Institutional and Social Affairs

Management and Financial analysis

4.1 Concept of Management

➢ Management is the art of making the best use of means and resources through the process of
planning, organizing, leading, directing, and controlling human resources, financial resources,
material resources, information, etc. available in the organization to achieve the goals of the
organization effectively and efficiently. Management is all the activities that are done for the
purpose of maximum output by collecting and using the various resources needed by the
organization.
➢ Management is a method, technology, art and science, which makes maximum use of the
organization's resources. The process of collecting the resources needed to achieve
predetermined objectives, coordinating them and deploying them in an orderly manner is called
management.
➢ The art of managing all office functions effectively by applying management principles in
practice is called office management.
➢ This can be further explained by the definition of various scholars:
➢ Luthargulik called office management as the collective form of all the work in the office,
including Planning, Organizing, Staffing, Directing, Coordinating, Controlling, Reporting,
Budgeting.
➢ " To manage is to forecast and to plan, to organize, to commnad, to coordinate and to control. "
Henri Fayol
➢ Management is a certain process of planning, organizing, implementing and controlling for
determining and achieving objectives using people and resources." -Georgr R. Terry
In this way, management is a prudent, creative and dynamic activity that uses knowledge of
many subjects.

Types of Management:

Management is both art and science. It is very difficult to say exactly what type it is, but on a practical
basis, some important types can be mentioned as follows:

1) Strategic Management: It includes the management of all activities from the creation of the
management strategy of the organization to its implementation and achieving the goals and objectives
of the organization.

2) Sales Management: It does all the management related tasks related to sales such as how much to
sell, how much stock to keep.

3) Marketing Management: Performs all management functions such as determining various strategies
and market promotion to sell the produced goods and services in the market.

4) Public Management: In this, necessary managerial work is done to maintain smooth relations
between the organization and the people.
5) Operation Management: It includes all management related activities related to the production of
goods and services.

6) Supply Chain Management: This includes the management related activities to deliver goods and
services from suppliers to customers.

7) Procurement management: This includes all the necessary management related tasks in relation to
obtaining the necessary goods and services from sources outside the organization.

8)Financial and Accounting Management: All management related work related to finance and
accounting is included under this.

9) Human Resource Management: The entire management from the acquisition of the human resources
required by the organization to the exit is included in this section

10) Information Technology Management: Work related to the management of information and
technology is included in this.

11) Engineering Management: This includes management activities such as developing new goods and
services, producing them, building new structures.

12) Research and Develop management: All management tasks related to research and exploration are
included in this.

13) Program Management: All management tasks related to program operation are included under this

14) Project Management: The activities related to the management of all projects related to projects,
including planning, organization, control etc. are included under this.

15) Risk Management: Risk management activities such as determining the risk in the organization and
minimizing it are included under this.

16) Change Management: All necessary management related tasks are done to become better than
other businesses by adapting to the changing environment.

17) Quality Management: All management-related activities related to making the quality of goods and
services effective are included under this.

Therefore, management is necessary in every field. Without management, it is almost impossible to

achieve the goals and objectives of the organization. Therefore, it cannot be said that the type of
management is the same.

Features of Management:

1. It is both art and science.

2. This is a process
3. It is work oriented.
4. This applies anywhere.
5. It involves a group effort.
6. This is a profession.
7. It is also a multifaceted and multidisciplinary subject.
 8. It is abstract.
9. It is a dynamic and simple process.

Importance of Management

Management is an essential element to run any organization successfully. Management: It is very

important for every organization. To achieve the goals and objectives of the organization, planning,
organizing, staffing, directing, controlling, reporting and budgeting in an efficient manner is the main
importance of management. Other important points are mentioned below:

1. To operate the available tools and resources in the highest, economical and regular manner,
2. To address environmental challenges,
3. To develop resources,
4. To solve problems and promote,
5. To lead, motivate, communicate, direct, coordinate, supervise and control;
6. To effectively achieve the goals and objectives of the organization
7. To increase office efficiency,
8. To enhance the prestige and reputation of the organization,
9. To run the activities of the organization smoothly,
10. To develop the personality of employees,
11. To solve organizational problems,
12. To achieve group goals,
13. To encourage new innovations,
14. To increase mutual cooperation, etc.

As Peter Duker said, management is a dynamic life-giver for an organization, without it, tools are just
tools and production never happens. Therefore, it is through efficient management that the
organization's objectives are achieved through proper utilization of the resources available in the
organization.

Basic Principles of Management:

Management is a social science. As a science, it follows various principles. These principles of

management provide guidance for performing practical work. The principles of management can be
mentioned as follows:

(a) Principles of Policy Making: Clear policies are needed for effective management in an organization.
The main principle of management is to create a policy that suits the goals and objectives of the
organization and implement it successfully.

(b) Principle of planning: Another important principle of management is the principle of planning. In
this, a clear blueprint of future actions is created. It provides clear guidance about who should do what
in the organization, when to do it, where to do it, how to do it, etc.

(c) Principles of leadership: Effective leadership is needed to achieve organizational goals. Effective
leadership works to motivate employees to work, maintain communication, mutual support and
harmony, etc. So management should follow the principles of leadership.`
(d) Principle of Rights and Responsibilities: Rights and Responsibilities are two sides of the same coin.
Responsibility cannot be discharged effectively without sufficient authority. On the other hand, while
using the rights correctly, one should also carry the responsibility. Therefore, sharing rights and
responsibilities is another key principle of management.

(e) Principle of Continuity: Another important principle of management is to continue the work of the
organization. Another principle of management is to continuously run the organization's tasks without
making the daily tasks to be performed by the organization unnecessarily long, complicated and
troublesome.

(f) Principle of Specialization: Specialization also increases the productivity by reducing the cost of
goods and increasing the quality. Therefore, the organization has to adopt the principle of specialization
to achieve the managerial objectives.

(G) Principle of Division of Work: While dividing the work among the employees, their interests,
qualifications, abilities, experience, etc. should also be considered for division of work. The principle of
division of labor is another important principle of management as the productivity and efficiency of the
organization will increase if the right person can be posted in the right place.

(h) Principle of balance: In order to increase the effectiveness of work in the organization, a balanced
structure is needed. The chief executive of the organization should maintain proper coordination within
the organization and maintain a cooperative and harmonious relationship should be able to The work,
duties, rights and responsibilities of the organization should be clearly defined. In this way, the principle
of balance is necessary in the organization.

(i) Principle of budget: From where to get the necessary budget for the organization, management is
also needed to do budgetary work such as how much to spend in which area.

(J) Principle of coordination: Only mutual cooperation, harmony and trust in the organization helps in
achieving the goal. Therefore, there is a need for two-way communication between each level of the
organization. The principle of coordination is necessary in management because it is difficult to achieve
the goals of the organization without effective coordination.

(k) Principle of control: If there is a difference between the value determined by the control system and
the actual performance, the reasons can be found and corrective measures can be taken. Therefore, the
principles of control should be adopted in management and procedures and systems should be
developed.

In principles of management F.W. Taylor's theory of scientific management, Henry Fayol's theory of
administrative management, Max Weber's theory of bureaucracy, etc. have played an important role in
developing management principles more timely.

Functions of Management:

Planning

Planning is an important function of management. It is a predetermined schedule, blueprint, program or

method designed to achieve a target objective. This is the task of predetermining what to do, where to
do it, when to do it, how to do it and who will do it in the future life of the organization. A plan is a
systematic effort to achieve targeted achievements in a certain period of time by properly utilizing the
limited resources and means of the organization. A development plan is a blueprint for planned
development efforts to achieve targeted achievements at a certain time by mobilizing available
resources and means to achieve the organization's goals and objectives. Planning is a visionary
approach. It is a guide for the journey towards the destination. Prioritize needs. Planning is a systematic
journey towards improvement. Takes a long-term view. Determines the scenario. Formulates goals,
objectives and strategies. It tries to achieve maximum results through the highest and systematic use of
resources. Anticipates and expects progress and achievement.

This can be explained by the definition of various scholars:

"Planning is a blueprint for establishing organizational goals and how to successfully achieve them." -
RickyGriffin "Planning is a proactive decision about what to do, including selecting objectives and
selecting policies, procedures, and programs from among alternatives." -M.E. Harley

So plan:

➢ It is futuristic.
➢ It is the primary function of management.
➢ Focused on purpose.
➢ It determines the goals, objectives, strategies, procedures and programs of the organization.
➢ It guides all the activities of the organization.
➢ This is the roadmap of the organization.

Planning Process:

Organizational planning is very complex. For this one has to go through various steps which can be
mentioned as follows:

(a) Identifying the needs of the plan: At this stage, the needs are identified as what the plan is for.
The plan should be clear, acceptable and enforceable. If the need for the plan is not clear, the
planning work cannot be carried forward.
(b) Analysis of the environment: At this stage of the plan, the internal and external environment of
the business is analyzed and information is given about the organization's strengths,
weaknesses, challenges and opportunities.
(c) Determination of goals and objectives: At this stage, the goals and objectives of the
organization are determined. Objectives should be specific, measurable, acceptable, credible
and clearly timed. The resources needed to accomplish the set objectives should also be
identified.
(d) Development of assumptions about the plan: At this stage, the bases of the plan are clarified
and to achieve the set objectives what should be done is determined. Planning assumptions
refer to forecasts or assumptions about the future internal and external environment of the
business. It should predict the future of the organization by studying in detail the possible rules
and regulations, competition, technology, available resources and means, political and social
environment, market etc.
 (e) Identification of alternatives: At this stage, various alternatives are identified to achieve the
objectives of the plan. For this, factual, reliable, relevant information is needed. Options can be
two or more than two.
(f) Evaluation of alternatives: The identified alternatives are analyzed and evaluated in an
appropriate manner. While evaluating alternatives, factors such as cost, risk, profit, benefit
should be considered comparatively. Both quantitative and qualitative tools can be used for
effective evaluation of each option
(g) (g) Selection of the best option: In this, the best option for the organization should be selected
by evaluating the purpose, nature and other elements of the organization. Thus, while choosing
the best option, the management should also pay attention to the current needs and future
possibilities.
(h) Formulation of action plan: After choosing the option, a detailed action plan should be drawn
up to fulfill the objectives of the organization. An action plan should be prepared regarding what
to do, who will do it, when to do it, how to do it, and by whom. The action plan should be
formulated in such a way that it does not conflict with the original plan. Activities,
responsibilities, time, procedures, etc. are clearly explained in the action plan.
(i) Implementation of the plan: In this phase, the paper work is given a practical shape. This is a
very important step. No matter how good the other steps are, if they are not implemented,
there is no point. At this stage, the plan is implemented from all levels.
(j) Review: Planning is a continuous process until the set objectives of the organization are
achieved. After the actual implementation of the plan, the predetermined income of the
organization and the actual income are compared and if there is any deviation, it is adjusted
according to the changing business conditions.

Importance/need of the plan:

1. Determines the action plan to achieve the goals and objectives of the organization.
2. The plan accommodates changes and uncertainties in the environment.
3. It helps the organization to achieve best results at low cost.
4. It makes the relationship between employees and managers smooth by not clearly dividing the
work of the employees of the organization
5. The plan compares between the predetermined achievement and the actual achievement and
effectively controls any deviation.
6. The plan helps the organization to take corrective action if any deficiencies are found during its
implementation.
7. Increases the effectiveness of the organization by increasing production, effective coordination,
control, organization, etc. at a low cost in the organization.
8. Organizational goals and objectives can be achieved.

Organizing

Organization is an important managerial function. In order to achieve the objectives of the organization,
preparing a blueprint of relationships, identifying tasks, classifying the identified tasks, combining tasks
in an appropriate manner, arranging the right people in the right place, making the coordination and
communication system effective in the organization, establishing authority and responsibility, and
establishing the relationship between work and positions are collectively called organization work.
It integrates all the organizational resources and means to achieve the target objectives. It creates a
structural framework of responsibilities and accountabilities in the organization. Organization work
includes work structure, departmentalization, organization structure, authority-responsibility
relationship, coordination, etc. Effectively mobilizes various resources of the organization.

From a functional point of view, the organization is considered as a formal structure that maintains the
division of work, responsibilities, rights and duties according to the resources and objectives and
maintains coordination. In order to achieve the objectives of the organization, the overall work such as
preparing the blueprint of the relationship, identifying the work, classifying the identified work,
combining the work in a suitable way, managing the right person in the right place, developing
coordination and relationship between people is called organization. Organization is a dynamic process
and managerial activity that brings people together to achieve common goals of the organization.

This can be further clarified by the definition of various scholars:

Theo Haimann, "Organization is the process of defining, classifying, and establishing authority
relationships between organizational activities."

V.K. Bhusan, "Organization is a dynamic process and managerial activity that is necessary to bring people
together and bind them together for the purpose of achieving common goals."

Therefore, an organization is both a structure and a process that divides work, assigns, allocates
resources, coordinates efforts, creates responsibilities, and performs necessary supervision and control
for the achievement of common goals.

Organizational process

The steps involved in the organizational process are explained below:

a) Determining the objectives: The manager must first determine the short-term and long-term
objectives that can be achieved through organizational work. Plans, policies and strategies can
be formulated based on organizational objectives.
b) Grouping of activities: In this, the activities of the organization are grouped on the basis of tasks,
objects, areas, customers, processes, time etc. The grouping of activities is also called
departmentalization. The departmentalization process may vary from organization to
organization.
c) Distribution of responsibilities: In the organizational process, it is necessary to distribute the
work based on the knowledge, skills and abilities of different people. In this, the management
principle of "right person, right job" should be followed.
d) Delegation of authority: It is not enough to give job descriptions to the employees in the
organization, the employees should also be given sufficient authority to fulfill the responsibilities
of the given work. At this stage, the chain of authority is determined.
e) Co-ordination between works: There is a need for effective co-ordination between the activities
of different people, groups and departments in order to avoid conflict and discord between
employees and departments in the organization. Only if there is effective coordination no
 duplication of work, cost effectiveness, and the development of a sense of cooperation among
employees can be achieved.
f) To evaluate the performance of the organization, etc.

Importance of organization:

1. It delegates authority and responsibility to employees, categorizes organizational activities,

divides labor, defines the work, duties, rights and responsibilities of each individual to facilitate
administration,
2. To enhance managerial efficiency,
3. To promote job specialization,
4. To eliminate duplication of work
5. To speed up the performance by saving time and resources
6. To coordinate and control,
7. To increase mutual cooperation
8. To make maximum use of human resources,
9. To bring uniformity in operations,
10. To develop spontaneous and collective spirit,
11. To encourage creativity,
12. To easily adjust to the changing environment,
13. To clearly define job roles, authority and accountability;
14. To clearly define authority,
15. As a whole, to bring efficiency by using resources in public service delivery and development,
etc.

controlling

Control is the act of monitoring whether the work has been done according to the plan and taking
appropriate steps for improvement. All the activities related to checking whether the organizational
activities are being carried out according to the predetermined plan and whether there is a difference in
the performance and performance, finding out the reasons for the difference in the performance and
performance, analyzing and taking corrective measures are called control as a whole.

Control is the basic function of management. It is the process of comparing the organization's actual
performance with predetermined standards and correcting any discrepancies. Control is the process of
taking steps as needed after comparing the set goals and actual results.

Checking within the control and finding out whether it is necessary or not, and motivating to work
according to the specified standards and goals, and improvement are included in the control. Corrective
action in an operation is the essence of control.

"Control is the process of evaluating current performance and directing it toward some predetermined
goal." -Joseph L. Maissie

Control refers to the process of evaluating and improving performance so that the plan is working
toward achieving the organization's objectives." -Koonz and Weihrich
Therefore, control includes determining the performance level, measuring the actual performance,
comparing the actual performance with the predetermined level and taking corrective action if there is
any difference. It is an ongoing dynamic process. This increases organizational efficiency, effectiveness
and profitability. Control is the basic function of a manager.

Process of Controlling_

Control is an ongoing process. It never ends. While controlling to make the organization effective the
following principles can be adopted as a procedure:

a) Establishing work standards or standards (Establishment of standard): In the first stage of the
control process which is to establish performance standards for comparison of actual
performance. The task should be practically achievable. When making work standards, you
should not be ambitious but follow the concept of SMART ((Specific; Measurable, Acceptable,
Realistic, Time bound). Work standards should be established on the basis of production
quantity, hours, speed, quality, income, profit, employee morale, motivation, human relations,
etc.
b) Measurement of actual performance: After establishing performance standards, the actual
performance of individuals, groups, departments or the entire organization is measured in the
second stage of the control process. Performance measurement can be at different time
intervals such as: weekly, monthly, fortnightly, semi-annually or annually
c) Comparison between actual performance and actual performance (Comparison of actual
performance with standard): At this stage, the actual performance is studied in detail and
compared with the standard. This step involves identifying the amount of difference and the
reasons for it. At this stage the edited function is compared with the default function. When
comparing in this way, if there is no difference between them, it should be considered that the
performance is effective.
Deviation = Standard-Actual Performance
d) Taking corrective action: This is the last step in the control process. The actual performance is
compared with the predetermined performance value and the reason for the difference is
investigated. If the difference is due to internal or external reasons, necessary steps should be
taken accordingly. If there is a difference between the actual work performed and the
performance, the elements responsible for the difference should be identified. The identified
responsible elements should be analyzed one by one.

OBJECTIVES / IMPORTANCE / NEED OF CONTROL:

1. To find out whether performance has been achieved as intended,

2. To take corrective action if action is not as intended,
3. To make the system of penalties and punishments effective by evaluating the performance,
4. To increase the productivity and profitability of the organization,
5. To increase the production and quality of goods by reducing the cost of production,
6. To make the organizational performance process effective,
7. To efficiently deploy resources,
8. To facilitate operational coordination,
9. To face environmental challenges,
10. To evaluate performance and guide the organization to achieve predetermined goals,
 11. To eliminate the human errors and limitations of the organization,
12. To raise the morale of the employees, etc.

Instructions on Management:
➢ It is an instruction to inform the subordinate employees how to perform the assigned
responsibilities and see whether they have complied with them or not. This is one of the
important functions of management. It is the act of influencing human behavior to achieve
organizational goals.
➢ The advice, orders, instructions given by the manager to make the work of the organization
purposeful and effective are the ideas, views, and intentions to be conveyed. This is a
continuous and inevitable task of management.
➢ In order to effectively achieve organizational goals, issuing orders and instructions to
subordinates, guiding, supervising and motivating them, providing dynamic leadership and
communicating, coordinating, etc. are included under the instructions.
➢ Instruction is the interpersonal aspect of management. It guides and supervises the assistants to
effectively achieve the goals of the organization. Effective directives have a positive effect on
management and speed up managerial tasks such as planning, organization, and personnel
management by providing guidance.
➢ It can be explained by the definition of various scholars regarding guidance.
➢ "Directing includes the processes and techniques for giving orders and ensuring that tasks are
carried out according to plan." - Theo Haimann
➢ "Direction is the interpersonal concept of management by which subordinates are directed to
understand and contribute efficiently and effectively to the achievement of organizational
goals."- Koontz and O'Donnell

Importance of Instruction:

1. Motivates employees.
2. Develops effective communication.
3. Integrates work efforts.
4. Makes supervision work effective.
5. Provides balance and stability to the organization.
6. Effectively deploys resources.
7. The work of the organization makes the action objective and effective.
8. Organizational work gives direction to action.
9. Assists in achieving organizational goals, etc.

Coordination

➢ Coordinating is the managerial act of bringing together the collective efforts of an organization
to achieve a common goal. Under this, the common goals of the organization are achieved by
coordinating the work of various units, individuals, organizations etc. working in the
organization.
➢ The process of common effort and reasonable behavior between people from more than one
unit of the same organization or more than one organization for the achievement of objectives
is considered as coordination. Coordination is the process of maintaining coordination among
 the people, resources, tools and units of an organization. It works to complete the tasks of the
organization with maximum economy and efficiency in minimum time without any conflict and
duplication.
➢ Coordination is the process of maintaining a close, harmonious and productive relationship
between resources and activities for effective performance. It is a ubiquitous and regular
function of management.
Relation + Communication+ Cooperation = Coordination.
➢ "Coordination is the coordination of individual efforts to achieve a collective goal." - Koontz and
Weihrich
➢ "Coordination is to establish coordination and harmony of all the activities of any organization,
through which its work runs smoothly and successfully. - Henry Fayol
➢ Therefore, coordination plays an important role in achieving organizational goals, as it will be
difficult to achieve the goals and waste of labor, time and money if there is no mutual
coordination and cooperative spirit between the various activities in the organization.

Purpose and Importance of Coordination:

1. To achieve the goals and objectives of the organization,

2. To speed up the execution of work,
3. To motivate the manpower in the organization,
4. To maintain harmony, harmony and unity among the members of the organization,
5. To maintain quality in production and increase productivity,
6. To save means and resources,
7. To maintain good relations between employees, organization and external parties,
8. To maintain frugality by eliminating duplication of work
9. To assist in functions such as supervision, direction, control,
10. To remove misunderstandings and establish unity,
11. To motivate employees by increasing job satisfaction,
12. To bring efficiency in work and provide fast, efficient and quality service etc.

Coordination issues/obstacles in Nepal

Coordination in an organization is a collective effort. Internal and external elements must work
effectively for effective coordination. If it does not work, there will be an obstacle in the coordination.
Some of the strong obstacles seen in the organization are as follows: ★

1. Organization's unclear goals, plans and policies;

2. Organizational structure being complex, rigid and unscientific,
3. dual division of labor,
4. Incompetent and incompetent leadership,
5. division of labor being unscientific,
6. A weak relationship between authority, responsibility and accountability,
7. Inability to accept new changes and thinking,
8. mass communication system,
9. Effective management information system,
10. lack of motivation among employees,
 11. lack of managerial short-sightedness and competence,
12. Allowing political interference and impunity in administration,
13. monogamy
14. Tendency to show no interest in transfer of leadership, etc.

Decision Making Process

➢ Decision-making in the organization is to choose the best option based on facts, logic, rationale,
etc. among the various options identified for achieving organizational goals and solving
problems. A decision is to reach a decision about what to do or not to do.
➢ A decision is a decision to choose a concrete option from among the various options to do
something. From this it can be determined which direction to lead the organization. This is a
very complex task of management.
➢ Decisions should be objective, result-oriented, reasonable, relevant, valid and target-oriented
➢ "Decision is the selection of the appropriate alternative among two or more alternatives." -
Stephen P. Robbins
➢ "Decision is choosing one action from among alternatives."- Harold Koontz

Therefore, making a decision means choosing the best option based on logic and reasonableness and
facts and judgment from among the various options identified for solving the problem. Managers use
their intellectual abilities while making decisions. The decision should be objective and appropriate to
the situation.

Steps in Decision Making Process

Decision making is an integral part of public administration. This is a difficult technical task.
Organizational rules, laws and environment should also be taken into consideration while making
decisions. If there is a problem, it may not be useful to take a decision immediately without thinking.
Decisions reflect expected outcomes as well as behavior. Therefore, management has to follow certain
procedures while taking decisions. The decision making process involves the following steps:

➢ Identification of the problem

➢ Analysis of the problem
➢ Nutrition
➢ Development of alternatives
➢ Execution of the decision
➢ Evaluation of alternatives
➢ Choosing the best option
a. Identification of the problem: The first step in the decision-making process is to identify the
problem. No decision can be made without real identification of the problem, proper analysis
and definition. Management should receive progress reports from their subordinates and
identify problems.
b. Analysis of the problem: After identifying the problem, the next step in the decision making
process is to analyze the problem. For this purpose, the decision maker should collect all
relevant information, data and facts related to the decision. It is necessary to reach the root of
the problem and find out the causes of the problem.
 c. Developing alternatives: There can be various alternatives to solve a problem. After analyzing
the problem, developing different possible options to solve it is the third step of the decision
making process. While preparing a list of options, the options for problem solving should be
developed analytically and creatively based on the objectives of the organization, benefit-cost of
each option, time, risk, resource limitations, review of previous problems, files, records,
opinions of experts, discussions with stakeholders, etc.
d. Evaluating alternatives: After developing various alternatives for solving a problem, each
alternative should be studied and evaluated on a certain basis. Options can be evaluated based
on time, cost, legal constraints, satisfaction, availability of resources and future impact.
e. Selection of the best alternative: After analyzing and evaluating the various options to solve the
problem, the best alternative should be selected. The decision maker must consider both the
short-term and long-term effects that each alternative has on organizational performance.
While choosing an option, the best option should be chosen keeping in mind the organizational
objectives, positive and negative aspects of the best option, possible risks and expected
benefits.
f. Implementation of decision: After choosing the best option, the next stage of the decision-
making process is to give it an action to achieve the target objective and to solve the specific
problem. Until the decision is implemented effectively, it cannot give any result. While
implementing the decision, the management should take into account the determinant
elements such as allocation, creation of favorable environment, effective communication and
time in order to achieve the goal successfully.
g. Evaluation of the result: After the manager has implemented any decision, it should be
monitored and evaluated regularly. It is necessary to review and evaluate whether actual
achievements have been achieved according to the organizational level and method. Continuous
evaluation or monitoring of results helps in controlling major differences between target level
and actual performance. At this stage, if there is any error in the decision, it is corrected.

Importance of decision making process:

1. To identify the problem

2. to solve the problem,
3. To use the universality of the decision-making process
4. To conduct managerial work and organizational activities,
5. To execute administrative tasks,
6. To evaluate managerial performance,
7. To determine policies and plans,
8. To run the organization successfully, etc.

Leadership

➢ A leader is a person who influences other people by providing advice, suggestions and guidance
to guide them towards achieving their goals. The main responsibility for the practical
implementation of plans and policies through the mobilization of resources and tools available
in the organization is the leader or manager. The ability and quality to mobilize and influence
followers to achieve organizational goals is called leadership. Leadership is the act of inviting the
organization's human resources to succeed in the goals of the organization by properly guiding,
 directing, controlling, and facilitating them. Leadership is to influence the performance and
humane and organizational behavior of the subordinate employees and make them
spontaneously assigned tasks. The leadership should be able to have a positive effect on the
perception, feeling and behavior of the subordinate employees. In today's competitive
environment, it is necessary for the manager to have the ability to give leadership for the
guidance and direction needed to motivate and encourage employees to work voluntarily.
➢ Leadership is an important element of the direction of management, which influences human
nature and behavior. It is the art of influencing other people to achieve a set goal. Leadership
can be defined as the process of influencing the behavior and performance of other people for
the purpose of achieving organizational goals. The success of an organization largely depends on
the quality of leadership.
➢ "Leadership is the act of influencing people to arouse desire from within for the attainment of
collective objectives." - George R. Terry
➢ “Leadership is the ability to influence a group to achieve goals.” - Stephen P. Robbins
➢ Therefore, leadership is an essential skill in management to achieve individual, collective and
organizational goals.

4.2 Motivation, Leadership, Control, Coordination and Team work, Decision Making

Motivation:

➢ The word motivation is developed from the Latin movere. Which means "To move".
➢ It means to be. In the general sense, motivation is the act of creating a positive attitude towards
work and duty. by motivation
➢ It enhances the desire and desire to work with hard work from the inner heart. ★ Motivation is
an internal state that empowers, activates and directs an individual's concepts and behavior to
perform for the achievement of the organization's objectives.
➢ Motivation is a psychological process. It makes the human being dedicated to the work from
both mental and physical aspects and activated to achieve the goal. It increases the willingness
and determination to work in the employees. Productivity = Capabilities × Motivation
➢ Motivation is an internal system that empowers, activates and directs the behavior of
employees to achieve the goals of the organization. Motivation helps achieve collective goals by
maintaining alignment between the goals of both the organization and the workers. Motivates
employees to work hard.
➢ "Motivation is a process that increases a person's desire and directs effort toward achieving a
goal."-Stephen P. Robbins

Importance of motivation in office

1. It helps to perform high level work.

2. Brings awakening of desire and desire to work.
3. Orients towards the goals and objectives of the organization.
4. Increases efficiency and effectiveness at work.
5. It helps to make maximum use of idle capacity and potentiality within the person.
6. Increases productivity.
7. Increases the creativity of employees.
 8. Disciplines employees
9. Prevents accidents.
10. Increases honesty and integrity in employees.
11. Reduces absenteeism of employees.
12. Reduces frustration.
13. Enhances readiness for change, etc.

Important theories related to motivation (Motivation Theories):

Any organization should make maximum use of various means to achieve its goals. Out of these various
tools, it is very complicated to make good use of human resources because human psychology is of
many types. Various theories have been proposed for the effective use of such complex human
resources. Some of the important principles are as follows:

a) Maslow's Hierarchy of Needs Theory: Abraham Maslow in 1943 divided human needs into five
levels on the basis of priority so that human needs increase hierarchically, that is, after one need is
fulfilled, the next need begins:
i) Physiological needs: Physiological needs are the first layer of human needs. Humans have
non-essential necessities like food, shelter, cotton, sex, medicine, etc. to survive.
ii) Safety needs (Safety or security needs): After physical needs are fulfilled, Security is needed.
Security of acquired property, security of job, insurance, security of old age etc. are related
requirements.
iii) Social needs : After the security needs are met, co-existence in humans or Social needs begin.
Under this, human beings are motivated to fulfill the needs of social involvement, affection,
social harmony, love, affection, friendship etc.
iv) Self-esteem needs : After social needs are fulfilled, it makes you feel the need for respect,
prestige, social value, self-respect, public respect.
v) Self-actualization needs: When other needs are fulfilled, the need for self-actualization is
created in humans. This is the point of Maslow's highest hierarchy of human needs. This
includes self-satisfaction needs such as self-identity, self-pride, power, work, religion, and
service.
b) Herzberg's Two Factors Theory: American scholar Frederick Herzberg proposed the two factor
theory of motivation. This theory is based on the fact that some employees working in an
administrative organization are satisfied and some are dissatisfied. In the research, Herz class has
discovered the following two elements that bring the workers to a state of lack of job satisfaction
and work satisfaction or increase motivation:
i) Hygiene factors: Factors related to the working environment of workers are called hygiene
factors. It does not motivate but only saves workers from dissatisfaction. Under health
factors. The following elements are included:
➢ Company policy and administration,
➢ Work Status,
➢ supervision,
➢ interpersonal relationships
➢ salary,
➢ dignity,
➢ working environment,
 ➢ social status,
➢ job security,
➢ personal life,
➢ Colleague relations, etc.
ii) Motivational factors: Motivational factors inspire workers to work. Motivational factors bring
workers from a state of lack of job satisfaction to a state of job satisfaction. Catalysts include
the following:
➢ Achievement,
➢ Responsibility,
➢ Progress,
➢ Challenging work,
➢ Identification,
➢ Work progress,
➢ Behavioral development, etc.
c) McGregor's theory of motivation (MC Gregor's Theory X and Theory Y): MC Gregor's has
proposed Theory X and Theory Y by studying deeply to find human behavior in support of human
relations theory. X-theory takes a pessimistic view of employees while Y Theory takes an
optimistic view, which is as follows:
i) Theory X: According to this theory, workers are naturally lazy. Employees are lazy, have a
tendency to evade work, have a tendency to neglect their responsibilities. They don't like to
work. They need strict control and guidance to make them work well. They should be put to
work by fear, threat, punishment and punishment.
ii) Theory Y: According to this theory, employees are self-motivated at work, always loyal to
their work, always ready to take responsibility, self-directed, etc. It says that instead of being
negative like Theory X, employees should be treated in a friendly manner without pressure
and be employed with love.

Monetary and non-monetary motivating factors

monetary stimulus element

➢ Salary, Allowance
➢ Dashai expenses, medical treatment expenses
➢ Employee Provident Fund and Citizen Investment Fund,
➢ arrangement of sum insured,
➢ Grade increment and holiday pay
➢ Gratuities and Pensions
➢ Dearness allowance and subsistence allowance
➢ Bonuses and Gratuities

Nonmonetary element

➢ posting
➢ Transfers and promotions
➢ training, study, study leave,
➢ Leave facility
➢ Respect and dignity
 ➢ Accommodation and vehicles
➢ Accretion
➢ Appreciation and responsibility

Morale

➢ Morale is a state of mind that provides energy to perform any task. Due to morale, even difficult
tasks can be completed easily. There is always a positive relationship between high morale and
performance levels.
➢ Morale is the courage, strength and enthusiasm of a person with the ability to perform any task.
Stimulates the morale of people with high morale, makes them more committed to work, increases
zeal and diligence, makes them want to continue working. In this way, morale is the process of
making a person's spirit strong.
➢ Morale refers to a person's strength of mind, courage and courage, self-strength, internal
enthusiasm and confidence.

Characteristics of Morale:

1. It is the internal energy of man.

2. Influenced by motivation and encouragement.
3. It varies from person to person.
4. It is related to mental state.
5. It changes from time to time.
6. When the morale is high, the performance of the organization increases.
7. This is an indispensable element.
8. It increases in collectivity.

Factors affecting morale:

1. organizational policy,
2. service facility,
3. motivation,
4. working environment,
5. Allocation of work responsibilities,
6. delegation of authority,
7. employee safety,
8. performance appraisal,
9. reward and punishment system,
10. Code of Conduct and Compliance,
11. availability of resources,
12. Leadership, etc.

Ways to boost morale:

1. Rights and responsibilities should be determined.

2. Provision of living facilities (salary, allowances and other facilities) should be made.
3. The transfer and promotion system should be scientific,
4. Rights and responsibilities as well as delegation of rights,
 5. Should be fair, strong, competent and good leadership,
6. There should be an orderly working environment,
7. Appropriate standards of motivation should be created and implemented.
8. Employees should be properly evaluated,
9. Punishment should be regulated,
10. There should be systematic and scientific supervision system,
11. There should be a close relationship between management and employees, etc.

The situation of employee morale in Nepal Electricity Authority:

1. stability of service,
2. Security, Attitude and Development of the Service,
3. Salary, allowance, gratuity and pension,
4. State of delegation of authority,
5. transfer, promotion, promotion,
6. Training, Visits and Capacity Development,
7. honor, respect, dignity,
8. Leadership Rights Responsibilities
9. Various other monetary and non-monetary elements, etc.

Role/importance/need of motivation and morale in organization

1. To instill the necessary zeal to achieve administrative goals,

2. To professionalize the administrative work system,
3. To speed up the service system,
4. To neutralize the service system,
5. To make the administrative management system practical,
6. To maintain efficiency, professionalism and regularity in service delivery,
7. To make the service system regular and fair,
8. To lay the foundation for building a dynamic administration,
9. To make service flow predictable,
10. To be more responsible towards work,
11. To awaken the feeling that let's work,
12. To streamline the regular service system,
13. to bear responsibility,
14. To take more responsible towards work,
15. To provide public service

The dynamic and essential element of administration is the human aspect. Human needs are physical
and immaterial. Human needs can be viewed as monetary and non-monetary elements to create
motivation. Employees may not be fully aware of the work only due to salary allowance, supervision,
monitoring, administration and work environment. Non-monetary elements are also needed to properly
engage and make employees aware of their work. Recognition of employees, achievement of work,
responsibility towards work, high level progress cannot be measured and evaluated in money.
Therefore, the need for non-monetary aspects was realized as an element of motivation.
Motivation affects the overall management system of employees in the organization. The role of
monetary and non-monetary elements is equally important to bring in qualified and honest people in
the administration. Time, situation, nature of organization, income source of employees, market price,
government's ability influence the determination of the element of motivation.

Importance of motivation and morale in the office:

1. It helps to perform high level work.

2. Brings awakening of desire and desire to work.
3. Orients towards the goals and objectives of the organization.
4. Increases efficiency and effectiveness at work.
5. It helps to make maximum use of idle capacity and potentiality within the person.
6. Increases productivity.
7. Increases the creativity of employees.
8. Disciplines employees.
9. Prevents accidents.
10. Increases honesty and integrity in employees.
11. Reduces absenteeism of employees.
12. Reduces frustration.
13. Enhances readiness for change, etc.

Leadership

➢ A leader is a person who influences other people by providing advice, suggestions and guidance
to guide them towards achieving their goals. The main responsibility for the practical
implementation of plans and policies through the mobilization of resources and tools available
in the organization is the leader or manager. The ability and quality to mobilize and influence
followers to achieve organizational goals is called leadership. Leadership is the act of inviting the
organization's human resources to succeed in the goals of the organization by properly guiding,
directing, controlling, and facilitating them. Leadership is to influence the performance and
humane and organizational behavior of the subordinate employees and make them
spontaneously assigned tasks. The leadership should be able to have a positive effect on the
perception, feeling and behavior of the subordinate employees. Voluntary from employees in
today's competitive environment
➢ It is necessary for the manager to have the ability to give leadership for the guidance and
direction needed to motivate and encourage them to do the work.
➢ Leadership is an important element of management's directive work, which influences human
nature and behavior. It is the art of influencing other people to achieve a set goal. Leadership
can be defined as the process of influencing the behavior and performance of other people for
the purpose of achieving organizational goals. The success of an organization largely depends on
the quality of leadership.
➢ "Leadership is the act of influencing people to create a desire from within for the attainment of
collective goals."Geroge R. Terry
➢ "Leadership is the ability to influence a group to achieve goals."Stephen P. Robbins
➢ Therefore, leadership is an essential skill in management to achieve individual, collective and
organizational goals.
Types of Leadership:

Leadership style is the style in which a leader influences his subordinates or followers or changes their
behavior. It is the result of the leader's personality, philosophy, experience and value measurement
system of the organization. Leadership styles vary from organization to organization. The most common
and universally accepted leadership styles are as follows:

(A) Autocratic Style:

➢ Under this style, the leader uses monopoly to make decisions about the organization's content. He
centralizes power and imposes decisions without consulting others. He does not involve the
employees in the decision-making process, he thinks that whatever decisions he makes, his
followers must follow them unconditionally. He alone takes the responsibility, power and authority
of the decision-making process.
➢ This type of leadership style is also known as dictator style. He does not involve anyone in the
stages from planning to implementation. In this style, actions such as giving strict orders and
instructions to employees, adopting a one-way communication system, and emphasizing negative
motivations are done.
➢ Its benefits include speedy decision-making, maintaining strict discipline in the organization,
providing strong motivation and rewards to the leader, while its disadvantages include emphasizing
negative motivation in employees, creating dullness in employees, destroying creativity, creating
an atmosphere of pressure, stress and anxiety, etc.

(b) Democratic leadership style (Democratic Style):

➢ Democratic leadership style is also known as liberal, participatory leadership style. It decentralizes
power and decision making. The leader always takes ideas, opinions and suggestions from the lower
level for organizational success. A dual communication system is adopted in this. In this style,
instructions and advice flow from the top down, while problems, achievements and suggestions flow
from the bottom up. Both the management and the employees contribute equally in carrying out
the responsibility. This style provides positive motivation to employees and also emphasizes
opportunities for career development.
➢ The advantages of this style include the creation of a good work environment, the development of
employees' creativity, emphasis on participatory decision-making process, increase in productivity,
etc., while the disadvantages include delays in the decision-making process, employees can shirk
responsibility, this style is not suitable if the employees are skilled and diligent, and it is difficult to
implement this leadership style in adverse situations. Nowadays, this leadership style is widely used
in educational, political, legal and other fields as well.

(c) Laissez Aaire Leadership Style:

➢ In this type of leadership style, the leader gives all the rights and responsibilities to the
subordinates. He only provides advice and guidance as requested by his subordinates. All
employees fulfill their responsibilities themselves. The leader only plays the role of a spectator. In
this, the employees are self-directed and make their own decisions. In this, the leader uses very
little power and control. In this type of leadership style, subordinates themselves are responsible
 for planning, controlling, evaluating and decision-making. In this, the role of the leader remains as
a facilitator or facilitator.
➢ The advantages of this style include high morale of employees, development of creativity of
employees, increase in productivity, reduction of burden on the leader, while disadvantages
include that this style is only suitable for high-level and trained employees. As there is no
participation of the leadership in the decisions, the question of legitimacy may arise, the
organization may be pushed in the wrong direction, and the leadership style of non-responsibility
is considered.

The state of leadership development in public institutions

Leadership is a guideline. Leadership is guiding any organization. Good leadership is the foundation of a
successful organizational system. Leadership is the collective action to achieve this collective goal. This is
work. It is viewed from a managerial perspective. Who has the ability to do extraordinary work.
Leadership creates motivation to achieve goals. It leads the organization. It paves the way to create a
successful organization.

Status of Leadership Development in Public Institutions:

1. Leadership and expertise are important,

2. no clear vision,
3. Administrative leadership is influenced by political leadership,
4. There is a tendency to buck passing to eliminate the problem.
5. Lack of expert group,
6. As a high-ranking yes man,
7. Inadequacy of resources
8. lack of skills, expertise,
9. There is a lack of public accountability,
10. Not taking on challenging responsibilities,
11. Circular and ad hoc decision-making,
12. Lack of natural competence,
13. Lack of ability to speak effectively, strategic ability,
14. lack of ability to cope with the situation,
15. Lack of ability to coordinate, partner and collaborate

suggestion

1. To separate the clear scope and responsibilities of politics and administration,

2. Developing leadership development,
3. Develop a system to monitor leadership behavior;
4. Emphasis on participatory leadership,
5. Maintain a high level of relationship between leaders and subordinates,
6. Provision of adequate resources and skilled manpower,
7. Determining clear, vision, mission and goals,
8. Developing a collective leadership system,
9. Ability to speak effectively, develop strategic skills,
10. Develop coping skills,
 11. Develop the ability to coordinate, partner and collaborate,
12. Clarify purpose, etc.

Finally

Leadership is a key tool for achieving objectives. Leadership is the art of effectively mobilizing fellow
travelers to achieve a collective goal. It guides the organization to reach its destination. The leadership
style should be successful, competent and good. For this, leadership should be conducted according to
the time, society and environment.

Qualities of a successful leader:

Leadership is the result of different qualities. The qualities in the leader play an important role in
influencing the employees to achieve the best results. Since leadership is related to psychological and
human behavior, it is very difficult to say what its qualities are, however, some important qualities that a
successful leader should have are as follows:

(A) Personal Qualities:

1) Physical Fitness,
2) Dynamic personality,
3) Intellectual capacity,
4) Emotional stability,
1. 5)Self confidence
2. 6)Flexible attitude
3. 7)Good character
4. 8) Sense of responsibility etc.

(B) Managerial Qualities:

1) Organizational ability (Organizing ability),

2) Technical knowledge,
3) Motivational skill,
4) Communication skill,
5) Human relation skill,
6) Ability of Judgment,
7) Ability to lead
8) Adaptability etc.

Controlling:

➢ Control is the act of monitoring whether the work has been done according to the plan
and taking appropriate steps for improvement. All the activities related to checking
whether the organizational activities are being carried out according to the predetermined
plan and whether there is a difference in the performance and performance, finding out
the reasons for the difference in the performance and performance, analyzing and taking
corrective measures are called control as a whole.
➢ Control is the basic function of management. It is the process of comparing the actual
performance of the organization with the predetermined standards and correcting it if
 there is any discrepancy. Control is the process of taking steps as needed after making a
comparative assessment between the set goals and the actual results.
➢ Checking within the control and finding out whether it is necessary or not, and motivating
to work according to the specified standards and goals, and improvement are included in
the control. Corrective action in an action is the essence of control.
➢ "Control is the process of evaluating current performance and tracking certain
predetermined goals."-Joseph L. Maissie
➢ Control refers to the process of evaluating and improving performance so that the
organization's stated plans work toward achieving the objectives."-Koonz and Weihrich
➢ Therefore, control includes the activities of determining the performance level, measuring
the actual performance, comparing the actual performance with the predetermined level
and taking corrective action if any difference is found. It is an ongoing dynamic process.
This increases organizational efficiency, effectiveness and profitability. Control is the basic
function of a manager.

Process of Controlling:

Control is a regular process. It never ends. The following principles can be adopted as a process while
controlling the organization to make it effective:

a. Establishing work standards or standards (Establishment of standard): The first step in the control
process is to establish work standards for comparison with actual performance. The task should be
practically achievable. While creating performance standards, the concept of SMART (Specific,
Measurable, Acceptable, Realistic, Time bound) should be followed instead of being ambitious.
Work standards should be established on the basis of production quantity, hours, speed, quality,
income, profit, employee morale, motivation, human relations, etc.
b. Measurement of actual performance: After establishing performance standards, the actual
performance of an individual, group, department or the organization as a whole is measured in the
second step of the control process. Performance measurement can be at different time intervals
such as: weekly, monthly, fortnightly, semi-annually or annually.
c. Comparison between actual performance and actual performance - Comparison of actual
performance with standard): At this stage, the actual performance is studied in detail and compared
with the performance standard. This step involves identifying the amount of difference and the
reasons for it. At this stage, the edited work is compared with the default work value. When
comparing in this way, if there is no difference between them, it should be considered that the
performance is effective.
Deviation = Standard - Actual Performance
d. Taking corrective action: This is the last step of the control process. The actual performance is
compared with the predetermined performance value and the reason for the difference is
investigated. The organization should find out whether the difference is due to internal or external
reasons and take necessary steps accordingly. If there is a difference between the actual work
performed and the performance, the factors responsible for the difference should be identified. The
identified responsible elements should be analyzed one by one.
Pre-Requisites for Effective Controlling:

In order to have effective control in the organization, it should be able to complete all the goals and
objectives in the specified time, level and cost. The following prerequisites may be important for this:

1. Control system fit to organization need and nature,

2. Simplicity,
3. Economical,
4. Objectives,
5. लचदार (Flexibility),
6. Future-oriented - Forwardlooking),
7. Acceptable
8. Adaptable to organization environment,
9. responsibility-based)
10. Corrective etc.

OBJECTIVES / IMPORTANCE / NEED OF CONTROL:

1. To find out whether the objective performance has been achieved,

2. To take corrective action if action is not as intended,
3. To make the system of penalties and punishments effective by evaluating the performance,
4. To increase the productivity and profitability of the organization,
5. To increase the production and quality of goods by reducing the cost of production,
6. To make the organizational performance process effective,
7. To efficiently deploy resources,
8. To facilitate operational coordination,
9. To face environmental challenges,
10. To evaluate performance and guide the organization to achieve predetermined goals,
11. To eliminate the human errors and limitations of the organization,
12. To raise the morale of the employees, etc.

Coordination:

➢ Coordinating is the managerial act of bringing together the collective efforts of an organization to
achieve a common goal. Under this, the common goals of the organization are achieved by
coordinating the work of various units, individuals, organizations etc. working in the organization.
➢ The process of common effort and reasonable behavior between people from more than one unit
of the same organization or more than one organization for the achievement of objectives is
considered as coordination. Coordination is the process of maintaining coordination among the
people, resources, tools and units of an organization. It works to complete the tasks of the
organization with maximum economy and efficiency in minimum time without any conflict and
duplication.
➢ Coordination is the process of maintaining a close, harmonious and productive relationship
between resources and activities for effective performance. It is a ubiquitous and regular function
of management.
Relation + Communication+ Cooperation = Coordination.
➢ "Coordination is the establishment of harmony between individual efforts to achieve a collective
goal." Koontz and Weihrich "Coordination is the establishment of coordination and harmony of all
the activities of any organization, through which its work runs smoothly and successfully."Henry
Fayol
➢ Therefore, coordination plays an important role in achieving organizational goals, as it will be
difficult to achieve the goals and waste of labor, time and money if there is no mutual harmony and
cooperative spirit between the various activities in the organization.

Features of coordination:

1. It is the integration of activities related to achieving the objectives and goals of the organization.
2. It works to establish relationships between the functions of the organization, between units and
between other organizations.
3. This is a continuous process.
4. This is a collective effort.
5. It ties up programs and activities with the objectives and goals of the organization.
6. It highlights the task of developing harmony and cooperation in the organization.
7. Emphasizes establishing the relationship between Quantity, Quality, Cost and Time.
8. It is a managerial tool. It can also be called the essence of management.
9. Coordination can be internal and external, vertical, flat, horizontal etc. at different levels.

Elements/methods required for coordination:

1. Coordination should be embraced from the initial stage of planning and policy making.
2. The goals of the organization should be clear and defined.
3. The organizational structure should be simple and clear so that everyone can understand it.
4. Coordination should be continued at all levels of the organization.
5. Division of work should be made scientific. The rights and responsibilities of employees should
be clearly defined.
6. Effective leadership and supervision should be arranged for effective coordination.
7. There should be integration of tasks and resources.
8. Mutual relationship should be effective.
9. Must have knowledge of work plan and work style.
10. Communication should be made effective by using modern means of communication.
11. Participatory decisions should be emphasized.

Purpose and Importance of Coordination:

1. To achieve the goals and objectives of the organization,

2. To speed up the execution of work,
3. To motivate the manpower in the organization,
4. To maintain harmony, harmony and unity among the members of the organization,
5. To maintain quality in production and increase productivity,
6. To save means and resources,
7. To maintain good relations between employees, organization and external parties,
8. To maintain frugality by eliminating duplication of work,
9. To assist in functions such as supervision, direction, control,
 10. To remove misunderstandings and establish unity,
11. To motivate employees by increasing job satisfaction,
12. To provide fast, efficient and quality service by bringing efficiency in work etc.

Problems/constraints related to coordination in Nepal:

Coordination in an organization is a collective effort. Internal and external elements must work
effectively for effective coordination. If it does not work, there will be an obstacle in the coordination.
Some of the strong obstacles seen in the organization are as follows:

1. Organization's unclear goals, plans and policies;

2. Organizational structure being complex, rigid and unscientific,
3. dual division of labor,
4. Incompetent and incompetent leadership,
5. division of labor being unscientific,
6. A weak relationship between authority, responsibility and accountability,
7. Inability to accept new changes and thinking,
8. mass communication system,
9. Effective management information system,
10. lack of motivation among employees,
11. lack of managerial short-sightedness and competence,
12. Allowing political interference and impunity in administration,
13. single act,
14. Tendency to show no interest in transfer of leadership, etc.

Team Work:

➢ A group is a group of people with a common goal. There are two or more people in a group. They
have a common goal. To achieve that goal, they interact with each other and perform in a
coordinated manner. A group's goal cannot be achieved through the efforts of a single individual.
The success of the organization is possible only through the overall efforts of all the members
within the group.
➢ A group is a group of people who interact and depend on each other, who work together to
achieve a common goal by maintaining coordination. Generally, there is a leader in the group, who
provides control and direction to the group. The leader plays a decisive role in achieving the goals
of the group.
➢ Group work is a group of two or more people, where they work together to achieve a common
goal. Their contribution remains for the group. They achieve organizational goals by making
maximum individual contributions for the success of the work assigned to the group in a
coordinated manner and interdependently in the group.
➢ Group work is a type of working method in which a certain type of work is usually done by a group
of certain people formed by the management and given collective responsibility through
coordinated efforts. It refers to unity of purpose, interdependent action, cooperative spirit, and a
sense of belonging.
➢ Although the objectives of group work and teamwork are similar, there is a fundamental difference
between the two. If there is individual responsibility in the work group, then the work team has
collective responsibility, in the work group, the members perform individually and only share
 information, while in the work team, they perform work collectively and no individual work is
performed, in group work, the individual performance of each person is evaluated, in the team, the
performance of the team as a whole is evaluated, in the work group, one person provides
leadership, while the work team has common leadership, in the work group, the leader provides
control and guidance, while in the work team, the leader provides consultation, facilitation, Grants
concessions, members in a work group are rewarded individually while in a team all members are
rewarded collectively.
➢ "A group is two or more interacting and interdependent individuals who come together to achieve
a specific goal." S.P. Robbins

Characteristics of group work:

1. Two or more people are united in a group.

2. A group has a common goal. They are trying to achieve that goal.
3. The group has a collective identity.
4. Within the group, all members feel that they are an integral member of the group.
5. Division of work is scientifically done among the members within the group.
6. Collective values and recognition are established among members within a group.
7. There is mutual interaction between the members in connection with the performance.
8. Group members are interdependent.
9. The group's goals can only be achieved through collective efforts.
10. Responsibility for work is both individual and collective.
11. Each member actively takes decisions on work matters.
12. All the members share equally for success and failure.

Reasons for group formation:

There are many reasons for group formation. Among them, the main reasons are as follows:

a. Reasons for group formation in terms of organization:

➢ To perform in an excellent manner,
➢ To communicate effectively,
➢ To make excellent decisions,
➢ To socialize by increasing the sense of friendship and humanity in the group,
b. Reasons for group formation in the eyes of employees:
➢ To make employees feel safe as people feel powerful and safe when they belong to a
group,
➢ Through specialization, all members of the group use their own skills and abilities to
achieve a common goal.
➢ To provide collective identity of individuals,
➢ To raise a voice for their interests and well-being, as they are strong and powerful in unity,
etc.

Group Type:

From the point of view of organizational behavior, groups can be studied in two ways, formal groups and
informal groups:
(1) Formal group: A group that has been legally established to achieve a certain purpose or goal is called
a formal group. Such a group is formed for the purpose of achieving the objectives of the formal
organization. It is in the form of an organizational structure. The work, duties and rights of a formal
group are determined formally.

(2) Informal group: When such a group is formed spontaneously when people work together or mingle,
it is called an informal group. Such a group does not have a formal structure. Nor has the group been
determined organizationally. A formal group is formed as a result of people's interaction and
conversation. The result of social contact is a formal group.

Advantages of group work:

1. Helps to perform in an excellent manner.

2. Helps in effective communication between group members.
3. It helps to make the best decision through group discussion.
4. It socializes the members of the group by increasing the sense of friendship and humanity in the
group.
5. Being a part of a group makes the employees feel safe because the person feels powerful and safe.
6. Through specialization, all members of the group use their skills and abilities to help achieve a
common goal.
7. It helps to develop the performance and efficiency of the employees.
8. Demonstrates conceptual reasoning and logical ability.
9. Helps to increase work coordination by increasing harmony and friendship among employees.
10. As employees work with high morale, productivity increases and employees get job satisfaction and
are more motivated towards work. It helps to get the collective identity of the person.
11. Being strong and powerful in unity helps to raise voice for their interests and well-being, etc.

Despite these benefits of group work, if the organization is not carried forward effectively, there may be
ideological mismatch, there may be discord, and the members of the group may go to the detriment of
the group, so the leader of the group should take these things into consideration and take effective
coordination and communication and strive to achieve the individual goals of the group members as
well as the group goals.

Importance of decision making process:

1. To identify the problem,

2. To solve the problem,
3. To use the universality of the decision-making process,
4. To conduct managerial work and organizational activities,
5. To execute administrative tasks,
6. To evaluate managerial performance,
7. To fulfill the responsibilities in assigned duties,
8. To satisfy the needs of the concerned parties effectively,
9. To make the announced program successful,
10. To improve work processes,
11. To correct existing deficiencies,
12. To maintain justice, fairness,
 13. To determine policies and plans,
14. To run the organization successfully, etc.

Features of the decision making process

1. This is a managerial and administrative function.

2. It is purposeful.
3. It is a dynamic process.
4. It is influenced by the environment.
5. This is a regular process.
6. This is a prudent process.
7. Decisions are time bound, etc.

Decision styles:

The decision is made by adopting different methods. Considering the level of the decision maker, the
importance of the decision, the way of exercising authority, the adoption of participation in the decision,
etc., the style of decision making can be classified as follows:

a. Autocratic style (Authoritative): The decision-making style in which the decision-maker imposes the
necessary information and experience on his own without consulting the opinions of assistants and
advisors and imposes only to make decisions and execute them is an autocratic decision-making
style. This decision depends on the determination, understanding and leadership ability of the
decision maker.
b. Consultative style: The style in which the decision-maker gives importance to his assistants,
receives their opinions, opinions, information, suggestions and takes decisions accordingly is called
consultative style. It is important to include everyone's views while maintaining mutual
understanding.
c. Facilitative style: Decision making style based on the advice and opinion of experts or stakeholders
is called facilitative style. It is decided according to the opinion of the experts related to the
decision.
d. Delegative style: This is the style in which the decision-maker delegates the inherent decision-
making authority to an executive or official under him or her.

Principle of decision making process:

Management scholars have presented the principles of decision making as follows:

a. Theory of public opinion (Populist Theory): Public opinion is valued in decision-making. This
principle is considered as a principle based on democratic principles. Decisions are made
considering the wishes, feelings, needs and suggestions of the people.
b. Theory of Discretionary Understanding (Tational Comprehensive Theory): According to this theory,
when making a decision, the best option is developed and taken as a decision. When making a
decision, the decision is made by understanding the situation.
c. Theory of bounded rationality (Bounded Rational theory): While making decisions according to this
theory, it is tried to make the best and universal decision as possible. Discretion and understanding
cannot be fully utilized. He believes that conscience has limitations.
 d. Incremental Theory: Decisions are made to improve and modify the previous situation. Decisions
are made by improving and adding to the previous decisions.
e. Mixed Scanning Theory: The principle of mixing both Theory of Discretionary Understanding and
Enhancement to make the best possible decision is the principle of mixed accounting. This decision
is made based on both discretion and promotion.
f. Constraints Theory in the decision-making process: Facing various obstacles while making a
decision are made. He is of the opinion that decisions should be made by solving the obstacles and
obstacles that have come and gone.
g. Theory of elite decision: The theory that decisions are made against the interests of the dominant
interest group is the principle of decision.

Factors influencing decision making

1. pressure group influence,

2. laws, regulations,
3. Political pressure, community expectations,
4. Inadequacy of information and data,
5. Competence and expertise of the decision maker
6. ability to choose alternatives,
7. Long-term thinking and long-term determination,
8. Level of participation

The basis for making decisions in the public sector of Nepal

1. Constitution of Nepal (Directive Principle of the State)

2. Acts, Rules and Regulations,
3. Periodic planning, budgeting system, government policies and programs,
4. International treaty agreement
5. Government decisions and circulars,
6. political manifesto,

Related example

Instructions from constitutional bodies, etc.

Qualities a decision maker should have:

Decision makers need to have skills like Conceptual skill, Human skill, Technical skill. Some of the
qualities a decision maker should have are as follows:

1. There should be information about the economic, social, religious, cultural and environmental
conditions of the nation as a whole.
2. Must have the ability to make appropriate decisions.
3. Must have knowledge of MIS.
4. It should be possible to understand the aspirations or desires of the customer.
5. Must have the ability to collect and analyze information and data.
6. Must have the ability to make decisions at the right time.
7. Must be dynamic, changeable, prudent and conscious.
 8. Must be transformative.
9. Must have clear analysis and identification skills.
10. Must have experience, expertise and knowledge.
11. Must have creative ability.
12. Must be bold, confident.
13. Must be able to study human nature, etc.

Decision making problems:

1. lack of long term thinking,

2. Unnecessary centralization of decisions,
3. lack of accountability,
4. lack of firm commitment,
5. Tendency to make decisions based on impulse without evaluating time and identifying alternatives,
6. Obscure Acts and Laws,
7. tendency to shirk responsibility,
8. lack of transparency,
9. Unnecessary interference from various parties,
10. The practice of emphasizing the process rather than the result, etc.

Measures to make decisions effective:

1. There should be a commitment in the implementation of the decision,

2. Making decisions only by evaluating problems and identifying alternatives;
3. To determine the duration of the decision-making process,
4. Emphasis on transparency,
5. End unnecessary interference,
6. To arrange a clear procedure to make the decision-making process agile, transparent and simple,
7. analyzing risk,
8. Making decisions based on benefits and costs,
9. empowering feedback,
10. Emphasis on participatory decision making,
11. reducing decision-making levels,
12. Correct negative feedback immediately from the decision,
13. Shifting decision-making from a process-oriented system to an outcome-oriented system,
14. Decision should be Demand based and not Force based etc.

Therefore, since only the implementation aspect of public participation decisions is difficult, the Bottom
to approach should be given place rather than the Top down approach. Only if this happens, the
decision will be expected by the people and the implementation side will also become stronger.

✔ Write down the problems and solutions in the decision-making process in Nepal.

1. The paper process is complicated and takes a lot of time.

2. There is a tendency to shirk responsibility.
3. Decisions are made based on individual interest rather than organizational interest.
4. Stakeholders are not involved in the decision.
 5. Decisions are not made using new technology, information and data.
6. There is a tendency to run away from problems and challenges.
7. The decision making process is circular.
8. There is a decision-making style without statistical information.
9. Analysis of options is lacking.
10. There is a delay in emotional judgment and decision making.
11. Decisions are made under influence and pressure.
12. Decisions are not made in time. It is done at the end.
13. There has been no development of the tradition of supporting the decision.
14. There is a lack of delegation of authority.

Solutions:

1. Improving commenting practices,

2. Using technology-based information and data,
3. delegating authority,
4. Making decisions with the participation of all stakeholders,
5. To develop the tradition of taking sustenance,
6. To monitor the implementation of the decision,
7. Establishing clear procedures and standards,
8. Decreasing the level of decision making,
9. Involvement of experts
10. Increasing the accountability of decision makers,
11. Abundant resources and capacity building,
12. Use of facts and figures,
13. Linking the decision-making process with monitoring and evaluation.
14. Involving experts in decision-making, etc.
15. The role of decision-making in public administration
16. To make a successful administration by choosing the right option,
17. To create people-centered administration through regular, economical, effective decision-making
process,
18. To promote responsibility and accountability,
19. To maintain policy coherence,
20. To maintain the quality of goods and services,
21. to solve the problem,
22. to delegate authority,
23. to increase performance levels,
24. To maintain policy coherence,
25. Assist in providing good governance,
26. For sustainable development, etc.

✔ What are the issues that need to be paid attention to while making a prudent decision? write

Decision making is the act of selecting the appropriate option from among the available options for
solving a problem. It is the bridge between thinking and action to do something. Discretionary decision-
making emphasizes the collection and analysis of sufficient information, the development of
alternatives, the impact and consequences of alternatives, the decision-making mechanism, etc.
Therefore, these and similar matters should be taken into consideration while making a prudent
decision, which can be mentioned as follows:

1. Complying with the laws and regulations, making decisions according to the legal provisions,
2. Adopt simple and transparent decision-making process, make full use of management information
system,
3. To make decisions on time,
4. taking necessary risks for the benefit of the organization;
5. obtaining accurate data and adopting informed decision-making processes;
6. Making full use of modern information technology,
7. to be free from prejudice,
8. Evaluating outcomes and impacts;
9. Addressing problems and challenges in a timely manner and making decisions so that the
organization gets benefits and opportunities, etc.

4.3 Corporate Planning and Strategic management

Corporate Planning

➢ Planning is an important function of management. It is a predetermined schedule, blueprint,

program or method designed to achieve a target objective. It is the task of predetermining things
like what to do, where to do it, when to do it, how to do it and who will do it in the future life of the
organization. Prioritize needs. It takes a long-term view, determines the scenario, formulates goals,
objectives and strategies, strives to achieve maximum achievement through the highest and
systematic use of resources, anticipates and expects progress and achievement. Institutional
planning is a systematic effort to achieve targeted achievements in a certain period of time by
properly utilizing the limited resources and means of the organization. To achieve the goals and
objectives of the organization, a corporate plan is made to achieve the target achievements at a
certain time by mobilizing the available resources and means.
➢ This is the highest level plan of the organization. All strategies and activities of the organization are
affected by this. Institutional planning formulates an integrated plan covering all aspects of
organizational objectives. Institutional planning exposes many perspectives. In this, the overall
form of organizational plan, economic plan, social plan, etc. is the institutional plan. It creates a
comprehensive and effective plan to achieve organizational objectives. It is also considered as a
central plan. It covers the comprehensive planning of the organization.
➢ The institutional level plan is the big plan made by the top management (chief executives and
directors) to achieve the objectives of the organization and to guide the organization in the right
direction. It is related to the existence, development and expansion of the organization. It is
prepared for a long period of time. Since the institutional level plan affects the entire organization,
this plan has to be made very carefully. An institutional plan should be made after analyzing the
capabilities, weaknesses and opportunities and challenges of the organization. In order to make the
institutional plan successful, professional plans, operational level plans, etc. are created based on
the institutional plan itself. In today's competitive and changing environment, a corporate plan is
needed for the progress and prosperity of the organization. It prepares an outline in advance of
what to do, how to do it, when to do it, who will do it, the choice of objectives and the necessary
 actions to achieve them, etc. to achieve organizational goals and objectives. The plan should be
made in a simple and clear way. The plan should be flexible as well as balanced to change according
to the situation.
➢ Corporate planning is a process of determining the major objectives of an organization and the
policies and strategies that will govern the acquisition, use and disposition of resources to achive
these objectives.
➢ This can be explained by the definition of various scholars:
➢ "A plan is a blueprint for setting organizational goals and how to successfully achieve them."-Ricky
Griffin
➢ "Planning is a pre-determined decision about what to do, which includes the selection of objectives
and the selection of policies, procedures and programs from among various options."-M.E. Harley

Various necessary plans are made to implement the institutional plan such as:

1. Strategic plan: The plan prepared by the top management to achieve the objectives of the
organization and accelerate the organization is called strategic plan. It is related to the long term
planning of the organization. It analyzes the internal and external environment of the organization
and the strengths and weaknesses and opportunities and challenges of the organization which
helps to gain competitive advantage. Strategic planning is long-term. Such a plan is related to the
existence, development and expansion of the organization.
2. Tactical plans: The plan prepared to clarify and support the organization's strategic plan is called the
tactical plan. Such plans are for the medium term and are prepared by middle level managers. This
plan outlines the tasks to be done by various departments and units of the organization.
3. Operational plan: The operation of the plan prepared for the purpose of achieving operational goals
is called a plan. It is prepared by the lower management. This plan basically focuses on how to
achieve the objectives set by the higher level rather than achieving the basic plan of the
organization. Such plans are short-term in nature.

Therefore, the institutional plan

1. It is futuristic.
2. It is the primary function of management.
3. It Focuses on purpose.
4. It determines the goals, objectives, strategies, procedures and programs of the organization.
5. It guides all the activities of the organization.
6. This is the roadmap of the organization.

Corporate planning is a system that determines the objectives of the organization as a whole and each
of its departments. It analyzes the data and constructs various plans necessary for achieving
organizational objectives. No plan should be created contrary to the corporate plan. The corporate plan
is the unified structure of all the departmental plans.

Things to consider while making a corporate plan

1. Analysis the external enviroment

2. Analysis the internal environment
3. Decide business and mission
 4. Set the corporate objectives,
5. Formulate strategies,
6. Make tactical plans,
7. Build in procedure for monitoring and controlling, etc.

Institutional Planning Process (Planning Process):

Organizational planning is a very complex task. For this one has to go through various steps which can be
mentioned as follows:

a. Identifying the needs of the plan: At this stage, the needs are identified as what the plan is for.
The plan should be clear, acceptable and enforceable. If the need for the plan is not clear, the
planning work cannot be carried forward.
b. Analysis of the environment: At this stage of the plan, the internal and external environment of
the business is analyzed and information is given about the organization's strengths, weaknesses,
challenges and opportunities.
c. Determination of goals and objectives: At this stage, the goals and objectives of the organization
are determined. Objectives should be specific, measurable, acceptable, credible and clearly
timed. The resources needed to accomplish the set objectives should also be identified.
d. Development of assumptions regarding the plan: At this stage, the foundations of the plan are
clarified and to achieve the set objectives what needs to be done is determined. Planning
assumptions refer to forecasts or assumptions about the future internal and external
environment of the business. The future of the organization should be predicted by detailed
study of potential rules regulations, competition, technology, availableresources and means,
political and social environment, market etc.
e. Identification of options: In this phase, various options are identified to achieve the objectives of
the plan. For this, factual, reliable, relevant information is needed. Options can be two or more
than two
f. Evaluation of alternatives: In this, the identified alternatives are analyzed and evaluated in an
appropriate manner. While evaluating alternatives, factors such as cost, risk, profit, benefit
should be considered comparatively. Both quantitative and qualitative tools can be used for
effective evaluation of each option.
g. Choosing the best option: In this, the best option for the organization should be chosen by
evaluating the purpose, nature and other elements of the organization. Thus, while choosing the
best option, the management should also pay attention to the current needs and future
possibilities.
h. Formulation of action plan: After choosing the option, a detailed action plan should be drawn up
to fulfill the objectives of the organization. An action plan should be prepared regarding what to
do, who will do it, when to do it, how to do it, and by whom. The action plan should be
formulated in such a way that it does not conflict with the original plan. Activities,
responsibilities, time, procedures, etc. are clearly explained in the action plan.
i. Implementation of the plan: In this phase the paper work is given a practical shape. This is a very
important step. No matter how good the other steps are, if they are not implemented, there is
no point. At this stage, the plan is implemented from all levels.
j. Review: Planning is a continuous process until the set objectives of the organization are achieved.
After the actual implementation of the plan, the predetermined income of the organization and
 the actual income are compared and if there is any deviation, it is adjusted according to the
changing business conditions.

Importance/Necessity of Corporate Planning:

(a) Determines the action plan to achieve the objectives and goals of the organization.
(b) The plan accommodates changes and uncertainties in the environment.
(c) It helps the organization to achieve best results at low cost.
(d) It makes the relationship between employees and managers smooth by not clearly dividing the
work of the employees of the organization.
(e) The plan compares between the predetermined achievement and the actual achievement and
effectively controls if there is any deviation.
(f) The plan helps the organization to take corrective action if any deficiencies are found during its
implementation.
(g) Increases the effectiveness of the organization by increasing production, effective coordination,
control, organization, etc. at a low cost in the organization.
(h) Organizational goals and objectives can be achieved.
(i) Coordinates all departments of the organization to achieve their goals.
(j) Enhances organizational effectiveness, etc.

Strategic Management

Strategic management is a joint and continuous practice of identifying strategy options based on
environmental changes and internal capabilities, selecting, implementing and sustaining the necessary
corrective measures. Strategic management is the combined form of management such as strategy
developed accordingly after continuous study and research of the various effects of environmental
change and its implementation and control.

Strategic management establishes a process and continuously studies the environment and takes
necessary steps. It should continuously adjust the objectives of the organization according to the
opportunities and challenges in the environment. Strategic management is understood from
formulation of strategy to its proper implementation and evaluation. This is a major function of top
management. It is a continuous process that adapts to the changing environment and adopts
appropriate measures to efficiently deploy the organization's resources. It includes everything from the
mobilization of resources to how to occupy the market share.

Therefore, strategic management matches the resources of the organization with the opportunities that
appear especially in the dynamic environment and the use of those opportunities is in the interest of the
organization.

Strategic Intent/Objective

➢ The objective is the final point (Destination) of the organization where the organization always tries
to reach on the basis of its existence and activities. Purpose is created with a certain intention and
strives to achieve it. Action without a purpose has no justification. Purpose is always guiding the
organization. A strategy is a means to achieve an objective as a strategy is formulated to achieve
the objective. Without a purpose, the organization can neither run nor can the existence of the
organization survive, but the purpose itself cannot fully contribute to the success of the
 organization. The strategic intent that encompasses the objective is the motivation or determinant
of the objective. Strategic intent includes objectives, broad vision, campaigns, goals and targets. A
big goal is a long-term vision for an organization's existence, which prepares a strategic plan for
what the organization should do in the future. By identifying the shorthand of the business that can
be operated practically, the big goal provides a way for setting goals at different levels. A big goal is
also called a campaign.
➢ Objectives are also at different levels, campaign-level objectives, institutional-level objectives,
business-level objectives, etc. The strategic management process begins with determining the
organization's long-term objectives. Under this, it is clarified what the organization is trying to
achieve in the long term and what is the reason for the existence of the organization. It is easy to
measure the level of success and activity of the organization by determining this objective.
Strategic objectives need to be aligned with the needs and expectations of the organization.
➢ Thus, any organization has developed a strategy as a powerful means to achieve its predetermined
goals and objectives. Just as the organization itself is not a single unit but appears in the form of
small units, in the same way the strategy should be divided into small units to be able to carry out
business activities. The strategic level in the organization should be able to guarantee efficiency
and effectiveness in fulfilling organizational objectives.
➢ According to Fred David: "A broad mission statement expresses an organization's long-term vision
of what it wants to serve and who it wants to serve."
➢ Therefore, it clarifies what is the long-term desire of the organization, determines the scope of the
organization, goods and services and market area. It guides the future of the organization. Setting
strategic objectives is done within the framework of established organizational objectives. Based
on the evaluation of the strategic options, the appropriateness, acceptability and feasibility should
be considered and an executable strategic objective should be determined.

Components of Mission :

1. Customer: Emphasizing the satisfaction of customer needs is a key element of a broad goal
statement.
2. Quality: Quality should also be mentioned in the broad goal statement.
3. Technology: The broad goal statement should also emphasize technology improvements.
4. Vision: The broad goal statement should express the organization's beliefs, values, beliefs, and
expectations.
5. Employees: The broad goal statement should also interest the employees working in the
organization. Equal opportunities and adequate opportunities for character development should be
given.
6. Competitive advantage: The broad goal statement should also emphasize the competitive
advantage that the organization can achieve.
7. Profitability: The broad goal statement should also mention the financial viability of the
organization.

Importance of Mission :

1. Developing clear broad goals is an important task of strategists. It explains why the organization
was established.
2. Its importance can be mentioned as follows:
 3. Common goals bring uniformity in the organization.
4. It helps in achieving the goal.
5. It provides a basis for the proper distribution of resources.
6. Motivates various stakeholders of the organization and creates an organizational culture for
achieving organizational goals.
7. Assists employees in achieving organizational goals by making them committed to the
organization.
8. It clarifies about the products, services, market as well as scope of the business.
9. It reflects the responsibility of the organization towards its stakeholders.
10. It clarifies the organization's values, beliefs and beliefs towards goods, services, markets and
society.

Strategic Vision

It is the end result or goal that represents the existence of the organization. It is the end result or goal
that an organization ultimately seeks to achieve. A goal is what an organization ultimately wants to
achieve and where it wants to go. It broadly mentions the nature of the business and the area covered
by the business. A goal clarifies how the business will move forward in the long term. The goal should
therefore represent the expectations and interests of its stakeholders.

It clarifies where the organization wants to reach in the future, that is, the vision shows what the
organization has a strong desire to achieve or what it wants to be. It provides a basis for strategic
decisions. It guides the overall goals and objectives of the organization.

A mission is a long-term vision of what an organization wants to be and who it wants to serve. This
explains the long-term consequences. The activities to be done by the organization are mentioned. Even
when setting strategic goals, strategic goals should be set in such a way as to fulfill the goals and
objectives of the organization. Based on this plan, the operational plan of the organization is formulated
and implemented. It determines the long-term direction and scope of the organization. Strategic goals
view the organization as a system. Strategic goal formulation is based on environmental analysis. Such a
goal is set only by analyzing the opportunities and challenges of the external environment and the
strengths and weaknesses of the internal environment. It should be definite, measurable, acceptable,
realistic, coherent.

Thus, any organization builds a strategy as a powerful means to achieve its predetermined goals and
objectives. Just as the organization itself is not a single unit, but a form of small units, in the same way,
the strategy should be divided into small units to be able to carry out business activities. The strategic
level in the organization should be able to guarantee efficiency and effectiveness in fulfilling the
organizational goal (vision).

Therefore, in this way, the vision expresses the long-term goals or ambitions of the organization for the
future. When determining it, it is clear where the organization is trying to reach in the future. It reflects
the expected strategic desire of the organization. When setting strategic goals (vision), it is done within
the scope of established organizational objectives. Based on the evaluation of the strategic options, the
appropriateness, acceptability and feasibility should be considered and an executable strategic goal
should be determined.
Benefit of Having a Vision:

It gives long-term direction to the organization.

1. It prepares the organization for the future.

2. It determines the priorities of the organization.
3. It identifies the common goal of the organization and directs everyone towards the goal.
4. It increases the risk bearing capacity.
5. Develops long-term thinking.
6. Integrates organizational efforts.
7. It reflects the expectations of all stakeholders of the organization.

Therefore, every organization needs to develop strategic objectives. Such objectives help in choosing the
appropriate option from among various options for conducting business activities. Strategic objectives
should be formulated based on the analysis of future opportunities and challenges. Objectives should be
specific, measurable, supportable, realistic, and time-bound.

Strategic policies

A strategic plan is developed after determining the organization's goals, objectives and analyzing the
external and internal environment as well as identifying the strengths and weaknesses of the
organization. While formulating a strategic plan, an effort is made to make maximum use of the
opportunities created by the organization's resources and means. Strategic policies are formulated to
transform the organization's goals and objectives into practical ones, to gain competitive advantage, and
to deal with environmental challenges. At present, no organization can run without competitive
advantage. In order to increase the competitive advantage of the organization as a whole, various levels
of objectives are formulated and as an effort to achieve those objectives, strategies are also developed
according to the objectives. There are three types of strategic planning in particular:

a. Corporate Level Strategic: This is a strategy from the highest level of management. It is of long
term nature. All other management level activities of the organization are affected by this. This
strategy provides basic direction for the entire organization.
b. Business level strategy: This strategy is related to the business unit. It provides guidance on how to
gain competitive advantage in the market. While preparing such a strategic plan, different
strategies are prepared to achieve business benefits.
c. Functional Level Strategy: It is used to prepare a strategic plan related to various functions such as
production, distribution, financing, human resources, research and development, etc. This
strategy should be focused towards realizing institutional level strategy and professional level
strategy.

Therefore, in this way, any organization builds a strategy as a powerful means to achieve its
predetermined goals and objectives. While preparing a strategic strategy, it is necessary to study the
environmental potential in order to be consistent with the goals/objectives of the organization and
choose the best option from among the various options and prepare a suitable strategy considering
the limitations of resources etc. Strategy should be able to guarantee efficiency and effectiveness in
achieving organizational objectives.
 Process of Strategic Planning and Implementation

The process of strategic management is the totality of all activities including determining the strategic
objective, choosing the level of strategy required by the management, implementing the strategy,
identifying the various types of problems that have appeared in the implementation of the strategy and
evaluating them in time, and reporting on the progress and problems in time after the implementation
of the strategy. This is an ongoing process.

(A) Strategic Planning: Strategic planning is considered as the main element of strategic management.
Strategic management begins with the formulation of a strategic plan. To achieve organizational
goals and objectives, different types of strategies are designed or built. Which includes the
following

1. Environmental micro-examination: The studying, researching, analyzing and evaluating the external
environment that affects the activities of a business organization is called environmental micro testing.
It enables the organization to assess the various types of situations arising from the internal and
external environment of the organization and prepare a strategy accordingly to obtain opportunities and
benefits and to face challenges. In particular, the environmental forces or elements are carefully studied
and the process is carried forward. It includes the following external and internal elements of the
environment:

i. External Environment: Political, economic, socio-cultural, technical etc. elements that are beyond the
control of the organization are included under the external environment. It presents challenges and
opportunities to the organization: A strategic manager should be able to identify opportunities and
benefits for the organization by carefully analyzing the external environment.

ii. Internal Environment: In the internal environment, especially the organization's culture, working
methods, various senior managers, human resources, etc. are included. If the organization can properly
utilize the human and financial resources within the organization, it will be stronger than other
competitors. The organization can identify the stakeholders of the organization such as customers,
suppliers, market, government, workers, unions, media, etc. and adopt strategies according to their
expectations and be able to benefit from external opportunities.

2. Strategy Formulation: After a thorough examination of the environment, the organization formulates
strategies. While formulating the strategy, various options are identified and only those options are
chosen from which the cost of the organization is less and the benefit is more. Specifically, strategies are
formulated at the following levels:

i. Institutional level strategy: It is an integrated strategy made by the top management which covers
the overall strategy of the organization. This affects the long-term and short-term activities of the
organization.
ii. Business level strategy: This strategy is formulated separately for each strategic business unit. It
emphasizes competitive advantage.
iii. Operational level strategy: It deals with activities like production, distribution, financing, research
and development etc. This strategy plays an important role in fulfilling the objectives of the
organization by making appropriate use of resources at its level.
 (b) Strategic Implementation (Strategic Implementation): Unless the strategies are implemented
correctly, they will be limited only as a piece of paper, so the important task of strategic
management is strategic implementation. Actions such as implementing strategies and
programs mentioned in them and building necessary structures, proper adjustment of resources
and giving proper instructions are included under strategic implementation. In particular,
various elements play an important role in implementing the strategy, which are as follows:
i. Structure creation: This includes creating an organizational structure that is accessible for
strategic management, determining the roles and tasks of managers, and establishing
boundaries and relationships.
ii. Resources: An important element of strategic management is the appropriate allocation and
management of resources. It enhances the ability of strategic management. A strategic
manager can gain a competitive advantage if he mobilizes the organization's resources while
adapting to the environmental changes.
iii. Management system: Under this, strategic management performs tasks such as building a
strong management team, developing and managing human resources, managing
information, etc.
iv. Effective communication: Effective communication is an essential element for the
implementation of strategic plans. It is necessary to have appropriate communication
between various branches, departments, departments and directorates of the organization.
v. Motivation: For the successful implementation of the strategic plan, the motivation of the
employees involved in the execution of organizational activities plays an important role. In
particular, employees can be motivated by proper management of rewards and
punishments
vi. Policy: The organization should formulate policies in such a way that they fully support the
plan.
vii. Environmental compatibility: The strategic plan should be adapted to the changes in the
environmental elements.
viii. Good coordination In order to effectively implement the strategic plan, management needs
to coordinate effectively between the employees and programs of the organization in
various ways.
(c) Strategic control: Another important element of strategic management is strategic control. It
helps to achieve strategic objectives by controlling and reviewing all elements of management in
the course of strategy implementation and identifying the right direction. If any mistakes and
errors appear during strategic implementation, they are corrected. Necessary corrective steps
are taken to prevent such mistakes from happening again.
(d) Briefing: After the strategy is implemented, regular briefing is done. Through this, challenges in
the organization are also molded into opportunities. It is reviewed whether the goals/objectives
of the organization have been achieved or not. Deficiencies in achieving organizational goals are
discovered and strategies are prepared accordingly.

Process of Strategic Implementation :

There is no efficiency until strategic execution. Therefore, efforts are made to implement the strategic
plan by forming 6 sub-processes under this, which are as follows:

a. Project implementation: It tries to organize the entire organization for strategy implementation.
 b. Methodological implementation: It prepares various blueprints for strategic implementation.
c. Allocation of resources: It prepares necessary procedures for acquisition and allocation of
resources.
d. Structural implementation: It prepares the structural framework for the implementation of the
strategy.
e. Operational implementation: It covers policy formulation and actual activities in various
operational areas.
f. Behavioral implementation: During the implementation of the strategy, the behavioral process
provides the basis for implementing the strategy, including leadership, social responsibility,
business ethics, organizational culture, institutional politics, etc.

Thus, the main purpose of creating and implementing various sub-processes is the implementation of
the strategy. Therefore, the emphasis of the strategic management process should be on making the
implementation more realistic and result-oriented.

Importance of strategic planning and management:

Short-term or long-term objectives and goals of the organization are determined. An organization has a
definite purpose. Strategic management is the sum total of the actions of formulating a plan to achieve
the target objectives of the organization, determining the outline of the implementation side, organizing
regular monitoring and evaluation, using the support system as an opportunity for improvement and
regular regulation and control. This is the managerial aspect of the organization. Which helps to make
the organization regular, practical and dynamic. Strategic management is the cornerstone of
organizational success. This is related to organization or whole management. Both of these are tools to
maintain the success of management. Strategic planning and strategic management are the basis of
preparation to achieve the objectives of the organization. The importance of these two is as follows

To guide the goals and objectives of the organization

1. To set goals based on priority and justification,

2. To manage the utilization of available resources,
3. To achieve success through the practical use of capabilities within the organization,
4. To achieve regularly set goals and objectives,
5. To formulate and implement clear, practical, objective plans and strategies,
6. To manage risks that may occur in the organization through business and practical action plans,
7. To use the concept of new managerial dimension while making the organization agile,
8. To build the foundation of organizational success by enhancing the productivity of the organization,
9. To manage risks and conflicts that may occur in the organization,
10. To determine the target objective and destination in a well-planned manner, etc.

Situation in Nepal

While formulating the plan, it is done on a theoretical basis rather than on the basis of reality. Although
more than six decades of practice of planned development, it still seems to be ignorance in determining
the strategy, as if any current plan has only been met with the goals taken, most of the goals and set
strategies have not been completed within the set time.

1. Lack of expertise in strategy formulation,

2. The strategy does not seem to be formulated based on needs and priorities.
3. More importance is given to theoretical basis rather than based on reality.
4. An objective, realistic strategic plan could not be created,
5. There was zero participation of relevant stakeholders during formulation.
6. The implementation aspect was weak.
7. Monitoring and evaluation process could not be practical and effective,
8. Recommendations from monitoring and evaluation could not be implemented as a supplement,
etc.

Suggestion:

1. Emphasizing objectivity and realism,

2. Involving people with expertise in strategic planning,
3. Formulating strategies based on organization's needs and priorities,
4. Strategic planning and management based on factual analysis,
5. Enhancing practical and business implementation capacity,
6. Adopting an indicator-based evaluation system;
7. Establishing a practice of accepting the suggestions from the evaluation as improvements,
8. Determining goals and plans based on the organization's capabilities, etc.

Swot Analysis

➢ SWOT is an abbreviation of Strengths, Weakness, Opportunities and Threats. Both the internal and
external environment should be studied equally to increase the organization's ability and
competitive position. By studying the internal environment, the strengths and weaknesses of the
organization become clear, while opportunities and challenges can be identified from the external
environment. A SWOT analysis is done to find out how the organization can cover the opportunities
from the opportunities based on these two environmental studies.
➢ From Swot Analysis, the organization's opportunities and challenges and strengths and weaknesses
are combined to form the basis for building the necessary strategy. A strategic analysis is essential
for strategic planning. SWOT analysis is based on micro-environmental analysis. The organization
should adopt such an effective strategy so that opportunities can be covered from strengths and
challenges can be nullified without affecting the effects of weaknesses. Therefore, the process of
strategy creation starts on the basis of this SWOT analysis.
➢ According to Rickey W. Griffin, a SWOT analysis is a careful assessment of an organization's internal
strengths and weaknesses as well as environmental opportunities and challenges.
➢ Therefore, to identify the organization's strengths, weaknesses, opportunities and challenges,
SWOT analysis is to examine the external elements and internal conditions of the organization. On
the one hand, it identifies important internal strengths of the organization, identifies important
opportunities in the external environment, and on the other hand, explains the weaknesses of the
organization and the external challenges to be faced due to that. It also lays the foundation for
formulating a strategic plan.

Elements of SWOT Analysis:

➢ Strengths
➢ Weaknesses
 ➢ Opportunities
➢ Threats
1. Strengths: Strengths are related to the internal capabilities of the organization. It is derived from the
internal environment such as structure, goals and policies, culture etc. Capacity refers to the
resourcefulness of an organization. The organization should be able to make maximum use of the
strengths obtained from the internal environment. A suitable strategy should be made for this.
2. Weakness: Weakness is also a subject related to the internal capacity of the organization. It refers to
the organization's lack of means, resources and skills. Although no organization is completely strong,
the management can reduce the weaknesses in the organization by managing them.
3. Opportunity: Opportunity is a subject related to the external environment. The organization should
be able to make full use of the opportunities that have come in the changing environment by
making maximum use of the available tools and resources. By which the organization can move
forward by surpassing the competitors.
4. Threats: Challenges are adverse conditions in the external environment. Organizations have to face
various challenges to gain competitive advantage. Due to technology and globalization,
organizations today have to face various challenges. The entry of a new competitor in the market,
inadequacy of means and resources, adverse laws, new policies and regulations, changes in the
needs and wants of customers, market growth, etc. challenges are encountered in the organization
due to various reasons. The organization can survive only if it can study these challenges and modify
its business accordingly.

Advantages of SWOT analysis:

1. SWOT analysis facilitates strategic matching between the organization's internal resources and
external environmental opportunities.
2. It helps to find out the internal strengths and weaknesses of the organization and manage the
weaknesses in a more effective way.
3. It guides to face challenges from the external environment.
4. It helps in devising alternative strategies.
5. It identifies opportunities in the market.
6. It makes it easier for the organization to adapt to environmental challenges.

As its limitation, it only provides the basis for strategy formulation, it has nothing to do with strategy
implementation. Therefore, in today's competitive business environment, the strategy determined by
the organization without the study and analysis of the internal and external environment is of no use.
Organizations should be able to identify what strengths or weaknesses they have in order to formulate
an appropriate and effective strategy. You should be able to figure out how to use the opportunities
from the external environment and how to face the challenges. The basic purpose of SWOT analysis is to
provide a basis for developing strategic options. Therefore, SWOT analysis can be used to determine the
appropriate strategy after strategic analysis in the organization.
Tools and techniques for strategic analysis:

The methods of strategic analysis are divided into two types, internal and external. Which are as follows:

(a) Methods of internal analysis: Internal analysis helps to find out the strengths and weaknesses as
mentioned before and to be clear about what can be improved. Such analysis can be done in different
ways. Some of the important ways are as follows:

1. Value Chain Analysis: Michael Porter developed this method in relation to how to give more
importance to customers and increase the competitive ability of the organization. Value chain analysis
studies how organizations work to create value in their activities. In particular, the organization makes
various activities within and outside the organization that contribute to the production of goods and
services in accordance with the expectations of customers, receiving importance from them in each
activity and creating a series of those importance, this is called the importance chain. It is a method of
internal analysis of the organization. It systematically studies and analyzes a series of various primary
and supporting activities related to the production and distribution of goods and services. It analyzes the
importance of creation from various activities involved in the production and distribution of goods and
services. Under this, commercial activities are divided into two parts:

2. Cost Efficiency Analysis: Cost Efficiency Analysis can be considered as a major method of internal
analysis. Cost efficiency is the ability of an organization to reduce the cost of all its activities. This can
reduce expenses. If frugality can be adopted in the cost of goods from production to sale and
distribution, the goods will be relatively cheap and importance will be created. Due to the importance
created in that way, Sangan can gain a competitive advantage.

Some of the key factors influencing cost efficiency are as follows:

➢ Economies of Scale
➢ Supply cost
➢ Product features
➢ Experience
➢ Outsourcing

In this way, if the cost to be borne by the organization is gradually reduced, the price to be paid by the
customer for goods and services can also be reduced. As a result, getting quality goods and services at a
low price, the customer feels the importance of the goods.

3. Product features analysis (Product features/Effectiveness Analysis): Effectiveness analysis is the

study of how the organization has been able to meet the customer's product and service needs and
become better than other competitors or increase product value. Effectiveness analysis is the efficiency
of providing goods and services that meet the real needs of the customer. Study in customer order on it

It believes that the match between the needs and the value added by the organization to the goods and
services increases the effectiveness of the organization. Being able to give the customer what they want,
when they want it, according to the customer's expectations increases effectiveness. When an
organization builds a value chain, it analyzes which activities can increase efficiency and how it
ultimately contributes to the increase in value.
4. Comparative analysis:

To succeed in today's competitive business environment, organizations must be able to achieve strategic
advantage. For this, the organization should compare its capabilities with its competitors. Analyzing your
capabilities to compare yourself with competitors is called comparative analysis. In this analysis, taking
the activities and achievements of competitors as a basis, comparing them with their own achievements
and activities: a comparative analysis is done. From this, the organization's strengths and weaknesses
can be identified and its ability to take environmental opportunities can be estimated. Its bases are as
follows:

➢ Historical analysis
➢ Comparison with Industry Norms (Coparision With Industry Norms),
➢ Benchmarking
➢ Robustness Analysis

In particular, in comparative analysis, the strategic elements of the organization's internal environment
are compared. It specifically explains what the strategy and strategic elements were, what was the
result, and how the change in the result began to appear with the change of those strategies.

(b). Methods of external analysis:

Under this, environmental opportunities and challenges are identified through continuous study and
monitoring of environmental elements under environmental impact testing. This helps to adjust
business strategy with environmental dynamics. This includes the following methods:

1. Pestel Analysis: Pestel analysis is a simultaneous analysis of the political, economic, social and
technical environment under the external environment.

P- Political Environment

E- Economic Environment

S- Sociao Cultural Environment

T- Technical Environment

L- Legal Environmenet

By analyzing all the above, it is clear from the Pestal analysis that how the organization can be taken
forward. Under this, the opportunities and challenges coming from them are determined by studying
and analyzing the environment. These elements remain uncontrolled for business. PESTL analysis helps
to formulate the strategy of the organization by examining the environmental factors.

2. Scenario Planning: When there is high uncertainty in the environment, it is very difficult to
understand its future impact. A scenario or environmental plan is the creation of a view of what a
situation or situation might be in the future based on a large amount of information gathered about the
environment. From this type of plan, a vision or visual picture can be prepared of what kind of
challenges the future environment may bring and how the organization should react to it. In other
words, environmental analysis or planning prepares a forecast of the possible future and predicts what
the organization should do today according to the environment. As a result, the numerous challenges
and uncertainties created by the environment can be reduced as much as possible. Analysis of the
scenario or environment is also considered necessary to predict the necessary activities based on the
study of various events and the trends of the events that occur between any period of time. Under this,
two steps are important:

3. Porter's Five Forces Model (Porter's Five Forces Model): Under this model of Porter, the competitive
situation of a business is identified by systematically studying the work environment or industrial
environment. It presents the competitive position of the organization in a systematic manner. It
describes the position of an organization in the existing situation and what is its competitive ability. As
competitors in the organization increase, Michael Porter said that these five elements should be studied
and analyzed and moved forward. Under this, the following aspects are studied:

(a) Threats of new entry: An organization has to face challenges at that time whenever such business is
added. If the rate of profitability and market expansion in the business is high, the possibility of such
entry remains high. If others start a new business like the one they are doing, it increases both
competition and competition. If the new business uses new products and new technology, it is
natural that the competitive ability of the old business will decrease. Producing goods and services
in large quantities, old or established businesses producing goods according to the needs and
interests of customers, making distribution channels effective, etc. can also turn the threat of new
business entry.
(b) Bargaining power of the supplier: Every organization must rely on suppliers for the necessary raw
materials, financial preparations and other services while producing goods and services. Therefore,
the number, behavior and supply costs of suppliers have a direct impact on an organization's
production costs and profitability. If the supplier has the ability to influence the buyer and keep the
price high, then the supplier is considered powerful. Since suppliers directly affect the operation of
the firm, their activities are very important. In addition, when the supplier is very powerful, the
organization has to face many problems. Even the organization can reach a very critical situation.
(c) Threats of Substitutes: The level of competition of any firm produced by it also depends on the
availability of the replacement item. If there are many substitute items then it gives challenges to
the firm and if there are few substitute items then it creates opportunities. If there are substitute
products available in the market, buyers may turn to those products. Due to this, the organization
may lose market share. While studying the competitive environment in this way, the challenge of
substitution should also be deeply pondered. When there is a demand for an alternative product
and the price is relatively low, the customers will switch to other products and there is always a
possibility that the organization's production will always be abandoned, so the organization should
always study the substitution and change its strategy in time.
(d) Buyers' Power: Buyer refers to the buyer of the firm's goods and services. If the buyer's bargaining
power is greater, they are considered powerful. In particular, when very few buyers purchase a large
number of goods and other organizations also introduce goods for the same purpose in the market,
the buyer becomes 'stronger'. As a result, the competitiveness of the business begins to decrease.
Therefore, the organization should find out that buyers become powerful and try to reduce it. You
should also find out how the competitor is trying to attract the buyer. Efforts should be made to
attract buyers towards you. Instead of depending only on a single buyer or a small number of
buyers, efforts should be made by the organization to increase the number of buyers, pay attention
to product diversification and revise its production and selling prices according to time.
(e) Competitive Rivalry: The competitors in the industry are also challenging the organization. In fact,
rivalry has arisen from the competition between organizations that manufacture similar products in
the same industry. Organizations are adopting various strategies while occupying their product
market and keeping the competitive situation under their control. Today, no market is a pure
monopoly. In that case, with whom you have to compete and how to compete & to know that it is
right, one must evaluate the existing position of the competitive rival under the competitive
environment. When competition or rivalry is created in the organization, the organization may come
under pressure. Therefore, it is necessary to study this kind of environment in time and adopt a
proper strategy.

5. Environmental Threats and Opportunity Profile (ETOP): One method of studying the information
collected during environmental analysis and presenting the collected information in a systematic
manner while highlighting its importance in terms of challenges and opportunities is the preparation of
the Environmental Challenges and Opportunities Profile (ETOP). During the environmental analysis,
numerous elements are studied separately and it is studied which element has what effect on the future
plan. ETOP is a method for finding overall environmental challenges and opportunities and finding
guidelines for future strategy by simultaneously analyzing the environmental sector such as economic,
social, political etc. Environmental dynamics can have a positive or negative impact on business. While
positive business changes are creating opportunities in the organization, negative environmental
changes are adding challenges to the business. In this way, a systematic study of opportunities and
challenges is done to evaluate the effects of environmental elements on the business as a whole, and
environmental opportunities and challenges are prepared. A systematic study of the impact of
environmental factors on business helps in formulating the future strategy of the organization.

4.4 Corporate Social Responsibility (CSR)

➢ The financial sector means banks, financial trading organizations such as insurance companies,
employee savings funds, citizen investment funds and microfinance trading organizations, banking
trading cooperatives. The Banks and Financial Institutions Act, 2063 also defines institutions
established for financial transactions as the financial sector.
➢ The financial sector deals with economic activities. It is a profitable business. In a liberal economic
policy, financial institutions are primarily run by the private sector. Their main purpose is profit. The
financial sector operated by government investment also has to earn profits to make itself
sustainable and professional.
➢ These financial institutions have to fulfill their moral, professional and human responsibility
towards the society from which they earn profit. The legal and moral responsibility that the
financial sector has to fulfill for this social benefit is called the social responsibility of the financial
sector.
➢ Social responsibility of the financial sector refers to the promotion of direct or indirect
accountability of the positive and negative impacts and effects of the financial sector on the society
while conducting its activities. In another sense, the social responsibility of financial institutions is
the moral, commercial and human responsibility towards the society that financial institutions have
to bear while conducting financial activities.
Financial institutions can perform social responsibility in four ways as follows. They are as follows:

1. By promoting socially oriented businesses: Financial institutions are fulfilling their social
responsibility by investing in areas where the economic interests of the weaker sections of the society
are protected, the underprivileged get jobs, domestic production increases and equitable development
is achieved by promoting socially oriented businesses. Nowadays, it seems that various types of financial
institutions have been mandated by the regulatory body to promote socially oriented business both
politically and legally.

In the context of Nepal, the following policy arrangements have been made to promote social-oriented
business:

1. Provision of compulsory investment for the poor,

2. Conducting micro credit programs to create financial access for backward areas, classes and
communities,
3. Lower rate of refinancing for small and household industries, agriculture, projects run by women
and designated underprivileged groups.
4. To continue with the policy of expanding financial services in remote and rural areas, expanding
the branches of financial institutions,
5. Expanding access to finance among poor, small, marginalized and remote areas through micro
finance programmes;
6. Addressing financial inclusion from a policy level.

2. By promoting social services: It is appropriate for financial institutions to spend some part of their
income on social services. There is a trend of spending on social services in order to increase the citizens'
trust towards such institutions and also for the opportunity to do exemplary work by promoting social
welfare. By following the policy framework made by the regulatory body, financial institutions are
performing social responsibility, and in some cases, financial institutions are also performing social
responsibility by promoting social services. For example, financial institutions are investing in areas such
as hospitals, maternity, education, drinking water, environmental protection, sanitation, and sports.
With this kind of investment, on one hand, the business of the financial institution is expanding, and on
the other hand, social services are promoted. This is also an aspect of social responsibility.

3. By fulfilling the corporate social responsibility: Financial institutions earn profits from customers of
different levels in the society. The actions taken by financial institutions to fulfill their social
responsibility are called corporate social responsibility. At present, financial institutions in Nepal protect
public places, spread public awareness against certain diseases, provide scholarships to poor and needy
students, provide sports equipment to clubs, sponsor mountain climbing, protect the environment, and
conduct cleaning campaigns. These actions are part of social responsibility.

4. By enhancing social welfare: Financial institutions are also part of society. They also fulfill their social
responsibility by assisting in various crises and calamities that occur in the society. For example,
providing relief materials during natural disasters such as floods, landslides, earthquakes, fires, assisting
in disaster management, providing assistance for the elderly, disabled or helpless children, providing
free health services for the underprivileged, etc. are included in social responsibility.
Epilogue: Financial institutions are essential components for economic development. Economic
development is impossible without financial institutions. But if financial institutions focus only on profit,
exploitation may be born from a human and social point of view. In the society where the financial
institution earns profit, the financial institution has some responsibility towards that society.

In the context of Nepal, the government-owned financial institutions are found to be fulfilling their
social responsibility well, while the private sector financial institutions are lagging behind in this regard.
For example, before the economic liberalization policy was adopted in Nepal, social banking, intensive
banking program, priority sector credit program and village oriented banking policies were implemented
in Nepal.

The financial institutions of the private sector were not keen on the implementation of policies and
programs full of social responsibility as the financial institution's profit would not increase. But
government-owned financial institutions contributed to the success of the program by assuming social
responsibility. Therefore, in the context of Nepal, it is necessary to motivate the private sector financial
institutions towards social responsibility, while it is necessary to make the government sector financial
institutions professional, competitive and capable. In this way, if these two types of financial institutions
can be guided by two different policies, the overall capacity of financial institutions can be increased and
social responsibility can also be fulfilled.

Need for Social Responsibility in Financial System:

1. To increase citizens' confidence in the financial system,

2. To invest a part of the profit earned in social activities,
3. To increase the security of citizens' savings by financial intermediaries,
4. To develop social responsibility by minimizing the activities of the financial sector only towards
earning profit,
5. To prevent the financial sector from being concentrated in the center or only in the cities,
6. To ensure an environment to invest in projects or programs where social benefits are high and
social costs are low when making investment decisions,
7. To facilitate the flow of investment in priority areas of the government,
8. To bring stability and stability to the overall financial system,
9. To improve transparency, hygiene and discipline in financial transactions etc.

Measures to increase social responsibility in the financial system:

1. By making policy arrangements for social responsibility,

2. By establishing clear and measurable indicators of social responsibility
3. By creating and enforcing a code of conduct,
4. By providing compulsory investment for the poor,
5. By extending financial services to remote and rural areas,
6. By adopting an open information system,
7. By making social benefit cost analysis the main basis for making investment decisions,
8. By involving large depositors and stakeholders in the decision-making process,
9. By adopting the principle of inclusion in the financial sector,
10. By spreading public awareness on issues of public concern, conducting cleanliness campaigns,
conducting environmental protection programs,
 11. By making it mandatory to spend a portion of the profits on social activities,
12. By arranging for a certain percentage of the investment to flow to socially backward areas,
castes, languages, classes and communities where direct benefits will be provided,
13. During emergencies, relief, rescue and distribution of assistance etc.

Responsibilities of Public Institutions:

Public accountability is the responsibility of answering to the person or group concerned with such work
regarding whether the person or organization who has been given public responsibility has fulfilled the
task assigned to him or not. Accountability is the responsibility of a person or organization to fulfill the
responsibility accepted. As public institutions are invested from public funds, there is a need for public
accountability. Public institutions should stick to the values and objectives they were established to
achieve. There is no scope for any public organization to shirk responsibility. Accountability should be
viewed broadly as it helps in achieving specific objectives of public institutions. In order to fulfill the
accountability, its methods and procedures should be clear.

The contribution expected from the public institution should not be taken only in terms of finance but
should be linked with the support provided in development efforts. Generally, public institutions are
oriented towards public contributions rather than commercial ones. Therefore, if the accountability is
made clear and certain, it is easier to fulfill the responsibility of answering. In some cases, they force
public institutions to fulfill their responsibilities through political parties, pressure groups, consumer
forums, civil society, etc.

Responsibility is to bear the responsibility of the work done by the public institution and to give a
satisfactory answer to the stakeholders. Public institutions have public trust and government ownership.
The supreme happiness of the people is the ultimate goal of the state. The responsibility of the institute
is focused on the happiness of the people. Achieving the target objectives of the institute reflects the
strength of the people and the state. As a result, to maintain peace, development, prosperity and good
governance, the responsibility of the institute should be towards the people. Public institutions should
deliver services through accountability and sensitivity to the people and the government. It is a
responsibility towards the government, the public and the management of public institutions. The
objective of the institute is production, supply and distribution of goods and services. To have
responsibility and accountability towards that purpose.

The responsibility of a public institution means to bear the responsibility towards the people and the
government. Carrying out the work, duties and responsibilities of the institute in a competent manner
also means responsibility. It is the responsibility of the public institution to fulfill the aspirations of the
concerned parties by doing the assigned work in an efficient manner.

Public institutions should also fulfill their responsibility towards the government. The government
should take responsibility towards the parliament regarding the performance of public institutions.
Adverse effects on the credit and credibility of the institution should not be allowed by providing
accurate and realistic information regarding the activities of the public institution.

In the context of Nepal, the responsibilities of public institutions include the following aspects:

1. Responsibility to sovereign people

2. Responsibilities to People's Representative Institutions,
 3. Responsibilities to the State and Government,
4. Responsibilities to stakeholders,
5. Accountability to constitutional bodies,
6. Responsibilities to the spirit and order of the Constitution,
7. Responsibilities towards lean and fair working systems of economic activities,
8. Accountability to Parliamentary Committees,
9. Responsibilities to shareholders who own and own shares, etc.

Importance of Accountability in Public Institutions:

1. To minimize the possibility of wastage of resources, to make maximum use of resources,

2. To increase public participation as needed in the decision-making process,
3. To improve efficiency, increase efficiency in performance,
4. To create an environment for the proper exercise of rights,
5. To expand systemic influence beyond individual influence and status,
6. To promote a culture of transparency, increase credibility,
7. To control irregularities and wastage,
8. To promote public participation in development activities,
9. To determine the basis for purposeful deployment of the means,
10. To minimize corrupt activities,
11. To lay the foundations of a well-governed state,
12. To gain citizens' trust in governance, to democratize the governance system,
13. To make public officials accountable to citizens,
14. To make the production, supply, distribution system of goods and services agile and
professional,
15. To make the responsibility of the institute effective and committed,
16. To deliver goods and services in a fair, timely and neutral manner,
17. To maintain everyone's access, identity and priority to the benefits of public institutions,
18. Balanced development of public institutions with participation of all, ownership,
19. To maintain social justice,
20. To make social security and delivery of goods and services effective,
21. To establish the legitimacy of the government, etc.

Positive condition:

1. Being accountable to the people and the government,

2. Accountability and accountability to Parliament and shareholders,
3. Committed to the objective by providing clear laws,
4. To audit the financial performance,
5. Use of public charters,
6. monitoring for improper actions,
7. Interest and increased accountability of anti-corruption agencies,
8. Stakeholder participation and coordination cooperation, etc.
Negative Condition:

1. It seems that there is more responsibility towards politics than towards the people,
2. Focused on profit rather than service,
3. Running on unnecessary vehicles rather than people's wishes,
4. Unable to compete with the private sector,
5. People not having access to and ownership of the institute's services,
6. Lack of responsible management style,
7. Increasing corruption and irregularity, etc.

Finally,

Autonomy and accountability of public institutions are the two main foundations of service delivery. On
the principle of autonomy, the institution should never forget its responsibility towards the people and
the state. Autonomy of the institute means to function independently. It is to determine the target
course of action without being chaotic. It does not mean doing irregularities in the name of freedom.
Similarly, responsibility means being responsible and accountable to the government and the people.
Both of these reveal the strength, competence and success of public institutions.

4.5 Project Management : Use of network models like CPM, PERT, manpower planning and resource
scheduling; projecto monitoring and control; project control cycle

Project:

➢ Generally: A structure prepared to implement a program or concept is called a project. A project

refers to a planned method of producing quality services or products from the specified time,
resources and means to complete a certain purpose or task. A project is a trade-off between
limited budget, short time and proper use of limited resources.
➢ The project is done with the specified objectives, specified time and specified budget. In other
words, it is called a project.
➢ A project is a scientifically prepared action plan to achieve a specific goal by preparing a suitable
strategy to achieve a specific goal by making maximum use of resources and getting a proper
return with the help of investment and institutional means, in which specific objectives are set to
be completed within a specified period of time.
➢ Projects are a planned pattern of interrelated and coordinated activities, which are designed to
achieve specific results within a specified budget and time frame. Projects are usually short term.
The project can be further clarified by the definition of various scholars:
➢ R. Max Widman, "A plan is any action to achieve a definite objective through limited resources and
means that has a definite beginning and end."
➢ Harold Kerzner, “A project is a hierarchical set of activities and goals in which,
There are certain objectives and goals.
Start and end arrangements are made.
Fixed costs and budgets are arranged.
It has features related to maximum resource utilization. "
In summary:

Projects are established with the goal of completing specific tasks at a specific time. A project is a
temporary organization that terminates automatically after a certain objective has been achieved. A
project is a team work conducted with the aim of producing quality goods or providing services at a
fixed cost and time. The project is run according to a fixed plan. Where human and non-human
resources are used and mobilized. By which it helps to fulfill the needs by making maximum use of the
resources.

Project management :

➢ All the work done to complete any project in an orderly manner is called project management.
Organizational management to achieve the goals set by the project is called project management.
➢ Project management creates profit by analyzing aspects such as target areas or communities'
needs, resources, existing capabilities and opportunities.
➢ In order to achieve certain goals and objectives, project management aims to complete the work
within the specified time period through planning, organization, personnel management,
leadership, motivation, control, etc.
➢ Project management includes both project planning and project monitoring. Project management
includes aspects such as how to operate the project, how much it will cost, who will benefit, how to
gather investment resources, and evaluate whether or not the project is working according to the
target.
➢ Project management is a process that creates reasonable returns from the use of resources and
tools available at a given time to meet the predetermined goals of any organization.
➢ Project management is a kind of managerial art of acquiring, mobilizing and operating the
resources and tools required to achieve predetermined objectives and goals.
➢ In order to achieve the pre-determined goals, planning, organization, direction, control and
coordination, by creating the necessary environment to work, increasing the efficiency of managers
and workers through the maximum use of human resources and means, and increasing the
efficiency of managers and workers to successfully obtain goods and services is called project
management.

This can be explained by the definition of various scholars:

➢ Harold Kerzner, "Project management is the planning, organizing, directing, and controlling of an
organization's resources in an organized manner to accomplish specific objectives and goals."
➢ According to David I. Cleland, "Project management is a series of procedural activities adopted by a
project group or other people to achieve various objectives according to project objectives, costs,
and schedules."

Therefore, project management is a new management concept adopted to achieve maximum

achievement in the field of production or service and construction. Project management is an action
plan to systematically edit and manage every problem created by the society within the scope of certain
resources and means. Project management is to achieve the goals of the project by making maximum
use of the resources and means of the project within the specified budget and at the specified time.
Features of Project Management:

1. Objectives oriented: The project always works to achieve certain objectives. Project management is
active to achieve the set objectives.
2. Change oriented: Project management is seen as a facilitator of change. It emphasizes on achieving
high returns within time and cost limits while doing any work.
3. Functional Coordination: The most important area in project management is that the activities are
divided into different ways and completed in a coordinated manner.
4. Planning & Control: Project management is the most important task is a plan to prepare for that.
Project management covers things like how to complete the project, for whom it will be completed,
and at what cost.
5. Constraints of time, cost and quality: The most difficult task for project management is the
obligation to do all the tasks of the project within the limits of time, cost and quality.
6. Unique art: Project management is a unique art. It achieves the objectives of the project by making
a proper combination of limited resources and means within the specified time, within the specified
budget.
7. Knowledge of different fields (knowledge of different sources): It is no exaggeration that project
management has all the knowledge required to complete any other work required for the project,
from the construction of the organizational structure.
8. Proper utilization of resources and means (Better utilization of resources and takes): In project
management, utilization of available resources and means in the maximum utilization is found as a
managerial function.
9. Team work: The project emphasizes group-based work.

Project Management Tasks:

The role of project management in today's competitive society The competition of projects is increasing
day by day. It is found that project management has been adopted to carry out various development
activities. The function of project management established to manage the project can be described as
follows:

1. Planning:

1. Developing project objectives, goals and strategies;

2. Dividing the work of the projects and developing the framework of the work structure,
3. Scheduling of project activities,
4. Planning the necessary resources of the project etc.

2. Organizing:

1. Develop an organizational structure for the project group;

2. Determining the roles of organizational group members,
3. Defining management policies, procedures, methods,
4. Determining the rights, responsibilities and accountability of the project's human resources, etc.
4. Motivation:
1. Determining the needs of workers,
2. Deploying the right staff at the right place,
3. To maintain transparency in transfers, promotions,
4. Provide various facilities to motivate employees,
5. Arranging punishments and rewards etc.

5. Directing:
1. Determining the limits of the right to make decisions regarding the distribution and
consumption of resources and means,
2. Developing a leadership system,
3. Develop cognitive abilities
4. Developing a methodology for decision making etc.
6. Controlling:
1. Determining project cost, schedule and performance levels;
2. Determining the method of progress evaluation,
3. Evaluating the progress of the project etc.

Project Management in Nepal

➢ Traditionally built monasteries, temples, pati, paua, buildings etc. are taken as the starting point of
the project of Nepal. Chandrajyoti Hydropower Project of 1968 is considered as the first project
constructed in Nepal by adopting the concept of project management. The concept of project
management in Nepal, especially It seems that the democracy achieved in 2007 came only later.
After the first five-year project implemented in 2013, the projects implemented in the fields of
roads, lights, electricity, water, irrigation, health, education etc. have taken the form of
development.
➢ Although there are abundant natural resources in Nepal, the country is lagging behind in achieving
overall economic progress due to the fact that they have not been used in a timely manner. It
seems that if the country is to be developed comprehensively, then the concept of project
management should be adopted and progressed.
➢ Even though projects have been started since the year 2013 from the five-year plan, due to lack of
investment, Nepal has not been able to carry out big projects. Currently, among the projects
implemented in Nepal, Melamchi Water Supply Project, Kaligandaki Hydroelectric Project,
Masyangdi Hydroelectric Project, Bagmati Irrigation Project, Pashupati Development Project etc.
are in the implementation phase. 21 projects of national pride including Madhyapahari Lokmarg,
Hulaki Highway, Rail and Metro Development Project, Upper Tamakoshi Hydroelectric Project,
Paschim Seti Hydroelectric Project, Budhigandaki Hydroelectric Project are currently running.
➢ In Nepal, there is a practice of selecting projects on the basis of personal interests rather than on
the basis of benefits and costs, the monitoring and evaluation of projects is not effective, there is a
high level of political influence in the activities from project survey to project operation, the
projects that are being run cannot be operated on the basis of participation, the market system for
selling the returns obtained in the project at a high profit rate, etc., are not able to be completed in
time.
➢ For an underdeveloped country like Nepal, the proper management of resources and tools
available here can be facilitated only through the concept of project management. Since the
project management principle has proved to be a milestone to create access to the lower class by
bringing development and economic prosperity to the areas that have not been developed, it is
necessary to make project management effective in order to realize our dream of reaching the
level of a middle-income country through a public welfare state with social justice.

Benefits of Project Management:

The concept of project management is a modern concept. Since the project is oriented towards
achieving the goal by making maximum use of the available resources and means by paying attention to
time, society and the country will get maximum benefit from this.Which is mentioned below:

1. Emphasizes the use of new technology which helps to achieve performance and goals.
2. Since certain objectives of project management are set in advance and it is determined to
achieve the same, certain returns can be obtained from this.
3. Change management is used as a weapon in project management by searching for, identifying,
analyzing, communicating, planning, implementing, supervising and evaluating changes in the
project.
4. Another benefit of project management is coordination. It facilitates the effective management
of conflicts by maintaining necessary coordination between various branches and agencies.
5. Project management develops collective spirit. As a result, the creative talent of the group
members will be revealed and the performance will be speeded up.
6. Project management detects and corrects errors and weaknesses in time and enhances
institutional capacity to prevent such problems from occurring in the future.
7. Tools and resources are fully utilized and mobilized.
8. The work is completed in a certain time and within a certain budget.
9. Consumers are satisfied because the goods and services produced by the project are of high
quality.

Reasons why project management is not effective in Nepal:

1. Instead of choosing based on economic benefits of the project, social analysis and availability of
resources, choosing based on personal interest,
2. Not assessing the truth of the information,
3. Ignoring project selection, construction, monitoring and evaluation;
4. High level of political interference from project design to implementation.
5. Being socially opposed to the project,
6. Lack of adequate market arrangement to sell the returns obtained from the project at a high
profit rate
7. Lack of full development of project management system based on public participation,
8. Due to political instability, not being a proper environment for investment,
9. Lack of skilled and professional manpower,
10. Laws and regulations are not clear and timely reforms are not possible.
11. Not giving high priority to research and development of the project,
12. Lack of coordination between various agencies in project management,
13. The practice of not giving the money when asked by the charity,
 14. The process of monitoring, inspection and evaluation is very weak,
15. Being dependent on foreigners and having to accept their terms,
16. Rampant corruption, lack of entrepreneurship, closures, strikes, local non-cooperation,
tendency to avoid responsibility and responsibility etc.

Project formulation technique :

Feasibility analysis

➢ Technical analysis
➢ Economic analysis
➢ Marketing analysis
➢ Management analysis
➢ Environment analysis
➢ Financial analysis

(२) Network analysis

(3) Input analysis

➢ Human resources
➢ selection of project site
➢ Materials
➢ Machinery
➢ Cost
➢ Information

(4) Financial analysis

➢ Capital requirements
➢ Sources of fund
➢ Measurement of payback periods
➢ Accounting and reporting system
➢ Project profit
➢ Net present value

(5) Cost Benefits Analysis

✔ Highlighting the need for monitoring in projects, mention the reasons for the weak monitoring
system in Nepal.

The project involves the mobilization of many resources. It involves a huge financial investment. Various
programs are conducted to achieve the objectives of the project. It is necessary to monitor and inspect
the projects to find out whether there is any problem in the implementation of such programs, whether
the goals are being achieved or not, whether the means have been used properly, other requirements
can be highlighted as follows:

➢ To measure the status of implementation of projects according to their goals,

➢ To efficiently deploy all the resources to be deployed in the project,
 ➢ To immediately identify and solve the problems encountered in the implementation phase of the
projects,
➢ To increase the active and meaningful participation of stakeholders in project implementation,
➢ To increase transparency and accountability in project implementation,
➢ Quality project construction to make executive bodies more responsible, etc.

Reasons for weak monitoring system in Nepal:

1. Absence of integrated laws related to monitoring,

2. Lack of operational coordination among the scattered monitoring agencies,
3. Not taking the project cycle seriously,
4. Lack of adequate resources and skilled manpower in monitoring work,
5. Not making monitoring a high priority,
6. Being limited to promoting rather than solving problems
7. Not making a clear standard to measure the physical and financial progress of the
implementation of the project, the tendency to rely on guesswork, not to associate the results
of monitoring with rewards and punishments;
8. Not being able to get the relevant agencies involved in the monitoring,
9. Not being able to continue and institutionalize the monitoring by monitoring the monitoring
work as well.

project cycle

➢ Identify the need

➢ evaluation
➢ project cycle
➢ Preparation/development phase
➢ Implementation and monitoring
➢ Analysis/Establishment of value recognition
➢ Talk discussion.

Project design

Needs or problems are identified to achieve the target objective. While designing the project, the
project is designed based on the National Development Plan. Where need is identified, social
appropriateness is looked at. When designing the project, the basis for the implementation of the
project is determined as a preparation. The justification of the project, cost plan, market and impact etc.
are analyzed. The project design can be shown as follows:

of the problem/need

identity

Review and revise

Project design

Preparation of Agenda/Method of Procedure

Monitoring evaluation
Project Analysis/Technology

Implementation and monitoring

Project implementation

Implementation is the stage of operating the project in a functional manner. For the effectiveness of the
project, the implementation aspect should be practical. The implementation side of the project must be
successful in order to make the national interest and national development plan successful.
Management of manpower and resources, coordination between involved agencies, information and
statistics of Time work-calendar , implementation schedule, monitoring and evaluation, management of
goods and services, strategy action plan, cooperation with beneficiaries and participation of sectors
other than the partnership state etc. are done in the project implementation phase.

Evaluation

Evaluation is done at the stage of project operation and after implementation or completion. Ongoing
evaluating prompts immediate improvement. Evaluation during project implementation gives an
opportunity for immediate improvement. Draws a roadmap for the future. Controls the basis and impact
that may occur during the operational phase. The evaluation after the completion of the operation
provides a successful foundation for the design and implementation of the next project, including
feedback.

✔ What are the problems of project management in Nepal? Mention and write measures to make
project implementation effective.

The project is a means and means of supporting the economic and social transformation of the country
by producing and distributing goods and services. There is a system of monitoring and evaluation from
the highest level to bring effectiveness in project implementation. Legal and institutional arrangements
have been made for project management, but the project has not been managed in Nepal. The start of
planned development in Nepal. It started from 2013/14. Most of the goals and objectives reflected in
the plan have not been achieved. The main reason for this is the lack of a successful, practical and
effective project. The sub-system project is what brings the national plan to life. Effective project
management is the means to fulfill the aspirations of the national plan. For which the project should be
conducted based on the demand and needs of the people. All phases of the project should be effective,
practical and objective. Following are the problems of project management in Nepal:

Various problems have been observed in it, which can be mentioned as follows:

➢ Not being able to formulate an implementable project based on real needs

➢ Lack of functional coordination between the agencies that formulate the project, arrange the
budget and implement the project,
➢ The foreign aided project should be in accordance with the conditions of the donor,
➢ Executing the project without adequate preparation;
➢ Failure to make the house and land evaluation process of project-affected citizens simple and
transparent, creating unnecessary obstacles,
➢ Frequent transfer of other employees from the project head involved in project implementation,
➢ Failure to fully comply with laws and regulations in project implementation,
 ➢ Contract lease and purchase not being done on time
➢ Not being able to get enough participation of the local stakeholders in the implementation of the
project,
➢ Inadequacy of required skills, capacity and resources,
➢ Participating Minister at local level; Lack of partnership working system,
➢ Lack of coordination between project and financial aspects,
➢ Lack of real information and data,
➢ Lack of effective coordination between the agencies involved,
➢ Approval approval, disbursement of funds, delays in donor procedures,
➢ procedural complexity,
➢ Lack of specialization, competence and competence,
➢ Various problems in implementation, supervision and operation,
➢ Inconsistency in sectoral, institutional functioning and performance,
➢ Failure to effectively monitor project implementation, etc.

Measures to make project implementation effective:

➢ To establish a system that will lead to the implementation of the project only after preliminary
preparation
➢ Formulate and implement the project implementation action plan,
➢ Demanding completion of accounting, reporting and auditing of projects run by foreign aid in time.
➢ To implement the project only after ensuring the amount of support received from the
development partner,
➢ Establishing a procedure for continuous monitoring and evaluation of the project from the highest
level,
➢ Do not transfer employees who have a major role in the project throughout the project period.
➢ To maintain discipline by fully complying with laws and regulations,
➢ Proper management of resources,
➢ Active participation of concerned people from project formulation and implementation to
maintenance level,
➢ To increase operational coordination between project design, implementation and monitoring
agencies,
➢ Breaking the contract of the contractor holding the project and taking action according to the law,
➢ Selection of projects based on local needs and national priorities,
➢ Enhancement of specialty knowledge and adequacy of resources,
➢ Coordination between local systems and project management;
➢ Use of objective factual information,
➢ Effective coordination and decision-making at the level,
➢ Resolving operational complexity,
➢ clear standards and guidelines,
➢ independent monitoring and evaluation system,
➢ Maintaining ecological balance, etc.

A large investment is required in the project. It is connected with the prosperity of the organization. If
the project does not give the right return, the investment will be wasted and the organization will have
to bear a huge loss. For this, special emphasis should be placed on the participation of all stakeholders in
the effective implementation, monitoring, maintenance and supervision of the project. Project
management draws the road map for the success of the national planning system. When choosing a
project, it should be done on the basis of clear criteria, priorities and needs. There should be a plan to
utilize local possibilities and opportunities. The identification and access of the target group should be
ensured. Inclusion, participation, ownership and support of stakeholders should be ensured for project
success. The project should be adapted to the changing environment, changing environment and
changing environment. Local acceptability, technically feasible, financially viable, implementable
projects are the cornerstones of a successful planning system.

Appraisal of investment proposal through distributional evaluation of investment proposal or

(Evaluation of Technique of capital investment proposal):

An entrepreneur makes an investment decision by analyzing which project is profitable from various
investment suitable projects. Since tomorrow's possible situation should be known now, it is necessary
to be cautious. The investment plan should be evaluated only after the cash flow estimation. It is
considered appropriate to choose the project from which the most profit can be created.

Various methods can be used to select the suitability of the project as follows:

(a) Traditional method:

When evaluating based on this method of evaluating the capital budget, the relative value of money is
not given importance. This method was used in the initial stage for project selection. It is called the
traditional method because it does not give importance to the relative value of money over time.

1. Pay back period: One of the comprehensive and widely used simplest measures to evaluate the
investment of the project is the investment payback period. The period during which the money
invested in any business is returned is called the payback period. This method gives more importance to
projects with short payback periods.

In order to determine the payback period, the following conditions must be present:

a. Net Investment Amount (NCO)

b. Life of the project
c. Net cash flow after tax or inflows (CFAT)

Two types of cash flows are important in determining the period:

(a) Even cash flow: Even cash flow is the cash flow that is being earned evenly during the project period.
Its Pay Back Period is calculated from the following formula:

PBP = Net Cash Out lay (NCO) /Annual Cash Flow after tax (CFAT)

(b) Earning cash income differently every year during the life of the project is called uneven cash income
flow. Its Pay Back Period is calculated from the following formula:

PBP = (Minimum year + Amount to be recovered )/Next year CFA

Advantages:

1. Easy to decide and understand.

2. Liquidity is emphasized more when making investment decisions.
3. This method helps to reduce the risk.
4. It is relatively less expensive.

Disadvantages:

1. This method ignores the time value of money.

2. This method emphasizes only liquidity, does not give importance to profitability.
3. It also ignores income and cash flow after the investment payback period.
4. This method also ignores the rate of return on investment and the cost of capital.
5. This method is considered suitable only for small projects where little investment and time is
required.
2. Average Accounting Rate: This method is used to calculate the average rate of return on investment
in the project. Accounting rate of return means an accounting method that evaluates on the basis of
profit after paying tax instead of cash flow. Therefore, it is called the accounting rate of return as it
is a method of evaluating the project based on the net profit determined from financial accounting.
This method selects projects with higher returns. This method gives more importance to profitability
than liquidity.

It can be deduced from the following formula:

ARR = Average Net Income Average Investment

Where,

Average Net Income = Total Net Income or Profit after tax Number of years

Average Investment= (Invetment + Salvage value)/ 2

Therefore, when choosing a project on the basis of ARR, it is selected only if the ARR is more than the
minimum rate of the project.

Advantages:

1. It is easy to calculate and understand.

2. In this method, the total income throughout the entire duration of the project is taken into
consideration.
3. This method gives more importance to the profitability of the project
4. This is based on available accounting information.

Disadvantages:

1. Does not give importance to the time relative value of currency.

2. It does not consider net cash flow (CFAT).
3. It does not give importance to the life of the project.
4. This method does not take into account the amount of project risk.
 5. This method calculates only the average return without calculating the actual return of the
project.

b) Discounted cash flow technique:

Denying the traditional notion that both the current value and the future value of currency are equal,
this method adopts the idea that the value of currency changes over time. While evaluating a project,
first all future cash flows from it are converted to present value according to the cost of capital rate.
Under this method the following method is followed:

1. Net Present Value: Finding the benefit from an investment project by adjusting the estimated future
cash flow to the present value is called Net Present Value. The net present value is the difference
between the net present value and the net investment.

NPV = TPV-NCO

In determining the net present value, the estimated future cash income flows must be converted into
present value. Battadar's help is taken to convert to the current price.

NPV can be determined from the following formula:

(a) If even cash flow

NPV = CF(PVIFAk%,n) – NCO

(b) If Uneven Cash flow

Any project or investment that has a positive net present value is chosen, but a project or investment
with a negative net present value is rejected.

Properties of net present value

➢ This method gives importance to the relative value of currency over time.
➢ account all types of income and cash flow throughout the life of the project.
➢ In this method, both the profitability and risk of the project are prioritized.
➢ It represents accounting for maximum profit.

Limits:

1. Compared to the traditional method, this method is a bit difficult and complicated.
2. A wrong decision can be made when the project funds are separate.
3. It discriminates against short-term projects.
4. Its accuracy depends on the estimated future cash flows and interest rates.
5. This method ignores non-financial data such as marketing.
2. Profitability index: The net present return from net investment throughout the life of the project

The profitability index tells about the ratio of revenue to total price. It is also called cost benefit ratio.
Under this method, projects are selected on the basis of cost-benefit ratio. Profitable inventory can be
considered as a better method than net present value. Even when the investment amount of different
projects is different, the right decision comes out from the profitable list.

It can be deduced from the following formula:

Advantages of Profitable List:

1. It focuses on the cash flow of the whole year of the project.

2. This method is based on the time relative value of currency.
3. Projects with different discount rates can also be evaluated by this method.
4. This method helps to achieve the financial objective of increasing wealth by earning maximum profit.

Disadvantages:

1. This method is considered difficult to analyze.

2. It is very difficult to determine the discount rate or interest rate according to this method.
3. It is difficult to get information about the actual status of any plan through this method.

3. Internal rate of return: The percentage that equals the present value of a project's net investment
and future cash flows is called the internal rate of return. For the internal rate of return, both the total
present value and the net investment must be equal. The net present value at the internal rate of return
is zero.

It is accepted only if the internal rate of return is greater than the cost of capital. It can be found from
the following formula:

Where,

LR = Lower Rate

HR = Higher Rate

TPV = Total Present Value

Decision: If IRR > Cost of capital = Accepted the project.

Advantages:

1. This method takes into account the relative value of currency over time.
2. This makes it easy to identify projects with high internal rate of return.
3. No need to imagine an imaginary rate.
4. This makes it possible to conduct a comparative study even when the duration of the project
and the amount of cash flow are different.
5. Focuses on maximizing investors' capital.

Disadvantages

➢ Generally, this method is difficult to understand and calculate.

➢ In this method, it is assumed that the cash received is reinvested at the rate of internal rate of
return (IRR), which is not practical.
➢ Annual cash flow is based on estimates, which may not be accurate.

Therefore, it is better to use NPV as the basis when choosing a project between NPV and IRR. Net
present value and internal rate of return may differ as the project life span and investment amount are
not equal. Self-present value takes into account all types of cash income streams. Similarly, IRR assumes
that the amount earned by the project is reinvested at the internal rate of return, which may not be
applicable in practice.

✓ Define a project? Explain the characteristics of Project and Project Life cycle?
➢ A project is a temporary and unique endeavor with a specific goal or objective that is undertaken to
create a product, service, or result.
➢ A Project is defined as planned set of interrelated tasks to be executed over a fixed period and
within certain cost, resource and other limitation:
➢ A project is temporary in that it has a defined beginning and end in time, and therefore defined
scope and resources.
➢ So, the project is specific, finite activity that produces an observable and measurable result under
certain preset requirement.

characteristics of Project

a.) Temporary Nature:

➢ Projects have a specific start and end date.

➢ Once the project's objectives are achieved, it is considered complete.

b.) Unique Deliverables:

➢ Projects are undertaken to create a unique product, service, or result. Even if similar projects
have been done before, each project is distinct in its details.

c.) Defined Objectives and Scope.

➢ Projects have clear and well-defined goals.

➢ The scope outlines what is included and excluded from the project, providing a boundary for the
work to be done.
d.) Resource Utilization.

➢ Projects require the allocation and utilization of resources such as people, time, money, and
materials.
➢ Effective resource management is crucial for project success.

e.) Cross-Functional Teams :

➢ Projects typically involve individuals from different departments or disciplines who collaborate
to achieve the project goals.

f.) Risk:

➢ These cross-functional teams bring diverse skills and expertise to the project.
➢ Projects are associated with uncertainty and risk. Identifying, assessing, and managing risks is an
integral part of project management to minimize potential negative impacts.

g.) Change:

➢ Projects may undergo changes in scope, requirements, or other aspects during their lifecycle.
Effective change management is necessary to address these modifications and their impact on
the project.

h.) Customer Satisfaction.

➢ Projects are ultimately undertaken to satisfy the needs or expectations of the customer or
stakeholders.
➢ Regular communication with stakeholders is essential to ensure their satisfaction throughout
the project.

i.) Constraints.

➢ Projects are often subject to constraints such as time, budget, and resource limitations. Project
managers must work within these constraints to deliver the project successfully.

j.) Progressive Elaboration.:

➢ Project details are progressively elaborated as the project progresses. Initially, the project may
be defined at a high level, and details are added and refined as more information becomes
available.

k.) Customer or Stakeholder Involvement :

➢ Projects have stakeholders, including customers or clients, whose needs and expectations must
be understood and addressed.
➢ Regular communication and feedback from stakeholders are crucial for project success.

l.) Project Life Cycle.

➢ Projects typically go through a series of phases or stages, from initiation to planning, execution,
monitoring and controlling, and finally, closure. Each phase has its own set of activities and
deliverables.
m.) Contracting and Sub contracting

➢ To bring the legality in agreement contracting is required and most of the project s are contract
based. For a complex project sub contracting is also required.

Project Life cycle.

➢ The Project life cycle refers to a series of activities which are necessary to fulfill project goals or
objectives.
➢ The project life cycle includes the steps required for project managers to successfully manage a
project from start to finish.
➢ There are five phases to the project life cycle.
➢ There are five phases to the project life cycle. Each of these project phases represents a group of
interrelated processes that must take place for a successful project.
1. Project Life Cycle
2. Closure closing the project
3. Initiation - starting the project
4. Execution carrying out the work
5. Planning organizing & preparing

Fig. Project life cycle