Unit-I

INTRODUCTION TO
MANAGEMENT, ORGANIZATION
AND ITS ENVIRONMENT
 MANAGEMENT:CONCEPTS &
FUNCTIONS
• Organisation: made of a group of people with some
specific goals, objectives and activities.
• Organisation Structure: components and relations
that bind the people working within the
organisation
• Three major issue within an organisation: its people
(education, training, attitude), organisation itself
(strategy, policy, culture, bureaucracy) and its
technology (hardware, software, telecom,
information system)
History of management
• Before Industrial Revolution In Europe, home-centre
production system
• With Industrial Revolution and its cascading effect,
significant advancements took place in technology,
communication, transportation and market
expansion
• Evolving complexity of technology-supported
production system resulted in need for people to
work in groups to accomplish the jobs and goals of
the organisation
• Two entities: capital owner and labour
• Globalization and advancement in technology
NATURE AND PROCESS OF MANAGEMENT
“Management is a dynamic process that helps to
get things done, through and with the efforts of
people ”
“Management as a process helps in optimizing
scarce resources”

DIMENSIONS OF MANAGEMENT
• Productivity Orientation
• Human-Relations Orientation
• Decision-making Orientation
• Leadership Orientation
• Process Orientation
FUNCTIONS OF MANGEMENT
• Luther Gullick (1937) PODSCORB
• Fayol (1949) 1. Planning, 2.Organising, 3.Commanding,
4.Coordinating and 5.Controlling

• Management consider all functions to be an

interrelated series.
- Planning
- Organizing
- Staffing
- Directing
- Control
All functions are described in preceding slides.
A) Planning:
• Planning is deciding in advance what is to be done, how is to be
done, when is to be done and by whom it is to be done.
• Intellectual: Planning the future course of action
• Preliminary or Preparatory step
• Helps to bridge the gap between present and future
• Rational approach: Decision making depending upon the availability
of alternatives
• Comprises determination and laying out of policies, objectives,
procedure, rules, programmes, budgets and strategies
• Planning permeates at all levels in organisation and every manager,
irrespective of their position in hierarchy must plan within the limits
of their authority and the decision of their seniors
B) Organizing
• Structuring of functions and duties to be performed
by a group of people for the achieving objective
• Right thing at right place in right quantity at right
time
• Optimization and efficiency
C) Staffing
• Provides an organisation with an adequate number
of competent and qualified personnel at all levels in
the enterprise.
• Managers are required to properly estimate the
workforce requirements of the organisation,
consistent with the qualifications expected for
proper and efficient discharge of duties of existing
and possible jobs in the organisation
• Continuous process in both new and established
enterprises
D) Directing
• Management may have well-coordianted plans,
properly estimated duties and authority relations, and
able personnel, but it is through the function of
directing that the mangers are able to get the
employees to accomplish their tasks.
• Involves making the employees integrate their
individual efforts with the interests and objectives of
the enterprise
• It calls for properly motivating, communicating with,
and leading the subordinates.
• Embraces three essential activities, issuing of orders
and instructions, guiding and counselling and
supervision
E) Control
• It involves compelling events to conform to plans
• It is closely related to planning
• Good control system should suggest corrective
measures so that negative deviations may not occur

Importance of Management Principles:

By means of principles of management, a manager can
avoid fundamental mistakes in his job and foretell the
results of his actions with confidence. Principles help in
following ways:
• To increase efficiency
• To crystallize the nature of management
• To improve research in management
• To attain social goals
CHARACTERISTICS OF MANAGEMENT
• Management is organised activities
• Management activities are aligned with organisational objectives
• Management optimizes constraining resources
• Management works with and through people
• Management is decision making
• Management is a science as well as art
• Management is universal
• Management functions are inseparable
• Management is an interdisciplinary approach
• Management is a social process
• Management is a system of authority
• Management is dynamic
• Management principles are relative and not absolute
• Management is a profession
• Management is a strategic function
SIGNIFICANCE OF MANAGEMENT
Management is important due to the following reasons:
• It optimizes use of scarce resources
• It ensures effective leadership and motivation
• It promotes harmony among industrial relations
• It facilitates the achievement of goals
• It facilitates change and growth
• It enhances the quality of life
• It improves productivity
• It contributes to organisational competitiveness
• It develops professionalism
• It contributes to organisational growth
Four Principles of Scientific Management
Taylor's four principles are as follows:
1. Replace working by "rule of thumb," or simple habit and
common sense, and instead use the scientific method to
study work and determine the most efficient way to perform
specific tasks.
2. Rather than simply assign workers to just any job, match
workers to their jobs based on capability and motivation, and
train them to work at maximum efficiency.
3. Monitor worker performance, and provide instructions and
supervision to ensure that they're using the most efficient
ways of working.
4. Allocate the work between managers and workers so that
the managers spend their time planning and training,
allowing the workers to perform their tasks efficiently.
 LEVELS OF MANAGEMENT
Three different level of organisation system:
a) Top Level: strategic level represents decision
making.
Top level
b) Middle Level: tactical or business
level where strategic decisions are
transformed into tactics to achieve Middle
strategic intent of the organisation level
c) Lower Level: operational level,
actual implementation where Lower level
first level employees and
workers execute tactics, adopting
the action plan of the organisation
 MANAGERIAL ROLES
mintzberg’s managerial roles

ROLE CATEGORY ROLE TYPE ROLE NATURE

Interpersonal -Figurehead Representing the organisation to perform ceremonial
duties
-Leader Influencing subordinates to achieve their goals and
objectives
-Liasion Maintaining horizontal chain of communication
Informational -Monitor Collecting info. concerning the organisation and
shortlisting relevant information
-Disseminator Sharing relevant info. with subordinates
-Spokesperson Maintaining protocol to share info. with outsiders
Decisional -Entrepreneur Focusing on innovation and change within the
organisation
-Disturbance Managing a conflicting situation by taking corrective
handler action
-Resource Optimizing resource allocation for different
allocator compensating needs within the organisation
-Negotiator Representing the organisation in all major negotiations
 Managerial skills and
competencies
• Skills are defined widely as overt responses (verbal, motor or
perceptual) and controlled stimulation.
- verbal responses typically stress on speaking
- motor responses stress on the movement of limbs and body
- perceptual responses stress on understanding of sensory
responses
- Controlled stimulation is defined as the energy inputs to
workers, which are expressed in units of time, frequency,
length and weight.
• Skills can be categorized as either generic or technical, or
entry level or advanced. Thus, it is defined as the amount of
knowledge or attributes deemed vital to organisational
success.
• There are four types of skills:
- Technical: concepts, methods and tools specific to an
organisation
- Supervisory: enables one to one effectively supervise
others
- Interpersonal: enables people to communicate and
interact effectively
- General Business: helps in business and support
infrastructure
• Technical skills are observable, demonstrable and
testable. The other skills are most subjective and
difficult to quantify.
• Skills of an Effective Manager are shown in next slide
Planning skills Organising skills Leading skills Controlling skills Decision making
skills
•Ability to think •Ability to •Ability to see •Ability to keep •Ability to make
ahead analyze and the big picture the activities on good and timely
•Ability to describe various •Ability to the desired path decisions
forecast future organisational communicate •Ability to initiate •Ability to devote
trends jobs ideas effectively corrective steps on key, important
•Ability to state •Ability to select, •Ability to inspire at right time and strategic
organisational train, develop people to do •Ability to ensure issues
objectives clearly and maintain better control measures •Ability to make
and precisely people in various •Ability to without hurting right choices and
•Ability to make jobs inculcate a sense the feelings of pursue activities
choices that help •Ability to define of collectivism in employees in a that enable the
in realizing working the employees negative manner organisation to
predetermined relationships and and forcing them accomplish its
goals authority-flow to work as a purposes
•Ability to set properly team •Ability to
performance •Ability to get •Ability to access commit funds to
standards for along with the situation and the best
measuring and changing initiate the advantage
implementing situations needed behavior
the plans in an appropriate
manner
Responsibilities/ Challenges Of New
Age Managers
1.Bridging the skill gap
2.Effective communication
3.Confronting performance problems
4.Making right hiring decisions
5.Managing conflicts
6.Employee retention – star performers
7.Creating calm at the time of turbulence
 Forms of Business Organizations

Types/ Forms of Business Organizations:

 1. Sole Proprietorship

Characteristics:
-The business enterprise is owned by one single individual (i.e. profit and loss belongs
to him only)
- Owner is the manager and the only source of capital
-The proprietor and business enterprise are same in the eyes of law.

Advantages:
-Easy Formation
-Better Control (Quick decision making and flexibility of operations)
- Subject vto fewer regulations
- not subject to corporate income tax
-Owner of all profits

Disadvantages:
-Owner has unlimited liability
-Difficult to raise capital
-Business has a limited life and it is difficult to do business beyond a certain size.
 2. Hindu Undivided Family (HUF)
Comes into existence as per the Hindu Inheritance Act of India.

Characteristics:
-This form of business is found only in India
- All members of the HUF owns business jointly
- The affairs of the business are managed by the family head known as Karta; other
members are called Co-parceners
- membership is restricted only to the members of joint family. No outsider can become
the member
- Karta has unlimited liability while other members enjoy limited liability
- the share of each member keeps on fluctuating
- business continues to exist upon the death of any member or karta.
 Hindu Undivided Family (HUF)
Advantages:
- Every Co-parceners has an assured share in profits
- The business has continued existence
- decision making is quick as the powers are in the hands of Karta
- No corporate tax
- people use it mostly for tax benefit purpose

Disadvantages:
- Absolute power in the hands of karta
-Instability
-Limited resources can be raised
- Scope of conflicty
 3. Partnership
A partnership consist of two or more people in business together. It is governed and
regulated by the Indian Partnership Act, 1932.
Characteristics:
- Minimum 2 and maximum 20 partners
- the relation between the partners is created in the form of a written contract known
as “Partnership Deed”
- the profits are shared in the ratio as agreed
-No Partner can sell/ transfer his share of interest to anyone without the consent of
other partners.
Advantages:
- Easy formation
-Larger Resources
-Better management and flexibility of operations
- No corporate income tax
- Subject to few regulations as compared to Companies
Disadvantages:
-Unlimited Liability
- limited life
-Difficult to raise capital
-Chances of dispute
 4. Joint Stock Company
It is a voluntary association of people who contribute money to carry on business.

Characteristics:
- Considered as a separate legal entity
- it comes into formation after all formalities under the Indian Companies Act 1956 arre
completed
- management and ownership is completely different
- Capital is raised through shares which are transferable

Advantages:
- limited liability of the shareholders/ promoter
- can easily raise capital
- have unlimited life
- ease of transfer of ownership

Disadvantages:
-Formation is not easy
- excessive government regulations
- double taxation
- delay in decision making
- control by a group
 Joint Stock Company
Two types of Corporations:

1. Private Company:
- Closely held by few people
- Minimum 2 and maximum 50 shareholders
- stocks cannot be traded on exchange and private equity cannot be raised
- Less regulations as compared to Public Companies

2. Public Company :
- Stocks are held by a large number of people
- minimum 7 shareholders and there is no limit to maximum
- can be listed on stock exchange and can go public
- have to follow many laws and regulations with regard to the board composition and
AGM
 5. Co-operative Society
It is a voluntary association of people or business to achieve an economic goal with a
social perspective.

Characteristics:
- Minimum membership requirement is 10 and there is no maximum limit
-Registration is must under “Co-operative Societies Act”. After registration it enjoys
certain privileges of a Joint Stock Company.

Advantages:
-Easy Formation
-Limited Liability
- Stability
- Democratic Management
- State Assistance

Disadvantages:
- Possibility of conflict
- Long Decision making process
- Not enough capital
 Unit II
PLANNING – PROCESS AND TYPES
 MEANING
• A plan is a forecast for accomplishment. It is a
predetermined course of action. It is today's
projection for tomorrow's activity. In other words,
to plan is to produce a scheme for future action,
to bring about specified results at a specified cost,
in a specified period of time.

According to Billy E. Goetz, “Plans forecast which actions,

will tend towards the ultimate objective; Managerial
planning seeks to achieve a consistent, coordinated
structure of operations focused on desired ends.”
 CHARACTERISTICS:

Planning has a number of characteristics:

❖ Planning is goal-oriented
❖ Planning is a primary function
❖ Planning is all-pervasive
❖ Planning is a mental exercise
❖ Planning is a continuous process
❖ Planning involves choice
❖ Planning is forward looking
❖ Planning is flexible
❖ Planning is an integrated process
❖ Planning includes efficiency and effectiveness dimensions
 IMPORTANCE OF PLANNING:
❖ Planning provides direction
❖ Planning provides a unifying framework
❖ Planning is economical
❖ Planning reduces the risks of uncertainty
❖ Planning facilitates decision making
❖ Planning encourages innovation and creativity
❖ Planning improves morale
❖ Planning facilities control
 IMPACT OF PLANNING ON BUSINESS GROWTH:
Effective planning requires an attitude of never being
satisfied with the company’s current performance. A basic
principle of planning is that a company’s future is to a
great extent in its own hands.
- Discovering opportunities
- Resource Management
- Coordinated effort
- Continual improvement
- Strategic positioning
- Competitive advantage
Steps in planning process:
1.
Establishing
objectives

2.
6. Providing
Developing
for follow-up
premises

5. Securing
3. Evaluating
cooperation
alternatives
and
and selection
participation

4.
Formulating
derivative
plans
A. Establishment of objectives
– Planning requires a systematic approach.
– Planning starts with the setting of goals and objectives to be achieved.
– Objectives provide a rationale for undertaking various activities as well
as indicate direction of efforts.
– Moreover objectives focus the attention of managers on the end
results to be achieved.
– As a matter of fact, objectives provide nucleus to the planning process.
Therefore, objectives should be stated in a clear, precise and
unambiguous language. Otherwise the activities undertaken are bound
to be ineffective.
– As far as possible, objectives should be stated in quantitative terms.
For example, Number of men working, wages given, units produced,
etc. But such an objective cannot be stated in quantitative terms like
performance of quality control manager, effectiveness of personnel
manager.
– Such goals should be specified in qualitative terms.
– Hence objectives should be practical, acceptable, workable and
achievable.
B. Establishment of Planning Premises
– Planning premises are the assumptions about the lively shape of
events in future.
– They serve as a basis of planning.
– Establishment of planning premises is concerned with
determining where one tends to deviate from the actual plans and
causes of such deviations.
– It is to find out what obstacles are there in the way of business
during the course of operations.
– Establishment of planning premises is concerned to take such
steps that avoids these obstacles to a great extent.
– Planning premises may be internal or external. Internal includes
capital investment policy, management labour relations,
philosophy of management, etc. Whereas external includes socio-
economic, political and economical changes.
– Internal premises are controllable whereas external are non-
controllable.
C. Choice of alternative course of action
– When forecast are available and premises are
established, a number of alternative course of actions
have to be considered.
– For this purpose, each and every alternative will be
evaluated by weighing its pros and cons in the light of
resources available and requirements of the
organization.
– The merits, demerits as well as the consequences of
each alternative must be examined before the choice
is being made.
– After objective and scientific evaluation, the best
alternative is chosen.
– The planners should take help of various quantitative
techniques to judge the stability of an alternative.
D. Formulation of derivative plans
– Derivative plans are the sub plans or secondary plans
which help in the achievement of main plan.
– Secondary plans will flow from the basic plan. These
are meant to support and expedite the achievement of
basic plans.
– These detail plans include policies, procedures, rules,
programmes, budgets, schedules, etc. For example, if
profit maximization is the main aim of the enterprise,
derivative plans will include sales maximization,
production maximization, and cost minimization.
– Derivative plans indicate time schedule and sequence
of accomplishing various tasks.
E. Securing Co-operation
– After the plans have been determined, it is necessary
rather advisable to take subordinates or those who
have to implement these plans into confidence.
– The purposes behind taking them into confidence are :-
• Subordinates may feel motivated since they are involved in
decision making process.
• The organization may be able to get valuable suggestions and
improvement in formulation as well as implementation of
plans.
• Also the employees will be more interested in the execution
of these plans.
F. Follow up/Appraisal of plans
– After choosing a particular course of action, it is put
into action.
– After the selected plan is implemented, it is important
to appraise its effectiveness.
– This is done on the basis of feedback or information
received from departments or persons concerned.
– This enables the management to correct deviations or
modify the plan.
– This step establishes a link between planning and
controlling function.
– The follow up must go side by side the implementation
of plans so that in the light of observations made,
future plans can be made more realistic.
 LIMITATIONS OF PLANNING:
❖ Rigidity
❖ Costly and time consuming
❖ Employee resistance
❖ False sense of security
❖ Managerial deficiencies
❖ Planning prevents innovation
❖ External Limitations

❖ Difficult to predict
❖ Projected too far into the future
❖ Environmental turbulence
❖ Emergency situations
• A planning is said to be effective when a plan when
formulated has following considerations:
- Climate
- Top management support
- Participation
- Communication
- Integration
- Monitoring
 STANDING AND SINGLE USE PLANS

Plans may be classified into two categories, i.e. standing plans

and single use plans.
•Standing plans are put to use, again and again, over a long
period of time. Once established, they continue to apply until
they are modified or abandoned.
•Single use plans are non-recurring in nature and deal with
problems that probably will not be repeated in the same form in
future.
 TYPES OF PLANS:
1. Objective: objectives are end results of an organisation. What
is to be done its towards to achieve these end points of
planning
2. Strategy: it is a comprehensive plan which includes various
steps. It is formulated for solving challenging and unforeseen
problems
3. Policies: it is a single plan. It is formed to carry out routine
function
4. Procedures: it is sequence of steps to be followed for
performing some important jobs which are rigid
5. Rules: these are norms for actions or no-actions of employees
6. Programmes: It is the combination of goals, policies,
procedures and rules. When all these are planned together
they form a plan
7. Methods: they are formalized way of doing routine and
repetitive jobs. Methods are specific but flexible
8. Budget: it is the statement of expected result expressed in
numerical terms
 OBJECTIVES:
• Objectives are basic to the existence of an organisation. Without
some purpose, there is no need for the organisation.
Organizations produce and market economic goods and services,
universities provide teaching and research, governments
providing welfare and security, and so on.
• Objectives are the focal points for the efforts of the organisation.
They are the ends toward which organistional efforts are directed.
They commit persons and organizations to verifiable
accomplishments.
• Set by top management .
• Determine what is to be done.
• Objectives are reflective of pious intentions, vague
generalizations and abstract ideas of management expressed in a
broad manner.
• Objectives are single-use plans. They outline a course of action to
fit a specific situation and are finished when the goal is reached.
 POLICIES
• A policy is a basic statement that guides decision-making. It tells
people what they may or may not do. It directs the way in which
activities are to be achieved.
• Policies set behavioral limits. They are restrictive in the sense that
they define the boundaries within which decisions ought to be made.
At the same time, they give enough room for subordinates to use
their discretion.
• PHASES OF POLICY MAKING AND ITS USE
- Policy formulation
- Policy communication
- Policy application
- Policy review and appraisal
 BUDGET

• Budget is a numerised programme designed primarily to

allocate the resources of an organisation.
• The basic features of a budget may be stated thus:
❖ It is a statement in terms of money or quantity or both,
❖ It is prepared for a definite future period,
❖ It is prepared in advance, and
❖ It aims at achieving a given objective.

• The use of a budget to monitor and regulate the

operational work of an organisation in a systematic way is
called 'budgetary control'.
 PROGRAMMES AND SCHEDULES
• A programme is a comprehensive plan that includes a complex
set of goals, procedures, rules, work assignments resource flow
and generally covers a large 'territory'.
• Schedules are often combined with programmes to ensure a
chronological sequence of activities.
• A six-step process for effective programming:
❖ Step-wise division of work
❖ Relationship and sequence between steps
❖ Fixing responsibility
❖ Arranging for resources
❖ Scheduling
❖ Data sheets for each task
 METHODS
• Methods are sub-units of a procedure; they show clearly as
to how a step of procedure should be performed. They
indicate the techniques to be employed to make the
procedure effective. The primary focus is on finding out the
best way of doing a piece of work.
RULES
• A rule is a very specific and detailed guide to action. It is
established to direct or restrict action in a fairly narrow
manner. There is no scope for discretion or judgment. Rules
must be followed precisely and observed strictly. Some
rules are couched in positive terminology. Others may be
expressed in a negative way. One important advantage with
rules is that they permit managers to simplify the decision-
making process.
Forecasting: Introduction

Business forecasting is a systematic attempt to probe the future, so as to recognise

problems and opportunities and turn them into plans of action. Business forecasting
helps in analysing the economic, political and market information to reduce the risks
involved in making business decisions and long-range plans.

Essential elements in business forecasting

❖ Developing the groundwork
❖ Estimating future business
❖ Comparing the actual with estimated results
❖ Refining the forecast process
Relationship Between Planning and Forecasting

Forecasts are key aids to planning in the following ways:

❖ Forecasts offer pertinent information regarding future.
❖ Forecasting helps in bringing a singleness of purpose to planning, that cannot
exist easily otherwise.
❖ Forecasting improves the quality of managerial planning. Forecasting helps in
minimising the costly planning errors. Forecasting also helps in preparing the
organisation for future crisis and emergencies.
❖ Forecasting supplies vital information regarding the weak spots in the
organisation thereby paving the way to appropriate control.
Advantages of Forecasting
❖ Forecasting is the essence of planning. They supply vital facts and pertinent
information for successful planning.
❖ Forecasting forces executives to look ahead, think through the future and
improve their mental faculties.
❖ Forecasting helps in achieving better coordination by focussing attention
on the future. It helps in ensuring a singleness of purpose to planning and
objectives.
❖ Forecasting, by revealing the weak spots in the organisation, helps in
ensuring control wherever it is lacking and thereby improves performance.
❖ Effective forecasting helps in identifying the environmental forces and
assists in providing for these challenges, though in an imperfect way.