FUNCTIONS OF

MANAGEMENT
UNIT III
PLANNING
• Planning is deciding in
advance
• What to do,
• How to do it,
• When to do it and
• Who is to do it.
• It involves anticipating the
future and consciously
• Choosing the future course
of action.
 PROCESS OF PLANNING

The main step in planning process are as follow:-

Step 1- Establish objectives
Step 2- Developing Premises
Step 3-Evaluating Alternatives and Selection
step 4- Formulating Derivative Plans
Step 5- Securing Cooperation and Participation
Step 6- Providing Follow up
 Forms of Planning

Dimensions Types of planning

Coverage of activities Corporate planning and functional planning
Importance of content Strategic planning and tactical/operational
planning
Time period involved Long-term planning and short-term planning
Approach adopted Proactive planning and reactive planning
Degree of formalization Formal planning and informal planning
 Corporate Planning and Functional Planning
Based on coverage of activities

Corporate planning Functional planning

• Planning activities (covers the • It is segmental and undertaken for
entire organizational activities) at each major function of the
the top level. organization like
production/operation, marketing,
• Focus is to determine the long- finance, human
term objectives of the resource/personnel etc.
organization as a whole and then, • It also undertakes sub-functions
to generate plans to achieve with the major functions.
objectives. • Example: Marketing – sales. Sales
• It is a total planning activities and promotion, marketing research.
not the total management
Strategic Planning and Operational Planning
Based on direction of actions set in
the organization

Strategic planning Operational planning

• “The process of deciding on objectives of • “The process of deciding the most
the organization, on changes on these effective use of the resources already
objectives, on the resources used to attain allocated and to develop a control
these objectives, and on the policies that mechanism to assure effective
are to govern the acquisition, use and implementation of that organizational
disposition of these resources”. objectives are achieved”.
• Sets the long-term direction of the • Also known as tactical or short-term
organization in which it wants to proceed planning.
in future. • Aim to sustain the organization in its
• Encompasses all the functional areas of production and distribution of current
business and is affected within the products or services to the existing
existing and long-term framework of markets.
economic, political, technological,
environmental and social factors.
Long-term Planning and Short-term Planning

Based on degree of futurity

Long-term planning Short-term planning

• One year period extending to 20 • Known as operational or tactical
years. Common long-term period planning.
is 3 to 5 years. • Aim to sustain the organization in
• Encompasses all the functional its production and distribution of
areas of the business and are current products or services to
affected within the existing and the existing markets.
long-term framework of • Why is the action required?, What
economic, social, environmental, action is to be taken?, What will
and technological factors. the action accomplish?, What are
• New product, product the results of the action
diversification, individuals in the required?, What objectives and
organization, development of new
 Proactive Planning and Reactive Planning
Based on response to environmental
dynamics.

Proactive planning Reactive planning

• Involves designing suitable courses of
action in anticipation of likely changes • Organizations’ responses come after
in the relevant environment. the environmental changes have
• Use broad planning approaches, broad taken place.
environmental scanning, decentralized • Organizations lose opportunities to
control, and reserve some resources to those organizations which adopt
be utilized for their future use. proactive approach because, by the
• These organizations do not wait for time, reactors are ready with their
environment to change but take plans.
actions in advance of environmental
change.
 Formal Planning and Informal Planning
Based on degree on the formalization which is used in
undertaking planning activities.

Formal planning Informal planning

• Well-structured process. • Generally smaller organizations.
• Formal way in which organizations • Process is based on manager’s
create separate corporate memory of events, intuitions and
planning cell placed at sufficiently gut-feelings rather than based on
high level in the organization. systematic evaluation of
• Generally, such cells are staffed by environmental happenings.
people with different backgrounds.
• Process that is adopted is rational,
systematic, well-structured, and
 ORGANIZING

• It is the process of prescribing

• Formal relationship among people and resources
• To achieve goals
• Defining and delegating authorities and responsibilities
 DEPARTMENTATION

• Process of grouping related work

activities into manageable units
Functional departmentalization
• Departments are segregated based on
functions or tasks they perform.
• Examples of functional departmentalization
include; production department, finance
department, marketing department, human
resource (HR) department, etc.
• Here, all activities, which are directly or
indirectly connected with production
are grouped together to make a
production department.
 Process
departmentalization
• Departments are separated based on their
role in a production process.
• Best example can be seen in a textile mill
where we may have a spinning
department, weaving department, dyeing
department, printing department, etc.
• Here, inside a textile mill, all activities,
which are directly or indirectly related with
spinning are grouped together to make a
spinning department.
• Bombardier
 Product
departmentalization
• Departments are separated based on a type
of product produced by the company.
• Here, every individual department is
responsible for producing and selling the
type of product assigned to them.
• A good example of product
departmentalization is witnessed in an
automobile manufacturing company.
(Hero, Honda, TATA, Reliance)
• In such a company, we generally see
departments like a two-wheeler
department, three-wheeler department,
four-wheeler department, heavy motors
department, etc., which manufacture
vehicles such as motorcycles (bikes), auto-
rickshaws, cars, buses and trucks,
respectively.
• Inside an automobile company, all activities,
which are directly or indirectly related to car
manufacturing are grouped together and
assigned to four-wheeler or car department.
 Geographic
departmentalization
• Separate departments are made based on
the company's operations to be carried out
either over a vast area or within some
restricted area through branches or
offices established at different zones
or places in that area.
• First, an entire area of operation (e.g.
world, country, state, city, etc.) is decided
followed by division of that area into
different zones.
• Secondly, a branch or an office is
established in each geographical zone to
manage local affairs of the company in that
zone.
• For example, a large company may operate
globally through its different zonal
departments established on a country
basis.
• In a similar context, a small business or
firm may operate only within city
boundaries through its offices established
in east zone, west zone, north zone and
south zone of the city.
 Customer
departmentalization
• Departments are separated from
each other based on the types
or groups of customers to be
handled or dealt with.
• For example, customers can be
classified under types such as,
international or foreign
customers, inland or domestic
customers, bulk purchasing or
wholesale customers, retail
• Each group of customers needs
different tactics and strategies to
handle them better. Hence, an
appropriate customer
departmentalization serves this
purpose.
• Departmentalization based on the
types or groups of customers to be
handled in shown in the following
image. (Service providing
institutions)
 Combined
departmentalization
• In combined departmentalization, a company or an
organization uses a mixture or combination or union of
two or more different bases of departmentalization.

• For example, in practice, owing to rising market

competition and emerging complexity of tasks most
organizations often uses a combination of above-
discussed types (i.e. methods or bases) of
departmentalization.
 Time departmentalization
• Departments are separated based on the
division of their working time or job shifts.
• For an example, departments can be made
based on night shift, morning or regular
shift, evening shift, etc.
• This method of departmentalization is
generally seen among those organizations
who render 24-hours emergency and/or
essential public services for 365 days a
year. Examples of such organizations
include; hospitals, hotels, airports,
police, security, and so on.
 Types of Organization Structure

• Line
• Line and Staff
• Functional (Same as functional departmentation)
• Matrix/ Project Based
• Organizational structure involves, in addition to task organizational
boundary considerations, the designation of jobs within an
organization and the relationships among those jobs. There are
numerous ways to structure jobs within an organization, but two of
the most basic forms include simple line structures and line-and-
staff structures.
 LINE ORGANIZATION
STRUCTURE
• In a line organization, top management has
complete control, and the chain of
command is clear and simple.
• Examples of line organizations are small
businesses in which the top manager, often
the owner, is positioned at the top of the
organizational structure and has clear
"lines" of distinction between him and his
subordinates.
• A line position is directly involved in the
day-to-day operations of the organization,
such as producing or selling a product or
service. Line positions are occupied by line
personnel and line managers. Line
personnel carry out the primary activities
of a business and are considered essential
to the basic functioning of the organization.
• Line managers make the majority of the
decisions and direct line personnel to
achieve company goals. An example of a
line manager is a marketing executive.
 LINE & STAFF ORGANIZATION
• A wide variety of positions exist within a line-and-staff
organization. Some positions are primary to the
company's mission, whereas others are secondary—in
the form of support and indirect contribution.
• Although positions within a line-and-staff organization
can be differentiated in several ways, the simplest
approach classifies them as being either line or staff.
• The line-and-staff organization combines
the line organization with staff
departments that support and advise line
departments. Most medium and large-sized
firms exhibit line-and-staff organizational
structures.
• An advantage of a line-and-staff
organization is the availability of technical
specialists. Staff experts in specific areas
are incorporated into the formal chain of
command. A disadvantage of a line-and-
staff organization is conflict between line
and staff personnel.
 MATRIX ORGANIZATION
STRUCTURE
• The authority of a functional manager flows vertically
downwards, and the authority of the project manager
flows sideways. Since these authorities flow downward
and sideways, this structure is called the matrix
organization structure.
• In a matrix organization structure, employees may
report to many managers, and some from one section
may report to one boss while the rest report to a
different boss.
• For example; let us say that you are a
mechanical engineer working in a
functional department. Your organization
gets a project and they need a mechanical
engineer to assist the project manager on
certain tasks. In this case, you may be
assigned to the project for a short time, or
they may transfer you there while your
services are required. If you’re assigned
there for a short time, you may have to
report to two bosses.
• The matrix organization structure takes the
characteristics of both types of organization
structures. The matrix structure is a composite
of the projectized organization structure and
the functional organization structure. Here the
knowledge, skill, or talent of an employee is
shared between the functional department and
project management team.

• In a matrix structure, some employees usually

work under more than one boss (usually two).
The first boss will be their functional manager
and the other often is a project manager.
• The functional manager may look after the
functional part of the project; he may decide
how to do the work, and may distribute the
project work among his subordinates. The
project manager will have authority over the
administrative part of the project, such as what
to do, follow-up on the schedule, evaluate the
performance, etc.
• Working in a matrix organization can be
challenging because you have a confusing role
while reporting to two bosses. To avoid
confusion and work efficiently in a matrix
organization, you must be clear on your role
and responsibilities and the work priorities.
• The matrix organization structure usually exists in large
and multi-project organizations, where they can relocate
employees whenever and wherever their services are
needed. The matrix structure has the flexibility of
relocating the organization’s talent. The employees are
considered to be shared resources among the projects
and functional units.
STAFFING
 Meaning

• Process of attracting, developing and

evaluating individuals at work.
• Features:
 Involves people
 Development-oriented
 Continuous
 Tree-step process
o Hiring the right kind of people to fill vacancies
o Developing their skills through training, and
o Maintaining them by creating favorable
conditions at work
 Functions of Staffing

• Human resource planning: Human resource planning is a process

by which the management of an organization determines its
future human resource requirements and how the existing human
resources can be effectively utilized to fulfill these requirements.
• Job Analysis: Job analysis is the procedure through which you
determine the duties of the company’s positions and the
characteristics of the people to hire for them.
• Recruitment: Recruitment is a search for promising job applicants
to fill the vacancies that may arise in the organization.
Elements of the staffing process
• Selection: Selection is a systematic process of
identifying suitable candidates for the available jobs
from the available applicant pool.
• Training and Development:
• Performance Appraisal:
DIRECTING
 Meaning

Direction is telling
people what to do and
seeing that they do it to
the best of their ability.
It is through directing
that managers get work
done through people.
- Dale
 Principles Of
Direction

• Principle of harmony of objectives

• Principle of unity of command
• Principle of direct supervision
• Appropriate techniques
• Managerial communication
• Informal organization
• Principle of maximum individual
contribution
• Use of motivation techniques
• Principle of follow up
Elements of Directing

Supervision

Leadership

Motivation
Communicatio
n
Leadershi
p
MOTIVATI
ON
CONTROL
Concept

Controlling: It is
Control: It is the process of
making comparing actual
something performance with
happen the way standard and
it was planned taking any
to happen necessary
corrective actions.
The Control Process
 Types of Control

Feedback It is a post-mortem examination of events, the purpose of

Control which is to improve performance in the future.

Concurren Control that consists of monitoring ongoing activities to

t Control ensure they are consistent with standards.

Feedforwa It is the intelligent anticipation of problems and their

rd Control timely prevention, rather than after-the-fact reaction.