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.