Class 12 Business Administration Notes · GSEB
Importance of Management
Importance of Management — see why management is decisive for resources, objectives, jobs, profit and society. GSEB Class 12 Commerce notes with eight illustrated importance points and exam-ready summaries.
Last updated: 23 Oct 2026
Notes
Why Management Decides Success or Failure
Notes — the key lines
- Success or failure of a business activity depends on its management.
- Resources alone are not enough — without management they are not used to the maximum.
- Good machines and good people both fail under weak management.
Management has great importance in the modern time. Success or failure of any business activity depends on its management.
Trap — Do not answer "importance" with resources — the point is that resources without management are wasted.
Eight Reasons Management Matters
Notes — the key lines
- Eight reasons: every field · optimum resource use · objectives · business success · jobs · profit · social benefit · national development.
- The chain is resources → objectives → success → jobs → profit → society → nation.
- Profit is the barometer of efficiency, not the whole purpose.
Management is required not only in business activity but also in all types of activities like religion, defence, society, politics, education, sports, etc. Management functions like Planning, Organisation, Direction and Control are required in all these activities.
Management makes it possible to take the optimum utilisation of business resources like land, capital, raw materials, personnel and machinery. It avoids wastage of resources.
Management is necessary for the accomplishment of objectives. Management makes it possible to take optimum utilisation of resources which helps to achieve business objectives.
In the success of a business unit, contribution of management is more as compared to other elements in the success of a business unit. Success or failure of a business depends on management. If a small scale industry can convert itself into a large scale industry, then its entire credit goes to management. Efficient management helps to convert a loss making unit into a profit making unit.
If management is efficient, the firm soon develops itself in the form of company whereas inefficient management becomes responsible for closure of many companies which leads to further increase in unemployment.
Generally, business units work with the motive of profit. Competent and proficient managers, with their insight and proficiency, make the maximum and the most economical utilisation of available resources and earn maximum profit. Therefore, it is rightly said that profit is the barometer for the efficiency and success of business.
Every business is carried out as a part of society and for the interest of society. By using resources of the society, management works in the favour of the society. Success of any business increases the wealth and welfare of society. Business units produce goods and services at low cost. This provides goods at reasonable rate which results into welfare of the entire society.
Management is essential to take maximum utilization of untapped human resources and factors of production for the economical, social and national development of an economy.
Key Takeaways
- Management is important because it makes activities systematic, avoids wastage, reduces uncertainty and helps accomplish objectives.
Trap — "Increase in profit" is one reason among eight — an importance answer that lists only profit loses breadth marks.
60-Second Recap
Key Takeaways
- Resources ≠ results; management is the difference.
- Field · resources · objectives · success · jobs · profit · society · nation.
Exam Questions
Exam Questions
Answer in the marks band shown. Try before you reveal.