small scale industry rising into a large scale industry goes to management.
- Efficient management can also convert a loss making unit into a profit making unit.
5. Increase in job opportunities: Efficient management can grow a small firm into company whereas on the other hand, inefficient management can lead to closure of full-fledged developed companies.
6. Increase in profit:
- The main aim of business is to earn profit.
- Competent and proficient managers have in depth knowledge about management and hold business skills.
- They make maximum and the most economic utilization of available resources and earn maximum profit out the business.
- Thus, management playa a key role in earning and increasing profit.
7. Social benefit:
- A business is done while remaining in the society and for the interest of the society.
- Management makes uses of resources such as manpower, knowledge gained from the society, etc. available in the society and then works in the favour of the society.
- When the business earns success it in turn increases the wealth and welfare of society. For example, with time, development and competition business units produce goods and services at low cost for the people. This results into welfare of the entire society.
8. National motive: Role of management is extremely important in utilizing untapped human resources and factors of production for the economic, social and national development of an economy.
