Chapter 1 : Introduction

- In the modern times one of the most important human activities is managing group of
people. Managing has been essential to ensure the coordination of individual efforts.
- The knowledge of management theory and practice enables managers to take more
realistic view about organizational and social problems and to find out their
effective solution.
- Management applies to any kind of organization and applies to managers at
all organizational levels.

1.1. Basic Definitions

1.1.1 Traditional Definitions Of Management
- Management is the art of securing maximum results with minimum of efforts so as
to get maximum success and happiness for both employer and employee and
give public the best services .
- Management is definite process consisting of planning ,organizing ,staffing ,leading,
and controlling utilizing both in each science and art and followed to accomplish
predetermined objectives of organization .
- ―Management is the art of knowing what you want to do and then seeing that it
is done in the best and cheapest way.‖ ( Taylor Def.)
- ―Management is the accomplishment of results through the efforts of other people
utilizing the physical and human resources for achieving organizational goals .‖
(Lawrence Def.)
1.1.2 Modern Definitions Of Management
- ― Prime mover of organization making it functional and productive‖
- ―Process of creating conductive and proper internal environment in
the organization‖ .
- ― Process of dealing well with changing external environment by relating
strengths and weakness of organization with it ―.

1.2 Nature ,Principle, Role And Importance

Of Management
1.2.1 Nature Of Management
1. Management is a universal activity or an integrating process which
includes planning, organizing, directing and controlling to achieve the
organization objectives .
2. Management is concerned with the efforts of a group
3. Management applies economic principles.
4. Management is goal-oriented and involves decision making.
6. Management co-ordinates all activities and resources.

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 7. Management takes into consideration the existing situations and advice best
way of doing things .
8. Management is the combination of art, science and profession.
8.1 Art means use of :creativity ,skills ,technical know how and directed to
getting results .
8.2Management is a profession because it involves knowledge and application of it
, besides social responsibility as
its aim should not be only profit
maximization, but they have to
follow certain rules for social
responsibilities as shown in the
following figure .
8.3 Management is a Science as it based
on certain principles and which are
universally approved. Science is
divided into two parts :
Physical science & Social science
because it deals with human being.
9. Management is a dynamic continuous
process.
1.2.2 Principles Of Management
The Principles of Management laydown guidelines for improving Management practices.
A list of fourteen principles of Management given by Henry Fayol as follow :
1. Division of work :
Total work of an organization is divided into small manageable units and assigned
to particular individuals. It can be applied at all levels in the organization.
2. Authority and responsibility :
The Manager gives his order directly to the subordinate after that he should take the
responsibility for the work done by them. It is important to delegate authority, at the
same time keep the responsibility with him.
3. Work Discipline : Should be followed by all the employees to let organization running
smoothly . For example ,Obedience behavior, flexibility and human consideration are
together called discipline.
4. Unity of Command : Every subordinate should receive orders and be accountable to
only one superior , to avoid conflicting orders and ensures organization stability .
5. Unity of Direction : Means that each group of activities having the same objective
must have one head and one plan.
6. Individual Interest must be coincides with general organization . When there is conflict
between the two, interest of the organization should prevail over individual interest.
7. Motivation methods should be fair and provide maximum possible satisfaction to both
employees and employers.
8. Centralization and Decentralization : Should be based upon optimum utilization of
all the personnel in each case.
9. Flow Scalar Chain authority : There should be a clear line of authority ranging from top
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 to bottom of the organization .
10. Order : This principle is concerned with the arrangement of things and
the placement of people in its proper place .
11. Equity : Equity implies that employees should be treated with justice and kindness.
12. Stability & Security Of Personnel : Employees cannot work efficiently unless job
security is assured to them.
13. Initiative : Initiative refers to the freedom to think for oneself and use direction in
doing work . Employees at all levels should be given the opportunity to take
initiative in the formulation and execution of plans.
14. ESPIRIT DE CORPS((team work spirit) : This refers to harmony and
mutual understanding among the members of an organization.

1.2.3 Role and Importance of Management

(i) Achievement of group goals
(ii) Optimum utilization of the available resources .
(iii) Minimization of cost .
(iv) Survival and growth: Modern business operates in a rapidly changing environment.
(v) Generation of employment: By setting up and expanding business enterprises, managers
create jobs for the people.
(vi) Development of the nation: Efficient management is equally important at the national level.

1.3 Modern Management Techniques

Defined as the systematic and analytical methods used to assist in decision making , the
improvement of efficiency & effectiveness and the conduct of planning and control .
A. Statistical techniques: As Regression analysis- Forecasting and time trends –
Decision theory and tree .
B. Activity analysis : As Time motion study – Work sampling & activity analysis
– Gantt chart & work schedule .
C. Mathematical techniques : As Simulation and modelling – System analysis
– Linear proramming – Net work analysis – PERT –CPM
D. Financial techniques : As Monitoring expenditure – Cost accounting and analysis
- Cost Benefit Analysis – Performance analysis .
E. Miscellaneous : As Management By Objectives & Evaluation by results –
Management By Exception – Situation analysis – Current state assessment .

1.4 Management Modern

approaches ( or Models)
Different management authors have proposed different models of management which
suit different leadership styles and motivation ideologies. Management by objectives and
management by exception are significant models out of such models.

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1.4.1 Management by Objectives (MBO)
Management by objective can be defined as ―a management model that attempts to devise
a common objective or goals that is acceptable for both the management and
employees, which will improve the overall performance of the organization from available
resources―.
OR
―MBO is a process whereby the superior, managers and subordinate of an organization
jointly identify the common goals, define each individual‘s major areas of responsibility
in terms of the results expected of him, and use these resources as guides for operating
the unit and assessing the contribution of each of its members‖.
1.4.1.1 Nature of Objectives
Objectives are defined as the specific targets to be achieved by an organization. They are
the end-points towards which all management activities like organizing, staffing,
directing and controlling are directed.
1. Objectives may be in quantitative or qualitative terms.
For example, in the areas of market standing, productivity and physical and
financial resources quantification is possible. On the other hand, worker‘s morale,
social responsibility, etc. cannot exactly quantified.
2. Objectives have hierarchy in that objectives .
These objectives are for the whole organization and split into unit level
or departmental objectives forming interrelated network.
3. Short-term and Long-term Objectives
Short-term objectives are those which are sought to be achieved by the organization in
the immediate future, while long-term objectives are those which are aimed to be
achieved over a longer period, say five to ten years or even more.
4. Objectives sometimes may be in conflict with each other
Each department considers that its goals are more important than other departments .
For example, the production goal of low unit cost achievable through mass production
may be in conflict with the sales goal of offering high quality goods.
1.4.1.2 Steps of MBO Process
The M.B.O approach includes following steps:-
1) Identifying the Key Results Areas (KRAs)
This is done by top management using discussion and SWOT Analysis( Strengths,
Weakness ,Opportunities and Threats). This finalized in the joint meeting of
superior & sub-ordinates.
2) Setting Objectives
In this stage the objectives for the whole organization to be achieved are decided by
all concern parties &key results areas are also finalized.
3) Developing Action Plan
Such action plan for the whole organization is prepared jointly based on objectives
& useful or suitable follow up for achieving objectives.
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 4) Conducting Periodical Review
Periodical review is useful for execution of action plan. If there is any deviation
remedial action can be taken.
5) Performance Appraisal( evaluation ):-
MBO provides a tool for performance appraisal to superiors. It helps to improve
the performance of staff in future .

6) Achieving the Objectives:-

The important aspect of MBO is to achieve the objectives within the definite limits using
communication & co-operation between all parties using corrective actions if required .
1.4.1.3 MBO Advantages
1) Result Oriented Approach .
2) Goals are never imposed forcefully to anyone. They are decided by all parties.
3) High Morale of Employee due to participation of superiors & clarity of goals .
4) Effective Planning which is standardized for the action plan.
5) It Facilitates Control for the performance as compared with standard one.
6) It gives reasonable freedom to lower level management and increase mutual
understanding between superior &sub-ordinates while achieving objectives.
7) Contributes for the installation of a democratic and participative setup essential for
the success of an organization in a complex business environment of today.
1.4.1.4 MBO disadvantages
1) It is time consuming process as it includes setting of objectives & responsibility with
careful consideration for every action.
2) It increases paper work for example written policy, manual, instruction cards, reports.
3) It creates organizational problem in setting objectives between superior &
subordinate.
4) Problem of goal setting , if objects are not set properly with particular responsibility
and are not agreed by all.
5) Conflicting objectives between individuals or departments which may result in lack
of co-ordination among different parties.
6) Secret can‘t be maintained as MBO involves participation of superior & sub-ordinate .
Some important matters should be kept with top level management, because some
times it is dangerous for the organization when there is leakage of information.
7) It is reward punishment approach which creates excess pressure on all executives.

1.4.2 Management by Exception (MBE)

It is a management technique or style by which managers concentrate , identify and isolate
the exceptional or significant deviations or problems that call for decision and action
instead of trying to correct each and every deviation to avoid dealing with those that can
be well handled by the subordinates themselves.
1.4.2.1 Advantages Of MBE
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 (1) Save time as it allows the manager to devote more time for important issues by letting
the subordinates deal with the issues of a routine nature.
(2) It enables the manager to decide when and where he should pay his attention only for
crisis and critical problems.
(3) Lesser number of decisions is required to be taken, which enables the manager to go
into detail to be able to make better decisions.
(4) The subordinates are given authority to make decisions on certain matters without any
interference by the executives.
(5) The management is also able to utilize the available talent at the lower levels
1.4.2.2 Limitations Of MBE
1. It requires a comprehensive observing and reporting system.
2. It increases paper work.
3. The system is silent till the problem becomes critical.
4. There is no parameter available by which one can differentiate important
deviations from the unimportant ones.
5. Some important factors, like human behavior, are difficult to measure.
6. Only an organization that has a perfect system of control will be able to employ
the technique of MBE
7. Mistakes in calculations the budgets can lead to higher variances and finding the
root causes can be a time-consuming task.
8. Dependency on accounting department is too high, and the probability of
accurate forecasting is questionable.
9. Important decisions will be with senior management and participation of employees
is less. This can be a demotivating factor.
1.4.2.3 Phases Of Management by Exception:
The system of Management by Exception can be evolved in following phases:
I Phase: Measurement Phase:
In this phase, information and facts of operational situation are collected and assessed
using quantitative measurements like using time standards, balance sheet data,
inspection results of finished products, inventory accumulation for sales, current
assets, equipment utilization data etc..
II Phase: Projection Phase:
In this phase, analysis of those measurements which are meaningful to the objectives
of the organization for future outlook or expectations is carried out. Past and present
data are projected by using the statistical concept like probability, standard deviation,
confidence, correlation, sample size, significance etc .Then the projections are modified
by the forecasts to decide the ‗goals‘.
III Phase: Selection Phase:
In this phase, those vital and economical available measures are selected, which will
best indicate the progress towards its objectives. Thus the criteria are selected,
which the management would like to use to follow the progress or performance
towards predicted objectives.

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 IV Phase: Observation Phase:
In this phase, current status of performance is periodically observed and measured.
V Phase: Comparison Phase:
In this phase, comparison is made between the actual and expected performance and
progress in order to identify the exception, analyze causes and report the need for action to
the appropriate authority about the exceptions that required priority of attention.

VI Phase: Action Phase:

This is the phase, where decisions are taken and implemented with a view to bring the
performance to the desired level or adjust in anticipations to reflect changing conditions
or take full advantage of better performance or opportunity.

1.4.3 Difference Between MBO &MBE

Characteristics MBO
Employee is essential for an MBO model
Participation as it needs a common objective
acceptable for management and
employees
Role Ambiguity the clarity of personal
responsibility towards
organizational goals is better
communicated and understood
by the employee
Dependency the dependency on one
department or group is less as
operations are handled with
organizational wide
participations.
Efficiency the active involvement of whole
organization in decision making
can lead to delays and complex
procedures which can reduce
efficiency.
MBE
in objective setting and decision
making is minimal in an MBE
model as that responsibility is
rested with senior management.
The clarity will be lacking, and
employees will perform a generic
responsibility without
understanding his role in the
overall objective achievement.
the dependency on one
department especially of
financial analysis / account is
high as they are responsible for
forecasting, budgeting and
monitoring.
as only a certain group makes
important decisions and
investigations are performed
only in instances of significant
deviation the time devoted to
daily work is more which can
result in better efficiency.

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1.5 Types of (hierarchical ) Management Levels
There are several types of management levels. However it is useful to divide them on
the basis of the numbers of levels : Two or Three Levels of management .
If there is large number of levels it will difficult to communicate and co-
ordinate and control. So the levels must be restricted.
1.5.1 Two Levels Of Management
1.5.1.1 Tall structures
Tall structure is one which develops narrow span of management, a large
number of management levels, and more centralized decision making. The
basic advantages of this structure are close supervision, close control of
followers activities, and fast communication between superior and his
subordinates .

1.5.1.2 Flat structures

Flat structure is that which reduces the level of management, widens span of
control of managers at various levels of the organization, and is often more
decentralized with regard to decision-making autonomy. Its main advantages are
more delegation of authority, more clear policy, provide greater need satisfaction
for employees and greater levels of self-actualization .
In such a structure, managers will be relatively unable to provide close
supervision, leading to greater levels of freedom of action for each employee
1.5.2 Three Levels Of Management
These levels existed for large organizations , in particular , and fall into the
following categories : Top , Middle and low level Management .

Diagram of Level Of
Management

Managers at all these levels perform different functions. The level of management is

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 depends upon the size of the organization . The role of managers at all the
three levels is discussed below:
1.5.2.1 Top Level of Management
It consists of board of directors, chief executive or managing director. The top
management is the ultimate source of authority and it manages goals and policies for
an enterprise. It deals with Long Term strategies . devotes more time on planning and
coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department
budgets, procedures, schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for
the performance of the enterprise.
1.5.2.2 Middle Level of Management
The branch managers and departmental managers constitute middle level. They
are responsible to the top management for the functioning of their department. It deals
with medium term administrative. They devote more time to organizational and
directional functions. In small organization, there is only one layer of middle level of
management but in big enterprises, there may be senior and junior middle level
management. Their role can be emphasized as -
i. They execute the plans of the organization in accordance with the policies
and directives of the top management.
j. They make plans for the sub-units of the organization.
k. They participate in employment & training of lower level management.
l. They interpret and explain policies from top level management to lower level. m.
They are responsible for coordinating the activities within the division or
department.
n. It also sends important reports and other important data to top level management.
o. Implement general guidelines established by top management
p. They are also responsible for inspiring lower level managers towards
better performance.
q. Responsible for tactical planning
1.5.2.3 Lower Level of Management
Lower level is also known as supervisory / operative level of management. It deals with
short term operative and consists of supervisors, foreman, section officers,
superintendent etc. According to R.C. Davis, ―Supervisory management refers to those
executives whose work has to be largely with personal oversight and direction of
operative employees‖. In other words, they are concerned with direction and
controlling function of management. Their activities include -
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a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good
relation in the organization.
e. They communicate workers problems, suggestions, and recommendatory appeals
etc to the higher level and higher level goals and objectives to the workers.
f. They help to solve the complains of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. Oversee daily operations
j. Directing and controlling primary functions
k. They arrange necessary materials, machines, tools etc for getting the things done.
l. They prepare periodical reports about the performance of the workers.
m. They ensure discipline in the enterprise.
n. They motivate workers.
o. They are the image builders of the enterprise because they are in direct
contact with the workers.
Difference Between Management and Administration

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Oliver Sheldon in his ―The Philosophy of Management‖ defines :
‗Administration as a function is concerned with the determination of the corporate policy,
the coordination of finance, production and distribution, the settlement of the of the
organization structure, under the ultimate control of the executive.‘
On the other hand, ‗Management is concerned with the execution of the policy, within
the limits setup by administration and the employment of the organization for the
particular objects before it‗ . Thus Sheldon declares administration as a thinking process
and management as doing process.

Practically, there is no difference

Between management &
administration. Every manager is
concerned with both – administrative
management function and operative
management function as shown
in the figure. However, the managers
who are higher up in the hierarchy denote more time on administrative function & the
lower level denote more time on directing and controlling worker‘s performance i.e.
management .The Figure clearly shows the degree of administration and management
performed by the different levels of management.

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Chapter 2 : Functions of Management
Management functions include main functions ( as planning, organizing, staffing and
directing) and other additional functions (as co-ordination , decision making and so on ) .

I. Main Functions Of Management

2.1 Planning :
Planning is the basic function of management that determines in advance what should
be done, why should be done, when, where, how should be done for achievement of
pre-determined goals. This is done not only for organization as a whole but also for
every division, section and department.
2.1.1 Nature of planning
- It includes forecasting, formation of objectives, policies, programs, producer
and budget.
- It is a function of determining the methods or path of obtaining there objectives
Planning is thinking before doing.
- Planning is necessary to ensure proper utilization of human and non-human resources.
- It also helps in avoiding confusion , uncertainties, risks ..etc.
2.1.2 Principles of Planning
 Take Time to Plan
 Planning can be top down and bottom up
 Involve and communicate with all those concerned 
 Plans must be flexible and dynamic .
 Evaluate and revise 

2.1.3 Type of Plans

Strategic Plans – Tactical Plans - Operational Plans – Contingency Plan

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2.1.3.1 Strategic Plans
A strategic plan is an outline of steps designed with the goals of the entire
organization as a whole in mind, rather than with the goals of specific divisions
or departments. It is further classified as follow :
i) Mission:
The mission is a statement that reflects the basic purpose and focus of the
organization which normally remain unchanged. The mission of the company is the
answer of the question : why does the organization exists?
ii) Objectives or goals:
Both goal and objective can be defined as statements that reflect the end towards
which the organization is aiming to achieve. However, there are significant differences
between the two. A goal is an abstract and general umbrella statement, under which
specific objectives can be clustered. Objectives are statements that describe—in
precise, measurable, and obtainable terms which reflect the desired organization‘s
outcomes.
iii) Strategies:
Strategy is the determination of the basic long term objectives of an
organization and the adoption of action and collection of action and allocation
of resources necessary to achieve these goals.

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 Characteristics of strategic plans:
- Strategic planning has a long time frame, often three years or more.
- Strategic planning generally includes the entire organization and includes
formulation of objectives and threats, as well as the strengths and weaknesses
of the organization .
- An organization‘s top management most often conducts strategic planning.
2.1.3.2 Tactical Plans
A tactical plan is concerned with units: What must do, how they must do it, and who
is in charge at each level. Tactics are the means needed to activate a strategy and
make it work.
Characteristics of strategic plans:
- Is concerned with shorter time frames and narrower scopes than are
strategic plans
- Is intermediate-range (one to three years) planning
- Is designed to develop relatively concrete and specific means to implement the
strategic plan.
- Middle-level managers often engage in tactical planning.
2.1.3.3 Operational Plans
An operational plan is a short-range (less than a year) plan that a manager uses to
accomplish his or her job responsibilities to attain precise and measurable
operational goals that support the strategic and tactical plans.
Types of Operational plans
- Single-use plans apply to activities that do not recur or repeat. A one-time
occurrence, such as a special sales program ,and a is a single-use plan
because it deals with the who, what, where, how, and how much of an activity .
 Program : It includes use of different resources in the organization in particular
time. It also shows line of action to be taken by whom, when & where to attain
 in particular sequence.
 Budget : It is define as financial or quantitative statement or projected plan
 of action prepared for definite period of time
- Continuing or ongoing plans are usually made once and retain their value over a
period of years while undergoing periodic revisions and updates such as
policy, procedure and rule .
1. A policy provides a broad guideline for managers to follow when dealing
with important areas of decision making.
2. A procedure is a set of step-by-step directions that explains how activities or tasks
are to be carried out.
3. A rule is an explicit statement that tells an employee what he or she can and cannot
do to promote the safety of employees and the uniform treatment and behavior of
employees .

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 2.1.3.4 Contingency (probable alternative)plans
Contingency planning is an Intelligent and successful management which
depends upon a constant pursuit of adaptation, flexibility, and dealing with the
changing conditions.

Contingency planning involves identifying alternative courses of action that can be

implemented if and when the original plan proves inadequate because of changing
circumstances such as unexpected problems and events frequently occur .

2.1.5 Steps in Planning

1. Identification of problems & Awareness of opportunities and Setting of goals
2.Outlining Planning assumptions about the internal and external elements
of organization environment .
3. Decide the planning period
4. Develop alternatives and then select the best course of action
5. Derivative plans or derive departmental plans the main plans To make it operational
6. Review periodically the plan results .

2.1.6 Rules For Planning

- Set realistic and achievable goals;
- Communicate the assumptions on which plans are formulated to all the people
and departments concerned;
- Encourage and make people participate in the planning program so as to ensure
- The right commitment;
- Ensure proper coordination between the short-term and long term plans.
- Encourage creativity in planning to help in identifying the best alternatives; and
- Pay attention to the resources position of the organization so as to ensure the
availability as and when required.

2.2 Organizing
Is the process of developing an organizational structure or the framework
within which effort is coordinated to ensure the useful or best functioning .
The structure is usually represented by an organization chart, which provides
a graphic representation of the chain of command within an organization.

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 Example of Organization Chart
2.2.1 Steps of Organizing:
The main steps involved in the process of organising are as follows:
1. Determining the activities to be performed to attain organisational objectives.
For example, in a manufacturing concern, the activities may be divided into
purchase, production, sales, storage, advertising, accounting etc.
2. Grouping of activities by grouping them into departments and division on the
basis of making identical or closely related activities are grouped in one
department. Each department is placed under the charge of a manager.
3. Assignment of duties. Right man should be selected for each job and proper
physical environment should be provided for efficient performance of jobs.
4. Delegation of Authority. Appropriate amount of authority is delegated to
each individual for enabling him to perform the duties assigned.
5.Defining authority relationships between different members of the organization
Each and every individual should know who is his boss, or his subordinates to
whom he can issue orders.
2.2.2 Building Blocks(elements) of organizational
Structure
There are four elements of structure that have been frequently studied in the
literature: centralization & decentralization , formalization, hierarchical levels, and
departmentalization.
2.2.2.1 Centralization & Decentralization And Delegation Of
Authority
Centralization:
Centralization is the systematic and consistent reservation of authority at central
points within an organization. In centralized companies, many important decisions are
made at higher or top management levels .
Centralized organization can be explained by the following chart.
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Advantages of Centralization:
1.Effective utilization of talents of the top Leader.
2.All parts move together. A unifying force that integrates all operations.
3.A strong co-ordinated top management team is developed.
4. Uniformity of policy and plans.
5.Best-arrangement to tackle emergencies. Resources and information can be
mobilized quickly and effectively.
6. Duplication of functions and facilities are minimized.
Disadvantages of Centralization:
1. Delays in decision-making and Communication.
2. Centralized power and authority may be abused.
3. Inhibits development of lower level people.
4. Low motivation and morale of lower level people.
5. Fortunes of the enterprise depend on the health and vitality of top executives.
Delegation Of Authority
Delegation is the process by which authority is granted to a subordinate by his superior.
Delegation is the only solution to cope with the increasing work load of managers as the
organization grows. A superior can delegate only authority and not responsibility
Authority is the right to command. It is the discretion power vested with a manager to
use the organizational resources. It flows from the top to down in the organization
structure. Authority is transferred on one-to-one basis from the superior to his followers
Responsibility, on the other hand is the obligation to perform the tasks and accounts for
their satisfactory completion. In contrast to authority, responsibility of an

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 individual in the organization is always upwards, that is, the subordinate is
responsible to his or her superior.
Steps/Process of Delegation:
1. Determination of results expected to obtain from his subordinates
2. Assignment of Duties &Responsibilities by answering the following questions :
what to delegate? When to delegate? Whom to delegate? And how to delegate .
3. Granting of Authority from superior to make subordinates able to perform and
execute the tasks e.g to use resources, to take decisions .
4. Creating accountability for performance . In other words, the subordinate is
accountable to his superior for the tasks delegated. Thus, while authority flows
downwards, responsibility flows upwards.
Advantages of delegation :
1. Vital for every organization because no individual, in any organization, can
perform all the tasks by himself.
2. Relief to Managers because they able to concentrate on more important duties.
3. Specialization as any organization may contain different activities such
as production, marketing, finance, quality control human resources , etc
4. Quick Decisions . It is, therefore, not necessary to refer every matter to the superior
and to await his decisions.
5. Improvement of Job Satisfaction
6. Scope for business expansion to include more activities.
Barriers to Effective ( or disadvantages of) Delegation
- Lack of Confidence in Subordinates abilities and skills.
- The ―I can do it better myself fallacy‖: Some managers always suffer from a feeling
that they only can do the job better .
- Lack of ability to direct: Some managers become so involved in day-to-day
operations that they ignore to see the broader picture.
- Fear from Risk: sometimes , the may fear that delegating the job will cause
problems.
- Absence of Selective Controls necessary to ensure proper controls in the form
of feedback about performance.
- Inadequate Information and Resources .
Degrees OF Delegation
Harvey Sherman categorized the following six degrees of delegation:
i. Take action – no further contact with me is needed.
ii. Take action – let me know that you did
iii. Look into this problem – Let me know what you intend to do; do it unless tell you
not to.
iv. Look into this problem – Let me know what you intend to do; delay action until I
give approval.
v. Look into this problem – Let me know alternative actions available with pros and
cons and recommend one for my approval
vi. Look into this problem – give me all facts; I will decide what to do.

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 Decentralization Of Authority:
Decentralization refers to the systematic effort to delegate to the lowest levels of
authority except that which can only be exercised at central points. Decentralization
of authority is broader in scope than delegation of authority and involves the transfer
of authority in the organization context from top to the lower ranks of management in
the hierarchy as shown in the following figure .

Example of Decentralization Organization

Advantages of Decentralization
1. Motivation of subordinates due to improving the job satisfaction and morale of lower
level manager by satisfying their needs for independence participation and status .
2. Effective communication by developing the relationships between superior and
Subordinates .
3. Executive development because subordinates learn how to decide and develop
their managerial skills .
4. Decisions can be made more quickly .
2.2.2.2 Formalization
Formalization is the extent to which an organization‘s policies, procedures,
job descriptions, rules and regulations are written to control & direct
employee behavior and reduces ambiguity (misunderstanding) .
Disadvantage of High degree of Formalization :
- Reduces motivation and job satisfaction which results in a slower steps
of Decision making.
- May actually lead to reduced innovativeness because employees are used to
behaving in a certain manner .
For example , Sometimes employees who are listening to a customer‘s problems
may need to take action, but the answer may not be specified in any procedural

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 guidelines or rulebook .
2.2.2.3 Departmentalization
There are many different ways to departmentalize organizational structures, including
organizing by function, product, customer and geography or process .
A. Functional Structures
In which organizations group jobs based on similarity in functions. Such structures
may have departments such as marketing, manufacturing, finance, accounting,
human resources, and information technology.

Example of Functional
Departmentation

B. Divisional structures
B.1 Product (Service) Departmentation
In which each departments represent the unique products, services, customers,
or geographic locations the company is serving. Within each department,
functions such as marketing, manufacturing, and other roles are existed .
In reality, many organizations are structured according to a mixture of functional
and divisional forms. For example, if the company has multiple product lines,
departmentalizing by product may increase innovativeness and reduce
response times .

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 B.2 Customer
Is the process of grouping activities on the basis of common customers or
Types of customers. Jobs may be grouped according to the type of
customer served by the organization as shown in the following example :

The assumption is that customers in each department have a common set of problems
and needs that can best be met by specialists.
B.3 Geographic Departmentation
Geographic departmentation is the process of grouping activities on the basis of
territory. If an organization's customers are geographically dispersed, it can group
jobs based on geography

B.4 Process Departmentation

is the process of grouping activities on the basis of product or service or customer
flow. Because each process requires different skills, process departmentation
allows homogenous activities to be categorized .

2.2.2.4 Span of Management

There is a limit to the number of persons or activities that a manager can
effectively manage. Span of management indicates the number of people who can be
effectively managed by one executive.
Manager‘s span of control is a statement or expression or the limitation of
the number of subordinates or activities that he can manage properly.

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 Factors influencing the span of management:
1. time devoted to supervision
2. variety and importance of activities
3. repetitiveness of activities
4. capacity and experience of manager
5. ability of subordinates
6. centralization

2.3 Staffing
Staffing as an managerial function , comes after determining strategies, policies,
programmes , activities , procedures and rules formulated for their achievement,
and understanding all work areas .
According to Kootz & O‘Donell, ―Managerial function of staffing involves manning
the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed in the structure‖.
2.3.1 Objectives Of Staffing
- To ensure that organizational positions is filled by qualified personnel .
- To define job description , persons acceptance tests , and required training .
- Matching the right persons in the right places .
2.3.2 Functions of Staffing
(a) Manpower planning involving determination of the number and the kind
of personnel required.
(b) Recruitment for attracting adequate number of potential employees to seek jobs in
the enterprise.
(c) Selection of the most suitable persons for the jobs under consideration.
(d) Placement, induction and orientation to fill the roles designed on the structure .
(e) Transfers, promotions(move to higher rank), termination and layoff.
(f) Training and development of employees.
(g) Remuneration(give bonus) Is key in terms of attracting the right talent
without damaging the organization‘s finances.
2.3.3 Staffing Selection Steps
1. Receiving Application Form .
2. Screening of Applications , to get to the applicants who are found to be qualified for
the consideration of employment.
3. Selection Tests , to accept or to know more or to reject the candidates such as
Achievement, Intelligence, Personality, and Interest tests
4. Interview, to find out overall suitability of candidates for the jobs based on
Education, knowledge ,skills and experience .
5. Checking of Candidates References to check information provided by candidates.
6. Physical fitness Examination, to ascertain the physical standards and fitness
of prospective employees.

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 7. Approval by Appropriate Authority.
8. 8. Placement selected candidates on their jobs initially under training period which may
range from six months to two years .

2.4 Directing (Leading):-

Directing is the function of leading the employees to perform efficiently, and
contribute their optimum to the achievement of organizational objectives.
This function is called by various names: directing, leading, motivating, actuating
and so on. Leading involves the social and informal sources of influence that you
use to inspire action taken by others
To become effective at leading, managers must first understand their subordinates‘
personalities, values, attitudes, and emotions.
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?‖
2.4.1 Importance of Directing
- It helps strengthen the operational capability of the organization.
- It ensures that the different parts of the organization are working better together .
- Directing is a bridge between the operational needs and the human requirements of its
employees.
- It creates a link between the necessity of turning in a profit, with the need of
keeping employees motivated and interested.
- Ensures productivity is going up instead of decreasing .

2.4.2 Elements of Directing

You can direct and lead your team by utilizing four key methods based on the findings of
human behavioral studies. These are: Supervision, communication ,motivation, leadership
.
2.4.2.1 Supervision
Implies overseeing the work of subordinates by their superiors. It is the act of watching &
directing work & workers .The method requires watching and monitoring the performance,
but also supporting and guiding the employees when things are not going as planned. You
could use evaluation reports, examine the quality of work, and be present during certain
parts, such as team meetings or when the person is talking to clients. In terms of support,
you want to discuss the work and how it‘s moving along. You also want to provide
materials that can help the employee to perform better.
2.4.2.2 Communication
It is defined as ―a process by which facts, ideas, experience, opinion and information
are exchanged between individuals and different management levels through a common
system of symbols, signs, or behavior.‖ Using different communication methods It is a
bridge of understanding and helps in building up high moral.

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 Communication fulfills three main functions within an organization:
(1) transmitting information, (2)coordinating effort, and
(3) sharing emotions and feelings in times of celebration and crisis.
Communication channels

Types of Communication:
Communication may be classified into the following types:
1. Based on Relationships -
(i) Formal It is the outcome of formal organization. It follows the hierarchy
(ii) Informal is the result of casual or personal contact between the individuals in an
organization
2. Based on its Flow of Direction –
(i) Upward : subordinate conveys some information to his superior
(ii) Downward : superior conveys certain information to his subordinate
(iii) Sideward : It takes place when the executives or subordinates operating at the
same level exchange information.
3. Based on the Method used –
(i) Oral communication involves exchange of messages through spoken words
(ii) Written communication is transmitted through written words in the form of
letters, memos, bulletins, instruction cards, manuals, handbooks, reports, ..etc
(iii) Gestural(e.g arms& head movements). Gestural communication is very useful in
Conveying feelings, emotions and attitudes. For example, handshake with a
subordinate or a pat on his back helps to motivate the subordinate.

Communication Barriers :
Filtering
Filtering occurs when a sender manipulates information so that the receiver will view it
More favorably .
Selective Perception
Receivers in the communication process selectively see and hear based on their personal

Page 26
 characteristics such as : needs, motivations, experience, interests and
expectations background .
Defensiveness
When people feel that they are being threatened, they tend to react in ways that reduce
their ability to achieve mutual understanding
information overload
The state of having more information than one can process. Individuals have a finite capacity
for processing data after which they tend to select out, ignore, pass over, or forget information .
Language
Words mean different things to different people. Age, education, and cultural background are three
of the more obvious variables that influence the language a person uses to define words.
2.4.2.3 Motivation
The act of stimulating(encouraging) the people so that they give their best to
achieve the organization or desired goals.
Studies of motivation and motivation theory provide important information about the
ways in which workers can be energized to put forth productive effort .
Types of Motivation:

1. Positive Motivation
Positive motivation implies creation of an environment in which people can satisfy
their needs through rewards and prizes .
2. Negative Motivation
It involves creating a sense of fear e.g using package of punishment .
3. Financial Motivation
Financial motivation implies use of monetary benefits to inspire employees .
4. Non-financial Motivation
Non-financial motivators are not associated with monetary rewards .
5. Extrinsic Motivation
Extrinsic(comes from outside) reward may be direct which are linked with performance
such as pay allowances, bonus ,or indirect compensation like free housing, medical
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 facilities, etc ..
6. Intrinsic Motivation
Intrinsic motivation occurs on the job and provides satisfaction while the job is being
Performed such as status, authority, participation, challenging task ,
greater responsibility opportunity for advancement etc.
Ways of motivating people in workplace :
1.know employees different needs: Because employees have different needs
(money ,praising..)
2. Properly assign tasks: By assigning the right person to the right place .
3.Employee appraisal : Appraisal should be done according to the employee's
needs and not according to the company policy.
4.Meet employees expectations: By satisfying their needs from the rewards .
5.Provide a way for relief: during the hard work hours .
6.Let them set goals: Because moving towards achieving goals and plans are one
of the very strong motivating factors.
7.Remove other irritating factors : Provide good lighting, fast computers and good
air conditioners as their absence will reduce the motivation levels of employees.
8. Involve and Communicate them. Many employees want to be involved in the
development and progress of the business and their personal performance
in their company.
9. Give them the tools to succeed . This includes; equipment, internal
support, inventory, marketing materials, training, etc.

2.4.2.4 Leadership
Defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Leadership Styles
1.Directive(Dictator/ Authoritarian/autocratic) Leader
Directive Leaders characteristics :
- Having firm views about how and when things should be done.
- Uses fear and threats to get the jobs done .
- Tend do not accept any suggestions or initiative from subordinates.
- He does not consult his subordinates (followers).
- Do not trust anybody .
- Tend to closely monitor the behavior and performance of others.
- Staff expected to obey orders without receiving any explanations
- Structured set of rewards and punishments
Appropriate conditions for use :
- you have all the information to solve the problem .
- you are short on time .
- Cases of a new employee who is just learning a job .
- Existence of crisis or serious urgent problems with his employees .
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2.Participative (democratic) Leader
Participative Leaders characteristics :
-Encourage contributions from followers in the decision making process to
get best solutions .
- Decisions responsibility is shared between by the leader &group as whole .
- Keeps staff informed about everything that affects their work .
- Produce high quality and high quantity work for long periods of time .
- Encourages staff to grow on the job and create harmony in the job
. Appropriate conditions for use :
-Working with a team of workers who know their job.
-The leader knows the problem, but does not have all the information.
3.Delegative Leader
Delegative Leaders characteristics :
- Delegating work to subordinates but delegation process may not involve consultation -
Allows the employees to work and make the decisions with the minimum
of supervision
-The leader is still responsible for the outcome of the delegated work .
Appropriate conditions for use :
- With a worker who knows more about the job than you .
- Existence of trust and confidence between the leader & his followers .
- When employees are able to analyze the situation and problems to give decisions .
- Allows leader to be at other places, doing other things.
4.Consultative Leader
Consultative Leaders characteristics :
-Combines elements of both democratic and directive leadership
-Tend to encourage contributions from the separate members of the team.
-They typically make the final decision .
This style is used specially to make use of experts experiences .
5.Negotiative Leader
Negotiative Leaders characteristics :
-Tend to negotiate subordinates to work towards their stated goals in a given way
- Uses carrots and sticks approach to further often his personal or party
agenda. Appropriate conditions for use :
- In Most modern-day political parties and politicians
- In case of existence difficult or stubborn subordinates .
6.Bureaucratic Leadership Style
• Manages ―by the book¨ . •He does not believe in new ideas •If not
covered by the book, referred to the next level above
•Follows all the rules and formalities of the organization
•He wants his subordinates to follow all his orders.

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2.5 Controlling
It is a process of checking actual performance against standard performance and
correction of deviations , if any , to ensure achievement of organizational goals.
2.5.1 Purpose of controlling
- To ensure that everything occurs in conformities with the standards.
- It ensures attainment of enterprise objective
- It ensures successful implementation of plans
- Helps to predict deviations before they actually occur.
- Minimize the effects of and risk of failure immediately or at the suitable time .
- Detects deviations and takes the necessary correction steps .
- control ensures
- control ensures that the resources of the enterprise put to optimum use. This leads
to higher efficiency
2.5.2 Types of Control Systems
The control systems can be classified into three types namely feed forward,
concurrent and feedback control systems.
a) Feed forward (or input)controls: They are preventive controls that try to anticipate
problems and take corrective action before they occur. Example – a team leader checks
the quality, completeness and reliability of their tools prior to going to the site.
Changing Organizational culture( called behavior management) , Market demand or
economic forecasts(called outcome control)
b) Concurrent (process) controls: The process of monitoring and adjusting ongoing
activities and processes . Such controls can prevent problems from becoming worse.
For this reason, we often describe concurrent control as real-time control because it
deals with the present. An examples of concurrent control might be adjusting the water
temperature of the water while taking a shower. Also Changing management
supervision during a project(called behavior management) and The real-time speed of a
production line (called outcome control)
c) Feedback( or output) controls:
Feedback controls involve gathering
information about a completed activity,
evaluating that information, and taking
steps to improve the similar activities in
the future in line with planned
objectives. Feedback mechanism helps
leaders and managers make
adjustments in the strategy, as perhaps
is reflected by changes in the planning,
organizing, and leading components.
This feedback loop is characterized
in the P-O-L-C process shown figure.

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 2.5.3 Steps of Controlling
1. The Establishment of Standards:
Means the establishment of the criterion or the standards to serve as a model
against which we compare or evaluate the actual performance in order to
figure out the deviations in quantity ,quality , time and cost .
2. Measurement of actual Performance:
This is done to detect any present or future deviations . Part of the process can
be performance reviews, actual quantifiable data and so on.
3. Comparing Measured Performance to Stated Standards:
This is done to evaluate the performance or to identify deviations or problems
either for the organization as a whole or for some individuals working within the
organization.
4. Taking Corrective Actions:
Corrective action is aimed to bring organizational performance up to the level of
performance standards or correcting organizational mistakes that hinder
organizational performance or find ways to boost the performance or revise your
objectives if it is difficult to do any action .
2.5.4 Deviations (or Nonconformity)
Nonconformity is the ―non-fulfillment of a requirement‖ or failure to comply with
requirements or is a deviation from a specification, a standard, and an expectation
of interested parties . Occurrence of non-conformity decreases quality of product, service or
process
2.5.4.1 Categories of Deviations (non-conformity)
 Systematic - a failure occurred at least once and can occur more times due to error in
system or process structure, for example: dimensions of the product are not being
checked during the production process which can lead to manufacturing a number of
 products with wrong dimensions.
 Random - a failure occurred at least once, but it's related to some random and rare
causes, e.g. dimensions of only one product were not checked because of some accident
that happened on production line.
2.5.4.2 Deviations (non-conformity) Classification :
Nonconformities are classified as either critical, major, or minor.
▪ Minor nonconformity – Any nonconformity which does not adversely affect the
performance, durability, interchangeability, reliability, maintainability, effective use or
operation, weight or appearance (where a factor), health or safety of a product. Multiple
minor nonconformities when considered collectively may raise the category to a major
or critical nonconformity.
▪ Major nonconformity – Any nonconformity other than critical, which may result in
failure or materially reduce the usability of the product for the intended purpose (i.e.
effective use or operation, weight or appearance (where a factor), health or safety) and

Page 31
 which can not be completely eliminated by rework or reduced to a minor nonconformity
by an approved repair.
▪ Critical nonconformity – Any nonconformity which may result in hazardous or
unsafe conditions for individuals using, maintaining or depending upon the product or
prevent performance of a vital products.
2.5.4.3 Deviations (Non- Conformity) Management
The main objective of non-conformity management is to deal with detected problem
and also deal with its causes to prevent further occurrence.
1. Detection. Anyone who detects non-conformity should report it to responsible person
as soon as possible.
2. Evaluation. The severity of the non-conformity should be evaluated.
3. Treatment. All non-conform products should be treated to either remove the
non-conformity, decrease its impact or remove the product.
4. Documentation. The documentation should include description of the non-conformity,
its cause and treatment. It should be a base of further analysis.
5. Causes treatment. In case of systematic non-conformities, the causes should be
analyzed and treated accordingly. The treatment should remove the cause, reduce
its impact, reduce its probability or at least implement tools that allow early cause
detection.
6. Actions evaluation. After completing the activities, their performance should be
checked. There should be an objective evidence of full implementation of
corrective action and its effectiveness.

2.5.5 Corrective actions

Corrective actions are steps that are taken to eliminate the causes of existing
nonconformities in order to prevent recurrence or continuation these nonconformities .
Corrective actions are implemented in response to customer complaints, unacceptable
levels of product non-conformance, issues identified during an internal audit, or product
monitoring process. When applied to products, Corrections can include: rework , regrade ,
rework ,repair , concession and scrap
2.5.5.1 Rework
The reprocessing of nonconforming material to make it conform completely to the
drawings, specifications or contract requirements .
2.5.5.2 Regrade
Regrading refers to re-purposing the item for a different use than its original, as long as
it meets the quality standards for the new use category. This takes for items that can‘t be
repaired. Proper documentation is required if using this behavior.
2.5.5.3 Repair
The reprocessing of nonconforming material in accordance with approved written
procedures and operations to reduce, but not completely eliminate, the nonconformance.
The purpose of repair is to bring nonconforming material into a usable condition. Repair is
distinguished from rework in that the item after repair still does not completely conform to
all of the applicable drawings, specifications or contract requirements.
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 2.5.5.4 Scrap
Nonconforming items that can neither be reworked nor regraded are essentially
unusable for manufacturing purposes. These items should be scrapped to prevent
introducing them to the supply chain. Scrapping an item does not necessarily
require it be thrown in the trash; some items, such as some metals and paper, can be
recycled.
2.5.5.5 Concession
―Permission to use or release a product that does not conform to specified requirements‖
. Such an item must have no negative impact on the form or function of the finished
product. This disposition should also be documented according to ISO rules.
2.5.6 Preventive action
Preventive actions are steps that are taken to prevent the occurrence of nonconformities
or situations that do not yet exist by removing or eliminating the causes of potential
nonconformities or potential situations that are undesirable. This can be initiated with the
help of active participation of staff members/workers through improvement teams,
improvement meetings, management review, customer feedback etc…

2.5.7 REQUIREMENTS FOR EFFECTIVE CONTROL

The requirements for effective control are
a) Control should be tailored to plans and positions
This is because every plan and every kind and phase of an operation has its unique
characteristics.
b) Control systems and information used must help individual managers carry out their
function of control. If they are not of a type that a manager can or will understand, they
will not be useful.
c) Control should be objective .
This is because when controls are subjective, a manager‘s personality may
influence Judgments of performance inaccuracy. Objective standards can be
quantitative or qualitative.
Quanitative such as costs or man hours per unit or date of job completion. Qualitative
in the case of training programs that have specific characteristics or are designed to
accomplish a specific kind of upgrading of the quality of personnel.
d) Control should be flexible
This means that controls should remain workable in the case of changed plans,
Unforeseen circumstances, or outsight failures. Much flexibility in control can
be provided by having alternative plans for various probable situations.
e) Control should be economical
This means that control must worth their cost. Although this requirement is simple,
its practice is often complex.
f) Control should lead to corrective actions
This is because a control system will be of little benefit if it does not lead to
corrective action for the indicated or experienced deviations from plans.

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 II. Other Functions for Management
2.6 Forecasting
Forecasting is one of the important functions of management. It is a part
and parcel of planning function .

Forecasting defined as means analysis of future about the operations of an

enterprise (e.g production, sales, profit ) with providing the details supported by
budget on the basis of research, study & survey. Or

―Forecasting is a systematic attempt to visualize the future by known facts to

provide management with information on which planning decisions are based.‖
2.6.1 Techniques Of Forecasting
The various techniques of forecasting are classified into quantitative techniques
(involves use of various statistical data for future) & Qualitative techniques
(involves prediction about future) as shown if the following figure .

2.6.1.1 Quantitative techniques

1) Time Series Analysis:-
Under this method historical series of data(if available) divided into various,
seasonal variation, random variation, cyclic variation, trend analysis etc.
2) Regression:-
This analysis helps to find out relative moment of two or more series. It is used
to estimate the change in variation & effect of that change on other variation.
3) Extrapolation:-
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 This method is based on time series. It is assumed that, there is constant moment in data.
4) Economical Model:-
Under this method mathematical models are used to express in quantitative terms. The
inter relationship between many variables. The large numbers of equations are formed to
arrive at a decision with the help of this model.
2.6.1.2 Qualitative techniques
1) Business Barometer:-
These are the index number which used while predicting. The direction in
which economy is moving, accordingly GNP (Gross National Product),
Consumer Price, Stock Exchange, are commonly used as index. Increase in
GNP indicates progress in the economy.
2) Morphological Analysis:-
This analysis is related to technical changes. It involve finding out the
objectives & various ways for achieving objectives. E.g.: - To find out multiple
uses of transistor micro – circuit.
3) Historical Analysis:-
Under this method forecasting is based on some analogue conditions which are
based on past.
4) Delphi Technique:-
Under this method minds of experts are judge systematically. There is no face
to face contact between two experts. They are kept separate from one another &
their identity is kept secret. Their opinions are judged with the help of written
answers. This method is based on scientific analysis. If there is difference of
opinions then discussion is held.

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2.7 DECISION MAKING
2.7.1 Introduction
Management is essentially a decision making process to make a choice among alternative
courses of action. However, it may be noted that decision making
is the means for carrying out managerial tasks and responsibilities. The efficiency of
the organization depends upon the efficiency of decision making of its management.
―Decision making defined as is a selection process based on some criteria from two or
more possible alternative.‖
2.7.2 Nature or characteristics of decision making
i) Decision making is a process of making a rational choice or selecting one of the
various alternative courses of action.
ii) Decision making is necessary only when different alternative solutions are available.
iii) Decision making is a purposeful activity.

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 iv) Decision making involves the commitment of resources and reputation of the
organization.
v) Decision making is always related to the situation or environment.
2.7.3 FEATURES OF DECISION MAKING
1) Decision making is a process. It includes choosing of one best alternative among
various alternatives.
2) It may change according to change in the situation.
3) Decision making has a purpose.
4) It is intelligent activity & depends upon the ability of the person.
5) Decision making is a commitment for achieving the object.
6) Decision making leads to increase the profitability of business.
2.7.4 TYPES OF DECISIONS
1) Major Decision & Minor Decision: -
Decision may be major (e.g Location of plant, schedule of production)or minor (Purchase
of stationary).
2) Strategic decisions set the course of organization.
3)Tactical decisions are decisions about how things will get done.
4) Operational decisions are decisions that employees make each day to run the
organization. , operating decisions are taken by middle or lower management .
5) Programmed & un-programmed Decision :-
Programmed decisions for repeated routine problems. It does not involve any risk
Factor.
Un-programmed decisions deal with unique problems which involve risk factor &
high expenditure.
6) Group Decisions & Personal Decisions :-
Group decisions are known as ‗Organizational Decisions‘ which are related
with formulating of policies.
Personal Decisions are taken by Manager as an individual & not as a member.
7) Policy Decisions & Operating Decisions :- Policy Decisions are taken by Top Level
Management such as to give bonus to employee, expansion of plan, change of
product Line etc.
8) Long Term & Departmental Decisions :-
In long term decisions, the period of decisions are more than 1 year and are taken by
top level management. It involves risk. E.g. Plant expansion, diversification, replacement
of machinery, change in technology etc.
2.7.5 Steps of Decision Making
1) Defining the Problem:- By collection of Data or information from internal &
external resources based on facts , speculation& assumption.
2) Analysis of the Problems: - By deeply studying and sorting properly the
collected information to understand and find the causes of the problem.
3) Identification the available Resources and opportunities for solving the problem .
4) Development of Criteria for choosing the best alternative to attain the successful
Solution

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5) Development of Alternatives for solving the problem
6) Selection of Best Alternatives based on criteria of step 4: -
7) Implementation of Decisions and monitoring progress considering the following points :
Effective communication - Time for Decision Making - Acceptance by employee.
2.7.5 STYLES OF DECISION MAKING
1) Autocratic Decision Making –
Autocratic executives tends to take decision on their own. He does not feel that it is
necessary to discuss the problem with subordinates and in order to avoid wastage
of time .they take decision and makes others to implement it. If anything goes
wrong he tends to criticize the process of implementation rather than rationality of
the decisions.
2) Participative Decision Making –
A participative executive tend to take advantage of the expertise and talents of the
subordinates in the process of decision making, to obtain a more realistic, practicable
and acceptable to the subordinates such that they implement such decisions effectively
and efficiently. In this case ,the leader is responsible for the decision results .
3) Consultative Decision Making –
When executives face complex and highly technical problems they prefer to discuss the
issues with experts in related fields and after consultation they prefer to take decision. In
this case , the decision responsibility is between leader and his subordinates .

Page 38
 Chapter 3
Functions, Roles, and Skills of Managers
Manager is a person who is responsible for the performance of a group of individuals and
administrate & coordinate resources effectively and efficiently to achieve organization goals
. Manager is a person who make the job done through other people .
,
3.1 Manager s Functions
Carrying out the five functions of management : Planning ,Organizing ,Staffing , Leading ,
and Controlling .
Planning
• Setting objectives
• Determining how they‘ll be
met Organizing
• Delegating and coordinating tasks
• Allocating resources

• Influencing employees to achieve

objectives Controlling
• Establishing mechanisms to make sure objectives are met
• Implementing mechanisms to make sure objectives are met
,
3.2 Manager s Roles
1. Interpersonal Role
 Figurehead : In this role, every manager has to perform some duties of a ceremonial
nature, such as attending the wedding of an employee, taking an important customer
 to lunch and so on.
 Leader : As a leader, every manager must motivate and encourage his employees. He
 must also try to reconcile their individual needs with the goals of the organization.
 Liaison(communication) : In this role of liaison, every manager must cultivate contacts
 outside his vertical chain of command to collect information useful for his organization.
2. Informational Role
 Monitor : As monitor, the manager has to scan his environment for information ,
and receive information, much of it as result of the network of personal contacts he
 has developed.
 Disseminator(spread information): the manager passes some of his special
 information directly to his subordinates who would otherwise have no access to it.
 Spokesman : In this role, the manager informs and satisfies various groups and
people who influence his organization about financial performance, assures consumer
groups that the organization is fulfilling its social responsibilities .


3. Decisional Role

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  Entrepreneur : In this role, the manager constantly looks out for new ideas and
 seeks to improve his unit by adapting it to changing conditions in the environment.
 Disturbance Handler : In this role, the manager has to work like a fire fighter. He
 must seek solutions of various unanticipated problems
 Resource Allocator : In this role, the manager must divide work and delegate
 authority among his subordinates.
 Negotiator : The manager has to spend considerable time in negotiations to
solve problems
‘
3.3 Manager s Skills
Not everyone can be a manager. Certain skills, or abilities to translate knowledge
into action that results in desired performance, are required to help other employees
become more productive. These skills fall under the following categories:
1.Technical Skills
Technical skills refer to the ability to use the tools, equipment ,procedures, techniques and
knowledge of a specialized field. These skills are essential for first line managers
2.Human Skills
This skill demonstrates the ability to work well in cooperation with others . Human
relation skills represent the ability to understand the behavior of people, their
problems, their needs, working conditions and motivation to people . They're critical for
all managers because of the highly interpersonal nature of managerial work.
3.Conceptual Skills
This skill calls for the ability to think analytically. Analytical skills enable managers
to break down problems into smaller parts, to see the relations among the parts, and
to recognize the implications of any one problem for others .
Conceptual skills also called design and problem-solving skills involve the
ability to:
- see the organization and the various components of it as a whole;
- understand how its various parts and functions are related in a network fashion
- to foresee how changes in any one of these may affect the others.
- Take advantage of opportunities ,resolving conflict , and managing time .
Manager Levels and Skills
For the purpose of analysis, skills required different manager levels are shown below:

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4. Personal skills
Business and management educators are increasingly interested in developing specialized
Skills , that contribute to high performance in a management job Business such as :
4.1 Computer Skills:-
Computer knowledge is essential for today‘s manager i.e. knowledge of hardware &
software .
4.2 Communication Skills:-
This skill requires the ability of listening and speaking in an effective manner. Also ability
to express ideas clearly in words or in writing . The manager is responsible for getting the
things done by others. Success is depends upon proper communication .
4.3 Administrative Skills:-
It involves the implementation of plan and use of available resources to get the
desired output that is profit and to regularize a performance in orderly manner .
4.4 Leadership — ability to influence others to perform tasks
4.5 Resistance to stress — ability to perform under stressful conditions

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