PRINCIPLES OF MANAGEMENT

(FYBBA & FYBBA(CA)

(2019 PATTERN)

BY: PROF. KAVITA PAREEK

DNYANSAGAR ARTS AND COMMERCE COLLEGE,
BALEWADI, PUNE - 45
 Unit – 1
Nature of Management
 MEANING OF MANAGEMENT

Management is a problem solving process of effectively

achieving organizational objectives by effective utilization
use of scarce resources in a changing environment.

Management is thus the process of planning, organising,

staffing, directing and controlling human efforts to achieve
organizational objectives effectively.
 DEFINITION OF MANAGEMENT
“ Management is the process of designing & maintaining an
environment in which individuals, working together in
group, efficiently accomplish selected goals.”
Koontz and Weihrich

“Management is the art of knowing what you want to do and

then seeing that it is done in the best and cheapest way.”
F.W. Taylor
 CONTD>>>>>>>
➢ As managers, people carry out the managerial
functions of planning, organizing, staffing, leading, &
controlling.
➢ Management applies to any kind of organization.
➢ It applies to managers at all organizational levels.
➢ The aim of all managers is the same to create a
surplus.
➢ Managing is concerned with productivity, this implies
effectiveness & efficiency.
NATURE OF MANAGEMENT

Multidisciplinary

Dynamic in Nature

Relative, not Absolute Principle

Management – Science or Art

Management as Profession

Universality of management
 IMPORTANCE OF MANAGEMENT

Optimum and profitable utilization of resources

Effective leadership and motivation

Establishing sound industrial relations

Achievement of goals and objectives

Change and growth

Improves standard of living

FUNCTIONS OF MANAGEMENT

Planning
Controlling

Directing Organising

Staffing
ROLE OF MANAGEMENT/ROLE OF MANAGERS

Formal authority & status

+
Personal skills &
characteristics

Interpersonal roles Informational roles Decisional roles

✓Figurehead ✓Monitor ✓Entrepreneur
✓Leadership ✓Disseminator ✓Disturbance
✓Liaison ✓spokesperson Handlers
✓Resource Allocators
✓Negotiator
MANAGERIAL FUNCTIONS AS AT DIFFERENT
ORGANIZATIONAL LEVELS

Top
level
Managers

Middle-level
Managers

First-level
Supervisors
 FUNCTIONS OF TOP MANAGEMENT :

➢ To analyze, evaluate & deal with the external

environmental forces
➢ To establish overall long-term goals strategy & policies of
the company including the master budget to allocate
resources.
➢ To create an organizational framework consisting of
authority responsibility relationships.
➢ To appoint departmental & other key executives.
➢ To provide overall leadership to the company.
 CONTD >>>>>>>

➢ To represent the company to the outside world, e.g. ; trade

associations, government, trade unions, etc.
➢ To exercise overall review & control on the company’s
operations.
➢ To coordinate the activities & efforts of different
departments.
FUNCTIONS OF MIDDLE MANAGEMENT :

➢ To interpret & explain the policies framed by top

management .
➢ To compile & issue detailed instructions regarding
operations.
➢ To maintain close contacts with operating results so as to
evaluate performance.
➢ To participate in operating decisions
➢ To cooperate among themselves so as to integrate or
coordinate various parts of a division or a department
FUNCTIONS OF SUPERVISORY MANAGEMENT :

➢ To plan day-to-day production within the goals laid down by

higher authorities.
➢ To assign jobs to workers to make arrangements for their
training & development.
➢ To supervise & control workers & maintain personal
contact with charge hands.
➢ To arrange materials & tools & to maintain machinery.
➢ To advise & assist workers by explaining work procedures,
solving their problems, etc
MANAGEMENT AS AN
ART, SCIENCE AND
PROFESSION
(A) MANAGEMENT AS AN ART

• TO UNDERSTAND MANAGEMENT AS AN ART FORM, WE SHOULD FIRST

UNDERSTAND THE MEANING OF ART. ART IS DEFINED AS THE ABILITY TO
USE INFORMATION AND SKILLS TO GET THE DESIRED RESULTS. ARTISTS
HAVE THE ABILITY TO COME UP WITH UNIQUE SOLUTIONS AND ART
FORMS FOR COMPLICATED PROBLEMS.

• THE ANALOGY STANDS UPRIGHT IN MANAGEMENT AS MANAGERS

COME UP WITH UNIQUE AND CREATIVE SOLUTIONS TO BUSINESS
CHALLENGES. THERE ARE NO PREDEFINED SOLUTIONS TO BUSINESS
PROBLEMS, AND USING HUNDREDS OF WAYS TO BUILD NEW PROCESSES
IS A NORMAL PART OF MANAGEMENT.
COMPARISON OF ARTS AND MANAGEMENT
Practical Knowledge

Need of Practice of Experience

Element of Creativity

Results Oriented

Personalised Skills

Qualities & Qualification

(B) MANAGEMENT AS A SCIENCE

• SCIENCE IS AN ORGANIZED COLLECTION OF KNOWLEDGE THAT HAS

AN EXPLANATION ON THE BASIS OF FACTS FOR EVERY PHENOMENON.
THE CONCEPTS AND HYPOTHESES OF SCIENCE ARE ALL DEFINED WITH
PRINCIPLES, AND A SIMILAR THING IS PRACTICED IN MANAGEMENT.

• LIKE ART, MANAGEMENT ALSO SHARES KEY FACTORS WITH SCIENCE,

WHICH CAN QUICKLY HELP US TERM MANAGEMENT AS A SCIENCE.
COMPARISON OF MANAGEMENT AND SCIENCE

Systematic body of Knowledge

Impersonal results

Clarity of concepts

Critically tested Knowledge

Universal applicability

Cause & Effect relationship

(C) MANAGEMENT AS A PROFESSION

• A PROFESSION IS A FORM OF OCCUPATION IN WHICH A PERSON

RENDERS HIS/HER SERVICES AFTER ACQUIRING EXPERTISE IN A
PARTICULAR DOMAIN. THE PROFESSIONAL IS REMUNERATED BY THE
COMPANY FOR WHICH HE/SHE RENDERS THE SERVICES.

• THE PROFESSION INVOLVES A CONTRACT BETWEEN A COMPANY

AND THE PROFESSIONAL FOR A SPECIFIC PERIOD, AND THE ENTRY
FACTORS FOR THE ROLE ARE LIMITED BY VARIOUS FACTORS.
COMPARISON OF MANAGEMENT AND PROFESSION

Well defined body of Knowledge

Restricted Entries

Presence of professional associations

Existence of ethical Codes

Service Motives
UNIVERSALITY OF MANAGEMENT

•
•
•
•
•
•
CONCEPT OF MANAGEMENT,
ORGANISATION &
ADMINISTRATION
 MANAGEMENT

• MANAGEMENT IS A DISTINCT PROCESS CONSISTING OF

PLANNING, ORGANIZING, STAFFING AND CONTROLLING,
PERFORMED TO DETERMINE AND ACCOMPLISH STATED
OBJECTIVES BY THE USE OF HUMAN BEINGS AND OTHER
RESOURCES.
FEATURES OF MANAGEMENT

➢ Organized activities
➢ Existence of objectives
➢ Relationship among resources
➢ Working with & Through people
➢ Decision- Making
 ORGANIZATIONS

“Organizations which can be defined as group of

people working together to create a surplus.”

➢ In business organizations, this surplus is profit.

➢ In non profit organizations, such as charitable
organizations, it may be the satisfaction of needs.
 ADMINSTRATION

• ADMINISTRATION MEANS OVERALL DETERMINATION OF

POLICIES, SETTING OF MAJOR OBJECTIVES, THE
IDENTIFICATION OF GENERAL PURPOSES AND LAYING DOWN
OF BROAD PROGRAMMES AND PROJECTS”. IT REFERS TO THE
ACTIVITIES OF HIGHER LEVEL. IT LAYS DOWN BASIC
PRINCIPLES OF THE ENTERPRISE.

• ACCORDING TO NEWMAN, “ADMINISTRATION MEANS

GUIDANCE, LEADERSHIP & CONTROL OF THE EFFORTS OF THE
GROUPS TOWARDS SOME COMMON GOALS”.
MANAGEMENT & ADMINISTRATION :

➢ Administration is above management

➢ Administration is part of management
➢ Management & administration are same
 ADMINISTRATION IS ABOVE MANAGEMENT :

➢ “administration is that phase of business enterprise

that concerns itself with the over all determination of
institutional objectives & the policies necessary to be
followed in achieving those objectives.”

➢ “Management on the other hand, is an executive

function which is primarily concerned with
carrying out broad policies laid down by the
administration.”
ADMINISTRATION IS A PART OF MANAGEMENT :
➢ Management is a generic name for the total process of
executive control in industry or commerce.

➢ It is a social process entailing responsibility for the

executive & economic planning & regulation of the
operation of an enterprise, in the fulfillment of a given
purpose or task.

➢ Administration is that part of management which is concerned

with the installation & carrying out the procedures by which it
is laid down & communicated, & the process of activities
regulated & checked against plans.
MANAGEMENT & ADMINISTRATION ARE SAME

➢ Management & administration are synonymous; the

difference between the two terms lies mostly in their usage in
different countries or different fields of human organizations.

➢ The distinction between the two terms may be drawn by

analyzing the origin of the word “administration”.

➢ The government often uses the word administrator,

instead of manager, to handle & manage its affairs
DIFFERENCE BETWEEN MANAGEMENT, ADMINISTRATION
AND ORGANIZATION
 Unit – 2
Evolution of Management
Thoughts
 INTRODUCTION
The schools of management thought are theoretical frameworks for the
study of management. Each of the schools of management thought are
based on somewhat different assumptions about human beings and the
organizations for which they work.
Since the formal study of management began late in the 19th century, the
study of management has progressed through several stages as scholars
and practitioners working in different eras focused on what they believed
to be important aspects of good management practice.
Over time, management thinkers have sought ways to organize and
classify the voluminous information about management that has been
collected and disseminated. These attempts at classification have
resulted in the identification of management schools.
 CONCEPT OF MANAGEMENT THOUGHTS

Management Thought is the gathering knowledge about the

origin of management, Thinking proper and foundation of
management research of different authers about the basic
concepts of management.

Henny Fayol, “To manage is to forecast and plan, to organize,

to command, to co-ordinate and to control.”
CONTRIBUTION OF
TAYLOR, MAYO,
FAYOL AND DRUCKER
(A) CONTRIBUTION
OF F.W.TAYLOR
 Frederick W. Taylor (1856- 1915)
• Frederick Winslow Taylor (20 March 1856-21 March 1915),
widely known as F. W. Taylor, was an American mechanical
engineer who sought to improve industrial efficiency.
• He is regarded as the father of scientific management, and
was one of the first management consultants.
• One of the first people to study the behavior and
performance of people at work.
• became a consultant and taught other managers how to
apply his scientific management techniques
• believed that by increasing specialization and the division
of labor, the production process will be more efficient.
 SCIENTIFIC MANAGEMENT

• It is the art of knowing what exactly you want from your

men to do & then seeing that it is done in best possible
manner.
• In simple words it is just an application of science to
management.
• The systematic study of relationships between people and
tasks for the purpose of redesigning the work process to
increase efficiency.
 MANAGEMENT THEORY BY TAYLOR

• Analyzing the work – One best way to do it.

• He is remembered for developing time and motion study.
• He would break a job into parts and measure each of 100th
of a minute.
• The efforts of his disciples (most notably H. L. Gantt) made
the industry to implement these ideas.
 Taylor’s view about management.

• Taylor believed that the industrial management of his day was

amateurish, that management could be formulated as an
academic discipline.
• Best results would come from the partnership between trained
and qualified management and a cooperative and
innovative workforce.
• Each side needed the other and there is no need for trade
unions.
Scientific Management can be described
in two different dimensions :

(I) Elements of Scientific Management

(II) Principles of Scientific Management

 (I) Elements of Scientific Management

1.Separation of Planning and doing

2. Job Analysis – Time, Motion, Method
Study

3. Fatigue study and rest study

4. Differential Wage System

5. Standardisation
6. Scientific Selection and Training of
Workers
7. Mental Revolution

8. Financial Incentives

9. Economy
(II) Principles of Scientific Management

1. Replacing rule of thumb with science i. Large Daily Task

ii. Standard Condition

2. Principles of Work
iii. High pay for Success

3. Harmony in group action, not discord iv. Loss in case of Failure

4. Co-operation and not individualism

5. Maximum Output, not restricted output

6. Development of Workers
 Taylor’s Contribution : Summary
➢Proved the applicability of scientific methods to all the
industries.
➢First one to advise management that duty to advise workers
was expected from them and also to specify the way in which
the task is to be performed.
➢Mutual revolution on the part of employees as well as
company.
➢Studied the work systematically and introduced the concept of
‘Time and Motion Study’.
➢Focused on the need to separate the planning of work from its
execution.
➢Suggested managers to design the work system.
 Cont…
➢He was the first one to introduced the concept of
Functional Specialist.
➢He believed in maximum output.
➢Every worker should be specialist in his job.
➢Focused on need of scientific selection, training and
development of workers.
➢Focused on standardization of methods, tools, time,
material etc.
➢Promoted better utilization of resources.
➢Encouraged the right person for right job.
(B) CONTRIBUTION
OF HENRY FAYOL
 Henry Fayol (1841 - 1925)
• Fayol was born in July, 1841 in a suburb of Istanbul, Turkey, where his
father, an engineer, was appointed superintendent of works to build
a bridge over the Golden Horn(Galata Bridge). They returned to
France in 1847, where Fayol studied at the mining school "École
Nationale Supérieure des Mines" in Saint-Étienne.
• When 19 years old he started as an engineer at a mining company
"Compagnie de Commentry-Fourchambeau-Decazeville" in
Commentry. By 1900 the company was one of the largest producers
of iron and steel in France and was regarded as a vital industry.
• Fayol became managing director in 1888, when the mine company
employed over 1,000 people, and held that position over 30 years
until 1918.
• In 1916 he published his experience in the book "Administration
Industrielle et Générale", at about the same time as Frederick
Winslow Taylor published his Principles of Scientific Management.
 ADMINSTRATIVE MANAGEMENT

• Administrative Management is the process

of managing information through people. This usually
involves performing the storage and distribution of
information to those within an organisation. A large
number of roles within business require some element
of administrative management.
 BIG CONTRIBUTIONS OF HENRI FAYOL
• He was the First management thinker who provided the
conceptual framework of the function of management in
his book.
• Due to his contribution to management theory & principles
he was rightly treated as the “FATHER OF MODERN
MANAGEMENT THEORY”.
• He wanted the formal education of management in
schools & colleges.
• Provided a link between strategies and organisational
theories.
Administrative Management can be
described in four parts as under :

(I) Classification of Business Activities

(II) Managerial Qualities

(III) General Principles of Management

(IV) Elements of Management

 (I) Classification of Business Activities

1. Technical Activities

2. Commercial Activities

3. Financial Activities

4. Accounting Activities

5. Managerial Activities

6. Security Activities
(II) Managerial Qualities

1. Physical Qualities

2. Mental Qualities

3. Moral Qualities

4. Educational Qualities

5. Technical Qualities

6. Experience Qualities
 (III) General Principles of Management

1. Division of 2. Authority & 4. Unity of 5. Unity of

3. Discipline Command Direction
Labour Responsibility

9. Scalar 7. 6.
10. Order 8.
Principle Remuneration Subordination
Centalisation
of Personnel of Interest

12. Stability of 14. Esprit de

11. Equity 13. Initiative
Tenure Corps
 (IV) Elements of Management

Controlling Planning

Co-ordnating
Organising

Commanding
TAYLOR (SCIENTIFIC APPROACH ) VS FAYOL
(ADMINSTRATIVE APPROACH)
S. No. Scientific Management School Administrative Theory School
1 Focus on jobs of individual workers Focus on total organization
2 Concerned with issues of efficiency Concerned with functions performed by
improving of individual jobs the managers, coordinating the resources
of the organization
3 Concentrates on worker level Concentrates on management from top
to bottom
4 Requires technical skill Requires conceptual, managerial and
human skill
5 Emphasis on technical aspects of Emphasis on the administrative aspect of
production organization
6 Increasing work through simplification of Improving overall administration by
work, time and motion study observing certain principles
7 Provided a major basis for Produced systematic theory of
accomplishments on the shop floor. management
(C) CONTRIBUTION
OF PETER DRUCKER
 PETER FERDINAND DRUCKER
(Nov 19,1909-Nov 11,2005)

• Born in Vienna,Austria
• Earned Doctorate in International Law in Germany
• Moved to U.S. and became citizen in 1943
• Popularly known as “The Father of Modern Management”
• Professor at New York University (1950-1971)
• Professor at Claremont Graduate University (1971-2005)
• Awarded presidential medal of freedom by G.W.Bush (2002)
• Writer, consultant, economist (Author of 39 books and countless
popular articles about humans in business, government and non profit
world)
Contribution of Peter Drucker to Management

1. Focus on Managers

2. Nature of Management

3. Decision – making Task Performance orientation

Min. Managerial level

4. Organisation Structure
Provision of training
5. Federalism
Objectives
6. Management by Objectives (MBO) Participation
Integration
7. Insightful Quotations
CONCLUSION

▪ Peter Drucker contributed to many fields of management.

▪ He has contributed to several management areas like Human Resource
Management, Marketing Management and organisational behaviour.
▪ His contribution seems much valuable in both management theory and
practice.
▪ His concepts are widely accepted globally.
(D) CONTRIBUTION
OF ELTON MAYO
 GEORGE ELTON MAYO
• George Elton Mayo (1880–1949) was an Australian born psychologist,
researcher and organizational theorist.
• Was born in South Australia on, 26 December 1880 .
• Father of Human Relations Approach.
• Professor at the Harward business school .
• Leader of the Hawthorne Experiments (1924-1927) .
• The research he conducted under the rubric of the Hawthorne Studies in
the late 1920s and early 1930s showed the importance of groups in
affecting the behavior of individuals at work.
• He carried out a number of investigations to look at ways of improving
productivity.
• Died on 1 September 1949.
The studies include investigation into:

▪ The extent of relationship between physical working

conditions and productivity.
▪ Extent of the value of the wage incentive.
▪ General worker attitude toward work and team members.
▪ Extent of the control of the individual upon working group.
Contribution of Elton Mayo to Management :

(I) Human Relations Approach

(II) Non-Economic Awards

(III) Social Man

(IV) Organisation as a Social System

1. Human Relations Approach: Mayo is rightly called the father of human
relations movement. His ideas were a milestone and a turning point in
human relations approach of the management. He recognised the
importance of human beings in management. He said that human beings
are complex and influential input into organisational performance. The
social and psychological needs of human beings cannot be ignored, if
management wants to enhance productivity.

2. Non-Economic Awards: The earlier assumption was that workers will

work more if they are offered more monetary incentives. Taylor was the
main proponent of this approach. Elton Mayo said that the techniques of
economic incentives were not only inadequate but also unrealistic.
He was able to show that humane and respectful treatment, sense of
participation and belonging, recognition, morale, human pride and social
interaction are sometimes more important than pure monetary rewards.
3. Social Man: Mayo developed a concept of ‘social man’. He said that man
is basically motivated by social needs and obtains his sense of identity
through relationships with others. He is more responsive to the social
forces of the informal group rather than managerial incentives and
controls. He also related productivity to a social phenomenon.

4. Organisation as a Social System: Mayo was of the view that informal

relationships in the organisation are more effective than formal
relationships. People form informal groups to give a bent to their feelings
and seek guidance for action from such groups.
In Mayo’s words, “An organisation is a social system, a
system of cliques, grapevines, informal status systems,
rituals and a minute of logical, non-logical and illogical
behaviour.” He was of the opinion that managers should
maintain an equilibrium between the logic of efficiency’
demanded by the formal organisation. He thought that
besides logic and facts people are also guided by sentiments
and feelings.
.
 INDIAN
MANAGEMENT
THOUGHTS
 J.R.D. Tata
▪Jehangir Ratanji Dadabhoy Tata (29 July 1904 – 29 November
1993) was an Indian aviator, industrialist, entrepreneur and
chairman of Tata Group.
▪ Born into the Tata family of India, he was the son of noted
businessman Ratanji Dadabhoy Tata and his wife Suzanne
Brière.
▪He is also best known for being the founder of several
industries under the Tata Group, including Tata Consultancy
Services, Tata Motors, Titan Industries, Tata Salt, Voltas and Air
India.
▪ In 1983, he was awarded the French Legion of Honour and in
1955 and 1992, he received two of India's highest civilian
awards the Padma Vibhushan and the Bharat Ratna.
These honours were bestowed on him for his contributions to
Indian industry.
Style of Management of J.R.D. Tata
▪ Courageous
▪ Diplomat
▪ Committed to Values
▪ Supportive towards innovation
▪ Gave credits to its employees for even small development
▪ Curbed his dreams which were hard to realise.
▪ Strived for excellence in every aspect of life.

“ Nothing worthwhile is ever achieved without deep thought and

hard work.”
- J.R.D. Tata
 Dhirubhai Ambani
▪Dhirajlal Hirachand Ambani, popularly known as Dhirubhai
Ambani (28 December 1932 – 6 July 2002) was a successful
Indian business tycoon who founded Reliance Industries.

▪ Ambani took Reliance public in 1977 and was worth $25.6

billion upon his death.

▪In 2016, he was honoured posthumously with the Padma

Vibhushan, India's second-highest civilian honour for his
contributions to trade and industry.
Style of Management of Dhirubhai Ambani

▪ Roll up your sleeves and help.

▪ Be a safety net for your team.
▪ Dream big, but dream with your eyes open.
▪ Learn the professional alone.
▪ Change your orbit constantly.
▪ Money is not a product itself, it is a by-product, so don’t chase it,
 N. R. Narayana Murthy
▪ Nagavara Ramarao Narayana Murthy (born 20 August 1946)
is an Indian billionaire businessman.

▪ He is the co-founder of Infosys, and has been the chairman,

chief executive officer (CEO), president, and chief mentor of
the company before retiring and taking the title chairman
emeritus.

▪ Murthy has been listed among the 12 greatest entrepreneurs

of our time by Fortune magazine.
▪ He has been described as the "father of the Indian IT sector"
by Time magazine for his contribution to outsourcing in India.
▪ Murthy has been honoured with the Padma Vibhushan
and Padma Shri awards.
Style of Management of Narayan Murthy
▪ Under promising and over delivering.
▪Performance oriented
▪Always being unique in the market place.
▪Never give up.
▪For creating a successful organisation, it requires creating trust in
people.
▪Do it first and do it right.

“ Think big, Don’t hesitate to smart small.”

- N. Murthy
 Verghese Kurien
▪ Verghese Kurien (26 November 1921 – 9 September 2012),
known as the "Father of the White Revolution" in India,was a
social entrepreneur whose "billion-litre idea", Operation Flood,
made dairy farming India's largest self-sustaining industry and
the largest rural employment sector providing a third of all
rural income.

▪ It made India the world's largest milk producer, doubled the

milk available for each person, and increased milk output
four-fold in 30 years.

▪He also made India self-sufficient in edible oils and fought

against the "oil kings", who used underhanded and violent
methods to enforce their dominance over the oilseed industry.
Style of Management of Verghese Kurien
▪ Clarity of vision and ability to share it with others.
▪ Ability to inspire and motivate others
▪ Willingness to take ( calculated ) risks.
▪ Lateral thinking
▪ Positive attitude in problem solving
▪ Ability to drive, inspire and embrace change and continous
improvement.
▪ Committed to making a significant difference.
▪ Respect for all team members.
▪ Clear standards of ethics, integrity, opens and honesty.
 Unit – 3
Major Managerial Functions
Forecasting
 MEANING OF FORECASTING

▪ In simple terms forecasting means, “estimation or prediction of future”. The prediction

of outcomes, trends, or expected future behaviour of a business, industry sector, or the
economy through the use of statistics. Forecasting is an operational research technique
used as a basis for management planning and decision making.

▪ Forecasting is a systematic guessing of the future course of events.

▪ Forecasting provides a basis for a planning.

 DEFINITION OF FORECASTING

▪ Websters new collegiate dictionary defines that, “A forecast is a

prediction and its purpose is to calculate and predict some future events
or condition.”

▪ Allen L.A., “Forecasting is a systemic attempt to probe the future by

inference from known facts.”

▪ Neter & Wasserman, “Business forecasting is refers to a statistical analysis

of the past and current movements in the given time series so as to obtain
clues about the future pattern of these movement.
 FEATURES OF FORECASTING

▪It is concerned with future events.

▪It is necessary for planning process.
▪The impact of future events has to be considered in the
planning process.
▪It is a guessing of future events.
▪It considers all the factors which affect organizational
functions.
▪Personal observation also helps forecasting.
 NEED & IMPORTANCE OF FORECASTING
1. Pivotal role in an organization:- Many organizations have failed
because of lack of forecasting or faulty forecasting. The reason is that
planning is based on accurate forecasting.
2. Development of a business:- The performance of specified objectives
depends upon the proper forecasting. So the development of a business or
an organization is fully based on the forecasting.
3. Co-ordination:- Forecasting helps to collect the information about internal
and external factors. Thus collected information provides a basis for co-
ordination.
4. Effective control:- Management executive can ascertain the strength and
weaknesses of sub-ordinates or employees through forecasting.
 CONT…
5. Key to success:- All business organizations are facing risks. Forecasting
provides clues and reduce risk and uncertainties. The management
executives can save the business and get success by taking appropriate
action.
6. Implementation of project:- Many entrepreneurs implement a project on
the basis of their experience. Forecasting helps an entrepreneur to gain
experience and ensures him success.
7. Primacy to planning:- The information required for planning is supplied
by forecasting. So, forecasting is then primacy to the planning.
 PROCESS/STEPS FOR FORECASTING

Step 1 – Analyzing & understanding

the problem

Step 2 – Developing sound

foundation

Step 3 – Collecting & Analyzing

data

Step 4 – Estimating future

events

Step 5 – Comparing Results

Step 6 – Follow up Action

FORECASTING METHODS & TECHNIQUES

1. Delphi Technique

2. Scenario Writing

3. Subjective Approach

4. Time – Series Forecasting

5. Brainstorming Technique
FORECASTING METHODS & TECHNIQUES

6. Goal oriented Forecast Technique

7. Graphic charting Technique

8. Matrix Technique

9. Nominal Group Technique (NGT)

10. Simple Average Technique

 ADVANTAGES

Effective handling of uncertainty

Better labour relations
Balanced work-load
Minimization in the fluctuations of production
Better use of production facilities
Better material management
Better customer service
Better utilization of capital and resources
Better design of facilities and production system
 LIMITATIONS
Forecasting is to be made on the basis of certain assumptions and human
judgments which yield wrong result.
It can not be considered as a scientific method for guessing future events.
It does not specify any concrete relationship between past and future events.
It requires high degree of skill.
It needs adequate reliable information so difficult to collect reliable
information.
Heavy cost and time consuming.
It can not be applied to a long period.
Planning
 MEANING OF PLANNING

❑Planning is essential in every walk of life.

❑Planning is the first and foremost function of management.
❑The planner can develop his efficiency by preparing himself to
face the future developments.
❑Planning is as intellectual process of thinking resorted to decide a
course of action which helps to achieve the pre-determined
objectives of the organization in future.
 DEFINITION OF PLANNING
❑ Koontz and O'Donnell: ‘Planning is deciding in advance what to do, how
to do it, when to do it,and who is going to do it. Planning bridges the gap
between where we are and where we want to go. It makes it possible for
things to occur which would not otherwise happen.’

❑George R Terry: ‘Planning is the selecting and relating of facts and the
making and using of assumptions regarding the future in the visualisation
and formulation of purposed activities believed necessary to achieve
desired results.’

❑Phillip Kotler : ‘Planning is deciding in the present what to do in the future.

It is the process whereby companies reconcile their resources with their
objectives and opportunities.’
FACTORS THAT INFLUENCE PLANNING
1. Competition

2. Economy

3. Managers

4. Information
 Purposeful
Activity Primary
Integrated Function
Process

Planning NATURE OF Pervasive

involves PLANNING Function
Choices

Forward Intellectual
Looking Process
Activity
Continuous
Process
 Need & Importance of Planning

1.Minimises Risk

2. Effective Control

3. Forecasting

4. Economic Operation

5. Choosing from Alternatives

6. Identification of Opportunities

7. Team Work

8. Development of Business Strategy

9. Simplifying Goals
 Types of Planning

Single Use or One Time Plan

1. Based on Application or Use
Standing Plans

2. Based on Mgt Functions/Branches Subject Plans

Long – term Plans

Middle – term Plans

3. Based on Time Frame
Short – term Plans

Strategic Plans

4. Based on Managerial Levels Operational Plans

Tactical Plans
 Steps in the Planning Process

3. Collecting 4. Analysing & 5. Establishing

1. Classifying 2. Determining complete classifying the planning
the problems the objectives information & information premises
data

10. Follow – up 9. Securing 8. Arranging 7. Selecting

of the participation of timing & operative plan & 6. Determining
sequence of preparing alternative Plans
purposed plan employees
operations derivative plans
 ADVANTAGES OF PLANNING

➢Planning facilitates quick achievement of objectives

➢Brings unity of purpose and direction
➢Ensures full utilization of resources
➢Avoids inconsistency in efforts
➢Raises competitive capacity/ strength
➢Promotes managerial efficiency
➢Avoids hasty decisions & actions
➢Ensures effective control on the organization
➢Acts as an insurance against future uncertainties
➢Facilitates other managerial functions
➢Improves motivation
 DISADVANTAGES OF PLANNING

➢Time – consuming and costly

➢Ineffective due to environmental changes
➢Dangers of unreliable data
➢Encroachment on individual freedom and initiative
➢Delays actions
➢Unsuitable to small firms
➢Limited practical value
➢No guarantee of expected results
➢Generates frustration
➢Involves huge paper work
➢Danger of overdoing
Organising
 MEANING OF ORGANISING

▪ Organising essentially implies a process which coordinates human efforts, assembles

resources and integrates both into a unified whole to be utilised for achieving specified
objectives.

▪ Organising can be defined as a process that initiates implementation of plans by

clarifying jobs and working relationships and effectively deploying resources for
attainment of identified and desired results (goals).
 DEFINITION OF ORGANISING

▪ Organising is the process of identifying and grouping the work to be

performed, defining and delegating responsibility and authority, and
establishing relationships for the purpose of enabling people to work most
effectively together in accomplishing objectives.
Louis Allen

▪ Organising is the process of defining and grouping the activities of the

enterprise and establishing authority relationships among them.
Theo Haimman
 FEATURES OF ORGANISING

▪ Division of Work

▪ Coordination

▪ Common objective

▪ Co-operative relationship

▪ Well-defined authority - responsibility relationship

STEPS IN ORGANISATION
1. Identification of activities

2. Departmentally organizing the activities

3. Classifying the authority

4. Coordination between authority and

responsibility
 OBJECTIVES OF ORGANIZING

▪ To help management

▪ To increase production

▪ Co – operation of employees
 TYPES OF ORGANIZATION

1. Flat Organizational Structure

2. Functional Organizational Structure

3. Product Organizational Structure

4. Geographical Organizational Structure

 DELEGATION OF AUTHORITY - MEANING

▪ Delegation refers to the downward transfer of authority from a superior to a subordinate. It

is a pre-requisite to the efficient functioning of an organisation because it enables a manager
to use his time on high priority activities. It also satisfies the subordinate’s need for
recognition and provides them with opportunities to develop and exercise initiative.

▪ The manager shall still be accountable for the performance of the assigned tasks.

▪ Moreover, the authority granted to a subordinate can be taken back and redelegated to
another person. Thus, irrespective of the extent of delegated authority ,the manager shall still
be accountable to the same extent as before delegation.
 DELEGATION OF AUTHORITY - DEFINITION

▪ “Delegation is the process a manager follows in dividing the work assigned to him
so that he performs that part which only he, because of his unique organisational
placement, can perform effectively and so that he can get others to help him with
what remains.”
Louis Allen

▪ “Delegation of authority merely means the granting of authority to subordinates to

operate within prescribed limits.”
Theo Haimman
DELEGATION OF AUTHORITY - ELEMENTS

1. AUTHORITY

2. RESPONSIBILTY

3. ACCOUNTABILITY
DELEGATION OF AUTHORITY - STEPS

1. Assignment of tasks and duties

2. Granting of authority

3. Creating responsibility and accountability

 NEED/IMPORTANCE OF DELEGATION
OF AUTHORITY
➢Relieves manager for more challenging jobs
➢Leads to motivation of subordinates
➢Facilitates efficiency and quick actions
➢Improves employee morale
➢Develops team spirit
➢Maintains cordial relationships
➢Facilitates management development
➢The advantages of delegation will not be available easily and
automatically
 DIFFICULTIES OR OBSTACLES ON THE
PART OF A MANAGER

➢Unwillingness of the manager to delegate authority

➢Fear of competition
➢Lack of confidence in subordinates
➢Lack of ability to direct
➢Absence of controls that warn of coming troubles
➢Conservative and cautious temperament of the manager
➢Desires to dominate subordinates
 DIFFICULTIES OR OBSTACLES ON THE
PART OF A SUBORDINATES
➢Too much dependence on the manager for decisions
➢Fear of criticism
➢Lack of information
➢Absence of positive incentives
➢Absence of self – confidence
➢Difficulty in decision – making
➢Poor superior – subordinate relations
➢Undue interference by superior
➢Fear of being exposed