Management:

According to Harold Koontz, “Management is an art of getting things done through and
with the people in formally organized groups. It is an art of creating an environment in
which people can perform and individuals and can co-operate towards attainment of

group goals”. According to F.W. Taylor, “Management is an art of knowing what to do,
when to do and see that it is done in the best and cheapest way”.
Management is a purposive activity. It is something that directs group efforts towards
the attainment of certain pre - determined goals.
Management can be defined in detail in following categories :
Management as a Process

Management as an Activity
Management as a Discipline
Management as a Group
Management as a Science
Management as an Art
Management as a Profession

Management as an Art:
1. Practical Knowledge: Every art requires practical knowledge therefore learning
of theory is not sufficient. It is very important to know practical application of
theoretical principles. E.g. to become a good painter, the person may not only be
knowing different colour and brushes but different designs, dimensions,
situations etc to use them appropriately. A manager can never be successful just

by obtaining degree or diploma in management; he must have also know how to

apply various principles in real situations by functioning in capacity of manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each
one has his own style and approach towards his job. That is why the level of
success and quality of performance differs from one person to another. E.g. there
are several qualified painters but M.F. Hussain is recognized for his style.
Similarly management as an art is also personalized. Every manager has his own
way of managing things based on his knowledge, experience and personality, that
is why some managers are known as good managers (like Aditya Birla, Rahul

Bajaj) whereas others as bad.

3. Creativity: Every artist has an element of creativity in line. That is why he aims at
producing something that has never existed before which requires combination
of intelligence & imagination. Management is also creative in nature like any
other art. It combines human and non-human resources in useful way so as to
achieve desired results. It tries to produce sweet music by combining chords in

an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist
becomes more and more proficient through constant practice. Similarly
managers learn through an art of trial and error initially but application of
management principles over the years makes them perfect in the job of
managing.

5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete

results. In the same manner, management is also directed towards
accomplishment of pre-determined goals. Managers use various resources like
men, money, material, machinery & methods to promote growth of an
organization.
Thus, we can say that management is an art therefore it requires application of certain

principles rather it is an art of highest order because it deals with moulding the attitude
and behavior of people at work towards desired goals.

Management as a Science:
Science is a systematic body of knowledge pertaining to a specific field of study that
contains general facts which explains a phenomenon. It establishes cause and effect
relationship between two or more variables and underlines the principles governing
their relationship. These principles are developed through scientific method of
observation and verification through testing.

Science is characterized by following main features:

1. Universally acceptance principles - Scientific principles represents basic truth
about a particular field of enquiry. These principles may be applied in all
situations, at all time & at all places. E.g. - law of gravitation which can be applied
in all countries irrespective of the time. Management also contains some fundamental principles
which can be applied universally like the Principle of Unity of Command i.e. one man, one boss.
This principle is applicable to all type of organization - business or non business.
2. Experimentation & Observation - Scientific principles are derived through

scientific investigation & researching i.e. they are based on logic. E.g. the principle
that earth goes round the sun has been scientifically proved.
Management principles are also based on scientific enquiry & observation and not only
on the opinion of Henry Fayol. They have been developed through experiments &
practical experiences of large no. of managers. E.g. it is observed that fair remuneration
to personal helps in creating a satisfied work force.

3. Cause & Effect Relationship - Principles of science lay down cause and effect
relationship between various variables. E.g. when metals are heated, they are
expanded. The cause is heating & result is expansion.
The same is true for management, therefore it also establishes cause and effect
relationship. E.g. lack of parity (balance) between authority & responsibility will lead to
ineffectiveness. If you know the cause i.e. lack of balance, the effect can be ascertained

easily i.e. in effectiveness. Similarly if workers are given bonuses, fair wages they will
work hard but when not treated in fair and just manner, reduces productivity of
organization.
4. Test of Validity & Predictability - Validity of scientific principles can be tested
at any time or any number of times i.e. they stand the test of time. Each time these
tests will give same result. Moreover future events can be predicted with
reasonable accuracy by using scientific principles. E.g. H2 & O2 will always give
H2O.

Principles of management can also be tested for validity. E.g. principle of unity of
command can be tested by comparing two persons - one having single boss and one
having 2 bosses. The performance of 1st person will be better than 2nd.
Management as an Art and Science:
Management is both an art and a science. The above mentioned points clearly reveals
that management combines features of both science as well as art. It is considered as a

science because it has an organized body of knowledge which contains certain

universal truth. It is called an art because managing requires certain skills which are
personal possessions of managers. Science provides the knowledge & art deals with the
application of knowledge and skills.
A manager to be successful in his profession must acquire the knowledge of science &
the art of applying it. Therefore management is a judicious blend of science as well as

an art because it proves the principles and the way these principles are applied is a
matter of art. Science teaches to ’know’ and art teaches to ’do’. E.g. a person cannot
become a good singer unless he has knowledge about various ragas & he also applies
his personal skill in the art of singing. Same way it is not sufficient for manager to first
know the principles but he must also apply them in solving various managerial
problems that is why, science and art are not mutually exclusive but they are

complementary to each other (like tea and biscuit, bread and butter etc.).
The old saying that “Manager are Born” has been rejected in favor of “Managers are
Made”. It has been aptly remarked that management is the oldest of art and youngest of
science. To conclude, we can say that science is the root and art is the fruit.
Management As a Profession:
A profession may be defined as an occupation that requires specialized knowledge and
intensive academic preparations to which entry is regulated by a representative body.
The essentials of a profession are:
1. Specialized Knowledge - A profession must have a systematic body of

knowledge that can be used for development of professionals. Every professional

must make deliberate efforts to acquire expertise in the principles and
techniques. Similarly a manager must have devotion and involvement to acquire
expertise in the science of management.
2. Formal Education & Training - There are no. of institutes and universities to
impart education & training for a profession. No one can practice a profession

without going through a prescribed course. Many institutes of management have

been set up for imparting education and training. For example, a CA cannot audit
the A/C’s unless he has acquired a degree or diploma for the same but no
minimum qualifications and a course of study has been prescribed for managers
by law. For example, MBA may be preferred but not necessary.
3. Social Obligations - Profession is a source of livelihood but professionals are

primarily motivated by the desire to serve the society. Their actions are
influenced by social norms and values. Similarly a manager is responsible not
only to its owners but also to the society and therefore he is expected to provide
quality goods at reasonable prices to the society.
4. Code of Conduct - Members of a profession have to abide by a code of conduct
which contains certain rules and regulations, norms of honesty, integrity and

special ethics. A code of conduct is enforced by a representative association to

ensure self discipline among its members. Any member violating the code of
conduct can be punished and his membership can be withdrawn. The AIMA has
prescribed a code of conduct for managers but it has no right to take legal action
against any manager who violates it.
5. Representative Association - For the regulation of profession, existance of a
representative body is a must. For example, an institute of Charted Accountants
of India establishes and administers standards of competence for the auditors but
the AIMA however does not have any statuary powers to regulate the activities of

managers.
Features Of Management:
Management is an activity concerned with guiding human and physical resources such
that organizational goals can be achieved. Nature of management can be highlighted as:
-
1. Management is Goal-Oriented: The success of any management activity is

assessed by its achievement of the predetermined goals or objective.

Management is a purposeful activity. It is a tool which helps use of human &
physical resources to fulfill the pre-determined goals. For example, the goal of an
enterprise is maximum consumer satisfaction by producing quality goods and at
reasonable prices. This can be achieved by employing efficient persons and
making better use of scarce resources.

2. Management integrates Human, Physical and Financial Resources: In an

organization, human beings work with non-human resources like machines.
Materials, financial assets, buildings etc. Management integrates human efforts to
those resources. It brings harmony among the human, physical and financial
resources.
3. Management is Continuous: Management is an ongoing process. It involves

continuous handling of problems and issues. It is concerned with identifying the

problem and taking appropriate steps to solve it. E.g. the target of a company is
maximum production. For achieving this target various policies have to be
framed but this is not the end. Marketing and Advertising is also to be done. For
this policies have to be again framed. Hence this is an ongoing process.
4. Management is all Pervasive: Management is required in all types of
organizations whether it is political, social, cultural or business because it helps
and directs various efforts towards a definite purpose. Thus clubs, hospitals,
political parties, colleges, hospitals, business firms all require management. When

ever more than one person is engaged in working for a common goal,
management is necessary. Whether it is a small business firm which may be
engaged in trading or a large firm like Tata Iron & Steel, management is required
everywhere irrespective of size or type of activity.
5. Management is a Group Activity: Management is very much less concerned
with individual’s efforts. It is more concerned with groups. It involves the use of

group effort to achieve predetermined goal of management of ABC & Co. is good
refers to a group of persons managing the enterprise.

Levels of Management:
The term “Levels of Management’ refers to a line of demarcation between various
managerial positions in an organization. The number of levels in management increases
when the size of the business and work force increases and vice versa. The level of

management determines a chain of command, the amount of authority & status enjoyed
by any managerial position. The levels of management can be classified in three broad
categories:
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the
three levels is discussed below:

1. Top Level of Management:

It consists of board of directors, chief executive or managing director. The top
management is the ultimate source of authority and it manages goals and policies
for an enterprise. It devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows -
Top management lays down the objectives and broad policies of the enterprise.

It issues necessary instructions for preparation of department budgets,

procedures, schedules etc.
It prepares strategic plans & policies for the enterprise.
It appoints the executive for middle level i.e. departmental managers.
It controls & coordinates the activities of all the departments.
It is also responsible for maintaining a contact with the outside world.

It provides guidance and direction.

The top management is also responsible towards the shareholders for the
performance of the enterprise.
2. Middle Level of Management
The branch managers and departmental managers constitute middle level. They
are responsible to the top management for the functioning of their department.

They devote more time to organizational and directional functions. In small

organization, there is only one layer of middle level of management but in big
enterprises, there may be senior and junior middle level management. Their role
can be emphasized as -
They execute the plans of the organization in accordance with the policies and
directives of the top management.

They make plans for the sub-units of the organization.

They participate in employment & training of lower level management.
They interpret and explain policies from top level management to lower level.
They are responsible for coordinating the activities within the division or
department.
 It also sends important reports and other important data to top level
management.
They evaluate performance of junior managers.
They are also responsible for inspiring lower level managers towards better

performance.
3. Lower Level of Management
Lower level is also known as supervisory / operative level of management. It
consists of supervisors, foreman, section officers, superintendent etc. According
to R.C. Davis, “Supervisory management refers to those executives whose work
has to be largely with personal oversight and direction of operative employees”.

In other words, they are concerned with direction and controlling function of
management. Their activities include -
Assigning of jobs and tasks to various workers.
They guide and instruct workers for day to day activities.
They are responsible for the quality as well as quantity of production.
They are also entrusted with the responsibility of maintaining good relation in

the organization.
They communicate workers problems, suggestions, and recommendatory
appeals etc to the higher level and higher level goals and objectives to the
workers.
They help to solve the grievances of the workers.
They supervise & guide the sub-ordinates.

They are responsible for providing training to the workers.

They arrange necessary materials, machines, tools etc for getting the things done.
They prepare periodical reports about the performance of the workers.
They ensure discipline in the enterprise.
They motivate workers.
 They are the image builders of the enterprise because they are in direct contact
with the workers.
Objectives of Management:
The main objectives of management are:

1. Getting Maximum Results with Minimum Efforts - The main objective of

management is to secure maximum outputs with minimum efforts & resources.
Management is basically concerned with thinking & utilizing human, material &
financial resources in such a manner that would result in best combination. This
combination results in reduction of various costs.
2. Increasing the Efficiency of factors of Production - Through proper utilization

of various factors of production, their efficiency can be increased to a great extent

which can be obtained by reducing spoilage, wastages and breakage of all kinds,
this in turn leads to saving of time, effort and money which is essential for the
growth & prosperity of the enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures
smooth and coordinated functioning of the enterprise. This in turn helps in

providing maximum benefits to the employee in the shape of good working

condition, suitable wage system, incentive plans on the one hand and higher
profits to the employer on the other hand.
4. Human betterment & Social Justice - Management serves as a tool for the
upliftment as well as betterment of the society. Through increased productivity &
employment, management ensures better standards of living for the society. It

provides justice through its uniform policies.

Importance of Management:
1. It helps in Achieving Group Goals - It arranges the factors of production,
assembles and organizes the resources, integrates the resources in effective
manner to achieve goals. It directs group efforts towards achievement of pre-
determined goals. By defining objective of organization clearly there would be no

wastage of time, money and effort. Management converts disorganized resources

of men, machines, money etc. into useful enterprise. These resources are
coordinated, directed and controlled in such a manner that enterprise work
towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical &
human resources productively. This leads to efficacy in management.
Management provides maximum utilization of scarce resources by selecting its

best possible alternate use in industry from out of various uses. It makes use of
experts, professional and these services leads to use of their skills, knowledge,
and proper utilization and avoids wastage. If employees and machines are
producing its maximum there is no under employment of any resources.
3. Reduces Costs - It gets maximum results through minimum input by proper
planning and by using minimum input & getting maximum output. Management

uses physical, human and financial resources in such a manner which results in
best combination. This helps in cost reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and
coordinated functions). To establish sound organizational structure is one of the
objective of management which is in tune with objective of organization and for
fulfillment of this, it establishes effective authority & responsibility relationship

i.e. who is accountable to whom, who can give instructions to whom, who are
superiors & who are subordinates. Management fills up various positions with
right persons, having right skills, training and qualification. All jobs should be
cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing
environment. It keeps in touch with the changing environment. With the change
is external environment, the initial co-ordination of organization must be
changed. So it adapts organization to changing demand of market / changing
needs of societies. It is responsible for growth and survival of organization.

6. Essentials for Prosperity of Society - Efficient management leads to better

economical production which helps in turn to increase the welfare of people.
Good management makes a difficult task easier by avoiding wastage of scarce
resource. It improves standard of living. It increases the profit which is beneficial
to business and society will get maximum output at minimum cost by creating
employment opportunities which generate income in hands. Organization comes

with new products and researches beneficial for society.

Managerial Skills:
A good manager has all the skills and can implement those skills for running the organization
properly. 5 managerial skills are technical skills, conceptual skills, interpersonal and
communication skills, decision-making skills
A good manager has all the skills and can implement those skills for running the organization
properly. 5 managerial skills are
1.Technical skills,
2.Conceptual skills,
3.Interpersonal and communication skills,
4.Decision-making skills
5.Diagnostic and Analytical Skill

Technical Skill
Technical skill is knowledge of and proficiency in activities involving methods, processes, and
procedures. Thus it involves working with tools and specific techniques. Technical skill is the
ability to use the specialized knowledge, procedures, and techniques of a field of activities.
Accountants, engineers, surgeons all have their technical skills necessary for their respective
professions. Most managers, especially at the lower and middle levels, need technical skills for
effective task performance. For example, mechanics work with tools, and their supervisors
should have the ability to teach them how to use these tools. Similarly, accountants apply
specific techniques in doing their job. This skill is most necessary and valuable at a supervisory
level or first-level/first-level management.

Conceptual Skill
Conceptual skill is the ability to see the “big picture,” to recognize significant elements in a
situation and to understand the relationships among the elements. Conceptual skill is the ability
to coordinate and integrates all of an organization’s interests and activities. It requires having the
ability to visualize the enterprise as a whole, to envision all the functions involved in a given
situation or circumstance, to understand how its parts depend on one another and anticipate how
a change in any of its parts will affect the whole. A manager’s ability to think in the abstract and
to view the organization holistically is important. Suggesting a new product line for a company,
introducing computer technology to the organization’s operations, or entering the international
market; for deciding this magnitude, a manager requires conceptual skill is his personality.

Interpersonal and Communication Skills

Communication skill for a manager is a must. The manager must be able to convey ideas and
information to others and receive information and ideas from others effectively. A manager’s job
is to control the subordinates and gives high-level managers or administrators information about
what’s going on. Communication skill enables a manager to perform them properly. Most of his
time, a manager’s job is to interact with people inside and outside of the organization. Manager’s
ability to communication with individuals and groups, controlling and motivation they are what
Interpersonal and Communication skill are. A manager requires having an effective Interpersonal
and communication skill to keep the responsibilities given to him.

Decision-Making Skill
In simple words, a manager’s job is to make decisions that will lead the organization to the
attainment of is goals. Decision making skill is the skill that makes a manager able to recognize
opportunities and threat and then select an appropriate course of action to tackle them efficiently
so that the organization can benefit them. Managers are not always going to make the best
decision. But a good manager most often makes a good decision and learns from the bad ones.
Decision making is a skill that improves as managers gain more experience. Training or
educating is also a good method to develop the Decision making the skill of a manager.

Diagnostic and Analytical Skills

A good manager has Diagnostic and Analytical skills in his bags. Diagnostic skill refers to the
ability to visualize the best response to a situation. Analytical skill means, the ability to identify
the key variables in a situation. Manager diagnostic skill and Analytical skill helps him to
identify possible approaches to a situation. After that is also helps a manager to visualize the
result or outcomes of these approaches. This skill sounds similar to the decision making skill, but
it is the skill required to make the decision.
Functions of 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.

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.

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.

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.

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 of staffing is to put right man/woman on right job i.e. square pegs in square
holes and round pegs in round holes.

According to Koontz & 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.
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 and action of people, because planning, organizing and staffing
are the mere preparations for doing the work. Direction is that inter-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.

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:
 1. Establishment of standard performance.
2. Measurement of actual performance.
3. Comparison of actual performance with the standards and finding out deviation if
any.
4. Corrective actions

Planning
Planning is a continuous process and the primary function of management. Planning in
management is all about outlining a future course of action in order to achieve organizational
objectives. Effective planning provides answers to important questions like; What to do? How to
do it? Who is going to do it? and When to do it?

PLANNING INVOLVES DEFINING THE ORGANIZATIONAL GOALS, ESTABLISHING

AN OVERALL STRATEGY, AND DEVELOPING A COMPREHENSIVE SET OF PLANS
TO INTEGRATE AND COORDINATE WORK IN AN ORG.
Planning is an activity. It can be considered as consisting of a process, there are various sub-
activities in the planning process. On the other hand,

A Plan is a commitment to a particular course of action that is necessary to achieve specific

results.

► Features

On the basis of the definition of planning. Its following features can be identified:
planning is goal-oriented
planning is a primary function
planning is all-pervasive.
planning is a brain exercise
It is a continuous process.

It involves decision-making.
planning is forward-looking
planning is dynamic
planning is an integrated process
It includes efficiency and effectiveness dimension
Planning is primarily concerned with looking into the future of the organization. It requires
forecasting of future situations in which the organization has to function.

Planning is the function performed by the managers at all levels.

Planning involves the selection of the best suitable course of action known as a plan. It bridges
the gap between the current position and desired position of the firm.
► Importance

Planning is present in all types of sectors, households, economies, etc. All organizations require
planning, whether it is the government, a private business, or a small business firm.
Planning is getting ready to do something in the future. Many organization often fails not
because of lack of resources but because of poor planning and wrong strategies.
We need to plan because the future is highly uncertain and it is impossible to predict the future
with 100% accuracy, as the conditions can change at any time.

Hence, planning is the basic requirement of any business firm for survival, growth, and success.
Primacy function of Management
To Offset Uncertainty and Change.
To Focus Attention on Objective
To Help in Coordination
To Help in Control

To Increase Organizational Effectiveness

Planning Objectives and Benefits

The main benefits and objectives of planning are as follows:
Planning increases the efficiency of an organization.
It reduces the risk factors in modern business activities.
It facilitates proper coordination within an organization.

It aids in organizing all available resources.

It provides the right direction to the organization.
It identifies future opportunities and threats.
It is important to maintain good control.
It helps to fulfill the objective of the organization.
It motivates the personnel of an organization.
It encourages managers’ creativity and innovation.
It also helps in decision-making.

Planning Process
As planning is an activity, there are certain reasonable measures for every
manager to follow:

(1) Setting Objectives

 This is the primary step in the process of planning which specifies the objective of an
organisation, i.e. what an organisation wants to achieve.
 The planning process begins with the setting of objectives.
 Objectives are end results which the management wants to achieve by its operations.
 Objectives are specific and are measurable in terms of units.
 Objectives are set for the organisation as a whole for all departments, and then
departments set their own objectives within the framework of organisational objectives.

(2) Developing Planning Premises

 Planning is essentially focused on the future, and there are certain events which are
expected to affect the policy formation.
 Such events are external in nature and affect the planning adversely if ignored.
 Their understanding and fair assessment are necessary for effective planning.
 Such events are the assumptions on the basis of which plans are drawn and are known
as planning premises.

(3) Identifying Alternative Courses of Action

 Once objectives are set, assumptions are made.

 Then the next step is to act upon them.
 There may be many ways to act and achieve objectives.
 All the alternative courses of action should be identified.

(4) Evaluating Alternative Course of Action

 In this step, the positive and negative aspects of each alternative need to be evaluated
in the light of objectives to be achieved.
 Every alternative is evaluated in terms of lower cost, lower risks, and higher returns,
within the planning premises and within the availability of capital.
(5) Selecting One Best Alternative

 The best plan, which is the most profitable plan and with minimum negative effects, is
adopted and implemented.
 In such cases, the manager’s experience and judgement play an important role in
selecting the best alternative.

(6) Implementing the Plan

 This is the step where other managerial functions come into the picture.
 This step is concerned with “DOING WHAT IS REQUIRED”.
 In this step, managers communicate the plan to the employees clearly to help convert
the plans into action.
 This step involves allocating the resources, organising for labour and purchase of
machinery.

(7) Follow Up Action

 Monitoring the plan constantly and taking feedback at regular intervals is called follow-
up.
 Monitoring of plans is very important to ensure that the plans are being implemented
according to the schedule.
 Regular checks and comparisons of the results with set standards are done to ensure
that objectives are achieved.

Types of Planning
There are four types of planning:

1.Strategic

2.Operational

3.Tactical

4.Contingency

Strategic planning

Strategic planning is defining a company's direction and goals and allocating its
resources to pursue them. It consists of analyzing the competitive environment and
identifying external and internal factors that can affect the organization. An example of
strategic planning for a SaaS company that offers project management software and
wants to expand its customer base and increase revenue would look like this: Conduct
market research to understand the needs and preferences of its target audience. Analyze
the competitive landscape to identify potential opportunities and threats. Based on this
analysis, the company sets the following goals:

Introduce new features and functionality to the software that addresses the specific
needs and pain points of the construction and engineering industries.

Develop targeted marketing campaigns to reach small and medium-sized businesses in

these industries through targeted online advertising, social media marketing, and
content marketing.

Increase customer retention by providing exceptional customer support and offering a

loyalty program for long-term subscribers.

To achieve these goals, the company allocates needed resources for marketing,
development, and customer support staff.

Operational planning

Operational planning is the process of defining specific actions and resources needed to
achieve the goals set out in the strategic plan. It involves developing detailed plans and
budgets to implement the strategies and tactics outlined in the strategic plan and
identifying and addressing any potential risks or challenges that may arise. The
example SaaS company has identified introducing new features and functionality to its
software as a key goal in its strategic plan. To achieve this goal, the company develops
an operational plan that outlines the specific actions and resources needed to execute
this strategy.

The operational plan includes tasks such as:

Implementing new features.

Allocating development resources and setting goals and timelines for developing the
new features.

Developing a budget for testing and quality assurance efforts.

Assigning staff members to oversee the development and testing of the new features.

Tactical planning

Tactical planning develops plans and actions to achieve the goals set out in the
operational plan. It involves breaking down the larger goals and objectives into
smaller, more manageable tasks that can be completed within a shorter time frame,
typically ranging from a few weeks to a few months. Tactical planning includes
developing content marketing campaigns, promoting new features, assigning tasks to
developers, etc.

Contingency planning

Contingency planning is the process of identifying potential risks or challenges that

may arise and developing plans to mitigate or address them. To ensure the success of
the launch of the new features, our example SaaS company develops a contingency plan
to mitigate potential risks or challenges that may arise.

Decision Making
Decision-making is a soft skill that involves choosing between possible solutions to a problem.
It is a highly valued skill that many recruiters and hiring managers look for when seeking new
talents. Typically, the person making a decision follows a step-by-step process, including
collecting information, weighing pros and cons and reviewing alternative solutions.

Process of Decision making

1. Identify the decision

Once you realise you must make a decision, define its nature and conditions. Find any variables
that relate to the problem for consideration as well. It is important to understand if a decision is
worth making. Not all situations require a tough decision, especially when other areas have a
greater need for similar resources.

2. Collect information

Gather all the information you can regarding the situation and the decision. Determine what
information you need and the best sources for it. Additionally, consider seeking out information
both internally and externally for every situation. For example, you might gather some
information internally through a self-assessment process by simply looking at what is in front of
you. Find other information externally online, in books or from other sources.

3. Figure out alternatives

Think about all the possible solutions or choices to your decision. This is a step that you can
perform continuously throughout your decision-making process. Try to come up with and
carefully consider each option, even if at first you are tempted to dismiss it.
4. Evaluate your evidence

Use both your intuition and reason to assess your evidence. Analyses and predict what could be
the outcomes of each option and which outcome would best fit the needs of the problem or
question. Rank your options in terms of which would be the most effective fix or choice and see
if a winning idea becomes clear.

5. Pick an option

Select what you have determined to be the most effective choice. Your ultimate solution may
also be a combination of your various options, depending on the circumstances and the
particular decision. Make sure that you have considered both the potential benefits and
drawbacks of each option before making your final choice.

6. Take action

Implement your decision. Begin taking action to make your decision happen. This may involve
notifying your team or company leaders, acquiring resources or making a budget. Continue
evaluating your decision as you put it into action and make changes or optimisations as needed.

Process of Recruitment
Recruitment process involves acquisition of work force. Recruitment process begins with
identification of vacancy in the organisation after which different steps are undertaken to fill
up the vacant position.

The recruitment process is discussed below:

1. Identifying Vacancy:

The first step to recruitment process is identification of vacancy in the organisation. The
manager or departmental head places requisition for manpower, specifying the job
requirement, the qualification, skill, knowledge, ability and experience required of the staff.

2. Recruitment Planning:

On identification of the vacancy in the organisation the HRM prepares a plan for efficient
execution of recruitment process and to ensure availability of appropriate personnel in right
time. The plan involves preparing job specification for the vacant post providing
information regarding the responsibilities, skills, experience and qualifications needed; the
salary structure for the job; the probable date when personnel will be appointed; whether
temporary or permanent; and other details related to the job.
3. Identifying Sources of Recruitment:

The HRM identifies different sources of recruitment from where personnel may be hired.
The sources of recruitment may be internal sources and external sources. The organization
contact different sources to attract job seekers to the organization.

4. Providing Information to Job Aspirant Regarding Vacant Positions:

This is an important and complex step in the process of recruitment. The firm has to identify
the process through which information regarding the vacant post is to be provided to the job
aspirant. Information regarding the vacant post may be provided through advertisement in
daily newspaper, journals and magazines, over the official website of the organisation and
so on.

The selection of the medium depends upon the type of organization, nature of job,
qualifications required of a worker. The medium that has wider reach that can call upon a
large number of job aspirants is selected.

5. Receiving of Application:

Applications are received from aspiring candidates. The applications are screened. The
applications that do not meet the job requirement are removed and selection procedure
begins

Process of Selection
The selection process can be defined as the process of selection and shortlisting of the right
candidates with the necessary qualifications and skill set to fill the vacancies in an organisation.
The selection process varies from industry to industry, company to company and even amongst
departments of the same company.

Every organisation creates a selection process because they have their own requirements. Although,
the main steps remain the same. So, let’s understand in brief how the selection process works.

Preliminary Interview

This is a very general and basic interview conducted so as to eliminate the candidates who are
completely unfit to work in the organisation. This leaves the organisation with a pool of potentially
fit employees to fill their vacancies.

Receiving Applications
Potential employees apply for a job by sending applications to the organisation. The application
gives the interviewers information about the candidates like their bio-data, work experience,
hobbies and interests.

Screening Applications

Once the applications are received, they are screened by a special screening committee who choose
candidates from the applications to call for an interview. Applicants may be selected on special
criteria like qualifications, work experience etc.

Employment Tests

Before an organisation decides a suitable job for any individual, they have to gauge their talents and
skills. This is done through various employment tests like intelligence tests, aptitude tests,
proficiency tests, personality tests etc.

Employment Interview

The next step in the selection process is the employee interview. Employment interviews are done
to identify a candidate’s skill set and ability to work in an organisation in detail. Purpose of an
employment interview is to find out the suitability of the candidate and to give him an idea about the
work profile and what is expected of the potential employee. An employment interview is critical
for the selection of the right people for the right jobs.

Checking References

The person who gives the reference of a potential employee is also a very important source of
information. The referee can provide info about the person’s capabilities, experience in the previous
companies and leadership and managerial skills. The information provided by the referee is meant
to kept confidential with the HR department.

Medical Examination

The medical exam is also a very important step in the selection process. Medical exams help the
employers know if any of the potential candidates are physically and mentally fit to perform their
duties in their jobs. A good system of medical checkups ensures that the employee standards of
health are higher and there are fewer cases of absenteeism, accidents and employee turnover.

Final Selection and Appointment Letter

This is the final step in the selection process. After the candidate has successfully passed all written
tests, interviews and medical examination, the employee is sent or emailed an appointment letter,
confirming his selection to the job. The appointment letter contains all the details of the job like
working hours, salary, leave allowance etc. Often, employees are hired on a conditional basis where
they are hired permanently after the employees are satisfied with their performance.