UNIT

2
PLANNING

1–1
What is Planning?
• Deciding in advance what to do, how to do it ,
when to do it and who has to do it.
• Planning is the pre-selection of objectives and
outlines the action before starting any
business.
• Planning is decision making in advance.
• Choosing the alternatives and making the
decision is called planning.

2
Nature of Planning
• Goal oriented: Every plan must contribute in
some positive way towards the accomplishment
of objectives.
• Primacy of Planning: Planning is the first of
the managerial functions
• Efficiency, Economy and Accuracy
• Co-ordination
• Limiting Factors: money, manpower etc
• Flexibility
• Planning is an intellectual process:
The quality of planning will vary according to the
quality of the mind of the manager.
3
Importance of Planning
• Provides direction
• Leads to economical utilization of resources
• Reduces the risks
• Facilitates decision making
• Encourages Innovation & Creativity
• Improves morale
• Facilitates control
Planning Process
(or)
Steps in Planning

1–5
 Steps in planning
Being Aware of opportunities
Market, competition, Customers, Strengths
Weakness
Establishing objectives
Where we want to be, what to achieve and
when
Developing premises
In what environment ( I & E), scenarios

Determining alternative courses

How many and which are most promising

Evaluating alternative courses

In the light of objectives

Selecting a course

Formulating derivative plans

Quantifying plans by budgeting

1. Being aware of opportunities
• All managers should take look at future
opportunities and see them clearly and
completely.
• They should know their strengths and
weakness, understand what problems they
wish to solve and why, and know what they
expect to gain.
• Setting realistic objectives depends on
(i) About market
(ii) About expected competition
(iii) What customers wants
2. SETTING OBJECTIVES
• The second step in planning is to establish or
set objectives
• Objectives specify the expected results and
indicate the end points of
(i) What is to be done
(ii) Where the primary emphasis is to be placed
(iii) What is to be accomplished by the
strategies, policies, procedures, rules, budgets
and programs.

1–8
3. DEVELOPING PREMISES
• It is important for all the managers
involved in planning to agree on the
premises.
• Forecasting is important in premising:
What kind of markets will be there?
What volume of sales? What prices? What
products? What technical developments?
What cost? Etc

1–9
4. INDENTIFYING ALTERNATIVE COURSES OF
ACTION
• to search and examined alternative
courses of actions.
• The planner must usually make
preliminary examination alternative
courses to accomplish the goal.

1–10
5. EVALUATING ALTERNATIVE COURSES
• After determining alternative courses and
examining their strong and weak points,
the next step is to evaluate the
alternatives.

1–11
6.SELECTING A COURSE
• Selecting an alternative is the real point of
decision making. This is the point at which
the plan is adopted.
• the manager has to decide one best alternative
or several alternative courses of action.

1–12
7.FORMULATING DERIVATIVE PLANS
• The seventh step in planning is
formulating derivative plans.
• When a decision is made next step is
to formulate a supporting plan, such
as to buy equipment, materials, hire
and train workers and develop a new
product.

1–13
8. Quantifying Plans by Budgeting
• the final step in planning is to quantify them
by converting them into budgets.
• The overall budgets of an enterprise represent
the sum total of income and expenses with
resulting profit.

1–14
 Types of Plans
• Long range Vs Short range

• Strategic Vs Operational

• Corporate Vs Functional

• Proactive Vs Reactive

• Standing Vs Single Use

15
 Long range Vs Short range
Long range plan Point of Short range plan
distinction

Covers many years & Meaning Covers less than one

affects many year and is more
departments of an specific & detail
organization
5 yrs or more Time Up to one year

Mission ,long term Deals Current operations of

goals and strategies with organization
Top management Prepared Lower level executives
by

16
 Strategic Vs Operational
Strategic Plan Point of Operational Plan
distinction

5 years or more Time Under one year

horizon

Adapt to external Purpose Implement internal goals

environment based on
internal strengths
Top management Level Middle & lower level
involved

Primarily judgmental Basis for Exact data & Standards

planning used

17
 Corporate Vs Functional
• Corporate Plan:
– A comprehensive plan that outlines the broad
objectives of a company as a whole and
develops plans to achieve those objectives
– Focus on organizational performance

• Functional Plan:
– Is unit planning and deals with different
departments.
– Focus on departmental performance
 Proactive Vs Reactive
• Proactive Planning:
– Managers challenge the future,
anticipating future contingencies
• Reactive Planning:
– Organizations react to events as and when
they arise

19
 Standing Vs Single Use

• Standing Plans • Single Use plans

– Developed for – Developed to carry
activities that recur out a course of
action that is not
regularly over a
likely to be
period of time repeated in future
• Ex: • Ex:
– Objectives, Policies, – Programmes,
Procedures, Methods, Schedules, Projects,
Rules Budgets
20
Types of Plans – Key Point
• Strategic Plans
Apply to the entire organization.
• Operational Plans
Specify the details of how the overall
goals are to be achieved.

7–21
Types of Plans – Key Point
• Long-Term Plans
Plans with time frames extending 5 years
• Short-Term Plans
Plans with time frames of one year or less
• Specific Plans
Plans that are clearly defined and leave no
room for interpretation
• Directional Plans
Flexible plans that set out general guidelines
and provide focus,
7–22
Types of Plans – Key Point
• Single-Use Plan
one-time plan specifically designed to
meet the need of a unique situation.
• Standing Plans
Ongoing plans that provide guidance
for activities performed repeatedly.

7–23
TYPES OF PLANS/ Hierarchy of Plans
Mission or purposes
Objectives or goals
Strategies
Policies
Procedures
Rules
Programs
Budgets
Mission or purpose
The basic purpose or function
or tasks of an enterprise or
agency or any part of it

Objectives or goals
The end towards which
activity is aimed
Strategies
The determination of the basic long
term objectives of an enterprise and the
adoption of courses of action and allocation
of resources necessary to achieve these
goals

Policies
General statements or
understanding that guide or channel
thinking in decision making
1–26
Procedures
Plans that establish a
required method of handling
future activities

Rules
Rules spell out specific
required actions or non actions
allowing no discretion
Programs
A complex of goals, policies,
procedures, rules, task assignments,
steps to be taken, resources to be
employed, an other elements necessary
to carry out a given course of action

Budgets
A statement of expected results
expressed in numerical terms

1–28
Cascading of Objectives
Management by Objectives
(MBO)

1–30
Management by Objectives (MBO)
• Is a method whereby managers and
employees define goals for every
department, project, and person and use them
to monitor subsequent performance.

4 major activities:
1. Set goals
2. Develop action plans
3. Review progress
4. Appraise overall performance
Step 1: Set Goals Step 2: Develop Action Plans
• Corporate
Action Plans
Strategic Goals
• Departmental
Goals
• Individual Goals
Review
Progress
Step 3:
Review
Take Corrective Progress
Action
Appraise
Performance

Step 4: Appraise
Overall Performance
 Benefits of MBO Problems with MBO
1. Improvement of 1. Danger of inflexibility
management

2. Performance can be 2. An environment of poor

improved at all company employer-employee relations
levels. reduces MBO effectiveness.
3. Employees are motivated. 3. Strategic goals may be
displaced by operational goals.
4. Departmental and 4. Mechanistic organizations and
individual goals are values that discourage
aligned with company participation can harm the
goals. MBO process.
5. Too much paperwork saps
MBO energy.
Strategic Management
The set of managerial decisions and
actions that determines the long-run
performance of an organization.

34
Strategic management process
a six-step process that encompasses
strategic planning, implementation, and
evaluation.

1–35
FORMATION OF CONSIDERATION
SWOT
MISSION & OF STRATEGIC
ANALYSIS
OBJECTIVES ALTERNATIVES

EVALUATION IMPLEMENTATION CHOICE OF

AND CONTROL STRATEGY

STRATEGIC MANAGEMENT PROCESS

1.Mission and Goals
• Mission
 a statement of the purpose of an
organization
• Major goals
 the foundation for further planning
• Secondary goals
 Are objectives to be attained that lead to superior
performance.
2.SWOT(Identifying Organizational
Opportunities)

Strengths Weaknesses

Opportunities Threats

a. External Analysis
b. Internal Analysis
a. External Analysis
• Identify strategic opportunities and threats in
the operating environment.

Immediate (Industry)

Macroenvironment National

1-39
b. Internal Analysis
• Identify strengths
 Quality and quantity of resources available
 Distinctive competencies
• Identify weaknesses
 Inadequate resources
 Managerial and
organizational deficiencies

1-40
Step 4: Formulating strategies
Develop and evaluate strategic alternatives
Select appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match organizational strengths to
environmental opportunities
Correct weaknesses and guard against
threats

8–41
• Step 5: Implementing strategies
Implementation: effectively fitting
organizational structure and activities to the
environment.
The environment dictates the chosen
strategy; effective strategy implementation
requires an organizational structure matched
to its requirements.
• Step 6: Evaluating results
How effective have strategies been?
What adjustments, if any, are necessary?
8–42
Strategic Managers for All Levels

1-43
 LEVELS
LEVELS OF
OF STRATEGIC
STRATEGIC MANAGEMENT
MANAGEMENT
 Corporate-Level Managers
 Oversee development of strategies for whole organization
 CEO is principle general manager who consults with other
senior executives
 Business-Level Managers
 Responsible for business unit that provides
product/service to particular market
 Functional-Managers
 Supervise particular function/operation (e.g. marketing,
operations, accounting, human resources)
Types of Organizational Strategies

8–45
1.Corporate Strategies
• Corporate Strategies
 Top management’s overall plan for the entire
organization and its strategic business units
• Types of Corporate Strategies
 Growth: expansion into new products and markets
 Stability: maintenance of the status quo
 Renewal: examination of organizational weaknesses
that are leading to performance declines

8–46
a. Growth Strategy
 Seeking to increase the organization’s
business by expansion into new products and
markets.
• Types of Growth Strategies
 Concentration
 Vertical integration
 Horizontal integration
 Diversification

8–47
a. i. Concentration
 Focusing on a primary line of business.

a. ii. Vertical Integration

attempting to gain control of inputs (become a
self-supplier).
attempting to gain control of output through
control of the distribution channel or provide customer
service activities (eliminating intermediaries).

8–48
iii. Horizontal Integration
 Combining operations with another competitor in the
same industry to increase competitive strengths and
lower competition among industry rivals.
iv. Diversification
 Expanding by combining with firms in different, but
related to field of operation

8–49
The BCG Matrix

8–50
• Renewal Strategies(re-establish)
 Developing strategies to counter organization
weaknesses that are leading to performance declines.

8–51
2.Competitive Strategies

• Competitive Strategy
 A strategy focused on how an organization will
compete in each of its SBUs (strategic business
units).

8–52
 UNIT-3
ORGANIZING

1–53
What Is Organizing?
• Deciding how best to
group organizational
activities and resources.
• Organizing: the process
by which managers
establish working
relationships among
employees to achieve
goals.

11 - 54
 NATURE OF ORGANIZING:

1. Group of Persons
2. Common Objectives
5. Communication
3. Division of Work
6. Central Authority
4. Co-ordination
7. Rules & Regulations
8. Environment
 Common Objectives: Every organization has a
common objectives. The common goal is the
basis of cooperation among the members.

 Group of Persons: An organization is a group of

people working together for the achievement of
common objectives.
 Division of Work: total task is divided into the members of
the group. Division of work is necessary not only because
one individual cannot do all the work but specialization
results in efficiency and effectiveness.

 Co-ordination: The members of an organization are

willing to help each other for the achievement of desired
goals.
 Communication: People who form an organization
communicate with each other in order to integrate or
coordinate their efforts. People can perform together
efficiently.

 Authority: In an organization, there is a central directing

authority which controls the concerted efforts of the
group. The chain of authority- responsibility relationships
is known as the chain of command.
 Rules and Regulations: For the orderly and systematic
working of the members, rules and regulations are laid
down and enforced by the central authority.

 Environment:
Economic,social,political and legal factors.
 1. Facilitates
Administration

7. 2. Encourages
Coordination Growth &
Diversification

IMPORTANCE OF
ORGANIZING
6. Ensures
3. Optimum
Continuity of
Use of
Enterprise
Technology

5. Encourages 4. Stimulates
Good Human Innovation &
Relations Technology
 PURPOSE / IMPORTANCE OF organizing:
Facilitates Administration: Achievement of the objectives
of an enterprise by providing a framework of coordination
and control. Individual goals can be coordinated towards
group goals. A properly balanced organization facilitated
both management and operation of the enterprise.

Encourages Growth & Diversification: It has enabled

organizations to grow and expand to giant sizes. It provides
flexibility for growth without losing control over various
activities.
Optimum Use of New Technology: Optimum use of
technology permits optimum utilisation of human
resources. Sound organization ensures that every individual
is placed on the job for which one is best suited.

Stimulates Innovation & Creativity: It stimulates

creative thinking and initiative on the part of employees. It
provides recognition for the professional and the specialist
in terms of their achievement.
Encourages Good Human Relations: The assignment of
right jobs to right person improves job satisfaction and
inter-personal relations. Well-defined jobs and clear lines of
authority and responsibility ensure good human relations.

Ensures Continuity of Enterprise: It provides scope for

the training and development of future management.

Coordination: Division of labor, better utility of

technology and human talent helps to improve the
efficiency and quality of work.
 PROCESS:

IDENTIFICATION GROUPING OF
OF ACTIVITIES ACTIVITIES

2.

1. 3.

4.

ASSIGNMENT OF DELEGATION OF
DUTIES AUTHORITY
 Process of organizing:
1. Identification of Activities: First step is to determine the
tasks that must be performed to achieve the established
objectives. Activities and jobs are building blocks of any
organization. The activities to be performed depends
upon the objectives, nature & size of the enterprise.

2. Grouping of Activities: The various activities are the

grouped into departments or divisions according to
similarity and common purpose.
It may be grouped on various basis i.e. functions
products, territories, customers etc depending on
requirements.
3. Assignment of Duties: The assignments of activities
creates responsibility and ensures certainty of work
performance. The process should be carried down to the
lowest levels.

4. Delegation of Authority: Every individual is given the

authority required to carry out the responsibility assigned
to him. Every individual must know to who are his
subordinates.
 Organizational Structure
It is a framework within which an Organization
arranges it’s lines of authorities and
communications and allocates rights and
duties.
 Formal and Informal Organization

Formal structure is defined as the relationships

among organizational resources as outlined by
management.

Informal structure is defined as the patterns of

relationships that develop because of the
informal activities of organization members.

9
1–69
 DEPARTMENTATION
The basis by which jobs are grouped together.
Forms (or) Types
• Departmentation by Function
• Departmentation by Geography
• Departmentation by Customer Group
• Departmentation by Product
• Departmentation by Process

1–70
 Functional/Divisional Structures
• A division is a collection of functions working
together to produce a product.

– Product structure: divisions created according to the

type of product or service.
– Geographic structure: divisions based on the area of
a country or world served.
– Market structure: divisions based on the types of
customers served.
 Product Structure
CE O
Corporation

Corporate
M anagers

W ashing M achine Lighting T elevision

Division Division Division
 Geographic
Organization
• Geographic Organization – The categorization of
organizational units by geography.

• Advantages :

 Allows for the use of local employees or salespeople.

• Disadvantages :

• Having multiple locations can be costly.

 Geographic Structure
CE O
Corporation

Corporate
M anagers

Northern W estern S outhern E astern

Region Region Region Region
 Customer Organization
• Customer Organization – The categorization of organizational units by
customers served.

• Advantages :
 Allows employees to identify with a particular customer type.

• Disadvantages :

• Possible duplication of facilities and equipment.

 Market Structure
CEO
Corporation

Corporate
M anagers

Large Business Sm all Business Educational Individual

Custom ers Custom ers Institutions Custom ers
 Hybrid Organization
• Hybrid Organization – An organizational structure that uses
multiple types of departmentalization within the organization.

• A small organization may have no organization at first. As it

grows, it may organize first on one basis, then another, and
then another.

• Hybrid organizations share the same advantages and

disadvantages as the organization types being used within it.
 Line Authority
• An organizational structure in which authority originates at
the top and moves downward in a line
• It is the simplest organizational structure.
Advantages :
• It is a clear authority structure that promotes rapid
decision making.
Disadvantages :
• May force managers to perform too broad a range of
duties.
• May cause the organization to become too dependent on
key employees who are capable of performing multiple
duties.
Line VS Staff

1–85
 Matrix Structure
• Matrix Structure – A hybrid organizational structure in which
individuals from different functional areas are assigned to work on a
specific project or task.

• Advantages :

• Employees are challenged constantly, interdepartmental cooperation

develops along with expanded managerial talent.

• Disadvantages:

• A role conflict can develop if the authority of the project manager is

not clearly delineated form that of a functional managers.
 Matrix Organization
Functional Control

Project A

Project-
based Project B
Control
Project C

Engineering Production Logistics Design

 Team Organization
Functional Control
Team Leader

Member A

Member B

Member C

Member D

Engineering Production Logistics Design

 Span of Control
The number of subordinates a manager can efficiently and
effectively direct

Concept
Concept
Wider
Widerspans
spansofofmanagement
managementincrease
increase
organizational
organizationalefficiency
efficiency

Narrow
NarrowSpan
SpanDrawbacks
Drawbacks
••Expense
Expenseofofadditional
additionallayers
layersofofmanagement
management
••Increased
Increasedcomplexity
complexityofofvertical
verticalcommunication
communication
••Encouragement
Encouragementofofoverly
overlytight
tightsupervision
supervisionand
and
discouragement
discouragementofofemployee
employeeautonomy
autonomy
Contrasting Spans of Control
 Determination of Span of Control
• Direct single relationship

A SUPERVISOR

B C SUBORDINATES
• Direct group relationship
A

B C

• Cross relationship 1–92

 Factors that Determine an Effective Span
• Capacity of supervisor
• Capacity of subordinates.
• Nature of Work
• Type of Technology
• Delegation of Authority
• Clarity of plans
• Communication Techniques
• Using of objective standards
• Geographical closeness of employees
• Direction and Coordination

1–93
 Tall Structure
• Large, complex organizations often require a
taller hierarchy.
• In its simplest form, a tall structure results in
one long chain of command similar to the
military.
 Flat Organizational Structure
• Flat structures have fewer management levels,
with each level controlling a broad area or
group.
• Flat organizations focus on empowering
employees rather than adhering to the chain
of command.
Centralization & Decentralization
Centralization
The degree to which decision making is concentrated at a
single point in the organization.

Decentralization
The degree to which decision making is spread
throughout the organization.
CENTRALIZATION

1–99
1–100
1–101
Advantages & Disadvantages Centralization

ADVANTAGES: DISADVANTAGES:
• Provide Power • less motivated
• Minimal extensive • Neglected functions
controlling procedures for mid. Level
and practices
• Minimize duplication
of function

1–102
Advantages & Disadvantages Decentralization

ADVANTAGES: DISADVANTAGES:
• Quicker Decisions • Loss of Control
• Motivation of Local • Duplication of
Managers Services
• Reduces workload

1–103
Delegation of
Authority
1–104
Delegation of Authority (Distributing Authority)

• Authority:
 Power that has been
legitimized by the
organization.
• Delegation:
 The process by which
managers assign a
portion of their total
workload to others.

11 - 105
 PROCESS OF DELEGATION

Define
Determining the MOTIVATION to
RESPONSIBILITY
GOAL and AUTHORITY subordinates

Holding TRAINING to Establishing

ACCOUNTABILITY subordinates CONTROL
IMPORTANCE OF
DELEGATION
Relief to top managers.
Development of managers.
Development of subordinates.
Better decision-making.
Specialization.
Job satisfaction.
 BARRIERS TO
DELEGATION
Insecurity.
Lack of confidence in subordinates.
Fear of making mistakes.
Lack of initiative.
Absence of access to various resources.
WAYS TO OVERCOME
BARRIERS TO DELEGATION
Develop confidence
Communication.
Motivation.
Choose the right person for the right job.
Freedom to subordinates.
Clarity of task.
Matching the jobs with abilities of
subordinates.
STAFFING
 Job Analysis
 Human Resource
Planning
Tasks Responsibilities Duties
 Recruitment
 Selection
 Training and
Development
Job  Performance
Descriptions Appraisal
Job
 Compensation and
Analysis
Job Benefits
Specifications  Safety and Health
 Employee and Labor
Relations
 Legal Considerations
Knowledge Skills Abilities  Job Analysis for
Teams 111
 "Staffing means filling
and keeping filled,
positions in the
organisation structure."

Harold
Koontz
 Importance Of
Staffing Function
IMPORTANCE OF STAFFING

FILLING ORGANISATIONAL POSITIONS:

Concerned with filling of good systematic
staffing.

DEVELOPING COMPETENCIES:
Right job according to right person.

RETAINING PERSONNEL:
Continuing them in the organization.
Staffing ELEMENTS
ELEMENTS OF STAFFING
Manpower planning
Job analysis
Recruitment and selection
Training and Development
Performance appraisal
SCOPE OF STAFFING

Hiring
Remuneration
Motivation
Employee maintenance
Human relations
MANPOWER PLANNING
“ Manpower planning is the process by which
an organization ensures that it has the right
number and the kind of people, at the right
place, at the right time, capable of effectively
and efficiently completing those tasks that will
help the organization achieve its overall
objectives”.
Features of manpower planning :

 To ensure right people at right place at

right time.
 To ensure future needs of manpower in
the light of organizational planning and
structure.
 Making the current manpower inventory
suitable for future managerial positions .
 Importance of manpower
planning
 DEFINING FUTURE PERSONNEL NEED.
(Basis of recruiting and developing
personnel)

COPING WITH CHANGES.

(Future changes can be cope up with
effective planning)

PROVIDING BASE FOR DEVELOPING

TALENTS.
(Setting up the priorities before
recruiting)

INCREASING INVESTMENT IN HUMAN

RESOURCES.
(Provides the way for effective utilization
of
Job analysis
“Job analysis is the process of studying
and collecting information relating to the
operations and responsibilities of a specific
job. The immediate products of this
analysis are job descriptions and job
specifications”.
Recruitment
Process of locating,
identifying, and attracting
capable candidates
Can be for current or future
needs
Critical activity for some
corporations.
What sources do we use for
recruitment
selection

Selection is the process of

differentiating between applicants
in order to identify and hire those
with a greater likelihood
of success in a job.
Sources of Recruitment
School
Placement Employee
Referrals

Internal
Searches
Recruitment Voluntary
Sources Applicants

Employment
Agencies Advertisements
 Difference : Recruitment &
selection
RECRUITMENT SELECTION

 To attract maximum number To choose best out of the

of candidates. available candidates.

 It creates application pool It is a rejection process

as large as possible. where few are selected.

 Techniques are not very Highly specialized techniques

intensive. are required.

 Outcome is application Outcome is the candidate

who
pool. is offered job.
Recruitment & selection process
RECRUITMENT SELECTION
Advertisement Screening of
applications
Employment agencies Selection tests
On campus recruitment Interview
Deputation Checking of
references
Employee recommendations Physical
examination
Labor unions Approval by
authority
Gate hiring Placement
Training & development
TRAINING :
“Training is a short term process utilizing a systematic
and organized procedure by which non managerial
personnel learn technical knowledge and skills for a
definite purpose.

 DEVELOPMENT:
“Development is a long term educational process
utilizing a
systematic and organized procedure by which
managerial
personnel learn conceptual and theoretical
knowledge for
general purpose”.
Role of training & development
 INCREASE IN EFFICIENCY

 INCREASE IN MORALE OF EMPLOYEES

 BETTER HUMAN RELATIONS

 REDUCED SUPERVISION

 INCREASED ORGANIZATIONAL VIABILITY &

FLEXIBILITY
Performance appraisal

 Major key to managing itself

 Basis of determining who is promotable to
higher position
 Determines strengths and weaknesses of a
manager
 Measures performance in accomplishing
goals and plans
 Integral part of organization
 Recognize legitimate desire of employees
for progress
 Essential for effective management
Appraisal Methods
Graphic Rating Scale
Critical Incidence method
BARS
Self Appraisal
180 Degree Appraisal
360 Degree Appraisal
Management by Objective
Balance Score Card
Conclusion
Staffing is the most vital asset with an
organization, without which it cannot
move ahead in the competitive world. It
can be equated with HR management as
both have same sort of objectives. Staffing
is an open system approach. It is carried
out within the enterprise but is also linked
to external environment.
 UNIT

4
DIRECTING
1–132
 Directing
• Involves motivating subordinates, influencing
individuals or teams as they work, selecting
the most effective communication channels
or dealing in any way with employee behavior
issues.

1–133
www.ReadySetPresent.com

Page 134
Creativity - Defined

Creativity is the development of ideas about

products, practices, services, or procedures
that are novel and potentially useful to the
organization
What Is Creativity?
Creativity Needs:
 Skill: Learned capacity or
talent to carry out pre-
determined results.

 Talent: Natural endowments

of a person.

 Personality: Patterns of
relatively enduring
characteristics of human
behavior.
Intellectual Skills:
Humans have intellectual skills that
allow them to have creativity . . .

 Choosing  Translating
 Predicting  Recalling
 Interpreting  Manipulating
 Choosing: To select from a number
of possibilities and pick by
preference.

 Predicting: To state, tell about, or

make something known in advance,
on the basis of special knowledge.

 Interpreting: To explain and

understand the meaning of
something and to conceive the
significance of it.
 Translating: To transform something
from one state to another.

 Recalling: To remember and bring

back to mind a previous subject or
situation.

 Manipulating: To handle, manage, or

use (sometimes with skill) an object
in a process or performance.
Use Your Own Process:
With these skills we are able
to . . .
 select knowledge and use it
toward a specific goal.
 interpret communication and
share it.
 remember previous
knowledge and use it skillfully.
Use 1 or more of the 6
intellectual skills to come up
with a creative idea
Creativity can come in different forms . . .

 Scientific: inventions or medical

cures.

 Artistic/Musical: beautiful
paintings, sculptures, or songs.

 Creative Writing: novels, short

stories, and poems.
 Innovation - Defined
Innovation is the implementation of new
ideas at the individual, group or
organizational level
ELEMENTS OF DIRECTION

Communication
Leading
Motivation
Supervision
Coordination
COMMUNICATION
Communication and Management

• Communication
– The sharing of information between two or
more individuals or groups to reach a
common understanding.

16-145
Communication and Management

• Importance of Good Communication

– Increased efficiency in new technologies
– Improved quality of products and services
– Increased responsiveness to customers
– More innovation through communication
 The Communication Process

• Phases of the Communication

Process:
– Transmission phase in which information
is shared by two or more people.
– Feedback phase in which a common
understanding is assured.

16-147
The Communication Process
Most Common Way to Communicate

Speaking Writing

Body Visual
language images
 The Communication Process

• Sender – person wishing to share

information with some other person
• Message – what information to
communicate
• Encoding – sender translates the
message into symbols or language
• Noise – refers to anything that hampers
any stage of the communication process
 The Communication Process

• Receiver – person or group for which

the message is intended
• Medium – pathway through which an
encoded message is transmitted to a
receiver
• Decoding - critical point where the
receiver interprets and tries to make
sense of the message
Verbal & Nonverbal Communication

• Verbal Communication
– The encoding of messages into words,
either written or spoken
• Nonverbal
– The encoding of messages by means of
facial expressions, body language.

16-152
 Communication Media

• Face-to-Face
– Has highest
information
richness.
– Can take
advantage of
verbal and
nonverbal signals.

16-153
 Communication Media

• Spoken Communication
Electronically Transmitted
– Has the second highest information
richness.
– Telephone conversations are information
rich with tone of voice, sender’s emphasis,
and quick feedback, but provide no visual
nonverbal cues.

16-154
 Communication Media

• Personally Addressed Written

Communication
– Has a lower richness
– Personal addressing helps ensure receiver
actually reads the message—personal
letters and e-mail are common forms.

16-155
 E-Mail Dos and Don’ts

• E-mail allows telecommuting employees to

work from home and keep in contact.

– Pay attention to spelling and treat the message like

a written letter.

16-156
 Communication Media

• Impersonal Written Communication

– Has the lowest information richness.
– Good for messages to many receivers
where little or feedback is expected (e.g.,
newsletters, reports)

16-157
 Communication Networks in
Groups and Teams

Type of Network
Wheel Network Information flows to and from one central
member.

Chain Network Members communicate only with the people next

to them in the sequence.

Wheel and chain networks provide little interaction.

Circle Network Members communicate with others close to them

in terms of expertise, experience, and location.

All-Channel Networks found in teams with high levels of

Network communications between each member and all
others.

16-158
Communication
Networks in
Groups and
Teams

16-159
 Technological Advances in
Communication
• Internet
– Global system of computer networks that is
easy to join and is used by employees to
communicate inside and outside their
companies
• World Wide Web (WWW)
– “Business district” with multimedia
capabilities

16-160
 Technological Advances in
Communication
• Intranets
– A company-wide system of computer
networks for information sharing by
employees inside the firm.
• Advantages of intranets
– Can be used for a number of different
purposes by people who may have little
expertise in computer software and
programming

16-161
 Technological Advances in
Communication
• Groupware
– Computer software that enables members
of groups and teams to share information
with each other and improve
communication.

16-162
New Technologies
for Communication

 Informational databases
 Electronic mail systems
 Voice mail systems
 Fax machine systems
 Cellular phone systems
 Barriers to Effective
Communication

– Messages that are unclear, incomplete, difficult

to understand
– Messages with no provision for feedback
– Messages that are misunderstood
– Messages delivered through automated
systems that lack the human element

16-164
 Movie Example: The Terminal

Is there communication
between Viktor and
Frank?
Why or why not?

16-165
FOUR BASIC
DIRECTIONS
Downward Communication

Travels from superior to

subordinates.

Togive specific task directives

about job instruction

To give information about

organization procedures and
practices
To tell subordinates about their
performance

To provide ideological-type

information to facilitate the goals
Upward Communication

Travels from subordinate to

superior. The most common
purpose of this communication is
to provide feedback on how well
things are going.
It provides also the middle
level managers the opportunity to
represent their subordinates to the
upper level managers.
Lateral Communication

Takes place between people in

the same level of the
management hierarchy. The most
common reason for this
communication flow is to provide
coordination and teamwork
Diagonal Communication

Occurs between people who

are neither in the same
department nor in the same level
of management hierarchy. In this
case, someone communicate
either downward or upward with
someone in another functional
area.
OVERCOMING BARRIERS TO
COMMUNICATION
Use feedback to facilitate
understanding and increase the
potential for appropriate action

Repeat message in order to

provide assurance that they
are properly received
Use multiple channels so that
the accuracy of the information
may be enhanced

Use simplified language that

are easily understandable and
which eliminates the possibility
of people getting mixed-up with
meanings
MOTIVATION
“Motivation is the work a
manager performs to inspired,
encourage, people to take
required action”
 Need Theory
People are motivated to obtain outcomes
at work to satisfy their needs.
1)Managers must determine what needs worker
wants satisfied.
2)Ensure that a person receives the outcomes
when performing well.
◦ Several needs theories exist.
 Maslow’s Hierarchy of Needs.
 Alderfer’s ERG.
 Maslow’s Hierarchy of Needs
Need Level Description Examples
Self-
Self- Realize
Realizeone’s
one’s Use
Useabilities
abilities
Actualization
Actualization full
fullpotential
potential to
tothe
thefullest
fullest

Feel
Feelgood
good Promotions
Promotions
Esteem
Esteem about
aboutoneself
oneself &&recognition
recognition

Social
Social Interpersonal
Interpersonal
Belongingness
Belongingness interaction,
interaction,love
love relations,
relations,parties
parties

Job
Jobsecurity,
security,
Safety
Safety Security,
Security,stability
stability health
healthinsurance
insurance

Food,
Food,water,
water, Basic
Basicpay
paylevel
level
Physiological
Physiological shelter
shelter to
tobuy
buyitems
items

Lower level needs must be satisfied before higher needs are

addressed.
 Alderfer’s ERG
Highest Need Level Description Examples

Self-development,
Self-development,Worker
Workercontinually
continually
Growth
Growth creative
creativework
work improves
improvesskills
skills

Interpersonal
Interpersonal Good
Goodrelations,
relations,
Relatedness
Relatedness relations,
relations,feelings
feelings feedback
feedback
Lowest

Food,
Food,water,
water, Basic
Basicpay
paylevel
level
Existence
Existence shelter
shelter to
tobuy
buyitems
items

After lower level needs satisfied, person seeks higher needs. When
unable to satisfy higher needs, lower needs motivation is raised.
 Maslow’s Hierarchy of Needs

SA
Esteem
er
rd
to
es
gh

Love (Social)
hi
o t
st
we
Lo

Safety & Security

Physiological
 Motivational Theories X & Y

SA Theory Y - a set of
assumptions of how to
Esteem manage individuals
motivated by higher
Love (Social) order needs
Theory X - a set of
Safety & Security assumptions of how to
manage individuals
Physiological motivated by lower
order needs
 Alderfer’s ERG Theory

SA Growth
Esteem

Love (Social)
Relatedness
Safety & Security
Existence
Physiological
 Herzberg’s Two-Factor Theory

Hygiene Factor - work condition related to

dissatisfaction caused by discomfort or pain
 maintenance factor

 contributes to employee’s feeling not dissatisfied

 contributes to absence of complaints

Motivation Factor - work condition related to the

satisfaction of the need for psychological growth
 job enrichment

 leads to superior performance & effort

Nature and Characteristics
Motivation

Isan internal feeling

Motivation is related to needs
Motivation lead to goal oriented
behaviour
Motivation can be positive or
negative
Importance of Motivation

1.Puts human resources into action

Every concern requires

physical, financial and human
resources to accomplish the goals.
2. Improves level of efficiency of
employees

The level of a subordinate or

an employee does not only depend
upon his qualifications and
abilities.
3. Leads to achievement of
organizational goals

The goals of an enterprise can

be achieved

4. Builds friendly relationship

Motivation is an important
factor which brings employees
satisfaction.
Organizational
Culture

1–188
Definition
• The general pattern of behaviour, shared beliefs
and values that organization members have in
common.

1–189
ELEMENTS
six elements are:

Stories: The past events and

people talked about inside and
outside the company.
Rituals and Routines: The
daily behavior and actions of
people that signal acceptable
behavior.
1–
19
Symbols: The visual
representations of the company
including logos
Organizational Structure: This
includes both the structure
defined by the
organization chart, and the
unwritten lines of power.
Control Systems: The ways that
the organization is controlled.
Power Structures: involve one or
two key senior executives, a 1–
19
MANAGING CULTURAL
DIVERSITY
Setting a good example
Communicate in writing
Training programs
Recognize individual
differences
Differences in cultural
background
Flexible work environment
Continuous monitoring
1–
19
LEADERSHIP
Leadership Is…

- Process of directing the

behaviour of others toward the
accomplishments of objectives.

- Is one of the important parts of

direction.
LEADING IN TIMES OF CRISIS

Stay calm
Be visible
Put people before business
Tell the truth
Know when to get back to
business
Leadership Theories

1–
19
Behavioral Theories
(LEADERSHIP STYLES)
1.Autocratic Leadership

Under the autocratic leadership

style, all decision-making powers
are centralized in the leader, as with
dictators.
The autocratic management has
been successful as it provides strong
motivation to the manager. It permits
quick decision-making.
2.Participative Leadership

consists of the leader sharing

the decision-making abilities
with group members by promoting
the interests of the group members
and by practicing social equality.
3.Free- rein Leadership

A person may be in a
leadership position without
providing leadership, leaving the
group to fend for itself.
Subordinates are given a free
hand in deciding their own
policies and methods.
4.Toxic leadership

A toxic leader is someone who

has responsibility over a group of
people or an organization.
Importance of
Leadership
Initiates action- Leader is a
person who starts the work by
communicating the policies and
plans to the subordinates from
where the work actually starts.

Motivation- He motivates the

employees with economic and
non-economic rewards and
thereby gets the work from the
Providing guidance- Guidance
here means instructing the
subordinates the way they have
to perform their work effectively
and efficiently.

Creating confidence-
Confidence is an important factor
which can be achieved through
expressing the work efforts to the
subordinates,
Building morale- Morale
denotes willing co-operation of
the employees towards their
work and getting them into
confidence and winning their
trust.

Builds work environment- An

efficient work environment helps
in sound and stable growth. He
should treat employees on
humanitarian terms.
Co-ordination- This
synchronization can be achieved
through proper and effective co-
ordination which should be
primary motive of a leader.
 UNIT-5
CONTROLLING

1–206
Controlling
Process
 The Purpose of Control

Adapt to Limit the

environmental change accumulation of error

Control helps
the organization

Cope with organizational

Minimize costs
complexity

20 - 208
 Levels of Control
• Operational control:
 Focuses on the processes used to transform
resources into products or services.
• Financial control:
 Concerned with financial resources.
• Structural control:
 How the elements of structure are serving the
intended purposes.
• Strategic control:
 How effective are the functional strategies helping the
organization meet its goals.

20 - 209
Levels of Control

20 - 210
Who Is Responsible for Control?

• Control rests with all

managers.
• Large corporations
have a controller.
• What does a
controller do?
 Helps line managers
with their control
activities.

20 - 211
Process of
controlling
1–212
Steps in the Control Process
• Establish standards.
• Measure performance.
• Compare performance against standards.
• Determine need for corrective action.
• The sub-steps:
Maintain status quo.
Correct deviation.
Change standards.

20 - 213
Steps in the Control Process

20 - 214
1. Establishing Standards
Measurable or tangible(Output Standards)
• Standards can be measured and expressed
quantitatively are called as measurable standards.
They can be in form of cost, output, expenditure,
time, profit, etc.
Non-measurable or intangible(Input Standards)
• There are standards which cannot be measured
quantitatively. For example- performance of a
manager, deviation of workers, their attitudes
towards a concern. These are called as intangible
standards.
 2. Measuring Actual Performance
• Measurements must be accurate enough to spot
deviations or variances between what really
occurs and what is most desired.

• Without measurement, effective control is not

possible.
3.Comparing Actual with Standard
• Deviation is as the gap between actual
performance and the planned targets.

• For example, if stationery charges increase

by a minor 5 to 10%, it can be called as a
minor deviation.
• On the other hand, if monthly production
decreases continuously, it is called as
major deviation.
Acceptable Range of Deviation
4.Correction of Deviation

• Taking any action necessary to correct or

improve things.

There are two types of exceptions:

Problems - below standard
Opportunities - above standard
Types of Control
BUDGETARY CONTROL
The establishment of budgets,
relating the responsibilities of executives
to the requirements of a policy

1–222
Salient features:
a. Objectives: Determining the objectives
b. Activities: Determining the variety of
activities
c. Plans: Drawing up a plan
d. Performance Evaluation: Laying out a
system of comparison of actual
performance
e. Control Action: Ensuring that when the
plans are not achieved, corrective
actions are taken
1–223
CLASSIFICATION OF BUDGETS

1–224
• Long Term Budget: prepared for periods longer
than a year ex: R&D Budget
• Short Term Budget: less than year
ex:cash budget
• Basic Budget: remains unaltered
• Current Budget: related to the current conditions
• Fixed Budget: remain unchanged
• Flexible Budget: various budgets for different
levels of activity
• Functional Budget: the individual functions in an
organization
• Master Budget: Profit & Loss Account
1–225
BUDGETARY CONTROL
TECHNIQUES

1–226
1. Revenue and Expense Budgets:
• budgets spell out plans for revenues and
operating expenses in rupee terms.

1–227
2.Time, Space, Material, and
Product Budgets:
• Many budgets are better expressed in quantities
rather than in monetary(money) terms.

1–228
3. Capital Expenditure Budgets
• capital expenditures for plant, machinery,
equipment, inventories, and other items.

1–229
4. Cash Budgets
• cash budget is simply a forecast of cash receipts

1–230
5. Variable Budget
• analysis of expense items to determine how
individual costs should vary with volume of
output

1–231
6. Zero Based Budget
• By starting the budget of each package from
base zero, budgeters calculate costs

1–232
NON-BUDGETARY CONTROL
TECHNIQUES
• many traditional control devices not connected
with budgets, although some may be related to,
and used with, budgetary controls.

1–233
i) Statistical data:
• Analysing the numerical data

1–234
ii) Break- even point analysis

• chart depicts the relationship of sales and

expenses

1–235
iii) Operational audit:
• internal audit

1–236
iv) Personal observation
• one should never overlook the importance of
control through personal observation.

1–237
v) PERT(Program (or Project)
Evaluation and Review Technique):

• one should never overlook the importance of

control through personal observation.

1–238
vi) GANTT CHART:
• a type of bar chart that illustrates a project
schedule
• Gantt charts illustrate the start and finish dates
of the terminal elements and summary elements
of a project.
 PRODUCTIVITY

• Productivity refers to the ratio between the

output from production processes to its input.
Typical Productivity
Calculations
a) Physical Productivity
This is a ratio of the amount of product to the
resources consumed.
b) Functional Productivity
This is a ratio of the amount of the
functionality delivered to the resources consumed
c) Economic Productivity
ratio of the value of the product produced to
the cost of the resources used to produce it.
 COST
CONTROL
• Cost control is the measure taken by
management to assure that the cost objectives
set down in the planning stage are attained
Steps involved in designing
process of cost control system:
• Establishing norms: To exercise cost control it
is essential to establish norms, targets or
parameters
• Appraisal: The actual results are compared with
the set norms.
• Corrective measures: The variances are
reviewed and remedial measures or revision of
targets, norms, standards etc., as required are
taken.
Advantages of cost control
• Better utilization of resources
• To prepare for meeting a future competitive
position.
• Reasonable price for the customers
• Improves the image of company for long-term
benefits.
• Improve the rate of return on investment.
 PURCHASE CONTROL
• Purchase control is an element of material
control.
• The advantages derived from a good and adequate
system of the purchase control are as follows:
a) Continuous availability of materials
b) Purchasing of right quantity
c) Economy in purchasing
d) Works as information centre
e) Development of business relationship
f) Finding of alternative source of supply
g) Fixing responsibilities
MAINTENANCE CONTROL
• Maintenance department has to excercise effective cost
control, to carry out the maintenance functions in a pre-
specified budget
• First line supervisors must be apprised of the cost
information of the various materials
• A monthly review of the budget provisions and
expenditures actually incurred in respect of each
center/shop
• The total expenditure to be incurred can be uniformly
spread over the year
• The controllable elements of cost such as manpower
cost and material cost can be discussed
 QUALITY
CONTROL
• Quality control refers to the technical process
that gathers, examines, analyze & report the
progress of the project & conformance with the
performance requirements
steps involved in quality control process are
1) Determine what parameter is to be controlled.
2) Establish its criticality
3) Establish a specification for the parameter to be
controlled
4) Produce plans for control
5) Organize resources to implement the plans
6) Install a sensor at an appropriate point
7) Collect and transmit data to a place for analysis
8) Verify the results and diagnose the cause of variance.
9) Propose remedies and decide on the action
10) Take the agreed action and check that the variance
Advantages and disadvantages
• Advantages include better products and services
• Disadvantages include needing more man
power/operations to maintain quality control
 PLANNING
OPERATIONS
• An operational planning is a subset of strategic
work plan. It describes short-term ways of
achieving milestones and explains how, or what
portion of, a strategic plan will be put into
operation during a given operational period, in
the case of commercial application
 Like a strategic plan, an operational plan
addresses four questions:
• Where are we now?
• Where do we want to be?
• How do we get there?
• How do we measure our progress?
Operational plans should contain:
• clear objectives
• activities to be delivered
• quality standards
• desired outcomes
• staffing and resource requirements
• implementation timetables
• a process for monitoring progress.
References
• www.slideshare.net
• www.docstoc.com
• www.slideworld.com
• www.nptel.ac.in
• www.scribd.com
• http://opencourses.emu.edu.tr/
• http://engineeringppt.blogspot.in/
• http://www.pptsearchengine.net/
• www.4shared.com
• www.eazynotes.com
Book References & PPT
materials
1. Stephen P. Robbins and Mary Coulter,
'Management', Prentice Hall of India.
2. Charles W L Hill, Steven L McShane,
'Principles of Management', Mcgraw Hill
Education
3.Hellriegel, Slocum & Jackson, ' Management - A
Competency Based Approach

1–254