Module 1

Q1. What is management?

Management has been described as a social process involving responsibility for economical
and effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements and activities. These activities
are different from operative functions like marketing, finance, purchase etc. Rather these
activities are common to each and every manger irrespective of his level or status.

Q2. Explain the functions of management.

Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating and
controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for
reporting & B for Budgeting. But the most widely accepted are functions of management given
by KOONTZ and O’DONNEL

i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

Q. What is Planning?

It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. According to KOONTZ, “Planning is deciding in advance -
what to do, when to do & how to do. It bridges the gap from where we are & where we
want to be”. A plan is a future course of actions. It is an exercise in problem solving &
 decision making. Planning is determination of courses of action to achieve desired
goals. Thus, planning is a systematic thinking about ways & means for accomplishment
of pre-determined goals. Planning is necessary to ensure proper utilization of human &
non-human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

Q. What is Organizing?

It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, “To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To
organize a business involves determining & providing human and non-human resources
to the organizational structure. Organizing as a process involves:

 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.

Q. What is Staffing?

It is the function of manning the organization structure and keeping it manned. Staffing
has assumed greater importance in the recent years due to advancement of technology,
increase in size of business, complexity of human behavior etc. The main purpose o
staffing is to put right man on right job i.e. square pegs in square holes and round pegs
in round holes. According to Kootz & O’Donell, “Managerial function of staffing
involves manning the organization structure through proper and effective selection,
appraisal & development of personnel to fill the roles designed un the structure”.
Staffing involves:

 Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
 Recruitment, Selection & Placement.
 Training & Development.
 Remuneration.
 Performance Appraisal.
 Promotions & Transfer.

Q. What is Directing?

It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel
aspect of management which deals directly with influencing, guiding, supervising,
motivating sub-ordinate for the achievement of organizational goals. Direction has
following elements:

 Supervision
  Motivation
 Leadership
 Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the

act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to

work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.

Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from

one person to another. It is a bridge of understanding.

Q. What is Controlling?

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if necessary,
to correct any deviation”. According to Koontz & O’Donell “Controlling is the
measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:

p. Establishment of standard performance.

q. Measurement of actual performance.
r. Comparison of actual performance with the standards and finding out deviation
if any.
s. Corrective action.
Q. Levels of management

Q. Role of a manager
Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management:
Inside our Strange World of Organizations," in 1990.
The 10 roles are then divided up into three categories, as follows:
 Category Roles

Figurehead
Leader
Interpersonal Liaison

Monitor
Disseminator
Informational Spokesperson

Entrepreneur
Disturbance Handler
Resource Allocator
Decisional Negotiator

Let's look at each of the ten managerial roles in greater detail.

Interpersonal Category
The managerial roles in this category involve providing information and ideas.
1. Figurehead – As a manager, you have social, ceremonial and legal responsibilities.
You're expected to be a source of inspiration. People look up to you as a person with
authority, and as a figurehead.
2. Leader – This is where you provide leadership for your team, your department or
perhaps your entire organization; and it's where you manage the performance and
responsibilities of everyone in the group.
3. Liaison – Managers must communicate with internal and external contacts. You need
to be able to network effectively on behalf of your organization.
Informational Category
The managerial roles in this category involve processing information.
4. Monitor – In this role, you regularly seek out information related to your organization
and industry, looking for relevant changes in the environment. You also monitor your
team, in terms of both their productivity, and their well-being.
5. Disseminator – This is where you communicate potentially useful information to your
colleagues and your team.
6. Spokesperson – Managers represent and speak for their organization. In this role,
you're responsible for transmitting information about your organization and its goals to
the people outside it.
Decisional Category
The managerial roles in this category involve using information.
7. Entrepreneur – As a manager, you create and control change within the organization.
This means solving problems, generating new ideas, and implementing them.
8. Disturbance Handler – When an organization or team hits an unexpected roadblock,
it's the manager who must take charge. You also need to help mediate disputes within
it.
9. Resource Allocator – You'll also need to determine where organizational resources are
best applied. This involves allocating funding, as well as assigning staff and other
organizational resources.
10. Negotiator – You may be needed to take part in, and direct, important negotiations
within your team, department, or organization.

Q. Types of Planning
Q. Difference between standing and single use plan.

Q. Nature of Planning

(i) Planning Focuses on Achieving Objectives

Management begins with planning and planning begins with the determining of objectives. In
the absence of objectives no organisation can ever be thought about. With the determining of
objective, the way to achieve the objective is decided in the planning.

(ii) Planning is Primary Function of Management

Planning is the first important function of management. The other functions, e.g., organising,
staffing, directing and controlling come later. In the absence of planning no other function of
management can be performed.

(iii) Planning is Pervasive

Since the job of planning is performed by the managers at different levels working in the
enterprise, it is appropriate to call it all-pervasive. Planning is an important function of every
manager; he may be a managing director of the organisation or a foreman in a factory.

For example, the decision to expand business is taken by the higher-level managers. The
decision to sell products is taken by the middle-level and lower-level managers.

(iv) Planning is Continuous

Planning is a continuous process for the following reasons:

(a) Plans are prepared for a particular period. Hence, there is need for a new plan after the
expiry of that period.

(b) In case of any discrepancy plans are to be revised.

(c) In case of rapid changes in the business environment plans are to be revised.

(v) Planning is Futuristic

Planning decides the plan of action what is to be done, how is it to be done, when it to be done,
by whom is it to be done all these questions are related to future. Under planning, answers to
these questions are found out.

For example, a company is planning to market a new product. While doing so it shall have to
keep in mind the customs and the interests/tastes of the people and also the possibility of any
change in them.

(vi) Planning Involves Decision Making

Planning becomes a necessity when there are many alternatives to do a job. A planner chooses
the most appropriate alternative. Therefore, it can be asserted that planning is a process of
selecting the best and rejecting the inappropriate. It is, therefore, observed that planning
involves decision making.

(vii) Planning is a Mental Exercise

Planning is known as a mental exercise as it is related to thinking before doing something. A

planner has mainly to think about the following questions:

(i) What to do? (ii) How to do it? (iii) When to do it? (iv) Who is to do it?

Q. What is Management by Objective ?

The term Management by Objectives was coined by Peter Drucker in 1954.

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 organization.

Management by objectives guides the employees to deliver their level best and achieve the
targets within the stipulated time frame.

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.

Q. What is Organizing Function of Management?

Organizing is the function of management which follows planning. It is a function in which
the synchronization and combination of human, physical and financial resources takes place.
All the three resources are important to get results. Therefore, organizational function helps in
achievement of results which in fact is important for the functioning of a concern. According
to Chester Barnard, “Organizing is a function by which the concern is able to define the role
positions, the jobs related and the co-ordination between authority and responsibility. Hence, a
manager always has to organize in order to get results.

Q. Characteristics of Organizing Function

A manager performs organizing function with the help of following steps:-

1. Identification of activities - All the activities which have to be performed in a concern

have to be identified first. For example, preparation of accounts, making sales, record
keeping, quality control, inventory control, etc. All these activities have to be grouped
and classified into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine
and group similar and related activities into units or departments. This organization of
dividing the whole concern into independent units and departments is called
departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to
classify the powers and its extent to the managers. This activity of giving a rank in order
to the managerial positions is called hierarchy. The top management is into formulation
of policies, the middle level management into departmental supervision and lower level
management into supervision of foremen. The clarification of authority help in bringing
efficiency in the running of a concern. This helps in achieving efficiency in the running
 of a concern. This helps in avoiding wastage of time, money, effort, in avoidance of
duplication or overlapping of efforts and this helps in bringing smoothness in a
concern’s working.
4. Co-ordination between authority and responsibility - Relationships are established
among various groups to enable smooth interaction toward the achievment of the
organizational goal. Each individual is made aware of his authority and he/she knows
whom they have to take orders from and to whom they are accountable and to whom
they have to report. A clear organizational structure is drawn and all the employees are
made aware of it.

Q. Importance of Organizing Function

1. Specialization - Organizational structure is a network of relationships in which the

work is divided into units and departments. This division of work is helping in bringing
specialization in various activities of concern.
2. Well defined jobs - Organizational structure helps in putting right men on right job
which can be done by selecting people for various departments according to their
qualifications, skill and experience. This is helping in defining the jobs properly which
clarifies the role of every person.
3. Clarifies authority - Organizational structure helps in clarifying the role positions to
every manager (status quo). This can be done by clarifying the powers to every manager
and the way he has to exercise those powers should be clarified so that misuse of powers
do not take place. Well defined jobs and responsibilities attached helps in bringing
efficiency into managers working. This helps in increasing productivity.
4. Co-ordination - Organization is a means of creating co-ordination among different
departments of the enterprise. It creates clear cut relationships among positions and
ensure mutual co-operation among individuals. Harmony of work is brought by higher
level managers exercising their authority over interconnected activities of lower level
manager.
5. Effective administration - The organization structure is helpful in defining the jobs
positions. The roles to be performed by different managers are clarified. Specialization
is achieved through division of work. This all leads to efficient and effective
administration.
6. Growth and diversification - A company’s growth is totally dependant on how
efficiently and smoothly a concern works. Efficiency can be brought about by clarifying
the role positions to the managers, co-ordination between authority and responsibility
and concentrating on specialization. In addition to this, a company can diversify if its
potential grow. This is possible only when the organization structure is well- defined.
This is possible through a set of formal structure.
7. Sense of security - Organizational structure clarifies the job positions. The roles
assigned to every manager is clear. Co-ordination is possible. Therefore, clarity of
powers helps automatically in increasing mental satisfaction and thereby a sense of
security in a concern. This is very important for job- satisfaction.
8. Scope for new changes - Where the roles and activities to be performed are clear and
every person gets independence in his working, this provides enough space to a
manager to develop his talents and flourish his knowledge. A manager gets ready for
taking independent decisions which can be a road or path to adoption of new techniques
of production. This scope for bringing new changes into the running of an enterprise is
possible only through a set of organizational structure.
 Q. Difference between Centralization and Decentralization

BASIS FOR
CENTRALIZATION DECENTRALIZATION
COMPARISON

Meaning The retention of powers and The dissemination of authority,

authority with respect to planning responsibility and accountability to
and decisions, with the top the various management levels, is
management, is known as known as Decentralization.
Centralization.

Involves Systematic and consistent Systematic dispersal of authority.

reservation of authority.

Communication Vertical Open and Free

Flow

Decision Making Slow Comparatively faster

Advantage Proper coordination and Sharing of burden and responsibility

Leadership

Power of decision Lies with the top management. Multiple persons have the power of
making decision making.

Implemented Inadequate control over the Considerable control over the

when organization organization

Best suited for Small sized organization Large sized organization

Q. What is Span of Management?

The Span of Management refers to the number of subordinates who can be managed
efficiently by a superior. Simply, the manager having the group of subordinates who report him
directly is called as the span of management.

The Span of Management has two implications:

1. Influences the complexities of the individual manager’s job

2. Determine the shape or configuration of the Organization
The span of management is related to the horizontal levels of the organization structure. There
is a wide and a narrow span of management. With the wider span, there will be less hierarchical
levels, and thus, the organizational structure would be flatter. Whereas, with the narrow span,
the hierarchical levels increases, hence the organizational structure would be tall.

Both these organizational structures have their advantages and the disadvantages. But however
the tall organizational structure imposes more challenges:

 Since the span is narrow, which means less number of subordinates under one superior,
requires more managers to be employed in the organization. Thus, it would be very
expensive in terms of the salaries to be paid to each senior.
 With more levels in the hierarchy, the communication suffers drastically. It takes a lot of
time to reach the appropriate points, and hence the actions get delayed.
 Lack of coordination and control because the operating staff is far away from the top
management.
The major advantage of using this structure is that the cross communication gets facilitated,
i.e., operative staff communicating with the top management. Also, the chance of promotion
increases with the availability of several job positions.

In the case of a flatter organizational structure, where the span is wide leads to a more complex
supervisory relationship between the manager and the subordinate. It will be very difficult for
a superior to manage a large number of subordinates at a time and also may not listen to all
efficiently.

However, the benefit of using the wider span of management is that the number of managers
gets reduced in the hierarchy, and thus, the expense in terms of remuneration is saved. Also,
the subordinates feel relaxed and develop their independent spirits in a free work environment,
where the strict supervision is absent