Unit1 Notes 1

Genba Sopanrao Moze College Of Engineering, Balewadi - Pune Department of
MCA, F.Y SEM – I, Information Systems and Engineering Economics
Information System and Engineering Economics

[310905] LECTURE NOTES
MCA I YEAR – SEM (I)(2022-2023)
DEPARTMENT OF MCA
GENBA SOPANRAO MOZE COLLEGE OF ENGINEERING

S. No. 25/1/3, Balewadi-Baner, Pune- 411 045
(Approved by AICTE and Govt. of Maharashtra, Affiliated to Savitribai Phule Pune
University)
Prepared by , Prof. Priyanka Yeole (MCA) Page 1

Genba Sopanrao Moze College Of Engineering, Balewadi - Pune
Department of MCA, F.Y SEM – I, Information Systems and Engineering
Economics
Unit – I
Basic of Management Theory & Practices
Introduction of Management, its nature and purpose, Functions and activities of Management,
planning, organizing, staffing, directing and controlling
Introduction of Organisation, Need for Organization , Process of Organizing , Organizational structure
Functional organization , Product Organization , Memorandum of Association (MOA) and Articles of
Association (AOA), Definition, types, merits and demerits of each of structures (Line, Functional, Line
and staff, Committee, Matrix and Project structure)
Role of Information Systems in Organizations, Concepts, Challenges of Information
Systems, Information Systems and Management Strategy Case Studies - Information
Systems in the Indian Railways, Information Systems in an e-commerce Organization.
COURSE OBJECTIVES:
To prepare the students to get knowledge of Management Functions, Organisational
Structures and understanding of Information Systems.
COURSE OUTCOMES:
CO1: Understand the need, usage and importance Management Functions, Organisational
structure and Information System
Prepared by , Prof. Priyanka Yeole(MCA) Page 2

Economics
UNIT _ 1
Introduction of Management
Management is what managers ‘do’, It is the process of coordinating work activities with and
through other people so that work activities are completed efficiently and effectively. The
Term ‘Management’ is used to refer the process of Managing the activities of Enterprise. In layman’s
Language Management refers to group of personnel of an enterprise who have supervisory
role over others. Example Good quality of Management and Bad Quality of Management. In
simple term Management the process of getting things done, effectively and efficiently,
through and with other people.
For management, it is important to be both effective and efficient. Effectiveness and
efficiency are two sides of the same coin. But these two aspects need to be balanced and
management at times, manager has to compromise with efficiency. For example, it is easier
to be effective and ignore efficiency i.e., complete the given task but at a high cost. Suppose,
a company’s target production is 5000 units in a year. To achieve this target the manager has
to operate on double shifts due to power failure most of the time. The manager is able to
produce 5000 units but at a higher production cost. In this case, the manager was effective
but not so efficient, since for the same output, more inputs (labour cost, electricity costs)
were used.
At times, a business may concentrate more on producing goods with fewer resources i.e.,
cutting down cost but not achieving the target production. Consequently, the goods do not
reach the market and hence the demand for them declines and competitors enter the market.
This is a case of being efficient but not effective since the goods did not reach the market.
Therefore, it is important for management to achieve goals (effectiveness) with minimum
resources i.e., as efficiently as possible while maintaining a balance between effectiveness
and efficiency. Usually high efficiency is associated with high effectiveness which is the aim of
all managers. But undue emphasis on high efficiency without being effective is also not
desirable. Poor management is due to both inefficiency and ineffectiveness.
In simple efficiency Means doing the things correctly; refers to the relationship between
inputs and outputs; Seeks to minimise the resource and cost. Effectiveness Means doing the
right things; Goal Attainment
In total we can understand that Management takes place within an organisation structure
Management positioned at top under which everything falls. Manager is the foundation upon which
an organisation is built. Within the organisation structure managers allocate resources (Like men
material machinery methods and money) and Manger uses the functions (such as Planning organising
Definition of Management
There is no universally accepted definition of the term Management. Different authorities on

management defined the term ‘management’ in different ways. Here are the few definitions
According to Mary Parker Follet, “Management is the art of getting of things through people.”
According to Harold Koontz, “Management is art of getting things done through and with the
people in formally organised groups”.
In the words of Economics
Henry Fayol Management is “To manage is to forecast and to plan, to
organise, to command, to co-ordinate and to control.”
In the words of George R Terry, “Management is a distinct process consisting of planning,
organising, actuating and controlling performance to determine and accomplish the
objectives by use of people and resources”
Management is defined in terms of functions undertaken by the manager to achieve
organisational goals. Management is the systematic way of doing things. It is an art of
creating an environment in which people can perform and an individual could co-operate
towards attaining the group goals.
Conclusion
It may be noted that Management is not just getting things done through others. It is getting
things done through others by satisfying their needs and providing them with the
opportunities for growth and advancement. It is the process for the utilisation of minimum
input for the production of maximum output.
Its nature:-
The Nature of Management can be understood through a study of its important

characteristics or features the following are the important characteristics
1. Universal Application: Management is applicable to all types of
organisation. Managers more or less perform same functions irrespective of their
position and nature of organisation. The basic principles of management can be applied
in all organisation and all managerial positions regardless of their nature size and location
of the organisation. Educational Institutions, Hospitals, Government, Urban centers, Team
of Players, Cultural body, NGO’s
2. Purposeful: Management is always aimed at achieving some definite organisational goals
and objectives. It aims to achieve economic and social objectives. Achieving aims implies
mobilisation interaction and utilisation of human physical and financial resources in a
disciplined manner in order to meet the needs of the society. The objective may be
economic or Social Ex: Increasing the sales in next quarter, providing employment
opportunity to local, Providing quality education to rural students
3. Social Process: Management is concerned with dealing with people. It essentially involves
managing people at work managers are required to direct coordinate and regulate human
efforts to achieve the desired organisational goal hence management is regarded as social
process
4. Co-Ordinating Force: Management coordinates the effort of employees of the organisation. Orderly
arrangement of activities to avoid duplication and overlapping. It
balances the individual goals and organisational goal and integrate human and physical resources to
achieve the organisational goals
5. Group Activity: Management plans organises directs and controls the group efforts to
achieve enterprise objectives. It is always concerned with group efforts and not individual
efforts
6. Intangible: Management is intangible. It is an unseen force. Its results can be felt in the
forms of orderliness, adequate work output, satisfactory work climate, Employee
Satisfaction etc.
Economics
Sem1: Principles of Management Nature and Process of Management
Digital Learning-DCE Mangalore University 2
7. System of Authority: Management is process of directing men to perform the task.
Authority or power to give orders and instructions is implied in the concept of
management. Management cannot perform its functions in the absence of authority.
8. Separate Identity: Activities in the organisations are classified in to managerial and Non-
Managerial ‘Managers’ are considered as Thinkers. ‘Doers’ are workers who are entrusted
to execution of work.
9. Working Through others: Management Involves working through others to accomplish
organisational goals. Management has to appoint right type of people, assign duties
motivate and control the subordinates to accomplish the work.
10. Management Is a Continuous function: Management is dynamic on-going process. It
Continues to operate as long as there is organised action to achieve group goals. It is never
ending process.
11. Management is science as well as art: Management is science because it has definite
principles, these principles are universally applicable. It is a social science. Management
is art because, it is concerned with the application of management knowledge and skills.
Every Manager applies certain knowledge and skills while dealing with the people to
achieve desired results.
12. Management is Profession: Management has some chrematistics of profession. It is
comparatively anew field of knowledge which can be acquired through formal training,
like other professions Manager has to apply management principles, Techniques skills to
solve the problems of the organizations
13. Needed at every level: Management is needed at every levels of the organisation. That is
at Top level the middle level and Lower level. Conceptual and Design skills play greater
role at top level, Human skills managing people are mostly required skills at middle level.
At lower level technical skills play a very important role while shadowing the pear
employee.
Purpose:-
The following points Purpose of management in an organisation:
1. Achieving goals: Management helps the organization in achieving its goals. The role of a
manager is to provide common guidance and direction to the individual efforts for the
fulfillment of organizational goals.
2. Increasing the efficiency: Management helps in increasing the efficiency of the business by
increasing productivity through efficient planning, organizing, controlling and directing.
3. Helps in creating a dynamic organization: Management helps in providing the required impetus
for an organization to transition from one phase of development to another and also in adjusting
to the changing dynamics of the business environment.
4. Helps in achieving individual objectives: Management helps in guiding the individuals towards
attaining personal objectives, which has a direct impact on attaining the organisational
objectives.

Economics
5. Development of society: By developing the organization, management helps in its growth. A
developed organization has some moral responsibilities towards society and it does so by
creating employment opportunities, providing good quality products and services.
Functions and activities of Management
Management is what a manager does. It is process of getting the things done through others. In this
sense, a manager has to perform certain activities in order to achieve the desired results. Those
activities are known as managerial functions.
Management functions are common to all business organisations and even to non-profit
organisations they are integrated and interrelated and integrated.
Luther Gullick an early writer of Management Coined the word “POSDCORB” to describe the
Functions
(P) Planning, (O) Organizing, (S) Staffing, (D) Directing, (Co)Coordinating, (R) Reporting, (B)
Budgeting
The important functions of management or important elements of Management process are
1) Forecasting
2) Planning
3) Organising
4) Staffing
5) Directing and Motivating
6) Co-ordinating
7) Controlling
8) Communication
9) Leadership
10) Decision –Making
➢ Forecasting: It is the important element of planning. It is the systematic attempt to probe
the future by inference from known facts. It is the process of predicting projecting and
estimating the future conditions in relation to operations of the enterprise. Example
estimation of future sales in order to effectively plan the production activities.
➢ Planning:
It is the primary function of every manager. It is the determination of future course of
action to achieve the desired results. It is the process of deciding in advance what is to be
done, how and where is to be done, who is going to do it, and how the results are going
to be evaluated. It is future oriented ex: Planning of all the activities to achieve production
& sales as per the target in next quarter. Planning is necessary to avoid difficulties that
may be arise in future.
Planning is function performed at all levels Be it a Top Middle or Supervisory.
Management might plan short term or Long term
➢ Organising: Management must organise human and physical resources of the firm.
Organising refers to Identification of activities to be carried out, grouping of similar
activities and creation of departments It is also concerned with Creation of authority and
responsibility relationship within and among the group. Organising is the process of
identifying and grouping the work to be performed, defining and delegating responsibility
arranging Money, Material, Machinery, men and selecting the optimal method of actual
Economics
execution of work in order to accomplish the objective effectively.
➢ Staffing: Determining the manpower requirement of the organisation, Recruitment of
personnel required for Managerial and non-managerial positions. In this function
manager tries to appoint right man for the right job. Staffing fixes the manager with the
responsibility to recruit and provide manager with adequate number of competent and
qualified personnel at all levels in the enterprise.
➢ Directing and motivating: next step in the management process would be direct and
supervise the employee towards organisational goals. Directing concerned with activities
of issuing order and instructions, guiding counselling, and instructing subordinates,
supervising the work of subordinates, motivating the subordinates, inspiring subordinates
for better performance giving them incentives so that they can perform to best of their
abilities.
➢ Controlling: It is the process of evaluating and regulating the activities of the organisation
to ensure they are in accordance with pre-determined plans procedure and desired
results
Following are the element of controlling
• Establishing the standard of performance
• Measuring the actual performance
• Comparing the actual with standard
• Measuring the variance or deviation
• Taking the corrective actions
➢ Co-coordinating: Orderly synchronisation of efforts of the employees in all departments to

move towards common goals. Harmonious blending of activities of different individuals
and group individuals for achievement of desired end
➢ Communication: Communication is an attempt to share understanding of two or more
persons, it is to share messages, ideas, opinion and to create an impression or
understanding in the minds of receiver. Communication system should be efficient so as
to avoid confusion and miss understanding
➢ Leadership: Is the process of influencing the subordinates, so that they co-operate
enthusiastically in the achievement of group goals Leadership qualities are required in
supervision and management
➢ Decision making: Decision Making be professional and Result oriented. Decision making
involves selecting a particular action among set of possible alternatives. It is Choosing
the best among various alternatives
Activities of Management:-
Management as an activity includes:
1. Informational activities - In the functioning of business enterprise, the manager constantly has to
receive and give information orally or in written. A communication link has to be maintained
with subordinates as well as superiors for effective functioning of an enterprise.

Economics
2. Decisional activities - Practically all types of managerial activities are based on one or the other
types of decisions. Therefore, managers are continuously involved in decisions of different kinds
since the decision made by one manager becomes the basis of action to be taken by other
managers. (E.g. Sales Manager is deciding the media & content of advertising).
3. Inter-personal activities - Management involves achieving goals through people. Therefore,
managers have to interact with superiors as well as the sub-ordinates. They must maintain good
relations with them. The inter-personal activities include with the sub-ordinates and taking care
of the problem. (E.g. Bonuses to be given to the sub-ordinates).
Planning in Organization:-
Definition: 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 peep 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.
Characteristics of Planning

Economics
1. Managerial function: Planning is a first and foremost managerial function provides the base for
other functions of the management, i.e. organising, staffing, directing and controlling, as they
are performed within the periphery of the plans made.
2. Goal oriented: It focuses on defining the goals of the organisation, identifying alternative
courses of action and deciding the appropriate action plan, which is to be undertaken for
reaching the goals.
3. Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all
the levels of the organisation. Although the scope of planning varies at different levels and
departments.
4. Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on.
Once that period is over, new plans are drawn, considering the organisation’s present and future
requirements and conditions. Therefore, it is an ongoing process, as the plans are framed,
executed and followed by another plan.
5. Intellectual Process: It is a mental exercise at it involves the application of mind, to think,
forecast, imagine intelligently and innovate etc.
6. Futuristic: In the process of planning we take a sneak peek of the future. It encompasses looking
into the future, to analyse and predict it so that the organisation can face future challenges
effectively.
7. Decision making: Decisions are made regarding the choice of alternative courses of action that
can be undertaken to reach the goal. The alternative chosen should be best among all, with the
least number of the negative and highest number of positive outcomes.
Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The
activity helps managers analyse the present condition to identify the ways of attaining the desired
position in future. It is both, the need of the organisation and the responsibility of managers.
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.
 It minimizes 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.

Economics
Steps involved in Planning
By planning process, an organisation not only gets the insights of the future, but it also helps the
organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should
be clearly stated and easy to understand because if the plan is too much complicated it will create
chaos among the members of the organisation. Further, the plan should fulfil all the requirements of
the organisation.
Organizing
Definition: Organizing is the second key management function, after planning, which coordinates
human efforts, arranges resources and incorporates the two in such a way which helps in the
achievement of objectives. It involves deciding the ways and means with which the plans can be
implemented.
It entails defining jobs and working relationships, assigning different tasks associated with the plans,
arranging and allocating resources, design a structure which distinguishes duties, responsibilities and
authorities, scheduling activities, in order to maintain smoothness and effectiveness in operations.

CharacteristicsEconomics
of Organizing
Organizing has the following characteristics:
 Division of Labour: Work is assigned to the employee who is specialised in that work.
 Coordination: Different members of the organization are given different tasks to perform when
all the tasks are put together logically and sequentially, it results in the objectives, so
coordination is required.
 Objectives: Objectives need to be specifically defined.
 Authority-Responsibility Structure: For an effective authority responsibility structure, the
position of each manager and executive is specified, as per the degree of the authority and
responsibility assigned to them, while performing the duties.
 Communication: The techniques, flow and importance of communication must be known to all
the members.
Process of Organizing
Organizing is the core function which binds all the activities and resources together in a systematic and
logical sequence. It encompasses a number of steps which are pursued to achieve organizational goals.

Economics
Now, we will discuss those steps in detail:
1. Identification and division of work: Organizing process begins with identifying the work and
dividing them as per the plans. Basically, the work is classified into different manageable
activities, to avoid redundancy, and sharing of work is encouraged.
2. Departmentalization: After classifying the work into different activities, the activities having a
similar nature are grouped together. This process is called as departmentalization which
facilitates specialization and forms the basis for creating departments.
3. Assignment of the task: After the formation of departments, employees are placed in different
departments under a manager, called as a departmental manager. Thereafter, employees are
assigned the jobs as per their skills, qualifications and competencies. For the effectiveness of the
performance, the manager must ensure that there is a proper match between the job and the
incumbent, i.e. the right person has to be placed at the right job.
4. Establishment of organizational hierarchy: Deployment of work is not all, the employees
must be aware of whom they have to report and who can give them orders. Hence, work
relationships need to be established clearly, which helps in the creation of a hierarchical
structure of the organization.
5. Provision of resources to the members: Arrangement and deployment of resources such as
money, materials, supplies, and machine, etc. which are important to carry out day to day
operations of the organization.
6. Coordination of efforts and scheduling of activities: The final step to this process is the
coordination of efforts and scheduling the activities in a logical and systematic manner so that
the common objectives can be achieved effectively.
Importance of Organizing
Organizing is integral to management as it facilitates the smooth functioning of the enterprise. The
importance of organizing is as under:

Economics
 Advantage of Specialization: Organizing helps in the classification of jobs systematically

amongst the workforce, which helps in the reduction of workload, as well as improved
productivity. This is because the organization will get the benefit of specialization wherein
workers will perform specific work on a regular basis, according to their competency.
 Describes work relationships: The definition of work relationships describes the flow of
communication and determine the superior-subordinate relationship. This removes confusion
and chaos, in getting orders and instructions.
 Effective utilization of resources: Organizing function ensures the best possible utilization of
resources whether it is human, material, financial or technical. This is because jobs are assigned
to the employees which avoid overlapping and duplication of work.
 Adaptation to change: Organizing process helps the organization to survive and adapt the
changes, by making substantial changes in the strategies, hierarchy, relationships, etc.
 Development of personnel: Organising encourages creativity in executives. Delegation of
authority reduce their workload and they get time to identify new methods to perform the work.
It also enables them to explore new areas for their growth and development.
In a nutshell, with organizing the manager brings order out of disorder, removes confusion with respect
to work and responsibility, and frames an ideal environment where all the members of the organization
can work in tandem.
Staffing
Staffing is the process of hiring eligible candidates in the organization or company for specific
positions. In management, the meaning of staffing is an operation of recruiting the employees by
evaluating their skills, knowledge and then offering them specific job roles accordingly. Let us find out
more about what is Staffing and what it entails along with its functions and characteristics.

Economics
Definition: Staffing can be defined as one of the most important functions of management. It involves
the process of filling the vacant position of the right personnel at the right job, at right time. Hence,
everything will occur in the right manner.
It is a truth that human resource is one of the greatest for every organization because in any
organization all other resources like- money, material, machine etc. can be utilized effectively and
efficiently by the positive efforts of human resource.
Therefore it is very important that each and every person should get right position in the organization
so as to get the right job, according to their ability, talent, aptitude, and specializations so that it will
help the organization to achieve the pre-set goals in the proper way by the 100% contribution of
manpower. Thus it can be said that it is staffing is an essential function of every business organization.
From this, we can understand what is Staffing?
Functions of Staffing
1. The first and foremost function of staffing is to obtain qualified personnel for different jobs
position in the organization.
2. In staffing, the right person is recruited for the right jobs, therefore it leads to maximum
productivity and higher performance.
3. It helps in promoting the optimum utilization of human resource through various aspects.
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4. Job satisfaction and morale of the workers increases through the recruitment of the right person.
5. Staffing helps to ensure better utilization of human resources.
6. It ensures the continuity and growth of the organization, through development managers.
Browse more Topics under Staffing
 Staffing in HRM & Its Revolution

 Staffing Process.
Importance of Staffing
Efficient Performance of Other Functions
For the efficient performance of other functions of management, staffing is its key. Since, if an
organization does not have the competent personnel, then it cannot perform the functions of
management like planning, organizing and control functions properly.
Effective Use of Technology and Other Resources
What is staffing and technology’s connection? Well, it is the human factor that is instrumental in the
effective utilization of the latest technology, capital, material, etc. the management can ensure the right
kinds of personnel by performing the staffing function.
Optimum Utilization of Human Resources
The wage bill of big concerns is quite high. Also, a huge amount is spent on recruitment, selection,
training, and development of employees. To get the optimum output, the staffing function should be
performed in an efficient manner.
Development of Human Capital
Another function of staffing is concerned with human capital requirements. Since the management is
required to determine in advance the manpower requirements. Therefore, it has also to train and
develop the existing personnel for career advancement. This will meet the requirements of the
company in the future.
The Motivation of Human Resources
In an organization, the behaviour of individuals is influenced by various factors which are involved
such as education level, needs, socio-cultural factors, etc. Therefore, the human aspects of the
organization have become very important and so that the workers can also be motivated by financial
and non-financial incentives in order to perform their functions properly in achieving the objectives.
Building Higher Morale
The right type of climate should be created for the workers to contribute to the achievement of the
organizational objectives. Therefore, by performing the staffing function effectively and efficiently, the

management is Economics
able to describe the significance and importance which it attaches to the personnel
working in the enterprise.
Characteristics of Staffing
People-Centered
Staffing can broadly view as people-centered function and therefore it is relevant for all types of
organization. It is concerned with categories of personnel from top to bottom of the organization.
 Blue collar workers (i.e., those working on the machines and engaged in loading, unloading etc.)
and white collar workers (i.e., clerical employees).
 Managerial and Non Managerial personal.
 Professionals (eg.- Chartered Accountant, Company Secretary)
Responsibility of Manager
Staffing is the basic function of management which involves that the manager is continuously engaged
in performing the staffing function. They are actively associated with the recruitment, selection,
training, and appraisal of his subordinates. Therefore the activities are performed by the chief
executive, departmental managers and foremen in relation to their subordinates.
Human Skills
Staffing function is mainly concerned with different types of training and development of human
resource and therefore the managers should use human relation skill in providing guidance and training
to the subordinates. If the staffing function is performed properly, then the human relations in the
organization will be cordial and mutually performed in an organized manner.
Continuous Function
Staffing function is to be performed continuously which is equally important for a new and well-
established organization. Since in a newly established organization, there has to be recruitment,
selection, and training of personnel. As we compare that, the organization which is already a running
organization, then at that place every manager is engaged in various staffing activities.
Therefore, he is responsible for managing all the workers in order to get work done for the
accomplishment of the overall objectives of an organization.
Directing and controlling
Controlling
Definition: Control is a primary goal-oriented function of management in an
organisation. It is a process of comparing the actual performance with the set
standards of the company to ensure that activities are performed according to
the plans and if not then taking corrective action.
Every manager needs to monitor and evaluate the activities of his subordinates.
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It helps in taking corrective actions by the manager in the given timeline to avoid
contingency or company’s loss.
Controlling is performed at the lower, middle and upper levels of the
management.
Features of Controlling
 It helps in achieving organizational goals.
 Facilitates optimum utilization of resources.
 It evaluates the accuracy of the standard.
 It also sets discipline and order.
 Motivates the employees and boosts employee morale.
 Ensures future planning by revising standards.
 Improves overall performance of an organization.
 It also minimises errors.
Controlling and planning are interrelated for controlling gives an important input
into the next planning cycle. Controlling is a backwards-looking function which
brings the management cycle back to the planning function. Planning is a
forward-looking process as it deals with the forecasts about the future
conditions.
Controlling
 Establishing standards: This means setting up of the target which needs
to be achieved to meet organisational goals eventually. Standards
indicate the criteria of performance. Control standards are categorized as
quantitative and qualitative standards. Quantitative standards are
expressed in terms of money. Qualitative standards, on the other hand,
includes intangible items.
 Measurement of actual performance: The actual performance of the
employee is measured against the target. With the increasing levels of
management, the measurement of performance becomes difficult.
 Comparison of actual performance with the standard: This compares the
degree of difference between the actual performance and the standard.
 Taking corrective actions: It is initiated by the manager who corrects any
defects in actual performance.
Controlling process thus regulates companies’ activities so that actual
performance conforms to the standard plan. An effective control system enables
managers to avoid circumstances which cause the company’s loss.
Types of control
There are three types of control viz.,
1. Feedback Control: This process involves collecting information about a finished task,
assessing that information and improvising the same type of tasks in the future.
2. Concurrent control: It is also called real-time control. It checks any problem and
examines it to take action before any loss is incurred. Example: control chart.
3. Predictive/ feedforward control: This type of control helps to foresee problem ahead
of occurrence. Therefore action can be taken before such a circumstance arises.

Economics
In an ever-changing and complex environment, controlling forms an integral part of
the organization.
3BCA5 Management Skills Notes Unit 1
Collected and Summarised by Raju Ranjan Sinha P a g e | 3
Advantages of controlling
 Saves time and energy
 Allows managers to concentrate on important tasks. This allows better utilization
of the managerial resource.
 Helps in timely corrective action to be taken by the manager.
 Managers can delegate tasks so routinely chores can be completed by
subordinates.
(b) Directing
DIRECTING is said to be a process in which the managers instruct, guide and
oversee the performance of the workers to achieve predetermined goals.
Directing is said to be the heart of management process. Planning, organizing,
staffing have got no importance if direction function does not take place.
Directing initiates action and it is from here actual work starts. Direction is said
to be consisting of human factors. In simple words, it can be described as
providing guidance to workers is doing work. In field of management, direction
is said to be all those activities which are designed to encourage the
subordinates to work effectively and efficiently. According to Human, “Directing
consists of process or technique by which instruction can be issued and
operations can be carried out as originally planned” Therefore, Directing is the
function of guiding, inspiring, overseeing and instructing people towards
accomplishment of organizational goals.
Direction has got following characteristics:
Pervasive Function - Directing is required at all levels of organization. Every
manager provides guidance and inspiration to his subordinates.
Continuous Activity - Direction is a continuous activity as it continuous
throughout the life of organization.
Human Factor - Directing function is related to subordinates and therefore it is
related to human factor. Since human factor is complex and behaviour is
unpredictable, direction function becomes important.
Creative Activity - Direction function helps in converting plans into
performance. Without this function, people become inactive and physical
resources are meaningless.
3BCA5 Management Skills Notes Unit 1
Collected and Summarised by Raju Ranjan Sinha P a g e | 4
Executive Function - Direction function is carried out by all managers and
executives at all levels throughout the working of an enterprise, a subordinate
receives instructions from his superior only.
Delegate Function - Direction is supposed to be a function dealing with human
beings. Human behaviour is unpredictable by nature and conditioning the
people’s behaviour towards the goals of the enterprise is what the executive

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does in this function. Therefore, it is termed as having delicacy in it to tackle
human behaviour.
Introduction of Organisation
An organisation is a group of people working together to achieve the specified goal. A manager play a
central role in grouping the people and activities, establishing authority and responsibility and
interacting with people for the achievement of the organisational goal. He performs the functions of
planning, organising, directing and controlling for smooth functioning of the organisation. Moreover,
continuous influence of dynamic environment on the organisation requires new managerial techniques
to manage these changes. The detailed study of various aspects of organisation and management may
provide proper
techniques for managing them effectively. In this unit, you will learn the concept of organisation and
management. You will further learn the functions and roles of managers. You will be acquainted with
the types of organisation and the features of the modern organisation.
CONCEPT OF ORGANISATION
To understand basic concept of organisation, let us learn it through following dimensions of enquiry:
• What? - What do we mean by an organisation?
• Why? - Why is study of organisation needed?
• When? - When are organisations able to serve its purpose
(or otherwise fail)?
• How? - How are organisations formed?
• Where? - Where to find people who can manage organisations well?
• Who? - Who are the people having ability to create excellent organisation?
What do we mean by an organisation?
Stoner, Freeman, and Gilbert describe that at an organisation, two or more people work together in a
structured way to achieve a specific goal or set of goals. Through this description, certain salient
features of an organisation emerge. These are:
• Organisation is a conglomerate of multiple number of persons;
• Relationship among people working together is defined through a structure. Through structure,
communications take place among persons working in the organisation. Such structure may be
relatively rigid, as in the case of formal structure, or the structure may be relatively loose, as in the
case of informal structure;
• Organisation strives to achieve planned goal. The goal(s) may be singular or plural. Goal is one of the
fundamental elements of an organisation.
Robbins describes an organisation as a consciously coordinated social entity, with a relatively
identifiable
boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals. The
additional salient features of this description of organisation are following:
• The activities at an organisation are consciously coordinated. It means affairs at organisation are
properly managed. It implies importance of management in organisation;
• The term relatively identifiable boundary implies that organisation works within a flexible yet
definable
boundary. Any organisation with a significant size has three layers of boundaries. The innermost
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boundary contains of the internal stakeholders i.e. employees, shareholders, and board of directors. The
next layer consists of external stakeholders i.e. customers, competitors, financial institutions,
suppliers,government, labour unions, media, and special-interest group. The outermost boundary
consists of major macro variables like economic variables, technological variables, political variables,
legal variables, and
social variables.Brown and Moburg describe organisations as relatively permanent social entities
characterised by goal-oriented behaviour, specialisation, and structure. This description of organisation
suggests that organisations
have four basic features:
• Organisations are relatively permanent social entities though many changes which might be taking
place
within the organisation- thus continuity is at the core of existence of any organisation;
• Goals remain an integral part of any organisation;
• Organisations need highly specialised skills to attain goals,
• In order to bring together various work activities, organisations need to have structures.
Hicks describes an organisation as a structured process in which persons interact for objectives. This
description indicates five facts that are common to all organisations:
• An organisation always include persons;
• These persons are involved with one another in some way;
• The interactions among persons can always be ordered or described by some sort of structure;
• Each person in the organisation tries to meet personal objectives also through organisational
activities;
• These interactions can also help to achieve compatible joint objectives, i.e. organisational objectives
and
personal objectives.
Schein describes organisation as the planned coordination of the activities of a number of people for
the achievement of some common, explicit purpose or goal, through division of labour and function,
and through hierarchy of authority and responsibility. According to this definition, Organisations have
following
characteristics:
• Coordination of efforts;
• Common goal;
• Division of labour;
• Hierarchy of authority.
Why is study of organisation needed?
Arguing in favour of rationale for the creation of organisations, Chris Argyris states:
Organisations are usually created to achieve objectives that can best be met collectively. This means
that the sequences of activity necessary to achieve objectives are too much for one individual and they
must be cut up into sequential units that are manageable by human beings. At the individual level the
unit are roles; at the
group level the units are departments. These units are integrated or organised in a particular sequence
or pattern designed to achieve the objectives, and the resulting pattern constitutes the organisation
structure.
Organisations have become cornerstone of our basic existence. Organisations pursue goals and
objectives that can be more efficiently and effectively achieved by the concerted actions of individuals.
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Hospitals, educational institutions, production units, service centres are nothing but organisations. Our
civilized life
would perhaps collapse without various organisations around us. Therefore there is need for us to
know how does an organisation work ? Further it is more important to make organisations around us
healthier and more effective for better future.
When are organisations able to serve its purpose (or they otherwise fail)?
Organisations are able to serve its purpose when they are well managed. In fact study of organisation
and study of management of organisation go hand in hand. A well managed organisation is able to
utilize human input and its resources like money, material, machine, motivation of employees, market
etc. in an integrated manner. Organisations are able to survive and excel if they utilize their all
resources in tune with the market
needs. Successful organisations also orient themselves towards external factors like economic
environment, political environment, legal environment, social environment, environment of
international market etc.
How are organisations structured?
There are various approaches to structure and design organisatio. At this point of time, it would be
desirable for you to comprehend that organisational structure or
its design is appropriately chosen to facilitate various factors like flow of communication, decision
making, execution of decision, controlling, and integration of all activities of the organisation. Where
to find people who can manage organisations well?
People who can manage an organisation well may be found within the already existing organisation.
Otherwise in case of a newly established organisation or even in case of old organisation, appropriate
people
can be identified from outside. People who are already with the organisation can be further developed
for higher responsibilities through developmental programmes, on the job training, and career
planning.
Appropriate people from outside can be identified for positions at various levels through proper
recruitment and selection policies and procedures.
Who are the people having ability to create excellent organisation?
In fact employees are the greatest assets of an organisation. In modern organisations, employees are
expected
to possess multiple skills. In order to perform various activities in an organisation, different persons are
expected to possess different skills, so that organisation has an appropriate skills-basket. Normally
people who can create excellent organisation have many desirable skills and traits. Some important
skills and traits
are:
• Integrative values i.e., ability to generate faith and trust;
• Organising ability;
• Ability to see further i.e., ability to perceive future trend;
• Ability to put adequate effort;
• Up-to-date skills to perform ever changing nature of task;
• Skills to establish effective human relations with insiders and outsiders;
• Ability to generate adequate resources.
Process of Organizing
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Organizing essentially consists of establishing a division of labor. The managers divide the work
among individuals and group of individuals. And then they coordinate the activities of such individuals
and groups to extract the best outcome.
Organizing also involves delegating responsibility to the employees along with the authority to
successfully accomplish these tasks and responsibilities. One major aspect of organizing is delegating
the correct amounts of responsibilities and authority.
Now, as one of the most important functions of management, organizing follows a meticulous process.
The following are the steps in the process of organizing,
Browse more Topics under Organising
 Intro to Organisation and its Importance

 Types of Organisation
 Organisation Structure
 Delegation
 Decentralisation
1] Identifying the Work
The obvious first step in the process of organizing is to identify the work that has to be done by the
organization. This is the ground level from which we will begin. So the manager needs to identify the
work and the tasks to be done to achieve the goals of the organization.
Identification of the work helps avoid miscommunication, overlapping of responsibilities and wastage
of time and effort.
2] Grouping of Work
For the sake of a smooth flow of work and smooth functioning of the organization, similar tasks and
activities should be grouped together. Hence we create departments within the company and divisions
within each department. Such an organization makes the functioning of the company way more
systematic.
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Depending on the size of the organization and the volume of work, an organization can have several
department and divisions. And every department has a manager representing them at the top-level of
the management.
In smaller organizations sometimes these departments are clubbed together under one manager.
3] Establish Hierarchy
The next step in the process of organizing is to establish the reporting relationships for all the
individual employees of the company. So a manager establishes the vertical and horizontal
relationships of the company.
This enables the evaluation and control over the performances of all the employees in a timely manner.
So if rectifications need to be made, they can be made immediately.
4] Delegation of Authority
Authority is basically the right an individual has to act according to his wishes and extract obedience
from the others. So when a manager is assigned certain duties and responsibilities, he must also be
delegated authority to carry out such duties effectively.
If we only assign the duties, but no authority he will not be able to perform the tasks and activities that
are necessary. So we must always assign authority and clearly specify the boundaries of the duties and
the authority which has been delegated.
5] Coordination
Finally, the manager must ensure that all activities carried out by various employees and groups are
well coordinated. Otherwise, it may lead to conflicts between employees, duplication of work and
wastage of time and efforts. He must ensure all the departments are carrying out their specialized tasks
and there is harmony in these activities. The ultimate aim is to ensure that the goal of the organization
is fulfilled.
Organizational structure Functional organization
“An organizational structure in which staff is grouped by areas of specialization, and the project
manager has limited authority to assign work and apply resources.”
A functional structure divides the organization into departments based on their functions. Each is
headed by a functional manager, and employees are grouped according to their roles. Functional
managers typically have experience in the roles they supervise, ensuring that employees are using their
skills effectively. A functional structure that maximizes department expertise helps companies achieve
their business objectives.
Under a functional organizational structure, employees are classified according to their function in an
organizational chart. This chart shows the role hierarchy (e.g., president, vice president, finance, sales,
customer service, administration, etc.).
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Each department has a head responsible for it, helping the organization control the consistency and
quality of its performance. These department heads are skilled, experienced in the same work, and
perform at a high level; accordingly, productivity is exceptional in a functional structure.
Functional departments are sometimes referred to as “silos.” This means each department is vertical
and disconnected from the others, and communication flows straight up through the department heads
to top management.
Here, all authority remains with the functional manager. Usually, a project manager has a minimal or
even non-existent role in functional organizations. Project managers will need the functional
manager’s approval to use resources and may operate as a coordinator or an expediter.
The functional organization structure works well in businesses dealing with operations, like
manufacturing industries.
The strengths of functional organizational structures are specialization and efficiency.
Small companies with a limited number of products use this structure. Their employees are highly
skilled due to repetitive work, which means they feature high efficiency and superior performance.
Since employees are grouped according to their skills and experience, they gain more knowledge and
expertise and become specialists, making them highly efficient and productive. They will perform
quickly, with less chance of error, and their output will be high quality.
The key weakness of functional structure is insufficient cooperation among different departments and
management problems.
Although each department is efficient and productive, the lack of coordination among functional units
or departments slows productivity. They often inadvertently compete with each other, putting their
department’s interests above the organization’s.
This causes low employee morale, affecting the productivity level, which can fall behind the target.
Communication in functional organizations is formal and mostly from top to bottom. The top
management makes decisions and informs the lower-level employees. They often change procedures
and modify the work environment without taking input from employees on the ground.
This negatively affects the morale of the employees and lowers efficiency, ultimately setting back
innovation.
Advantages of the Functional Organizational Structure
The following are several benefits of the functional organizational structure:
 Employees are grouped by their knowledge and skills, allowing them to achieve high
performance.
 Their roles and responsibilities are fixed, facilitating easy accountability for the work.
 Economics
The hierarchy is clear and transparent. This reduces the number of communication channels.
 Communication is frictionless within the department.
 Work is not duplicated, as all departments have defined responsibilities.
 Employees feel secure; they perform well without fear or uncertainty.
 Because of job security, employees tend to be loyal to the organization.
 Employees have a clear career growth path.
 Cooperation is excellent within the department.
Disadvantages of the Functional Organizational Structure
The following are a few disadvantages of the functional organizational structure:
 Employees may feel bored because of repetitive work. This monotony causes a loss of
enthusiasm.
 Conflicts may arise if the performance appraisal system is not properly managed.
 A highly skilled employee costs more.
 Departments develop an insular, self-interested mentality. Functional managers pay more
attention to their own departments and ignore others’ interests.
 Communication is weak among the departments. This causes poor inter-department
coordination, affecting flexibility and innovation.
 A lack of teamwork among different departments slows innovation.
 Employees may have little concern or curiosity about events outside their group.
 The rigid functional structure makes adapting to changes difficult and slow.
 Decision-making is sluggish due to the bureaucratic hierarchy.
 Functional managers can make decisions without consulting team members. This is not good for
company morale.
 Personal bias may affect employee morale. For example, an employee may feel demoralized
when a low-performing employee is promoted over them.
 As the organization grows larger, managing functional areas becomes challenging. Each
department may start behaving like a small company, i.e., the “silo” effect.
 Functional departments may be more committed to departmental goals rather than organizational
goals.
 Employees do not learn new skills, and their roles don’t often change, causing stagnation.
Product Organization
When it comes to corporate structures, a product organization prioritizes customer demands and puts
the product first. Product-led companies, the de facto strategy for digital-first SaaS businesses, place a
premium on the user experience above all other factors.
Historically, organizations may have relied on the ability of a particular sales team or the efficiency of
a specific marketing approach when it came to acquiring new customers or users. And while these still
have a place in the product organization, the focus of the dialogue still focuses on the product itself.

Economics
The product is the primary vehicle for client acquisition, growth, and acceptance, which are critical
components of the customer experience.
What Is The Organizational Structure Of A Product Organization?
The most successful way to structure a product organization is to match it with the product strategy.
This is typically measured by the number of products developed by a business. Assume the entire
company is focused on a single development. It makes a lot more sense to organize around a
centralized structure, with jobs such as CEO, CTO, and CPO all serving the needs of a single product
organization.
A corporation that develops many goods might profit from establishing many business units, which
would report to the chief executive officer. The chief technology officer (CTO) may sit alongside
business unit leaders in this configuration to guarantee technological consistency across the product
line.
The following are some popular organizational structures for product teams:
 Small teams: A small group may require a single product manager to oversee the team’s
activities.
 Medium teams: Teams with many people in each department may require the services of a
few intermediate product managers. These managers then communicate with the division’s chief
product officer or vice president.
 Large teams: Large corporations may group a variety of items. Product managers may
report to product directors, who report to the chief product officer or vice president.
How Does One Go About Establishing A Product Organization?
Before establishing a product organization, a corporation must first examine its current organizational
structure and assets. For instance, a business already has an internal information technology system
that includes APIs and cloud storage. This may provide an opportunity to leverage these assets for
customer-facing products and services. Developing a product organization begins with a shift in
perspective and a straightforward question: How does our company structure benefit our product?
Structure: Consider the advantages and disadvantages of each product organization structure and
select the most appropriate one for your business. Consider the number of products & the market
segments engaged. The product manager must assess the primary drivers of product sales & the
production needs for each product.
Roles and Responsibilities: Your company’s size may affect managing your product organization
structure. Determine the number of managers your organization requires to maintain a streamlined
communications system without compromising the leadership essential to realize the potential of each
department. You could assign various divisions to single management on a product team, but keep
each manager’s skills in mind. Your product managers’ success is contingent upon their ability to
make sound judgments and deliver actionable feedback.

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Evaluate outcomes: It is critical to have systems to evaluate performance, even more so when
establishing a new product organization structure. Managers should create regular reports and track
key indicators to assess whether your product reaches more people and offers more value to customers.
Additionally, you may do internal research to ascertain how the staff has adapted.
Additional factors: Once you’ve determined your organizational structure and leadership
responsibilities, determine which personnel are assigned to which projects. Your objective is to group
team members whose collaboration will be most productive. Consider the following factors:
 Product requirements: Each product has distinct development requirements. Consider your
best marketers for teams developing new products and your best inventors for teams developing
products with higher competition.
 Background: Take what your employees have accomplished thus far with your company
and past companies. Align knowledge with the items that will benefit the most.
 Teamwork: Utilize your knowledge of your colleagues’ working connections to help retain
successful collaborators.
 Diversification: Diverse teams frequently deliver superior results. Consider the potential
contributions of each team member based on their experience, education, and talents. Larger
organizations may have personnel spread across the country or in multiple locations. Evaluate
whether remote cooperation is necessary and whether any staff is interested in relocating.
Memorandum of Association (MOA) and Articles of Association (AOA) :-
Memorandum of Association (MOA) is a document that contains all the fundamental data which are
required for the company incorporation. Articles of Association (AOA) is a document containing all
the rules and regulations that govern the company.
The step of Memorandum of Association (MOA) and Articles of Association (AOA) comes in when
you wish to take your business as a separate entity and register it as a private or public limited or if you
are incorporating it.
Memorandum of Association (MOA)
The MOA is considered as the supreme document of the Company. The MOA has to be drafted very
carefully as the AOA also has to comply with MOA. Moreover, the Company cannot go against
anything that is mentioned in the MOA.The Memorandum of Association (MOA) has the following
information in it:
1. Name Clause – Name of the registered entity (Business/Company name)

2. Registered Office Clause – Registered office address
3. Object Clause – Aims and objectives of the Company
4. The Association Clause – Information about its first shareholders and number of shares allocated
to each of them
5. The Capital Clause – Share capital, minimum paid-up capital, etc
6. The Liability Clause – Clause about its limited liability. State the liability of each member
Economics
Articles of Association (AOA)
The Articles of Association (AOA) is to draft the rules and regulations that the company has to follow
and the layout of the internal management of the Company.
Moreover, AOA should be drafted in such a way that it should not violate anything that is mentioned
in the MOA. The AOA sets the structure under which the Company is to be administered. The
following are the points that are to be described in the AOA:
1. Allocation of shares and the manner that how shares have to be handled
2. Voting rights of members
3. List of Intellectual Property Rights
4. Procedure to elect the Chairman and his voting rights
5. List of Directors, including first of directors or directors for life, their appointment,
remuneration, qualifications, powers, and proceedings of Board of Directors’ meetings
6. Dividends and reserves (Dividing the profits)
7. Alteration in Capital
8. General Meetings and proceeding at General Meetings
9. Board of Directors and their powers
10. How accounts and Audits will be managed
11. Borrowing Powers
12. How the Company can be dissolved
13. AOA is the next important document after the MOA.
14.
15. Thus, review your Board Meeting Minutes immediately after the meeting. When your board
meeting minutes are complete and finish, make sure to distribute it to board members as soon as
possible.
16. Once the members approve minutes by vote during the board meeting, they become part of the
official record of the organization.
Difference Between MOA and AOA

Particulars MOA AOA
Defines rules and regulations of the
Defines the company’s constitution, company. It also defines the duties,
Description powers, objectives, and constraints of the powers, liabilities and rights of
organisation. individuals associated with the
organisation.
It contains the provisions as per the
Contents It contains the five mandatory clauses.
requirements of the organisation.

Economics The drafting of AOA is mandatory.
It is a mandatory document that must be
Filing at the time However, the filing of AOA with the
filed with the ROC at the time of company
of registration ROC is optional at the time of
registration.
company registration.
Importance and MOA is a supreme legal document and AOA is subordinate to the MoA and
position subordinate to the Companies Act. the Companies Act.
Any provision in the AOA that
The relationship MOA is a dominant document that helps in
contradicts the MoA is considered as
between the two the drafting of the AoA.
null and void.
An alteration can be made in the MOA only
after passing a special resolution in the An alteration in the AOA can be made
Alteration Annual General Meeting (AGM) and after by passing a special resolution in the
obtaining prior approval from the Central Annual General Meeting (AGM).
Government.
Retrospective The MOA cannot be amended with The AOA can be amended
amendment retrospective effect. retrospectively.
Types of Organisational Structures: their Advantages and Disadvantages!
All managers must bear that there are two organisations they must deal with-one formal and the other
informal.
The formal organisation in usually delineated by an organisational chart and job descriptions. The
official reporting relationships are clearly known to every manager.
Alongside the formal organisation exists are informal organisation which is a set of evolving
relationships and patterns of human interaction within an organisation that are not officially prescribed.
Formal organisational structures are categorised as:
(i) Line organisational structure.
(ii) Staff or functional authority organisational structure.
(iii) Line and staff organisational structure.
(iv) Committee organisational structure.
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(v) Divisional organisational structure.
(vi) Project organisational structure.
(vii) Matrix organisational structure and
(viii) Hybrid organisational structure.
These organisational structures are briefly described in the following paragraphs:
1. Line Organisational Structure:
A line organisation has only direct, vertical relationships between different levels in the firm. There are
only line departments-departments directly involved in accomplishing the primary goal of the
organisation. For example, in a typical firm, line departments include production and marketing. In a
line organisation authority follows the chain of command.
Exhibit 10.3 illustrates a single line organisational structure.
Features:
Has only direct vertical relationships between different levels in the firm.
Advantages:
1. Tends to simplify and clarify authority, responsibility and accountability relationships
ADVERTISEMENTS:
2. Promotes fast decision making

Economics
3. Simple to understand.
Disadvantages:
1. Neglects specialists in planning
2. Overloads key persons.
Some of the advantages of a pure line organisation are:
(i) A line structure tends to simplify and clarify responsibility, authority and accountability
relationships. The levels of responsibility and authority are likely to be precise and understandable.
(ii) A line structure promotes fast decision making and flexibility.
(iii) Because line organisations are usually small, managements and employees have greater closeness.
However, there are some disadvantages also. They are:
(i) As the firm grows larger, line organisation becomes more ineffective.
(ii) Improved speed and flexibility may not offset the lack of specialized knowledge.
(iii) Managers may have to become experts in too many fields.
(iv) There is a tendency to become overly dependent on the few key people who an perform numerous
jobs.
2. Staff or Functional Authority Organisational Structure
The jobs or positions in an organisation can be categorized as:
(i) Line position:
a position in the direct chain of command that is responsible for the achievement of an organisation’s
goals and
(ii) Staff position:
A position intended to provide expertise, advice and support for the line positions.
The line officers or managers have the direct authority (known as line authority) to be exercised by
them to achieve the organisational goals. The staff officers or managers have staff authority (i.e.,
authority to advice the line) over the line. This is also known as functional authority.
An organisation where staff departments have authority over line personnel in narrow areas of
specialization is known as functional authority organisation. Exhibit 10.4 illustrates a staff or
functional authority organisational structure.
Economics
In the line organisation, the line managers cannot be experts in all the functions they are required to
perform. But in the functional authority organisation, staff personnel who are specialists in some fields
are given functional authority (The right of staff specialists to issue orders in their own names in
designated areas).
The principle of unity of command is violated when functional authority exists i.e., a worker or a group
of workers may have to receive instructions or orders from the line supervisor as well as the staff
specialist which may result in confusion and the conflicting orders from multiple sources may lead to
increased ineffectiveness. Some staff specialists may exert direct authority over the line personnel,
rather than exert advice authority (for example, quality control inspector may direct the worker as well
as advise in matters related to quality).
While this type of organisational structure overcomes the disadvantages of a pure line organisaional
structure, it has some major disadvantages:
They are: (i) the potential conflicts resulting from violation of principle of unity of command and (ii)
the tendency to keep authority centralized at higher levels in the organisation.
3. Line and Staff Organisational Structure:
Most large organisations belong to this type of organisational structure. These organisations have
direct, vertical relationships between different levels and also specialists responsible for advising and
assisting line managers. Such organisations have both line and staff departments. Staff departments
provide line people with advice and assistance in specialized areas (for example, quality control
advising production department).

Economics
Exhibit 10.5 illustrates the line and staff organisational chart. The line functions are production and
marketing whereas the staff functions include personnel, quality control, research and development,
finance, accounting etc. The staff authority of functional authority organisational structure is replaced
by staff responsibility so that the principle of unity of command is not violated.
Three types of specialized staffs can be identified:
(i) Advising,
(ii) Service and
(iii) Control.
Some staffs perform only one of these functions but some may perform two or all the three functions.
The primary advantage is the use of expertise of staff specialists by the line personnel. The span of
control of line managers can be increased because they are relieved of many functions which the staff
people perform to assist the line.

Economics
Some advantages are:
(i) Even through a line and staff structure allows higher flexibility and specialization it may create
conflict between line and staff personnel.
(ii) Line managers may not like staff personnel telling them what to do and how to do it even though
they recognize the specialists’ knowledge and expertise.
(iii) Some staff people have difficulty adjusting to the role, especially when line managers are reluctant
to accept advice.
(iv) Staff people may resent their lack of authority and this may cause line and staff conflict.
Features:
1. Line and staff have direct vertical relationship between different levels.
2. Staff specialists are responsible for advising and assisting line managers/officers in specialized
areas.
3. These types of specialized staff are (a) Advisory, (b) Service, (c) Control e.g.,
(a) Advisory:
Management information system, Operation Research and Quantitative Techniques, Industrial

Engineering, Planning etc
(b) Service:
Maintenance, Purchase, Stores, Finance, Marketing.
(c) Control:
Quality control, Cost control, Auditing etc. Advantages’
(i) Use of expertise of staff specialists.
(ii) Span of control can be increased
(iii) Relieves line authorities of routine and specialized decisions.
(iv) No need for all round executives.
Disadvantages:
(i) Conflict between line and staff may still arise.
(ii) Staff officers may resent their lack of authority.

Economics
(iii) Co-ordination between line and staff may become difficult.
Committee Organisational Structure Features:
(a) Formed for managing certain problems/situations
(b) Are temporary decisions.
Advantages:
1. Committee decisions are better than individual decisions
2. Better interaction between committee members leads to better co-ordination of activities
3. Committee members can be motivated to participate in group decision making.
4. Group discussion may lead to creative thinking.
Disadvantages:
1. Committees may delay decisions, consume more time and hence more expensive.
2. Group action may lead to compromise and indecision.
3. ‘Buck passing’ may result.
4. Divisional Organisational Structure:
In this type of structure, the organisation can have different basis on which departments are formed.
They are:
(i) Function,
(ii) Product,
(iii) Geographic territory,
(iv) Project and
(iv) Combination approach.
Exhibit 10.6 illustrates organisational structures formed based on the above basis of departmentation.

Economics
5. Project Organisational Structure:
The line, line and staff and functional authority organisational structures facilitate establishment and
distribution of authority for vertical coordination and control rather than horizontal relationships. In
some projects (complex activity consisting of a number of interdependent and independent activities)
work process may flow horizontally, diagonally, upwards and downwards. The direction of work flow
depends on the distribution of talents and abilities in the organisation and the need to apply them to the

Economics
problem that exists. The cope up with such situations, project organisations and matrix organisations
have emerged.
A project organisation is a temporary organisation designed to achieve specific results by using teams
of specialists from different functional areas in the organisation. The project team focuses all its
energies, resources and results on the assigned project. Once the project has been completed, the team
members from various cross functional departments may go back to their previous positions or may be
assigned to a new project. Some of the examples of projects are: research and development projects,
product development, construction of a new plant, housing complex, shopping complex, bridge etc.
Exhibit 10.7 illustrates a project organisational structure.
Feature:
Temporary organisation designed to achieve specific results by using teams of specialists from
different functional areas in the organisation.
Importance of Project Organisational Structure:
Project organisational structure is most valuable when:
(i) Work is defined by a specific goal and target date for completion.
(ii) Work is unique and unfamiliar to the organisation.
(iii) Work is complex having independent activities and specialized skills are necessary for
accomplishment.
(iv) Work is critical in terms of possible gains or losses.

(v) Work is not Economics
repetitive in nature.
Characteristics of project organisation:
1. Personnel are assigned to a project from the existing permanent organisation and are under the
direction and control of the project manager.
2. The project manager specifies what effort is needed and when work will be performed whereas the
concerned department manager executes the work using his resources.
3. The project manager gets the needed support from production, quality control, engineering etc. for
completion of the project.
4. The authority over the project team members is shared by project manager and the respective
functional managers in the permanent organisation.
5. The services of the specialists (project team members) are temporarily loaned to the project manager
till the completion of the project.
6. There may be conflict between the project manager and the departmental manager on the issue of
exercising authority over team members.
7. Since authority relationships are overlapping with possibilities of conflicts, informal relationships
between project manager and departmental managers (functional managers) become more important
than formal prescription of authority.
8. Full and free communication is essential among those working on the project.
6. Matrix Organisational Structure:
It is a permanent organisation designed to achieve specific results by using teams of specialists from
different functional areas in the organisation. The matrix organisation is illustrated in Exhibit 10.8.
Feature:
Superimposes a horizontal set of divisions and reporting relationships onto a hierarchical functional
structure
Advantages:
1. Decentralised decision making.
2. Strong product/project co-ordination.
3. Improved environmental monitoring.
4. Fast response to change.

Economics
5. Flexible use of resources.
6. Efficient use of support systems.
Disadvantages:
1. High administration cost.
2. Potential confusion over authority and responsibility.
3. High prospects of conflict.
4. Overemphasis on group decision making.
5. Excessive focus on internal relations.
This type of organisation is often used when the firm has to be highly responsive to a rapidly changing
external environment.
In matrix structures, there are functional managers and product (or project or business group)
managers. Functional manager are in charge of specialized resources such as production, quality
control, inventories, scheduling and marketing. Product or business group managers are incharge of
one or more products and are authorized to prepare product strategies or business group strategies and
call on the various functional managers for the necessary resources.
The problem with this structure is the negative effects of dual authority similar to that of project
organisation. The functional managers may lose some of their authority because product managers are
given the budgets to purchase internal resources. In a matrix organisation, the product or business
group managers and functional managers have somewhat equal power. There is possibility of conflict
and frustration but the opportunity for prompt and efficient accomplishment is quite high.
Economics Structure:
7. Hybrid Organisational
Exhibit 10.9 (a) illustrates the hybrid organisational structure.
Exhibit 10.9 (b) illustrates a combination structure
Advantages:
1. Alignment of corporate and divisional goals.
2. Functional expertise and efficiency.
3. Adaptability and flexibility in divisions.
Disadvantages:
1. Conflicts between corporate departments and units.
2. Excessive administration overhead.
3. Slow response to exceptional situations.
Uses:
Used in organisations that face considerable environmental uncertainty that can be met through a
divisional structure and that also required functional expertise or efficiency

Economics
This type of structure is used by multinational companies operating in the global environment, for
example, International Business Machines USA. This kind of structure depends on factors such as
degree of international orientation and commitment. Multinational corporations may have their
corporate offices in the country of origin and their international divisions established in various
countries reporting to the CEO or president at the headquarters. The international divisions or foreign
subsidiaries may be grouped into regions such as North America, Asia, Europe etc. and again each
region may be subdivided into countries within each region.
While the focus is on international geographic structures, companies may also choose functional or
process or product departmentation in addition to geographic pattern while at the head quarter’s the
departmentation may be based on function.
The Informal Organisation:
An informal organisation is the set of evolving relationships and patterns of human interaction within
an organisation which are not officially presented. Alongside the formal organisation, an informal
organisation structure exists which consists of informal relationships created not by officially
designated managers but by organisational members at every level. Since managers cannot avoid these
informal relationships, they must be trained to cope with it
The informal organisation has the following characteristics
(i) Its members are joined together to satisfy their personal needs (needs for affiliation, friendship etc.)
(ii) It is continuously changing:
The informal organisation is dynamic.
(iii) It involves members from various organisational levels.
(iv) It is affected by relationship outside the firm.
(v) It has a pecking order: certain people are assigned greater importance than others by the informal
group.
Even though an informal organisational structure does not have its own formal organisational chart, it
has its own chain of command:
Benefits of Informal Organisation:
(i) Assists in accomplishing the work faster.
(ii) Helps to remove weakness in the formal structure.
(iii) Lengthens the effective span of control.
(iv) Compensation for violations of formal organisational principles.

(v) Provides an Economics
additional channel of communication.
(vi) Provides emotional support for employees.
(vii) Encourages better management.
Disadvantages of informal organisation:
(i) May work against the purpose of formal organisation.
(ii) Reduces the degree of predictability and control.
(iii) Reduces the number of practical alternatives.
(iv) Increases the time required to complete activities.
Role of Information Systems in Organizations:-

Any business, big or small, must have a system in place to collect, process, store and share data. In the
past, these tasks required a lot of time and paperwork. Today, companies use modern technology to
streamline and automate these operations. Information systems are now playing a crucial role in data
processing and decision making. When used correctly, they can positively impact an organization's
overall performance and revenue.
What Is an Information System?
At the most basic level, an information system (IS) is a set of components that work together to
manage data processing and storage. Its role is to support the key aspects of running an organization,
such as communication, record-keeping, decision making, data analysis and more. Companies use this
information to improve their business operations, make strategic decisions and gain a competitive
edge.
Information systems typically include a combination of software, hardware and telecommunication

networks. For example, an organization may use customer relationship management systems to gain a
better understanding of its target audience, acquire new customers and retain existing clients. This
technology allows companies to gather and analyze sales activity data, define the exact target group of
a marketing campaign and measure customer satisfaction.
The Benefits of Information Systems
Modern technology can significantly boost your company's performance and productivity. Information
systems are no exception. Organizations worldwide rely on them to research and develop new ways to
generate revenue, engage customers and streamline time-consuming tasks.
With an information system, businesses can save time and money while making smarter decisions. A
company's internal departments, such as marketing and sales, can communicate better and share
information more easily.

Economics
Since this technology is automated and uses complex algorithms, it reduces human error. Furthermore,
employees can focus on the core aspects of a business rather than spending hours collecting data,
filling out paperwork and doing manual analysis.
Thanks to modern information systems, team members can access massive amounts of data from one
platform. For example, they can gather and process information from different sources, such as
vendors, customers, warehouses and sales agents, with a few mouse clicks.
Uses and Applications
There are different types of information systems and each has a different role. Business intelligence
(BI) systems, for instance, can turn data into valuable insights.
This kind of technology allows for faster, more accurate reporting, better business decisions and more
efficient resource allocation. Another major benefit is data visualization, which enables analysts to
interpret large amounts of information, predict future events and find patterns in historical data.
Organizations can also use enterprise resource planning (ERP) software to collect, manage and analyze
data across different areas, from manufacturing to finance and accounting. This type of information
system consists of multiple applications that provide a 360-degree view of business operations.
NetSuite ERP, PeopleSoft, Odoo and Intacct are just a few examples of ERP software.
Like other information systems, ERP provides actionable insights and helps you decide on the next
steps. It also makes it easier to achieve regulatory compliance, increase data security and share
information between departments. Additionally, it helps to ensure that all of your financial records are
accurate and up-to-date.
In the long run, ERP software can reduce operational costs, improve collaboration and boost your
revenue. Nearly half of the companies that implement this system report major benefits within six
months.
At the end of the day, information systems can give you a competitive advantage and provide the data
you need to make faster, smarter business decisions. Depending on your needs, you can opt for
transaction processing systems, knowledge management systems, decision support systems and more.
When choosing one, consider your budget, industry and business size. Look for an information system
that aligns with your goals and can streamline your day-to-day operations.
Concepts of Information System:-
1. Data represents a fact or an event statement unrelated to other things. Data is generally used
regarding hard facts. This can be a mathematical symbol or text used to identify, describe, or
represent something like temperature or a person. The data simply exists and has no meaning
beyond its existence (in itself). It can exist in any form, usable or not. The data exists in different
formats, such as text, image, sound, or even video.
2. Information is data combined with meaning. Information embodies the understanding of a
relationship as the relationship between cause and effect . Ex: The temperature dropped 15
Economics
degrees, then it started to rain. A temperature reading of 100 can have different meanings when
combined with the term Fahrenheit or with the term Celsius. More semantics can be added if
more context for the temperature read is added, such as the fact that this temperature concerns a
liquid or a gas or the seasonal norm of 20°. In other words, information is data that has meaning
through relational connection. According to Ackoff, information is useful data; it provides
answers to the questions: “who,” “what,” “where,” and “when.”
3. Knowledge can be seen as information combined with experience, context, and interpretation.
Knowledge constitutes an additional semantic level derived from information via a process.
Sometimes this process is observational. Ackoff defines it as applying data and information;
knowledge provides answers to the question “how” For example, what happens in cold weather
for aircraft managers? Observational knowledge engineers interpret cold by its impact, which is
the ice that can form on an aircraft by reducing aerodynamic thrust and potentially hampering
the performance of its control surfaces.
IF temperature < = 0° C THEN cold = true;
Cold IF == right THEN notify personnel to remove ice from aircraft.
Indeed, knowledge is the appropriate collection of information such that it intends to be useful.
Knowledge is a deterministic process. Memorization of information leads to knowledge. Knowledge
represents a pattern and provides a high level of predictability regarding what is being described or will
happen next.
Ex: If the humidity is very high and the temperature drops drastically, the atmosphere is unlikely to
hold the humidity so that it rains.
This knowledge has a useful meaning, but its integration in a context will infer new knowledge. For
example, a student memorizes or accumulates knowledge of the multiplication Table. A student can
answer 2 × 2 because this knowledge is in the multiplication table. Nevertheless, when asked for 1267
× 300, he cannot answer correctly because he cannot dip into the multiplication table. To answer such
a question correctly requires a real cognitive and analytical capacity that exists in the next level …
comprehension. In computer jargon, most of the applications we use (modeling, simulation, etc.) use
stored knowledge.
2. System definition
The system is an aggregated “whole” where each component interacts with at least one other
component of the system. The components or parts of a system can be real or abstract.
All system components work toward a standard system goal. A system can contain several subsystems.
It can be connected to other systems.
A system is a collection of elements or components that interact to achieve goals. The elements
themselves and the relationships between them determine how the system works. Systems have inputs,
processing mechanisms, outputs, and feedback mechanisms. A system processes the input to create the
output.

 Economics
Input is the activity of collecting and capturing data.
 Processing involves the transformation of inputs into outputs such as computation, for example.
 Output is about producing useful information, usually in the form of documents and reports. The
output of one system can become the input of another system. For example, the output of a
system, which processes sales orders, can be used as input to a customer’s billing system.
Computers typically produce output to printers and display to screens. The output can also be
reports and documents written by hand or produced manually.
 Finally, feedback or feedback is information from the system used to modify inputs or
treatments as needed.
3. Information system definition
An information system (IS) is a set of interrelated components that collect, manipulate, store and
disseminate information and provide a feedback mechanism to achieve a goal. The feedback
mechanism helps organizations achieve their goals by increasing profits, improving customer service,
and supporting decision-making and control in organizations
Companies use information systems to increase revenues and reduce costs.
In organizations, information systems are structured around four essential elements, proposed in the
1960s by Harold Leavitt.The pattern is known as the “Leavitt Diamond.”
1. Technology: The IT (Information Technology) of an IS includes the hardware, software, and

telecommunications equipment used to capture, process, store and disseminate information.
Today, most IS are IT-based because modern IT enables efficient operations execution and
effective management in all sizes.
2. Task: activities necessary for the production of a good or service. These activities are supported
by the flow of material, information, and knowledge between the different participants.
3. Person: The people component of an information system encompasses all the people directly
involved in the system. These people include the managers who define the goals of the system,
the users, and the developers.
4. Structure: The organizational structure and information systems component refers to the
relationship between individuals people components. Thus, it encompasses hierarchical
structures, relationships, and systems for evaluating people.

Figure 1. Economics
Leavitt’s diamond: A socio-technical view of IS.
4. Typology of information systems
A company has systems to support the different managerial levels. These systems include transaction
processing systems, management information systems, decision support systems, and dedicated
business intelligence systems.
Companies use information systems so that accurate and up-to-date information is available when
needed [5].
Within the same organization, executives at different hierarchy levels have very different information
requirements, and different types of information systems have evolved to meet their needs. A common
approach for examining the types of information systems used within organizations is to classify them
according to their roles at different organizational structure levels, and this approach is called a vertical
approach. Indeed, the organization is considered a management pyramid at four levels:
 On the lowest level, staff perform routine day-to-day operations such as selling goods and
issuing payment receipts.
 Operational management in which managers are responsible for overseeing transaction control
and deal with issues that may arise.
 Tactical management, which has the prerogative of making decisions on budgets, setting
objectives, identifying trends, and planning short-term business activities.
 Strategic management is responsible for defining its long-term objectives and positioning
concerning its competitors or its industry.

Economics
Figure 2.
Information Systems types according to managerial level.
4.1 Transaction processing system (TPS)
At the operational level, managers need systems that keep track of the organization for necessary
activities and operations, such as sales and material flow in a factory. A transaction processing system
is a computer system that performs and records the routine (daily) operations necessary for managing
affairs, such as keeping employee records, payroll, shipping merchandise, keeping records, accounting
and treasury.
At this level, the primary purpose of systems is to answer routine questions and monitor transactions
flow through the organization.
At the operational level, tasks, resources, and objectives are predefined and highly structured. The
decision to grant credit to a customer, for example, is made by a primary supervisor according to
predefined criteria. All that needs to be determined is whether the client meets the criteria.
4.2 Management information systems (MIS)
Middle managers need systems to help with oversight, control, decision making, and administrative
activities. The main question that this type of system must answer is: is everything working correctly?

Economics
Its role is to summarize and report on essential business operations using data provided by transaction
processing systems. Primary transaction data is synthesized and aggregated, and it is usually presented
in reports produced regularly.
4.3 Decision support systems (DSS)
DSS supports decision-making for unusual and rapidly evolving issues, for which there are no fully
predefined procedures. This type of system attempts to answer questions such as: What would impact
production schedules if we were to double sales for December? What would the level of Return on
investment be if the plant schedule were delayed by more than six months?
While DSSs use internal information from TPS and MIS systems, they also leverage external sources,
such as stock quotes or competitor product prices. These systems use a variety of models to analyze the
data. The system can answer questions such as: Considering customer’s delivery schedule and the
freight rate offered, which vessel should be assigned, and what fill rate to maximize profits? What is
the optimum speed at which a vessel can maximize profit while meeting its delivery schedule?
4.4 Executive support system (ESS)
ESS helps top management make decisions. They address exceptional decisions requiring judgment,
assessment, and a holistic view of the business situation because there is no procedure to be followed
to resolve a given issue at this level.
ESS uses graphics and data from many sources through an interface that senior managers easily
understand. ESS is designed to integrate data from the external environment, such as new taxes or
competitor data, and integrate aggregate data from MIS and DSS. ESSs filter, synthesize and track
critical data. Particular attention is given to displaying this data because it contributes to the rapid
assimilation of these top management figures. Increasingly, these systems include business intelligence
analysis tools to identify key trends and forecasts.
5. Decision making and information systems
Decision-making in companies is often associated with top management. Today, employees at the
operational level are also responsible for individual decisions since information systems make
information available at all company levels.
So decisions are made at all levels of the company.
Although some of these decisions are common, routine, and frequent, the value of improving any
single decision may be small, but improving hundreds or even thousands of “small” decisions can add
value to the business.
Not all situations that require decisions are the same. While some decisions result in actions that
significantly impact the organization and its future, others are much less important and play a relatively
minor role. A decision’s impact is a criterion that can differentiate between decision situations and the
degree of the decision’s structuring. Many situations are very structured, with well-defined entrances
and exits. For example, it is relatively easy to determine the amount of an employee’s pay if we have
the appropriate Economics
input data (for example, the number of hours worked and their hourly wage rate), and
all the rules of relevant decision (for example, if the hours worked during a week are more than 40,
then the overtime must be calculated), and so on. In this type of situation, it is relatively easy to
develop information systems that can be used to help (or even automate) the decision.
In contrast, some decision situations are very complex and unstructured, where no specific decision
rules can be easily identified. As an example, consider the following task: “Design a new vehicle that
is a convertible (with a retractable hardtop), has a high safety rating, and is esthetically pleasing to a
reasonably broad audience. No predefined solution to this task finalizing a design will involve many
compromises and require considerable knowledge and expertise.
Examples of Types of decisions, according to managerial level, are presented in Table 1.
Decision level Characteristics of decisions Examples of decisions

Decide whether or not to come into the market
Top Management Unstructured Approve the budget allocated to capital
Decide on long-term goals
Design a marketing plan
Intermediate management Semi-structured Develop a departmental budget
Design a website for the company
Determine the overtime hours
Determine the rules for stock replenishment
Operational management Structured
Grant credit to customers
Offer special offers to customers
Table 1.
Types of decisions according to managerial level.
Generally speaking, structured decisions are more common at lower levels of the organization, while
unstructured problems are more common at higher business levels.
The more structured the decision, the easier it is to automate. If it is possible to derive an algorithm
that can be used to make an efficient decision and the input data to the algorithm can be obtained at a
reasonable cost, it generally makes sense to automate the decision.
Davenport and Harris proposed a framework for the categorization of applications used for decision
automation. Most of the systems they describe include some expert systems, often combined with DSS
and/or EIS aspects. The categories they provided include Solution Configuration, Optimization of
Performance, Routing or Segmentation of Decisions, Business Regulatory Compliance, Fraud
Detection, Dynamic Forecasting, and Operational Control.

Many business Economics
decision situations are not very structured, and therefore cannot (or should not) be fully
automated.
5.1 A particular type of decision support system: geographic information systems
Data visualization tools allow users to see patterns and relationships in large amounts of data that
would be difficult to discern if the data had been presented in tabular form, for example.
Geographic Information Systems (GIS) helps decision-makers visualize issues requiring knowledge
about people’s geographic distribution or other resources. GIS software links the location data of
points, lines, and areas on a map. Some GIS have modeling capabilities to modify data and simulate
the impact of these modifications. For example, GIS could help the government calculate response
times to natural disasters and other emergencies or help banks identify the best replacement for
installing new branches or ATMs of tickets.
Geographic (or geospatial) information refers not only to things that exist (or are being planned) on
specific locations on the Earth’s surface but also to events such as traffic congestion, flooding, and
other events such as an open-air festival.
Its scope and granularity characterize this information:
 Location, extent, and coverage are essential aspects of geographic information.

 Granularity, for example, geometric information, can be concise or fuzzy depending on the
application.
GIS is used to capture, store, analyze, and visualize data that describes part of the Earth’s surface,
technical and administrative entities, and the results of geosciences, economics, and ecological
applications.
 It is a computer system with a database observing the spatial distribution of objects, activities, or
events described by points, lines, or surfaces.
 It is a comprehensive collection of tools for capturing, storing, extracting, transforming, and
visualizing real-world spatial data for applications.
 It is an information system containing all the data of the territory, the atmosphere, the surface of
the Earth, and the lithosphere, allowing the systematic capture, the update, the manipulation, and
the analysis of these data standardized reference framework.
 It is a decision support system that integrates spatial data into a problem-solving environment.
Other definitions of GIS exist depending on the point of view of application,a GIS can be considered
as
 A collection of spatial data with storage and retrieval functions

 A collection of algorithmic and functional tools
 A set of hardware and software components necessary for processing geospatial data
 A particular type of information technology
 A gold mine for answers to geospatial questions
 A model of spatial relations and spatial recognition.
Typically, a GISEconomics
provides functions for the storage and retrieval, interrogation and visualization,
transformation, geometric and thematic analysis of information.
Indeed, geographic/geospatial information is ubiquitous, as seen on mobile devices such as cell

phones, maps, satellite images, positioning and routing services, and even 3D simulations, gaining
popularity from increasingly essential segments of the consumers.
Technological advances in recent years have transformed classical GIS into new forms of geospatial
analysis tools, namely:
 Web-based and service-oriented approaches have led to a client–server architecture.

 Mobile technology has made GIS ubiquitous in smartphones, tablets, and laptops (opening up
new markets).
6. Information systems applications
IS applications cover functional areas and focus on the execution of business processes across the
enterprise, including all management levels.
There are several categories of business applications: Enterprise Resource Planning (ERP), Supply
Chain Management systems (SCM), Customer Relationship Management systems (CRM), electronic
commerce or e-commerce, Knowledge Management systems or KM, and Business Intelligence or BI.
The categories of business applications dealt with in this section cover all managerial levels since
KMS are mainly intended for top management (ESS), SCMs, CRMs, and BI for mid-level
management (MIS and DSS), ERP and e-commerce dedicated to the transactional level (TPS or basic
or operational).
However, it is useful to specify that some ERP systems, such as the global giant SAP, offer versions of
its software package covering these different categories, including SCM and CRM.
6.1 ERP, Enterprise resource planning
ERPs allow business processes related to production, finance and accounting, sales and marketing, and
human resources to be integrated into a single software system. Information that was previously
fragmented across many different systems is integrated into a single system with a single,
comprehensive database that multiple business stakeholders can use.
An ERP system centralizes an organization’s data, and the processes it applies are the processes that
the organization must adopt. When an ERP provider designs a module, it must implement the rules of
the associated business processes. ERP systems apply best management practices. In other words,
when an organization implements ERP, it also improves its management as part of ERP integration.
For many organizations, implementing an ERP system is an excellent opportunity to improve their
business practices and upgrade their software simultaneously. Nevertheless, integrating an ERP
represents a real challenge: Are the processes integrated into the ERP better than those currently used?
Furthermore, if the integration is booming, and the organization operates the same as its competitors,
how do you differentiate yourself?

Economics
ERPs are configurable according to the specificities of each organization. For organizations that want
to continue using their processes or even design new ones, ERP systems provide means for
customizing these processes. However, the burden of maintenance falls on the organizations
themselves in the case of ERP customization.
Organizations will need to consider the following decision carefully: should they accept the best
practice processes embedded in the ERP system or develop their processes? If the choice is ERP,
process customization should only concern processes essential to its competitive advantage.
6.2 E-commerce, electronic commerce
Electronic commerce is playing an increasingly important role in organizations with their customers.
E-commerce enables market expansion with minimal capital investment, improves the supply and
marketing of products and services. Nevertheless, there is still a need for universally accepted
standards to ensure the quality and security of information and sufficient telecommunications
bandwidth.
The three main categories of e-commerce are Business-to-Consumer (B2C), Business-to-Business

(B2B), and Consumer-to-Consumer (C2C).
 Business-to-Consumer (B2C) e-commerce involves the retailing of products and services to

individual customers. Amazon, which sells books, software, and music to individual consumers,
is an example of B2C e-commerce.
 Business-to-Business (B2B), e-commerce involves the sale of goods and services between
businesses. The ChemConnect website for buying and selling chemicals and plastics is an
example of B2B e-commerce.
 Consumer-to-Consumer (C2C), this type of e-commerce involves consumers selling directly to
consumers. For example, eBay, the giant web-based auction site, allows individuals to sell their
products to other consumers by auctioning their goods, either to the highest bidder or through a
fixed price.
6.3 SCM, Information systems for supply chain management
Information systems for the management of the supply chain or SCM make it possible to manage its
suppliers’ relations. These systems help suppliers and distributors share information about orders,
production, inventory levels, and delivery of products and services so that they can source, produce
and deliver goods and services efficiently.
The ultimate goal is to get the right amount of products from their suppliers at a lower cost and time.
Additionally, these systems improve profitability by enabling managers to optimize scheduling
decisions for procurement, production, and distribution.
Anomalies in the supply chain, such as parts shortages, underutilized storage areas, prolonged storage
of finished products, or high transportation cost, are caused by inaccurate or premature information.
For example, manufacturers may stock an excessive amount of parts because they do not know
precisely the dates of upcoming deliveries from suppliers. Alternatively, conversely, the manufacturer
Economics
may order a small number of raw materials because they do not have precise information about their
needs. These supply chain inefficiencies squander up to 25 percent of the company’s operating costs.
If a manufacturer has precise information on the exact number of units of the product demanded by
customers, on what date, and its exact production rate, it would be possible to implement a successful
strategy called “just in time” (just-in-time strategy). Raw materials would be received precisely when
production needed them, and finished products would be shipped off the assembly line with no need
for storage.
However, there are always uncertainties in a supply chain because many events cannot be predicted,
such as late deliveries from suppliers, defective parts or non-conforming raw materials, or even
breakdowns in the production process. To cope with these kinds of contingencies and keep their
customers happy, manufacturers often deal with these uncertainties by stocking more materials or
products than they need. The safety stock acts as a buffer against probable supply chain anomalies.
While managing excess inventory is expensive, a low stock fill rate is also costly because orders can be
canceled.
6.4 CRM, Information systems for customer relationship management
CRM aims to manage customer relationships by coordinating all business processes that deal with
customers’ sales and marketing. The goal is to optimize revenue, customer satisfaction, and customer
loyalty. This collected information helps companies identify, attract and retain the most profitable
customers, and provide better service to existing customers and increase sales.
The CRM captures and integrates the data of the company’s customers. It consolidates data, analyzes
it, and distributes the results to different systems and customer touchpoints throughout the company. A
point of contact (touchpoint, contact point) is a means of interaction with the customer, such as
telephone, e-mail, customer service, conventional mail, website, or even a sales store, by retail.
Well-designed CRM systems provide a single view of the company’s customers, which is useful for
improving sales and customer service quality. Such systems also provide customers with a single view
of the business regardless of their contact point or usage.
CRM systems provide data and analytical tools to answer these types of questions: “What is the value
of a customer to the business” “Who are the most loyal customers?” “Who are the most profitable
customers” and “What products are profitable customers buying?”
Businesses use the answers to these questions to acquire new customers, improve service quality,
support existing customers, tailor offerings to customer preferences, and deliver escalating services to
retain profitable customers.
6.5 KM, knowledge management
Some companies perform better than others because they know how to create, produce, and deliver
products and services. This business knowledge is difficult to emulate, is unique, and can be leveraged
and deliver long-term strategic benefits. Knowledge Management Systems or KMS enable
organizations to manage processes better to collect and apply knowledge and expertise. These systems
Economics
collect all the relevant knowledge and experiences in the company and make them available to
everyone to improve business processes and decision management.
Knowledge management systems can take many different forms, but the primary goals are: 1)
facilitating communication between knowledge workers within an organization, and 2) to make
explicit the expertise of a few and make it available to many.
Consider an international consulting firm, for example. The company employs thousands of
consultants across many countries. The consultancy team in Spain may be trying to resolve a client’s
problem, very similar to a consultancy team in Singapore that has already been solved. Rather than
reinventing the solution, it would be much more useful for the Spain team to use the Singapore team’s
knowledge.
One way to remedy this situation is to store case histories from which employees worldwide can access
(via the Internet) and search for cases (using a search engine) according to their respective needs. If the
case documentation is of good quality (accurate, timely, complete), the consultants will share and
benefit from each other’s experiences, and the knowledge gained.
Unfortunately, it is often difficult to get employees to contribute meaningfully to the knowledge base
(as they are probably more concerned with moving forward on their next engagements with customers
rather than documenting their past experiences). For such systems to have any chance of success, the
work organization must change, such as establishing a reward system for cases captured and well
documented.
6.6 BI, business intelligence
The term Business Intelligence (BI) is generally used to describe a type of information system
designed to help decision-makers learn about trends and identify relationships in large volumes of data.
Typically, BI software is used in conjunction with large databases or data warehouses. While the
specific capabilities of BI systems vary, most can be used for specialized reporting (e.g., aggregated
data relating to multiple dimensions), ad-hoc queries, and trend analysis.
As with knowledge management systems, the value of business intelligence systems can be hampered
in several ways. The quality of the data that is captured and stored is not guaranteed. Besides, the
database (or data warehouse) may lack essential data (for example, ice cream sales are likely to
correlate with temperature; without the temperature information, it may be difficult to identify why it
is. There has been an increase or decrease in sales of ice cream). A third challenge is the lack of
mastery of data analysts over the context of the organization’s operations, even if they are proficient in
BI software. In contrast, a manager has mastery of the organization but does not know how to use BI
software. As a result, it is common to have a team (a manager associated with a data analyst) to get the
most information (and/or knowledge) from a business intelligence system.
7. Information systems security
Unlike physical assets, the information does not necessarily disappear when it has been stolen. If an
organization holds confidential information such as a new manufacturing process, it may be uploaded
by an unauthorized person and remain available to the organization.
Economics
Exposing information to unauthorized personnel constitutes a breach of confidentiality.
Another type of system failure happens when the integrity of information is no longer guaranteed. In
other words, rather than unauthorized exposure of information, there are unauthorized changes of
information. A corporate website containing documentation on how to configure or repair its products
could suffer severe financial harm if an intruder could change instructions, leading to customers
misconfigure or even ruin the purchased product.
Finally, the denial of access to information or the unavailability of information represents another type
of information failure. For example, if a doctor is prevented from accessing a patient’s test results, the
patient may suffer needlessly or even die. A commercial website could lose significant sales if its
website were down for an extended period.
Understanding the potential causes of system failure enables appropriate action to be taken to avoid
them. There are a wide variety of potential threats to an organization’s information systems.
Human threats are the most complicated to manage because they include a wide variety of behaviors.
To illustrate how the level of detail can vary, some relevant subcategories include:
 Accidental behavior by members of the organization, technical support staff, and customers of
the organization
 Malicious behavior by someone inside or outside the organization
 Other categories of threats include:
 A natural event: flood, fire, tornado, ice storm, earthquake, pandemic flu
 Environmental elements: chemical spill, gas line explosion.
 Technical Threat: Hardware or software failure
 Operational Threat: a faulty process that unintentionally compromises the confidentiality,
integrity, or availability of information. For example, an operational procedure that allows
application programmers to upgrade software without test or notification system operators can
result in prolonged outages.
It is possible to categorize the various checks intended to avoid a failure, such as:
1. Management controls management processes that identify system requirements such as

confidentiality, integrity, and availability of information and provide for various management
controls to ensure that these requirements are met.
2. Operational controls: include the day-to-day processes associated with the provision of
information services.
3. Technical controls: concern the technical capacities integrated into the IT infrastructure to
support the increased confidentiality, integrity, and availability of information services.
A widely cited Gartner research report concludes that “people directly cause 80% of downtime in
critical application services. The remaining 20% are caused by technological failures, environmental
failure or a natural disaster”.
Often, these failures are the result of software modifications such as adding new features or
misconfiguring servers or network devices.
IT professionalsEconomics
should ensure that system changes are prioritized and tested and that all interested
parties are notified of proposed changes.
8. Information systems assessment
Perceptible benefits can be quantified and assigned a monetary value. Imperceptible benefits, such as
more efficient customer service or improved decision making, cannot be immediately quantified but
can lead to quantifiable long-term gain.
System performance can be measured in different ways.
8.1 Efficiency
Efficiency is often referred to as “doing the things right” or doing things right. Efficiency can be
defined as the ratio of output to input. In other words, a company is more efficient if it produces more
with the same amount of resources or if it produces the same amount of output with a lower investment
of resources, or - even better - produces more with less input. In other words, the company achieves
improvements in terms of efficiency by reducing the waste of resources while maximizing
Productivity.
Each time an item is sold or ordered, the manager updates the quantity of the item sold in the inventory
system. The manager needs to check the sales to determine which items have been sold the most and
restocked. This considerably reduces the manager’s time to manage his stock (limit input to achieve
the same output). So efficiency is a measure of what is produced divided by what is consumed.
8.2 Effectiveness
Effectiveness is measured based on the degree achieved in achieving system objectives. It can be
calculated by dividing the objectives achieved by the total of the objectives set.
Effectiveness is denoted as “doing the right thing” or doing the things necessary or right. It is possible
to define effectiveness as an organization’s ability to achieve its stated goals and objectives. Typically,
a business more significant is the one that makes the best decisions and can carry them out.
For example, to better meet its various customers’ needs, an organization may create or improve its
products and services founded on data collected from them and information accumulated from sales
activities. In other words, information systems help organizations better understand their customers
and deliver the products and services that customers desire. Collecting customer data on an individual
basis will help the organization provide them with personalized service.
The manager can also ask customers what kind of products and services customers would like to buy
in the future, trying to anticipate their needs. With the information gathered, the manager will order the
customers’ products and stop ordering unpopular products.
In what follows, we present several formulas established to measure efficiency and effectiveness
resulting from the information systems use. Indeed, the impact of an information system on an
organization can be assessed using financial measures.
Economicsof managerial performance
8.3 Financial measures
When the information system is implemented, management will certainly want to assess whether the
system has succeeded in achieving its objectives. Often this assessment is challenging to achieve. The
business can use financial metrics such as Productivity, Return On Investment (ROI), net present
value, and other performance metrics explained in the following:
8.3.1 Return on investment
Return on investment, denoted as a Return rate, is a financial ratio that measures the amount gained or
lost compared to the amount initially invested.
An information system with a positive return on investment indicates that this system can improve its
efficiency.
The advantage of using Return on investment is that it is possible to quantify the costs and benefits of
introducing an information system. Therefore, it is possible to use this metric to compare different
systems and see which systems can help the organization be more efficient and/or more effective.
8.3.2 Productivity
Developing information systems that measure Productivity and control is a crucial element for most
organizations. Productivity is a measure of produced output divided by required input. A higher
production level for a given entry-level means greater Productivity; a lower output level for a given
entry-level means lower Productivity. Values assigned to productivity levels are not always based on
hours worked. Productivity may be based on the number of raw materials used, the quality obtained, or
the time to produce the goods or services. According to other parameters and with other organizations
in the same industry, Productivity’s value has to mean only compared to other Productivity periods.
8.3.3 Profit growth
Another measure of the SI value is the increase in profit or the growth in realized profits. For example,
a mail-order company installs an order processing system that generates 7 percent growth in profits
over the previous year.
8.3.4 Market share
Market share is the percentage of sales of a product or service relative to the overall market. If
installing a new online catalog increases sales, it could help increase the company’s market share by,
for example, 20 percent.
8.3.5 Customer satisfaction
Although customer satisfaction is difficult to quantify, many companies measure their information
systems performance based on internal and external feedback. Some companies use surveys and
questionnaires to determine whether investments have resulted in increased customer satisfaction.

8.3.6 Total costEconomics
of ownership
Another way to measure the value of information systems has been developed by the Gartner Group
and is called the Total Cost of Ownership (TCO). This approach allocates the total costs between
acquiring the technology, technical support, and administrative costs. Other costs are added to the
TCO, namely: retooling and training costs. TCO can help develop a more accurate estimate of total
costs for systems ranging from small computers to large mainframe systems.
9. Information systems evolution
The evolution of information technologies leads to the reflection on new approaches that set up more
flexible, more scalable architectures to meet its agility needs. The urbanization of information systems
is one such approach.
9.1 Definition of the urbanization of information systems
The company’s information system’s urbanization is an IT discipline consisting of developing its

information system to guarantee its consistency with its objectives and business. By taking into
account its external and internal constraints while taking advantage of the opportunities of the IT state
of the art.
This discipline is based on a series of concepts modeled on those of the urbanization of human habitat
(organization of cities, territory), concepts that have been reused in IT to formalize or model the
information system.
Town planning defines rules and a coherent, stable, and modular framework, to which the various
stakeholders refer for any investment decision relating to the management of the information system.
In other words, to urbanize is to lead the information systems’ continuous transformation to simplify it
and ensure its consistency.
The challenges of urbanization consist of managing complexity, communicating and federating work,
considering organizational constraints, and guiding technological choices.
9.2 Stages of urbanization

9.2.1 Definition of objectives
Define and frame the objectives of the project, define the scope, develop the schedule.
9.2.2 Analysis of the existing situation
Carry out the inventory, organize the work, and present the deliverables. More precisely, list the assets
and map the different layers (business, functional, application, and technical):
 Business Architecture

Identify “business
Economicsprocesses”: Who does what and why? The description of the processes is
done with BPMN, EPC formalisms, etc. This step is tricky and may require the use of
exploration methods. However, it does improve the overall understanding and increase the
possibilities for optimization
 Functional architecture
Identify the “functional block”: What do we need to carry out the business processes? Here, we
are based on a classic division into zones (exchanges, core business, reference data, production
data, support activities, management). This step’s difficulty lies in choosing the right level of
detail and remaining consistent with business processes. However, it provides a hierarchical
presentation and makes it easier to break down the work.
 Application Architecture
Identify the applications: How to achieve the functionalities? This step is based on a classic N-
Tiers division. However, it is not easy to provide value and solutions compared to functional
architecture. This stage lays the foundations for the realization (major technological choices,
etc.).
 System Architecture
Identify the technical components: With what and where the applications work, it is based on a
classic division into technical areas (security, storage, etc.). It is not easy to make the connection
between applications and servers. This step brings concrete and structuring and is essential to
assess the cost of the system.
9.2.3 Identification of the target IS
Impact on the different layers, consideration of constraints (human, material, etc.), design of costed
scenarios, and arbitration of the choice of a target.
9.2.4 Development of the trajectory
How to organize the work, frame and then refine the budgets, design and plan projects, define the
support strategy, set up an organization, contributions, roles, and responsibilities of actors.
At the end of this process, a Land Use Plan (LUP) is defined. It is a report consisting of:
 Summaries of the orientations chosen as well as the justifications for the options selected.
 A definition of areas, neighborhoods, and blocks.
 Existing and target maps (process, functional, application, and technical mapping).
 Additional documents (interview reports, list of people and organizational entities, etc.)
The goal is to identify the gaps between the existing and the principles of urbanization and establish
changes by describing the actions and their corresponding cost.

In practice, the Economics
urbanization process is very cumbersome to implement. On the one hand, it requires
the participation of many actors in the organization, and on the other hand, the analysis is very long.
As a result, needs to change, and LUP is no longer necessarily suitable.
10. Information systems challenges
The reasons for a successful or unsuccessful IS implementation are complex and contested by different
stakeholders and from the various perspectives involved. Developers tend to focus on the system’s
technical validity in terms of execution, operation, and evolution. Other qualities are often considered,
such as security, maintainability, scalability, stability, and availability. All of these criteria are
considered to be signs of successful IS Development.
The failure of an IS can be defined as: either the system put in place does not meet the user’s
expectations or does not function properly. The reasons for failure are as divergent as the projects.
The perspective of project management, on the other hand, tends to focus on the consumption of
resources. The project delivered with the initial budget and within the allotted time is considered a
successful project. Nelson analyzed 99 SI projects and identified 36 classic errors. He categorized
these errors into four categories: process, people, product, and technology. The last category concerns
the factors leading to IS failures based on the misuse of modern technologies.
The seminal article by DeLone and McLean suggested that IS success should be the preeminent
dependent variable for the IS domain. These researchers proposed a taxonomy of six interdependent
variables to define the IS’ success as the system’s quality, the quality of information, the IS, user
satisfaction, individual impact, and organizational impact.
One of the significant extensions to this proposition is the dimension of the IT department’s quality of
service.
Either way, the use of the system is seen as a sign of its success. The IS use level is incorporated into
most IS success models.These models show the complexity of measuring user satisfaction because,
even in the same organization, some user groups may be more or less enthusiastic than others to use
the new information system.
In the current global context of the covid pandemic, it appears clear that information systems that
integrate web and mobile technologies can positively contribute to the monitoring of contaminated
cases and therefore minimize the risks of contamination provided that users adhere to this movement
for the benefit of all . A truly global, rapid, and efficient decision-making process is enabled by the
integration of information systems from distributed sources.
11. Conclusion
To conclude this introductive chapter, we present its key ideas:
 Levels of information are data, information, and knowledge.

 The system is an aggregated “whole” where each component interacts with at least one other
system component to achieve a goal.
 Economics
An information system can be defined as a set of interconnected components that gather,
process, store and dispense information to support decision making and control in an
organization. An IS can be seen as a socio-technical system. The technical part includes the
technology and the processes, while the social part includes the people and the structure.
 The role of information systems is to solve an organization’s problems concerning its
information needs
 A company has systems to support the different managerial levels: transaction processing
systems, management information systems, decision support systems, and systems dedicated to
business intelligence.
 Decisions can be operational or strategic.
 There are several categories of business applications: enterprise resource planning, supply chain
management systems, customer relationship management systems, knowledge management
systems, and business intelligence.
 Among the failures that can affect IS a violation of confidentiality, integrity, and availability of
information.
 The controls intended to avoid the IS’s security failures include management controls,
operational controls, and technical controls.
 The information system’s performance can be measured according to efficiency, effectiveness,
Return on investment, Productivity, customer satisfaction, etc.
 Urbanizing an information system means directing its continuous transformation to guarantee its
consistency
 The reasons for a successful or unsuccessful implementation of an IS are complex and contested
by the various stakeholders and from the various perspectives involved.
Challenges of Information Systems
Today’s businesses run on technology. Every client interaction and internal process relies
heavily on the computer systems that power everything. Management information systems
(MIS) is a general term to encompass the various technologies that exist in organizations today,
as well as the personnel necessary to manage it all. Common problems include failure to
strategize, meeting organizational needs, hiring and retaining good employees, staying current
and integrating all your technologies.
Lack of Strategy
Many of the most common MIS issues can be traced back to a lack of a solid strategy. Information
systems leaders are well aware of the many tools available to gather data on their network. But putting
that information to use is often a challenge.
At one time, technology departments served as a separate operation, providing tech support and
keeping an organization’s server equipment running. Today, MIS leadership often sits alongside other
business leaders, working together to ensure that the technology being used supports the overall
mission of the company moving forward.

Economics Needs
Meeting Organizational
MIS plays an ever-increasing role in organizations, with professionals relying on technology for every
aspect of operations. Sales and marketing rely heavily on customer relationship software to track client
interactions, for instance, while accounting needs its own software for billing, invoicing and financial
tracking.
With more than half of all companies now relying on big data analytics, MIS is playing an even more
important role. Before making a decision, today’s management teams are likely to pull reports on
existing activity to ensure they use facts rather than make educated guesses.
Attracting and Retaining Top Talent
For at least the past couple decades, the growth in technology has outpaced the number of people
entering the field. Over the past seven out of 10 years, IT positions have been in the top 10 of jobs with
the most hiring challenges, as documented by ManpowerGroup. The professionals most in demand
include developers and programmers, database administrators and IT leaders and managers.
Even as an increasing number of businesses shift to cloud software, the IT shortage continues to affect
businesses. If cloud technology providers have difficulty finding professionals to support the
applications their clients use, the businesses will see issues. Even with cloud technology, though, many
organizations find they still need to have an MIS specialist on staff to ensure the business meets its
goals.
Keeping Up with Change
If one thing is for certain in information technology, it’s that nothing will remain the same for long.
From one year to the next, innovations mean that software needs to be upgraded and even replaced. In
order to remain competitive, businesses have to keep up with this, investing in software that will give
them an edge.
As businesses respond to those changes, though, they face a challenge in getting employees on board
with adjusting what they do. At one time this was simply training employees to go from old paper-
based processes to using computers in the first place. Today, managers have to onboard new systems
while ensuring they provide employees what they need to be productive.
Integrating New Technologies
Although there are plenty of comprehensive solutions, businesses will inevitably find that they have
multiple types of software operating at once. This includes general administrative tools like Microsoft
Office, as well as specialized tools for accounting, customer relationship management and project-
management tools, among many others. Ensuring all these tools work together is essential since
otherwise, employees will find they have to duplicate processes.
Complicating matters is the fact that employees no longer work using just one dedicated computer on a
desk in an office space. Many employees work in the field, using laptops and tablets. You’ll also have

Economics
numerous cellphones in addition to the laptop and desktop computers your employees use, bringing
challenges to providing support without risking security
Information Systems in an e-commerce Organization
Information system can be defined as set of people, procedure and resources that
collects, transforms & disseminates information in an organistion. It is a system that
accepts data resources as input & processes them into information products as outputs
this supports an organistaion’s business strategies, business processes & organizational
structures & culture to increase the business value of the enterprise in a dynamic business
environment,
Information systems can be described by four of their key components which are:
1. Decisions
2. Transactions and processing
3. Information and its flow
4. Individuals or functions involved

Economics Unit 1:Basic of Management Theory & Practices
Q 1) Define management. Explain different functions of management. .
Q 2) Briefly explain any five features of Management.
Q 3) Write short note on: Memorandum of Association (MOA) and Articles of Association (AOA).
Q.4) What are the main functions of Management? Discuss them in the order of their importance to an
Organization.
Q.5) Explain Role of Information system in organization with suitable example

Economics

Economics

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Genba Sopanrao Moze College Of Engineering, Balewadi - Pune Department of

MCA, F.Y SEM – I, Information Systems and Engineering Economics

Information System and Engineering Economics

MCA I YEAR – SEM (I)(2022-2023)

GENBA SOPANRAO MOZE COLLEGE OF ENGINEERING

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There is no universally accepted definition of the term Management. Different authorities on

The Nature of Management can be understood through a study of its important

The following points Purpose of management in an organisation:

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Functions and activities of Management

➢ Co-coordinating: Orderly synchronisation of efforts of the employees in all departments to

Management as an activity includes:

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 It helps managers to improve future performance, by establishing objectives and selecting a

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Organizing has the following characteristics:

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Now, we will discuss those steps in detail:

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 Advantage of Specialization: Organizing helps in the classification of jobs systematically

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Browse more Topics under Staffing

 Staffing in HRM & Its Revolution

Effective Use of Technology and Other Resources

Optimum Utilization of Human Resources

Development of Human Capital

The Motivation of Human Resources

Building Higher Morale

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Directing and controlling

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Browse more Topics under Organising

 Intro to Organisation and its Importance

1] Identifying the Work

Organizational structure Functional organization

The strengths of functional organizational structures are specialization and efficiency.

Advantages of the Functional Organizational Structure

The following are several benefits of the functional organizational structure:

Disadvantages of the Functional Organizational Structure

The following are a few disadvantages of the functional organizational structure:

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What Is The Organizational Structure Of A Product Organization?

How Does One Go About Establishing A Product Organization?

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Memorandum of Association (MOA) and Articles of Association (AOA) :-

Memorandum of Association (MOA)

1. Name Clause – Name of the registered entity (Business/Company name)

Difference Between MOA and AOA

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Types of Organisational Structures: their Advantages and Disadvantages!

Formal organisational structures are categorised as:

(i) Line organisational structure.

(ii) Staff or functional authority organisational structure.

(iii) Line and staff organisational structure.

(iv) Committee organisational structure.

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(vi) Project organisational structure.

(vii) Matrix organisational structure and

(viii) Hybrid organisational structure.