Title of the Course: Agribusiness Management

Course Code: AG235

Unit II

Management

Definition

According to Harold Koontz, "Management is the art of getting things done through and with
people in formally organized groups".

According to Henry Fayol, "To manage is to forecast and to plan, to organise, to command, to
coordinate and to control".

According to Peter Drucker, "Management is a multi-purpose organ that manages business

and manages managers and manages workers and work".

Management is needed for planning business activities, for guiding employees in the right
direction and finally for coordinating their efforts for achieving best/most favorable results.
Efficient management is needed in order to achieve the objectives of business activity in an
orderly and quick manner.

Planning, Organising, Coordinating and Controlling are the basic functions of management.
Management is needed as these functions are performed through the management process.
Management is needed for effective communication within and outside the Organisation.
Management is needed for motivating employees and also for coordinating their efforts so as
to achieve business objectives quickly.

Efficient management is needed for success, stability and prosperity of a business enterprise.
Modem business is highly competitive and needs efficient and capable management for
survival and growth.

Management is needed as it occupies a unique position in the smooth functioning of a business

unit.This suggests the need of efficient management of business enterprises.
Profitable/successful business may not be possible without efficient management. Survival of
a business unit in the present competitive world is possible only through efficient and
competent management.

Management as both Science and Art

Management is both an art and a science. The above-mentioned points clearly reveal that
management combines features of both science as well as art. It is considered as a science
 Title of the Course: Agribusiness Management
Course Code: AG235

because it has an organized body of knowledge which contains certain universal truth. It is
called an art because managing requires certain skills which are personal possessions of
managers. Science provides the knowledge & art deals with the application of knowledge and
skills.
Characteristics of Management

1. Management is Universal
Every organization irrespective of their financial position requires management to
manage their activities, thus it is universal in nature.
2. Management is Goal Oriented
It is concerned with the achievement of goals through its functions. Goals differ from
organization to organization. In business, the basic economic goal is to earn maximum
profit, while in service organization like hospital and educational institution for the
basic goal is to provide better service and better education.
3. Management is Continuous Process
There are various functions of management. These are- planning, organising, directing,
staffing and controlling. A manager performs all these functions simultaneously.
Although these functions are separate, management is concerned with performing all
of them simultaneously all the time. Consequently, management is a dynamic and
continuous process.
4. Management is an Integrating Process
It integrates the men, materials and machines for achieving the specified objective.
5. Management is Intangible
It is abstract and cannot be seen. It is experienced by the quality of the organisation and
through its result.
6. Management is Multi-disciplinary
Management is basically multidisciplinary. This implies that, although management
has been developed as a separate discipline, it draws knowledge and concepts from
various disciplines. It draws freely ideas and concepts from such disciplines as
psychology, sociology, anthropology, economics, ecology, statistics, operations
research, etc. Management integrates the ideas and concepts taken from these
disciplines and present newer concepts which can be put into practice for managing the
organization.
7. Management is Situational
 Title of the Course: Agribusiness Management
Course Code: AG235

Management of an organisation changes according to situation.

8. Management is Group Activity
An organisation consists of a large number of individuals having different reasons and
purposes to join. Again these individual differ based on their needs and behaviours.
However, it is important to realise that these diverse individuals work together towards
the achievement of the organisational goals. Management diverts the individual efforts
towards the right direction. Further, effective management enables all the individuals
to grow and develop as their needs and opportunities change.
9. Management is both science and an art
Management has certain universally applicable principles, laws etc. Hence it is science.
It is called an art because managing requires certain skills which are personal
possessions of managers. Science provides the knowledge & art deals with the
application of knowledge and skills.

MANAGEMENT FUNCTIONS
According to Henry Fayol, “To manage is to forecast and plan, to organize, to
command, & to control”.
Whereas Luther Gullick has given a keyword ‘POSDCORB’ where
P stands for Planning,
O for Organizing,
S for Staffing,
D for Directing,
Co for Co-ordination,
R for Reporting &
B for Budgeting.
But the most widely accepted are functions of management given by KOONTZ and
O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
Planning
It is the basic function of management. Planning is determination of courses of action
to achieve desired goals. Thus, planning is a systematic thinking about ways & means
for accomplishment of predetermined goals. Planning is necessary to ensure proper
utilization of human & non-human resources.
It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion,
uncertainties, risks, wastages etc.
 Title of the Course: Agribusiness Management
Course Code: AG235

Organising
It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals.
According to Henry Fayol, “To organize a business is to provide it with everything
useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize
a business involves determining & providing human and nonhuman resources to the
organizational structure. Organizing as a process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
Staffing
The main purpose of staffing is to put right man on right job. 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 un the structure”.
Staffing involves:
• Manpower Planning (estimating man power in terms of searching, choose the
person and giving the right place).
• Recruitment, Selection & Placement.
• Training & Development.
• Remuneration.
• Performance Appraisal.
• Promotions & Transfer.
Directing
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. Direction deals directly with
influencing, guiding, supervising, motivating sub-ordinate for the achievement of
organizational goals.
Direction has following elements:
• Supervision
 Title of the Course: Agribusiness Management
Course Code: AG235

• Motivation
• Leadership
• Communication

Controlling
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Koontz & O’Donell “Controlling is the measurement & correction of
performance activities of subordinates in order to make sure that the enterprise
objectives and plans desired to obtain them as being accomplished”. Therefore,
controlling has following steps:
a) Establishment of standard performance.
b) Measurement of actual performance.
c) Comparison of actual performance with the standards and finding out deviation
if any.
d) Corrective action.
 Title of the Course: Agribusiness Management
Course Code: AG235

MANAGEMENT ROLES / ROLES OF A MANAGER

Henry Mintzberg identified ten different roles, separated into three categories. The categories
he defined are as follows

a) Interpersonal Roles

The ones that, like the name suggests, involve people and other ceremonial duties. It can be
further classified as follows

• Leader – Responsible for staffing, training, and associated

duties.
• Figurehead – The symbolic head of the organization.
• Liaison – Maintains the communication between all contacts
and informers that compose the organizational network.

b) Informational Roles

Related to collecting, receiving, and disseminating information.

• Monitor – Personally seek and receive information, to be able

to understand the organization.
• Disseminator – Transmits all import information received
from outsiders to the members of the organization.
• Spokesperson – On the contrary to the above role, here the manager transmits the
organization’s plans, policies and actions to outsiders.

c) Decisional Roles

Roles that revolve around making choices.

• Entrepreneur – Seeks opportunities. Basically, they search for change, respond to it,
and exploit it.
• Negotiator – Represents the organization at major negotiations.
• Resource Allocator – Makes or approves all significant decisions related to the
allocation of resources.
 Title of the Course: Agribusiness Management
Course Code: AG235

• Disturbance Handler – Responsible for corrective action when the organization faces
disturbances

PLANNING

Planning is the fundamental management function, which involves deciding beforehand, what
is to be done, when is it to be done, how it is to be done and who is going to do it. It is an
intellectual process which lays down an organisation’s objectives and develops various courses
of action, by which the organisation can achieve those objectives. It chalks out exactly, how to
attain a specific goal.

Planning is nothing but thinking before the action takes place. It helps us to take a look into
the future and decide in advance the way to deal with the situations, which we are going to
encounter in future. It involves logical thinking and rational decision making.

According to Koontz and O’Donnel, “Planning is deciding in advance what to do, how to
do it, when to do it and who is to do it. It bridges the gap from where we are to where we
want to go.”

Planning is the continuous managerial process of anticipating and forecasting the future.
environment of the business organization, the formulation of the long term and short-term
goals. to be achieved and selecting the strategies for their realization.

Planning is also a management process, concerned with defining goals for a company's future
direction and determining the missions and resources to achieve those targets. To meet
objectives, managers may develop plans, such as a business plan or a marketing plan.

The planning process provides the information top management needs to make effective
decisions about how to allocate the resources in a way that will enable the organization to reach
its objectives.

Productivity is maximized and resources are not wasted on projects with little chance of
success.

Importance of Planning

• It helps managers to improve future performance, by establishing objectives and

selecting a course of action, for the benefit of the organisation.
 Title of the Course: Agribusiness Management
Course Code: AG235

• It minimises risk and uncertainty, by looking ahead into the future.

• It facilitates the coordination of activities. Thus, reduces overlapping among activities
and eliminates unproductive work.
• It states in advance, what should be done in future, so it provides direction for action.
• It uncovers and identifies future opportunities and threats.
• It sets out standards for controlling. It compares actual performance with the standard
performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. We need
to plan because the future is highly uncertain and no one can predict the future with 100%
accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of
any organization for the survival, growth and success.

Types of Plans

Three major types of plans can help managers achieve their organisation’s goals: strategic,
tactical, and operational. Operational plans lead to the achievement of tactical plans, which in
turn lead to the attainment of strategic plans. In addition to these three types of plans, managers
should also develop a contingency plan in case their original plans fail.

1. Operational plans: The specific results expected from departments, work groups, and
individuals are the operational goals. These goals are precise and measurable

(a) Process 150 sales applications each week

(b) Publish 20 books this quarter

Thus, an operational plan is one that a manager uses to accomplish his or her job
responsibilities. Supervisors, team leaders, and facilitators develop operational plans to support
tactical plans.

Operational plans can be a single-use plan or an ongoing plan

(a) Single-use plans: These plans apply to activities that do not recur or repeat. A onetime
occurrence, such as a special sales program, is a single-use plan because it deals with the who,
what, where, how, and how much of an activity.

Example: A budget: Because it predicts sources and amounts of income and how much they
are used for a specific project.
 Title of the Course: Agribusiness Management
Course Code: AG235

(b) Continuing or ongoing plans: These are usually made once and retain their value over a
period of years while undergoing periodic revisions and updates.

Tactical plans: A tactical plan is concerned with what the lower level units within each
division 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.

Tactical plans are concerned with shorter time frames and narrower scopes than are strategic
plans. These plans usually span one year or less because they are considered short-term goals.

Normally, it is the middle manager’s responsibility to take the broad strategic plan and identify
specific tactical actions.

2. Strategic plans

A strategic plan is an outline of steps designed with the goals of the entire organisation as a
whole in mind, rather than with the goals of specific divisions or departments. Strategic
planning begins with an organisation’s mission.

Strategic plans look ahead over the next two, three, five, or even more years to move the
organisation from where it currently is to where it wants to be. Requiring multilevel
involvement, these plans demand harmony among all levels of management within the
organisation. Top-level management develops the directional objectives for the entire
organisation, while lower levels of management develop compatible objectives and plans to
achieve them. Top management’s strategic plan for the entire organisation becomes the
framework and sets dimensions for the lower-level planning.

3. Contingency plans

Intelligent and successful management depends upon a constant pursuit Notes of adaptation,
flexibility, and mastery of changing conditions. Strong management requires a “keeping all
options open” approach at all times - that’s where contingency planning comes in.

Contingency planning involves identifying alternative courses of action that can be

implemented if and when the original plan proves inadequate because of changing
circumstances.

Steps in the Planning Process

1. Establishing objectives
 Title of the Course: Agribusiness Management
Course Code: AG235

The first step in the planning process is to identify the goals of the organisation. The internal
as well as external conditions affecting the organisation must be thoroughly examined before
setting objectives. The objectives so derived must clearly indicate what is to be achieved, where
action should take place, who is to perform it, how it is to be undertaken and when is it to be
accomplished. In other words, managers must provide clear guidelines for organisational
efforts, so that activities can be kept on the right track.

2. Developing premises:

After setting objectives, it is necessary to outline planning premises. Premises are assumptions
about the environment in which plans are made and implemented. Thus, assumptions about the
impact of important environmental factors such as market demand for goods, cost of raw
materials, technology to be used, population growth, government policy, etc. on the future
plans are made. Planning premises can be of several types. Controllable or internal premises
are under the control of management, e.g., resources, techniques and policies of the enterprises.
On the other hand, uncontrollable or external premises are beyond the control of the enterprises.
These relate to rate of population growth, general economic conditions, government policies,
political situation, etc.

Plans should be formulated by the management, keeping the constraints imposed by internal
as well as external conditions in mind.

3. Identifying alternative course of action

There can be several ways or (more than one action plan) of achieving the same objectives.
The various available alternative should be identified. For example, in order to increase sale,
an enterprise may intensify sales efforts, explore new markets or develop new products, in
order to develop all possible alternatives, a manager must have imagination, skills and
experience.

4. Evaluating alternative course of action

The various alternatives are compared and weighted in the light of objectives and premises.
Each alternative has its merits and demerits but all alternatives cannot be equally appropriate
or practicable. Each alternative should be closely examined to determine its suitably. Several
statistical and mathematical techniques are used to evaluate alternative course of action.

Each alternative has to be carefully evaluated against factors like costs, associated risks
involved, benefits likely to arise, availability of spare capacity etc. The pros and cons as well
 Title of the Course: Agribusiness Management
Course Code: AG235

as the consequences of each alternative course of action must be examined thoroughly before
a choice is made.

5. Selecting the best Alternative / Selecting the best course of action

After evaluating the various alternatives, the most appropriate alternative is selected. This is
the point at which the plan is adopted. Sometimes, the evaluation may suggest that more than
one alternative is good. In such a case, a manager may choose several alternatives and combine
them in action

6. Formulating derivative plans

After selecting the best course of action, the management has to formulate the secondary plans
to support the basic plan. The plans derived for various departments, units, activities, etc., in a
detailed manner are known as ‘derivative plans’. For example, the basic production plan
requires a number of things such as availability of plant and machinery, training of employees,
provision of adequate finance, etc. To ensure the success of a basic plan, the derivative plans
must indicate the time schedule and sequence of performing various tasks.

7. Implementing the plan

This step is concerned with transforming the plan into action. The plan must be communicated
must be communicated to the employees in detail.

This is when all the other functions of management come into play and the plan is put into
action to achieve the objectives of the organisation.

8. Follow up Action

Monitoring the plan constantly and taking feedback at regular intervals is called follow up.
Plans have to be reviewed continually to ensure their relevance and effectiveness. In the course
of implementing plans, certain facts may come to light that were not even thought of earlier.
In the light of these changed conditions, plans have to be revised. Without such a regular
follow-up, plans may become out-of-date and useless. Moreover, such a step ensures the
implementation plans along right lines. Management can notice shortcomings in time and
initiate suitable remedial steps. A continuous evaluation of plans also helps to develop sound
plans in future, avoiding mistakes that have surfaced while implementing the previous plans