MODULE-II

Functions of management
⮚ Planning- Looking Forward
It is the basic function of management. It deals with determining a future course of
action & deciding in advance what to do for achievement goals. According to KOONTZ,
“Planning is deciding in advance – what to do, when to do & how to do. It bridges the
gap from where we are & where we want to be”. A plan is a future course of actions. It is
an exercise in problem solving & decision making. Planning is determination of courses
of action to achieve desired goals. Thus, planning is a systematic thinking about ways &
means for accomplishment of predetermined goals.

• Terms
• Goal: Broad and long term target of an organization. It may be financial goal(profit) or
strategic goal(Branch expansion).
• Programme: Single use plans that are prepared to handle specific situation
• Budget: Are statements expressed in financial terms ie, in terms of income and
expenditure.
• Policy: Broad guideline for taking an action. Eg. Drug free workplace.
• Procedure: A series of related actions that must be taken to accomplish a particular task.
Characteristics of planning
• Planning is goal oriented
• Sequence of planning
• Continuous and cyclical activity
• Choice based decision making activity
• Occurrence of planning
• Coordination
• Limiting factors
• Flexibility
• Importance
• Planning facilitates management by objectives
• Planning gives a sense of direction
• Improved performance
• Dealing uncertainty
• Economy in operation
• Better coordination
• Basis for controlling
• Planning improves employees moral
• Advantages
• Unproductive work and waste of resources can be minimized.
• Planning enables a company to remain competitive with other rivals in the
industry.
• Through careful planning crisis can be anticipated and delays can be avoided.
• Planning can point out the need for future change.
 • Planning enables the systematic and thorough investigation of alternative methods
or solutions to a problem. Thus we can select the best alternative
• Steps in planning
• Being aware of opportunities: strengths and weakness- study legal, political
framework or existing position, change in customer mindset change in technology
competition, the present position of the industry level. Here organization has to
analyze its own strengths & weakness. If the good opportunity is existing in the
surrounding organization can proceed to the next step.(eg. Hotel industry- good
market)
• Establish objectives : eg Sales profitability, R& D, quality & so on
• Developing planning premises
• Internal Premises:- These are the factors that influence the plan which are inside
the firm such as organizational policies, resources of government etc.
• External premises:- These are the factors that influence the plan which are outside
the firm such as economic conditions. Policies etc.
• Evaluate alternatives: Various alternatives are evaluated for different criteria
like cost, future competition, generation of profit, the requirement of manpower,
etc
• Select the best: select the best alternative keeping in the view of environmental
factor, planning process & objectives
• Establish a sequence of action: eg. Who will do a specific task when it will be
completed what exactly he has to do etc
• Review the planning process: Check actual performance with that of established
one
• Identify alternative course of action: eg If a company wants to launch a new
mobile hand, this can be done in various ways:
• Creating mobile for youth, Creating for low or high-class income group
• Whether smart phone including 3g & 4 g features

TYPES OF PLAN

� On the basis of Scope:

� Strategic plan- Top level management- outlines the broad goals for the whole
organization& also states its mission (purpose of existence). So it is a plan for the entire
organization (long term). eg. Penetrating in to a new market. Determination of objectives,
assessing the areas of strength and weakness & preparing action plan to achieve
objectives are the three phases in strategy formation.
� Tactical plan: Derived from strategic plan- Middle level management- identifies specific
tactical action eg. Designing and testing equipment for a new product
( one year or less than one year)
� Operational plan: Department managers, supervisors, low level managers- How to
operate day today activities to achieve strategic plans. Plan for a period of a week,
month,year etc, its departmental planning. Eg. Advertisement plans

� On the basis of frequency of use

� Single use plan- Plan for a specific purpose. Eg. budget
� Standing plan- permanent plan- welfare committee
� On the basis of time:
� Long term plan- for a period of 2-5 years- profitability, market share etc
� Medium term plans- for a period of 1-2 years
� Short term plans- less than one year
� Specific plan- cutting cost by 3% every year
� Directional plan/ general plan- Profit target of 4 to 6%
� Proactive- scenario planning- planning before an action take place- in anticipation of a
likely change
� Reactive plan-crisis management- plan once an environment change occur

There are three levels of planning:-

⚫ Top Level planning
⚫ Middle Level Planning
⚫ Lower level Planning
⮚ Top level planning focuses on organizations long term goals and strategies in
general terms. Strategic plans clarify the company's vision and goals for the future. It is
carried out by the top management. These plans are generally made for more than 5
years.
⮚ Middle level planning is carried out by middle level managers. These plans are
charted to support the implementation of strategic plan. Middle level plans are tactical
plans which are concerned with how the resources of the organization will be utilized to
achieve the organizational strategic goal. These plans are generally made for 1- 5 years.
⮚ Lower Level planning is carried out by departmental managers and supervisors.
These plans are operational plans which are prepared for achieving operational goals. Is
usually for a short term that is up to 1 year.
⮚ Organizing

• Organizing is the process of identifying the activities to be performed, grouping them,

assigning duties and responsibilities to people in groups and departments, then
establishing authority – responsibility relationship among [Link] end result of
organizing process is an organization. If the plans and goals define what to do,
organizing defines how to do it.
•
•
• Principles of organisation
• Unity of objectives, specialization, Coordination, communication, efficiency, authority,
simplicity, flexibility etc are the principle of organization
• Importance
• Specialization
• Utilization of resources
• Effective administration
• Establishment of coordination

• Formal & informal organisation

• In a formal organization, the position, authority, responsibility and accountability of each level
are clearly [Link] informal organization is not established by any formal authority, but
arises from the personal and social relations of the [Link] organizations refers to the
relationship between people based on personal attitudes, emotions, prejudices, likes, dislikes
[Link] groups are not pre‐planned, but they develop automatically within the organization
according to its environment.
• Organizational Design
• Organizational design involves the creation of a new organization structure or modification of an
existing organizational structure to enable the organization to achieve its goals.

• It helps manager to

• Divide the organizational goals of the whole organization into smaller tasks.

• To coordinate these smaller tasks efficiently to accomplish the bigger task.

• Organizational structure
• An organization structure means the systematic arrangement of people working for the
organization and their relationship between positions.

• The structure provides appropriate authority and responsibility to the officials .Organization
structure defines the functions to be performed, objectives to be established and working
relationship of individual participants. Depending on the size of organization, nature of product
being produced and complexity associated with production , there are three well known
organizational structures like line structure, line & staff and functional structure

• Line structure of organization

• Authority flows directly from top to bottom.

• The subordinates knew to whom they are accountable.

• It is applicable to small size industrial concerns.

• merits

• simple and easy to understand

• easy to expand and contract

• clear division of authority

• clear channel of communication

• speedy action.

• Demerits

• it is applicable only to small size industrial concerns

• neglect service of experts

• wastages of resources

• dictatoral way of leadership and

• High supervision is needed.

• Line & staff structure

• Line executives are assisted by some people who are experts in their fields known as “staff”
members. When the industry grows in to size and complexities line executives are not able to
look after the entire affairs of production such as marketing, sales, finance, research and
development etc so they are assisted by some efficient persons who are experts in their own
fields. It is applicable to medium size industry.
• merits :

• Experts advice can be made use of

• less wastage of resources

• better quality

• more production

• Some line managers are relieved from some of their function.

• Demerits

• production cost increases

• Line and staff function may get in confusion if they are not properly defined,

• if any type of difference of opinion arise among line and staff members adversely affect the
industry

• some line executives are overburdened with work

• Functional structure
• This is a form of line structure with a difference that instead of a foreman several functional staff
control and direct a worker. Or A worker is assisted by several functional staff. It is applicable to
most modern and advanced industrial concerns.
• merits

• since one foreman is responsible for one function , he can do his function in a better manner,
efficiency of workers improved,

• quality & productivity can be improved,

• Reduces absenteeism, labour turn over etc.

• Demerits

• coordination is difficult

• it is difficult to maintain discipline

• Workers are overburdened with work

• Lack of effective control.

• Project structure
• Project structure is predominant in the construction industry. Where at the highest level we can
see the project board consisting of senior managers & staff. Below project board there are
several project managers in charge of a project or several project. Under them there are several
contractors
Matrix Structure
• Matrix organizations is a combination of functional and project organizational structure.

• Staffs are grouped and located by specialty into functional units headed by a functional
manager.

• The project manager in the matrix works with the functional manager for timely completion of
project.

• Employees in a matrix structure belong to two formal groups at the same time – a functional
group and project team. Employees have dual subordination towards project heads and towards
functional heads. Applicable in banks, educational institution etc

Committee organization
• A committee is a voluntary association of people (at least 2) formed to achieve a common goal.
There are two committees: ad hoc committees and permanent. Ad hoc is temporary in nature
ed. Event committee. Permanent committees are existent committees eg. Welfare committee

•
• Manpower planning

• Plan manpower in accordance with the (shortage/ excess) existing staff and anticipated staff.

• Recruitment means searching of perspective employees and encourages and stimulates them
for applying for the job. There are two sources of recruitment- External & internal. Campus
recruitment, employment exchange, labour contractors, advertisement in media etc are the
external sources. Internal sources are promotion, transfer, friends & relatives recommended by
the existing employees, retaining employees who are having good employment records etc.

• Selection: Selecting the right person for right job. It involves different steps

• Job description: Describing the job in detail with regard to salary, dept,desirable experience,
qualification etc

• Application form: universal mechanism used to screen eligible canditates

• Conducting Test: To test the inborn traits and qualities. Aptitude test, intelligence test,
Personality test, Dexterity(Skill) test etc are the important test

• Conducting interview: Face to face interaction- Two types of interviews , Directed & indirected
one

• Physical examination: To check the physical fitness of people

• Induction & orientation- Placed in industry

• Training: It is an ever continuing process for imparting knowledge & information to the
employees. There are different techniques in this regard.

• Lecture method, apprentice training, training by experts, conference, workshop, seminar,

manual, outside training programme etc

• The objective is to improve the skill & efficiency of employees.

• Performance appraisal & Promotion

• Evaluating the performance of staff for the purpose of giving remuneration

• Directing involves:

• Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.

• Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
 • Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.

• Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding

Leadership

A manager must perform the function of leadership if he is to guide the people effectively for the
achievement of organizational objectives. It may be defined as “ the process by which a manager guides
and influences the behavior of his subordinates”.

Qualities of a Good Leader

⮚ Good Personality

⮚ Emotional stability

⮚ Ability to teach and guide

⮚ Initiatives and creative thinking

⮚ Good understanding and sound judgment.

⮚ Communicating skill.

⮚ Sociable

⮚ Objective and flexible approach

⮚ Honesty and integrity approach

⮚ Self confidence

⮚ Courage to accept responsibility

⮚ It means leading the subordinates, inducing them and encouraging them to do things willingly
and effectively. There are different styles of leadership.

⮚ They are autocratic style of leadership- No role to followers , decision is of leader.

Leader

Follower
 F F F

b) Participative leadership style, where both leader & subordinates together take decision

Leader
F

F F

Free rein leadership style- No role to leader full voice to subordinates. The first and last is not suitable
for an organization Leader
F

F F

Difference between leader & manager

Managers Leaders

Develop Policies & Procedures Develop vision & Strategy

Direct & Control Motivate &Inspire

Explain“What we have to do” Where we are going

 Task oriented Vision oriented

Concerned with here and now Concerned with long view

Concerned with projects Concerned with people

Doing things right Doing the right things

Theories of leadership
(1) Trait theory: Leadership is a function of certain traits like intelligence, confidence ,
maturity, enthusiasm, leadership qualities etc. Every one do not have these qualities, those
person having these qualities are a good leader. universal set of traits and characteristics to
distinguish leaders & non leaders:

◦ 5 physical traits (energy, appearance, height)

◦ 4 intelligent and ability traits

◦ 16 personality traits (achievement drive, ini

◦ 9 social characteristics (cooperativeness, interpersonal skills

2. Behaviour theory
According to this theory leadership is not a function of traits, it is the behavior or action that determines
the quality of a leader. A leader has to undertake task function(work related) & social function(group
maintenance). In task related function he has to perform functionally & dysfunctionally,ie, positively
and negatively(punishment, enforcement). Social function includes maintaining interpersonal relations

3. Contingency theory/ situational theory

According to this theory contingency factors/ situational factors determines the role of a leader. The
subordinates characteristics, leader’s characteristics, organizational characteristics decide the role of a
leader. Eg. Winston Churchill was a good prime minister during the first world war , but after that he was
not able to perform in such a way. So it is said that situation determines the role of a leader.

4 Transactional & Transformational leadership

Leadership is a function of transactions. If you contribute some thing to the industry, then organization
will give you something in return as [Link] is a kind of barter system/ give and take system. In
transformational leadership the role of a leader is to transform his subordinates. Leader brings changes
in the performance of subordinates.

Managerial grid theory

Grid has two dimension- concern for people & concern for production. According to this theory there
are four styles of leadership. This is represented with help of a diagram. X axis represents concern for
production & Y axis represents concern for people.

Impoverished Style of management

At 1:1point there is low concern for people & low concern for production.

Country club management style

1:9 represents Low concern for production & High concern for people

Task Management style

9:9 represents high concern for people and high concern for production

Autocratic style of management

9: 1 represents High concern for production & little concern for people

Managerial grid is in between these four dimensions ie, 5:5(Medium concern for people & medium
Concern for Production)

⮚ Communications- is the process of passing information, experience, opinion

etc from one person to another. It is a bridge of understanding.
 The communication process has five steps: idea formation, encoding, channel selection,
decoding and feedback. Anything that interferes with clear communication is called noise.
Noise can interfere with each step of the communication process.

Barriers to communication
● Linguistic Barriers.
● Psychological Barriers.
● Emotional Barriers.
● Physical Barriers.
● Cultural Barriers.
● Organisational Structure Barriers.
● Attitude Barriers.
● Perception Barriers.

Controlling- Looking Back

⮚ Checking or reviewing actual performance against standard one. It involves the
following steps:
⮚ Establishment of standard performance.
⮚ Measurement of actual performance.
⮚ Comparison of actual performance with the standards and finding out deviation if
any.
⮚ Corrective action
Basic Control Process

Feed forward control

Feed forward control is preventive in nature. It is pre control measure/input control/steering
control. If you feel a subject tough in a semester, concentrate the subject in order to avoid

failure. It is a preventive control technique

Feedforward control

Feedback control is post Information

controlCorrective
measure/out
action
put control. It takes place once
Desired values an action
of outputs (standards) is over.

If you fail for a subject in a semester which are the measures taken to over come it is post
Corrective action
control method.
Inputs Process Outputs

Feed ‐ forward Simple feedback

351
 Feed back control

Comparison of actual performance against standards

Measurement of actual performance
Desired performance Actual performance

Analysis of causes of deviations

Implementation of corrections
Program of corrective action Identification of deviations

350

Coordinating
⮚ Essence of management
It is an orderly arrangement of individual effort to group effort
Decision making
Making a fair decision from among a number of alternatives

Delegation
⚫ It means ‘devolution of power’. ie, the ability of a manager to share his work burden
among the subordinates effectively. It may be downward(from superior to subordinates)
upward(lower level to higher level) & sideway(among same level of authority)
⚫ Principles of delegation
⚫ there should be parity between authority & responsibility,
⚫ responsibility should be specific
⚫ there should be free flow of information,
⚫ delegation should be on the basis of one’s standard , position and experience in an
organization
⚫ authority and responsibility should move together
Problems associated with delegation
⚫ Superiors
⚫ fear about perfection of work
⚫ absence of control
⚫ conservative attitude
⚫ fear of being exposed.
⚫ Subordinate
⚫ fear of too much dependence over boss
⚫ fear of being criticized
⚫ lack of confidence
⚫ overburdened with work.
 ⚫ organization
⚫ lack of control
⚫ weak organizational structure,
⚫ ineffective planning
⚫ Complex nature of work
SPAN OF CONTROL
� It means the number of subordinates under a superior. If it is too large , difficult to co
ordinate, if too small, desired result can’t achieve. So the desirable number should be in
between 3 & 20. Based on the structure the number of span may vary. In a professional
concern small spans are desirable and in a flat structure large spans are needed.
� Factors that determine span of control
� The ability of manager
� the knowledge and experience of subordinates,
� nature of the work,
� complexities of production,
� the degree of planning

Wide and narrow span of control

In a wide span, a manager can manage a large number of subordinates. Under a manager there
are several subordinates.

In a narrow span low number of subordinates are there.