Meaning of Management and Its Objectives (ISC Class 12 Commerce)
Updated 18 October 2026 · Fact-checked
Management is the process of planning, organising, staffing, directing and controlling the activities of an organisation to achieve its goals effectively and efficiently through people. It can be viewed as an activity, a group, a discipline and a process. Its objectives are organisational (survival, profit, growth), social and personal.
Management is a continuous cycle of five functions that works towards organisational, social and personal objectives, both effectively and efficiently.
Illustration drawn for QuestionBuddy.
Understand Meaning of Management and Its Objectives
1. Meaning. Management is the process of planning, organising, staffing, directing and controlling the activities of an organisation to achieve its goals effectively and efficiently, through and with people.
2. Effectiveness and efficiency
- Effectiveness: doing the right task and achieving the target on time; an outcome idea.
- Efficiency: doing the task correctly with minimum cost of resources; an input-output idea.
Good management aims at both. A firm that meets its production target by heavy overtime and wastage is effective but inefficient.
3. Four senses of the word
- As an activity: what managers do: interpersonal activities (dealing with people), informational activities (receiving and giving information) and decisional activities (taking decisions).
- As a group (people): all the persons who manage the organisation, from the board and top executives to supervisors.
- As a discipline: a systematised body of knowledge and a separate field of study with its own principles and theories.
- As a process: a series of interrelated functions (planning, organising, staffing, directing, controlling) performed continuously.
4. Objectives of management
- Organisational (economic) objectives: survival (revenue enough to cover costs), profit (a reasonable return to reward owners and finance growth) and growth (more sales, capacity, products, market share, employees).
- Social objectives: obligations to society: quality products at reasonable prices, employment generation, fair dealing, environmentally friendly methods, honest payment of taxes, support for community welfare.
- Personal (human) objectives: meeting employees' needs: fair wages and incentives, recognition, safety, growth and job satisfaction.
5. Sorting an objective. If it concerns the firm's own existence and earnings, it is organisational. If it concerns the community or environment, it is social. If it concerns employees, it is personal.
6. A numerical view of efficiency (imaginary). A plant meets its monthly target of 10,000 units at a planned cost of Rs 40 per unit but actually spends Rs 60 per unit. Planned cost = 10,000 x 40 = Rs 4,00,000; actual cost = 10,000 x 60 = Rs 6,00,000; the extra Rs 2,00,000 is waste, showing the plant was effective (target met) but inefficient.
Meaning of Management and Its Objectives: key facts
- Management
- Planning
- Organising
- Staffing
- Directing
- Controlling
- Effectively and efficiently.
- Four senses
- Activity
- Group
- Discipline
- Process
- Identify from the sentence.
- Objectives
- Organisational: survival, profit, growth
- Social
- Personal
- Three classes.
How to answer Meaning of Management and Its Objectives questions
Questions give a sentence and ask in which sense management is used, or which objective is shown, or ask you to compare effectiveness and efficiency.
- 1For the sense of management: people who manage means group; field of study means discipline; what managers do means activity; sequence of functions means process.
- 2For objectives, decide whether the concern is the firm, society or employees.
- 3For effectiveness and efficiency, check separately whether the target was met and whether resources were used well.
- 4Give a one-line reason.
Meaning of Management and Its Objectives in real life
The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.
Management as a group
Suppose a news report says 'The management of the hospital has decided to extend visiting hours.'
In which sense is the word management used?
Try it first, then show the solutionSolution
- It refers to the persons who run the hospital.
- So it is used as a group.
Answer: Management as a group.
Memory hook: The management decided: people.
Effective but inefficient
Imagine a bakery delivers 500 cakes for an event on time, but 120 cakes are wasted because of poor planning of ingredients.
Judge the management on effectiveness and efficiency.
Try it first, then show the solutionSolution
- The target of 500 cakes was met on time: effective.
- Resources were wasted: inefficient.
Answer: Effective but not efficient.
Memory hook: Effective: right target. Efficient: no waste.
Tricks to remember Meaning of Management and Its Objectives
Short memory aids. Say each one aloud once, then use it on a question the same day.
AGDP
Activity, Group, Discipline, Process: the four senses.
Use it when: Identifying the sense.
Effective = Ends, Efficient = Economy
Effective is about reaching the end; efficient is about economy of resources.
Use it when: Separating the two.
Meaning of Management and Its Objectives: solved examples
Ordered from board level to HOTS. Try each one before you open the solution.
Example 1: Sense of management · 1 mark · MCQBoard level
A college offers a two-year course in management with textbooks and principles. Here management is used as a:
(a) group
(b) discipline
(c) activity
(d) process
Try it first, then show the solutionSolution
- A field of study with its own principles is a discipline.
Answer: (b)
Example 2: Define effectiveness and efficiency · 2 marks · Short answerBoard level
Distinguish between effectiveness and efficiency in management.
Try it first, then show the solutionSolution
- Effectiveness is doing the right task and achieving the target; efficiency is doing the task correctly with minimum cost.
- Effectiveness concerns outcomes; efficiency concerns the use of inputs.
Answer: Target met versus resources used well.
Example 3: Cost of inefficiency · 4 marks · Short answerHarder board level
A plant meets its monthly target of 10,000 units, planned at Rs 40 per unit, but actual cost is Rs 60 per unit. Calculate planned and actual costs, the extra cost, and judge the management on both criteria.
Try it first, then show the solutionSolution
- Planned cost = 10,000 x 40 = Rs 4,00,000.
- Actual cost = 10,000 x 60 = Rs 6,00,000.
- Extra cost = 6,00,000 - 4,00,000 = Rs 2,00,000, which is 50% over plan (2,00,000 / 4,00,000 x 100).
- The target was met, so the management was effective, but cost overran, so it was not efficient.
Answer: Extra Rs 2,00,000 (50%); effective but not efficient.
Example 4: Objectives in a case · 4 marks · Short answerHarder board level
Classify as organisational, social or personal: (i) a firm sets a target to double its sales in five years, (ii) it offers free eye-check camps to nearby villages, (iii) it introduces a scheme to reward good performers and give training, (iv) it makes sure it earns enough to pay its bills each year.
Try it first, then show the solutionSolution
- (i) Organisational: growth.
- (ii) Social: support for community welfare.
- (iii) Personal: recognition and growth of employees.
- (iv) Organisational: survival.
Answer: (i) organisational, (ii) social, (iii) personal, (iv) organisational.
Example 5: Balancing objectives · 8 marks · Long answerHOTS / competency
Suppose a factory owner argues that profit is the only objective and that spending on pollution control and staff welfare wastes money. Evaluate this view using the three classes of objectives of management.
Try it first, then show the solutionSolution
- Profit is an organisational objective along with survival and growth; without it the business cannot reward owners or finance growth.
- Social objectives such as environmentally friendly methods and fair dealing are obligations to society and affect the firm's reputation and licence to operate.
- Personal objectives such as fair wages, recognition and safety keep employees motivated and productive.
- The three are linked: motivated employees raise efficiency and profit; a good reputation attracts customers.
- Ignoring social and personal objectives can lead to complaints, penalties, labour trouble and loss of goodwill.
- Therefore management should balance all three, not profit alone.
Answer: The view is too narrow; management should balance organisational, social and personal objectives.
Where students lose marks in Meaning of Management and Its Objectives
The slips examiners see most often, and what to write instead.
Mistake: Treating effectiveness and efficiency as the same
They refer to different things.
Wrong working
Efficiency means achieving the target.
Right working
Effectiveness means achieving the target; efficiency means doing so with minimum cost.
Do this: Ends versus economy.
Usually costs: 1-2 marks.
Mistake: Naming 'profit' under social objectives
Profit is organisational.
Wrong working
Social objective: earning profit.
Right working
Profit is organisational; social objectives concern society, such as employment and environment.
Do this: Classify by the party served.
Usually costs: 1 mark.
Mistake: Wrong base for percentage
Overrun is measured on planned cost.
Wrong working
3,60,000 / 15,60,000 x 100.
Right working
3,60,000 / 12,00,000 x 100 = 30%.
Do this: Divide by the plan.
Usually costs: 1-2 marks.
Exam tips
- Management is a major part of the ISC Class 12 Commerce syllabus, so learn every definition precisely.
- Give a one-line meaning for each of the four senses.
- For objectives, use a table with three columns.
- State both effectiveness and efficiency when judging a case.
Practice questions on Meaning of Management and Its Objectives
Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.
Q1 · 1 mark · Very short answerBoard level
Name the four senses in which the word management is used.
Hint
AGDP.
Answer
Activity, group, discipline and process.
Q2 · 2 marks · Short answerBoard level
State two organisational objectives of management.
Hint
Survival, profit, growth.
Answer
Survival, profit and growth (any two).
Q3 · 2 marks · Short answerHarder board level
Why is management called a process?
Hint
Series of functions.
Answer
It consists of interrelated functions, namely planning, organising, staffing, directing and controlling, performed continuously to achieve goals.
Q4 · 4 marks · Short answerHarder board level
A firm sets out to make 8,000 bags at Rs 150 each but makes 8,000 bags at Rs 195 each. Calculate planned cost, actual cost and the percentage overrun, and comment on efficiency.
Hint
Overrun on planned cost.
Answer
Planned = 8,000 x 150 = Rs 12,00,000. Actual = 8,000 x 195 = Rs 15,60,000. Overrun = Rs 3,60,000, which is 3,60,000 / 12,00,000 x 100 = 30%. The target was met but cost rose by 30%, so the firm is effective but not efficient.
Q5 · 4 marks · Short answerHOTS / competency
Suppose the 'management' of a company is blamed for a safety failure. Explain in which sense the word is used, and which objective of management the failure affects.
Hint
People and employees.
Answer
Management is used as a group: the persons who run the company. A safety failure affects the personal objective (safety and well-being of employees) and may also affect the social objective if the public is harmed.
Test your recall
Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.
1.Define effectiveness.Show answer
Doing the right task and achieving the target.
2.Define efficiency.Show answer
Doing the task correctly with minimum cost.
3.Give a social objective.Show answer
Employment generation, environmentally friendly methods or quality products at reasonable prices.
4.Which sense means a field of study?Show answer
Management as a discipline.
Meaning of Management and Its Objectives: frequently asked questions
Is management only for businesses?
No, it is needed in every organisation, which is its pervasive character.
What is meant by 'management' as a group?
All the persons who manage, from the board to supervisors.
Is survival an objective?
Yes, an organisational objective: earning enough to cover costs.