Principles of Management

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 1

What is Management

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 2

Importance of Management

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 3

Functions of Management

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 4

 Decision-Making Process
( Concept of Decision Making – Different Styles of Managerial Decisions –Nature of
Decision Making – Decision Tree Analysis – Some Common errors in decision-
making process- Organizing Decision making process Process )

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA)

5
What is Decision Making in Management?
 Decision-making in management is the process of choosing between two or more options. This
involves evaluating the pros and cons of various choices and choosing the best option to achieve
a desired outcome. In management, decision-making is about acting to meet organizational goals
and objectives.
•

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 6

Decision Making Process Steps

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 7

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 8
Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 9
Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 10
Decision Making Types
Here are the four decision-making styles with examples of
how they might be used in the workplace
1. Directive
The directive decision-making style uses quick, decisive thinking to
come to a solution. A directive decision-maker has a low tolerance for
unclear or ambiguous ideas. They're focused on the task and will use
their own knowledge and judgment to come to a conclusion with
selective input from other individuals.
2. Analytical
Analytical decision-makers carefully analyze data to come up with a solution.
They're careful and adaptable thinkers. They will invest time to glean
information to form a conclusion. These decision-makers are task-oriented
but have a high tolerance for ambiguity. Analytical decision-makers take time
to compile data and evidence before they come to a conclusion

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 11

3. Conceptual
Those who make decisions with a conceptual style are big picture thinkers who are
willing to take risks. They evaluate different options and possibilities with a high
tolerance for ambiguity. They're social-oriented and take the time to consider big
ideas and creative solutions. Conceptual decision-makers look forward to what could
happen if the decision is made.
4. Behavioral
A behavioral style of decision-making focuses on relationships more than the task. It
evaluates the feelings of others as part of their decision-making process. Behavior
decision-makers have a low tolerance for ambiguity and a social focus as they
evaluate solutions. These decision-makers rely on information from others to guide
what they choose.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 12

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 13
Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 14
Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 15
Decision Making Process
 The Decision Tree Analysis tool is a scientific model and is often used in the decision making
process of organizations. When making a decision, the management already envisages alternative
ideas and solutions.
 By using a decision tree, the alternative solutions and possible choices are illustrated graphically
as a result of which it becomes easier to make a well-informed choice.
 This graphic representation is characterized by a tree-like structure in which the problems in
decision making can be seen in the form of a flowchart, each with branches for alternative
choices.
 The Decision Tree Analysis makes good use of the ‘what if’ thought. There are several alternatives
that consider both the possible risks and benefits that are brought about by certain choices.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 16

A decision tree is a diagram that depicts the many
options for solving an issue. Given particular
criteria, decision trees usually provide the best
beneficial option, or a combination of alternatives,
for many cases. By employing easy-to-understand
axes and graphics, a decision tree makes difficult
situations more manageable. An event, action,
decision, or attribute linked with the problem
under investigation is represented by each box or
node.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 17

 A practical Decision Tree Analysis
• Suppose a commercial company wishes to increase its sales and the associated profits in the next year.
• The different alternatives can then be mapped out by using a decision tree. There are two choice for both increase of
sales and profits: 1- expansion of advertising expenditure and 2- expansion of sales activities. This creates two branches.
Two new choices arise from choice 1, namely 1-1 a new advertising agency and 1-2 using the services of the existing
advertising agency. Choice 2 presents two follow-up choices in turn; 2-1-working with agents or 2-2- using its own sales
force.
• The branching continues.
• The following alternatives from 1-1 are:
1-1-1 The budget will increase by 10% -> end result: sales up 6%, profits up 2%
1-1-2 The budget will increase by 5% -> end result: sales up 4%, profits up 1.5 %
• The alternatives that arise from 1.2:
1-2-1 The budget increases by 10% -> end result: sales up 5%, profits up 2.5%
1-2-2 The budget increases by 5 % -> end result: a sales up 4%, profits up 12%
• From 2.1 possibly follows:
2-1-1 Set up with own dealers -> end result: sales up 20%, profits up 5%
2-1-2 Working with existing dealers -> end result: sales up 12.5%, profit up 8%
• From 2.2 possibly follows:
2-2-1 Hiring of new sales staff -> end result: sales up 15%, profits up 5%
2-2-2 Motivating of existing sales staff -> end result: sales up 4%, profits up 2%.
Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 18
•
 Solution of the Problem

In all likelihood, the company will opt for final outcome 1-2-2, because the forecast of this decision is that profits will increase by 12%.
This Analysis is particularly useful in situations in which it is considered desirable to develop various alternatives and potential outcomes of
decisions in a structured manner as this will present a clear substantiation.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 19

 NON-
BASIS FOR PROGRAMMED
PROGRAMMED
COMPARISON DECISIONS
DECISIONS

Meaning Programmed Non-programmed

decisions are the decisions are known
everyday decisions, for dealing with rare
which are taken or unusual
within the periphery problems, which do
of the organization's not have predefined
rules and policies. alternatives.

Problem Well-structured and Ill-structured and

repetitive non-repetitive

Decision made by Middle or Low-level Top-level managers

managers

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 20

Common Decision-Making Errors & Characteristics of Effective decision making

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 21

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 22
 Economic, Financial & Quantitative Analysis
(Production- Markets Overview – National Income Accounting –
Financial Functions & Goals – Financial Statement & Ratio analysis –
Quantitative Methods – Classification of Quantitative techniques –
Management of Working Capital – Sources of Finance )

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 23

Factors of Production

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 24

Production

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 25

Production Function

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 26

Concept of Market

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 27

Markets

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 28

Economic Flow – Market Analysis> Circular Flow Model of Economy
 The circular flow of economic activity helps to generate wealth in a country. The
features of the product markets, businesses, individuals and factor markets, allow
buyers and sellers to exchange money for products or products for money. Markets may be
local, regional, national or international.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 29

National Income Accounting

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 30

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 31
Overview on National Income –GDP & GNP

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 32

Financial Functions

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 33

Financial Functions / Objectives

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 34

Meaning of Financial Statements ,Ratio Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 35

Financial Statements

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 36

Financial Statement and Ratio Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 37

Ratio Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 38

Types of Financial Ratios & Benefits of Ratio Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 39

Limitations of Ratio Accounting

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 40

Quantitative Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 41

Data Types with Examples

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 42

Types of Quantitative Analysis

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 43

Working Capital Management

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 44

Working Capital Concept

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 45

Working Capital Management Cycle, Source of Mgmt , Advt & Disadvt.

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 46

Sources of Finance

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 47

Why Finance is Important for a Business

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 48

 Operations and Technology Management
(Operations Mgmt. – Production Planning & Control – Operations
Planning – The Management of Operations – Total Quality
Management – Logistics & Supply Chain Mgmt. )

Presented By -[Link] Bhatttacharya PhD,FCMA & CISA (USA) 49