This document discusses definitions and concepts of management. It defines management as a set of activities including planning, organizing, leading, and controlling organizational resources to achieve goals efficiently and effectively. A manager is someone who carries out these management functions. Management involves planning and decision making, organizing, leading, and controlling human, financial, physical, and information resources using a process to attain organizational goals. Management can be viewed as both a science, relying on logical problem-solving techniques, and an art, involving intuition and personal skills. The document also examines different interpretations and levels of management.

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MANAGEMENTMANAGEMENT

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What is Management?What is Management?What is Management?What is Management?
A set of activitiesA set of activities
planning and decision making, organizing, leading, andplanning and decision making, organizing, leading, and
controllingcontrolling
directed at an organization’s resourcesdirected at an organization’s resources
human, financial, physical, and informationhuman, financial, physical, and information
with the aim of achieving organizational goalswith the aim of achieving organizational goals
in an efficient and effectivein an efficient and effective
manner.manner.

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What is a Manager?What is a Manager?
 Someone whose primary responsibility is toSomeone whose primary responsibility is to
carry out the management process.carry out the management process.
 Someone who plans and makes decisions,Someone who plans and makes decisions,
organizes, leads, and controlsorganizes, leads, and controls
human, financial, physical,human, financial, physical,
and information resources.and information resources.

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Kinds of Managers by LevelKinds of Managers by Level
 Top ManagersTop Managers
 The relatively small group of executives whoThe relatively small group of executives who
manage the organization’s overall goals, strategy,manage the organization’s overall goals, strategy,
and operating policies.and operating policies.
 Middle ManagersMiddle Managers
 Largest group of managers in organizationsLargest group of managers in organizations
 Implement top management’s policies and plans.Implement top management’s policies and plans.
 Supervise and coordinate lower-level managers’ activities.Supervise and coordinate lower-level managers’ activities.
 First-Line ManagersFirst-Line Managers
 Managers who supervise and coordinate theManagers who supervise and coordinate the
activities of operating employees.activities of operating employees.

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Management in OrganizationsManagement in Organizations
Inputs from the environment
• Human resources
• Financial resources
• Physical resources
• Information resources
Planning
and decision
making
Leading
Organizing
Controlling
Goals attained
• Efficiently
• Effectively

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Figure 1.2Figure 1.2
The Management ProcessThe Management Process

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The Management ProcessThe Management Process
(cont’d)(cont’d) Planning and Decision MakingPlanning and Decision Making
 Setting an organization’s goals and selecting a courseSetting an organization’s goals and selecting a course
of action from a set of alternatives to achieve them.of action from a set of alternatives to achieve them.
 OrganizingOrganizing
 Determining how activities and resources areDetermining how activities and resources are
grouped.grouped.
 LeadingLeading
 Getting organizational members to work together toGetting organizational members to work together to
advance the interests of the organization.advance the interests of the organization.
 ControllingControlling
 Monitoring organizational progress towards goals.Monitoring organizational progress towards goals.

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Skills andSkills and
thethe
ManagerManager
FundamentalFundamental
ManagementManagement
SkillsSkills
FundamentalFundamental
ManagementManagement
SkillsSkills
Technical SkillsTechnical Skills
Interpersonal SkillsInterpersonal Skills
Conceptual SkillsConceptual Skills
Diagnostic SkillsDiagnostic Skills
Communication SkillsCommunication Skills
Decision-Making SkillsDecision-Making Skills
Time-Management SkillsTime-Management Skills

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Fundamental ManagementFundamental Management
SkillsSkills
 TechnicalTechnical
 Skills necessary to accomplish or understand theSkills necessary to accomplish or understand the
specific kind of work being done in anspecific kind of work being done in an
organization.organization.
 InterpersonalInterpersonal
 The ability to communicate with, understand, andThe ability to communicate with, understand, and
motivate both individuals and groups.motivate both individuals and groups.
 ConceptualConceptual
 The manager’s ability to think in the abstract.The manager’s ability to think in the abstract.
 DiagnosticDiagnostic
 The manager’s ability to visualize the mostThe manager’s ability to visualize the most
appropriate response to a situation.appropriate response to a situation.

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Fundamental Management SkillsFundamental Management Skills
(cont’d)(cont’d)
 CommunicationCommunication
 The manager’s abilities both to convey ideas andThe manager’s abilities both to convey ideas and
information effectively to others and to receiveinformation effectively to others and to receive
ideas and information effectively from others.ideas and information effectively from others.
 Decision-MakingDecision-Making
 The manager’s ability to recognize and defineThe manager’s ability to recognize and define
problems and opportunities correctly and then toproblems and opportunities correctly and then to
select an appropriate course of action to solve theselect an appropriate course of action to solve the
problems and capitalize on opportunities.problems and capitalize on opportunities.
 Time-ManagementTime-Management
 The manager’s ability to prioritize work, to workThe manager’s ability to prioritize work, to work
efficiently, and to delegate appropriately.efficiently, and to delegate appropriately.

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Management: Science or Art?Management: Science or Art?
 The Science of ManagementThe Science of Management
 Assumes that problems can be approached usingAssumes that problems can be approached using
rational, logical, objective, and systematic ways.rational, logical, objective, and systematic ways.
 Requires technical, diagnostic, and decision-makingRequires technical, diagnostic, and decision-making
skills and techniques to solve problems.skills and techniques to solve problems.
 The Art of ManagementThe Art of Management
 Decisions are made and problems solved using aDecisions are made and problems solved using a
blend of intuition, experience, instinct, and personalblend of intuition, experience, instinct, and personal
insights.insights.
 Requires conceptual, communication, interpersonal,Requires conceptual, communication, interpersonal,
and time-management skills to accomplish the tasksand time-management skills to accomplish the tasks
associated with managerial activities.associated with managerial activities.

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CONCEPTS OF MANAGEMENTCONCEPTS OF MANAGEMENT
DEFINITION:DEFINITION:
It is difficult to define ‘Management’It is difficult to define ‘Management’
because it is looked in to by different scholarsbecause it is looked in to by different scholars
from different wayfrom different way

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The Economist consider Management as aThe Economist consider Management as a
resource like Land, Labour, Capital andresource like Land, Labour, Capital and
Organisation.Organisation.
The Bureaucrats consider it as an authorityThe Bureaucrats consider it as an authority
The Sociologists consider managers as a partThe Sociologists consider managers as a part
of the class elite classof the class elite class

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Henry L.SiskHenry L.Sisk
Defines Management is the coordination of allDefines Management is the coordination of all
resources through the process of Planning,resources through the process of Planning,
Organizing, Directing and Controlling in orderOrganizing, Directing and Controlling in order
to attain stated objectivesto attain stated objectives

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Ralph C.DavisRalph C.Davis
Defines Management as a function ofDefines Management as a function of
Executive LeadershipExecutive Leadership
Peter DruckerPeter Drucker
Defines Management as a Multi purpose organDefines Management as a Multi purpose organ
that manager a business, Manager Mangersthat manager a business, Manager Mangers
and Managers workers and work.and Managers workers and work.

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Concepts of ManagementConcepts of Management
The terms management has been interruptedThe terms management has been interrupted
in several ways as below.in several ways as below.
i.i. Management as an Activity:Management as an Activity:
It is an activity like playing, studying,It is an activity like playing, studying,
teaching etc. It is an art of getting thingsteaching etc. It is an art of getting things
done through the effort of othersdone through the effort of others

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ii. Management as a Process:ii. Management as a Process:
It is include the process of Planning,It is include the process of Planning,
Organizing, Staffing, Directing andOrganizing, Staffing, Directing and
Controlling functions. As a process theControlling functions. As a process the
management includes social process,management includes social process,
integrated process, continuous process andintegrated process, continuous process and
interactive processinteractive process

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iii. Management as an Economic Sources:iii. Management as an Economic Sources:
Management occupies the central placeManagement occupies the central place
among other 4 m’s Men, Machine, Materialamong other 4 m’s Men, Machine, Material
and Moneyand Money
Man Power
Money
Machine
Management Material

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Management as a TeamManagement as a Team
Managers operate at different levels ofManagers operate at different levels of
authority like top, Middle, Operating etc.authority like top, Middle, Operating etc.
Management is managing all these activities inManagement is managing all these activities in
a team sprit. Managers have become elite classa team sprit. Managers have become elite class
in society occupying position with enormousin society occupying position with enormous
power and prestige.power and prestige.

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Management as an AcademicManagement as an Academic
DisciplineDiscipline
Management has became a very popular fieldManagement has became a very popular field
of study since offers a very rewarding andof study since offers a very rewarding and
challenging career.challenging career.

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Management as a groupManagement as a group
Management means the group of personsManagement means the group of persons
occupying managerial position like executives,occupying managerial position like executives,
departmental head, supervisor etc.departmental head, supervisor etc.

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NATURE ANDNATURE AND
CHARACTERISTICS OFCHARACTERISTICS OF
MANAGEMENTMANAGEMENT

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(i) Management as a goal oriented(i) Management as a goal oriented
The main goal of Management is to ensureThe main goal of Management is to ensure
efficiency and economy is the utilisation ofefficiency and economy is the utilisation of
human, physical and financial resourceshuman, physical and financial resources

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(ii) Management is Universal(ii) Management is Universal
All type of organization like family, club,All type of organization like family, club,
university, government, army, cricket team (a)university, government, army, cricket team (a)
business, require managementbusiness, require management

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(iii) Management is an interactive(iii) Management is an interactive
forceforce
Management reconciles the individual goalsManagement reconciles the individual goals
with organizational goals. It integrates humanwith organizational goals. It integrates human
and other resourcesand other resources

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(iv) Management is a social process(iv) Management is a social process
Management is done by the people, throughManagement is done by the people, through
the people and for the people concerned withthe people and for the people concerned with
interpersonal relationship. A good manager isinterpersonal relationship. A good manager is
a leader and not a bossa leader and not a boss

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(v) Management is Multidisciplinary(v) Management is Multidisciplinary
Management depends up on wide knowledgeManagement depends up on wide knowledge
derived from several discipline likederived from several discipline like
engineering, sociology, psychology,engineering, sociology, psychology,
economics etc.economics etc.

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(vi) Management is a Continuous(vi) Management is a Continuous
processprocess
Management is a continuous process whichManagement is a continuous process which
continues until the goal is achievedcontinues until the goal is achieved

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(vii) Management is intangible(vii) Management is intangible
It is invisible force. It cannot be seen but itsIt is invisible force. It cannot be seen but its
presence can be feltpresence can be felt

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(viii) Management Art as well as(viii) Management Art as well as
SciencesSciences
Management consists of theoretical knowledgeManagement consists of theoretical knowledge
as well as practical application of suchas well as practical application of such
knowledgeknowledge

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Objectives of ManagementObjectives of Management
(i)(i) Organisational objectives :- It includesOrganisational objectives :- It includes
(a) Reasonable Profit(a) Reasonable Profit
(b) Survival and solvency of business(b) Survival and solvency of business
(c) Growth and expansion of the enterprise(c) Growth and expansion of the enterprise
(d) Improve the Good will and reputation(d) Improve the Good will and reputation

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(ii) Personal Objectives(ii) Personal Objectives
(a) Fair remuneration(a) Fair remuneration
(b) Reasonable working conditions(b) Reasonable working conditions
(c) Training and Development(c) Training and Development
(d) Participation is Management(d) Participation is Management
(e) Security of Service(e) Security of Service

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(iii) Social Objectives(iii) Social Objectives
(i) Prompt payment of Taxes(i) Prompt payment of Taxes
(ii) Conservation of energy(ii) Conservation of energy
(iii) Preservation of ethical value(iii) Preservation of ethical value

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LEVELS OF MANAGEMENTLEVELS OF MANAGEMENT
Board of DirectorBoard of Director
Managing Director Top LevelManaging Director Top Level
General ManagerGeneral Manager
Departmental ManagerDepartmental Manager
Middle LevelMiddle Level Deputy ManagerDeputy Manager
Asst. ManagerAsst. Manager
SupervisorsSupervisors
Lower LevelLower Level
WorkersWorkers

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Figure 1.1Figure 1.1
Kinds of Managers by LevelKinds of Managers by Level
and Areaand Area

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Distinction Between ManagementDistinction Between Management
and Administrationand Administration
Oliver Sheldon defines administration as aOliver Sheldon defines administration as a
function concerned with the determination offunction concerned with the determination of
corporate policies, the coordination of finance,corporate policies, the coordination of finance,
production, distribution, structure under theproduction, distribution, structure under the
ultimate control of the executiveultimate control of the executive

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Distinction Between ManagementDistinction Between Management
and Administration (Contd.)and Administration (Contd.)
On the other hand Management is concernedOn the other hand Management is concerned
with the executives of policy within the limitwith the executives of policy within the limit
set by the administration. Thus administrationset by the administration. Thus administration
is a thinking process and management as doingis a thinking process and management as doing
processprocess

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Three points of viewThree points of view
(i)(i) Administration is different from ManagementAdministration is different from Management
This view is largely held by American experts.This view is largely held by American experts.
They held that administration is a higher levelThey held that administration is a higher level
activity while management is a lower levelactivity while management is a lower level
function. The administration involves decisionfunction. The administration involves decision
making while the management is concerned withmaking while the management is concerned with
the execution of policies and supervision of work.the execution of policies and supervision of work.
According to American school of thoughtAccording to American school of thought
Administration is superior to management.Administration is superior to management.

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(ii) Administration is a part of(ii) Administration is a part of
ManagementManagement
According to European school of thought ofAccording to European school of thought of
management is inclusive of Administration andmanagement is inclusive of Administration and
Organisation.Organisation.
Management is the policy making including planningManagement is the policy making including planning
and guidance, where as Administration is executiveand guidance, where as Administration is executive
of above planning. Thus management is planningof above planning. Thus management is planning
agency while administration is an implementationagency while administration is an implementation
agency. Thus European just appropriate view ofagency. Thus European just appropriate view of
AmericansAmericans

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(iii) Administration and Management(iii) Administration and Management
are oneare one
Many writers like Henri Fayol, New manMany writers like Henri Fayol, New man
viewed that the management andviewed that the management and
administration are one and same usedadministration are one and same used
interchangedly. The term Administration isinterchangedly. The term Administration is
more popular in Government and other Publicmore popular in Government and other Public
sector organisation and the term Managementsector organisation and the term Management
is more commonly used in other businessis more commonly used in other business
world.world.

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iii) Administration and Managementiii) Administration and Management
are one (Cont.d)are one (Cont.d)
To solve this conflict of Opinions betweenTo solve this conflict of Opinions between
administration and management. Managementadministration and management. Management
classified into –classified into –
(i) Administrative Management(i) Administrative Management
(ii) Operative Management(ii) Operative Management

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Distinguish BetweenDistinguish Between
Administration and ManagementAdministration and Management
Points ofPoints of
distinctiondistinction
AdministrationAdministration ManagementManagement
1.1. NatureNature It is aIt is a
determinative ordeterminative or
thinking functionthinking function
It is an executiveIt is an executive
or doing functionor doing function
2. Type of Work2. Type of Work It is concernedIt is concerned
with thewith the
determination ofdetermination of
majormajor
It is concernedIt is concerned
with thewith the
implementation ofimplementation of
policiespolicies
3. Levels of3. Levels of
authorityauthority
It is mainly a topIt is mainly a top
level functionlevel function
It is largely aIt is largely a
middle and lowermiddle and lower
level functionlevel function

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Distinguish BetweenDistinguish Between
Administration and ManagementAdministration and Management
4. Influence4. Influence Decision areDecision are
influenced byinfluenced by
Public opinionPublic opinion
and outside forcesand outside forces
Decision influencedDecision influenced
by Objectives andby Objectives and
Policies of thePolicies of the
CompanyCompany
5. Direction of5. Direction of
Human EffortsHuman Efforts
Not directlyNot directly
concernedconcerned
Actively concernedActively concerned
6. Main6. Main
FunctionsFunctions
Planning andPlanning and
Control are mainControl are main
functionsfunctions
Directing andDirecting and
Organizing are mainOrganizing are main
functionsfunctions

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Distinguish Between AdministrationDistinguish Between Administration
and Managementand Management
7. Skills required7. Skills required Conceptual andConceptual and
Human SkillsHuman Skills
Technical andTechnical and
Human SkillsHuman Skills
8. Usage8. Usage Government andGovernment and
Public sectorPublic sector
BusinessBusiness
OrganizationsOrganizations
9. Illustrations9. Illustrations Commissioner,Commissioner,
Registrar, Vice-Registrar, Vice-
Chancellor,Chancellor,
Governor etcGovernor etc
ManagingManaging
Director , GeneralDirector , General
Manager, SalesManager, Sales
Manager, BranchManager, Branch
Manager etc.Manager etc.

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Meaning of PlanningMeaning of Planning
Planning is the process of deciding inPlanning is the process of deciding in
advance what is to be done, how it is to beadvance what is to be done, how it is to be
done, where, when and whom.done, where, when and whom.

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According to L.F.Ur WickAccording to L.F.Ur Wick
Planning is fundamentally a mentalPlanning is fundamentally a mental
predisposition to do things is an orderly way,predisposition to do things is an orderly way,
to think before and to act in the light of theto think before and to act in the light of the
fact rather than of guesses.fact rather than of guesses.

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Features of PlanningFeatures of Planning
a)a) Planning is good – orientedPlanning is good – oriented
b)b) Planning is future orientedPlanning is future oriented
c)c) Planning is an mental exercise involves creativePlanning is an mental exercise involves creative
thinkingthinking
d)d) Planning is a primary functionPlanning is a primary function
e)e) Different planning is required for different levels ofDifferent planning is required for different levels of
organisation (Pervasiveness)organisation (Pervasiveness)
f)f) Planning is ContinuousPlanning is Continuous
g)g) Planning aims at efficiencyPlanning aims at efficiency

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Importance of PlanningImportance of Planning
i)i) Make objectives clearMake objectives clear
ii)ii) Helps the organisastion a right pathHelps the organisastion a right path
iii)iii) It reduces risks and uncertaintyIt reduces risks and uncertainty
iv)iv) It improves efficiency of operationIt improves efficiency of operation
v)v) It provides the basis of controlIt provides the basis of control
vi)vi) It facilitate decision makingIt facilitate decision making
vii)vii) Effective co-ordinationEffective co-ordination

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Limitation of PlanningLimitation of Planning
i.i. Assumptions not fully reliableAssumptions not fully reliable
ii.ii. The condition under which plans areThe condition under which plans are
implemented may differ from assumedimplemented may differ from assumed
conditions.conditions.
iii.iii. Availability of time is a limiting factor forAvailability of time is a limiting factor for
planningplanning
iv.iv. Cost involved in planningCost involved in planning
v.v. Mental attitudeMental attitude

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Steps in PlanningSteps in Planning

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Principles of PlanningPrinciples of Planning
a.a. Principles of contribution to objectivesPrinciples of contribution to objectives
b.b. Principles of PervasivenessPrinciples of Pervasiveness
c.c. Principles of Limiting factorPrinciples of Limiting factor
d.d. Principles of FlexibilityPrinciples of Flexibility
e.e. Principles of Navigational changePrinciples of Navigational change

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Kinds of PlanningKinds of Planning
a.a. Long range PlanLong range Plan
b.b. Short range PlanShort range Plan
c.c. Strategic PlanningStrategic Planning
d.d. Operational PlanningOperational Planning
e.e. Functional PlanningFunctional Planning

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Decision MakingDecision Making
Definition:Definition:
According to Lereitner :According to Lereitner :
Decision Making is a process of identifyingDecision Making is a process of identifying
and choosing alternative courses of action in aand choosing alternative courses of action in a
manner appropriate to the demand of themanner appropriate to the demand of the
situationsituation

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According to Peter Drucker:According to Peter Drucker:
Whatever Manager does, he does throughWhatever Manager does, he does through
Decision MakingDecision Making

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Six Steps in Decision MakingSix Steps in Decision Making
Figure 7.4

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Theories of Decision MakingTheories of Decision Making
1.1. Marginal Theory : This theory stresses anMarginal Theory : This theory stresses an
profit maximizationprofit maximization
2.2. Psychological Theory : This theory stressesPsychological Theory : This theory stresses
on customer satisfactionon customer satisfaction
3.3. Mathematical Theory: This theory arrivesMathematical Theory: This theory arrives
decision making using models like Lineardecision making using models like Linear
Programming, Probability etc.Programming, Probability etc.

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Problems in Decision MakingProblems in Decision Making
1.1. Correctness of DecisionCorrectness of Decision
2.2. Timing of DecisionTiming of Decision
3.3. Effective Communication of DecisionsEffective Communication of Decisions
4.4. Participation in Decision MakingParticipation in Decision Making
5.5. Decision EnvironmentDecision Environment
6.6. Implementation DecisionImplementation Decision

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Modern Quantitative Techniques ofModern Quantitative Techniques of
Decision MakingDecision Making
1.1. Linear programming : It is based on theLinear programming : It is based on the
assumption that there exist a linearassumption that there exist a linear
relationship between the variables.relationship between the variables.
For Example:For Example:
With the help of linear equation, optimumWith the help of linear equation, optimum
combination of cost, time and utilization ofcombination of cost, time and utilization of
time can be compared. The main object oftime can be compared. The main object of
this techniques is to either maximize benefitthis techniques is to either maximize benefit
or to minimizes costor to minimizes cost

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2. Probability Theory2. Probability Theory
This statistical device is based on the assumptionThis statistical device is based on the assumption
that certain things are likely to happen inthat certain things are likely to happen in
future depending on assumed probabilities. Ex.future depending on assumed probabilities. Ex.
Pay-off matrices, Decision trees.Pay-off matrices, Decision trees.

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3.Queueing Theory3.Queueing Theory
It is based on the assumption that althoughIt is based on the assumption that although
delays are costly, eliminating them may bedelays are costly, eliminating them may be
even more costly. This techniques may be usedeven more costly. This techniques may be used
in service organisations hospitals and banksin service organisations hospitals and banks

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4.Simulation4.Simulation
For example : Instead of studying andFor example : Instead of studying and
analyzing transportation system of Chennai inanalyzing transportation system of Chennai in
a real life, its models can be prepared and reala real life, its models can be prepared and real
solution can be simulated to itsolution can be simulated to it

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5. Net Work Techniques5. Net Work Techniques
The project evaluation and review techniquesThe project evaluation and review techniques
(PERT) and critical path method (CPM) are(PERT) and critical path method (CPM) are
used for planning, monitoring andused for planning, monitoring and
implementing a projectimplementing a project

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6. Decision Trees6. Decision Trees
It is a graphic method used for identifying theIt is a graphic method used for identifying the
alternatives and risk and outcome associatedalternatives and risk and outcome associated
with each alternativeswith each alternatives

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DelegationDelegation
Definition :Definition :
According to Haimann “Delegation” ofAccording to Haimann “Delegation” of
authority merely means granting authority toauthority merely means granting authority to
subordinate to operate within prescribed limitssubordinate to operate within prescribed limits

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The Process of DelegationThe Process of Delegation
1.1. Assignment of DutiesAssignment of Duties
2.2. Granting of AuthorityGranting of Authority
3.3. Creating of ResponsibilityCreating of Responsibility

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Difference between Authority andDifference between Authority and
ResponsibilityResponsibility
Sales Manager
Sales Manager
Sales Officer
Branch Manager

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AccountabilityAccountability
It is the obligation of a subordinate to reportIt is the obligation of a subordinate to report
back to his superior that the job entrusted toback to his superior that the job entrusted to
him has been successfully completedhim has been successfully completed

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Centralisation and DecentralisationCentralisation and Decentralisation
According to Henri Fayol “Every thing whichAccording to Henri Fayol “Every thing which
goes to increase the subordinates” roles isgoes to increase the subordinates” roles is
decentralisation, every thing which goes todecentralisation, every thing which goes to
decrease it is centralisation”decrease it is centralisation”
In centralised administration, the staff dependIn centralised administration, the staff depend
on the top management for guidance on allon the top management for guidance on all
matters. An organisation is said to be decentralisedmatters. An organisation is said to be decentralised
where managers at middle and lower levels arewhere managers at middle and lower levels are
given the authority to take decision on mattersgiven the authority to take decision on matters
relating to their functions.relating to their functions.

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Centralisation and DecentralisationCentralisation and Decentralisation
(Contd.)(Contd.)
For Example :For Example :
An organisation havingAn organisation having
branches in different cities may be centralised.branches in different cities may be centralised.
Similarly, a company may be decentralisedSimilarly, a company may be decentralised
even things all its officer are located in oneeven things all its officer are located in one
building.building.

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Merits of DecentralisationMerits of Decentralisation
1.1. Reduces Burden of Top ExecutivesReduces Burden of Top Executives
2.2. Quick DecisionQuick Decision
3.3. Motivation to SubordinatesMotivation to Subordinates
4.4. Growth and DiversificationGrowth and Diversification
5.5. Management DevelopmentManagement Development
6.6. Diversion of RiskDiversion of Risk
7.7. Effective Supervision and ControlEffective Supervision and Control

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Demerits of DecentralisationDemerits of Decentralisation
1.1. Cadre of CoordinationCadre of Coordination
2.2. Difficult to ControlDifficult to Control
3.3. High cost of operationHigh cost of operation
4.4. Non Availability Talented ManagersNon Availability Talented Managers
5.5. External Constraints.External Constraints.

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CONTROLLINGCONTROLLING

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The Control ProcessThe Control Process
 Establish objectives and standards.Establish objectives and standards.
 Measure actual performance.Measure actual performance.
 Compare results with objectives and standards.Compare results with objectives and standards.
 Take necessary action.Take necessary action.

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Establish Objectives andEstablish Objectives and
StandardsStandards
 There are two types of standards:There are two types of standards:
 Output StandardsOutput Standards - measures performance results- measures performance results
in terms of quantity, quality, cost, or time.in terms of quantity, quality, cost, or time.
 Input StandardsInput Standards - measures work efforts that go- measures work efforts that go
into a performance task.into a performance task.

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Measuring Actual PerformanceMeasuring Actual Performance
 Measurements must be accurate enough toMeasurements must be accurate enough to
spot deviations or variances between whatspot deviations or variances between what
really occurs and what is most desired.really occurs and what is most desired.
 Without measurement, effective control is notWithout measurement, effective control is not
possible.possible.

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Comparing Results withComparing Results with
Objectives and StandardsObjectives and Standards
 The comparison of actual performance with desiredThe comparison of actual performance with desired
performance establishes the need for action.performance establishes the need for action.
 Ways of making such comparisons include:Ways of making such comparisons include:
 Historical / Relative / EngineeringHistorical / Relative / Engineering
 BenchmarkingBenchmarking

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Taking Corrective ActionTaking Corrective Action
 Taking any action necessary to correct or improveTaking any action necessary to correct or improve
things.things.
 Management-by-ExceptionManagement-by-Exception focuses managerialfocuses managerial
attention on substantial differences between actualattention on substantial differences between actual
and desired performance.and desired performance.

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Taking Corrective ActionTaking Corrective Action
 Management-by ExceptionManagement-by Exception can save thecan save the
managers time, energy, and other resources, andmanagers time, energy, and other resources, and
concentrates efforts on areas showing theconcentrates efforts on areas showing the
greatest need.greatest need.
 There are two types of exceptions:There are two types of exceptions:
 ProblemsProblems - below standard- below standard
 OpportunitiesOpportunities - above standard- above standard

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Effective ControlsEffective Controls
The Best Controls in OrganizationsThe Best Controls in Organizations
areare
 Strategic and results orientedStrategic and results oriented
 UnderstandableUnderstandable
 Encourage self-controlEncourage self-control

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Effective ControlsEffective Controls
The Best Controls in Organizations areThe Best Controls in Organizations are
 Timely and exception orientedTimely and exception oriented
 Positive in naturePositive in nature
 Fair and objectiveFair and objective
 FlexibleFlexible

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Types of ControlTypes of Control
 PreliminaryPreliminary
Sometimes called theSometimes called the feedforwardfeedforward controls,controls,
they are accomplished before a workthey are accomplished before a work
activity begins.activity begins.
They make sure that proper directions areThey make sure that proper directions are
set and that the right resources are availableset and that the right resources are available
to accomplish them.to accomplish them.

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Types of ControlTypes of Control
 ConcurrentConcurrent
Focus on what happens during the workFocus on what happens during the work
process. Sometimes calledprocess. Sometimes called steeringsteering controls,controls,
they monitor ongoing operations and activitiesthey monitor ongoing operations and activities
to make sure that things are being doneto make sure that things are being done
correctly.correctly.

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Types of ControlTypes of Control
 PostactionPostaction
Sometimes calledSometimes called feedbackfeedback controls, theycontrols, they
take place after an action is completed. Theytake place after an action is completed. They
focus on end results, as opposed to inputsfocus on end results, as opposed to inputs
and activities.and activities.

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Types of ControlsTypes of Controls
Managers have two broad options with respectManagers have two broad options with respect
to control.to control.
 They can rely on people to exercise self-They can rely on people to exercise self-
control (control (internalinternal) over their own behavior.) over their own behavior.
 Alternatively, managers can take direct actionAlternatively, managers can take direct action
((externalexternal) to control the behavior of others.) to control the behavior of others.

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Types of ControlsTypes of Controls
Managers have two broad options with respectManagers have two broad options with respect
to control.to control.
 They can rely on people to exercise self-They can rely on people to exercise self-
control (control (internalinternal) over their own behavior.) over their own behavior.
 Alternatively, managers can take direct actionAlternatively, managers can take direct action
((externalexternal) to control the behavior of others.) to control the behavior of others.

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Types of ControlTypes of Control
 Internal ControlsInternal Controls
Allows motivated individuals toAllows motivated individuals to
exercise self-control in fulfilling jobexercise self-control in fulfilling job
expectations.expectations.
The potential for self-control is enhancedThe potential for self-control is enhanced
when capable people have clear performancewhen capable people have clear performance
objectives and proper resource support.objectives and proper resource support.

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Types of ControlTypes of Control
 External ControlsExternal Controls
It occurs through personal supervision and the use ofIt occurs through personal supervision and the use of
formal administrative systems.formal administrative systems.
 Performance appraisal systems, compensation andPerformance appraisal systems, compensation and
benefit systems, employee discipline systems, andbenefit systems, employee discipline systems, and
management-by-objectivesmanagement-by-objectives..