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Management – Theory and


Management Process

Presented by:
Process of Management
Basic Resources


Machine Planning Actuating G

Materials A
Market Organising Controlling S

Functions of Management
• Luther Gullick in 1930’s narrated the
following functions of Management
– Planning
– Organising
– Staffing
– Directing
– Co-ordinating, Controlling, Co-operating
– Reporting
– Budgeting
Some other Functions
• Motivating
• Decision making
• Leading
• Communicating
• Deciding in advance what to do, how to do it,
when to do it and who is to do it.
– Koontz and O’Donnel
• Characteristics of Planning
• Goal Oriented
• Future oriented
• Continuous activity
• Link between past present and future
• Primacy
• Pervasiveness
• Intellectual process
• Essentials of good plan
• Simplicity
• Suitability
• Flexibility
• Easy acceptance
• Facilitate organizing
• Provide direction
• Facilitate control
• Generate efficiency
• Motivate
• Advantages of Planning
• Minimizes risk
• Facilitates co-ordination
• Focus on goals
• Facilitates decision making
• Limitations of Planning
• Time consuming
• Rigidity
• Over / under targeting
• Human error
• Changing situations
• Steps in Planning
1. Environmental analysis (internal and external)
2. Setting Objectives
3. Determining alternative plans
4. Evaluation of alternative plans
5. Selecting best plan
6. Formulating derivative plans (sub plans, day-to-
7. Establish sequence of activities
8. Implementation and review
Components of Planning
• Organizing, in companies point of view, is
the management function that usually
follows after planning. And it involves the
assignment of tasks, the grouping of tasks
into departments and the assignment of
authority and allocation of resources
across the organization.
• Process of Organization
1. Define organizational goals
2. Determine activities
3. Grouping activities
4. Arranging Resources
5. Assigning Duties
6. Granting authority and responsibility
7. Establish relationships
8. Co-ordination
Organizational structure and
• Structure
– The framework in which the organization defines how tasks are divided,
resources are deployed, and departments are coordinated.
– A set of formal tasks assigned to individuals and departments.
– Formal reporting relationships, including lines of authority, decision
responsibility, number of hierarchical levels and span of managers control.
– The design of systems to ensure effective coordination of employees across

• Work specialization
– The degree to which organizational tasks are sub divided into individual
jobs; also called division of labour
– With too much specialization, employees are isolated and do only a single,
tiny, boring job.
– Many organizations enlarge jobs to provide greater challenges or assigning
to tasks that are rotated
Authority and Responsibility
• Chain of command
– An unbroken line of authority that links all individuals in the
organization and specifies who reports to whom.
• Unity of Command - one employee is held accountable to only one supervisor
• Scalar principle - clearly defined line of authority in the organization that
includes all employees

• Authority, responsibility, and accountability

– Authority - formal and legitimate right of a manager to make
decisions, issue orders, and allocate resources to achieve
organisationally desired outcomes.
– Responsibility - duty to perform the task or activity an employee has
been assigned
– Accountability - the fact that the people with authority and
responsibility are subject to reporting and justifying task outcomes to
those above them in the chain of command
Line and Staff Authority
• Line authority characterized by superior
subordinate authority relationships
• Authority flows from top to bottom
• Superior exercises direct command
• Staff authority means function of a supporting
• It is a manager to manager authority relationship
and can exixt in any levels
• Eg Training department is a staff function of HR
Authority and Responsibility
Delegation of authority
• Delegate means grant or confer
• It does not mean give away or lose
• With authority, RESPONSIBILITY is also
automatically delegated.
• It is the obligation of individual to execute the
activity with the use of authority that he has been
Process of Delegation

Stage 1 – Assign Duties

Stage 2 – Transfer of Authority

Stage 3 – Acceptance Condition

Stage 4 – Creation of Responsibility

Span of Control
• Span of Management
– Nothing but how many employees are reporting to a
particular manager
– The no. of subordinates handled by a supervisor

• Factors influencing larger span of management.

– Work performed by subordinates is stable and routine.
– Subordinates perform similar work tasks.
– Subordinates are concentrated in a single location.
– Subordinates are highly trained and need little direction in performing tasks.
– Rules and procedures defining task activities are available.
– Support systems and personnel are available for the managers.
– Little time is required in nonsupervisory activities such as coordination with
other departments or planning.
– Managers' personal preferences and styles favour a large span.
Span of Control
• Span of Management
– Graicunas’ theory
• As the number of subordinates increase
arethmetically, the number of relationships among
them increases geometrically
R = n {2^n / 2 + (n-1)}
No. of subordinates Potential Relationships
2 6
3 18
4 44
5 100
6 222
Organisational structures
Tall and Flat Structure
Centralisation and Decentralisation
• Centralization refers to the union and consolidation of departments
into one center

• Within the center, standardization may occur on operations ranging

from computer systems to networked resources, from employee
policy and conduct to furniture layout and space allocation
Centralisation and Decentralisation
• Decentralization refers to a shift in organizational structure
that distributes more administrative control to local centers or

• Minor Decisions may not be stndardised and can be taken by

the divisional head
Centralisation and Decentralisation

Benefits Costs
• Greater efficiency • May lessen internal communication

• Increased professionalism • May lessen involvement with organizational image

• Less parochialism • May lessen the extent of "team member" feelings

• Uniform corporate image • Possible loss of innovation

• Standardization of space allocation and furniture distribution • Delayed response time

• Cost Savings on bulk purchases of building services and • Manipulation of zoning, space allocation, and lease
materials requirements probable
• Minimizes company's dependence on outside consultants and • Dependence on centralized authorities may discourage the
vendors development of local skills and talents
• Allows for company wide databases • Necessary changes become slow to implement
Centralisation and Decentralisation

Benefits Costs
• Enhances communication and interaction among employees • Loss of objectivity may occur

• Promotes project prioritization • Possible loss of budget control failure

• Creates a need for less formalized communication • Possible loss of ability to address cross-therapeutic issues

• Facilitates a more comprehensive understanding of individual • Limited opportunity and ability to think more broadly
• Less formal restrictions promote innovation and creativity • Need for constant employee training since operations are
• Increased input from local hubs • Veteran knowledge easily lost with turnover

• More difficult to ensure and monitor employee compliance with

company policies
Centralistion and Decentralisation
within the organisation
Vice President

Purchase R&D

Cost Budget

Standard Training

Manager I Manager II Manager III

Centralistion and Decentralisation
within the organisation
Vice President

Manager I-Factory Manager II-Shop Manager III-Mktg

Purchase Cost R&D

Engineering Sales Advertising

Budgeting Standards Distribution

Centralisation and Decentralisation
• The debate over whether to centralize or
decentralize is not so much over which type
of strategy is more effective, but in the
degree to which each strategy is used in
combination with one another.
• Organizations are left with the task of
deciding which operations should be
centralized, decentralized, or left alone.
• Neither strategy is better or worse, the
strategies are simply more or less
appropriate under given circumstances
Organisational Culture
• Organisational or corporate culture is the set of
norms, beleifs, values and assumptions shared
by the organisation’s members
• It defines vision of the company
• Employees feel a sense of security and
• It is more implicit then explicit and it is
multidimensional ie can flow from top or from
• And it is relatively stable in nature
SWOT Analysis
SWOT Analysis
• While Strengths and Weaknesses are
concerned with the internal environment,
Opportunities and threats form a part of the
external environment.
• S and W are more controllable then O and T.
• S and W can be predictable where as O and T
are not so predictable. However, macro
environmental studies may help in overcoming
the Threats and identifying the Opportunities.
SWOT Analysis PEST analysis

Mission and
Customers, Management reviews,
competition, financial product measures,
market, substitute process measures,
technology, consumer performance measures,
behavior internal audits

Strategic objectives,
critical success factors
Business plans
and periodic

Performance management and monitoring.

Corrective and Preventive Actions.
Annual review and feedback.
SWOT Analysis
Class activity :
• Select a particular industry
• Environmental analysis and uncertainty
• List down SWOT
Thank You