What is the difference between management and administration?

Answer:
 Difference between Administration and Management
There are many factors according to which administration can be distinguished from
management. These are as follows:
Administration Management

Nature of work It is concerned about the It puts into action the policies
determination of objectives and plans laid down by the
and major policies of an administration.
organization.

Type of function It is a determinative function. It is an executive function.

Scope It takes major decisions of an It takes decisions within the

enterprise as a whole. framework set by the
administration.

Level of authority It is a top-level activity. It is a middle level activity.

Nature of status It consists of owners who It is a group of managerial

invest capital in and receive personnel who use their
profits from an enterprise. specialized knowledge to
fulfill the objectives of an
enterprise.

Nature of usage It is popular with It is used in business

government, military, enterprises.
educational, and religious
organizations.

Decision making Its decisions are influenced by Its decisions are influenced by
public opinion, government the values, opinions, and
policies, social, and religious beliefs of the managers.
factors.

Main functions Planning and organizing Motivating and controlling

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 functions are involved in it. functions are involved in it.

Abilities It needs administrative rather It requires technical activities

than technical abilities.

Define management process?

Four major functions are associated with the process of management: (1) planning, (2)
organizing. (3) Leading, and (4) controlling.
Planning and Decision Making
– Setting the organization’s goals and deciding how best to achieve them.
– defining goals, establishing strategies for achieving those goals, and developing
plans to integrate and coordinate activities
Organizing
– Determining how best to group activities and resources.
– - determining what tasks are to be done, who is to do them, how the tasks are to
be grouped, who reports to whom, and where decisions are made
Leading
– Motivating members of the organization
– directing and motivating all involved parties and dealing with employee behavior
issues
Controlling
– Monitoring and correcting activities
– monitoring activities to ensure that they are going as planned
b)Mention management skill mixes at different Organization level.

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In addition to fulfilling roles, managers also need a number of specific skills
• The most fundamental management skills are:
– Technical
– Interpersonal
– Conceptual
– Diagnostic
– Communication
– Decision-making
– Time-management
Technical Skills
• Necessary to accomplish or understand the specific kind of work being done.
• These skills are especially important for first line managers.
Interpersonal Skills
• The ability to communicate with, understand, and motivate both individuals and groups.
• Be able to get along with:
– Subordinates
– Peers
– Those at higher levels
Conceptual Skills
• A manager’s ability to think in the abstract.
• The mental capacity to:

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 – Understand organizational goals and its environment.
– How the organization is structured.
– Viewing the organization as system
Diagnostic Skills
• Skills that enable a manager to visualize the most appropriate response to a situation.
c) Enumerate Managerial success factor.
Managerial Success Factors
 Personal Factors
– Abilities and skills
– Motivation
– Personality
 Situational Factors
– Nature of the work and environment
– Relationships with subordinates and supervisors
– Abilities of subordinates
 Actions Taken
– Appropriate for the situation?
 Luck
– Being in the right place at the right time?
d) Explain the concept of scientific Management
Scientific Management
– The application of scientific methods to increase individual workers’ productivity.
– Concerned with improving the performance of individual workers (i.e.,
efficiency).
– Grew out of the industrial revolution’s labor shortage at the beginning of the
twentieth century.
Question 1: Explain key managerial roles.
Answer:
Category Role Sample Activities

Interpersonal Figurehead Attending ribbon-cutting ceremony for new plant

Leader Encouraging employees to improve productivity

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 Liaison Coordinating activities of two projects

Informational Monitor Scanning industry reports to stay abreast of

developments

Disseminator Sending memos outlining new organizational initiatives

Spokes person Making a speech to discuss growth plans

Decisional Entrepreneur Developing new ideas for innovation

Disturbance handler Resolving conflict between two subordinates

Resource allocator Reviewing and revising budget results

Negotiator Reaching agreement with a key supplier or labor union.

Question 1: Explain efficiency and effectiveness in management with an example.

Efficiency
• Getting work done with a minimum of effort, expense, or waste
• Doings things right—most output for least input
Effectiveness
• Accomplishing tasks that help fulfill organizational objectives
• Doing the right things

Planning and Decision Making

IMPORTANCE OF PLANNING

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 Planning is the most importance of all the management functions. Some of the
importance
are as follows:
(a) Planning reduces uncertainty, risk and confusion in operation. Through planning, the
future course of action is known to all and so, everybody knows exactly what needs to be
done. This gives a sense of direction resulting in efficiency in operations.
(b) Planning guides the decision making by the managers. Planning of goals to be achieved
and the course of action to be followed to achieve the goal act as a guide in their own
decision making and action plans.
(c) Planning helps in achieving coordination and facilitates control. Proper planning
Integrates the tasks at the operational level, thereby making coordination more effective.It
also helps in identifying deviations and taking the corrective action.
(d) Planning with an element of flexibility makes the organization adaptable. In other words
planning makes the organization capable of coping with the changing environment and
facing challenges.
(e) Planning leads to economy and efficiency in operations. Best methods are selected
out of available choices, thus, reducing overlapping and wasteful activities.
(f) Planning begins with the determination of objectives and directed towards their
achievement. It keeps the executive alive and alert. Managers have to review the
progress periodically and recast their strategies to meet the objectives
Define planning. Explain the importance of planning and planning process.
• Generally planning is deciding in advance what is to be done; it is a projected course of
action. Planning process starts with the assumption that the future will be different from
the present and it attempts to determine how the enterprise will take advantage of that
difference. Planning thus becomes a device for change to meet the future.
Importance of planning
• Specific objective.
• Primacy of planning.
• Coordination with decision.
• Contribution to Purpose and objective.
• Efficiency, economic and accuracy
• Pervasive in all division
• Flexibility.
The Planning Process

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 • The planning process takes place within an environmental context. Managers must
develop a complete and thought understanding of this context to determine the
organization’s mission and develop its strategic, tactical and operational goals and plans.
Explain Contingency Planning and Crisis management
• Contingency Planning
– Planning for change
– Seeks to identify in advance important aspects of a business or its market that
might change and the ways in which a company will respond to changes
– The determination of alternative courses of action to be taken if an intended
plan is unexpectedly disrupted or rendered inappropriate.
– These plans help managers to cope with uncertainty and change.
• Crisis Management
– Involves an organization’s methods for dealing with a crisis—an unexpected emergency
requiring immediate response
– The set of procedures the organization uses in the event of a disaster or other
unexpected calamity.
Explain the barrier to goal setting and planning. How to overcoming the barrier?
Barriers to goal setting and Planning
• Inappropriate goals
• Improper reward system
• Dynamic and complex environment
• Reluctant to establish goals
• Resistance to change
• Constrains
Overcoming the Barriers
• Understand the purpose of goals and planning
• Communication and participation
• Consistency, Revision and Participation
• Effective reward system
Enumerate the steps in planning
Steps in planning
1. Be ware of opportunities.
In light of:

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 • The market.
• Competition.
• What customers want?
• Our strength.
• Our weakness
2. Establishing objectives.
• Where we want to be and what we want to accomplish and when.
3. Considering planning premises
• In what environment – internal or external will our plans operate?
4. Determining alternative courses of action.
• What are the most promising alternatives to accomplishing our objectives.
5. Evaluating alternative courses:
• Which alternative will give us the best chance of meeting our goals at the lowest cost
and highest profit?
6. Selecting course
• Selecting the course of action we will pursue.
7. Formulating derivative plans
Such as plans to :
• Buy equipment; Buy materials; Hire and train workers; Develop a new product.
8. Numberizing plans by Budgeting Develop such budgets as:
• Volume, price and cost of sales.
• Operating expenses necessary for plans
• Expenditures for capital equipment.
Different between strategic goal and tactical goal
• Strategic plans are the plans develop to achieve strategic goals. More precisely, a
strategic plan is a general plan outlining of resource allocation, priorities and action
steps necessary to reach strategic goals.
• Tactical plans aimed at achieving tactical goals and developed to implement parts of
strategic plan.

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A) Explain the nature and purpose of Organization control?
The Nature of Control in Organizations
Control is a process to regulate organizational activities so that some targeted element of
performance remains within acceptable limits.
 Provides organizations with indications of how well they are performing in relation
to their goals.
 Example: ship’s rudder, keeps the organization moving in the proper direction. Like a
rudder, control provides an organization with a mechanism for adjusting its course if
performance fails outside of acceptable
The Purpose of Control
Control is one of the four basic management functions. The control function, in turn, has four
basic purposes.

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 Adapt to environmental change
Limit the accumulation of error

Control helps the organization

Cope with organizational complexity Minimize costs

Adapt to environmental change.
All organizations need to contend with change. A properly designed control system can help
managers anticipate, monitor, and respond to changing circumstances. In contrast, an
improperly designed system can result organization performance that falls far below acceptable
levels.
Limit accumulation of error.
Small mistakes and errors do not often seriously damage an organization's financial health.
However, small errors may accumulate and eventually become vary serious. Controlling helps
managers to rectify small mistakes and errors so that they do not become a major problem for
the long run.
Help coping with organizational complexity.
Small companies which produce only one product, has simple organizational design, and enjoys
constant demand, can maintain control with a very basic and simple system. But business that
produce many products and has a large market area, a complicated organization design , many
competitors needs sophisticated system to maintain adequate control. Example : Emery Air
Freight was quite profitable until it bought Purolator Courier Corporation. After the acquisition
the company became big, and more complex, but it added no new controls to organization.
Consequently, Emery lost market share and was on the verge of bankruptcy.
Helps minimize costs.
When practiced effectively, control can help reduce costs and boost output. Example : Georgia-
pacific Corporation, a furniture company, learned a new technology that it could use thinner
blades for its saws. The company used its control system to calculate that massive amount of
wood could be saved by using the thinner blades, and thus it could save them a huge cost. As
the company discovered, effective control systems can eliminate waste, lower labor costs, and
improve per unit output.
B) Explain different type of budget? Difference between Bureaucratic and Decentralization
Control?
Types of Budget What Budget Shows

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 Financial Budget Sources and Uses of Cash

Cash-flow or cash budget All sources of cash income and cash expenditures in
monthly, weekly, or daily periods

Capital expenditures budget Costs of major assets such as a new plant, machinery, or
land

Balance sheet budget Forecast of the organization’s assets and liabilities in the
event all other budgets are met

Operating Budget Planned Operations in Financial Terms

Sales or revenue budget Income the organization expects to receive from normal
operations

Expense budget Anticipated expenses for the organization during the

coming time period

Profit budget Anticipated differences between sales or revenues and

expenses

Nonmonetary Budget Planned Operations in Nonfinancial Terms

Labor budget Hours of direct labor available for use

Space budget Square feet or meters of space available for various

functions

Production budget Number of units to be produced during the coming time

period

• Bureaucratic Control
– A form of organizational control characterized by formal and mechanistic
structural arrangements.

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 • Decentralized Control
– An approach to organizational control characterized by informal and organic
structural arrangements.

Dimension Bureaucratic Control Decentralized Control

Goal of control Employee compliance Employee commitment

approach

Degree of formality Strict rules, formal controls, rigid Group norms, culture, self-
hierarchy control

Performance Directed toward minimum Directed toward enhanced

expectations levels of acceptable performance above and
performance beyond the minimum

Organization design Tall structure, top-down Flat structure, shared influence

influence

Reward system Directed at individual Directed at group performance

performance

Participation Limited and formal Extended and informal

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C) Why manager resist to control? How to overcome resistance to control?
• Resistance to Control
– Overcontrol
Trying to control too many details becomes problematic when control affects
employee behavior and employees perceive control attempts as unreasonable.
– Inappropriate Focus
• The control system may be too narrow or it may focus too much on
quantifiable variables and leave no room for analysis or interpretation.
– Rewards for Inefficiency
• Rewarding operational inefficiency can lead employees to behave in ways
that are not in the best interests of the organization.
– Too much accountability
Efficient controls are resisted by poorly performing employees.
• Resistance to control can be overcome by:
– Designing effective controls that are properly integrated with organizational
planning and aligned with organizational goals and standards.
– Creating controls that are flexible, accurate, timely, and objective.
– Avoiding overcontrol in the implementation of controls.

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 – Guarding against creating controls that reward inefficiencies.
– Encouraging employee participation in the planning and implementing of control
systems.
– Developing a system of checks and balances in the control systems through the
use of multiple standards and information systems that allow the organization to
verify the accuracy of performance indicators.
Describe the steps in the control process

• Steps in the Control Process

1 2 Compare 3 Determine 4
need
Establish Measure performance for corrective
standards performance
against standards action

Maintain the Correct the Change

status quo deviation standards

Establish Standards
The first step in the control process is establishing standards. A control standard is a target
against which subsequent performance will be compared. Example: at Taco Bell Fast –food
restaurant service standards are

– 95% of all the customers are greeted within 3 minutes

– Preheated chips will not sit in the warmer for more than 30 minutes
– All Empty tables will be cleaned within 5 minutes after being vacated
Standard established for control should be expressed in measurable terms. In the above
example standard one is 95%, three is ‘‘All Tables’’.
Measure Performance
This is the second step in the control process. Performance measurement is a constant, ongoing
activity for most organization. For control to be effective, performance measures must t be
valid.
– Daily, weekly, and monthly sales figures measure sales performance.
– Production performance may be expressed in terms of unit cost, product quality,
or volume produced.

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 – Employee performance is often measure in terms of quality or quantity of
output.
Compare Performance Against Standards.
Performance may be higher than, lower than, or identical to the standard. In some cases
comparison is easy. The timetable for comparing performance to standards depends on a
variety of factors including the importance and complexity of what is being controlled. For
longer-run and higher-level standards, annual comparisons are necessary. In another
circumstances, more frequent comparisons are necessary. Example: a business with a cash
shortage may need to monitor its on-hand cash reserves daily.
Consider Corrective Action
Decisions regarding corrective actions draw heavily on a manager’s analytic and diagnostic
skills. After comparing performance against control standards, one of the three actions is
appropriate.
– Maintain status quo (do nothing) : preferable when performance matches the
standard
– Correct the deviation: some actions are needed to correct the deviation. Sometimes,
if performance is higher than expected it may cause problems. Example: Ford
enjoyed a huge demand for Contour (car). There were customer’s waiting list and
many were willing to pay more for the car. Ford did not increase production in the
fear that demand would eventually drop. To deal with the excessive demand, ford
reduced its advertising for the car. That curtailed the demand for the car.
– Change the standards: changing standard is necessary if it was set too high or too
low. This is apparent if most employees routinely beat the standard by a wide
margin or if no employees ever meet the standard. Also, standards that seemed
appropriate when they were established may need to be adjusted because
circumstances have changed.
D) Steps in the Control Process (cont’d)
– Establish Standards
• Control standard—a target against which subsequent performance will be
compared.
• Control standards should be expressed in measurable terms.
• Control standards should be consistent with organizational goals.
• Control standards should be identifiable indicators of performance.
– Measure Performance
• Performance measurement is an ongoing process.
• Performance measures must be valid indicators (e.g., sales, costs, units
produced) of performance.
– Compare Performance Against Standards

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 • Define what is a permissible deviation from the performance standard.
• Utilize the appropriate timetable for measurement.
– Determine the Need for Corrective Action
• Maintain the status quo (do nothing).
• Correct the deviation to bring operations into compliance with the standard.
• Change the standard if it was set too high or too low.
E) Explain the type of control in response of area and level
Organizations practice control in a number of different areas and at different levels, and the
responsibility for managing control is widespread.
– Areas of Control
• Physical resources—inventory management, quality control, and
equipment control.
• Human resources—selection and placement, training and development,
performance appraisal, and compensation.
• Information resources—sales and marketing forecasts, environmental
analysis, public relations, production scheduling, and economic
forecasting.
• Financial resources—managing capital funds and cash flow, collection
and payment of debts.
– Levels of Control

– Operational control:
– Focuses on the processes used to transform resources into products or services.
– Financial control:
– Concerned with financial resources. Example : Monitoring receivables to make
sure that customers are paying their bills on time.
– Structural control:
– How the elements of organization’s structure are serving the intended purposes.
Example : Monitoring the administrative ration to make sure that staff expenses
do not become excessive.
–

• Characteristics of Effective Control

– Integration with Planning
The more control is linked to planning, the more effective the control system.

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 – Flexibility
The control system must be flexible enough to accommodate change.

– Accuracy
Inaccurate information results in bad decision making and inappropriate
managerial actions.

– Timeliness

A control system should provide information as often as necessary.

– Objectivity

A control system must be free from bias and distortion.

Strengths and Weaknesses of Budgeting

• Strengths

– Budgets facilitate effective operational controls.

– Budgets facilitate coordination and communication between departments.

– Budgets establish records of organizational performance, which can enhance

planning.

• Weaknesses

– Budgets can hamper operations if applied too rigidly.

– Budgets can be time consuming to develop.

– Budgets can limit innovation and change.

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