MANAGEMENT CONCEPTS - MODULE NO 02

Planning Definition
According to Theo Haimann, “Planning is deciding in advance, what is to be done. When a manager
plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated
structure of operations aimed at the desired results.”
According to Alford and Beaty, “Planning is the thinking process, the organized foresight, the vision
based on fact and experience that is required for intelligent action.”
According to ME. Hurley, “Planning is deciding in advance what is to be done. It involves the selection
of objectives, policies, procedures and programs from among alternatives.”

TYPES OF PLANS

 On the basis of Nature

 Operational Plan: Operational plans are the plans which are formulated by the lower level
management for short term period of up to one year. It is concerned with the day to day
operations of the organization. It is detailed and specific. It is usually based on past experiences.
It usually covers functional aspects such as production, finance, Human Resources etc.

 Tactical Plan: Tactical plan is the plan which is concerned with the integration of various
organizational units and ensures implementation of strategic plans on day to day basis. It involves
how the resources of an organization should be used in order to achieve the strategic goals. The
tactical plan is also known as coordinative or functional plan.

 Strategic Plan: Strategic plan is the plan which is formulated by the top level management for a
long period of time of five years or more. They decide the major goals and policies to achieve the
goals. It takes in a note of all the external factors and risks involved and makes a long-term policy
of the organization. It involves the determination of strengths and weaknesses, external risks,
mission, and control system to implement plans.
On the basis of managerial level:

 Top level Plans:Plans which are formulated by general managers and directors are called top-
level plans. Under these plans, the objectives, budget, policies etc. for the whole organization are
laid down. These plans are mostly long term plans.

 Middle-level Plans: Managerial hierarchy at the middle level includes the departmental
managers. A corporate has many departments like purchase department, sales department, finance

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

department, personnel department etc. The plans formulated by the departmental managers are
called middle-level plans.

 Lower level Plans: These plans are prepared by the foreman or the supervisors. They take the
existence of the actual workplace and the problems connected with it. They are formulated for a
short period of time and called short term plans.

On the basis of time:

 Long Term Plan: Long-term plan is the long-term process that business owners use to reach
their business mission and vision. It determines the path for business owners to reach their goals.
It also reinforces and makes corrections to the goals as the plan progresses.

 Intermediate Plan: Intermediate planning covers 6 months to 2 years. It outlines how the
strategic plan will be pursued. In business, intermediate plans are most often used for campaigns.

 Short-term Plan: Short-term plan involves pans for a few weeks or at most a year. It allocates
resources for the day-to-day business development and management within the strategic plan.
Short-term plans outline objectives necessary to meet intermediate plans and the strategic
planning process.
On the basis of use:

 Single Plan: These plans are connected with some special problems. These plans end the moment
of the problems to be solved. They are not used, once after their use. They are further re-created
whenever required.

 Standing Plan: These plans are formulated once and they are repeatedly used. These plans
continuously guide the managers. That is why it is said that a standing plan is a standing guide to
solving the problems. These plans include mission, policies, objective, rules and strategy.
PLANNING PROCESS
Planning is a complex process which requires high level of studies and analysis. To create a plan there
must be determination of objectives and outlining of the course of action to achieve the goals. There is no
set formula for planning. A planning process which is suitable for one kind of organization may not be
suitable for another type of organization. However, we can take the following steps as the guideline to
draw a plan:
1. Analysis of the environment: Planning begins with the awareness of the opportunities in the external
environment and within the organization. For this SWOT analysis is most suitable. Strength and
weaknesses are the internal factors whereas opportunities and threats are the environmental factors which
are to be analyzed.

2. Setting the objectives: The second step of planning is to set objectives and goals for the organization
as a whole and for each department. Long term, as well as short-term plans, are to be created. Objectives
are specified to each and every manager and department head. Objectives give direction to the major
plans. So managers should have an opportunity to contribute their ideas for setting their own objectives
and of the organization.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

3. Develop premises: Planning premises are the assumptions about the future on the basis of which the
plans will be ultimately formulated. Planning premises are the key to the success of planning as they
supply pertinent facts and information regarding the future such as general economic conditions,
production cost, and prices, probable competitive behavior, governmental control etc. Forecasting is an
essential part of premises.

4. Determine and evaluate alternatives: The fourth step is to search and identify the alternative course
of action. It suggests that a particular objective can be achieved through numerous ways. But the most
relevant alternatives must be listed down so that selection is made easier. Once various alternatives are
identified, they must be well analyzed with their strong and weak points.

5. Selection of Best Alternative: This is the point where the certain plan is adopted. When the
alternatives are determined most suitable alternative must be chosen out from the list which can give
maximum output with minimum risk.

6. Formulation of a derivative plan: Derivative plans are the backing plans which are very essential.
Once the basic plan has been formulated, it must be translated into day to day operation of the
organization. Middle and low-level managers must draw up the appropriate plans, programs and budget
for their sub-units.

7. Budget formulation: After decisions are made and plans are set the next step is giving them sufficient
funds to carry them out. Optimum budgeting must be done for every course of action.

8. Implementation of a plan: Once the plans are set up, now the plans must be well informed and shared
with the employees and managers expecting full commitment and trust. Finally, the plans must be carried
out.

9. Follow up action: Obviously once a plan is carried out it generates certain output. The progress must
be well monitored and managers need to check the progress of their plans so they can take necessary steps
to improve the plans if needed.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Features/Nature/Characteristic of Planning:

1. Planning contributes to Objectives:

Planning starts with the determination of objectives. We cannot think of planning in absence of objective.
After setting up of the objectives, planning decides the methods, procedures and steps to be taken for
achievement of set objectives. Planners also help and bring changes in the plan if things are not moving in
the direction of objectives.
For example, if an organisation has the objective of manufacturing 1500 washing machines and in one
month only 80 washing machines are manufactured, then changes are made in the plan to achieve the
final objective.

2. Planning is Primary function of management:

Planning is the primary or first function to be performed by every manager. No other function can be
executed by the manager without performing planning function because objectives are set up in planning
and other functions depend on the objectives only.
For example, in organizing function, managers assign authority and responsibility to the employees and
level of authority and responsibility depends upon objectives of the company. Similarly, in staffing the
employees are appointed. The number and type of employees again depends on the objectives of the
company. So planning always proceeds and remains at no. 1 as compared to other functions.

3. Pervasive:
Planning is required at all levels of the management. It is not a function restricted to top level managers
only but planning is done by managers at every level. Formation of major plan and framing of overall
policies is the task of top level managers whereas departmental managers form plan for their respective
departments. And lower level managers make plans to support the overall objectives and to carry on day
to day activities.

4. Planning is futuristic/Forward looking:

Planning always means looking ahead or planning is a futuristic function. Planning is never done for the
past. All the managers try to make predictions and assumptions for future and these predictions are made

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

on the basis of past experiences of the manager and with the regular and intelligent scanning of the
general environment.

5. Planning is continuous:
Planning is a never ending or continuous process because after making plans also one has to be in touch
with the changes in changing environment and in the selection of one best way.
So, after making plans also planners keep making changes in the plans according to the requirement of the
company. For example, if the plan is made during the boom period and during its execution there is
depression period then planners have to make changes according to the conditions prevailing.

6. Planning involves decision making:

The planning function is needed only when different alternatives are available and we have to select most
suitable alternative. We cannot imagine planning in absence of choice because in planning function
managers evaluate various alternatives and select the most appropriate. But if there is one alternative
available then there is no requirement of planning.
For example, to import the technology if the licence is only with STC (State Trading Co-operation) then
companies have no choice but to import the technology through STC only. But if there is 4-5 import
agencies included in this task then the planners have to evaluate terms and conditions of all the agencies
and select the most suitable from the company’s point of view.

7. Planning is a mental exercise:

It is mental exercise. Planning is a mental process which requires higher thinking that is why it is kept
separate from operational activities by Taylor. In planning assumptions and predictions regarding future
are made by scanning the environment properly. This activity requires higher level of intelligence.
Secondly, in planning various alternatives are evaluated and the most suitable is selected which again
requires higher level of intelligence. So, it is right to call planning an intellectual process.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Importance/Significance of Planning:
1. Planning provides Direction:
Planning is concerned with predetermined course of action. It provides the directions to the efforts of
employees. Planning makes clear what employees have to do, how to do, etc. By stating in advance how
work has to be done, planning provides direction for action. Employees know in advance in which
direction they have to work. This leads to Unity of Direction also. If there were no planning, employees
would be working in different directions and organisation would not be able to achieve its desired goal.
2. Planning Reduces the risk of uncertainties:
Organisations have to face many uncertainties and unexpected situations every day. Planning helps the
manager to face the uncertainty because planners try to foresee the future by making some assumptions
regarding future keeping in mind their past experiences and scanning of business environments. The plans
are made to overcome such uncertainties. The plans also include unexpected risks such as fire or some
other calamities in the organisation. The resources are kept aside in the plan to meet such uncertainties.
3. Planning reduces over lapping and wasteful activities:
The organisational plans are made keeping in mind the requirements of all the departments. The
departmental plans are derived from main organisational plan. As a result there will be co-ordination in
different departments. On the other hand, if the managers, non-managers and all the employees are
following course of action according to plan then there will be integration in the activities. Plans ensure
clarity of thoughts and action and work can be carried out smoothly.
4. Planning Promotes innovative ideas:
Planning requires high thinking and it is an intellectual process. So, there is a great scope of finding better
ideas, better methods and procedures to perform a particular job. Planning process forces managers to
think differently and assume the future conditions. So, it makes the managers innovative and creative.
5. Planning Facilitates Decision Making:
Planning helps the managers to take various decisions. As in planning goals are set in advance and
predictions are made for future. These predictions and goals help the manager to take fast decisions.
6. Planning establishes standard for controlling:
Controlling means comparison between planned and actual output and if there is variation between both
then find out the reasons for such deviations and taking measures to match the actual output with the
planned. But in case there is no planned output then controlling manager will have no base to compare
whether the actual output is adequate or not.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

For example, if the planned output for a week is 100 units and actual output produced by employee is 80
units then the controlling manager must take measures to bring the 80 unit production upto 100 units but
if the planned output, i.e., 100 units is not given by the planners then finding out whether 80 unit
production is sufficient or not will be difficult to know. So, the base for comparison in controlling is
given by planning function only.
7. Focuses attention on objectives of the company:
Planning function begins with the setting up of the objectives, policies, procedures, methods and rules,
etc. which are made in planning to achieve these objectives only. When employees follow the plan they
are leading towards the achievement of objectives. Through planning, efforts of all the employees are
directed towards the achievement of organisational goals and objectives.

Limitations of Planning:

1. Planning leads to rigidity:

Once plans are made to decide the future course of action the manager may not be in a position to change
them. Following predefined plan when circumstances are changed may not bring positive results for
organisation. This kind of rigidity in plan may create difficulty.
2. Planning may not work in dynamic environment:
Business environment is very dynamic as there are continuously changes taking place in economic,
political and legal environment. It becomes very difficult to forecast these future changes. Plans may fail
if the changes are very frequent.
The environment consists of number of segments and it becomes very difficult for a manager to assess
future changes in the environment. For example there may be change in economic policy, change in
fashion and trend or change in competitor’s policy. A manager cannot foresee these changes accurately
and plan may fail if many such changes take place in environment.
3. It reduces creativity:
With the planning the managers of the organisation start working rigidly and they become the blind
followers of the plan only. The managers do not take any initiative to make changes in the plan according
to the changes prevailing in the business environment. They stop giving suggestions and new ideas to
bring improvement in working because the guidelines for working are given in planning only.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

4. Planning involves huge Cost:

Planning process involves lot of cost because it is an intellectual process and companies need to hire the
professional experts to carry on this process. Along with the salary of these experts the company has to
spend lot of time and money to collect accurate facts and figures. So, it is a cost-consuming process. If the
benefits of planning are not more than its cost then it should not be carried on.
5. It is a time consuming process:
Planning process is a time-consuming process because it takes long time to evaluate the alternatives and
select the best one. Lot of time is needed in developing planning premises. So, because of this, the action
gets delayed. And whenever there is a need for prompt and immediate decision then we have to avoid
planning.
6. Planning does not guarantee success:
Sometimes managers have false sense of security that plans have worked successfully in past so these will
be working in future also. There is a tendency in managers to rely on pretested plans.
It is not true that if a plan has worked successfully in past, it will bring success in future also as there are
so many unknown factors which may lead to failure of plan in future. Planning only provides a base for
analysing future. It is not a solution for future course of action.
7. Lack of accuracy:
In planning we are always thinking in advance and planning is concerned with future only and future is
always uncertain. In planning many assumptions are made to decide about future course of action. But
these assumptions are not 100% accurate and if these assumptions do not hold true in present situation or
in future condition then whole planning will fail.
For example, if in the plan it is assumed that there will be 5% inflation rate and in future condition the
inflation rate becomes 10% then the whole plan will fail and many adjustments will be required to be
made.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Management By Objectives

An effective management goes a long way in extracting the best out of employees and make them work as
a single unit towards a common goal.
The term Management by Objectives was coined by Peter Drucker in 1954.
What is Management by Objective ?

The process of setting objectives in the organization to give a sense of direction to the employees is
called as Management by Objectives.
It refers to the process of setting goals for the employees so that they know what they are supposed to do
at the workplace.
Management by Objectives defines roles and responsibilities for the employees and help them chalk out
their future course of action in the

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

1. Determining Organizational Goals

The entire development of an organization depends on the set goals. A goal is the most critical and
necessary factor behind the effectiveness and efficiency of an organization, so it is important to
effectively manage set goals either single or many of different kinds. Prior to start working on the set
goals, the managers should determine organizational goals with the aim to create a potential management
that must be capable of handling different kinds of goals easily. Determining goals don’t mean creating
goals, as the preliminary goals are set by the top level supervisors on the basis of in-depth analysis and
judgment about what should be accomplished and how to do so in a certain period.

2. Determining Employees’ Objectives

After determining the organizational goals, the next thing to do is to know the individual’s goals or more
clearly employees’ goals. It is the responsibility of the manager to ask employees about what goals they
can accomplish within a specific time period and what resources will they use to achieve the goal. Also, if
needed, then managers and employees can classify the goals from the most important to the least one in
order to make the goal achieving process more easily and in favor of the organization.

3. Constant Monitoring Progress and Performance

The process of MBO is not just set for providing additional effectiveness to managers across the
organization, but it is also equally important for constantly monitoring the progress and performance of
the employees. There are certain things stated below that can help managers to monitor performance and
progress.

 Checking less-effective or ineffective programs by performing a comparison of performance with

already prepared objectives.
 Using ZBB (Zero Based Budgeting)
 For measuring plans and individuals, implementing MBO concepts
 Defining short and long term plans and objectives
 Installing efficient and effective controls
 Eventually, composing completely sound structure of the organization with all things at
appropriate places such as responsibilities, decision making and so on.

4. Performance Evaluation

As per the basic concept of MBO, the performance evaluation comes under the responsibility of
concerned managers and is made by their participation. Keep in the mind, performance evaluation is one
the most important factors of the organization that can help operating certain objectives smoothly.

5. Providing Feedback

The psychologically influential factor of MBO is constantly providing feedback to employees regarding
their performance and individual goals, so that they can monitor, correct and extra improve their skills
and mistakes. Mostly, the feedback is provided in periodic meetings where supervisors and their
subordinates review the performance and progress towards achievement of goals. At one point, feedback
helps individuals know their weakness. While on the other hand, it also motivates already potential
individuals to enhance and develop their performance additionally.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

6. The Performance Appraisal

Performance appraisals are the final step of the process of Management by Objectives. By definition, a
day by day review of the employee’s performance across the organization can be called as performance
appraisal

Need for Management by Objectives (MBO)

 The Management by Objectives process helps the employees to understand their duties at the
workplace.
 KRAs are designed for each employee as per their interest, specialization and educational
qualification.
 The employees are clear as to what is expected out of them.
 Management by Objectives process leads to satisfied employees. It avoids job mismatch and
unnecessary confusions later on.
 Employees in their own way contribute to the achievement of the goals and objectives of the
organization. Every employee has his own role at the workplace. Each one feels indispensable for
the organization and eventually develops a feeling of loyalty towards the organization. They tend
to stick to the organization for a longer span of time and contribute effectively. They enjoy at the
workplace and do not treat work as a burden.
 Management by Objectives ensures effective communication amongst the employees. It leads to a
positive ambience at the workplace.
 Management by Objectives leads to well defined hierarchies at the workplace. It ensures
transparency at all levels. A supervisor of any organization would never directly interact with the
Managing Director in case of queries. He would first meet his reporting boss who would then
pass on the message to his senior and so on. Every one is clear about his position in the
organization.
 The MBO Process leads to highly motivated and committed employees.
 The MBO Process sets a benchmark for every employee. The superiors set targets for each of the
team members. Each employee is given a list of specific tasks.

Limitations of Management by objectives Process

 It sometimes ignores the prevailing culture and working conditions of the organization.
 More emphasis is being laid on targets and objectives. It just expects the employees to achieve
their targets and meet the objectives of the organization without bothering much about the
existing circumstances at the workplace. Employees are just expected to perform and meet the
deadlines. The MBO Process sometimes do treat individuals as mere machines.
 The MBO process increases comparisons between individuals at the workplace. Employees tend
to depend on nasty politics and other unproductive tasks to outshine their fellow workers.
Employees do only what their superiors ask them to do. Their work lacks innovation, creativity
and sometimes also becomes monotonous.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

DECISION MAKING
Introduction to decision making
Decision making is a daily activity for any human being. There is no exception about that. When it
comes to business organizations, decision making is a habit and a process as well.Effective and
successful decisions make profit to the company and unsuccessful ones make losses. Therefore,
corporate decision making process is the most critical process in any organization.In the decision making
process, we choose one course of action from a few possible alternatives. In the process of decision
making, we may use many tools, techniques and perceptions.In addition, we may make our own private
decisions or may prefer a collective decision.Usually, decision making is hard. Majority of corporate
decisions involve some level of dissatisfaction or conflict with another party.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Steps of Decision Making Process

Following are the important steps of the decision making process. tools and techniques.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it
comes to identifying the purpose of the decision.

 What exactly is the problem?

 Why the problem should be solved?

 Who are the affected parties of the problem?

 Does the problem have a deadline or a specific time-line?

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Step 2: Information gathering

A problem of an organization will have many stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.

In the process of solving the problem, you will have to gather as much as information related to the
factors and stakeholders involved in the problem. For the process of information gathering, tools such as
'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining
the criteria, organizational goals as well as the corporate culture should be taken into consideration.

As an example, profit is one of the main concerns in every decision making process. Companies usually
do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles
should be identified related to the problem in hand.

Step 4: Brainstorm and analyse the different choices

For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it
is vital to understand the causes of the problem and prioritization of causes.

For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect
diagram helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize
and identify the causes with highest effect.

Then, you can move on generating all possible solutions (alternatives) for the problem in hand.

Step 5: Evaluation of alternatives

Use your judgement principles and decision-making criteria to evaluate each alternative. In this step,
experience and effectiveness of the judgement principles come into play. You need to compare each
alternative for their positives and negatives.

Step 6: Select the best alternative

Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best
alternative is an informed decision since you have already followed a methodology to derive and select
the best alternative.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the
help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you should learn and then correct
in future decision making. This is one of the best practices that will improve your decision-making skills.

Conclusion
When it comes to making decisions, one should always weigh the positive and negative business
consequences and should favour the positive outcomes.

This avoids the possible losses to the organization and keeps the company running with a sustained
growth. Sometimes, avoiding decision making seems easier; especially, when you get into a lot of
confrontation after making the tough decision.

But, making the decisions and accepting its consequences is the only way to stay in control of your
corporate life and time.

The following are the main types of decisions every organization need to take:

1. Programmed and non-programmed decisions:

Programmed decisions are concerned with the problems of repetitive nature or routine type matters.A

standard procedure is followed for tackling such problems. These decisions are taken generally by lower

level managers. Decisions of this type may pertain to e.g. purchase of raw material, granting leave to an

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

employee and supply of goods and implements to the employees, etc. Non-programmed decisions relate

to difficult situations for which there is no easy solution.

These matters are very important for the organisation. For example, opening of a new branch of the

organisation or a large number of employees absenting from the organisation or introducing new product

in the market, etc., are the decisions which are normally taken at the higher level.

2. Routine and strategic decisions:

Routine decisions are related to the general functioning of the organisation. They do not require much

evaluation and analysis and can be taken quickly. Ample powers are delegated to lower ranks to take

these decisions within the broad policy structure of the organisation.

Strategic decisions are important which affect objectives, organisational goals and other important policy

matters. These decisions usually involve huge investments or funds. These are non-repetitive in nature

and are taken after careful analysis and evaluation of many alternatives. These decisions are taken at the

higher level of management.

3. Tactical (Policy) and operational decisions:

Decisions pertaining to various policy matters of the organisation are policy decisions. These are taken by

the top management and have long term impact on the functioning of the concern. For example, decisions

regarding location of plant, volume of production and channels of distribution (Tactical) policies, etc. are

policy decisions. Operating decisions relate to day-to-day functioning or operations of business. Middle

and lower level managers take these decisions.

An example may be taken to distinguish these decisions. Decisions concerning payment of bonus to

employees are a policy decision. On the other hand if bonus is to be given to the employees, calculation

of bonus in respect of each employee is an operating decision.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi
 MANAGEMENT CONCEPTS - MODULE NO 02

4. Organisational and personal decisions:

When an individual takes decision as an executive in the official capacity, it is known as organisational

decision. If decision is taken by the executive in the personal capacity (thereby affecting his personal life),

it is known as personal decision.Sometimes these decisions may affect functioning of the organisation

also. For example, if an executive leaves the organisation, it may affect the organisation. The authority of

taking organizational decisions may be delegated, whereas personal decisions cannot be delegated.

5. Major and minor decisions:

Another classification of decisions is major and minor. Decision pertaining to purchase of new factory

premises is a major decision. Major decisions are taken by top management. Purchase of office stationery

is a minor decision which can be taken by office superintendent.

6. Individual and group decisions:

When the decision is taken by a single individual, it is known as individual decision. Usually routine type

decisions are taken by individuals within the broad policy framework of the organisation. Group decisions

are taken by group of individuals constituted in the form of a standing committee. Generally very

important and pertinent matters for the organisation are referred to this committee. The main aim in

taking group decisions is the involvement of maximum number of individuals in the process of decision-

making.

Prof. Siddharth D C
Jain College of Business Administration, Belagavi