Module II – Management and Organization

Management process – planning-Mission –

objectives – goals – strategy – policies –
programmes – procedures
Organizing, principles of organizing, organization
structures
Directing, Leadership
Motivation, Controlling
 MANAGEMENT PROCESS
 Management is a process which brings the scarce human and
material resources together and motivates people for the
achievement of objectives of the organization.

 Management is not a onetime act but an on-going series of

interrelated activities. The sum total of these activities is known as
management process.

 It consists of a set of interrelated operations or functions necessary

to achieve desired organizational goals.

 An analysis of management process will enable us to know the

functions which managers perform.
 FUNCTIONS OF MANAGEMENT

 PLANNING
 ORGANIZING
 STAFFING
 DIRECTING
 CONTROLLING
1. PLANNING:

 involves the formulation of what is to be done, how, when, where it

is to be done, who is to do it and how results are to be evaluated.
 It is the first essential which is to be performed by a manager to
determine what must be done by the member in order to
accomplish the work.

The process of planning involves:

 Crystallization of determination of the corporate objectives
 Collection and classification of information
 Development of the alternative courses of action
 Selection of the optimum course of action
 Establishment of policies, procedures/ methods, schedule systems, standard and
budgets
2. ORGANIZING:

 distribute or allocate the necessary component activities

among the members of the group.
 The work of task allocation, authority delegation and
relationship establishing by the manager is known as
organizing.

The process of organizing involves:

 Division of the work in to component activities;
 Assigning people to tasks;
 Defining responsibilities;
 Delegation of authority; and
 Establishment of structural relationships to secure coordination.
3. STAFFING:

 For doing work, the superior has to do man power planning i.e., the
planning for how many persons are required and what should be the
qualities they possess.
 On this basis, persons are selected and after that they are trained.

 Staffing function involves the following activities:

 Forecasting of the number of personnel required.
 Decide their qualification which is required.
 Recruitment & selection.
 Training & development of employees.
 Performance evaluation of employees.
 Take the decision relating to the issues like promotion, transfer, demotion
etc.
 Prepare a compensation package plan.
 Maintaining personnel accounts.
4. DIRECTING:

 To carry out physically the activities resulting from the

planning & organizing steps, it is necessary for the manager
to take measures that will start and continue action as long
as they are needed in order to accomplish the tasks by the
members of the group.

 The process of directing involves:

 Providing effective leadership.
 Integrating people and tasks and convincing them to assist in the
achievement of the overall objectives.
 Effective communication, and
 Providing climate for subordinates' development.
 5. CONTROLLING

 Controlling involves checking the performance by comparing it with the desired

results to see how much has been achieved or whether we are going in right
direction or not.

 Controlling involves the following activities:

 Continuous observation and study of periodic results performance in order to identify
potential problems;
 Selection of the best of the mode of control;
 Comparison of the performance with the range of standards established beforehand;
 Pinpointing significant deviations;
 Assertion their exact causes; and
 Initiation and implementation of the corrective action.
MANAGEMENT PLANNING
 PLANNING
 major and primary function of management that involves setting objectives and
determining a course of action for achieving those objectives.

 Planning is a preparatory step for action.

 It means systematized pre-thinking for determining a course of action to achieve
some desired result.
 Planning is essentially a process of deciding in advance what is to be done, when
and where it is to be done, and how it is to be done, and by whom.

 Planning is the process by which the managers of an

organisation set objectives, make an overall assessment of the
future, and chart the courses of action with a view to achieving
the organisational goals.
planning process involves:

The determination of appropriate goals and

objectives

The specification of the actions needed to

reach the established objectives

The optimum period of time for achieving them

STEPS IN PLANNING
TYPES OF PLANNING
Financial or Non-Financial Planning:
 Financial plans relate to the monetary side of a concern.
 Plans relating to the physical resources of a concern may be termed as non-
financial or non-cash plans.

Formal and Informal Planning:

 Formal plans are more than just talk put on paper. It is in the form of well
structured process.
 Formal planning is based on systematic evaluation of environmental
happenings
 Informal planning is based on managers memory of events, intuitions and gut
feelings.
Specific or Routine Planning:
 Any plan for a particular purpose is known as 'specific planning',
 that which is mechanical may be termed as 'routine planning.'

Profit Planning:
 Profit planning is generally based on forecast, and therefore, to get profit,
certain steps must be taken, duties must be assigned and the future
forecasted in such a way as to get the object fulfilled.
 profit plans provide intermediate check points enabling the management
to appraise the progress made towards pre-determined goals.
Short and Long-Range Planning:
 short- range planning can be defined as planning which covers a period
from six to twelve months.
 Long-range planning usually involves time interval of three to five years.

Hierarchical Plans
 Strategic planning involves analyzing competitive opportunities and threats,
as well as the strengths and weaknesses of the organization, and then
determining how to position the organization to compete effectively in their
environment.

 Tactical planning is intermediate-range (one to three years) planning that is

designed to develop relatively concrete and specific means to implement
the strategic plan. Middle-level managers often engage in tactical planning.

 Operational planning is short-range (less than a year) planning that is

designed to develop specific action steps that support the strategic and
tactical plans.
Contingency Plans
 Plans created to deal with events that might come to confront the
organization (e.g., natural disasters, terrorist threats); alternative courses of
action that are to be implemented if events disrupt a planned course of
action.

Frequency-of-Use Plans
 Standing Plans
 Policies
 Rules
 Procedures
 Single-Use Plans
 Programs
 Projects
 Budgets
ORGANISING
ORGANIZATION

 The term “organisation is derived from the word organism which means a
structure of interrelated and interdependent parts.
 The various elements that constitute organisation include men, machines,
materials, money, methods, authority and responsibility. There is no
standard definition for the word organisation.

 “Organisation is a system of consciously coordinated activities or forces of

two or more persons

 “Organisations are collectivities of people that have been established for

pursuit of relatively specific objectives on a more or less continuous basis”.
Characteristics of an Organisation
Common goal
Division of labour
Authority structure
Group
Communication
Co-ordination
Environment
Rules and regulations
PROCESS OF CREATING AN ORGANIZATION
Determination of total work
Departmentation
Work/duty assignment
Delegation of Authority
Creation of Accountability
Defining relationship
ORGANIZING
 Organising means designing the organisation structure.

 Organizing is the function of management that involves

developing an organizational structure and allocating human
resources to ensure the accomplishment of objectives.

 Organising is that managerial process which seeks to define

the role of each individual (manager and operator) towards
the attainment of enterprise objectives.

 The structure of the organization is the framework within which

effort is coordinated.
 In performing the organising function, the manager
differentiates and integrates the activities of his
organisation.

 The structure is usually represented by an organization

chart, which provides a graphic representation of the
chain of command within an organization.
Importance of Organizing in an Organisation
Benefits of Specialization
Clarity in Working Relationships
Optimum Utilization of Resources
Adaptation to Changes
Effective Administration
Development of Personnel
Expansion and Growth
DELEGATION

 The process of delegation starts from the chief executive of an organisation

who has the total responsibility for the achievement of goals.
 In order to share the responsibility of accomplishing goals, he further
delegates the work to his subordinates.

Elements of Delegation
1. Assignment of duties or tasks.
2. Delegation of authority.
3. Accountability for performance of duties and exercise of authority.
 SPAN OF CONTROL
 The term "span of
control" or "span of
management is
defines "the number
of subordinates who
are working under
one manager."

 It indicates the
number of
subordinates who
report directly to a
manager.
Factors determining  Effectiveness of Communication
System
Span of Control
 Quality of Planning
 The Capacity and Ability of the
Executive  Degree of Physical Dispersion

 Competence and Training of  Assistance of Experts

Subordinates  Control Mechanism
 Nature of Work  Dynamism or Rate of Change
 Well-defined Authority and  Need for Balance
Responsibility
 Geographic Location
 Time Available for Supervision
 Economic considerations
 Degree of Decentralization
and Extent of Delegation
ORGANISATION STRUCTURES
 Organisation structure is the pattern of organisational hierarchy based on authority
responsibility relationship.

Features and characteristics of organisation structure are:

 It facilitates coordination of organisational activities and tasks.
 It states the pattern of formal relationships and duties among people at different
positions in the organisation.
 In elaborates the hierarchical relationship among different levels of management
within the organisation.
 It facilitates the implementation of policies, practices, procedures, standards
evaluation systems etc. that guide the activities and relationship among people in the
organisation.
 It sates the activities and tasks assigned to different departments and people in the
organisation.
 It is a network of well-defined activities. The activities are arranged in a logical manner
that the performance of one activity leads to performance of the other.
 It is a distribution of authority which gives rise to superior-subordinate relationship,
 This is composed of differentiation and integration. The different tasks are divided into
subtasks and performed by individuals with specialized skill.
Factors Influencing Organisation Structure
Objectives of organisation
Nature of organisation
Size of the operation
Attitude of management
Level of technology absorption
Different Organisation Structures

1.Line Organisation
2.Line and Staff Organisation
3.Functional Organisation
4.Project Organisation
5.Matrix Organisation
 Line Organisation
 It is also known as scalar organization,
military organization, vertical organization
etc.
 The main characteristic of this type is
superior subordinate relationship.
 Authority flows vertically from top level
person to all the persons responsible for the
execution of work.
 Everybody is responsible for his work and is
accountable to his boss.
 Since authority and responsibility flow in an
unbroken straight line, it is called line
organization.
 Advantages of Line Organization:
1. structure is very simple to understand and simple to operate.
2. Communication is fast and easy and feedback can be acted upon faster.
3. Responsibility is fixed and unified at each level
4. authority and accountability are clear-cut
5. Useful when the company is small in size, it provides for greater control and discipline in the
organization.
6. It makes rapid decisions and effective coordination possible. So it is economic and effective.
7. The people in line type of organization get to know each other better and tend to feel close to each
other.
8. The system is capable of adjusting itself to changing conditions for the simple reason that each
executive has sole responsibility in his own sphere.

Disadvantages of Line Organization:

I. It is a rigid and inflexible form of organization.
II. There is a tendency for line authority to become dictatorial.
III. It overloads the executive with pressing activities so that long-range planning and policy formulation
are often neglected.,
IV. There is no provision for specialists and specialization, which is essential for growth and optimisation.
V. Different departments may be much interested m their self-interests, rather than overall organizational
interests and welfare.
VI. It is likely to encourage nepotism.
VII. It does not provide any means by which a good worker may be rewarded and a bad one punished.
 Line and Staff Organisation
 This type of organization structure is in
large enterprises.
 The functional specialists are added to
the line in line and staff organization.
 Mere, staff is basically advisory in nature
and usually does not possess any
command authority over line managers.
 In the line and staff organisation, staffs
assist the line managers in their duties in
order to achieve the high performance.
 Advantages of Line and Staff Organisation:
 Line officers can concentrate mainly on the doing function as the work of
planning and investigation is performed by the staff. Specialisation provides for
experts’ advice and efficiency in management.
 Since the organisation comprises line and staff functions, decisions can be taken
easily.
 The staff officers supply complete factual data to the line officers covering
activity within and without their own units. This will help to greater co-ordination.
 It provides an adequate opportunity for the advancement of workers.
 The staff services provides a training ground for the different positions.
 Adequate organisation a balance among the various activities can be attained
easily.
 The system is flexible for new activities may be undertake by the staff without
forcing early adjustments of line arrangements.
 Staff specialists are conceptually oriented towards looking ahead and have the
time to do programme and strategic planning and analyse the possible effects
of expected future events.
 Disadvantages of Line and Staff Organisation:
 Confusion and conflict may arise between line and staff. Because the allocation of
authority and responsibility is not clear and members of the lower levels may be
confused by various line orders and staff advices.
 Staff generally advise to the lines, but line decides and acts. Therefore the staffs often
feel powerless.
 Too much reliance on staff officers may not be beneficial to the business because line
officials may lose much of their judgment and imitative.
 Normally, staff employees have specialised knowledge and expert. Line makes the final
decisions, even though staff give their suggestions. Staff officers, therefore, may be
resented.
 Staff officers are much educated so their ideas may be more theoretical and
academic rather than practical.
 Although expert advice is available it reaches the workers through the managers. Here
it is liable to create a greater deal of misunderstanding and misinterpretation.
 Since staff specialists demand higher payments, it is expensive.
 The staff are unable to carry out its plan or recommendations because of lack of
authority. So they become ineffective sometimes, it will make them careless and
indifferent towards their jobs.
 Since the line arc performed, with the advice provided by the staff, if things go right
then the staff takes the credit and if things go wrong then the line get the blame for it.
 Functional Organisation
 The expansion of business and large-
scale production has necessitated the
use of experts in different fields.

 As the name implies, under functional

authority relationships, the whole task of
management is divided according to
the type of work involved.

Features of Functional Organisation:

a. Each worker receives instructions not only from one superior, but
also from a group of specialists.
b. Three types of authority relationships are in the functional
organisation such as line authority, staff authority and functional
authority.
c. Staff specialists are given the authority to decide and do things in a
limited way.
d. The scope of the work is kept limited but the area of authority is left
unlimited.
e. There is a grouping of activities of the enterprise into certain major
functional departments.
Advantages of Functional Organisation:
 Each manager is an expert in his field. He has to perform a limited number of functions. So
complete specialisation will be in functional organisation.
 The greater degree of specialisation leads the improvement in the quality of product.
 Since the job requirements are definite and tangible, organisation can achieve the intensive
utilisation of the principle of specialisation of labour at the managerial level.
 Specialisation will lead for mass production and standardisation.
 Since experts get sufficient time for creative thinking, planning and supervision are made
efficient.
 It increases the work satisfaction for specialists who presumably do what they like to do.

Disadvantages of Functional Organisation:

 Since there is no direct boss or controller of the workers, coordination is hard to achieve.
 Since workers are under different bosses, discipline is hard to achieve. As results there will be low
morale on the part of the workers.
 The non-supervisory employees are uncertain as to whom they should turn for advice and aid
when problem call for analysis.
 Due to that control is divided, action cannot be taken immediately.
 Since there will be many foreman of equal rank in the same department, the conflicts of
leadership may arise.
 It reduces the opportunities for the training of all-round executives to assume further leadership
in the firm.

 Project Organisation

 This organisational structure are

temporarily formed for specific projects
for a specific period of time, for the
project of achieving the goal of
developing new product

 the specialists from different functional

departments such as production,
engineering, quality control, marketing
research etc., will be drawn to work
together.
 Matrix Organisation
 A matrix structure is a type of
departmentalization that
superimposes a horizontal set
of divisional reporting
relationship onto a hierarchical
functional structure.
 This organization is also called
is a grid organization.
 Thus, a matrix structure can be
termed to the both functional
and divisional at the same
time.
 A matrix structure has two
chains of command- Vertical
and horizontal.
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