POM BOOK PUBLISHED COPYN.pdf HYAAENA PUB

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Authors
Dr. J. Mexon M.Com., M.Phil., B.Ed.,Ph.D., NET
Faculty in Commerce and Management Studies,
PGP College of arts and science, Namakkal
Tamil Nadu, India.
Mr.B.Vignesh.
Assistant Professor,
Department of Commerce PA ,
NPR College of arts and science, Natham.
Tamil Nadu, India.
Legal Advisor
Mr. P. RAJENDRA CHOLAN
ADVOCATE, BAR ASSOCIATION
THIRUTHIRAIPOONDI,
THIRUVARUR
PRINCIPLES OF MANAGEMENT

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Text ©AUTHOR, 2024
Cover page © HEDUNA PEER INTERNATIONAL RESEARCH AND REVIEWS
Author ©: Dr. J. Mexon, Mr.B.Vignesh.
Editors: Dr N Hariharan
Publisher: Heduna Peer International Research and Reviews
T. Vadipatty, M.P Nagar, Madurai, Tamilnadu, India Phone: + 91 9345020835
E-mail:hpirrjournal@gmail.com
Book: PRINCIPLES OF MANAGEMENT
ISBN - 978-81-969444-6-9
Edition: Feb – 2024 Price: Rs 449/
€ 5.02/-
Printed By: HYAENA PUBLISHERS INDIA
All rights are reserved. No part of this publication may be reproduced, stored in a retrieval
System, or transmitted in any form or by any means, electronic, mechanical, photocopying,
Recording, or otherwise, without the prior permission of the copyright holder.

PRINCIPLES OF MANAGEMENT ISBN - 978-81-969444-6-9
4
I realize that this book will create a great deal of controversy. It has never been easy to
challenge the consensus because the System – of any kind, in any context – will try
to preserve the status quo, by all means possible.
.Hopefully, this account will raise the level of awareness among the general public and
initiate the discussion that, in turn, may entail major cultural change, as well as a
revision of the consumer basket. This book can be read ontwo different levels. First, it
may be read by ordinary people with a limited, if any, scientific background.
Throughout, the book has been written with this audience in mind. I hope that you
won’t be easily discouraged. Even if the chemical content of a given chapter is hard to
understand, the scientific evidence presented, the citations from original documents,
conclusions drawn, and recommendations made can be easily comprehended.
Represented by professionals from academia, and government agencies, as well as
consumer protection and advocacy groups. I do not expect everybody in the scientific
community to agree with the content and ideas put forth in this book. But I do hope
that the information and knowledge presented will become a wake-up call for the
general public, regulatory agencies, legislators, business leaders, and scientists coming
to the realization.
Dr N HARIHARAN
Founder and chief Editor of Heduna Peer
International Research and Reviews
.

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Dr. J. MEXON, M.Com., M.Phil., B.Ed., Ph.D., (NET), currently is working as a
Assistant professor in the department of Commerce at PGP College of arts and
science He has 11 years of teaching experience at the college and university level
and published more than 10 research papers in the field of Commerce and
Management.He has experience in handling subjects related to Commerce
(Accounts and Finance) and Management. His area of specialization is Accounts.
Currently he is guiding a number of Post Graduate and Ph.D students in research.
As an experienced faculty, he would like to practice the unique methodology of
teaching that creates interest among the students. For further communications
kindly contact through email: jmexon86@gmail.com

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Mr.B.Vignesh, M.Com., currently is working as a Assistant professor in the
Department of Commerce (PA) at NPR College of arts and science, Natham He
has 2.5 years of teaching experience at the college and university level and
published more than 10 research papers in the field of Commerce and
Management.He has experience in handling subjects related to Commerce
(Taxation and Finance) and Management. His area of specialization is Taxation.
As well he acted as an Resource Person for National level seminars, workshops
and Guest lecture programs. As well he is an motivational speaker delivered a
speech in various functions. He work and Get a Patent in the field of IOT. He
would like to practice the unique methodology of teaching that creates interest
among the students. For further communications kindly contact through email:
spkvignesh1100@gmail.com

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Sl.
N
o.
Chapter Particulars Page
No.
1 Chapter – I Introduction to Management:
Introduction-Meaning-Definitions-Nature of
Management- Scope of Management- Objectives of
Management- Need and Importance of Management-
Levels of Management - Functions of Management-
Management as an Art- Management as a Science-
Management as Both science and Art- Management vs.
Administration – Qualities of a Good Manager- Major
roles and responsibilities Manager- Duties of Manager.
10 - 36
2 Chapter-II Planning:
Introduction- Definitions- Nature/Characteristics
Planning- Needs/Importance of Planning- Elements of
Fundamentals of planning- Planning Process (or) Steps
in planning- Types of Planning- Techniques and Tools
for planning.
37 – 53
3 Chapter-III Organizing:
Meaning – Definitions – Nature of Characteristics of
organizing – Needs (or) Importance of organizing –
Types of Organisations- Distinguish between Formal and
Informal Organisation- Organisation Structure- Types of
Organisation Structure- Organisation chart- Types of
Organisation chart -Advantages of Organisation Chart-
Limitations of Organisation Chart- Factors affecting
Organisational Chart-
54 – 71
4 Chapter –
IV
Departmentalisation
Departmentalisation – Objectives of
Departmentalisation- Processes of Departmentalisation –
Need and Importance of Departmentalisation – Types of
Departmentalisation – Factors to be considered in
Departmentalisation.
72 - 83

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5 Chapter - V Authority & Responsibility and Centralisation &
Decentralisation:
Authority- Process of Delegation of Authority- Types of
Authority in Management – Responsibility- Features of
Responsibility – Centralization- Factors Determining
Centralization of Authority- Advantages of
Centralization- Disadvantages of Centralization-
Decentralization- Importance of Decentralisation-
Advantages of Decentralisation- Disadvantages of
Decentralisation – Difference between Centralization and
Decentralisation.
84 – 93
6 Chapter-VI Staffing:
Introduction- Definition- Needs and Importance of
staffing- Staffing Process- Benefits of staffing process-
Recruitment - Definitions – Sources of Recruitment –
Modern recruitment Methods.
Selection and Training:
Introduction- Selection Procedure- Training –
Definition- Need and Importance of Training – Types of
Training.
94 - 111
7 Chapter –
VII
Decision Making:
Meaning and Definition- Characteristics of Decision
Making- Steps in Decision Making – Types of Decision
Making- Forecasting Meaning – Importance of
Forecasting- Methods of forecasting.
112 -
124
8 Chapter –
VIII
Performance Appraisal and Promotion:
Performance appraisal - Process of Performance
appraisal- Methods of Performance appraisal –
Traditional Approach – Modern Approach.
Promotion:
Introduction- Features of Promotion- Purpose of
promotion – Types of promotion – Advantages of
Promotion – Disadvantages of Promotion .
125 -
134

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9 Chapter –
IX
Work From Home:
Introduction- Advantages of work from Home -
Disadvantages of work from Home – Managing Work
from Home.
135 -
138
10 Chapter – X Management by Objectives and Span of
Management
Introduction – Meaning – Need for Management by
Objectives (MOB) – Features of MBO – Benefits of MBO
– Drawbacks of MBO – Process of MBO – Span of
Management – Importance of Span of Management –
Factors determining Span of Management – Types of
Span of Control .
139 -
151

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CHAPTER – I : INTRODUCTION TO MANAGEMENT
INTRODUCTION
Management is a universal phenomenon. It is very popular and widely used term. All
organizations - business, political, educational, cultural or social are involved in management
because it is the management which helps and guides the various efforts towards a definite goal
or purpose. Management is the process of working with and through others to effectively achieve
the goals of the organization, by efficiently using limited resources in the changing world.
Management is a purposeful and definite activity. It is something that guides and directs group
efforts towards the achievement of certain well defined and pre-determined goals.
Management involves creating an internal environment which puts into use the various factors of
production. Therefore, it is the responsibility of management to create such conditions which are
conducive to maximum efforts so that people are able to perform their task efficiently and
effectively. Management is the process of designing & maintaining an environment in which
individuals working together in groups and working efficiently to achieve the goal of the
organization.
Generally, five managerial function like Planning, Organizing, Staffing, Leading & Controlling
which are generally carry out by all Managers but their time spent may be vary depending on
different function.
MEANING:
Management is the art of maximizing efficiency, as a social process, a method of getting things
done through others a plan of action and its direction by a co-operative group moving towards a
common goal. Effective utilisation of available resources to achieve same objective is
management. Management is a comprehensive function of Planning, Organising, Forecasting
Coordinating, Leading, Controlling, Motivating the efforts of others to achieve specific
objectives. Management can precisely be called the rule – making and rule – enforcing body.

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DEFINITIONS:
According to Taylor: - “Management is the art of knowing what you want to do and then seeing
that it is done in the best and cheapest way.”
According to Henry Fayol: - “To manage is to forecast and to plan, to organize, to co-ordinate
and to control.”
Harold Koontz says, “Management is the art of getting things done through and within formally
organized group.”
NATURE OF MANAGEMENT
The nature of management is not a simple aspect it has multiple parameters of its own. The
organization is been working on these multiple Parameters to achieve their predetermined goals
and objectives.
1) Multi-Disciplinary: Management is basically multi-disciplined. This implies that
management has developed from different disciplines like physiology, psychology, arts, science,
sociology, etc. Management integrates Knowledge, Skills, Idea & Concepts from the above
discipline & present a newer concept that can be put into practice for managing the business
operation. According to sociology human element plays a very important role in the
organization. So by using, this concept one can motivate & lead the human element in the
organization to achieve goals according to psychology make –up of humans plays important role
in productivity thus by understanding workers’ attitudes one can increase productivity in the
organization.
2) Vibrant and Energetic Nature of Principle: Management has certain principles that are
based on Practical evidence however these principles are flexible in nature & change according
to the changes in the environment. With the continuous development of the speed there in fields,
older principles are to be changed by a new principle. It always vibrant and energetic in
managing things in the business.

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3) Relative not fixed principle: Management principle is relative but not permanent means
these are applied according to the need of an organization. Each organization may be different
from others in a variety of aspects including the age of the organization, nature, type of product
or service, place, society, and cultural factors etc.
4) Management is both Art & Science: Still, there are differences of opinions about whether
management is science or art, however, management is both art & science.It is considered as a
science because it has an organized body of knowledge which contains certain universal truth. It
is called an art because managing requires certain skills which are personal possessions of
managers.
5) Management as a Profession: Management is the profession that deals with the
administration and operation of an organization, especially its human resources, finance,
marketing, and sales. It is a critical function of an organization.Management has been regarded
as a profession while many have suggested that it has not achieved the status of the profession
6) The Flexibility/Modification of Management Principles: Management is a universal
phenomenon. However, the management principle is not universally applicable to all
organization as same to everyone, but is to be modified according to the needs of the situation
and organization nature. The nature of management suggested that it is a multidisciplinary
phenomenon its principles are flexible, relative & absolute.So the management principles
flexible in nature and modified are according to the needs of the organization.
SCOPE OF MANAGEMENT:
The scope management is responsible to define responsibilities of project and control them
properly to attain the objectives. It determines the extent of vie, outlook, operation and
effectiveness of the organization. The scope of business organizations may be classified into the
following categories:
(1) Production Management: Production management is the process which combines and
transforms different resources used in the production system of the organization to add/increase

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more values to the production a controlled and useful manner. It also implies different functions
like planning, organizing, directing and controlling so as to produce the right goods, in right
quantity, at the right time and at the right cost which fulfils goal or objectives of the
organization. The production management helps to increase the product acceptability. It includes
the following activities:
 Designing the Features and Characteristics of the Product.
 Managing purchasing policy or approach and systemize warehousing of production
materials.
 Location and layout of the Plant and building.
 Accessibility and Neighborhood of Plant and Building
 Managing factors of production and production process& operations.
 Maintenance and Repair which should be planned in such a way to achieve zero
breakdown hours.
 Implement and adopt proper Inventory cost and quality control programme.
 Avoid accidents in the production system/process and increase the level of Production.
 Investing and managing in research and development activities to introduce effective
production methodologies and system.
(2) Marketing Management: Marketing management is a managerial process that uses tactics,
ideas, channels and concepts that accelerate scope their products or service in the market. In the
marketing management organizations identify consumers’ needs and wants and supplying goods
and services which can satisfy these needs & wants. Product or services should meet the
expectation of consumers to attract them towards their product or service. It involves the
following activities:
 It involves convincing the prospective consumers to purchase the product or service.
 Setting standardized price for the products and services.
 It helps to delivery of finished products to the customer’s places (It makes sure wide
circulation of product all over the place).
 Holding of products in usable or saleable condition from the time they are produced until
they reach the customers.

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 Involves in research and development to determine the current needs and expectation of
consumers and design the future product to meet the customer expectation.
 Selecting the right channel of distribution to continuous flow of products and promotional
activities like proper advertising and sales promotion.
 Managing market information received from various sources to take correct and timely
decisions for the growth and development.
(3) Financial Management: Financial management is concerned with planning, monitoring,
directing, controlling, protecting and reporting financial sources to manage the organization
effectively to achieve its goals. It also ensures that right amount and type of funds invested in the
business at the right time and at reasonable cost. It is considered as the backbone of any business
organization. It includes the following activities:
 It involves Procurement of funds and effectively managing same in the business.
 Determine the revenue a company need to reach its objectives and determine how much
capital organization needs.
 Accessing the requirement of funds based on the nature and type of business.
 Selecting the appropriate source of funds that suits to the nature and size of business.
 Raising the funds at the right time with appropriate terms and conditions.
 Determine capital structure or composition which suitable to the type of business. It must
be assessed amount of capital needs to be invested.
 Ensuring proper utilization and allocation funds to maintain safety and liquidity of funds
and profitability of business.
 Making decisions on how to invest money in successful ventures and must aware be
aware of the financial management risk and projected return.
 Needs to develop tactics to control and manage funds and also develop strategies to raise,
allocate and spend funds.
(4) Personnel Management: Personnel management involves different management functions
like planning, organizing, staffing, controlling and directing that improve the involvement and
contribution of personnel in the business organisation. It helps to effective and efficient use of

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human resources in the organisation to achieve its goals and objectives in proper way. Generally,
it consists of following activities:
 Planning and controlling Manpower need of the business organisation.
 Recruitment & Selection of deserving candidates according to the needs and objective of
the organisation.
 Provide necessary Training & Development for selected candidates.
 Motivate employees through it’s effective incentive plans so that employees provide
maximum contribution to the growth of the business organisation.
 Analyse performance of the personnel through proper Employee appraisal scheme.
 Provide Employee promotion and transfer according to their performance measured
through Employee Appraisal scheme.
 Provide Employee Compensation according to the need and necessity.,
 Introduce effective Employee welfare services to the benefit employees and also make
sure that it induces them contribute towards growth of the organisation.
(v) Office Management: Office Management includes planning, organising, controlling and
coordinating all office activities to achieve an organization’s goals and objectives and is
concerned with efficient performance of office related works. The success of a business
organisation also depends upon the efficiency of its office. For example, an administration’s
efficiency impacts a business significantly. The more organized the departments and
responsibilities are the more effective an organization is. It involves following major activities.
 Receive and collect the information for timely business decisions.
 Record the collected information in suitable form for future reference and uses.
 Covert the collected information in the form of notes, reports, graphs etc. depending upon
nature and importance of information.
 Supply the right information, at the right time, at the right mode to different departments
and outsiders for sound business decisions and management.
 Plan and set up suitable system and procedures for the effective and efficient
performance of the office.

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 Retain the records of those documents which serve as objective evidence of activities
performed, events occurred and results achieved.
 By adopting scientific methods in office management control over the cost office
management system.
OBJECTIVES OF MANAGEMENT
1. Maximum Utilisation of Resources – The primary objective of management is to use all
the available resources (like man, material, money etc.) to the maximum extent to provide
the optimum output. This objective creates the scope to increase the profits by reducing
the ratio of resources costs to profits.
2. Maximum Results with Minimum Efforts - The major objective of management is to
secure maximum outputs or result with minimum efforts & resources. Management is
basically concerned with thinking and utilizing human, material & financial resources in
such a manner that would result in best combination. These combinations results in
reduction of various costs and achieve organisation goals.
3. Increase the Competency of Production Factors- Through proper and effective
utilization of various factors involved in the production, the management efficiency can
be increased to a great extent which can be obtained by reducing spoilage, wastages and
breakage of all kinds, this in turn leads to saving of time, effort and money which is
essential for the growth & prosperity of the business organisation.
4. Increase Efficiency of Organisation – Through increasing the efficiency of different
operations, production system and services leads for the greater production, sales and
profit to the organisation. Management aims at improving work process, duration of work
and flow of work to increase efficiency of organisation.
5. Maximum Wealth or Benefit for Employer & Employees - Management ensures
smooth and coordinated functioning of the enterprise. This in turn helps in providing
maximum benefits to the employee in the shape of good working condition, suitable
wage system, incentive plans on the one hand and higher profits to the employer on the
other hand.
6. Managing Risks and Uncertainties – Management focus on forecasting and projecting
results and deviations of results. It tries to reduce opportunities and causes of risks and

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losses. By reducing risk factors in inside and outside the organisation tries to eliminate
loss and accelerate profit of the business.
7. Human Improvement and Social Justice - Management serves as a tool for the
upliftment as well as betterment of the society. Through increased productivity and
employment, management ensures better standards of living for the human beings in the
society. It provides justice through its uniform policies and procedures.
NEED AND IMPORTANCE OF MANAGEMENT
1. It helps in Achieving Organisation Goals - It arranges the factors of production,
assembles and organizes the resources, integrates the resources in effective manner to
achieve goals. It directs group efforts towards achievement of pre-determined goals. By
defining objective of organization clearly there would be no wastage of time, money and
effort. Management converts disorganized resources of men, machines, money etc. into
useful enterprise. These resources are coordinated, directed and controlled in such a
manner that enterprise work towards attainment of goals.
2. Maximum Utilization of Resources - Management utilizes all the Non human& human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge, and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no under employment of
any resources.
3. Provide guidance and direction to the Employees – By adopting effective management
system guiding employees of the organisation in the right path in the right manner to
achieve organisation goals and objectives. Giving them a sense of direction by providing
regular updates on what is expected on them and employees also performing the role
according the necessity of the organisation.
4. Reduces Costs - It gets maximum results through minimum input by proper planning and
by using minimum input & getting maximum output. Management uses physical, human
and financial resources in such a manner which results in best combination. This helps in
cost reduction.

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5. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfilment of this, it
establishes effective authority & responsibility relationship i.e. who is accountable to
whom, who can give instructions to whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right skills, training and
qualification. All jobs should be cleared to everyone.
6. Establishes Stability in the Organisation - It enables the organization to survive in
changing environment. It keeps in touch with the changing environment. With the change
is external environment, the initial co-ordination of organization must be changed. So it
adapts organization to changing demand of market / changing needs of societies. It is
responsible for growth and survival of organization.
7. Maximise Prosperity/Welfare of the Society - Efficient management leads to better
economical production which helps in turn to increase the welfare of people. Good
management makes a difficult task easier by avoiding wastage of scarce resource. It
improves standard of living. It increases the profit which is beneficial to business and
society will get maximum output at minimum cost by creating employment opportunities
which generate income in hands. Organization comes with new products and researches
beneficial for society.
LEVELS OF MANAGEMENT
The term “Levels of Management’ refers to a line of segregation that exists between various
managerial positions in an organization. The number of levels in management increases when the
size of the business and work force increases and vice versa. The level of management
determines a chain of command, the amount of authority & status enjoyed by any managerial
position. The levels of management can be classified in three broad categories:
1. Top Level Management/ Administrative level
2. Middle Level Management / Executory
3. Low Level Management / Supervisory / Operative

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1. Administrative / Top Level of Management
It consists of board of directors, chairman, president, general manager, chief executive or
managing director. The top management is the ultimate source of authority and it
manages goals and policies for an enterprise. It devotes more time on planning and
coordinating functions. The top management of an organisation is responsible for its
survival and welfare.
The role of the top management can be summarized as follows -
 Top management determines the objectives and policies of the Organisation to
run the organization efficiently.
 Top management issues necessary instructions for preparation of department
budgets, procedures, schedules etc.
 It prepares strategic plans and policies for the effective functioning of
Organisation.
 It recruits the executive for middle level management i.e. departmental managers.
 It controls & coordinates the activities of different departments of the
Organisation.
 It is also responsible carefully analyzing the business environment and its
implications and take necessary decisions for better results.
 It provides guidance and direction to set up organizational framework to execute
its plan and policies.
 To level management needs to assemble different resources of organisation such
as material, machines, man and money to achieve organisation goals.
 The top management is also responsible towards the shareholders for the better
performance of the business organization.
2. Executory / Middle Level of Management
Middle level management serves as a bridge between Top level management and Lower-
level management. They are responsible to the top management for the functioning of
their department. They devote more time to organizational and directional functions. In

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small organization, there is only one layer of middle level of management but in big
enterprises, there may be senior and junior middle level management. The middle level
management is superior to the lower-level management and sub ordinate to the top-level
management. Their roles are as follows -
 Middle level management executes the plans of the organization in accordance
with directions given by the top management.
 Middle level management participates in employment & training of lower level
management.
 They interpret and explain policies from top level management to lower level.
 They are responsible for coordinating the activities within the division or
department.
 They also send important reports and other important data to top level
management.
 They recruit and select suitable employees for different departments-based firm’s
requirement and necessity.
 They Assign duties and responsibilities of the lower-level management.
 They are also responsible for inspiring lower-level managers towards better
performance.
 Co-ordinating with top and lower-level management for smooth and effective
functioning of organisation.
3. Supervisory / Lower Level of Management
Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
“Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees”. The lower-level management
plays crucial role in the proper management of an Organisation, as they directly interact
with actual work force in day-to-day activities of the business organisation. In other
words, they are concerned with direction and controlling function of management. Their
activities include -

21
 Issuing orders to the workers and instruct them on their responsibility and
authority clearly.
 Assigning of jobs and duties to various workforces in the Organisation.
 Guide and instruct workers in day-to-day activities.
 They are responsible for the quality as well as quantity of production.
 They are also entrusted with the responsibility of maintaining good relation in the
organization.
 They communicate workers problems, suggestions, and recommendatory appeals
etc. to the higher level and higher-level goals and objectives to the workers.
 Listen to the grievances of the workers and report those issues to the middle level
management.
 Arrange necessary materials, machines, tools etc for getting the things done from
the workers.
 Ensure safe and proper work environment as it motivates employees to work
towards accomplishment of enterprise goals.
 Prepare periodical reports at the regular intervals about the performance of the
workers.
 They ensure discipline in the Organisation and motivate workers to perform
better.
FUNCTIONS OF MANAGEMENT
Management involves controlling and guiding human and non-humanresources within the
organisation to achieve organisation goals or objectives. It is a dynamic process consisting of
various elements and activities. These activities are different from operative functions like
marketing, finance, purchase etc. Rather these activities are common to each and every manger
irrespective of his level or status. Different experts have classified functions of management.
According to George & Jerry, “There are four fundamental functions of management i.e.
planning, organizing, actuating and controlling”.

22
According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where
 P stands for Planning
 O stands for Organizing
 S stands for Staffing
 D stands for Directing
 Co stands for Co-ordination
 R stands for Reporting
 B stands for Budgeting.
But the most widely accepted functions of management given by KOONTZ and O’DONNEL
i.e. Planning, Organizing, Staffing, Directing and Controlling.Each function creates its own
impacts on other performance or functions. All these management functions are interconnected
and plays key role in achieving objectives of organisation.
1. Planning
It is the primary function of management. It deals with working out a future course of
action & deciding in advance the most appropriate course of actions for achievement of
well-defined pre-determined goals. According to KOONTZ, “Planning is deciding in
advance - what to do, when to do & how to do. It bridges the gap from where we are
&where we want to be”. A plan is a future course of actions. It is an exercise in problem
solving & decision making. Planning is determination of courses of action to achieve
desired goals. Thus, planning is a systematic thinking about ways & means for
accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is all pervasive, it is an intellectual
activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.
2. Organizing
It is the process of bringing together human and non-human resources and developing
productive relationship amongst them for achievement of organizational objectives and

23
goals. According to Henry Fayol, “To organize a business is to provide it with everything
useful for its functioning i.e. raw material, tools, capital and personnel’s”. To organize a
business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:
 Identifying Major Activities of the business
 -Classification of Activities under different groups based on some major criteria.
 Assigning duties to all human resources in the organisation
 Proper Delegation of Authority to achieve goals
 Creation of Responsibility for effective functioning
3. Staffing
It is the function of recruiting qualified candidates for different positions in an
organisation. Staffing has greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behaviour etc. The main
purpose of staffing is to put the right man on the right job at the right time at right cost .
According to Koontz & O’Donell, “Managerial function of staffing involves manning the
organization structure through proper and effective selection, appraisal & development of
personnel to fill the roles designed in the structure”. Staffing involves:
 Manpower Planning (Determining man power requirement of business
organisation for the effective functioning).
 Recruitment, Selection & Placement of Employees.
 Proper Training & Development Programmes.
 Employee Performance Appraisal or Assessment.
 Remuneration for employees based on Performance.
 Promotions, Demotion & Transfer of Employees.
4. Directing
Directing involves guiding, instructing and directing performance of employees towards
achievement of objectives of Organisation. It is considered life-spark of the enterprise
which sets it in motion the action of people because planning, organizing and staffing are
the mere preparations for doing the work. Directing is telling employees what to do and

24
seeing that they do it to the best of their ability. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising, motivating sub-
ordinate for the achievement of organizational goals. The following are major elements
of elements:
 Supervision
 Motivation
 Leadership
 Communication
 Supervision- It implies overseeing the work of subordinates by their superiors. It
is the direct control of and guidance of subordinates while doing their work. For
this supervisor needs technical, conceptual and human relations.
 Motivation- It means inspiring, stimulating or inducing the employees with aims
to accomplish the task with the help of them. Motivation may be Positive,
Negative, Monetary and Non-monetary. Motivation influences the employees to
perform their role effectively.
 Leadership- It may be defined as the action or an act of guidance of leading a
group of people in an organisation. It is a process by which manager guides and
influences the work of employees in a desired direction.Leaders’ individuality
creates major impact on the work performance of employees in an organisation.
 Communications- It is the process of passing ideas, knowledge, information,
experience, opinion etc., from one person to another person in an organisation. It
involves planning, execution, monitoring and improvement of communication. It
is interpersonal and organizational.
5. Controlling
It implies that deciding and defining pre-determined standards and making sure that
performance of the employees match with the standards set by the management and
ensuresthat achievement of organizational goals. The purpose of controlling is to ensure
that everything occurs in according with the pre-determined standards. An efficient

25
system of control helps to predict deviations before they actually occur. According to
Koontz &O’Donell “Controlling is the measurement & correction of performance of
subordinates in order to make sure that the organisation objectives and plans are being
accomplished as desired”. Therefore, controlling involves following steps:
 Establishment of Standard performance – (Standards are the targets needs to be
achieved).
 Measurement of Actual performance – (Measuring performance in terms of units,
cost, money, weekly, monthly yearly etc.).
 Comparison of Actual performance with the Standards- (Finding out deviation if
any, whether Positive or Negative).
 Remedial or Corrective Action – (Detect the errors and take remedial measures)
MANAGEMENT AS AN ART
Management applies knowledge, experience & skill to achieve desired results. An art may be
defined as personalized application of general theoretical principles for achieving best possible
results. Art is concerned with the understanding of how particular task can be accomplished.
Thus, we can say that management is an art therefore it requires application of certain principles
rather it is an art of highest order because it deals with moulding the attitude and behavior of
people at work towards desired goals. It is highly personalized activity to achieve desired goals.
Since, art varies from person to person it is prone to failure. It has the following characters -
1. Practical Knowledge: Every art requires practical knowledge therefore learning of
theory is not sufficient. It is very important to know practical application of theoretical
principles. E.g. to become a good painter, the person may not only be knowing different
colour and brushes but different designs, dimensions, situations etc. to use them
appropriately. A manager can never be successful just by obtaining degree or diploma in
management; he must have also knobn34yw how to apply various principles in real
situations by functioning in capacity of manager.

26
2. Personal Skill: Although theoretical base may be same for every artist, but each one has
his own style and approach towards his job. That is why the level of success and quality
of performance differs from one person to another. Similarly, management as an art is
also personalized. Every manager has his own way of managing things based on his
knowledge, experience and personality, that is why some managers are known as good
managers whereas others as bad.
3. Creativity: Every artist has an element of creativity in line. That is why he aims at
producing something that has never existed before which requires combination of
intelligence & imagination. Management is also creative in nature like any other art. It
combines human and non-human resources in useful way so as to achieve desired results.
It tries to produce sweet music by combining chords in an efficient manner.
4. Perfection through practice: Practice makes a man perfect. Every artist becomes more
and more proficient through constant practice. Similarly, managers learn through an art of
trial and error initially but application of management principles over the years makes
them perfect in the job of managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the
same manner, management is also directed towards accomplishment of pre-determined
goals. Managers use various resources like men, money, material, machinery & methods
to promote growth of an organization.
Just like any other art:
i. Management is also application of knowledge in different situations.
ii. Management is a highly personalized activity and varies from manager to manager. Thus,
management is also prone to failure.
iii. Management is action-oriented to achieve organizational objectives.
Thus, management is a perfect art or rather a fine art.

27
MANAGEMENT AS A SCIENCE
Science is a systematic body of knowledge pertaining to a specific field of study that contains
general facts which explains a phenomenon. It establishes cause and effect relationship between
two or more variables and underlines the principles governing their relationship. These principles
are developed through scientific method of observation and verification through testing.
Science is characterized by following main features:
1. Universally accepted principles - Scientific principles represents basic truth about a
particular field of enquiry. These principles may be applied in all situations, at all time &
at all places. E.g. - law of gravitation which can be applied in all countries irrespective of
the time. Management also contains some fundamental principles which can be applied
universally like the Principle of Unity of Command i.e. one man, one boss. This principle
is applicable to all type of organization - business or non-business.
2. Experimentation & Observation - Scientific principles are derived through scientific
investigation & researching i.e. they are based on logic. E.g. the principle that earth goes
round the sun has been scientifically proved.
Management principles are also based on scientific enquiry & observation and not only
on the opinion of Henry Fayol. They have been developed through experiments &
practical experiences of large no. of managers. E.g. it is observed that fair remuneration
to personal helps in creating a satisfied work force.
3. Cause & Effect Relationship - Principles of science lay down cause and effect
relationship between various variables. E.g. when metals are heated, they are expanded.
The cause is heating & result is expansion. The same is true for management, therefore it
also establishes cause and effect relationship. E.g. lack of parity (balance) between
authority & responsibility will lead to ineffectiveness. If you know the cause i.e. lack of
balance, the effect can be ascertained easily i.e. in effectiveness. Similarly, if workers are
given bonuses, fair wages they will work hard but when not treated in fair and just
manner, reduces productivity of organization.

28
4. Test of Validity & Predictability - Validity of scientific principles can be tested at any
time or any number of times i.e. they stand the test of time. Each time these tests will
give same result. Moreover, future events can be predicted with reasonable accuracy by
using scientific principles. E.g. H2 & O2 will always give H2O.Principles of management
can also be tested for validity. E.g. principle of unity of command can be tested by
comparing two persons - one having single boss and one having 2 bosses. The
performance of 1st person will be better than 2nd.
Management satisfies these requirements to a certain extent:
i. Management is a systematic body of knowledge with its own theories and principles.
ii. The principles of management also evolved through repeated experimentation. But since
management deals with humans, the outcome of the experiments is significantly unpredictable.
iii. The principles of management do not have a universal applicability and need modification
under different circumstances.
It cannot be denied that management has a systematic body of knowledge but it is not as exact as
that of other physical sciences like biology, physics, and chemistry etc. The main reason for the
inexactness of science of management is that it deals with human beings and it is very difficult to
predict their behavior accurately. Since it is a social process, therefore it falls in the area of social
sciences. It is a flexible science & that is why its theories and principles may produce different
results at different times and therefore it is a behavior science. Ernest Dale has called it as a Soft
Science.
MANAGEMENT AS BOTH SCIENCE AND ART
Management is both an art and a science. The above-mentioned points clearly reveal that
management combines features of both science as well as art. It is considered as a science
because it has an organized body of knowledge which contains certain universal truth. It is called
an art because managing requires certain skills which are personal possessions of managers.
Science provides the knowledge & art deals with the application of knowledge and skills.

29
A manager to be successful in his profession must acquire the knowledge of science & the art of
applying it. Therefore, management is a judicious blend of science as well as an art because it
proves the principles and the way these principles are applied is a matter of art. Science teaches
to ’know’ and art teaches to ’do’. E.g. a person cannot become a good singer unless he has
knowledge about various ragas & he also applies his personal skill in the art of singing. Same
way it is not sufficient for manager to first know the principles but he must also apply them in
solving various managerial problems that is why, science and art are not mutually exclusive but
they are complementary to each other (like tea and biscuit, bread and butter etc.).
The old saying that “Manager are Born” has been rejected in favour of “Managers are Made”. It
has been aptly remarked that management is the oldest of art and youngest of science. To
conclude, we can say that science is the root and art is the fruit.
MANAGEMENT VS ADMINISTRATION
Management is process it includes planning, organizing, directing and controlling. It can be
understood as the skill of getting the things done from others to accomplish desired goals. It is
not exactly same as administration, which alludes to a process of effectively administering the
entire organization. The most important point that differs management from the administration is
that the former is concerned with directing or guiding the operations of the organization, whereas
the latter stresses on laying down the policies and establishing the objectives of the organization.
Broadly speaking, management takes into account the directing and controlling functions of the
organization, whereas administration is related to planning and organizing function.
Management
Management is defined as an act of managing people and their work, for achieving a common
goal by using the organization’s resources. It creates an environment under which the manager
and his subordinates can work together for the attainment of group objective. Planning,
organizing, leading, motivating, controlling, coordination and decision making are the major
activities performed by the management. Management brings together 5M’s of the organization,
i.e. Men, Material, Machines, Methods, and Money. It is a result-oriented activity, which focuses
on achieving the desired output.

30
Administration
The administration is a systematic process of administering the management of a business
organization, an educational institution like school or college, government office or any non-
profit organization. The main function of administration is the formation of plans, policies, and
procedures, setting up of goals and objectives, enforcing rules and regulations, etc.
Administration lay down the fundamental framework of an organization, within which the
management of the organization functions. Administration represents the top layer of the
management hierarchy of the organization. These top-level authorities are the either owners or
business partners who invest their capital in starting the business.
DISTINGUISH BETWEEN MANAGEMENT AND ADMINISTRATION
S. No. Basis Management Administration
1. Meaning Management is a
systematic way of
managing people and
things within the
organization.
The administration is defined as
an act of administering the whole
organization by a group of
people.
2. Activity Management is an activity
of business and functional
level
Administration is a Top or High-
level activity.
3. Policy Management focuses on
policy implementation to
achieve organisation goal
or objective.
Administration performs the task
of policy formulation or invention
of the Organisation.
4. Function Functions of management
are executive and
governing.
Functions of administration
include legislation and
determination.
5. Decision making Management decision
makings are subject to the
Administration takes all the major
or important decisions of the

31
limits or boundaries set by
the Administration.
organization.
6. Representation Employees represent the
Management and they are
part of it. A group of
persons, who are
employees of the
organization is collectively
known as management.
Administration represents
the owners or representatives of
the owner of the organization.
7. Work Management is all about
making plans and taking
actions according to the
plan to execute things
effectively.
Administration is concerned with
framing organisation strategies,
policies, procedures, guidelines
and objectives.
8. Role Management plays an
executive role in the
organization and Manager
looks after management of
the Organisation.
Administration plays a role of
Decisive in nature and
responsible for Administration of
Organisation.
9. Suitability Management is more
suitable for profit-making
organization like business
enterprises.
Administration suitable for
government and military offices,
clubs, hospitals, religious
organizations and all the non-
profit making enterprises.
10. Focus Management focuses on
managing employees and
their work.
Administration focuses on
making the best possible results
by utilising organization’s
resources effectively.

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QUALITIES OF A GOOD MANAGER
A manager has to undertake a number of functions from planning to controlling. He has to take
decisions for every type of activity in the business enterprise. The decisions of the manager
influence the performance of an organization. If the manager possess following qualities that
may contribute for the effective functioning of any organisation.
1. Proper Educational Background:
A manager must have proper educational background. These days managers are supposed to
have management education, besides other educational qualifications. Education not only widens
mental horizon but also helps in understanding the things and interpreting them properly. The
knowledge of business environment is also important for dealing with various problems the
organization may face.
2. Right Aptitude:
A manager has to perform more responsibilities than other persons in the organization. He
should have higher level of aptitude as compared to other persons. Right Aptitude will help a
manager in assessing the present and future possibilities for the business. He will be able to
foresee the things in advance and take necessary decisions at appropriate time.
3. Leadership Skills:
A manager has to direct and motivate persons working under him/her in the organization. He/she
provides leadership role to subordinates. The energies of the subordinates will have to be
channelize of properly for achieving organizational goals. If a manager has the leadership
qualities, then he can motivate subordinates in improving their performance and working to their
full capacity for the benefit of the organization.
4. Managerial Skills:
A manager has to acquire managerial skills. These skills consist of technical skills, human skills
and conceptual skills. These skills have to be acquired through education, guidance, experience
etc. These skills are needed for all levels of managers.

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5. Technical Knowledge:
A manager should have technical knowledge of production processes and other activities
undertaken in the enterprise. He will be in a better position to inspect and guide if he himself has
knowledge of those activities.
6. Mental Maturity:
A manager should have mental maturity for dealing with different situations. Heshould be
patient, good listener and quick to react to situations. He has to take many stubborn decisions
which may adversely affect the working if not taken properly. He should keep calm when
dealing with subordinates. All these qualities will come with mental maturity.
7. Positive Attitude:
Positive attitude is an asset for a manager. A manager has to deal with many people from inside
as well as from outside the organization. He should be sympathetic and positive to various
suggestions and taken humane decisions. He should not pre-judge the things and take sides. He
should try to develop good relations with various persons dealing with him. He should
understand their problems and try to extend a helping hand.
8. Self-confidence:
A manager should have self- confidence. He has to take many decisions daily, he may analyse
the things systematically before taking decisions. Once he takes decisions then he should stick to
them and try to implement them. A person who lacks self-confidence will always be unsure of
his decisions. This type of attitude will create more problems than solving them.
9. Foresight:
A manager has to decide not only for present but for future also. There are rapid changes in
technology, marketing, consumer behaviour, financial set up etc. The changes in economic
policies will have repercussions in the future. A manager should visualize what is going to
happen in future and prepare the organization for facing the situations. The quality of foresight
will help in taking right decisions and face the coming things in right perspective. In case the
things are not rightly assessed then the organization may face adverse situations.

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MAJOR ROLES AND RESPONSIBILITIES OF A MANAGER
A manager is an important asset to the organization. The primary role of the manager is to co-
ordinate the work of all the employees in the organization and to bring about the best results that
ensures the growth of the organization. There are various roles and responsibilities that managers
hold in order to bring about the best outcomes from the employees. Following are the major role
and responsibilities of a manger in all kind of organisations.
1. Envisage the Goals: The managers need to understand how the goals are being directed in the
organization. He/she should envision the mission and goals of the organisation which is
detrimental for the growth of the business. The managers need to communicate the goals
properly to the employees and map ways that help to achieve these goals in a strategic fashion.
2. Manage the growth: One of the most common roles and responsibilities of a manager is to
sustain the growth of the organization. The manager needs to scan and analyse the internal and
external environment that poses threat on the survival of the business.
3. Improve the competency of the firm: The manager needs to ensure that the resources are
properly utilised and not wasted. This can pave way for overall competency of the firm’s
resources. Managers need to improve and maintain the competency of the firm in order to reach
success.
4. Being Creative and Innovative: The manager needs to be creative and innovative in his
work. He needs to formulate strategies that would help find creative solutions to the problems
encountered in the organization. The manager must inculcate innovation in the employees and
encourage them to come up with innovative ways to achieve the goals faster and better.
5. Motivation and Leadership: The manager must be a good leader and a motivator. He/she
needs to inspire and motivate the employees working in the organization. A leader must ensure
that the goals of the company are achieved and the employees’ interests are protected at the same
time. The manager must possess superior leadership skills in order to lead the employees in a
better way.
DUTIES OF MANAGER
Managers are often met with a diverse, versatile workday. Their duties can include tasks that are
task or goal-based. They may be involved in the day-to-day operations of the business or

35
completing projects that meet the long-term goals of the company. Here are a few top duties of a
manager:
1. Leading the team members: One of the manager’s main duties is to lead the team
members. Managers will lead their team to complete tasks and meet goals. They may also
be in charge of maintaining the mission and values of the company, and leading team
members to complete tasks that bring them closer to the achievement of those goals.
2. Setting and Managing goals: Some managers may also be in charge of setting these
goals, and tracking progress toward them. They will do this by evaluating the long-term
goals of the business and then breaking them down into short-term tasks and projects.
Managers may need to share these goals or plans with their team members to ensure
everyone is aware of the expectations.
3. Maintain a harmless work environment: Managers are tasked with ensuring employees
have a safe work environment at all times. This means ensuring that all employees are
following regulations and workplace laws. It also means handling any safety concerns in
a timely manner.
4. Enforce better quality standards: Managers are responsible for enforcing quality
standards, usually set by the company. This might include ensuring specific customer
satisfaction ratings or evaluating the quality of products. Managers are in a good position
to provide valuable feedback to other team members and upper management on potential
improvements in duties.
5. Administrative duties: Managers may also often be in charge of certain administrative
duties. This could include making schedules, tracking pay, managing profits and losses
day-to-day and even managing budgets.
6. Delegate tasks according to employee skills: It is the manager’s role to understand the
strengths and weaknesses of each employee and to delegate tasks as needed. They may
need to motivate employees and keep them engaged in working toward company goals.
7. Manage employees: Managers may also need to manage certain aspects of their
employees. This could include recognizing obstacles toward progress or dealing with
conflict among team members.

36
8. Hiring Potential employees: Managers may need to recruit new employees. This
includes evaluating the current tasks of the business and identifying what skills and
experience are needed. Then, they may be involved in reviewing resumes and
interviewing potential employees.
9. Train and development employee team: Managers may or may not be involved in the
selection of their team members, but they will almost always be a part of training and
developing their team. This includes implementing training programs that teach team
members the skills they need to complete their assigned tasks.
10. Develop current employees’ potentials: The manager is also responsible for developing
current team members to reach their full potential. This requires an evaluation of each
team member’s strengths and abilities.
11. Evaluate employee Progression: Managers may need to assess the progress and
development of their team members each year. This often requires an evaluation of
progress toward key performance indicators, as well as completing performance reviews.
12. Manage Budget and finances: Managers are also often involved in the budgeting and
finances of the business, including estimating and creating budgets and tracking
spending.
A manager’s duties may also vary, depending on the type of industry in which they work. For
example, an accounting manager will need to oversee the financial tasks of their team members.
A manager in a retail store will need to fill in for team members from time to time, while also
working closely with customers. In specialized industries, managers may need to complete duties
that are more related to their field.
************

37
CHAPTER – II: PLANNING
INTRODUCTION
Planning is the fundamental management function, which involves deciding beforehand, what is
to be done, when is it to be done, how it is to be done and who is going to do it. Planning bridges
the gap from where we are to where we want to go. It is an intellectual process which lays
down organization’s objectives and develops various courses of action, by which the
organization can achieve those objectives. It chalks out exactly, how to attain a specific goal.
Planning is nothing but thinking before the action takes place. It helps us to take a look into the
future and decide in advance the way to deal with the situations, which we are going to encounter
in future. It involves logical thinking and rational decision making.
DEFINITIONS
“Planning is deciding advance what to do, how to do it, when to do it, who is to do it. It bridges
the gap between where we are, where we want to go. It makes it possible for things to occur
which would not otherwise happen.” - Koontz and O’Donnel
“Planning is the selecting and relating of facts and the making and using of assumptions
regarding the future in the visualization to achieve desire results.” - George Terry
NATURE/CHARACTERISTICSOFPLANNING
1. Basic and Primary Managerial function: Planning is the primary function of the management
which provides base for other management functions, i.e. Organizing, Staffing, Directing, Co-
ordinating, Motivating and Controlling, as they are performed within the margin or limits of the
plans made.
2. Focus on Goal or Aim of the Organisation: It focuses on determining the aims or goals of the
organization, identifying alternative courses of action and deciding the appropriate action plan,
which is needs to be undertaken for achieving the goals effectively within the stipulated time
limit.

38
3. Pervasiveness: It is pervasive in the sense that it is needed in all the categories and is required at
all the levels of the organisation. Although the scope of planning varies at different levels and
departments.
4. Continuous Process: Plans are made for a specific term, say for a day, week, month, quarter,
year and so on. Once that period is over, new plans are prepared after considering organisation’s
present and future requirements and situations. Therefore, it is an ongoing process, as the plans
are framed, executed and followed by another plan, it keeps going continuously.
5. Logical Process: It is a mental exercise at it involves the application of mind, to think, forecast,
imagine intelligently and innovate etc.So, it is a logical process to making preparations according
the scenarios.
6. Future Oriented: In the process of planning, we will make plans by forecasting the future with
the help of past and present scenarios. It encompasses looking into future, to analyse and predict
it, so that the organisation can face the future challenges effectively.
7. Decision making: Decisions are made regarding the choice of alternative courses of action that
can be undertaken to reach the goal. The alternative chosen should be best among all, with least
number of negative and highest number of positive outcomes.
8. Co-ordinate all major functions: Planning co-ordinates the what, who, how, where and why of
planning. Without co-ordination of all activities, we cannot have united efforts.It co-ordinates all
major functions of the organization to achieve the goals of the organization.
Planning is concerned with setting objectives, targets, and formulating plan to accomplish them.
The activity helps managers analyse the present condition to identify the ways of attaining the
desired position in future. It is both, the need of the organisation and the responsibility of
managers.
NEEDS / IMPORTANCE OF PLANNING
i. Planning guides to right Path: Planning leads to right direction to managers and
non- managers alike. When employees know what their organization or work unit is
trying to accomplish and what they must contribute in order to reach goals, they can
coordinate their activities, cooperate with each other and do what it takes to

39
accomplish those goals. Without planning, department and individuals might work at
cross-purpose and prevent the organization from efficiently achieving goals.
ii. Planning anticipate changes and reduces uncertainty: Planning reduces
uncertainty by forcing managers to look ahead, anticipate change, consider the impact
of change, and develop appropriate response. Although planning won’t eliminate
uncertainty, managers plan so they can respond efficiently. Future is always full of
uncertainties and changes. Planning foresees the future and makes the necessary
provisions for it.
iii. Planning Minimizes wastages and Idleness: Planning Minimizes unnecessary
wastages in terms of everything in the organisation andalso reduce idle time with
proper planning. When work activity is coordinated around plans, inefficiency
becomes noticeable and can be corrected and eliminated.
iv. Planning establishes the Standard or Basefor effective controlling: When
management plan, they develop standards and base for controlling mechanism. When
they control, they see whether the plans have been carried out and the goals met.
Without planning there would be no goals against which to measure or evaluate work
effort. The controlling function of management relates to the comparison of the
planned performance with the actual performance. In the absence of plans, a
management will have no standards for controlling other's performance.
v. Planning gives more attention on objectives of the Organisation: All the activities
of an organization are designed to achieve certain specified objectives. However,
planning makes the objectives more concrete by focusing attention on them.
vi. Planning assist for co-ordination: Co-ordination is, indeed, the essence of
management, the planning is the base of it. Without planning it is not possible to co-
ordinate the different activities of an organization.
vii. Planning control Cost (Economical): Planning involves, the selection of most
profitable course of action or activity that would lead to the best result at the
minimum costs. It makes sure that cost is under control to accelerate profit margin of
the business.
viii. Planning accelerates overall effectiveness of organization: Mere efficiency in the
organization is not important; it should also lead to productivity and effectiveness.

40
Planning enables the manager to measure the organizational effectiveness in the
framework of the primary or major objectivesof the organisation and take further
actions in this direction.
ELEMENTS OR FUNDAMENTALS OF PLANNING:
1. Objectives:
The important task of planning is to determine the objectives of the business organisation.
Objectives are the goals towards which all managerial activities of the business enterprise aim.
All planning work must spell out in clear terms the objectives to be realised from the proposed
business activities. When planning action is taken, these objectives are made more concrete and
meaningful. For example, if the organisational objective is maximising sales, planning activity
have to specify how much Sales to be achieved within the stipulated period of time and also look
into all facilitating and constraining factors of the organisation.
2. Foretelling:
It is the analysis and interpretation of future in relation to the activities and working of an
enterprise. Business foretelling refers to tell beforehand the statistical data and other economic,
political and market information for the purpose of reducing the amount of risks involved in
making business decisions. Foretelling provides a logical basis for anticipating the shape of the
future business transactions and their requirements as to man and material.
3. Policies:
Planning also requires laying down of policies for the easy functioning of business. Policies are
statements or principles that guide and direct different managers at various levels in making
decisions. Policies provide the necessary basis for executive operation. They set forth overall
boundaries within which the decision-makers are expected to operate while making decisions.
Policies act as guidelines for taking administrative decisions.
In a big enterprise, various policies are formulated for guiding and directing the subordinates in
different areas of management. They may be Production policy, Sales policy, Human resource
policy, Promotion policy, Financial policyetc. But these different policies are co-ordinated and

41
integrated in such a way that they ensure easy realisation of the ultimate objectives of business.
Policies should be consistent and must not be changed frequently.
4. Procedures:
The manner in which each work has to be done is indicated by the procedures laid down.
Procedures outline a series of tasks to be performed in the specified course of action. There may
be some confusion between policies and procedures. Policies provide guidelines to thinking and
action, but procedures are definite and specific steps to thinking and action. For example, the
policy may be the recruitment of personnel from all parts of the country; but procedures may be
to advertise and invite applications, to take interviews and offer appointment to the selected
personnel.
Thus, procedures mean definite steps in a chronological sequence within the area chalked out by
the policies. In other words, procedures are the methods by means of which policies are
enforced. Different procedures are adopted in different areas of business activities. There may be
production procedure, sales procedure, purchase procedure, personnel procedure etc.
5. Guidelines:
Guidelines or Rules acts as a guide which helps the management authority to take proper
decisions to run the organisation effectively. This decision signifies that a definite action must be
taken in respect of a specific situation. The guidelines prescribe a definite and stiff course of
action to be followed in different business activities without any scope for deviation or
discretion.
Any deviation of rule entails penalty. Rule is related to parts of a procedure. Thus, a rule may be
incorporated in respect of purchase procedure that all purchases must be made after inviting
tenders. Similarly, in respect of sales procedure, rule may be enforced that all orders should be
confirmed the very next day.
6. Programmes:
Programmes are precise plans of action followed in proper sequence in accordance with the
objectives, policies and procedures. Programmes, thus, lead to a concrete course of inter-related
actions for the accomplishment of a purpose. Thus, a company may have a programme for the

42
establishment of schools, colleges and hospitals near about its premises along with its expanding
business activities.
Programmes must be closely integrated with the objectives. Programming involves dividing into
steps the activities necessary to achieve the objectives, determining the sequence between
different steps, fixing up performance responsibility for each step, determining the requirements
of resources, time, finance etc. and assigning definite duties to each part.
7. Budgets:
Budget means an estimate of men, money, materials and equipment in numerical terms required
for implementation of plans and programmes. Thus, planning and budgeting are inter-linked.
Budget indicates the size of the programme and involves income and outgo, input and output. It
also serves as a very important control device by measuring the performance in relation to the set
goals. There may be several departmental budgets which are again integrated into the master
budget.
8. Strategies:
Strategies are the devices formulated and adopted from the competitive standpoint as well as
from the point of view of the employees, customers, suppliers and government. Strategies thus
may be internal and external. Whether internal or external, the success of the plans demands that
it should be strategy-oriented.
The best strategy of planning from the competitive standpoint is to be fully informed somehow
about the planning ‘secrets’ of the competitors and to prepare its own plan accordingly.
Strategies act as reserve forces to overcome resistances and reactions according to
circumstances. They are applied as and when required.

43
PLANNING PROCESS [OR] STEPS IN PLANNING
The planning is one of the major and primary function of management. It involves setting the
objectives or goals of the business enterprise and then managing the resources to achieve such
goals. The following are the major steps involved in the overall planning process.
1] Perception or Awareness of Opportunities
The primary part of planning process is to be aware business opportunities available in internal and
external environment of the business enterprise. Once such opportunities get recognized the
managers can recognize the actions that need to be taken to realize them. Perception of
opportunities includes a preliminary look at possible opportunities and the ability to see them clearly
and completely, a knowledge of where the organization stands in the light of its strengths and
weaknesses and a vision of what it expects to gain. A realistic look must be taken at the prospect of
these new opportunities and a SWOT (Strength, Weakness, Opportunities and Threat) analysis
should be done.
2] Setting/Establishing Objectives
This is the second and perhaps the most important step of the planning process. Objectives specify
the results expected and indicate the end points of what is to be done in key areas. Here we establish
the objectives for the whole organization and also individual departments. Organizational objectives
provide a general direction, objectives of departments will be more planned and detailed.
Objectives can be long term and short term as well. They indicate the end result the company
wishes to achieve. So, objectives will percolate down from the managers and will also guide and
push the employees in the correct direction.
3] Planning and Awareness of Premises
Planning is always done keeping the future in mind and it always makes predictions on future
events; however, the future is always uncertain. So, in the function of management certain

44
assumptions will have to be made. These assumptions are the premises. Such assumptions are made
in form of forecasts, existing plans, past policies etc.
These planning premises are also of two types – internal and external. External assumptions deal
with factors such as political environment, social environment, advancement of technology,
competition, market environment, government policies etc. Internal assumptions deal with policies,
procedures, strategies, personnel, availability of resources, work environment, quality of
management, leadership etc. These assumptions being made should be uniform across the
organization. All managers should be aware of these premises and should agree with them.
4] Identifying Multiple Alternatives
The fourth step of the planning process is to identify the alternatives available to the managers.
There is no one way to achieve the objectives of the firm, there is a multitude of choices. All of
these alternative courses should be identified. There must be options available to the manager.
Maybe he chooses an innovative alternative hoping for more efficient results. If he does not want to
experiment, he will stick to the more routine course of action. The problem with this step is not
finding the alternatives but narrowing them down to a reasonable number of choices so all of them
can be thoroughly evaluated.
5] Examining Alternative Course of Action
The next step of the planning process is to evaluate and closely examine each of the alternative
plans. Every option will go through an examination where all their pros and cons will be weighed.
The alternative plans need to be evaluated in the light of the organizational objectives.
For example, if it is a financial plan. Then it that case its risk-return evaluation will be done.
Detailed calculation and analysis are done to ensure that the plan is capable of achieving the
objectives in the best and most efficient manner possible.

45
6] Selecting the Right Alternative
Finally, we reach the decision-making stage of the planning process. Now the profitableand most
feasible plan will be chosen to be implemented in the organisation. The ideal plan is the most
profitable one with the least number of negative consequences and is also adaptable to dynamic
situations.
The choice is obviously based on scientific analysis and mathematical equations. But a manager’s
perception and experience should also play a big part in this decision. Sometimes a few different
aspects of different plans are combined to come up with the one ideal and effective plan.
7] Formulating Supporting or Secondary Plan
Once you have chosen the plan to be implemented, managers will have to come up with one or
more supporting plans. These secondary plans help with the implementation of the main plan. For
example, plans to hire more people, train personnel, expand the office etc are supporting plans for
the main plan of launching a new product. So, all these secondary plans are in fact part of the main
plan.
8] Implementation of the Effective Plan
And finally, we come to the final step of the planning process, implementation of the plan. This is
when all the other functions of management come into play and the plan is put into action to achieve
the objectives and goals of the organization. The tools required for such implementation involve the
types of plans- procedures, policies, budgets, rules, standards etc.
TYPES OF PLANNING
1. On the basis of Coverage of activities
i.) Corporate Planning: David has defined corporate planning as follows: "Corporate planning
includes the setting of objectives, organising the work, people, and systems to enable those

46
objectives to be attained, motivating through the planning process and through the plans,
measuring performance and so controlling progress of the plan and developing people through
better decision making, clearer objectives, more involvement, and awareness of progress.The
term corporate planning denotes planning activities at the top level, also known as corporate
level, which cover the entire organisational activities. The basic focus of corporate planning is to
determine the long-term objectives of the organisation as a whole and then to generate plans to
achieve these objectives bearing in mind the probable changes in environment.
ii.) Functional Planning: As against corporate planning which is integrative, functional
planning is segmental and it is undertaken for each major function of the organisation like
production/operation, marketing, finance, human resource/personnel, etc. At the second level
functional planning is undertaken for sub functions within each major function. For example,
marketing planning is undertaken at the level of marketing department and to put marketing plan
in action, planning at sub functions of marketing like sales, sales promotion, marketing research,
etc., is undertaken. A basic feature of functional planning is that it is derived out of corporate
planning and, therefore, it should contribute to the latter.
2. On the basis of Importance of Contents
i.) Strategic Planning: Strategic planning sets the long-term direction of the organisation in
which it wants to proceed in future. Anthony has defined strategic planning as follows: "Strategic
planning is the process of deciding on objectives of the organisation, on changes on these
objectives, on the resources used to attain these objectives and on the policies that are to govern
the acquisition, use and disposition of these resources”. Examples of strategic planning in an
organisation may be planned growth rate in sales, diversification of business into new lines, type
of products to be offered, and so on.
ii.) Operational Planning: Operational planning, also known as tactical or short-term planning,
usually covers one year or so. It is aimed at sustaining the organisation in its production and
distribution of current products or services to the existing markets. Operational planning can be
defined as follows: "Operational planning is the process of deciding the most effective use of the

47
resources already allocated and to develop a control mechanism to assure effective
implementation of the actions so that organisational objectives are achieved. Operational
planning taken in this way answers the questions about a particular function as follows:
Operational planning is undertaken out of the strategic planning. The various examples of
operational planning may be adjustment of production within given capacity, increasing the
efficiency of operating activities through analysing past performance, budgeting future costs,
programming the comprehensive and specific details of future short-term operations, and so on.
3. On the basis of Time Period involved
i.) Long-term Planning: Long-term planning, is of strategic nature and, involves more than one-
year period extending to twenty years or so. However, more common long-term period is 3 to 5
years. The long-term plans usually encompass all the functional areas of the business and are
affected within the existing and long-term framework of economic, social and technological
factors. Long-term plans also involve the analysis of environmental factors, particularly with
respect to how the organisation relates to its competition and environment. Sometimes, basic
changes in organisation structure and activities become the real output of such plans. Examples
of such changes may be new product, product diversification, individuals in the organisation,
development of new markets, etc.
ii.) Short-term Planning: Short-term planning, also known as operational or tactical planning,
usually covers one year. These are aimed at sustaining organisation in its production and
distribution of current products or services to the existing markets. These plans directly affect
functional groups-production, marketing, finance, etc. Within its time dimension they pertinent
questions about a particular function as follows:
4. On the basis of Approach adopted
i.) Proactive Planning: Proactive planning involves designing suitable courses of action in
anticipation of likely changes in the relevant environment. Organisations that use proactive
planning use broad planning approaches, broad environmental scanning, decentralised control,
and reserve some resources to be utilised for their future use. These organisations do not wait for

48
environment to change but take actions in advance of environmental change. Most of the
successful organisations, generally, adopt proactive approach in planning. In India, companies
like Reliance Industries, Hindustan Lever, etc., have adopted this approach and their growth rate
has been much faster than others.
ii.) Reactive Planning: In reactive planning, organisations' responses come after the
environmental changes have taken place. After the changes take place, these organisations start
planning. In such a situation, the organisations lose opportunities to those organisations which
adopt proactive approach because, by the time, reactors are ready with their plans, the contextual
variables of planning show further changes. Therefore, their plans do not remain valid in the
changed situations. This approach of planning is useful in a environment which is fairly stable
over a long period of time.
5. On the basis of Formalisation
i.) Formal Planning: Formal planning is in the form of well-structured process involving
different steps. Generally, large organisations undertake planning in formal way in which they
create separate corporate planning cell placed at sufficiently high level in the organisation.
Generally, such cells are staffed by people with different backgrounds like engineers,
statisticians, MBAs, economists, etc., depending on the nature of organisation's business. These
cells monitor the external environment on continuous basis. When any event in the environment
shows some change, the cells go for the detailed study of the impact of the event and suggest
suitable measures to take the advantages of the changing environment. The planning process that
is adopted is rational, systematic, well-documented, and regular.
ii.)Informal Planning: As against formal planning, informal planning is undertaken, generally,
by smaller organisations. The planning process is based on managers' memory of events,
intuitions and gut-feelings rather than based on systematic evaluation of environmental
happenings. Usually, the corporate planning affairs are not entrusted to any single cell or
department but become the part of managers' regular activities. Since the environment for
smaller organisations is not complex, they do reasonably well with informal planning process.

49
TECHNIQUES AND TOOLS FOR PLANNING
There are different analytical techniques at their disposal that companies use to prepare an
effective plan. Management wants a plan which incorporates market fluctuations, internal and
external trends, and competitors’ threats. Moreover, it should also achieve the goals with
minimum resources. The management planning techniques help in deciding the course of action
and assessing the effects of those actions on the business.
1. Forecasting
In the planning process, management has to make predictions about future events before they
actually occur. This prediction of future affairs is called forecasting. Forecasting is a systematic
process of calculating the probability of relevant future events. The estimation is based on the
interpretation of past and present events. However, the predictions are not 100% correct, and
there is a possibility of deviation from actual future events. Thus, past and present data help to
forecast because one cannot predict the future without knowing its past. Forecasting takes into
account the current trends, past performances, and anticipated changes in behaviour.
Long-term planning also involves forecasting political, social, and economic conditions.
Organizations need to predict their business operations, personnel needed, the budget required,
and other managerial operations. Though managers have done their part in forecasting, they
cannot relax completely. They must monitor and review the forecasts. Another critical point is to
reduce the guesswork and use analytical tools and techniques for accurate forecasts.
Forecasting is a vital planning technique in management as no plan is prepared without
anticipating future events. Therefore, you can consider forecasting the baseline of the planning
process.
 Predicts / Forecast future events and actions
 Devises the future course of action
 Consider past and present behaviours at different scenarios
 Valid to a certain extent

50
 Needs analytical and mathematical tools
2. SWOT analysis
SWOT is the abbreviation of strengths, weaknesses, opportunities, and threats. This analysis is a
mechanism to analyse a company’s competitive positive. It examines internal and external
factors and also determines current and future potential.
 Strengths: The strengths of a company describe what that company is good at. It also
describes what separates that organization from others. It could be anything like its
product quality, low prices, customer service, strong brand, hefty exports, special
features, long last usage, flexibility etc. A company should use its strengths to its benefit
and exploit them to their fullest. Because these strengths make your company and
products stand out from other and give individual identity in the market.
 Weaknesses: Weaknesses are the company’s weak points that stop the organization from
reaching its maximum potential and become hurdle achieve its objectives. Hence,
businesses need to improve those areas to be more successful. It can be high turnover,
lack of resources, high price, low quality, bad brand value etc.Strengths and weaknesses
are the companies inside factors, while opportunities and threats are external factors.
 Opportunities: Opportunities are external factors that a company can use for its benefit
and make its actions better. A business should use its strengths to make use of
opportunities. The best business organisation always utilises the opportunities by make
use of their strengths. For example, technological advancement, new potential markets, or
subsidies from the government are some great opportunities.
 Threats: Threats are those factors that can harm the production, sales, profitand overall
benefits of a company and it also affect performance of a business enterprise. Anything
capable of breaking a business growth and development is a threat. It can be a natural
calamity, increased taxes, economic slowdown, high competition, lack of demand
inflation, etc. They can also be referred to as obstacles that a business needs to overcome.
An organization should use this SWOT analysis in its planning process, so the business knows
where it stands. Also, this analysis can help you move forward, taking advantage of the strengths

51
and opportunities and reducing weaknesses and threats. Mostly Strength and Weakness are
internal factors of the organisation that they can manage easily with proper planning. But Threats
and Opportunities are totally beyond organisations control, it is purely external factors.
3. Scenario planning
Scenario planning is a mechanism in which different scenarios are built based on the projected
forecasts. Then management decides how they would act if a particular scenario arise in the
future.
A set of two to five scenarios is a good number. It enables the professionals to think in advance
about how they would react if the future unfolds a certain way. Hence, scenario planning helps
make a plan adaptable to external and internal changes. Planning meetings are held to brainstorm
and devise a plan. Therefore, businesses should make scenarios that incorporate market changes,
environmental events, supply-chain problems, shortage of capital, etc. So, when any such
scenario plays out in the future, the company already has a plan to respond effectively and
quickly.
Scenario planning helps avoid problems and creates more opportunities to manage the situations.
Management has to face all scenarios to determine the success of the plan. The following are the
major steps involved in the scenario planning. The following are the major steps involved in the
scenario planning.
 Brainstorm future situations and circumstances of business
 Identify key driving forces of business development
 Develop a suitable scenario
 Evaluate a scenario of business
 Make strategies for business
4. Benchmarking
Benchmarking is a procedure in which one company measures its success against companies in
the same field. The products, services, and processes are estimated compared to the leading

52
companies to determine any gap. Therefore, benchmarking identifies the performance gaps,
which are reduced by improving our performance. Benchmarking gives insight into how
organisation can improve the processes or products. It can identify areas of improvement by
setting the leading companies as a benchmark. Organisation may need minor improvements or
dramatic improvements depending on your performance.
If a company uses benchmarking as their planning technique, they have to figure out the leading
company against which they will measure their performance. After setting the benchmark, set
new and competitive goals. Goals have to be achievable; unrealistic goals demotivate the
employees.
Once you set realistic goals, collect all the information about how your competitors execute
processes. Then analyse the data and determine where your business is lacking. How can your
business reach to competitor’s level? But remember, no company is perfect, so keep your mind
open while analysing data. Take action to improve your performance and monitor and review the
plan for successful execution.
5. Contingency planning
Contingency planning can also be referred to as plan B. We usually associate contingency
planning with big disasters like earthquakes or floods. But contingency planning isn’t all about
major crises; it also deals with common workplace problems—for example, loss of data, website
server down, employee strike, etc.
As contingency planning deals with day-to-day problems of an organization, it is essential to
make it a part of your every plan. For this purpose, you must conduct a risk assessment because
every business poses a different risk.
First, you need to determine the most important procedures without which your company cannot
operate—for example, your internet connection, your supply chain, and so on. Then determine
the threats and the factors that can harm those important procedures—for example, technical

53
failure, loss of staff, etc. Once you have a list of threats, you need to figure out a contingency
plan for those threats. It would be unwise to prepare a contingency plan for all hazards, so you
got to prioritize. Contingency planning is a way to respond to risk. A good contingency plan
prevents your business from facing unexpected scenarios or threats.
************

54
CHAPTER- III: ORGANISING
MEANING
Organising or Organising in management refers to the relationship between people, work and
resources used to achieve the common objectives (goals). Organising is the process of defining
and grouping the activities of the enterprise and establishing the authority relationships among
them."
Organising refers to a process consisting of a series of steps to identify and group various
activities, collect or assemble various resources and establish authority relationships with
responsibility amongst job positions. It can be mentioned as collecting and utilizing human
and non-human resources to implement plans in a highly effective and efficient manner. It is
to achieve the overall plan of the organisation. In other words, it refers to the process of
arranging people to work together and accomplish a common goal. It is a process of
identifying activities to be performed, grouping these activities into work units, assembling
tasks for the various job positions, defining rules, and establishing the authority,
responsibility, and relationship amongst them.
DEFINITIONS
According to Louis Allen "Organising is the process of identifying and grouping the work to be
performed, defining and delegating responsibility and authority and establishing relationships for
the purpose of enabling people to work most effectively together in accomplishing objectives."
Organising is a process of defining and grouping the activities of the enterprise and
establishing the authority relationships among them. In performing the organising function, the
manager defines, departmentalizes, and assigns activities so that they can be most effectively
executed. -Theo Haimann
Mooney and Reiley “Organisation is the form of every human association for the attainment of
common purpose.”

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