Four Funciton of Managment PDF

Addis Ababa Science and Technology University
College of Natural and Social Sciences
MBA (Industrial Management)

Modern Management Theories and Practices
(MBAD 6011)
Assignment on
Four Critical Functions of Management (P-O-L-C)
Submitted to: - Essayas Taye (BSc, MA, EMBA, PhD)
Submitted by: - Mr. Arkbom Hailu (GSR 034/13)

Mr. Samuel Tekelehana (GSR 045/13)
March 2021
Four Critical Function of Management, P-O-L-C
Table of Contents
1. Introduction to Management ............................................................................................................... 4

2. Planning and Plan.................................................................................................................................. 5
2.1 Characteristics or nature of planning: .......................................................................................... 7
2.2 Types of plans and planning........................................................................................................ 10
2.3 Management by Objective (MBO) .............................................................................................. 11
2.4 Activity 1 – Group Discussion...................................................................................................... 12
3. Organizing ........................................................................................................................................... 15
3.1 Purpose of organizing ................................................................................................................. 16
3.2 Steps of organizing process......................................................................................................... 17
3.3 Fundamental of Organizing......................................................................................................... 21
3.3.1 Division of labor/work specialization .................................................................................. 22
3.3.2 Chain of command .............................................................................................................. 24
3.3.3 Span of control/management (supervision) ....................................................................... 24
3.3.4 Centralization and decentralization .................................................................................... 25
3.3.5 Delegation of authority ....................................................................................................... 27
3.3.6 Departmentalization ........................................................................................................... 29
3.4 Group Discussion, why organizing function is important to a company. ................................... 32
4. Leading ................................................................................................................................................ 34
4.1 Leadership role ........................................................................................................................... 35
4.1.1 Strategist ............................................................................................................................. 36
4.1.2 Communicator .................................................................................................................... 36
4.1.3 Innovator ............................................................................................................................. 37
4.1.4 Coach................................................................................................................................... 37
4.1.5 Delegator............................................................................................................................. 37
4.1.6 Adaptor ............................................................................................................................... 37
4.1.7 Networker ........................................................................................................................... 38
4.2 Conventional leadership style ..................................................................................................... 38
4.3 Modern leadership style ............................................................................................................. 39
4.4 Group Discussion - I .................................................................................................................... 41
4.5 Group Discussion – II................................................................................................................... 42
5. Controlling........................................................................................................................................... 44
5.1 Characteristics of an Effective Control System ........................................................................... 46
Modern Management Theories and Practices pg. 2

5.1.1 Accuracy: ............................................................................................................................. 46

5.1.2 Timeliness: .......................................................................................................................... 47
5.1.3 Flexibility: ............................................................................................................................ 47
5.1.4 Acceptability: ...................................................................................................................... 47
5.1.5 Integration: ......................................................................................................................... 47
5.1.6 Economic feasibility: ........................................................................................................... 47
5.1.7 Strategic placement: ........................................................................................................... 48
5.1.8 Corrective action: ................................................................................................................ 48
5.1.9 Emphasis on exception: ...................................................................................................... 48
5.2 Types of Control Techniques in Management ............................................................................ 48
5.2.1 Budgetary Control (Traditional Practices)........................................................................... 49
5.2.2 Standard Costing (Traditional Practices) ............................................................................. 49
5.2.3 Financial Ratio Analysis (Traditional Practices) ................................................................... 50
5.2.4 Internal Audit (Traditional Practices) .................................................................................. 50
5.2.5 Break-Even Analysis (Traditional Practices) ........................................................................ 50
5.2.6 Statistical Control (Traditional Practices)............................................................................ 51
5.2.7 Return on Investment (Modern Techniques) ..................................................................... 51
5.2.8 Ratio Analysis (Modern Techniques) .................................................................................. 51
5.2.9 Responsibility Accounting (Modern Techniques) ............................................................... 51
5.2.10 Management Audit ............................................................................................................. 52
5.2.11 PERT & CPM ........................................................................................................................ 52
5.3 Controlling process ..................................................................................................................... 52
5.4 Group Discussion - 1 ................................................................................................................... 53
5.5 Group Discussion - II ................................................................................................................... 55
6. Reference ............................................................................................................................................ 56

1. Introduction to Management
Every organization, in spite of its enormity, has fully developed and implemented management
concepts that enable smooth running of activities aimed at realizing the projected vision, goals and
objectives.
The functions of management break down into four areas that take care of strategic, tactical and
operational pronouncements of an organization. Thus, management in an organization is a creative
tool of solving problems through planning, organizing, leading and controlling. In essence, the
functions of management solve a particular problem facing an organization.
Consequently, the results will provide an avenue of accomplishing the goals, objectives and
mission of the organization. The functions of management in an organization is to provide a
framework of focusing both short- and long-term views hence, foster it towards success.
Additionally, management as a decision-making process entails a premeditated vision, fixed goals,

a crafted plan, all which if executed and implemented properly, will see an organization achieve
its mission.
From in-house operations to industry, the functions of management serve to address issues
affecting a certain organization for example, effective utilization of resources, appraisal of core
competencies, evaluation of the present and prospect participants, and strategic control among
others (Himanshu, 2009, p.1).
Nevertheless, the four function of management cannot bring success into an organization minus
sound leadership from the mangers. In most cases, the manager’s style of leadership affects the
operation of an organization, positively or negatively. Thus, good managers should exhibit certain
traits and skills, which will enable an organization, achieve its mission, goals and objectives.
For example, an organization with highly skilled workers makes managers to be allowing, while
an organization with less skilled workforce mandates the manager to take a closer look on
production.

The management process by which we pursue goals includes planning, organizing, leading, and
controlling. These are “the how” a manager pursues organizational goals, and are universally
known as the four functions of management. They stem from the work of a French mining
administrator, Henri Fayol, who first identified management as a practice that could be improved
through the use of five functions – planning, organizing, commanding, coordinating, and
controlling. Since he published his work in 1916, it is decided that leading people through
motivation and incentivization works much better than telling them what to do (e.g. commanding
and coordinating). We use the term leading instead of these practices.
Thus, good managers are the ones who flex their style, train and inspire employees to work towards
the realization of vision, goals and objectives. The paper will examine the four functions of
management namely: planning, organizing, directing and controlling within an organization
(Haridimos, 2004, pp. 289-301).
Fig 1.1 The P-O-L-C Framework
2. Planning and Plan
This is the first contrivance of the four function of an organization’s management process.
Primarily, the success of an organization depends on the planning procedure. The planning
procedure is the one that determines whether a manager is successful or not. Planning provides
logical understanding on how to make decisions, which will drive an organization towards the path
of attaining its objectives.

Good managers use a planning process to plan for expectations, and as a blueprint to predict
quandaries, which might hinder an organization from achieving its objectives.
In addition, the planning process provides measures for prevaricating intricate issues and a
framework of beating competition. Thus, planning is an essential tool of management in that it
facilitates control, which is a valuable strategy in decision-making hence averting business ravage.
Planning is the systematic process of making decisions about goals and activities the organization
will pursue (Bateman & Snell, 2013). To make a decision about the direction of an organization,
the planning phase must begin with analyzing the environment. Without a solid understanding of
the context, the manager would have no basis to provide future direction. The context gives a
manager a point of reference for improvement, opportunity, and learning from past mistakes. For
this reason, the planning function should begin with analysis. This analysis should consider both
the internal factors such as culture, values, and performance of team members as well as the
external factors such as competitive environment, legal regulations, economy, technology, social
values, and demographics.
The second component of planning is to use this analysis of the environment to build goals,
activities, and objectives. For a major organization this might be the vision and mission statement
of the organization. For a smaller organization this could be a year end, or season end goal. Some
consider planning that point in your day or month that you step away from your desk, and think
about the direction of your organization. This requires you to reflect on your organization’s past,
and determine how that impacts the direction going forward.
Planning is the function of management that involves setting objectives and determining a course
of action for achieving those objectives. Planning requires that managers be aware of
environmental conditions facing their organization and forecast future conditions. It also requires
that managers be good decision makers.
Planning is a process consisting of several steps. The process begins with environmental
scanning which simply means that planners must be aware of the critical contingencies facing their
organization in terms of economic conditions, their competitors, and their customers. Planners
must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when.
Planners must then identify alternative courses of action for achieving objectives. After evaluating
the various alternatives, planners must make decisions about the best courses of action for
achieving objectives. They must then formulate necessary steps and ensure effective
implementation of plans. Finally, planners must constantly evaluate the success of their plans and
take corrective action when necessary.
2.1 Characteristics or nature of planning:
Planning involves thinking and analysis of information, arriving at certain assumptions in

connection with what is likely to happen in the future and then formulating the activities required
to achieve desired results or goals or objectives. Some Characteristics of Planning are as follows:
1 - Planning is an Intellectual Process:
Planning is chiefly an intellectual process which means ‘thinking before doing’. The success of
planning depends on the manager and his ability to collect the facts which are likely to affect
planning-whether these facts are connected with the present situation or the estimated future
changings; how correctly he studies and evaluates these facts; and how correctly he takes his
decisions on their basis.
The whole process happens to be intellectual and for the successful completion of all these
activities the planner should have far-sightedness, imaginative power and decision – making
capacity.
A planner should mainly consider the following questions:
• What is to be done?
• (How is it to be done?
• When is it to be done?
• By whom is it to be done?
Taking decisions on all these questions depends on the competence of the planner. Therefore, it
can be said that planning requires thinking at every step. Hence, it can be considered as an
intellectual process.

2 - Planning is Selection of the Best Alternative:
The second important characteristic of planning is the selection of the best alternative. There can
be many ways of doing a work and the planner selects the best possible alternative. Therefore, it
can be said that planning involves the selection of the best alternative and rejection of the
inappropriate ones.
3 - Planning is all Pervasive:
It will be appropriate to describe planning as ail pervasive because it operates at all the levels of
management in an enterprise. It is an important function of every manager to plan things whether
he is a managing director or simply a foreman in a factory. Some people are of the opinion that
planning is the job of only the high-level managers but it is not true.
It can, however, be admitted that the high-level managers spend more time in comparison to the
middle-level or lower-level managers in the work of planning. It is, therefore, clear that all the
managers working in an enterprise have to plan their activities.
4 - Planning is the Primary Function of Management:
Planning is the primary function of management and all other functions like organizing; staffing,
leading and controlling come later. In the absence of planning no other function of management
can be completed. Undoubtedly planning is the first function of management but it does not mean
that after planning when other functions start it is not needed.
In reality planning is required in the performance of other functions of management. Without

planning neither organization can be created, nor can staffing be done. Similarly, planning is
needed in case of leading and controlling.
5 - Planning is Forecasting:
Planning always takes into consideration the future. Under planning, on the basis of collected facts,
the future is anticipated and proper decision taken. Thus, we can say that forecasting is the essence
of planning.

6 - Planning is a Continuous Process:
Planning is the process which begins with the establishment of the organization and ends with the
organization. In other words, the process of planning continues so long as the organization
continues to exist. A manager starts planning before the work is started and when one work is
accomplished, planning for the other begins and this process continues. Thus, planning is a
continuous process.
7 - Planning is Flexible:
Planning involves forecasting the future which is uncertain. It is quite possible that the basis of the
forecast made by the manager or the facts on which he makes his planning undergo some changes
after sometime. In case, he finds any such thing happening, he immediately brings in changes in
his planning according to the changed facts or situations. It can thus be said that planning is a
flexible process.
8 - Planning is Goal-Oriented:
An enterprise in established with some pre-determined objectives and planning tells us how to
achieve those objectives. First of all, the objectives of the organization are determined and then
planning is made to achieve them. Therefore, it is clear that planning without some objectives is
meaningless.
9 - Planning is an Interdependent Process:
The activities of an enterprise are divided into many departments like Purchase department, Sales
department, Production department, Finance department, Personnel department, etc. All these
departments have their own separate plans which are the parts of a master plan. All the
departmental plans depend on one and other. If some change becomes necessary in the plan of a
particular department due to some reason, the plans of all other departments have to be modified
accordingly.
For example- if the sales department achieves more sales than the anticipated quantity, its plans
shall have to be modified resulting in more purchases and production to cope with the demand of

the sales department. This, in turn, necessitates changes in the plans of the purchase and production
departments as well. Thus, the departmental planning depends on one and other.
10 - Planning Leads to Efficiency and Economy:
Planning makes it possible to utilise the available human and material resources in the most
favorable manner in an organization. Capital, labor, material, machinery, etc., are utilized in a
manner to produce the maximum quantity of the best quality goods with minimum cost.
11- Planning Considers Limiting Factors:
The quantity of available resources of production has to be kept in mind before planning. If a
manager ignores the limited resources, planning is bound to fail. For example- if the raw material
can be available up to a certain limit for a certain period, then the raw material will be the limited
factor. Only after its availability is decided, the other activities like production, sales, etc., can be
thought of.
12 - Planning Creates Coordination:
In any organization coordination of all the activities is necessary to run the work smoothly. With
the help of planning ‘what’, ‘why’, ‘who’, ‘where’, ‘when’, etc., of everything is clarified. Doubts
are cleared and coordination is established. Planning makes it clear as to what is to be done, why
it is being done, who will do it, where it will be done and when it will be done. On the other hand,
without planning nobody will know what is to be done and what is not to be done.
2.2 Types of plans and planning.
• Strategic planning involves analyzing competitive opportunities and threats, as well as

the strengths and weaknesses of the organization, and then determining how to position the
organization to compete effectively in their environment. Strategic planning has a long-
time frame, often three years or more. Strategic planning generally includes the entire
organization and includes formulation of objectives. Strategic planning is often based on
the organization’s mission, which is its fundamental reason for existence. An
organization’s top management most often conducts strategic planning.

• Tactical planning is intermediate-range (one to three years) planning that is designed to

develop relatively concrete and specific means to implement the strategic plan. Middle-
level managers often engage in tactical planning.
• Operational planning generally assumes the existence of organization-wide or subunit
goals and objectives and specifies ways to achieve them. Operational planning is short-
range (less than a year) planning that is designed to develop specific action steps that
support the strategic and tactical plans.
2.3 Management by Objective (MBO)
The “Management by Objective” (MBO) approach, in the sense that it requires all managers to set
specific objectives to be achieved in the future and encourages them to continually ask what more
can be done, is offered as a partial answer to this question of organizational vitality and creativity.
As a term, “Management by Objectives” was first used by Peter Drucker in 1954. As a
management approach, it has been further developed by many management theoreticians, among
them Douglas McGregor, George Odiorne, and John Humble. Essentially, MBO is a process or
system designed for supervisory managers in which a manager and his or her subordinate sit down
and jointly set specific objectives to be accomplished within a set time frame and for which the
subordinate is then held directly responsible. All organizations exist for a purpose, and, to achieve
that purpose, top management sets goals and objectives that are common to the whole organization.
In organizations that are not using the MBO approach, most planning and objective setting to
achieve these common organizational goals is directed downward or top down approach. Plans
and objectives are passed down from one managerial level to another, and subordinates are told
what to do and what they will be held responsible for. The MBO approach injects an element of
dialogue into the process of passing plans and objectives from one organizational level to another.
The superior brings specific goals and measures for the subordinate to a meeting with this
subordinate, who also brings specific objectives and measures that he or she sees as appropriate or
contributing to better accomplishment of the job. Together they develop a group of specific goals,
measures of achievement, and time frames in which the subordinate commits himself or herself to
the accomplishment of those goals. The subordinate is then held responsible for the
accomplishment of the goals. The manager and the subordinate may have occasional progress
reviews and reevaluation meetings, but at the end of the set period of time, the subordinate is

judged on the results the he or she has achieved. He or she may be rewarded for success by
promotion or salary increases or he or she may be fired or transferred to a job that will provide
needed training or supervision. Whatever the outcome, it will be based on the accomplishment of
the goals the subordinate had some part in setting and committed himself or herself to achieving
2.4 Activity 1 – Group Discussion
You are the manager of the online game developing company. The goal of the company is to
obtain larger market shares in the industry. (The use of SMART goal setting can help managers
save time and resources by making the planning process more efficient and effective)
1) Setting company goals

2) Listing alternative ways of achieving the goals
3) Selecting best way to achieve the goals
4) Developing plans to pursue the chosen alternative
5) Putting plans into action
In the process of planning one of the critical criterial is observing the environment and this
environment might be internal or external one. The internal one will scrutinize the capacity of the
company in the finance and human resource. technologies and the penetration capacity with the
existing market. And, the external factor can include competitive environment, legal regulation,
economy, technology, social value and demographic (market segment, rural or urban place). The
planning process will systematically consider those factors to achieve the goals and activities of
the organization.
1) Company Goal
Being the leading game developing company in Ethiopia with updated software programing and
high-quality resolution
• Generate game script and story board, write code for games for a variety of formats, such
as PCs, consoles, web browsers and mobile phones.
• Employed high skilled programmer for high quality programing script and up to date video
game development
• Develop branded playable game, related with local traditional play

2) Alternative Way
✓ Employ high skill junior graduates from known universities
✓ Invite investors to invest in the company using different marketing advertisement
✓ Search a crowdfunding for the business or bank loan using convincing project plan.
✓ Use some highly skilled expert of programmer as a part – timer workers
✓ Establishing an online platform for the programing work.
✓ Hire a marketing person for promoting all new released product to the market
3) Selecting best way to achieve the goals
➢ Establishing an online platform for the programing work.
➢ Use some highly skilled expert of programmer as a part – timer workers
➢ Search a crowdfunding for the business or bank loan using convincing project
plan.
➢ Hire a marketing person for promoting all new released product to the market
4) Developing plans to pursue the chosen alternative
For any business firm the plan is the first task that should be done in a way that it must give
a clear direction of the firm from the resource input to the output of the business. It includes
all the internal and external factor or environment. In the process of planning the owner of
the company with all the stockholder will formulate the plan and put all the hierarchical
order in a smooth and clear fashion.
Obtained • Using crowdfunding or

financial asset for
the company • Loan from bank
Employ skilled Man • Expert in programming and video gaming as artimer

power, and purchase • Engaged some software experts and video gamer on the
lincenced software online work.
Based on the result
obtained the action
Hire a marketing
person for •Hire a person with good skill plan will be revised
promoting all of digital and normal
newreleased techniques.
product
Fig 2.1 Plan for game developing Company

For this company the main Input for the end product are a software developer skill, licensed
software and financial strength and the end product will be a video game that are customized with
local graphics.
5) Putting plans into action

An action plan is an organized form that follows a defined methodology to define goals and
objectives, the activities that must be carried out, those responsible for developing each one of
them and who also follow the progress of each project, so that the best results can be achieved. In
fact, creating an action plan for better teamwork planning is an activity that all managers at some
point need to do.
Activities
Planning Hiring Finance Video Game Promotion Controlling
Development
✓ ✓ ✓
Manager
✓
Software
Programmer
✓
Marketing
Prosomal
✓
HR

3. Organizing
Organizing is the process of assembling and assigning the human, financial, physical,
informational, and other resources needed to achieve goals (Bateman & Snell, 2013). The core
of the organizing function is leveraging the resources to align with the determined
goals. Organizing human resources means first of all attracting a labor force that can help pursue
the company goal. Within the organization, managing the human element means assigning tasks,
delegating authority, determining a structure and hierarchy. Organizing the financial resources
equates to making sure your capital is being utilized to meet goals. If an organization decides they
want to have a best-in-class customer service team, they better being willing to spend the money
to attract people with the disposition towards serving others, and spend money on training, or a
retreat to teach the agents the skillsets they need. Marshalling physical resources focuses on the
effectiveness of where you place and how you use physical assets. An executive chef might re-
arrange a kitchen to improve process flow, food quality, or mitigate safety risks for
example. Informational resources imply a leveraging and disseminating the organization’s
knowledge in meaningful ways to achieve goals. Connecting employees to how they contribute
to the financial bottom line is a way of leveraging informational resources, as is using your
company’s proprietary algorithm to predict stock prices or develop new products.
Organizing is the function of management that involves developing an organizational structure

and allocating human resources to ensure the accomplishment of objectives. The structure of the
organization is the framework within which effort is coordinated. The structure is usually
represented by an organization chart, which provides a graphic representation of the chain of
command within an organization. Decisions made about the structure of an organization are
generally referred to as organizational design decisions.
Organizing also involves the design of individual jobs within the organization. Decisions must be
made about the duties and responsibilities of individual jobs, as well as the manner in which the
duties should be carried out. Decisions made about the nature of jobs within the organization are
generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or
cluster, jobs into departments to coordinate effort effectively. There are many different ways to
departmentalize, including organizing by function, product, geography, or customer. Many larger
organizations use multiple methods of departmentalization.
Organizing at the level of a particular job involves how best to design individual jobs to most
effectively use human resources. Traditionally, job design was based on principles of division of
labor and specialization, which assumed that the narrower the job content, the more proficient the
individual performing the job could become. However, experience has shown that it is possible for
jobs to become too narrow and specialized. For example, how would you like to screw lids on jars
one day after another, as you might have done many decades ago if you worked in company that
made and sold jellies and jams? When this happens, negative outcomes result, including decreased
job satisfaction and organizational commitment, increased absenteeism, and turnover.
Recently, many organizations have attempted to strike a balance between the need for worker
specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs
are now designed based on such principles as empowerment, job enrichment and teamwork. For
example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional
“departments” to focus on listening and responding to customer needs. From company-wide
meetings to team huddles, HUI employees know and understand their customers and how HUI
might service them best (Huimfg, 2008).
3.1 Purpose of organizing
An organization with a clear purpose or mission is one that is easy to understand and manage. A
common purpose unifies employees and helps them understand the organization’s direction. Any
employee working at the NASA Space Center in the 1960s knew that that organization’s common
purpose was to put a man on the moon. Included with the common purpose would be the business
and company strategy, mission statement, company values, and the organization’s short- and long-
term objectives. The role of communicating all of these components most likely falls to managers
through the company.
• Human Treatment of Employees: Organization should operate for the betterment of staff
a requirement not encourages monotony of labor thanks to higher degree of specialization.

Now, organization has custom-made the trendy construct of systems approach supported
human relations and it discards the normal productivity and specialization approach.
• Optimum use of resources: to form optimum use of resources like men, material, money,
machine and methodology, it’s necessary to style a company properly. Work ought to be
divided and right folks ought to be right folks ought to be right jobs to scale back the
wastage of resources in a company.
• Helps to attain organizational goal: organization is used to attain the objectives of
business companies. Organization focuses attention of individual’s objectives towards
overall objectives.
• Facilitates Growth and Diversification: a decent organization structure is important for
increasing commercial activity. Organization structure determines the input resources
required for enlargement of a commercial activity equally organization is important for
product diversification like establishing a brand-new business line.
• To perform social control Function: coming up with, organizing, Staffing, directional
and dominant cannot be enforced while not correct organizing.
It is during this sense that we expect of organizing jointly the identification and
classification of needed activities 2 the uncertain of activities necessary to realize
objectives, 3 the assignment of every grouping to a container with the authority delegation
necessary to supervise it and 4 the supply for coordination horizontally on identical or
similar structure level and vertically company headquarters, division and department
within the organization structure. There are more information about What is Controlling in
Management? Features of Controlling Functions.
3.2 Steps of organizing process
There are five main steps of organizing process the steps are:
1. Consideration of Plans and Goals
2. Determining the Work Activities Necessary to Accomplish Objectives
3. Classifying and Grouping Activities
4. Assigning Work and Delegating Appropriate Authority

5. Designing a Hierarchy of Relationships.
Step # 1. Consideration of Plans and Goals:
Organizational plans and their goals affect organizing and its outcome, the organization. The
purposes and activities that organizations have at present or are likely to have in future are dictated
by plans. Certain basic purposes and some general activities are likely to remain fairly constant in
the long run. For example, from its very inception a business firm will continue to seek profit and,
in this endeavor, it will continue to employ human and non-human (material) resources.
But with the passage of time new plans will be formulated. This will surely lead to a change in the
ways in which basic activities are carried out. Certain departments or divisions may be closed some
old ones may be entrusted with additional responsibility and some new departments may be created
or set up.
Moreover, there may emerge new relationships among groups of decision makers. Organizing is
supposed to create the new structure and relationships and modify the old ones.
Step # 2. Determining the Work Activities Necessary to Accomplish Objectives:

It is necessary to determine those work activities which are necessary to accomplish organization
objectives. Prima facie, it is absolutely essential to prepare a list of tasks to be done. Therefore,
there is the need to classify the tasks into two categories: on-going tasks and once-for-all tasks.
Examples of the former are hiring, training, and record-keeping. Such tasks may also include
assembling, machining, shipping, storing, inspecting, selling, advertising etc.
An example of the latter is setting up a new plant or department or installing a new plant in an
existing plant. In an ongoing business such specific programmes — which are essentially single-
use plans-may require temporary reorganization within a business or department to handle them.
For example, the Finance Department may temporarily look after the newly set up corporate
planning department.
Likewise, a pilot project conducted for an ongoing business may identify which activities should
be performed in a work unit or incorporated into the business. Once managers come to know what
tasks must be done, they are ready to classify and group those activities into manageable work
units.

Step # 3. Classifying and Grouping Activities:

This stage demands three processes to be performed by managers:
1. Examine each activity identified to determine its general nature (marketing, production,
finance, personnel, etc.).
2. Grouping those activities into these interrelated functional areas. Establishing the basic
department design for the organization structure.
In practice, the first two processes go hand in hand. True enough, selling, advertising,
shipping and storing can be considered as marketing-related activities, and can be grouped
under the broad heading ‘marketing’ without any loss of generality. Likewise, assembling,
cutting, machining, welding, painting and inspecting are treated as manufacturing process
and can thus be grouped as production. In a similar way, activities like hiring, training,
developing, recruiting and compensating can be grouped under personnel-related activities.
Classifying and grouping similar activities using the guidelines of homogeneity are based
on the concept of division of labor and specialization. (It may be recalled that, essentially,
division of labor is breaking down the work into its basic components or activities and
assigning them to individuals who will then be specialists and perform the jobs more
efficiently and effectively.
For accomplishing works which are similar in nature different tasks, processes or skills
required are to be placed together so as to achieve organizational objectives.
As soon as the tasks are classified and grouped into related work units (production,
marketing, accounting and personnel)
3. The third process, viz., departmentation, is being finalized, i.e., a decision is being made
on the basic organizational format or departmental structure for the enterprise. Groups,
departments and divisions are being formed on the basis of the objectives of the
organization.

Management will choose a departmental type of organizational format from functional,

geographic or territorial, customer, product line, or matrix options. (These various
alternative approaches to organizing will be discussed separately.)
Step # 4. Assigning Work and Delegating Appropriate Authority:

After identifying activities necessary to achieve objectives, classifying and grouping these into
major operational areas, and selecting a departmental structure, management has to assign the
activities to individuals who are simultaneously given the appropriate authority to accomplish the
task.
This step is a crucial one in both the initial and ongoing organizing processes. The foundation of
this step lies in the principle of functional definition. The principle basically suggests that in estab-
lishing departments, the nature, purpose, tasks, and performance of the department must first of all
be determined as a basis for authority.
The strategic implication of this principle for business is that the activities determine the type and
quantum of authority necessary.
It is widely believed that the nature, purpose, tasks and expectations dictate the type and quantum
of authority needed by the manager to function effectively. The activities are to be assigned first.
These will form the basis of authority thereafter.
Step # 5. Designing a Hierarchy of Relationships:

This final step necessitates the determination of both vertical and horizontal operating relationships
of the organization as a whole. In effect this step is ‘putting it all together’.
Vertical Structuring:
The vertical structuring of the organization results in a decision-making hierarchy specifying the
respective roles of managers at different levels in the organizational hierarchy. It shows who is in
charge of each task, of each specialty area, and of the organization as a whole.

Different levels of management (such as the lower level, middle level and the top level) are
established in the organization — from bottom to top. From these levels emerge the chain of
command or hierarchy of decision-making levels, in the company.
Essentially the chain of command depicts the authority- responsibility relationships that establish
links between supervisors and subordinates throughout the whole organization. As shown in
Fig.3.1, it flows from the chief executive officer down to the lowest worker in the organization.
Fig 3.1 The chain of commands
3.3 Fundamental of Organizing
Managerial planning focuses on deciding what to do, organizing focuses on how to do it. Thus,
after a manager has set goals and developed a workable plan, the next managerial task is to
organize people and groups to carry out the plan.
Organizing is the process of identifying and grouping the work to be performed, defining and
delegating authority, and establishing relationships to enable people to work together to achieve
the organization's objectives. In essence, organizing involves the grouping of activities and

resources in a logical fashion. The various approaches to the division and coordination of work
activities and resource allocation fall under two broad categories: the classical closed systems and
the open systems. Closed systems involve sets of interacting elements operating without any
exchange with the environment in which they exist. Open systems consist of sets of elements that
interact with each other and with the environment, and whose structure evolves over time as a
result of these interactions. The span of management refers to the number of subordinates who
report directly to a specific manager. According to Graicunas, what counts is the number of
relationships among those who report to a manager, not the number of people who report to him.
Spans of management have a direct effect on the number of hierarchical levels in an organization.
A tall structure consists of many hierarchical levels with narrow spans of control, whereas a flat
structure contains fewer hierarchical levels. The process of organizing consists of six steps -
defining the firm's objectives, framing supporting objectives and policies, identifying and
classifying the required activities, grouping the activities according to the available human and
material resources, delegating authority, and horizontal and vertical coordination of the various
groups in the organization.
Effective organizing has many benefits. It helps individuals clearly visualize the tasks they are
expected to accomplish. It supports planning and control activities. Organizing also creates
channels of communication and helps in maintaining the logical flow of work activities. The
process of organizing ensures efficient use of resources and helps avoid conflicts and duplication
of effort. It coordinates diverse activities and builds harmonious relationships among members of
the organization. The process of organizing helps managers to focus on tasks that are logically
related to a common goal. The Fundamentals of organizing which helps to achieve the objective
of the company are stated below
3.3.1 Division of labor/work specialization
The division of labor allows individuals and firms to specialize and to produce more for several
reasons:
a) It allows the agents to focus on areas of advantage due to natural factors and skill levels;

b) It encourages the agents to learn and invent;
c) It allows agents to take advantage of economies of scale.
The formal study of economics began when Adam Smith (1723–1790) published his famous book
The Wealth of Nations in 1776. Many authors had written on economics in the centuries before
Smith, but he was the first to address the subject in a comprehensive way. In the first chapter,
Smith introduces the division of labor, which means that the way a good or service is produced is
divided into a number of tasks that are performed by different workers, instead of all the tasks
being done by the same person.
Fig 3.2 Workers on an assembly line are an example of the divisions of labor. (Credit: Nina
Hale/Flickr Creative Commons)
To illustrate the division of labor, Smith counted how many tasks went into making a pin: drawing
out a piece of wire, cutting it to the right length, straightening it, putting a head on one end and a
point on the other, and packaging pins for sale, to name just a few. Smith counted 18 distinct tasks
that were often done by different people—all for a pin.
Believe it or not! Modern businesses divide tasks as well. Even a relatively simple business like a
restaurant divides up the task of serving meals into a range of jobs like top chef, sous chefs, less-
skilled kitchen help, servers to wait on the tables, a greeter at the door, janitors to clean up, and a

business manager to handle paychecks and bills—not to mention the economic connections a
restaurant has with suppliers of food, furniture, kitchen equipment, and the building where it is
located. A complex business, like a large manufacturing factory such as the shoe factory shown in
Figure 3, or a hospital, can have hundreds of job classifications.
3.3.2 Chain of command
In an organizational structure, “chain of command” refers to a company's hierarchy of reporting

relationships – from the bottom to the top of an organization, who must answer to whom. The
chain of command not only establishes accountability, it lays out a company’s lines of authority
and decision-making power. A proper chain of command ensures that every task, job position and
department have one person assuming responsibility for performance.
The command chain doesn't happen accidentally. Organizational designers lay it out as the last
step in creating an organizational structure. Planners first consider a company’s goals since
organizational structure must support strategy. Designers next determine the tasks needed to reach
the goals.
Departmentalization follows as designers decide how to group the tasks. Grouping affects resource
sharing and the ease with which people communicate and coordinate work. After
departmentalizing, designers assign authority for tasks and areas. Once authority is assigned,
planners can finally lay out the relationships between positions, thereby creating a chain of
command.
The reporting relationships established in the final step of organizational design are easy to see on
an organizational chart, which depicts a company’s structure. Starting at the bottom, each position
is connected to one above it by a line. Following the line vertically from position to position reveals
the chain of command. Each person is one link in the chain.
3.3.3 Span of control/management (supervision)
A manager may be linked to many or few subordinates. The number of people reporting to a
manager is called a manager’s span of control. Managers with wide spans of control have many
subordinates, and it’s not possible for a manager to closely examine activity. Consequently,

employees under such managers have more authority to perform their jobs and even make
decisions than do employees reporting to managers with narrow spans of control.
Flat Organizational Structures
When a manager has a wide span of control, the organizational chart takes on a horizontal, flattened
appearance. Fewer managers are needed in middle management, so the company has less of a
power hierarchy. These are characteristics found in organic organizational structures. In organic
structures, the chain of command’s importance is de-emphasized, since power is distributed among
employees.
The chain may only consist of employees and the owner or employees to a manager to the CEO,
making for a very short chain of command. Lacking bureaucracy, flat organizations can readily
mobilize to meet market conditions.
Vertical Organizational Structures
Managers closely supervising subordinates can only manage a few. These managers have narrow
spans of control. Narrow spans require more managers to make sure all employees are properly
supervised. These managers must also be managed closely, given their involvement in details and
decision-making.
This results in tall organizations with several layers of middle management. The chain of command
is important and is used to exert control from the top. Many rules govern activities. Such structures
are rigid and mechanistic, leaving little room for innovation and creativity.
3.3.4 Centralization and decentralization
Centralization is said to be a process where the concentration of decision making is in a few hands.
All the important decision and actions at the lower level, all subjects and actions at the lower level
are subject to the approval of top management. According to Allen, “Centralization” is the
systematic and consistent reservation of authority at central points in the organization. The
implication of centralization can be: -
• Reservation of decision-making power at top level.

• Reservation of operating authority with the middle level managers.

• Reservation of operation at lower level at the directions of the top level.
Under centralization, the important and key decisions are taken by the top management and the
other levels are into implementations as per the directions of top level. For example, in a business
concern, the father & son being the owners decide about the important matters and all the rest of
functions like product, finance, marketing, personnel, are carried out by the department heads and
they have to act as per instruction and orders of the two people. Therefore, in this case, decision
making power remain in the hands of father & son.
On the other hand, Decentralization is a systematic delegation of authority at all levels of

management and in all of the organization. In a decentralization concern, authority in retained by
the top management for taking major decisions and framing policies concerning the whole
concern. Rest of the authority may be delegated to the middle level and lower level of management.
The degree of centralization and decentralization will depend upon the amount of authority
delegated to the lowest level. According to Allen, “Decentralization refers to the systematic effort
to delegate to the lowest level of authority except that which can be controlled and exercised at
central points.
Decentralization is not the same as delegation. In fact, decentralization is all extension of

delegation. Decentralization pattern is wider is scope and the authorities are diffused to the lowest
most level of management.
Delegation of authority is a complete process and takes place from one person to another. While
decentralization is complete only when fullest possible delegation has taken place. For example,
the general manager of a company is responsible for receiving the leave application for the whole
of the concern. The general manager delegates this work to the personnel manager who is now
responsible for receiving the leave applicants. In this situation delegation of authority has taken
place. On the other hand, on the request of the personnel manager, if the general manager delegates
this power to all the departmental heads at all level, in this situation decentralization has taken
place.
There is a saying that “Everything that increasing the role of subordinates is decentralization and
that decreases the role is centralization”. Decentralization is wider in scope and the subordinate’s

responsibility increase in this case. On the other hand, in delegation the managers remain
answerable even for the acts of subordinates to their superiors.
Implications of Decentralization
• There is less burden on the Chief Executive as in the case of centralization.
• In decentralization, the subordinates get a chance to decide and act independently which
develops skills and capabilities. This way the organization is able to process reserve of talents
in it.
• In decentralization, diversification and horizontal can be easily implanted.
• In decentralization, concern diversification of activities can place effectively since there is
more scope for creating new departments. Therefore, diversification growth is of a degree.
• In decentralization structure, operations can be coordinated at divisional level which is not
possible in the centralization set up.
• In the case of decentralization structure, there is greater motivation and morale of the
employees since they get more independence to act and decide.
• In a decentralization structure, co-ordination to some extent is difficult to maintain as there are
lot many department divisions and authority is delegated to maximum possible extent, i.e., to
the bottom most level delegation reaches. Centralization and decentralization are the categories
by which the pattern of authority relationships became clear. The degree of centralization and
de-centralization can be affected by many factors like nature of operation, volume of profits,
number of departments, size of a concern, etc. The larger the size of a concern, a
decentralization set up is suitable in it.
3.3.5 Delegation of authority
A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the
manager should delegate authority. Delegation of Authority means division of authority and
powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of
your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to
the subordinates in order to achieve effective results.
Elements of Delegation

Authority - in context of a business organization, authority can be defined as the power and right
of a person to use and allocate the resources efficiently, to take decisions and to give orders so as
to achieve the organizational objectives. Authority must be well- defined. All people who have the
authority should know what is the scope of their authority is and they shouldn’t mis utilize it.
Authority is the right to give commands, orders and get the things done. The top-level management
has greatest authority.
Authority always flows from top to bottom. It explains how a superior gets work done from his
subordinate by clearly explaining what is expected of him and how he should go about it. Authority
should be accompanied with an equal amount of responsibility. Delegating the authority to
someone else doesn’t imply escaping from accountability. Accountability still rest with the person
having the utmost authority.
Responsibility - is the duty of the person to complete the task assigned to him. A person who is
given the responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks
for which he was held responsible are not completed, then he should not give explanations or
excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among
the person. Responsibility flows from bottom to top. The middle level and lower level management
holds more responsibility. The person held responsible for a job is answerable for it. If he performs
the tasks assigned as expected, he is bound for praises. While if he doesn’t accomplish tasks
assigned as expected, then also he is answerable for that.
Accountability - means giving explanations for any variance in the actual performance from the
expectations set. Accountability cannot be delegated. For example, if ’A’ is given a task with
sufficient authority, and ’A’ delegates this task to B and asks him to ensure that task is done well,
responsibility rest with ’B’, but accountability still rest with ’A’. The top-level management is
most accountable. Being accountable means being innovative as the person will think beyond his
scope of job. Accountability, in short, means being answerable for the end result. Accountability
can’t be escaped. It arises from responsibility.
For achieving delegation, a manager has to work in a system and has to perform following steps:
• Assignment of tasks and duties
• Granting of authority

• Creating responsibility and accountability

Delegation of authority is the base of superior-subordinate relationship, it involves following
steps: -
Assignment of Duties - The delegator first tries to define the task and duties to the subordinate.
He also has to define the result expected from the subordinates. Clarity of duty as well as result
expected has to be the first step in delegation.
Granting of authority - Subdivision of authority takes place when a superior divides and shares
his authority with the subordinate. It is for this reason, every subordinate should be given enough
independence to carry the task given to him by his superiors. The managers at all levels delegate
authority and power which is attached to their job positions. The subdivision of powers is very
important to get effective results.
Creating Responsibility and Accountability - The delegation process does not end once powers
are granted to the subordinates. They at the same time have to be obligatory towards the duties
assigned to them. Responsibility is said to be the factor or obligation of an individual to carry out
his duties in best of his ability as per the directions of superior. Responsibility is very important.
Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is
absolute and cannot be shifted. Accountability, on the others hand, is the obligation of the
individual to carry out his duties as per the standards of performance. Therefore, it is said that
authority is delegated, responsibility is created and accountability is imposed. Accountability
arises out of responsibility and responsibility arises out of authority. Therefore, it becomes
important that with every authority position an equal and opposite responsibility should be
attached.
Therefore, every manager, i.e., the delegator has to follow a system to finish up the delegation
process. Equally important is the delegate’s role which means his responsibility and accountability
is attached with the authority over to here.
3.3.6 Departmentalization
Departmentalization or Departmentation is a process wherein jobs/teams are combined

together into functional units called as departments on the basis of their area of specialization, to

achieve the goals of the organization. So, in this way, the entire organization is divided into parts,
i.e. departments which comprise of a group of employees, who carry out activities of similar
nature.
It determines the functions/activities which are to be housed together and coordinated at the same
place. Further, it groups the personnel, who will undertake the delegated functions/tasks.
In a corporate ladder, every level below the top is departmentalized, and each subsequent level is
further differentiated into departments.
The top-level executives, groups activities in various departments, such as production, marketing,
finance, human resource, research and development, etc. These departments are headed by senior
executives, called as managers of the respective department. The departmental managers can
delegate tasks and duties to the subordinates, and they are accountable to the chief executive for
the performance of the department.
Objectives of Departmentalization
• To specialize activities.
• To simplify the process and operations of the organization
• To maintain control
Departmentalization of activities results in the increase in efficiency of the management and

ultimately the enterprise. It is helpful in fixing responsibilities and accountability.
Methods of Departmentalization
1. Departmentalization by Function: When the creation of department is on the basis of

specified functions, such as production, marketing, purchase, finance etc. In this method,
all the activities related to a function or which are of similar nature are combined in a single
unit, to give proper directions to the entire group in one go.

Fig 3.3 Departmentation by Function

2. Departmentalization by Process: In departmentation by the process, the activities are
grouped as per the production processes. These departments require manpower and
material so as to carryout operations.
Fig 3.4 Departmentation by Processes

3. Departmentalization by Product: When the activities related to product development and
delivery are combined into a particular division, it is called as product departmentalization.
It is appropriate for large-scale multi-product enterprises.

Fig 3.5 Departmentalization by Product
4. Departmentalization by Customer: The grouping of the organization according to the

different classes of customer or clients. It focuses on special customer needs.
Fig 3.4 Departmentation by Customer

5. Departmentalization by Territory: When the division is based on the geographical area,
it is called as territorial departmentalization. This is suitable for the organizations, that have
widespread operations at different locations.
6. Departmentalization by Project: In project departmentalization, the organizational
activities are classified by differentiated or special ventures or activities.
The choice of departmentalization basis is influenced by the factors such as the degree of
specialization, coordination, control, cost consideration, adequate attention to key areas, etc.
3.4 Group Discussion, why organizing function is important to a company.
• To have a benefit from specialization: under organizing all the activities are sub-divided into
various works or jobs. For all the sub-works, competent people are appointed who become

expects by doing a particular job in time and again in this way maximum work is accomplished
in the minimum span of the time and the organization gets the benefit of specialization.
• Clarity in working relationship: organizing clarifies the working relations among employees
.it specifies who is to report to whom. Therefore, communication becomes effective. It also
helps in fixing accountability.
• Optimum Utilization of resource: under the process of organizing, the entire work is divided
in to various small activities. There is a different employee performing every job, by doing so,
there is no possibility of any activity being left out or any possibility of unnecessary duplicating
any job. Consequently, there is optimum utilization of all the available resource (e.g. material,
machine, financial, human resource) in the organization.
• Development of personnel: under the process of organizing, delegation of authority is
practiced. These are done not because of the limited capacity of any individual, but also
discover new a technique of work. It provides opportunities of taking decisions to the
subordinates. By taking advantage of this situation, they try to find out the latest techniques
and implement them. Consequently, it helps them to grow and develop

4. Leading
Leading is stimulating high performance by members of the organization (Bateman and Snell,
2013). This function is getting members of the organization on board with its plan.
Normally, this means connecting with direct reports or teammates on a personal

level. Understanding what drives individuals within the team allows a manager to design strategies
around motivating, incentivizing, mobilizing, and arousing a desire to contribute.
Imagine for a minute, that you analyzed the conditions of the organization, you determined a game
plan to pursue and even directed resources to step in that direction. You have successfully
implemented the planning and organizing functions. In this scenario, however, you did not give
consideration to how your team or organization would be involved. Do they agree with your
direction? Did they have input in the process? Do they feel valued as a team member? Do they
understand their role in a successful outcome? All of these questions are answered by the degree
to which a manager is engaged in the leading function.
Having personal conversations, designing a bonus structure, or giving a rousing speech might all
be considered leading the organization.
Leading involves the social and informal sources of influence that you use to inspire action taken
by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting
effort to attain organizational objectives.
The behavioral sciences have made many contributions to understanding this function of
management. Personality research and studies of job attitudes provide important information as to
how managers can most effectively lead subordinates. For example, this research tells us that to
become effective at leading, managers must first understand their subordinates’ personalities,
values, attitudes, and emotions.
Studies of motivation and motivation theory provide important information about the ways in
which workers can be energized to put forth productive effort. Studies of communication provide
direction as to how managers can effectively and persuasively communicate. Studies of leadership

and leadership style provide information regarding questions, such as, “What makes a manager a
good leader?” and “In what situations are certain leadership styles most appropriate and effective?”
What is Leadership?
Leadership is a process by which an executive can direct, guide and influence the behavior and
work of others towards accomplishment of specific goals in a given situation. Leadership is the
ability of a manager to induce the subordinates to work with confidence and zeal.
Leadership is the potential to influence behavior of others. It is also defined as the capacity to
influence a group towards the realization of a goal. Leaders are required to develop future visions,
and to motivate the organizational members to want to achieve the visions.
According to Keith Davis, “Leadership is the ability to persuade others to seek defined objectives
enthusiastically. It is the human factor which binds a group together and motivates it towards
goals.”
Characteristics of Leadership
❖ It is a inter-personal process in which a manager is into influencing and guiding workers
towards attainment of goals.
❖ It denotes a few qualities to be present in a person who includes intelligence, maturity and
personality.
❖ It is a group process. It involves two or more people interacting with each other.
❖ A leader is involved in shaping and molding the behavior of the group towards
accomplishment of organizational goals.
❖ Leadership is situation bound. There is no best style of leadership. It all depends upon
tackling with the situations.
4.1 Leadership role
No matter what your specific management position entails, being a leader is not an easy job to
have. You must wear many different hats and respond to the needs of many different people not
just your own team members and employees, but your managers and the people you are serving
and for whom you are creating and delivering your product or service, too.

Everyone has a different leadership style, philosophy and way of executing her vision while
leading her company or team. However, great leaders must always fill certain roles in order to do
their jobs well, achieve progress and make their personal and company vision a success.
The 7 roles of the leadership
4.1.1 Strategist
As a leader, your work involves developing a plan for your company and the work you and your
team members do. Your responsibilities include outlining specific goals for your company and
determining the steps you and your employees need to take to achieve them. You should also
establish what metrics you will use for evaluating whether you have achieved your goals and plans.
Determine what success means upfront:
• Do you want to increase sales numbers?

• Are you looking to streamline your processes?
• Is there a particular area, product, or department that you would like to improve?
Figuring out what success looks like will help you hone your strategy and the steps you will take
to achieve it. Clearly define the best measures to evaluate specific goals, too. What kind of data
will you generate? How can you use it to measure your efforts?
4.1.2 Communicator
Communication is crucial for all organizational leaders and really any employee at any stage in
her career. You need to be able to communicate your ideas to your employees, the public, and your
managers. You will also communicate with people on a regular basis; even sending a quick email,
running or participating in a meeting and making a phone call are forms of communication.
Whether you're a new manager relaying plans for the company, implementing organizational
change or simply communicating day-to-day procedures and expectations, effective
communication is one of the most important skills a leader can have

4.1.3 Innovator
You didn't rise to the top solely because you possess strong skills in your industry—although that
is surely the case. Your capacity for innovation helped get you there, too. Good leaders don't just
continue to do things the way they've always been done or sit back and let "followers" carry out
the responsibilities; they continually develop new ideas. Not all your ideas will pan out, but failure
is part of the innovation process. In order for a business to thrive and grow, change needs to take
place—and you are the one who should drive that change.
4.1.4 Coach
Leaders certainly have their moment in the spotlight, but effective managers also give their
employees time and opportunities to shine. Part of being a team leader or company leader means
you should help your employees grow and thrive in their roles. That means giving feedback—both
positive feedback when they've done something particularly well and constructive criticism when
you notice a skill or task upon which they can improve—, offering direction and celebrating
success, even if it's not your personal victory.
4.1.5 Delegator
This one goes hand-in-hand with coach. A leader can't and shouldn't do everything. If you're good
at your job, you'll know your own limitations and recognize when somebody else could be doing
a task or project better than you could. Furthermore, you'll understand that others need to to learn
because it takes many people to run a successful organization, and you need to give them a chance
to develop their own skills, even if you may have already mastered them
4.1.6 Adaptor
Management is not without its hiccups and bumps along the road. All leadership positions require
a fair degree of flexibility. If a plan isn't panning out the way you wanted or expected it to, you
need to be capable of recognizing that and changing course when it becomes necessary. No one
likes admitting defeat, but part of being a leader means that you have to stop wasting time and
resources on something that just isn't going to pan out.

You also need to adapt to changing environments. Sometimes market trends force a company to
adapt and change with the times. For instance, new technologies are changing the way industries
across the board perform their work, and as a leader in your industry, you need to make sure your
company keeps up with trends. You don't want to be the one lagging behind.
4.1.7 Networker
It is a crucial aspect of any professional's life, and none more so than a leader. Depending on your
specific leadership position and function, you may be the face of your company; if that's the case,
or even you're not at the very top, you need to constantly promote your company and its values.
Networking isn't just important for your company's growth; it's also essential for your personal
growth.
4.2 Conventional leadership style
Discussions of conventional leadership focus on senior executives of large organizations. So, the
question of leadership traits becomes: What traits does it take to become a senior executive and be
effective in that role?
Early research on leadership traits was unsatisfactory because leadership was felt to vary too much
across situations. But, in recent years, some agreement has been achieved, based on rigorous
research, about the traits needed for leadership. Among such traits are the following:
• Intelligence
• Personality traits such as extraversion, conscientiousness and emotional stability
• Motives such as the need for power and achievement
• Social skills such as social and emotional intelligence
This is not an exhaustive list but enough to make it clear that the focus of trait research is on
conventional leadership defined as what it takes to get things done by taking charge and
coordinating the efforts of a group toward a goal. Conscientiousness is essential for the
achievement of complex goals. Social skills are necessary to resolve conflict between people and
to get the best out of them. Power motivation is sometimes expressed as the drive to dominate, to
be the person who calls the shots in a group. This drive is found in many animal species, not just
humans.

4.3 Modern leadership style
Anyone who thinks about the meaning of leadership would agree that leaders influence people to
do things that they would not do otherwise. The question is: Who are they influencing? The
conventional concept of leadership takes a narrow view: leaders influence members of the group
in which they are the recognized leader. But it can be argued that this is only a special case of
leadership. A more general, wider view recognizes that leadership can influence people who are
not members of the leader’s immediate group.
Consider the following examples:
✓ Martin Luther King, Jr. had a leadership impact on the U.S. Supreme Court when his
demonstrations against segregation on buses led that organization to rule such
discrimination unconstitutional.
✓ Mahatma Gandhi’s protests led Britain to grant independence to India. Jack Welch’s
demand that all GE businesses be first or second in their markets led other companies
around the globe to follow his example.
✓ Green leaders such as Al Gore could have a leadership impact on communities in far flung
places that he has never visited.
✓ A front-line knowledge worker convinces top management to adopt a new product.
In none of the above examples is the person who shows leadership a member of the group to which
leadership is shown, let alone in charge of it. The other feature shared by these examples is that
the leaders had nothing to do with managing the implementation of their proposals in the groups
that followed their lead. In other words, their leadership was successful, and it came to an end,
once their respective follower groups acted based on the leadership shown by what was effectively
an outsider relative to their group.
The essence of this leadership is showing a better way, sometimes by being the first to do
something novel and sometimes by explicitly challenging the status quo. But why should we be
interested in such odd instances of leadership? The reason is that we now live in a fast-changing
world that is driven by rampant innovation. Leadership in this realm is rapidly shifting from

hierarchical position to the person with the latest good idea. But no one has a monopoly on good
ideas, so we need to see leadership as a rapidly shifting, transient ability to have a brief impact on
people, rather than as an ongoing position or role. The future success of organizations that depend
on innovation will be driven by the ideas of front-line knowledge workers. The great benefit of
this shift in power is that those at the front-line will feel massively empowered when organizations
start to recognize them as their real leaders. This shift in perspective can only lead to more
innovation, greater employee engagement and better talent retention.
The value of citing King, Gandhi, Jack Welch and Al Gore in this context is to show that bottom-
up leadership is not an isolated case of having a leadership impact on a group without being in
charge of it. The conventional business model of leadership has blinded us to other forms of
leadership. Bottom-up leadership can also be called thought leadership and it can be shown top-
down and sideways as well as bottom-up.
Table 4.1 Comparison between Modern and Conventional Leaders

4.4 Group Discussion - I
Can you describe the characteristics of a good leader like the former Chairman of Apple
Computers Inc., Steve Jobs?
✓ Good Leaders Are Future Oriented
The predominant quality of great leaders is that they
o Think about the future most of the time.

o Think about where they are going rather than where they have been.
o Maintain a positive attitude and think about the opportunities of tomorrow rather
than focusing on the problems of the past.
✓ Great Leaders Keep A Positive Attitude

Top people maintain a positive attitude and are long-term thinkers. Average thinkers think only
about the present, and about immediate gratification. But great leaders think about where they want
to be in five and ten years, and what they have to do each hour of each day to make their desired
futures a reality. Great leaders inspire other people, their friends, customer, associates and even
their children because they are inspired themselves.
✓ The Best Leaders Take Responsibility
One of the most important leadership qualities is the acceptance of personal responsibility. Leaders
never complain, never explain. Instead of making excuses, they make progress. Whenever they
have a setback or difficulty, they repeat to themselves, “I am responsible! I am responsible! I am
responsible!”
✓ Good leader is Invent and simplify things.

✓ Good leader Hire and develop the best
In an interview of his, Steve Jobs says, “The greatest people are self-managing. They don’t need
to be managed. Hire and develop the best, once they know how to do it, they go out and do it. But
what they need is a common idea.”

“It doesn’t make sense to hire smart people and tell them what to do: we hire smart people so they
can tell us what to do”
• Good leaders Have a clear vision
Like many innovative game-changers, Jobs wasn't looking to replicate what's already been done.
He had a totally different mindset from the others. He found what the customer needed before they
asked for it.
• Good leaders Focus:
Steve Jobs’ only focus was on making Apple great
• Customer obsession
Steve Jobs was very obsessed with customer experience.
4.5 Group Discussion – II
Which leadership style should be adopted by the management in the following situations? Briefly
explain your answer.
1. A newly recruited employee who is expected to pick up work in short time, the manager is
being a coach to direct him in work.
✓ For this situation, coaching management leadership style is adopted. Because in
this style, managers see themselves as the coach and their employees as the valued
members of their team.
✓ The manager’s job is to develop and guide their team, putting their team’s
professional development at the forefront of their priorities. Long-term
development is valued above short-term failures in this style, and the manager
wants to promote learning, up skilling and growing in the workplace.
2. The existing project team who knows their job well and does not require too much
instruction. The manager simply let the team make their own decision and provide
feedback when they need help.
✓ Delegatory leadership style must be used for this kind of situations. This one goes
hand-in-hand with coach. A leader can't and shouldn't do everything. If the

members of the team are good at the job. Furthermore, the manager must
understand that others need to learn because it takes many people to run a successful
organization, and the leader need to give them a chance to develop their own skills,
even if the leader may have already mastered it the job that are expected to be done
by the members of the team.
3. An employee who is the expert of his job and knows more about the job than the manager.
There is no need for the manager to give instruction and the employee is free to make his
own decision at work.
✓ For this situation Laissez-Faire management styles should be adopted. Because,
Laissez-Faire management styles emphasizes employee freedom. In a smoothly
operating team, a laissez-faire manager will only appear present at the beginning
and the end of the work process. At the beginning, to provide guidelines, share
information, and answer questions. And at the end to review the outcome(s) of the
team and provide advice or recommendations about how the team can do even
better next time.

5. Controlling
Control is installing processes to guide the team towards goals and monitoring performance
towards goals and making changes to the plan as needed (Batemen & Snell, 2013). Control does
not always mean limited what the organization can do by having a hand in everything. We might
call this micro-managing, which is control in its extreme form. Healthy control processes involve
putting systems in place to make sure your organization is on track to meet the goals you
established in the planning process. Planning sets standards to compare against, and the control
process is the dashboard that tells whether or not you are meeting the standard. For example, a
grocery store might set a goal of reducing shrink (that’s product lost to shoplifting, damage). They
decide that they want to reduce their shrink loss by 50%. To achieve this plan, they will have to
dedicate resources (more employees to monitor, rearrange loading dock). You already recognize
that step as the organizing function. We then incentivize our employees by designing a bonus
structure – i.e. if we collectively meet the goal, each employee shares in the savings. If we stop
there, we would have no way of knowing if we met the goal. The control process solves this for
us. The last step in the grocery store manager’s managerial approach is to have each department
head report their shrink loss at the end of the shift, and aggregate those in an excel spreadsheet. In
this way, the manager can see if the rearrangement of the loading dock has reduced the number of
damaged canned goods that was happening under the old arrangement. The manager can make
changes if they see that shrink is not improving even after hiring a greeter at the entrance.
Monitoring performance is the first step in control. After see the progress towards goals, the next
step is to make changes. In this way, the control process always leads a manager back to the
planning phase of management. There are only two outcomes to the control process. You are
making progress towards your goal, or you are digressing in your performance. If you reach your
goal, you will need to set new goals, which is the planning function. If you are not progressing
towards your goal, you need to analyze the environment and determine why not. In this way the
management functions are related and highly dependent upon each other, especially control and
planning.
To illustrate the application of the four functions of manager, consider the various contexts
in Figure 4.1. Under the personal budget, an engaged couple has decided to save for a house after

getting married. The softball coach must determine how to win a conference championship, and
the corporate manager is working on a strategy to improve waning sales figures.
Fig 4.1 The Functions of Management Applied
Controlling involves ensuring that performance does not deviate from standards. Controlling
consists of three steps, which include
1. Establishing performance standards,

2. Comparing actual performance against standards, and
3. Taking corrective action when necessary.
Performance standards are often stated in monetary terms such as revenue, costs, or profits but
may also be stated in other terms, such as units produced, number of defective products, or levels
of quality or customer service.
The measurement of performance can be done in several ways, depending on the performance
standards, including financial statements, sales reports, production results, customer satisfaction,
and formal performance appraisals. Managers at all levels engage in the managerial function of
controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or
manipulative sense. This function does not imply that managers should attempt to control or to
manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this
function of management concerns the manager’s role in taking necessary actions to ensure that the
work-related activities of subordinates are consistent with and contributing toward the
accomplishment of organizational and departmental objectives.
Effective controlling requires the existence of plans, since planning provides the necessary
performance standards or objectives. Controlling also requires a clear understanding of where
responsibility for deviations from standards lies. Two traditional control techniques are budget and
performance audits. An audit involves an examination and verification of records and supporting
documents. A budget audit provides information about where the organization is with respect to
what was planned or budgeted for, whereas a performance audit might try to determine whether
the figures reported are a reflection of actual performance. Although controlling is often thought
of in terms of financial criteria, managers must also control production and operations processes,
procedures for delivery of services, compliance with company policies, and many other activities
within the organization.
5.1 Characteristics of an Effective Control System
Controls at every level focus on inputs, processes and outputs. It is very important to have effective
controls at each of these three stages.
Effective control systems tend to have certain common characteristics. The importance of these
characteristics varies with the situation, but in general effective control systems have following
characteristics.
5.1.1 Accuracy:
Effective controls generate accurate data and information. Accurate information is essential for
effective managerial decisions. Inaccurate controls would divert management efforts and energies
on problems that do not exist or have a low priority and would fail to alert managers to serious
problems that do require attention.

5.1.2 Timeliness:
There are many problems that require immediate attention. If information about such problems
does not reach management in a timely manner, then such information may become useless and
damage may occur. Accordingly, controls must ensure that information reaches the decision
makers when they need it so that a meaningful response can follow.
5.1.3 Flexibility:
The business and economic environment is highly dynamic in nature. Technological changes occur
very fast. A rigid control system would not be suitable for a changing environment. These changes
highlight the need for flexibility in planning as well as in control. Strategic planning must allow
for adjustments for unanticipated threats and opportunities. Similarly, managers must make
modifications in controlling methods, techniques and systems as they become necessary. An
effective control system is one that can be updated quickly as the need arises.
5.1.4 Acceptability:
Controls should be such that all people who are affected by it are able to understand them fully
and accept them. A control system that is difficult to understand can cause unnecessary mistakes
and frustration and may be resented by workers. Accordingly, employees must agree that such
controls are necessary and appropriate and will not have any negative effects on their efforts to
achieve their personal as well as organizational goals.
5.1.5 Integration:
When the controls are consistent with corporate values and culture, they work in harmony with
organizational policies and hence are easier to enforce. These controls become an integrated part
of the organizational environment and thus become effective.
5.1.6 Economic feasibility:
The cost of a control system must be balanced against its benefits. The system must be
economically feasible and reasonable to operate. For example, a high security system to safeguard
nuclear secrets may be justified but the same system to safeguard office supplies in a store would

not be economically justified. Accordingly, the benefits received must outweigh the cost of
implementing a control system.
5.1.7 Strategic placement:
Effective controls should be placed and emphasized at such critical and strategic control points
where failures cannot be tolerated and where time and money costs of failures are greatest.
The objective is to apply controls to the essential aspect of a business where a deviation from the
expected standards will do the greatest harm. These control areas include production, sales, finance
and customer service.
5.1.8 Corrective action:
An effective control system not only checks for and identifies deviation but also is programmed to
suggest solutions to correct such a deviation. For example, a computer keeping a record of
inventories can be programmed to establish “if-then” guidelines. For example, if inventory of a
particular item drops below five percent of maximum inventory at hand, then the computer will
signal for replenishment for such items.
5.1.9 Emphasis on exception:
A good system of control should work on the exception principle, so that only important deviations
are brought to the attention of management, in other words, management does not have to bother
with activities that are running smoothly. This will ensure that managerial attention is directed
towards error and not towards conformity. This would eliminate unnecessary and uneconomic
supervision, marginally beneficial reporting and a waste of managerial time.
5.2 Types of Control Techniques in Management
Management theorists and experts have devised several techniques over the years. They often
divide these techniques into two categories: traditional and modern. Traditional types of techniques
generally focus on non-scientific methods. On the other hand, modern techniques find their sources
in scientific methods which can be more accurate.

Despite the emergence of modern techniques, traditional practices are still widely in use these
days. Let us discuss them one by one.
5.2.1 Budgetary Control (Traditional Practices)
Budgeting simply means showcasing plans and expected results using numerical information. As
a corollary to this, budgetary control means controlling regular operations of an organization for
executing budgets.
A budget basically helps in understanding and expressing expected results of projects and tasks in
numerical form. For example, the amounts of sales, production output, machine hours, etc. can be
seen in budgets.
There can be several types of budgets depending on the kind of data they aim to project. For
example, a sale budget explains selling and distribution targets. Similarly, there can also be budgets
for purchase, production, capital expenditure, cash, etc.
The main aim of budgetary control is to regulate the activity of an organization using budgeting.
This process firstly requires managers to determine what objectives they wish to achieve from a
particular activity. After that, they have to lay down the exact course of action that they will follow
for weeks and months.
Next, they will translate these expected results into monetary and numerical terms, i.e. under a
budget. Finally, managers will compare actual performances with their budgets and take corrective
measures if necessary. This is exactly how the process of budgetary control works.
5.2.2 Standard Costing (Traditional Practices)
Standard costing is similar to budgeting in the way that it relies on numerical figures. The
difference between the two, however, is that standard costing relies on standard and
regular/recurring costs.

Under this technique, managers record their costs and expenses for every activity and compare
them with standard costs. This controlling technique basically helps in realizing which activity is
profitable and which one is not.
5.2.3 Financial Ratio Analysis (Traditional Practices)
Every business organization has to depict its financial performances using reports like balance
sheets and profit & loss statements. Financial ratio analysis basically compares these financial
reports to show the financial performance of a business in numerical terms.
Comparative studies of financial statements showcase standards like changes in assets, liabilities,
capital, profits, etc. Financial ratio analysis also helps in understanding the liquidity and solvency
status of a business.
5.2.4 Internal Audit (Traditional Practices)
Another popular traditional type of control technique is internal auditing. This process requires
internal auditors to apprise themselves of the operations of an organization.
Generally, the scope of an internal audit is narrow and it relates to financial and accounting
activities. In modern times, however, managers use it to regulate several other tasks.
For example, it can also cover policies, procedures, methods, and management of an organization.
Results of such audits can, consequently, help managers take corrective action for controlling.
5.2.5 Break-Even Analysis (Traditional Practices)
Break-even analysis shows the point at which a business neither earns profits nor incurs losses.
This can be in the form of sale output, production volume, the price of products, etc.
Managers often use break-even analysis to determine the minimum level of results they must
achieve for an activity. Any number that goes below the break-even point triggers corrective
measures for control.

5.2.6 Statistical Control (Traditional Practices)
The use of statistical tools is a great way to understand an organization’s tasks effectively and
efficiently. They help in showing averages, percentages, and ratios using comprehensible graphs
and charts. Managers often use pie charts and graphs to depict their sales, production, profits,
productivity, etc. Such tools have always been popular traditional control techniques.
Modern techniques of controlling are those which are of recent origin & are comparatively new in
management literature. These techniques provide a refreshingly new thinking on the ways in which
various aspects of an organization can be controlled. These include:
5.2.7 Return on Investment (Modern Techniques)
Return on investment (ROI) can be defined as one of the important and useful techniques. It
provides the basics and guides for measuring whether or not invested capital has been used
effectively for generating a reasonable amount of return. ROI can be used to measure the overall
performance of an organization or of its individual departments or divisions. It can be calculated
as under-Net income before or after tax may be used for making comparisons. Total investment
includes both working as well as fixed capital invested in the business.
5.2.8 Ratio Analysis (Modern Techniques)
The most commonly used ratios used by organizations can be classified into the following
categories:
❖ Liquidity ratios
❖ Solvency ratios
❖ Profitability ratios
❖ Turnover ratios
5.2.9 Responsibility Accounting (Modern Techniques)
Responsibility accounting can be defined as a system of accounting in which overall involvement

of different sections, divisions & departments of an organization are set up as ‘Responsibility
centers. The head of the center is responsible for achieving the target set for his center.

Responsibility centers may be of the following types:

❖ Cost center
❖ Revenue center
❖ Profit center
❖ Investment center
5.2.10 Management Audit
Management audit refers to a systematic appraisal of the overall performance of the management
of an organization. The purpose is to review the efficiency &n effectiveness of management & to
improve its performance in future periods.
5.2.11 PERT & CPM
PERT (programmed evaluation & review technique) & CPM (critical path method) are important
network techniques useful in planning & controlling. These techniques, therefore, help in
performing various functions of management like planning; scheduling & implementing time-
bound projects involving the performance of a variety of complex, diverse & interrelated activities.
Therefore, these techniques are so interrelated and deal with such factors as time scheduling &
resources allocation for these activities.
5.3 Controlling process
Control process involves the following steps as shown in the figure:
Fig 5.1 Controlling process

• Establishing standards: This means setting up of the target which needs to be achieved
to meet organizational goals eventually. Standards indicate the criteria of performance.
Control standards are categorized as quantitative and qualitative standards. Quantitative
standards are expressed in terms of money. Qualitative standards, on the other hand,
include intangible items.
• Measurement of actual performance: The actual performance of the employee is
measured against the target. With the increasing levels of management, the measurement
of performance becomes difficult.
• Comparison of actual performance with the standard: This compares the degree of
difference between the actual performance and the standard.
• Taking corrective actions: It is initiated by the manager who corrects any defects in actual
performance.
Controlling process thus regulates companies’ activities so that actual performance conforms to
the standard plan. An effective control system enables managers to avoid circumstances which
cause the company’s loss.
5.4 Group Discussion - 1
• A restaurant wants to improve the service provided to its customers. One of the targets is
to reduce the waiting time for serving the food after the customer places an order.
• Please design a controlling system to measure the efficiency of service and customer
satisfaction.
A design for controlling system to measure the efficiency of service and customer satisfaction is

Recruiting/Training
• Recruit new employees by seeking referrals.

• Recruit new employees by advertising.
Orientation/Training
• Conduct on-site orientation for new employees.

• Explain employee benefits and compensation
programs.
• Plan training programs for employees.
• Conduct on-site training for employees.
• Scheduling for Shifts
• Review employee work schedule for shift.
• Determine staffing needs for each shift.
• Make work assignments for dining room, kitchen staff, and maintenance person(s).
• Make changes to employee work schedule.
• Assign employees to work stations to optimize employee effectiveness.
• Call in, reassign, or send home employees in reaction to sales and other needs.
• Approve requests for schedule changes, vacation, days off, and so on.
• Supervision/controlling and Employee Development
• Observe employees and give immediate feedback on unsatisfactory employee
performance.
• Observe employees and give immediate feedback on satisfactory employee
performance.
• Discuss unsatisfactory performance with an employee.
• Develop and deliver incentive for above-satisfactory performance of employees.
• Observe employee behavior for compliance with safety and security.
• Counsel employees on work-related problems.
• Counsel employees on non-work-related problems.
• Talk with employees who have frequent absences.

• Observe employees to ensure compliance with fair labor standards and equal
opportunity guidelines.
• Discipline employees by issuing oral and/or written warnings for poor
performance.
• Conduct employee and staff meetings.
• Identify and develop candidates for management programs.
• Put results of observation of employee performance in writing.
• Develop action plans for employees to help them in their performance.
• Authorize promotion and/or wage increases for staff.
• Terminate employment of an employee for unsatisfactory performance.
5.5 Group Discussion - II
You have just been employed as the manager of a local fast-food shop. You are reviewing the
management tasks ahead and aware that they belong to one of the four major management
functions. Identify the management functions performed in the activities listed in the Student
Worksheet (Parts 5-2).
Activity Planning Organizing Leading Controlling

Decide whether to open a branch. ✓
Assign job duties ✓
Check register slips to ensure proper ✓
prices are being charged to customer
Consider the use of technology to save ✓

costs
Decide what new menu items to offer ✓

Monitor that shop opens and closes as ✓
scheduled
Set target time to complete customer’s ✓

order
Check whether the budgeted profit is ✓

achieved for the year
Explain the work plan with staff and the ✓

expectations on them

6. Reference
Bateman, T. & Snell, S., 2007. Management: Leading and collaborating in a Competitive World.
(7th ed.). New York: McGraw – Hill.
Bateman, T., & Snell, S. (2013). M: Management (3rd ed). McGraw Hill / Irwin: New York, NY
Blue, R., 2007. Functions of management. Journal of the American Society for Information
Science, 40(2), 135-136.
Bretti, A., 2009. Four Functions of management, Journal of Physical Distribution & Logistics,
1(1), 15-18.
Gomez, M., Luis, R., Balkin, B. & Robert L., 2008. Management: People, Performance, Change.
(3rd ed.). New York: McGraw-Hill.
Haridimos, T., 2004. What is Management? An Outline of a Metatheory. British Journal of

Management, 5(9), 289-301.
Himanshu, J. 2009. Functions of Management Web.
Huimfg.com, http://www.huimfg.com/abouthui-yourteams.aspx (accessed October 15, 2008).
https://fhsu.pressbooks.pub/management/chapter/introduction-to-management/
https://www.businessmanagementideas.com/management/planning-management/characteristics-
of-planning/19378
https://smallbusiness.chron.com/chain-command-organizational-structure-59110.html
https://courses.lumenlearning.com/baycollege-introbusiness/chapter/reading-the-division-of-and-
specialization-of labor/#:~:text=The%20division%20of%20labor%20allows,advantage%20of%
20 economies % 20of%20scale.
https://www.managementstudyguide.com/centralization_decentralization.htm
https://www.managementstudyguide.com/delegation_of_authority.htm

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Addis Ababa Science and Technology University

College of Natural and Social Sciences

MBA (Industrial Management)

Submitted to: - Essayas Taye (BSc, MA, EMBA, PhD)

Submitted by: - Mr. Arkbom Hailu (GSR 034/13)

1. Introduction to Management ............................................................................................................... 4

Modern Management Theories and Practices pg. 2

5.1.1 Accuracy: ............................................................................................................................. 46

Modern Management Theories and Practices pg. 3

Additionally, management as a decision-making process entails a premeditated vision, fixed goals,

Modern Management Theories and Practices pg. 4

Fig 1.1 The P-O-L-C Framework

2. Planning and Plan

Modern Management Theories and Practices pg. 5

Modern Management Theories and Practices pg. 6

2.1 Characteristics or nature of planning:

Planning involves thinking and analysis of information, arriving at certain assumptions in

1 - Planning is an Intellectual Process:

A planner should mainly consider the following questions:

Modern Management Theories and Practices pg. 7

2 - Planning is Selection of the Best Alternative:

3 - Planning is all Pervasive:

4 - Planning is the Primary Function of Management:

In reality planning is required in the performance of other functions of management. Without

Modern Management Theories and Practices pg. 8

6 - Planning is a Continuous Process:

9 - Planning is an Interdependent Process:

Modern Management Theories and Practices pg. 9

10 - Planning Leads to Efficiency and Economy:

11- Planning Considers Limiting Factors:

12 - Planning Creates Coordination:

2.2 Types of plans and planning.

• Strategic planning involves analyzing competitive opportunities and threats, as well as

Modern Management Theories and Practices pg. 10

• Tactical planning is intermediate-range (one to three years) planning that is designed to

2.3 Management by Objective (MBO)

Modern Management Theories and Practices pg. 11

2.4 Activity 1 – Group Discussion

1) Setting company goals

Modern Management Theories and Practices pg. 12

Obtained • Using crowdfunding or

Employ skilled Man • Expert in programming and video gaming as artimer

Fig 2.1 Plan for game developing Company

Modern Management Theories and Practices pg. 13

5) Putting plans into action

Modern Management Theories and Practices pg. 14

Organizing is the function of management that involves developing an organizational structure

Modern Management Theories and Practices pg. 15

3.1 Purpose of organizing

Modern Management Theories and Practices pg. 16

3.2 Steps of organizing process

1. Consideration of Plans and Goals

2. Determining the Work Activities Necessary to Accomplish Objectives

3. Classifying and Grouping Activities

4. Assigning Work and Delegating Appropriate Authority

Modern Management Theories and Practices pg. 17

5. Designing a Hierarchy of Relationships.

Step # 1. Consideration of Plans and Goals:

Step # 2. Determining the Work Activities Necessary to Accomplish Objectives:

Modern Management Theories and Practices pg. 18

Step # 3. Classifying and Grouping Activities:

Modern Management Theories and Practices pg. 19

Management will choose a departmental type of organizational format from functional,