Meaning of Management Gives Direction  What is to be achieved?
Gives Direction
Management is the process of coordination and administration of tasks that is required to achieve the goals of
the organisation. It is also referred to as the art of making things happen with the help of resources.
Management is required for an established life and is essential for managing all types of organisations. A sound
management system is the fortitude of thriving companies. Managing life implies getting everything done to
accomplish the aspirations of life and maintaining an establishment. This means getting things done with and
by other people to fulfill its objectives.
To put it in other words, the organisation and coordination of the pursuits of an industry for the idea of
accomplishing determined objectives efficiently and thoroughly are marked as management.
This authoritatively obligatory association connects individuals as subordinates and superiors and gives rise to
distinct degrees in an establishment. There are 3 levels in the ranking order of an establishment and they are:
Top-level management
Middle-level management
Lower-level management
Let us discuss these management levels in detail in the following lines.
Top Level Management
They comprise of the senior-most executives of the company. They are normally regarded as the Chairman, the
Chief Executive Officer (CEO), the Chief Operating Officer (COO), President and Vice-president (VP). Top
management is a team consisting of managers from various operational levels, managing marketing, finance,
etc., For instance, Chief Finance Officer (CFO), Vice President (marketing) whose primary task is to combine
various components and regulate the actions of different units according to the overall objectives of the
company.These top-level managers are accountable for the progress and continuation of the establishment.
They investigate the trading atmosphere and its connections for the survival of the company. They form the
overall organisational aims and approaches for their accomplishment. They are held responsible for all the
pursuits of the company and for its influence on the society. The job of the top manager is difficult and stressful,
necessitating long hours and dedication to the company.
Middle Level Management
It is the connection between top and lower level managers. They are lower to the top managers and above to
the first line managers. They are normally called as division heads, for instance, Production Manager. Middle
management is accountable for executing and regulating systems and manoeuvrings generated by the top
management.
At the same time, they are liable for all the actions of the first-line managers. Their principal task is to bring out
the plans formed by the top managers. For this purpose, they have to:
Understand the procedures outlined by the top management
Guarantee that their staff has the required workers
Designate certain tasks and duties to them, and drive them to accomplish the aspired objectives.
Interact with other departments for the stable operation of the company. At the same time, they are subject to
all the actions of the first-line managers.
Lower Level Management Managers and supervisors make up the lower level of the management in the
hierarchy of the business. Supervisors immediately manage the efforts of the workforce. Their power and ability
are defined according to the maps drawn by the top management.
Supervisory management performs a significant task in the system since they coordinate with the genuine
workforce and move in directions of the middle management to the employees. Through their efforts the worth
of the output is reported, wastage of substances is reduced, and security measures are affirmed.
Planning in Management: Definitions, Importance, Characteristics, Process
What is Planning?
Planning is the primary function of management that involves formulating a future course of action for
accomplishing a specific purpose. Planning enables managers to decide what task to do, how to do the task,
when to do the task and by whom the task has to be done.
To be more precise planning lays a foundation for establishing a mission statement, defining organisational
goals and determining resources needed to achieve organisational goals. On the other hand, in a narrow sense,
planning is the tactic to complete a specific task.
Definitions of Planning
By going through the definitions of planning we will be able to understand its concept therefore some
definitions are as follows:
Planning is the continuous process of making present entrepreneurial decisions systematically and with best
possible knowledge their futurity, organising systematically the ef- forts needed to carry out these decisions
and measuring the results of these decisions against the expectation through organised systematic feedback.
Peter Drucker
Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between
where we are, where we want to go. It makes possible things to occur, which would not otherwise occur.
Koontz and O’Donnell
Importance of Planning in Management
The importance of planning in management is explained in the following points:
Forms Goals
Planning is a goal-oriented process that helps in determining what each individual in an organisation has to
achieve at the end and executing work accordingly. In addition, the planning function enhances the efficiency of
other managerial functions.
Remains as a Continuous Process
Planning in any organisation is a never-ending function. This is because every organisation operates in a
dynamic business environment which is subject to frequent changes. As new changes become known, revisions
and amendments are made to plans.
MBO Definition:
• “MBO is a process whereby the superior and the mangers of an organization jointly identify its common goals,
define each individual’s major area of responsibility in terms of results expected of him, and use these
measures as guides for operating the unit and assessing the
contribution of each of its members.”
Features of MBO
• MBO is concerned with goal setting and planning for individual managers and their units.
• The essence of MBO is a process of joint goal setting between a supervisor and a subordinate.
• Managers work with their subordinates to establish the performance goals that are consistent with their
higher organizational objectives.
• MBO focuses attention on appropriate goals and plans.
• MBO facilitates control through the periodic development and subsequent evaluation of individual goals and
plans.
mbo process
Process of MBO:
The various steps in the MBO process are
• Setting of organizational purpose& objectives (long term objectives)
• Planning premises (certain assumptions about future happenings.
• Fixing Key result areas (it indicates the strength of the organization)
• Setting superior’s objectives (long term &short term objective).
• Superior’s recommendations for subordinate’s objectives.
• Subordinates statement of his objective.• Matching of goals& resources.
• Subordinate’s agreed objectives
• Setting standard for subordinate performance
• Periodic review and appraisal of performance.
Benefits of management by objectives
• Better managing of organizational resources and activities.
• Clarity in organizational action& objectives.
• MBO provides greatest oppourtunity for personal satisfaction (for managers)
• MBO provides a basis for organizational change and provide a framework and also it provide guideline for
planned change ,enabling the top mgt to initiate, plan , direct and control the direction , speed and change.
• MBO helps the manager to understand their role in the total organization involvement.
• Commitment and hardwork by managers as they are involved in setting the objectives.(participating in the
mgt
• MBO helps in evaluating the performance systematically.
• MBO motivates the workers &make the job meaningful.
• Mgt takes the decision very quickly as the workers know the purpose of taking decisions
• Improvement of managing through results-oriented planning
• Clarification of organizational roles and structures as well as delegation of authority according to the results
expected of the people occupying the roles
• Encouragement of commitment to personal and organizational goals
• Development of effective controls that measure results and lead to corrective actions
Failures of management by objectives and some recommendations
Despite all its advantages, an MBO system has a number of weaknesses. Most are due to shortcomings in
applying the MBO concepts.
1. Failure to teach the philosophy of MBO is one of the weaknesses of certain programs. Managers must explain
to subordinates what it is, how it works, why it is being done, what part it will play in appraising performance,
and, above all, how participants can benefit. The
philosophy is built on the concepts of self-control and self-direction.
2. Failure to give guidelines to goal setters is often another problem. Managers must know what the corporate
goals are and how their own activities fit in with them. Managers also need planning premises and a knowledge
of major company policies.
3. There is also the difficulty of setting verifiable goals with the right degree of flexibility. Participants in MBO
programs report at times that the excessive concern with economic results puts pressure on individuals that
may encourage questionable behavior. To reduce the
probability of resorting to unethical means to achieve results, top management must agree to reasonable
objectives, clearly state behavioral expectations, and give high priority to ethical behavior, rewarding it as well
as punishing unethical activities.
4. Emphasis on short-run goals can be done at the expense of the longer-range health of the organization.
5. Moreover, the danger of inflexibility can make managers hesitate to change objectives, even if a changed
environment would require such adjustments.
Limitations of MBO:
• Time consuming process: requires large amt of time of the senior managers and cost high due to paper work
and other resources which are scarce.
• Fail to teach philosophy: managers fail to teach MBO philosophy of managing an organization.
• Variable objective: Setting of variable objectives difficult at least in time areas.
• Much emphasis for short term objectives at the cost of long term objectives.
• Danger on inflexibility
• Difficulty of setting goals
How to make MBO effective:
– Support from all types of MGT
– Acceptance of MBO program by managers
– Training of managers
– Organizational commitment: MBO
Here, it is convenient to set standards of performance. This helps to compare the actual performance with
standard performance more quickly. This helps in taking prompt decisions to correct deviations. This leads to
maintaining effective control in the organization.
High Morale and Motivation to Subordinates
Decentralization is very motivational as it provides the juniors the autonomy to act and make decisions. This
develops among the subordinates a feeling of status and recognition and ultimately a feeling of dedication,
commitment, and belongingness. This helps in maintaining the high motivation and morale of the subordinates.
Facilitates Diversification
The addition of new product lines or expansion of existing lines of business develops complexity in the
organization. This also develops challenges for the top manager. The top manager can face such trials by
delegating authority to his subordinates. He can only play the role of coordinator.
Environmental Adaptation
A dynamic environment may create problems in different operating units. In decentralization, decision-making
right is transferred to the operating level managers. This facilitates quick and flexible decisions based on the
situation.
Disadvantages of Decentralization of Authority
Let’s explain the disadvantages of decentralization:
Increase in Expenditure
Decentralization needs to be qualified, competent, and skilled manpower at middle and lower levels. They are
to be paid based on their qualification and experience. Besides, there is a possibility of duplication of effort,
which unnecessarily may increase the cost of production.
Conflict and Problems in Coordination
In decentralization, the top-level authority puts more force on departmental managers to boost output and
revenue. In such a situation, every department lays more emphasis on their own departmental goals instead of
corporate goals. This may rise to interdepartmental conflict and too much fragmentation creates problems in
coordination and control.
Unsuitable For Emergency Situation
The lower and middle-level managers are assigned authority only for routine decisions. Whenever they face
complex and non-programmed problems they can not decide due to limited authority.
Maximizes Risk
The decision-making authority is delegated to the subordinate level. If subordinate level managers are unskilled
and incapable, they may take wrong decisions, which may increase the risk and result in losses.
Difficulty In Communication
Different departments are formed in various locations and authority and responsibility are assigned to
departmental heads. If the network system to communicate information is unclear, communication will be
distorted.
Unsuitable For Specialized Services
The concept of decentralization is not applicable in types of services. It is not suitable for the specialized nature
of services like accounting, human resources, engineering surveys, research, etc.
Thus, summing up, decentralization of authority is the dispersion of decision-making authority to operating
level staff in other to increase the performance of the organization and make it possible to take prompt
decisions.
Types of Control Techniques in Management
In management, Controlling is one of the most important functions in an organization which is goal-oriented.
Types of Control techniques in management are Modern and Traditional control techniques. Feedforward,
feedback and concurrent controls are also types of management control techniques.
Controlling helps the managers in eliminating the gap between organizations actual performance and goals.
Controlling is the process in which actual performance is compared with the company standards. Comparing it
gives the visibility that activities are performed according to strategy or not. If it is not performed then
necessary corrective action should be taken. Let us learn more about 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.
 What is to be achieved?
Planning channelises the efforts of people in an organisation in the best possible manner to attain the desired
results. For example, during the planning process, plans are laid for each department of the organisation, which
helps people at all levels to know exactly what work they have to perform so that organisational goals can be
achieved without any hindrances.
Tackles Uncertainty
Planning is helpful in making predictions with the available amount of information. This helps
organisations/businesses tackle an uncertain future. Planning assists in finding a better way to achieve goals by
anticipating a future risk or chances of occurrence of future risks.
Minimises Duplication and Wasteful Activities
As mentioned earlier, planning helps individuals at all levels to know what they exactly need to do. This helps in
preventing the duplication of work, authority, responsibility, etc. As a result, wastage of resources and efforts is
minimised.
Supports and Promotes Innovative Ideas
Nowadays, organisations operate in an environment of cut-throat competition. Customers always demand
something new or unique. If an organisation fails to fulfil customers’ demands, customers can easily switch to
competitors.
Planning enables managers to think out of the box, generate new ideas and provide something unique to
customers with less cost and more efficiency, thereby satisfying customers.
Facilitates Decision Making
Planning as a guide plays an important role in making efficient and accurate decisions. For instance, the
production department of an organisation needs to choose between two vendors who supply raw materials at
the same cost and of the same quality level.
However, the two vendors differ in delivery time. In this case, the decision of choosing the vendor will be made
as per the planned number of days.
Sets Standards for Controlling Function
Planning and controlling are inter-related functions of management. Planning sets goals for the organisation and
controlling ensures their accomplishment within the decided time period. In addition, controlling direct the
course of planning by highlighting the areas where planning is required.
Facilitates Coordination
The planning function helps management in aligning department-wise activities of the organisation. The plans
made by one department are understood and supported by another department.
Overall planning that is done by top management facilitates departments to coordinate and plan accordingly to
achieve organisational goals.
Characteristics of Planning
The characteristics of the planning function are explained as follows:
Continuous Process
Planning is done for a specific period of time and plans are reformed at the end of that specific period as per
the new requirements and changing conditions. Planning goes on, till the existence of an organisation, as issues
and problems keep cropping up, and plans are needed to tackle the problems effectively.
Intellectual Process
Planning requires creative thinking to visualise the future situation and frame plans accordingly. It is the
outcome of managers’ thinking process based on their experience and knowledge.
Futuristic Approach
Planning is conducted to achieve future organisational goals while efficiently utilising organisational re- sources.
This is done by predicting future situations and making forecasts.
Flexible process
Planning involves a flexible approach. Since the future is uncertain and unpredictable, changes in the business
environment take place in the form of competition, government policies, customer demand, etc. Thus, there is
always room for flexibility in planning to incorporate future changes.
Primary Function of Management
Planning is done prior to all other functions of management, i.e., organising, staffing, directing, controlling,
coordinating, reporting and budgeting. It is the first, foremost and base managerial function of any
organisation. The effectiveness of a management’s plan determines the competence of the management’s
activity for the planned time period.
Assists Decision Making
Planning comprises decision making because it is an activity of making choices from the available alternatives
for performing tasks. Hence, planning comprehends decision making as its indispensable part.
Goal-oriented Approach
Planning emphasises defining the aims, objectives and goals of the organisation. It also involves the
identification of alternative courses of action to decide on a suitable action plan, which should be undertaken
for the attainment of goals.
Pervasive
Planning is regarded as pervasive because it is present in all the segments of an organisation. It is required at
all levels of management. The scope of planning differs at different levels of management and departments.
Process of Planning
The process of planning involves a number of steps in chronological order which are given below:
Setting Organisational Objectives
The planning process begins with the first step of establishing organisational objectives. It involves identifying
organisational goals to be achieved by examining internal and external business conditions. For this, the
answers to be given for the following questions:
– Allocation of adequate time and resources
– Provision of uninterrupted information feedback
Types of Organization
Types of Organization
What is an Organization?
Meaning of an Organization: – An organization is an entity such as a company or an association that
consists of one or more people and has a specific purpose. The word is derived from the Greek word
organ, meaning instrument or instrument, musical instrument and organ. An organization is a group of people
who work together, like a neighborhood association, a charity, a union, or a corporation. Organization is also the
act of forming or establishing something (like an organization). Let’s go through the five common types of
organization and reasons why you might consider each of them.
What are the types of organization?
There are 5 types of organizations such as Line Structure Organization, Line and Staff
Organization, Functional Structure Organization, Matrix Structure Organization and Project
Structure Organization.
1. Line Structure Organization
Meaning of Line Structure Organization: – Line structure organization is the simplest and oldest form of
organization structure. It is called as a scalar type of military or divisional or organization. Under this
system, authority flows directly and vertically downward from the top of the managerial hierarchy to different
levels of managers and subordinates, and down to the operative level of workers. It is also known as the chain
of command or scalar principle.
Advantages of Line Structure Organization: –
 Simple to understand and simple to operate;
 Communication is fast and easy;
 Feedback can be acted upon faster;
 Responsibility is fixed and unified at each level and authority and accountability are clear-cut, hence
each individual knows to whom he is responsible and who is or in truth responsible to him;
 Since it is especially useful when the company is small in size, it provides for greater control and
discipline in the organization.
 It is a stable form of organization.
Disadvantages of Line Structure Organization: –
 It is a rigid and inflexible form of organization;
 Line authority has a tendency to become dictatorial;
 It overloads the executive with suppressive activities so that long-range planning and policy making
are often neglected;
 A line organization can suffer from a lack of specialization. This is because each department manager
is concerned only with the activities of his own department.
 Different departments may be more interested in their interests rather than overall organizational
interests and welfare;
 This is likely to encourage nepotism;
It might stop progress and prevent the unit to work effectively.

 It does not provide any means by which a good worker can be rewarded and a bad one can be
punished.
2. Line and Staff Organization
Meaning of Line and Staff Organization: – Line and staff organization, in management, approach
authorities (For example: – managers) establish goals and instructions that are then met by employees and
other workers. A line and staff organizational structure attempts to present a large and complex enterprise in a
more flexible way without sacrificing managerial authority. Staff groups support those who are engaged in the
central productive activity of the enterprise. They back up their work. Staff groups help the organisation in
analysing, researching, counselling, monitoring, and in evaluating activities.  
Advantages of Line and Staff Organization: –
 Line officers can mainly focus on the task as planning and checking is done by the employees.
Specialization provides expert advice and proficiency in management.
 Since the organization includes line and staff functions, decisions can be made easily.
 Staff officers provide complete factual data to line officers covering activity within and without their
units. This will help to create more coordination.
 It provides ample opportunities for the advancement of workers.
 Staff services provide a training ground for various positions.
 This arrangement is flexible for newcomers in that employees can be forced to make early
adjustments to the line arrangement.
 Staff experts are ideologically oriented to look forward and have time to undertake program and
strategic planning and analyze the potential impacts of future potential events.
Disadvantages of Line and Staff Organization: –
 Confusion and conflict may arise between the line and the staff. Because the allocation of authority
and responsibility is not clear and the lower level members may be confused with various line orders
and staff advice.
 The staff usually advises the lines, but the line makes decisions and tasks. So employees often feel
powerless.
 Too much reliance on staff officers may not be beneficial to the business as line officers may have to
lose a lot about their decisions and duplication.
Traditional Types of Control Techniques in Management
Budgetary Control
Standard Costing
Financial Ratio Analysis
Internal Audit
Break-Even Analysis
Statistical Control
Types of control techniques in management
Despite the emergence of modern techniques, traditional practices are still widely in use these days. Let us
discuss them one by one.
Budgetary Control
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.
Standard Costing
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.
Financial Ratio Analysis
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.
Internal Audit
productivity and profitability and boosting return on investments, as all these are parts of the desired future of
What actions are to be taken?
Who is to perform it?
How is it to be undertaken?
What should be the time frame?
Examining Business Environment
The next step in the planning process is to examine internal and external factors that influence the business
environment.
The internal factors include strengths and weaknesses (for example, the efficiency of available resources) of the
organisation, while external factors involve threats and opportunities (for example, overall economic and
industrial environment and competitive position of the organisation).
Assessing Available Alternatives and Selecting the Most Appropriate AlternativeThe next step in the
planning process is to evaluate all available alternatives and then select the best alternative. Generally, an
alternative is evaluated against risks associated, costs involved, upcoming benefits, etc.
Formulating secondary plans
The successful accomplishment of organisational objectives is confirmed by formulating secondary or
alternative plans. These plans are derived for various activities, units, departments, etc., and indicate a
sequence in which various tasks are to be performed and the time schedule for per- forming those tasks.
Ensuring cooperation and participation
In this step, employees at middle and lower levels of management are encouraged to participate in the
successful accomplishment of organisational goals. Suggestions were given by operating personnel to help the
management rectify shortcomings in plans and set things right at the start of the planning process and at the
time of its implementation.
Following up
The last step in the planning process is to provide the scope of follow-up for determining the value of plans
made and implemented. This step involves a continuous review of plans for ensuring their relevance and
effectiveness.
Reviewing plans on a continuous basis helps the organisation develop sound plans for the future and avoid
mistakes that took place while implementing the previous plans.
Limitations of Planning
In spite of several advantages, the planning function also has certain limitations. We have here listed the
key limitations of planning:
Time-consuming
Planning turns out to be a time-consuming activity as it requires data collection, data analysis, forecasting, etc.,
for selecting the best future course of action.
Expensive
Planning requires expertise and the collection of authentic data, which incurs a lot of costs for the organisation.
For instance, companies like IBM need to do a lot of planning prior to starting any new venture. For this, such
companies also spend a lot on research and pay highly to experts to get their advice.
Gap Between Targets and Results
Planning is done by top-level management and implemented by middle and lower-level management. This
creates a gap between the plan set and actual results achieved as different employees may have different
perceptions of accomplishing plans.
Resistance Towards Change
Planning often requires changes due to the dynamic business environment. However, as a natural human
tendency, employees are always reluctant to accept changes and may not provide their full cooperation.
Paperwork
Planning involves paperwork as plans cannot be finalised in one go. The plans are reworked again and again
and after getting a final plan, subordinates give the copies of the plan to the top-level management in the form
of a report or a proposal to get the plans finalised for implementation.
Reason of Frustration
Sometimes, planned targets are not achieved by managers and employees irrespective of their best efforts.
Such failures frustrate them and cause a low level of motivation in them.
Problem of Over-target
Planning sometimes makes the top-level management fix targets that are unachievable and causes problems of
over-expectation from employees.
Types of Plans
Plans bind individuals, resources, departments and organisations to achieve specific goals in the future. Plans
help design organisational goals effectively which fits into the hierarchy from top to lower level of management.
In an organisation, there are different types of plans made.
Some important types of plans are explained as follows:
Strategic plans
Strategic plans are a framework for an organisation. These plans contain the mission of an organisation and
outline goals to be achieved. Strategic plans aim to turn the vision of an organisation into reality. Thus, strategic
plans are long-term and forward-looking in nature and accommodate future growth and expansion of an
organisation. These plans are generally developed by top management and are implemented by middle and
lower management.
For instance, Varun works as a top-level manager for Dino’s PizzaSizz. As a top-level manager, he has to make
use of strategic planning to ensure that the long-term goals of the organisation are attained. Varun in
consultation with other top-level managers developed strategic plans for achieving growth, increasing
 Since staff specialists demand high pay, it is expensive.
 Employees are unable to carry out its plan or recommendations due to lack of authority. So they
sometimes become ineffective, this will make them careless and indifferent to their jobs.
 As the line is performed, with advice provided by employees, if things go right, the employee takes
credit and if things go wrong, the line gets the blame for it.
3. Functional Structure Organization
Meaning of Functional Structure Organization: – Functional Structure Organization is one of the most
common structures of organization. They are grouped based on their specific skills and knowledge. Under
this structure, the employees are divided into groups by the organization according to a particular or group of
tasks. Where functional structures operate well in stable environments, where business strategies have little
inclination for change or mobility, the level of bureaucracy makes it difficult for organizations to react quickly to
market changes.
Advantages of Functional Structure Organization: –
 The executive or the team leader has the knowledge and experience of that particular field. For
example, the person heading the IT department will have the education and skill necessary to shoulder
this responsibility and successfully run his team.
 Because the employee has expertise in that particular field, the work is more efficient and precise.
There are fewer mistakes. This also helps with the motivation of the employees of the company.
 Since all team members come from similar backgrounds it allows them to share ideas and come up
with solutions. There is a sharing of knowledge, which is always beneficial.
 The employees also having a clear idea of the hierarchy of the firm. They need not report or answer to
several managers.
Also, the employees feel secure in their work. They see that their work and efforts is not going

unnoticed. This sense of security helps them perform better.
Disadvantages of Functional Structure Organization: –
 The work can be quite one dimensional. After a while, the employees may start feeling monotony or
boredom. The lack of new challenges can make them unenthusiastic for the job at hand.
 In this structure, the manager must take care of the appraisal system. If the correct approach is not
taken then conflicts may arise between the employees regarding promotions or appraisals.
 Also, this form of organization requires a high degree of specialization which is difficult to establish
 If there is a necessary change of personnel it can disrupt the whole system and its balance. Also, it is
quite a rigid structure, not leaving a lot of scope for adaptation.
 In Functional Organizational Structure, the employees never gain any knowledge or skills outside their
own department. This can cause difficulties in inter-departmental communication.
4. Matrix Structure Organization
Meaning of Matrix Structure Organization: – A matrix organizational structure is a structure of
organization in which some individuals report to more than one supervisor or leader, which is described
as solid line or dotted line reporting. More broadly, it can also describe the management of cross-functional,
cross-business groups and other work models that do not maintain rigid business units or silos grouped by
function and geography. For example, an employee may have a primary manager they report to as well as one
or more project managers they work under.
Advantages of Matrix Organization: –
 Since there is both vertical and horizontal communication, it increases coordination and this leads to
greater and more effective control over operations.
 As the matrix organization is handling many projects, the available resources will be fully utilized.
 It focuses organizational resources on specified projects, thus enabling better planning and control.
It is highly flexible in following rules, procedures etc. Experience here is the best guide for setting rules
and procedures.
 As any department has to put its efforts towards the completion of any one project, employees are
effectively motivated.
Disadvantages of Matrix Organization: –
 Since, there is more than one supervisor for each worker, this causes confusion and conflict and
reduces effective control.
 There is continuous communication both vertically and horizontally, which increases paper work and
costs.
 It is difficult to achieve downward balance on projects technical and administrative aspects.
5. Project Structure Organization
Meaning of Project Structure Organization: – A project structure organizational structure is used to
determine the hierarchy and authority of people involved in a specific project. This organizational structure
is temporarily created for specific projects for a particular period, for the project to achieve the goal of
developing a new product, specialize in various functional departments such as production, engineering, quality
control, marketing research etc. and will be ready to work together. These specialists return to their duties as
soon as the project is completed.
In fact, the project organization is established with the aim of overcoming the major weakness of functional
organization, such as absence of unity of command, delay in decision making and lack of coordination.
When to use the project structure organization?
Another popular traditional type of control technique is internal auditing. This process requires internal auditors
to appraise 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.
Break-Even Analysis
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.
Statistical Control
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
Personality Types - Different Types of Personality
Let us go through the following personality types:
The Duty Fulfiller - Such individuals take their roles and respo
the pizzeria.
Varun and other top-level managers developed organisational objectives through strategic plans so that middle-
and lower-level managers can create compatible plans aligned with those objectives. Varun also involved other
level personnels because strategic plans require multilevel involvement.
Tactical plans
Tactical plans are developed by middle-level management for a span of generally less than three years. These
plans contain instructions for lower-level management on what should be done, how should be done and by
whom should be done. In addition, tactical plans define tactics which managers adopt for achieving objectives
mentioned in the strategic plan. Tactical plans also provide information on resources to be employed and work
distribution among the sublevels within each department.
For instance, when Mira, the middle-level manager at Dino’s PizzaSizz, learns about Varun’s strategic plan for
improving productivity, Mira im- mediately began to think about possible tactical plans. Tactical planning for
Mira included things like testing a new process in making pizzas in a shorter amount of time or perhaps looking
into purchasing a better oven that can speed up cooking pizza or even exploring ways to better map out the
delivery routes and drivers.
As a tactical planner, Mira required to form a set of calculated actions that takes a shorter amount of time and
is narrower in scope than the strategic plan but still help to bring the organisation closer to its long-term goal.
Operational plans
An operational plan is developed by the supervisors, team leaders and facilitators for supporting tactical plans.
It governs the day-to-day operations of an organisation/business. Operational plans can be of two types, namely
single use plans (for example, budget) and ongoing plans.
For instance, Ravi, the frontline manager at Dino’s PizzaSizz, has the responsibility of operational planning.
Scheduling employees each week, creating a monthly budget, developing a promotional advertisement for the
quarter to increase the sales of a certain product or outlining an employee’s performance goals for the year and
doing an assessment, ordering and stocking inventory are the operation plans Ravi need to make and get
executed.
A continuing or ongoing plan is the one which is made once and its value is retained over a period of years. The
plan undergoes periodic revisions and updates. Following are examples of on-going plans:
 Policy: A policy is a broad guideline followed by managers to deal with the important aspects and
areas of decision making. Policies are referred to as those general statements which explain how
managers should handle their routine management responsibilities.
For example, a typical human resources policy of an organisation addresses the matters related to the
hiring of employees, terminations of non-performing employees, performance appraisals as an
important culture, pay increases and discipline of employees.
Procedure: A procedure is a standard set of directions that provides stepwise instructions of carrying
out activities or tasks for achieving and attaining the organisational objectives. For example, typically,
organisations have procedures/processes to purchase supplies and equipment.
The procedure of purchasing supplies and equipment generally starts with a supervisor who completes
the purchase requisition. After that, the requisition is then sent for approval to the next level of
management. As the requisition gets approved, it is forwarded to the purchasing department.
The amount of the purchase requisition is considered by the purchasing department either to place an
order or to secure quotations bids from several vendors before placing the order.
Rule: A rule is a statement that explicitly guides employees for what they can and cannot do. Rules
promote the safety of employees by placing the ‘do’ and ‘don’t’ statements. It also directs for the
uniform treatment and the behaviour of employees in an organisation/business. For example, the rules
of absenteeism and unpunctuality allow supervisors to make discipline related to fair decisions quickly.
Contingency plans
A successful organisation depends upon the fact that how intelligently, flexibly and constantly its management
chases, adapts and masters the changing conditions. A strong management entails to ‘keep all options open’
approach at all times. This is where contingency planning comes into the organisation.
In contingency planning, an alternate plan is identified, analysed and implemented so that in case the original
plan proves insufficient, the backup is ready to be used. The factors which are beyond managers’ control are
kept in mind and the alternative future scenarios are prepared carefully.
When unanticipated problems and events occur, managers may need to change their plans. It is best to
anticipate the changes during the planning process as things don’t always go as expected. Management should
develop alternatives to the existing plan and keep them ready for use when unexpected circumstances occur.
Management By Objectives – MBO | Definition , Process , Advantages
MANAGEMENT BY OBJECTIVES (MBO)
• MBO was first popularized by Peter Drucker in 1954 in his book ‘The practice of Management’.
• MBO (Management by objectives) as a comprehensive managerial system that integrates many key
managerial activities in a systematic manner and is consciously directed toward the effective and efficient
achievement of organizational and individual objectives.
This view of MBO as a system of managing is not shared by all. While some still define MBO in a very narrow,
limited way, we prefer to see it as a comprehensive goal-driven, success-oriented management system as
shown below. Besides being used for performance appraisal, as an instrument for motivating individuals, and in
strategic planning, there are still other managerial subsystems that can be integrated into the MBO process.
They include human resource planning and development (staffing as well as individual and organization
development), career planning (building on personal strengths and overcoming weaknesses), the reward
system (paying for performance), budgeting (planning and controlling), and other managerial activities
important for a specific position. These various managerial activities need to be integrated into a system. In
short, MBO, to be effective, must be considered a way of managing as shown in below, and not an addition to
the managerial job.
 It is a one-time task and is fixed in the context of a single, specific goal.
 It is big in scope It is unfamiliar or lacks precedent.
 It is complex and calls for a high degree of freedom.
 Successful completion of the project has a high stake.
 The result is very important for the organization.
Advantages of Project Structure Organization: –
 It is a notable depiction of the relationship between environment, strategy and structure.
 The team can focus properly.
 The clustering of activities on the basis of each project initiates new authorization patterns.
 As experts from different organizations are ready to work together under the project organization, it
helps in coordination.
 This makes for personal control and determination of personal responsibility.
Disadvantages of Project Structure Organization: –
 The uncertainty can be attributed to the diverse background of the professional who is deputed in the
project.
 The project manager finds it difficult to control in the traditional way in order to motivate and control
employees, in the absence of a norm of lines and norms responsible for communication.
 Project completion may be delayed.
 Effective project management can also be hindered by top management who may not be fully aware
of the problems in the project center.
Decentralization of Authority
Decentralization of authority means the delegation of authority by top-level management to the subordinate
level management based on their responsibilities. It is a belief in a systematic delegation of managerial
authority to subordinate level management.
Decentralization is an important management concept that concerns the distribution of decision-making power
to the subordinate level management or to those parties of the organization by whom the organizational work is
to be done. This assumes that the top management should keep limited authority and delegate maximum
authority to the operating levels. After delegating, the top management has to play the role of supervisor over
the operating levels staff.
The best advantage of the decentralization of authority is that it motivates the subordinates, enhances their
performance, and ultimately leads to an increase in the productivity of the organization.
Some important definitions of decentralization provided by scholars are as follows:
Louis A. Allen – Decentralization is the systematic and consistent delegation of authority to the level where the
work is performed.
Koontz and Weihrich – Decentralization is the tendency to disperse the decision-making authority in an
organized structure.
Dale S. Beach – Decentralization means placing the authority and decision-making power as close as possible to
the level at which the work is done.
Thus, decentralization is the scientific and systematic delegation of managerial authority to operating levels of
staff according to their responsibility.
Delegation of authority is not mandatory but is optional, the top manager may or may not delegate the
authority.
In the practical field, it is not possible to delegate absolute authority to the lower level. The top-level manager
delegates only limited power to the lower-level managers. Every organization has to decide how much authority
should be centralized and how much authority should be decentralized. Generally, it depends on the nature and
size of the organization and the responsibility vested on the lower level management. The top manager has to
delegate such a degree of authority to the lower level so that quick decisions and their implementation are
possible.
Advantages of Decentralization
Explaining the advantages of decentralization of authority as follows:
Relief To Top Management
In decentralization, most of the routine managerial responsibilities are delegated to middle and lower-level
managers. It minimizes the excessive workload of the top manager. It gives enough time to the top manager to
focus on non-programmed decisions like planning, policymaking, strategy formulation, controlling, etc.
Facilitates Manager’s Development
Here, relevant duty and power are delegated to subordinate levels managers. It allows them to hone their skill
and efficiency to get promotions. Therefore, decentralization creates the reserve of talent.
Enhance Better Decisions
Decentralization delegates the decision-making authority to the managers nearest to the operation level. The
manager working to the nearest to the operation is in a better position to understand the complexity of the
problems. This helps in making a better decision to solve a problem.
Effective Control