Fundamentals of Business Economics and Management · Introduction to Management
Objectives and Importance of Management Explained
Updated 10 October 2026 · Fact-checked
Management is the process of getting work done through people to reach set goals. Its objectives fall into three groups: organisational (survival, profit, growth), social (benefit to society) and personal (needs of employees). To answer exam questions, classify the given statement into one of these three groups.
Understand Objectives and Importance of Management
Every organisation exists for a purpose. Management is the effort that turns that purpose into results by using people, money, materials and machines well. Objectives are the targets that guide this effort.
The usual classification has three groups. Organisational objectives are what the business itself needs: survival, profit, growth and a good reputation. Management is responsible for these because the owners and the business depend on them.
Social objectives are what society expects from the business: good quality goods at fair prices, jobs, fair dealing, care for the environment and use of resources without waste. A business works inside society, so it must give something back to it.
Personal objectives are the needs of the people who work in the organisation: fair pay, job security, respect, a chance to grow and satisfaction from work. When these are met, employees work better and stay longer.
The importance of management comes from these objectives. Management helps a group reach its goals, uses scarce resources efficiently, reduces cost, helps the business cope with change, builds a stable and orderly workplace and helps the society grow through jobs and better products. Without management, effort is scattered and resources are wasted.
Key formulas to remember
- Three groups of management objectives
- Objectives = Organisational + Social + Personal
- Organisational: survival, profit, growth. Social: benefit to society. Personal: employee needs and growth.
- Organisational objectives
- Survival, Profit, Growth (and reputation)
- Survival means earning enough to cover costs. Profit pays for risk and expansion. Growth means higher sales, more products, more markets.
- Importance of management (key points)
- Achieves group goals | Efficiency | Dynamism | Stability | Personal development | Social development
- Learn these as a list. Questions often ask which point a given statement illustrates.
How to solve Objectives and Importance of Management questions
Most questions give a statement or a situation and ask which objective or which point of importance it shows. Use this method.
- 1Read the statement and find who benefits: the business, society or the employees.
- 2If the business benefits (profit, survival, growth, image), mark it organisational.
- 3If customers, the community or the environment benefit, mark it social.
- 4If employees benefit (pay, training, security, recognition), mark it personal.
- 5For importance questions, match the keyword: goals, efficiency, change, stability, development.
- 6Check the four options and remove those that name the wrong group or the wrong function.
- 7If two options seem right, pick the one that fits the main beneficiary in the statement.
Quickest way: Beneficiary test
When to use it: Use it for any MCQ asking you to classify an objective or identify a point of importance.
- Ask: who gains? Business means organisational, society means social, employee means personal.
- Spot trigger words: profit, growth, survival for organisational; environment, fair price, jobs for social; training, pay, morale for personal.
- For importance: change means dynamic, cost saving means efficiency, orderly work means stability.
- Eliminate options from other groups and choose the remaining one.
Common mistakes in Objectives and Importance of Management
Calling profit a social objective because it helps the economy.
Students think any benefit is social.
Fix: Profit is the business's own need, so it is organisational. Social objectives are benefits aimed at customers and the community.
Treating employee training as an organisational objective.
Training also helps the firm, which causes confusion.
Fix: If the statement stresses the employee's growth or satisfaction, mark it personal.
Confusing survival with growth.
Both sound like staying healthy as a business.
Fix: Survival means continuing to exist and meet costs. Growth means expansion in sales, size or markets.
Mixing objectives of management with functions of management.
Both topics appear in the same chapter.
Fix: Objectives are goals to achieve. Functions such as planning and organising are activities used to reach them.
Memorising only 'management is important' without the points.
The topic seems easy and general.
Fix: Learn the list of importance points with a one-line example each so you can match them in MCQs.
Worked examples
Example 1
A company starts a free skill-training programme for its factory workers so that they can qualify for better jobs. This is an example of which objective of management? (a) Organisational (b) Social (c) Personal (d) Legal
Show the solution
- Find who benefits most: the factory workers, who are employees.
- The aim is their own growth and better jobs.
- Needs of employees fall under personal objectives.
- Organisational would stress profit or growth, and social would stress the community, so these do not fit.
Answer: (c) Personal
Example 2
A Pune-based firm reduces wastage of raw material and lowers its cost per unit. Which point of the importance of management does this best show? (a) Stability (b) Efficiency (c) Dynamism (d) Social development
Show the solution
- The key facts are less wastage and lower cost.
- Using resources well to cut cost is efficiency.
- Stability refers to orderly, steady working, and dynamism refers to coping with change, so neither is the main idea here.
- Social development refers to jobs and community benefit, which is not mentioned.
Answer: (b) Efficiency
Exam tips
- Practise the beneficiary test until you can classify a statement in ten seconds.
- Learn one example for each objective: profit, fair prices, employee training.
- Do not confuse objectives with functions or principles of management.
- If unsure, eliminate two clearly wrong options first. There is no negative marking, so always answer.
Practice questions from Introduction to Management
- Which statement about management's importance is most accurate?
- A newly appointed manager at Kaveri Textiles first sets the quarterly production target of 12,000 metres and decides the steps needed to rea…
- Which of the following management principles of Henri Fayol states that an employee should receive orders from only one superior?
- Which statement correctly distinguishes Fayol's approach from Taylor's approach in classical management thought?
- Following Mintzberg's classification, a CEO of a Chennai textile company meets a visiting delegation of buyers and also cuts the ribbon at t…
Objectives and Importance of Management: frequently asked questions
What are the three objectives of management?
They are organisational, social and personal objectives. Organisational ones serve the business, social ones serve society and personal ones serve employees.
Why is management important for a business?
It helps reach goals, uses resources efficiently, cuts cost, helps the firm deal with change and keeps work orderly. It also supports employee growth and social development.
Is profit an organisational or social objective?
Profit is an organisational objective because it serves the business. Social objectives concern customers, the community and the environment.
How much should I study this topic for the exam?
Learn the three objectives and the list of importance points with examples. Then practise classification MCQs, as they are the usual question style.