PRINCIPLES OF
MANAGEMENT
UNIT II – PLANNING AND DECISION MAKING
PLANNING
• Planning provides a sense of direction to business activities
• Planning bridges the gap from where we are and where we want to
go.
• Planning is deciding in advance what to do, how to do it, when to do
it, and who is to do it.
• Planning is the process of establishing goals and a suitable course of
action for achieving those goals.
NATURE / CHARACTERTISTICS OF
PLANNING
• Goal oriented
• Future oriented
• Continous activity
• Link between thr past, present and future
• Primary function
• Pervasiness
• Intellectual process
• Integrated process
IMPORTANCE / ADVANTAGES OF
PLANNING
• Minimize risk
• Facilitate co-ordination
• Generates efficiency
• Encourages innovation
• Focus on goals
• Motivates personnel
• Provides proper direction
• Better Decision making
• Facilitates control
LIMITATIONS OF PLANNING
• Time consuming
• Paper work
• Expensive
• Danger of over targeting or under targeting
• Human error
• Problem of technical staff
• Changing situations
• Resistance to change
• Problems of internal conflicts
PROCESS OF PLANNING
1. Analysis of internal environment
2. Analysis of external environment
3. Setting of objectives
4. Framing alternative plans
5. Studying alternatives
6. Selecting of the best plan
7. Formulation of derivative plans/ Operational plans or day to day activities
8. Establishing the sequence of activities
9. Implementation
10. Review
DECISION MAKING
• Decision making is the process of identifying and selecting a course of
action to solve a specific problem.
• When managers make decisions they are choosing, they are deciding
what to do on the basis of some conscious or deliberate logic or
judgement.
• Managers have alternatives available when they are making decisions,
it depends on the skill set and ability of the manager to select the
right type of alternative in order to achieve organisational goals.
IMPORTANCE OF DECISION MAKING
• Basis of managerial function
• Provides direction
• Helps in effective control
• Means to problem solving
• Motivates personnel
• Builds better corporate image
• Develops competitive advantage
• Brings customer satisfaction
• Helps in facing challenges
DECISION MAKING TECHNIQUES
• A) Programmed Decision Making Techniques:
1. Game Theory
2. Simulation
3. Queuing Theory
4. Pay Off Matrix
5. Network techniques
B) Non Programmed Decision Making
Techniques
1) Brainstorming
2) Nominal Group technique
3) Delphi technique
4) Quality circles
ADVANTAGES OF MBO
1. Better utilisation of resources
2. Aids in planning
3. Development of personnel
4. Better team work
5. Concentration on KRA
6. Objective evaluation
7. Result oriented
8. Sound organisational structure
ORGANISING
• Organising is the process through which managers identify what work
needs to be done to accomplish the goals laid out in the planning
process, divide work amongst units and individuals, then coordinate
the divided efforts so that the goals can be accomplished.
NATURE AND CHARCTRSITICS OF
ORGANISING / ORGANISATION
• A group of persons
• Common goal
• Division of labour
• Resources
• Hierarchy of authority
• Network of relationships
• Coordination of efforts
• Dependence on environment
• Continous function
PROCESS OF ORGANISING
1. Defining organisational goals
2. Identifying activities to achieve goals
3. Grouping of activities
4. Making arrangement of resources
5. Defining authority
6. Delegating authority
7. Establishing superior-subordinate relationships
8. Provision of coordination
TYPES OF ORGANISATION STRUCTURE
1. Formal Organisation
2. Informal organisation
FACTORS AFFECTING ORGANISATION
STRUCTURE
• Objectives
• Size of organisation
• People
• Technology
• Environment
• Management Philosophy
TYPES / FORMS
1) Line Organisation
2) Line and Staff O.S.
CONFLICT BETWEEN LINE AND STAFF
O.S.
• Complaints if Line Managers against Staff Officers
1. Unfamiliar with actual work
2. Less Degree of freedom
3. Superiority complex
4. Excessive paper work
5. Enjoys easy access to top management
6. Lacks human skills
Complaints of the Staff against Line
1. Last minute advice
2. Line managers are irresponsible
3. No clarity of problems
4. Shifting of responsibility
5. Reluctant to access new ideas
6. Line Managers Enjoys all authority
7. Lack of mutual respect
Resolving Line and Staff Conflicts
1. Formal Meetings
2. Training
3. Mutual Respect
4. Team Work
5. No shifting of Responsibility
6. Clarity of problems
7. Rotation of jobs
8. Matters of dispute to higher authorities
9. Mutual dependency
