Module-1

Management and
Planning
 Content
• Management
• Nature
• Function
• Importance
• Definition
• Management Functions

• Management: Nature and Functions of Management –

Importance, Definition, Management Functions, Levels of
Management, Roles of Manager, Managerial Skills,
Management & Administration, Management as a Science, Art
&Profession (Selected topics of Chapter 1, Text 1). Planning:
Planning-Nature, Importance, Types, Steps and Limitations of
Planning; Decision Making – Meaning, Types and Steps in
Decision Making(Selected topics from Chapters 4 & 5, Text 1).
 Introduction

What is Management ?
• Management means effective usage of all the available
limited resources to meet the targeted goal.
• Management brings together 4Ms (Men, Material, Machine,
Money) of Production or project.
• Mary Parker Follett defines management as “art of getting
things done through people”
 Definition
• A better definition is given by George R Terry
who defines management as “a process
consisting of planning, organizing, actuating
and controlling performed to determine and
accomplish the objectives by the use of
people and resources”.
• ‘Planning’ means thinking of the manager’s
action in advance. It is a process of deciding
the business objectives and charting out the
method of attaining those objectives.
• ‘Organizing’ means coordinating machines,
materials and human resources of the
organization.
• ‘Actuating’ means motivating, directing the
subordinates.
• ‘Controlling’ means that manager must
ensure that there is no deviations from plans.
 Management functions or
process of management
1. Planning – determination of what is to be done,
how and where it is to be done, who is to do it and
how results are to be evaluated
•This is done for every division of the organization
•Thus performed by managers of all levels - top,
middle and supervisory
Management functions or
process of management cont.
2.Organizing – may be divided into two main sections:
the human organization(ex: personnel) and the
material organization (ex: materials, tools, capital)
•Identifying and grouping work
•Defining and assigning responsibilities and authorities
and establishing relationships
•Staffing - manager has to recruit and make certain
that there is enough manpower available to fill the
various positions needed in the organization
 Management functions or
process of management cont.
3.Directing – involves three sub functions
1.Communication – passing on information
2.Leadership – includes guiding and influencing his
subordinates
3.Motivation – helping the workers to do the best of
their ability
4. Controlling – involves three elements
1.Establishing standards of performance
2.Measuring current performance and comparing it
against the established standards
3.Taking action to correct any performance that does
not meet those standards
 Management functions or
process of management cont.

5.Innovating – creating new ideas to improve a

product, process or practice. Ex: innovations in
packaging(HUL’s inexpensive single use shampoo
sachet’s), distributions(Eureka Forbes direct to house
sales force) and business models(ITC’s e-Choupals
which now benefit hundreds of Indian farmers across
the country)
6. Representing - manager represents his
organization before various outside stake holders to
win their support
Levels of Management
Top level manager
• Responsible for controlling and overseeing
the entire organization. They develop goals,
strategic plans, company policies, and
make decisions on the direction of the
business.
• Top-level managers play a significant role
in the mobilization of outside resources.
• Top-level managers are accountable to the
shareholders and general public.
Middle-level managers
• Ex: General managers, branch managers,
and department managers. They are
accountable to the top management for
their department’s function.
• Executing organizational plans in
accordance with the company’s policies
• Defining and discussing information and
policies from top management to lower
management
• Inspiring and providing guidance to low-
level managers towards better
performance.
Low-level managers

• Ex: Supervisors, section leads and

foremen
• Assign tasks to the employees
• Guide and supervise employees on day-
to-day activities
• Ensure the quality and quantity of
production
• Make recommendations and suggestions
• Up channeling employee problems
 Roles of Management
Mintzberg has identified ten roles of manager which are
classified into three broad categories as shown.
Roles of Manager
1.Interpersonal roles
•Figurehead role – Manager performs duties that are
causal and informal like receiving and greeting visiting
dignitaries, attending social functions of employees,
taking an important customer to lunch and so on
•Leader – managers motivate, direct and encourage his
subroutines
•Liaison – manager acts as liaison officier between top
level management and subordinate staff. He also
develops contacts with outside people and collects
useful information for the well being of the
organization
Roles of Manager cont.
2. Decision roles
•Resource allocator
• manager divides the work, provides required resources and
facilities to carry out the allocated work.
• Assigns required authority among his subordinates
•Arbitrator
• Finds solution for various un-anticipated problems both
within and outside the organization
•Entrepreneur
• Improves the organization by going along with changing
environment (during corona pandemic some of the garment
factories into factories preparing ppe)
•Negotiator
• Tries to resolve any internal problems like strikes
Roles of Manager cont.
3. Information roles
•Monitor - monitors and collects information through
his personal contacts with colleagues and subordinates
•Spokesperson
• Communicates the information of organization
to his staff
• Communicates the progress of work to his
superiors
• Communicates the performance of the company
to shareholders
•Disseminator – manager communicates useful
information to the colleagues
 Management Skills
• Skill is an individual’s ability to convert / translate
knowledge into action. Skill is not Inborn. It can be
developed through practice.
• As per Mr. Katz, a manager should have 3 types of
Managerial Skills viz.,

1) Conceptual Skills  Deals with ability to think,

conceive ideas.
(to cause a beginning)

2) Human Skills  Ability to work with people.

3) Technical Skills  Job Specific Knowledge and
techniques to perform tasks.
 Managerial Skills cont..
1. Conceptual Skills
• Ability to conceptualize the environment, the organization and the job
to set appropriate goals for the organization
• vital for top level managers, less critical for mid-level managers, and not
required for first-level managers

2. Human Relation Skills

• Ability to interact effectively with people of at all levels
• Consistently important for managers of all levels

3. Technical Skills
• It is the Manager’s understanding about the nature of the job that the
people under him have to perform
• Knowledge and proficiency in any type of process or technique. Ex: In a
production department, this would mean an understanding of the
technicalities of the process of production.
• Ability to judge the skills required for different works and assign of jobs
correctly to work force.
• More important for lower levels of management, its relative importance
diminishes as the manager moves to higher positions
Skill Mix at Managerial Levels
Managerial Effectiveness
• Manager’s performance can be measured in terms of two concepts:
• Efficiency:ability to do something correctly at the lowest
possible cost
• Effectiveness: ability to do correct things

Maximizing efficiency and effectiveness at the same

time often creates conflict between the two goals. Ex:
At the customer service counter being efficient means
using fewest people possible and being effective
means minimizing the amount of time that customer
need to wait in line
Management and Administration
• According to Spreigal, “Administration is that phase of
business enterprise that concerns itself with the overall
determination of institutional objectives and the policies
necessary to be followed in achieving those objectives”.
• Management on the other hand is “an executive function
which is primarily concerned with carrying of broad
policies laid down by the administration”.
• This implies that administration deals with establishing
objectives and policies and is done by the top level
whereas management is the execution of these policies
by the middle and lower organizational level.
 Differences between Administration and Management
Characteristics Administration Management

Main Function Planning, Organizing and Leading, motivating and

staffing controlling

Status Acts as owner Acts as an agency

Skills Requires good admirative Requires more technical

skills skills

Level in the organization Top level Low level

Position Managing Director, CEO Managers, Supervisors

Objectives Makes the policies, Implements the plans and

objectives and goals to be policies
achieved

Involvement No direct involvement in Directly involves in the

production or services executive of the plans and
achieving goals
 Management as a Science or
Art

• There is great controversy whether management is

science or art.
• It is an art in the sense of possessing of managing skill
by a person.
• It is a science also because of developing principles or
laws which are applicable in a place where a group of
activities are coordinated.
Management as science
•Science is a systematized body of knowledge which is universally
accepted.
•We call a discipline scientific if its
1)Methods of inquiry are systematic and empirical(factual).
2)Information can be ordered and analyzed
3)Results are cumulative and communicable.
From the above definition management also can be presumed as
science
•Management have to deal with the study of man and multiplicity of
factors affecting him
•Findings are not as accurate and dependable as those of the
physical science(possible to study the effect of anyone of the many
factors affecting the phenomenon individually by making others
inoperative for time being)
•Tells only about tendencies and probabilities
•Therefore management is categorized as behavioral science(deals
with human behavior in society)
 Management as an ART
• Art is concerned about how a phenomenon can be accomplished.
In this sense, Management is an ART since it is MAINLY about
getting things done from others.
• Thus, coordinating various resources for effective utilization
(process of management) can be referred as an ART .
• The manager based on objectives, analyses situations, seeks
alternatives, decides the best and implement tasks efficiently – all
tells about HOW to do things – which is an ART.
• It’s a personalized approach

Thus, to be a successful manager, a person requires

the knowledge of management principles and also
the skills of how the knowledge can be utilized.
Absence of either will result in inefficiency.
•
Management as a Profession
• According to McFarland, “Profession” possesses the following
characteristics:
1)Existence of an organized knowledge.
2)Formalized method of acquiring training and experience.
3)Existence of professional association.
4)Existence of an ethical code to regulate the behavior.
5)Charging of nominal fees.

• Management does not possess all the above characteristics of

profession.
• Management has no fixed norms for managerial behaviors
• No uniform code of conduct or licensing of managers
• No restrictions to individuals to possess an academic degree

In the light of absence of these characteristics, management cannot

be called as profession.
Management as a Profession cont.
• But managing a business is no longer just a matter of
intuition or a family ability
• It is now been studied and taught as subject by itself
• Professionalization of management has begun
through institutes of management
• This enables young graduates to take up the
profession of management
• According to Peter Druckcr academic degree should
not be a condition to get entry into the management
profession because this overemphasizes knowledge
and completely overlooks skill

Essence of management is achievement not

knowledge; results not logic
 Planning
Planning is deciding in advance what to do, how to do it,
when to do it and who is to do it. It bridges the gap from
where we are and to where we want to go.
Nature of planning:
•Intellectual process - requires a manager to think before
acting
•Continuous process – manager has to constantly watch the
progress of his plans to determine if any changes are
required in his plans
•Plan must be flexible – should be able to adapt to the
changing situation without unneccessary cost in at least five
major areas i.e technology, market, finance, personnel and
organization
•Pervasive function – it’s important at all levels
management
 Importance of Planning
• It overcomes uncertainty and minimizes risk – By using rational
and fact based procedure for making decisions, manager can
reduce the risk and uncertainty.
• It facilitates effective control – Control involves the
measurement of actual performance, comparing it with the
standards and initiating corrective action if there is deviation.
• It focuses attention only on the organization’s goals – Entire
organization is forced to take up identical goals and
collaborate in achieving them
• It makes operation economical and leads to success –
Advanced planning avoids confusion and needless overlapping
of activities
• It forms bridge between present and future – a proper and
systematic plan forms the bridge between what we are today
and what we want to be in future
Types of Planning based on
nature of planning
Strategic Planning Tactical Planning
Long term concept of planning, which Short term allocation of resources for
is based on vision, mission and implementing the strategy
objectives
Done by top level management Done by low level management

Consists of major goals and policies of Consists of use of facilities and

an organization and resources and resources
facilities to accomplish

Less detailed More detailed since it caters to day to

day operations and activities of the
organization
More uncertain Less uncertain
 Types of Planning based on
their use
• Single use plans
• plans developed to achieve a specific end, and after reaching
the target, that plan becomes useless
• Majority of them are programmes which are non repetitive
and non routine in nature. Ex: installing new machines in the
factory

• Standing Plans
• Standing plans are designed for situations that recur often
enough to justify a standardize approach. For example a bank
designs a standing plan to process a loan application.
• The major types are policies, procedures, methods and rules
 Types of Standing plans
• Policies - Policy is a verbal, written or implied overall guide, setting
up boundaries that supply the general limits and directions in
which managerial action will take place
• Only provide a framework within which decisions must be made by
the management in different areas of organization
• Ex: promotion policies, purchasing policies

• Procedures – Provides detailed set of instructions for performing a

sequence of actions involved in doing a certain piece of work
• Same steps are followed each time that activity is performed
• Ex: Procedure for recruitment of personnel: 1. inviting applications
2. screening the applications 3. conducting written test
4.conducting interview for those who have passed the written test
5. medical examination of those who are selected for the post
 Types of Standing plans cont..
Policy Procedure

General guide lines to General guidelines at the

both think and act action level
Top level activity Low level activity

Fulfill the objectives of an Guide the way to

organization implement the policies
Made without study or Made after thorough
analysis study and analysis
 Types of Standing plans cont..
• Rules - Rules are detailed and recorded instructions that a
specific action must or must not be performed in a given
situation.
• Ex: reporting time to office

• Methods – Prescribed way in which one step of a procedure is

to be carried out
• A procedure has a number of steps, each step may have
number of methods to do it
• Help increase the effectiveness and usefulness of a procedure
Ex: a sequence of steps involved in the recruitment constitutes
procedure, where as the specified technique to be used in
screening the application is a method
 Steps in Planning
The planning process is different from one plan to another
and one organization to another. The steps generally
involved in planning are as follows:
1) Establishing goals/objectives
2) Establishing planning premises
3) Deciding the planning period
4) Identification of alternatives
5) Evaluation and selection of alternative
6) Developing derivative/supportive plans
7) Measuring and controlling the process
 Steps in Planning cont.
1. Establishing goals/objectives
•Identifying the goals and objectives of the organization
•Set by upper level managers
•Once the organizations objectives are determined, department
wise objectives are planned at the lower level. Ex: development
of new product

2. Establishing planning premises

•Premises are assumptions about the environment in which
plans are made and implemented. Thus assumptions about
market demand, cost of raw material, technology to be used
etc. are to be made while formulating a plan
•The planning premises can be classified as below.
a.Internal and External premises
b.Tangible and Intangible premises
c.Controllable and non-controllable premises
Steps in Planning cont.
a. Internal and External premises
• Internal premises - Internal premises include sales
forecasts, ability of the organization in the form of
machines, methods of design, behavior of the
owners and employees etc.,
• External premises - exists outside the enterprise and
includes business environment, economic
environment, technological changes, government
policies and regulations, population growth etc.,
Steps in Planning cont.
b. Internal and External premises
• Tangible premises - those which can be quantitatively
measured. They include population growth, industry
demand, capital and resources invested etc.,
• Intangible premises – those which cannot be
quantitatively measured. They include political
stabilities, sociological factors and behavior of the
owners etc., are intangible premises.

c. Controllable and Non-controllable premises

• Controllable – those which are controllable, examples
are resources, finance, workers etc.
• Non controllable – those which are non-controllable
examples are strikes, wars, natural calamity etc.
• Because of the presence of non-controllable factors
organizations have to revise plans.
Steps in Planning cont.
3. Deciding the planning period
• Businesses considerably vary in their planning periods.
• Some plans are made for a year and in others it will be
decades. In each case, there is always some logic in
selecting a particular time range for planning.
Companies generally base their period on a future
that can reasonably be anticipated.

4. Identification of alternatives – Search and identity

some alternatives courses of action

5. Evaluation and selection of best alternative

• A desired and best suitable alternative is selected by
comparative analysis with reference to cost, risk and
gain etc keeping in mind the goals and objectives.
Steps in Planning cont.
6. Developing derivative/supportive plans
• Once the plan is selected, various plans are derived so
as it support the main plan.
• The derivative may be planning for buying equipment,
buying raw material etc. These derivative plans are
formulated out of the main plan and therefore, they
support.

7. Measuring and controlling the process

• Managers check the progress of their plans so that
remedial action can be taken to make plan work or
change the plan if it is unrealistic.
 Limitations of Planning
• Planning is expensive and time consuming process
• It curbs the initiative of the manager and forces him to operate
within the limits set by it
• The scope of planning is limited in the case of organizations
with rapidly changing situations.
• When unforeseen changes in the environment , such as a
business recession, change in government policies etc take
place, the original plan loses its value and there is need to draw
up a fresh plan. But there is a tendency to make the original
plan work
• Planning may sometimes face people’s resistance to accept
• Planning is based on the anticipation of future
happenings. Since future is uncertain and dynamic,
therefore, the future anticipations are not always true.
Therefore, to consider planning as the basis of success is
like a leap in the dark.
 Decision Making
“A decision is a choice between two or more
alternatives” and has the following factors:
1)Deciding what to do, keeping in mind the objective of
the organization
2)Evaluating several alternatives and selecting the best
one.
3)Achieving some results through decision making.
Types of decision making
Decisions can be classified in a number of ways:
1.Programmed and Non Programmed Decisions
Programmed decisions –
• Made in accordance with some policy, rule or procedure
• These are repetitive and routine
• Ex: salary payment to employees who have been ill
Non Programmed decisions –
• Non repetitive
• Has no definite procedure
• Decision taken for problems requiring custom tailored treatment
• Ex: what to do about a failing product line
Types of decision making cont..
2. Major and Minor Decisions –
Major decisions –
• Has long range impact
• Done by top level management
• Affects all other functional areas
• Rare decisions with no rules
• Ex: employing new technology

Minor decisions –
• Does not have long range impact
• Recur very often
• Have rules or guides
• Done by low level management
• Affects only one function(department)
• Ex: Purchasing stationary
Types of decision making cont..
3. Routine and Strategic decisions
Routine decisions
• Decisions related to day to day operations
• Routine in nature, taken by low level management Ex: deputing
employees to attend conferences
Strategic decisions
• Requires careful considerations
• Includes large funds, done by top level management Ex: Lowering the
price of a product
4. Individual and Group Decisions
Individual decisions
• Decisions taken by individual
• For problems which are routine in nature and has definite rules and
procedures ex: granting causal leave
Group Decisions
• inter departments decisions where changes affect the organization
as a whole. Ex: deputation of a staff
Types of decision making cont..
5. Simple and Complex decisions
Simple – When variables to be considered for solving a problem are few
Complex decisions - When variables to be considered for solving a
problem are many
6. Heuristics and Intuitive Decisions –
Heuristic decisions – decisions taken based on past experience
Intuitive decisions – decision based on guess
Steps in Rational Decision Making

Recognition Deciding Diagnosis Developing

of Problem Priorities Of Problem Alternate
Solutions

Measuring &
Comparing
Consequences of
Alternatives

Decision
Implementation &
Follow up
Steps involved Rational Decision
Making
1. Recognizing the problem - Problem exist if any of
these condition occur:
• When there is a deviation from the past experience.
Ex: expenses have suddenly increased
• When there is a deviation from the plan Ex: profit
levels are lower than anticipated
• When other people bring problems to the manager.
Ex: customer may complain about late deliveries
• When competitors outperform Ex: other companies
might develop new processes
Steps involved Rational Decision Making
2. Deciding priorities among problems
The manager should identify the problems which he can solve,
the problems which he feels that his subordinates can solve and
the problems which are to be referred to the higher officers.
With this the manager is left with very few problems.
3. Diagnosing the problem
Systems approach is to be followed to diagnose a problem. He
must make thorough study of all the sides of problem in
relation to all sub parts of organization before tackling the
problem. Here experience comes to his help.
Ex: In the early days of frozen foods sales in America was not
profitable for wholesellors because of retailer’s reluctance to
invest several hundred dollars in a refrigerated showcase rather
than low consumer demand
Steps involved Rational Decision Making
4. Developing alternate solutions
The solutions should be feasible and the Manager
should know the limiting factors / constraints of
alternate solutions.
Ex: To increase production, options may be to go for
new plant or Overtime production or to have additional
shift etc. The limiting factor for 1st option may be - late
delivery of equipment or non availability of Funds in
Time etc.
Steps involved Rational Decision Making
5. Studying and comparing the effect of alternatives
•This involves comparison of Quality and Acceptability of
alternate solutions.
•Quality of a solution depends on it’s Tangible & Intangible
consequences. Tangible consequences can be quantitatively
measured or mathematically demonstrated. Example: Cost
comparison of various alternatives to increase production.
•Intangible consequences can’t be measured quantitatively but
these also play important role. Example – How to select a
supplier with Low rates or the one with higher rate but with
reputation to make In-time deliveries. Then, One must use his
judgment and Intuition to solve problems.
Steps involved Rational Decision Making
Acceptability of alternate solutions is also important
because
• A solution may be OK ( as per quality) but not
acceptable by all for some reasons. Then, we have to
check the relative importance of Quality and
Acceptability and strike a balance.
• In technical matters like Engineering, Production,
Finance, importance is given to Quality and in All
Human matters like Working Conditions, Acceptance
is given importance.
Steps involved Rational Decision Making
6. Converting the decision into effective action
•Communication of the decisions to the concerned employees in
clear and simple terms failure of which may lead to unfortunate
results
7. Follow up of action
The action should be continuously followed up and if the result
is not satisfactory the manager has to take necessary corrective
action or modify his decision