CHARUTAR VIDAYA MANDAL’S

SEMCOM
V. V. NAGAR

(WHAT WE THINK, OTHERS DON’T)

Faculty Name : Dr. Joe Marry George

Class : MCOM SEM I (2023-24)
Subject : FUNDAMENTALS OF MANAGEMENT
Unit : 1 Introduction to Management

Meaning of Management:
Management in simple language means managing men in the organisation.
But the managers are not only managing men but also the basic resources called as 6M‟s. They are
men, materials, machines, methods, money and market.
An environment created by the manager in which people can work efficiently as a group or the
activities of managers are collectively called management. Therefore management is what managers
do.
Management is an activity that converts disorganized human and physical resources into useful and
effective results. For example…..

Basic Resources Fundamental Functions Stated Objectives

Men
Planning Organising
Materials Objectives

Machines OR

Methods End
Directing Controlling
Results
Money

Market

Thus, management means, “getting things done through other people.”

Management is a distinct process consisting of activities of planning, organising, directing and
controlling, performed to determine and accomplish stated objectives with the use of human beings
and other resources.
Management makes human efforts more productive.
Management helps to bring better equipments, plants, offices, products, services and human relations
in our society.
Management helps continuous progress and improvement.
Management helps to solve problems and achieve the goal.
The term management is used in three alternative ways as under:
1. Management as a discipline
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 2. Management as a group of people
3. Management as a continuous process
4. Management as a social process
1.Management as a discipline: Disciple refers to a field having well-defined concepts and
principles. Management as disciple includes various relevant concepts and principles, the
knowledge, which helps management or which helps in managing. Henri Fayol identified fourteen
principles of management and the modern concept of management was identified by F W Taylor and
Henri Fayol. Management prescribes various principles and also helps to use these principles in
managing the organisation thus, it can be called as a discipline.
2. Management as a group process: When we refer to management or to an organisation we refer to
a group of people or personnel who perform managerial functions in organisations.
In an organisation there are different levels which we group into different groups like top level,
middle level and bottom level. Example: When we think the relationship between management and
labour in an organisation, we see them as two different groups. In the first category we include only
those persons who are responsible for managerial functions and in the second category we include
non-managerial personnel. Thus, in management we often see different group of people.
3. Management as a continuous process: Management always helps for continuous improvement
and progress by giving an identifiable flow of information through inter-related stage of analysis.
Management always directs the organisation towards the achievement of an objective through
continuous planning, organizing, directing, staffing, etc. Management is continuously production
oriented, decision oriented, people oriented and function oriented.
4. Management as a social process: Management considers each individual based on their
individual differences, like values, culture, behaviour, feeling, expectations, etc. Management treats
employee as human being and not as machines or materials. Management helps to satisfy social needs
of employees in terms of love, acceptance, belongingness, freedom of expression of feelings, etc.

Definitions of management:
1. “Management is the art of getting things done through others.”
2. “Management is the art of getting things done through and with people in formally organized
groups.” By Harold Koontz
3. “Management is the process by which managers create, direct, maintain and operate purposive
organizations through systematic, co-coordinated, cooperated human effort.”
By Dalton E. McFarland
4. “Management is what managers do.”
5. “Management is what management does.”

Thus, management is a process involving planning, organizing, staffing, directing and controlling
human efforts to achieve stated objectives in an organisation. (By L. M. Prasad)

Significance of Management:
The success of the business depends in the effective integration of 5M‟s. It is the management who is
responsible for the effective integration of factors of production. The important role of the
management can be justified on the following grounds.
1. Achieving business objectives: Management is basically concerned with the achieving the
objectives of the business by utilizing the available physical and human resources of the enterprises.

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The successful management must achieve the objectives of the business by making optimum
utilization of minimum resources and the least wastage is the ultimate end of every business.
2. Optimum use of business resources: Management tries to make effective utilization of various
resources. The resources are scarce in nature and to meet the demand of the society, management tries
hard. An efficient manager achieves maximum output by making use of minimum input at minimum
cost by making the best possible use of 5M‟s.
3. Development of resources & improving efficiency: Management develops various resources
including human resources. Management is the development of people. Research activities are carried
out in an organised way for the development of various resources. Other resources of the company
are also developed with the help of research and developmental activities. Thus through the
development activities, management improves the quality of lives of people in the society. The
management should not only make the best possible utilization of available factors of production but
he should try to develop and improve the efficiency of the factors of production. Increased
productivity of the resources will result is excellent performance.
4. Incorporate innovations: Today, changes are occurring at a very fast rate in both technology and
social process and structure. These changes need to be incorporated to keep the organisations alive
and efficient. Business organisations are moving from primitive to sophistication, from simple to
complexity. Therefore, they require high degree of specialization, high level of competence, and
complex technology. All these require efficient management so that organisations work in the most
efficient way.
5. Integrating various interest group: In the organisation there are various interest groups who put
pressure over the other groups for maximum share in the output. For example, in case of a business
organisation there are various pressure groups such as shareholders, employees, government, etc.
Management has to balance these pressures from various interest groups.
6. Effective leadership and motivation: The effective management plays an effective role of
leadership. An effective leader will always understand the needs of both the organisation and the
employees. Thus they will try to motivate the employees and provides maximum satisfaction to
employees and at the same time they will help the organisation to achieve its goals.
7. Effective organization and coordination: Effective management means all the activities and the
functions of the organisation will be carried out in an organized way. Organized activities itself
means coordination between all the activities and functions. It coordinates the efforts of different
levels in the organisation.
8. Establishing clear authority and responsibility: Management means managing men or it‟s a art
of getting things done from the people. The art involves discipline in all senses. The management
clearly assigns duties, establishes authority and fixes responsibility to all levels of management to get
the work done from the people.
9. Solution of labour problems: The workers are now-a-days participating in the management and
conscious of their contribution towards the enterprise. Therefore, of any kind of disputes are solved
immediately. As management helps for continues development of the people, it tries to find out the
problem areas of the people. Thus any kind of problem can be easily identified and solved out
immediately.
10. Fulfilling social responsibility: The management in the past exploited workers and consumers
but these days they have realized their responsibilities towards the various sectors of the society or
community. Management provides stability in the society. In the modern age more emphasis is on
new inventions for the betterment of human beings. But these inventions make old systems and
factors mostly inefficient. Management provides integration between traditions and new inventions,
and safeguards society from the unfavourable impact of these inventions so that continuity in social
process is maintained.

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Objectives of Management:
1. Obtaining maximum output with the minimum input: Management is basically concerned
with the achieving the objectives of the business by utilizing the available physical and human
resources of the enterprises. The successful management must achieve the objectives of the
business by making optimum utilization of minimum resources and the least wastage is the
ultimate end of every business. The successful management must achieve the objectives of the
business at minimum input and maximum output. That is optimum utilization of the available
resources.
2. Maximum employer’s & employees prosperity: Every management should make sincere
efforts to earn maximum profit for the enterprise. Thus, prosperity of employer and employees is
the primary objective of the management. The management has the equal responsibility to pay
fair, reasonable and competitive remuneration to employees. In order to win the confidence and
hole-hearted support of employees‟ financial and non-financial incentives should be provided to
the employees. Prosperity for both the employer and employees is the primary objectives or the
management.
3. Development of resources & improving efficiency: Management develops various resources
including human resources. Management is the development of people. Research activities are
carried out in an organised way for the development of various resources. Other resources of the
company are also developed with the help of research and developmental activities. Thus through
the development activities, management improves the quality of lives of people in the society.
The management should not only make the best possible utilization of available factors of
production but he should try to develop and improve the efficiency of the factors of production.
Increased productivity of the resources will result is excellent performance.
4. Social justice & human betterment: An effective management brings prosperity for employers
and employees. Excellent remuneration improves the standard of living of workers. The growth of
business generates employment opportunities. Equal pay for equal work without any
discrimination brings social justice.
5. Integrating various interest group: In the organisation there are various interest groups who
put pressure over the other groups for maximum share in the output. For example, in case of a
business organisation there are various pressure groups such as shareholders, employees,
government, etc. Management has to balance these pressures from various interest groups.
6. Incorporate innovations: Today, changes are occurring at a very fast rate in both technology and
social process and structure. These changes need to be incorporated to keep the organisations
alive and efficient. Business organisations are moving from primitive to sophistication, from
simple to complexity. Therefore, they require high degree of specialization, high level of
competence, and complex technology. All these require efficient management so that
organisations work in the most efficient way.
7. Effective leadership and motivation: The effective management plays an effective role of
leadership. An effective leader will always understand the needs of both the organisation and the
employees. Thus they will try to motivate the employees and provides maximum satisfaction to
employees and at the same time they will help the organisation to achieve its goals.
8. Effective organization and coordination: Effective management means all the activities and the
functions of the organisation will be carried out in an organized way. Organized activities it self
means coordination between all the activities and functions. It coordinates the efforts of different
levels in the organisation.
9. Establishing clear authority and responsibility: Management means managing men or it‟s a art
of getting things done from the people. The art involves discipline in all senses. The management
clearly assigns duties, establishes authority and fixes responsibility to all levels of management to
get the work done from the people.

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10. Solution of labour problems: The workers are now-a-days participating in the management and
conscious of their contribution towards the enterprise. Therefore, of any kind of disputes are
solved immediately. As management helps for continues development of the people, it tries to
find out the problem areas of the people. Thus any kind of problem can be easily identified and
solved out immediately.

Features/Characteristics of Management:
1. Management as a discipline: Disciple refers to a field having well-defined concepts and
principles. Management as disciple includes various relevant concepts and principles, the knowledge,
which helps management or which helps in managing. Henri Fayol identified fourteen principles of
management and the modern concept of management was identified by F W Taylor and Henri Fayol.
Management prescribes various principles and also helps to use these principles in managing the
organisations thus, it can be called as a discipline.
2. Management as a group process: When we refer to management or to an organisations we refer
to a group of people or personnel who perform managerial functions in organisations. In an
organization there are different levels such as top level, middle level and bottom level. No individuals
work in isolation, all individuals work in coordination with the others or departments. No individuals
work can be seen as a separate work. All work in teams or groups and work for the achievement of
the objectives. Thus, in management we often see different group of people.
3. Management as a continuous process: Business is a continuous activity and never ending
process. Therefore management functions must be performing continuously. Planning, organizing,
directing, controlling, staffing, etc. becomes an ongoing functions in any organization. Any lethargy
on the part of management in planning, organizing, directing & controlling business operations will
prove fatal to the organization and will affect the end results or targets negatively.
4. Management as a social process: Man is a social animal and he tries to fulfill all his social needs
from the organisations such as love, affection, acceptance, recognition, etc. The main function of the
management is to deal with the human element in the business and provide satisfaction. Human factor
is an essential, active & sensitive factor of production. It activates other factors of production also.
This shows that the management should look into the interest of the employees, understands the
differences & deal with them with a feeling of human touch and respect.
5. Management is a dynamic function: All the functions of management needs to be dynamic
accepting the changes in market, government policies, market trends, customer expectations, etc. The
dynamic functions of management helps in achieving the objectives of the organization. Any change
in the external factors of the organization affects the internal factors and forces to change the present
plan, policies, norms, etc. Therefore management is a dynamic process.
6. Management is a pervasive function: Management is present in all type of organization, small,
medium, large, profit making, non-profit making, government, non-government, religious
organization, military, etc. Its utility and importance is felt in all types of organization.
7. Management is a profession: Management is a systematized body of knowledge, which is studied
in specialized management institutions and practiced in the real situations of the business, therefore it
is a profession. Management fulfills the following characteristics of profession.
1. Specialized body of knowledge
2. Formal training
3. Social responsibility
4. Code of conduct
8. Management is a science as well as an art: It is called an art because managers requires certain
skills which are personal possessions of managers. Science provides the knowledge & art deals with
the application of knowledge and skills. A manager to be successful in his profession must acquire the

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knowledge of science & the art of applying it. Management is a science because as science,
management applies various theories and techniques in the real world.
9. Management as a universal process: Management is universally accepted. Management is
required everywhere. Its applications are widely used in all type of organisations. Mgt function are not
restricted to business alone but performed in every organisation, whether it is social, religious, political
or cultural. Every activity, which requires a group to perform, needs to be routed through the
managerial process of planning, organising, directing & controlling.
10. Management helps to achievement of predetermined objectives: Management is basically
concerned with achieving the objectives of the business by utilizing the available physical and human
resources of the enterprises. The successful management helps in the achievement of the objectives of
the business by making optimum utilization of minimum resources and helps in least wastage of every
business resources. The successful management helps in the smooth achievement of the objectives of
the business with minimum input and maximum output.

Functions of Management
The important functions of management are briefly described below.
1) Planning: Planning is the primary function of management. Nothing can be performed without
planning. Planning refers to deciding in advance that which will be done in the near future. In order to
achieve objective the organization plans what is to be done, when is to be done, how is to be done and
by whom it is to be done. Planning should take place before doing; most individuals or group efforts
are made by determining before any operative action takes place, what shall be done where, how and
who shall do it.
2) Organising: Organising is the distributing of work in group wise or section wise for effective
performance. Organizing provides all necessary facilities which are necessary to perform the work.
The organization divides the total work and co-ordinates all the activities by authority relationship.
Besides organizing defines the position of each paths through which communication should flow. The
manager would determine who should report to whom and how.
3) Staffing: Staffing for comprises the activities of solution and placements of competent personnel.
In the other words staffing refers to placements of right persons in the right jobs at the right time.
Staffing includes selection of best persons, retirement of old persons, personnel, training to those
needy personnel. The success of any enterprise depends upon the successful performance of staffing
function.
4) Directing: The actual performance of work starts with the function of directing. Planning,
organizing and staffing functions are for the achievements of organizational objective. Direction
includes guidance supervision and motivation of employees. It is the final action of the manager in
getting others to act after all preparations have been completed.
5) Controlling: Controlling helps to set standards of performance and quality of output. Once the
standards are fixed the present performance and the quality of the product is compared with the
standards or the expected one. This will help to find the gap between the expected performance and
the standard quality. Further management carries out the planning, organizing, staffing, etc in order to
achieve the expected performance and match with the standards.
6) Co-ordination: All the activities are divided group wise or section wise under organizing function.
Now, such grouped activities are coordinated towards the accomplishment of objects of the
organization. The difficulty of co-ordination is increased with the increasing size of the organization.
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7) Reporting: Reporting is the communication of the activities and action taken in order to achieve
the goals. Reporting gives the clear idea of the authority-responsibility relationship in the hierarchy.
Reporting is generally done by the subordinates to their immediate superiors in the organisational
hierarchy. Reporting should not only be one way but it should be two way communication. Upward
and downward communication gives freedom to the subordinates and motivates them for higher
performance.
8) Budgeting: Budgeting is not only for the use of money or for financial matters. Budgeting is done
for all the six Ms. Generally budgeting is the statement of expenses over the expected income. In
which the expenses should not be going beyond the income. It is one type of planning for the
effective utilization of all the available resources in an optimum manner. It helps to plan in advance
about the use of various resources so that the goals and objectives can be achieved smoothly.

Difference between management and administration

Points of difference Administration Management

1. Primary function Administration is concerned Management is concerned with getting
with the formulation of things done through others.
objectives, policies and plan
of the enterprise.
2. Nature of functions It is determinative or thinking It is executive or doing function.
functions
3. Type of functions It is concerned in decision It is concerned in execution function.
making function.
4. Level of functions Administrative functions Management is more important at
dominate at higher level. supervisory/lower levels.
5. Skills required It required conceptual and It requires technical and human skills.
human skills.
6. Influenced by Influenced by external factors Influenced by internal factors
7. Period of planning Long term period Short term period
8. No. of people involved Few people are involved Large no. of people are involved
9. Usage It is largely used in It is largely used in business
government & public sectors. organisations.
10. Types of reward Administration is rewarded Management is rewarded with salaries, as
with profit or loss, because it they are the employee of the organisation.
represents owners of the
enterprise.

Levels of Management
Top level management can be said to be determinative and administrative, middle level as executory
management and low level as operational management.
The Management has the following three levels.
1. Top level management
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2. Middle level management
3. Low or operational or bottom level or first line or supervisory level management

The various levels of management are summarized as under:

Top Executives
Top level management
(Determinative & administrative)

Departmental Managers Middle level management

(Executory)

Supervisors/Foreman/Inspectors Low level or operational management

Workers Operative working force

1. Top level management

This level of management is designated as board of directors, managing directors, general managers
and senior most managers. This level of management is responsible for framing policies of the
business. Important decisions are made at this level. Top level management performs administrative
functions more than the managerial functions.
Functions of top level management:
1. determining objectives of the business
2. formulating broad policies of the business
3. taking important decisions
4. deciding future line of action after taking into consideration the government economic policies,
public opinion and other social, national and international factors.
5. assembling the resources needed to put the plans into operation
6. issuing guidelines to administrative in nature. In includes Board of directors , managing director,
general manager and other top level executives.
2. Middle level management
This level of management consists of different departmental heads. These managers receive orders
and instructions from their superiors (top level managers) and pass it to their subordinates (low level
managers). These managers supervise, direct and control the activities of foreman, inspectors and
supervisors. They receive reports of actual performance from their low level managers, study the
reports and issue necessary instructions.
Medium level managers are the link between top level and low level managers. They bridge the vast
gap between the two, remove misunderstanding and create cordial relationship.
Functions of middle level management:
1.interpreting and communicating the policies of the top level management
2.determining organisational set up of their departments
3.issuing instructions to low level managers

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4.motivating subordinates for higher productivity and rewarding them for their outstanding
performance
5.compiling statistical reports for top level management and preparing records of their departments
6.recommending revised and amended policies of their departments
Middle level management is the link between top level and low level management and executory by
nature.
3. Low or operational or bottom level or first line or supervisory level management.
This level of management includes foreman, supervisors and inspectors. Low level management in
link between middle level management and workers. These managers are directly related to workers.
They attend to their problems. They are also the source of inspiration. These managers build the
image of the enterprise before workers and help in creating the sense of belongingness among them
towards the firm.
Low level of management is also known as operational level of management. These managers are
directly related with the routine functions of the firm.
Functions of operational (low level) management:
1. working as link between middle level management and workers
2. receiving instructions from middle level bosses and carrying out the instructions in the day today
affairs of the business
3. assigning duties to individual workers. Inspecting and supervising workers under their command at
work. Attending to workers problems, removing their doubt and inspiring them to contribute their
maximum worth.
4. maintaining proper discipline and congenial atmosphere in the factory, so that productive activities
could be performed smoothly
5. ensuring safety of workers, machines, tools and equipments, etc
6. preventing wastages and misuse of raw materials, machines, tools and equipments
7. building image of the enterprise before workers and creating sense of belongingness among
workers towards the enterprise
Operational management consists of supervisors, inspectors, foremen and superintendents. These
low level bosses have to work in the real situations of the work and thus they are called
operational managers.

Difference between levels of management on the basis of functions:

Points of difference Top level mgt. Middle level mgt. Lower level mgt.
1.Nature It is determinative. It It is more executory. It is operative. It is more
is more administrative It is more managerial managerial than
than managerial. than administrative. administrative.
2.Time period taken It covers long span of It covers It is concerned with short
period. intermediate range. period.
3.Skills required It requires creative It needs influencing It is concerned with
skills. skills. operative skills.
4.Evaluation It is difficult to It is less difficult to It is easy to evaluate its
evaluate its evaluate its achievement.
performance. performance.

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 5.No. of Persons It involves few It concerns moderate It is concerned with large
persons. number of persons. number of persons.
6.Nature People CEO, MD, Senior Departmental heads Supervisors/Foreman and
managers are are involved. workers are involved.
involved.
7.Policy Formulation It is concerned with It is moderately It is least concerned with
the formulation of concerned policy formulation
policies to a greater
extent
8.Influenced by Influenced more by Influenced more by Influenced more by
external factors. internal factors and internal factors only.
less by external
factors.

Concept:
Planning is not one single activity. It is a continuous process having various sub-activities. It makes
selection among various alternatives. Planning is the most basic of all management functions. Every
individual plans for one or the other thing in life at different stages of life. Examples: Even a child
who plays by making castle plans, birds plan to make a nest at the time of their requirements.
Every manager plans, no matter at what level he operates. Planning takes place at top level, middle
level and bottom level. It is through planning that he decides what to do, when to do, how to do and
who will do a particular task.
There is a famous saying that, „if you do not know where you are going then no road can help to
reach the destination. In the same way if there is no planning no one will be able to do the required
things or achieve the target or goal of any kind of activities.
Planning may be described as a continuous attempt to set the goals of the organization. Planning calls
for forecasting. Thus, planning is future oriented, decision oriented and goal oriented.
Planning as a process involves the determination of future course of action.
Definitions of planning:
1.“Planning is the selection and relating of facts and making and using of assumptions regarding the
future in the visualization and formalization of proposed activities believed necessary to achieve
desired result.”
Thus, in planning, a manager uses facts, reasonable premises and constraints and from all these he
visualizes and formulates what necessary activities are, how they will be conducted and what will be
their contribution to achieve desired results.
2.“Planning may be broadly defined as a concept of executives action that embodies the skills of
anticipating, influencing and controlling the nature and direction of change.
Characteristics of planning:
1. Planning is all-pervasive: Planning is present in all kind of economic and non-economic
activities. Planning is present in all human activities. For the success of any work planning is

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required. A well planned work always gives the best result and leads towards success. In the same
way planning is required in small, big, private and government business. Planning is performed by all
departments and throughout the organization at all levels. Planning is therefore widespread function.
It is the soul of management. Therefore we can say that planning is all-pervasive.
Examples: (1) Planning is required for organizing different programmes in the school (2) Planning is
required for conducting the election (3) Planning is must in running any business unit, etc.
2. Planning is the first function of management: Well planned business activities can only help
the business to run smoothly. Planning helps for making different decisions in the business. Without
planning decisions cannot be taken as planning serve as a base for decision making. On the basis of
planning further actions are done. So planning puts management in action. Planning is very much
required in management. Therefore, in all kind of activities planning is considered as the first step or
function of management.
Example: Planning is the first and foremost function to start a business.
3. Planning is a conscious process: Planning cannot be done with closed eyes. It required lot of
thinking and brain storming. Without sufficient knowledge and assumption ability planning is not
possible. Therefore, a person who plans something has to think continuously which is related to the
intellectual process. Thus, no one can plan while he is sleeping or when he is in his unconscious
mind. Planning determines the course of action consciously. Therefore, planning is done with the
complete knowledge of the person who is making the plan. Planning is not instinctive ;( natural,
inborn or automatic) it is a conscious intellectual process.Example: A sleeping man or a person in his
unconscious mind will not be able to make plan.
4. Planning is a continuous and permanent process: To start any business planning is required also
planning is required for the routine activities of the business. So planning continuous in the business
forever. At every step or stage planning is required in business. Proper planning keeps the business
run smoothly. Planning cannot be separated from business as one cannot separate blood from the
human body. Blood is required in sufficient quantity for the smooth functioning of the human body.
In the same way planning has to be present in the business for its smooth functioning. Thus, planning
is continuous and permanent process.
Example: Planning is required in the business from the day one to its end.
5. Planning is dynamic: Planning is done for the smooth functioning of the business. Planning has to
be changed according to the needs and change in business environment. Any change in political,
economic, social, technological, government policies, religion, language, climate, and competitors
business, and national or international environment the planning has also to be changed to suit the
business needs. Therefore, planning cannot be static or rigid. It changes according to the needs of the
organization. Planning is done to suit the activities and for its success. Therefore, planning changes
according to the future requirements. Example: Planning needs to be changed when the market
structure changes. (When there is fluctuations in the market conditions)
6. Planning is realistic: Planning is done for carrying out the activities smoothly in the future. In
future actions are taken on the basis of the plan. After doing planning the things has to be carried out
in the same way otherwise planning will be of no use. Therefore, planning is the blueprint of the
future course of action. Planning is done before the actual things start but it is done as one wants or

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desires to see or run the business. Planning is done so that one can run the business according to one‟s
desire or expectations. Planning outlines the results expected and the nature of the results expected.
Thus planning is realistic. What we plan today we implement for future, we see the results and we
evaluate the results.
7. Forecasting is a pre-requisite for planning: Without forecasting, there will be no planning. The
planning process starts with the assumption of the future. Planning is done on the basis of thinking or
forecasting about the future. One has to forecast about different factors like politics, economy, social,
technology, government policies, nature, demands, expectations, fashion, etc. Keeping in mind about
these factors planning is done. Also, one should have sufficient knowledge and expertise about the
future changes. Thus, without forecasting, there will be no planning.

Importance of Planning
Planning is an important and basic function of management. Orderly procedure is possible, through
planning. Planning states the way through which the objectives are achieved and anticipates the
activities well in advance i.e., planning should take place before doing.
According to George R .Terry, “Planning is basic to the other fundamental management functions
that is organizing, actuating and controlling. Without the activities determined by planning, there
would be nothing to organize,, no one to actuate, and no need to control .This viewpoint stresses the
importance of planning in the management process”.
Planning helps the businessman get early success. Success without planning is almost impossible in
business. So, the planning function is very important due to the following reasons:
1. To manage by objectives: All the activities of an organization are designed to achieve the framed
objectives. However, planning makes the organization focus on the objectives for early achievement.
2. To convert uncertainty into certainty: Future is full of uncertainties. These uncertainties may be
predicted through forecasting. Then, the planning provides necessary provision to face the
uncertainties. Besides, planning evaluates the alternative course of action for the continuous growth
and prosperity of the organization.
3. To have economy in operation: Planning selects any one of the available alternatives which will
help produce the best results at minimum costs.
4. To have better coordination: The coordination is obtained by the management through planning,
well published policies, programmes and procedures. So, planning also helps the management get
coordination. According to Koontz and O‟Donnell, “Plans are selected courses along which the
management desires to coordinate group action”.
5. To manage increasing complexities of business: At present, there is need for many people with
different qualifications to run a business. This makes it necessary for the management to plan the
business activities clearly as to who is to do, what is to be done, where is to be done, when it is to be
and how it is to be done.
6. To have effective Control: Control is necessary only when there is a deviation in the actual
performance from the planned performance. In the absence of a plan, there are no standards to
compare. In simple words, planning without control are useless and control without planning is
impossible. H.G. Hicks has said that, “Planning is clearly a prerequisite for effective controlling. It is

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utterly foolish to think that controlling could be accomplished without planning; without planning
there is no predetermined understanding of the desired performance.
7. To make effective utilization of resources: Planning involves deciding in advance of the business
activities. Then, the business activities are completed without any delay .It leads to effective
utilization of resources at the cheapest and in the best manner.
8. To avoid business failures: Planning includes the selection of best objectivities conversion of
uncertainty into certainty, economy in operation, coordination, facing the complexities, effective
control and effective utilization of resources and avoiding business failures.

Steps in planning/Process of Planning

The planning steps changes from organization to organization and from plan to plan. Planning
processes are in such a way that they lead to the translation of an idea into action.
Following are the steps in planning:
1. Perception of opportunities: Perception of opportunities can be identified through SWOT
analysis. SWOT analysis outcome leads to formulation of plans by providing clue whether
opportunities exist for taking up particular plans. Perception can be considered as the beginning of
planning process. Perception of opportunities means a preliminary look at possible opportunities. It
helps to know where the organization stands in the light of the strengths and weaknesses. Perception
of opportunities provides opportunity to set the objectives in real sense. Once the opportunities are
perceived, the other steps of planning are undertaken.
2. Establishing objectives: The second and important step in planning is establishing the objectives.
Objectives specifies what is to be done, when is to be done, how is to be done and who will do.
Objectives specify the results expected and indicate the end points of what is to be done. Establishing
objectives give direction to the natural of all major plans. Establishing objectives helps in planning of
the activities to be done. It helps to plan in the right direction and at the right time. It removes all the
confusion and helps to plan in a straightforward direction. Once the objectives have been established
one will be able to plan by keeping in mind the set objectives.
3. Planning premises: After determination of objectives, the next step is establishing planning
premises. Planning is done for the future and therefore we need to assume about the various internal
and external factors. Planning premises means the conditions under which planning activities will be
undertaken or the limitations under which the business has to function. Planning about the premises
helps to determine the actual boundaries of the business in which the business activities are to be
undertaken. Planning premises are planning assumptions about the expected environmental or
external and internal conditions. External premises include total factors in like political, social,
technological, competitors, government policies, etc. Internal factors include organizations policies,
resources of various types and the ability of the organization.
The nature of planning premises differs at different levels of planning.
4. Identification of alternatives: Based on the organizational objectives and planning premises,
various alternatives can be identified. Identifying the alternatives is easy but after identifying number
of alternatives, it is difficult to minimize the alternatives. Only such alternatives must be selected
which seems to be most promising and which can be taken for detailed analysis. Those alternatives

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must be selected which requires minimum investment. Only those alternatives has to be selected
which matches with the present economy, social, technology, government policies, and conditions,
etc.
5. Evaluation of alternatives: The various alternatives selected as best may be taken for detailed
evaluation. Each selected alternatives must be evaluated to see how each alternatives contribute to
the organizational objectives. Therefore, evaluation of alternatives is a must.
6. Choice of alternative: After the evaluation of various alternatives, the most appropriate one
should be selected. Sometimes evaluation shows that more than one alternative is equally good. In
such cases the planner must choose more than one alternative. So that if, one alternative seems not
working, then, the second alternative can be selected.
7. Formulation of supporting plans: After formulating the basic plan, various plans are derived so
as to support the main plan. In an organization there can be various derivative plans like planning for
buying equipment‟s, buying raw materials, recruiting and training personnel, developing new
product, etc.
8. Establishing sequence of activities: After formulating basic and derivative plans, the sequence of
activities is determined so that plans are put into action. Activities are arranged in sequence so that
activities are conducted in sequence and not in a haphazard manner. Each activity has some purpose
or objectives to be achieved, arranging these activities in sequence will help to achieve the purpose or
objectives easily and smoothly. Based on plans at various levels, it can be decided who will do what
kind of activities and at what time.

Types of plans/Components of plan/Elements of plan

There are two types of plan, standing plan or multiuse plan and single use plan. Standing plans are:
Objectives policies, procedures, rules, strategies and Single use pans are: Schedule, programme,
budget, forecasting and projects. They are explained as under.
1. Objectives: Objectives are plans for the future that will provide direction for activity. Any
organizations have different objectives to be fulfilled. Each department has its own objectives within
the framework of basic goals to carry out the departmental activities.
2. Policies: A policy is a standing plan and is a general statements which guide or channel thinking in
decision making. It is a guide to action or decision of a manager. A policy helps keep work in line
with objective. Policies are directives providing continuous framework for executive actions on
recurrent managerial problems. A policy sets up the overall boundaries for activities.
3. Rules: Rules are the simplest type of plan chosen from alternatives. A rule requires that a specific
action be taken or not taken with respect to a situation. It is more rigid and more specific than a
policy. A rule never allows deviation from a stated course of action. Rules are essential for discipline
and smooth operations of the business.
4. Procedure: It is a standing plan acting as a means of implementing a policy. A procedure lays
down the manner or method by which work is to be performed in a standard and uniform way.
Procedures ensure uniformly high level of performance. It simplifies the work. Policies guide
thinking and action whereas procedures guide action only to fulfill the objectives.

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5. Programme: Programme is a sequence of activities designed to implement policies and
accomplish objectives. It gives step-by-step approach to guide action necessary to reach
predetermined targets. A good programme ensures smooth and efficient operations. A programme
tells what is to be done.
6. Schedules: Scheduling is the process of establishing time sequence of the work to be done. A
schedule specifies the time when each of a series of actions should take place. Schedules are prepared
well in advance for any programme to carry out the activities smoothly and easily.
7. Budget: A budget is an appraisal of expected expense against anticipated income or a future
period. It may be stated in time, materials, money or other units required to perform work and secure
specified result. A budget is a type of plan and it is also used as a control device. The budget begins
as a forecast and therefore, requires planning.
8. Forecasting: Forecasting is of three types (a) extrapolation, (b) economic forecasting and (c)
marketing research. It is based on statistical data and marketing research. Economic forecasting is
the basis of planning. It is a systematic attempt to probe the future on the basis of known
information.
9. Strategies: Strategies are one type of plan which is prepared specifically to meet the immediate
objectives. Strategies are prepared for a specific reason and purpose. Strategies are hidden plans to
beat the competitors. Once the objectives or purposes are achieved new strategies are prepared. It is
prepared keeping in mind certain internal or external factors affecting and influencing the
organization most.
10. Project: Project is a specific plan to achieve specific objectives and goals. The project emerges
from the parent organization and all the resources used for the project comes from the parent
organization. Once the project goals and objectives are achieved the project is said to be completed.

Managerial Skills:
Managers at every level in the management hierarchy must exercise three basic types of skills:
technical, human, and conceptual. All managers must acquire these skills in varying proportions,
although the importance of each category of skill changes at different management levels.

1. Conceptual Skill: Conceptual skills are more required at the top level. The top level people are
involved in the formulation of broad policies, rules, regulations, objectives, plans etc which
requires the skills like analyzing, interpreting, comparing, creative solutions of the problems,
innovations, etc. Moreover they need the knowledge and ability for converting their ideas and
thinking into practice.

2. Human Skill: Human skills are required equally at all the levels who are the heads of different
departments like human resource, finance, maketing,et. Through this skill the manager will be able
to get the work done by others. This skill reflects the managers ability to interact with others,
motivate the employees, to make optimum use of human resources.

3. Technical Skill: Technical skills are required more at bottom level who are involved in the
conversion process or production process. This skill helps the supervisors, foreman and workers to
deal with the mechanical or technical works. The knowledge about this skill helps to make use of

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 variety of equipments, operate machines, increase the sales, design different types of products and
services.

Managerial Roles:
As against management functions, Mintzberg has defined the roles of managers to identify what
managers do in the organization. Role is defined as the pattern of behaviour which is defined for
different positions. Mintzberg has pointed out three broad categories of roles that a manager performs
in an organization. There are interpersonal roles, informational roles and decisional roles.
Managerial roles depend on the formal authority which is delegated to the manager in an organization. In
performing a particular role, the manager uses his skills and other characteristics.

1. Interpersonal Role: Interpersonal role of a manager is concerned with other persons, both the
organizational members & outsiders. There are three types of interpersonal roles.
1. Figure head Role: in this role, the manager performs activities which are of ceremonial and symbolic
nature. These include greeting the visitors, attending social functions involving employees.
2. Leader Role: Manager’s leader role involves leading his subordinates and motivating them for willing
contributions. Willing contributions come from subordinates when they see in a manager certain
exemplifying behaviours.
3. Liaison Role: in this role, the manager serves as a connecting link between his organization and outsiders
or between his unit and other organizational units. The major objectives of this role is to maintain a link
between the organisaiton and its external environment.
2. Informational Role: Informational role of a manager includes communication—giving and receiving
information—both within and outside the orgnisation. Information is required to make decisions
effective. There three types of informational roles of a manager.
1. Monitoring Role: In this role, the manager constantly collects informational about those factors which
affect his activities. Such factors may be within the org. as well as outside it.
2. Disseminator Role: In this role, the manager distributes the informational to his subordinates who may
otherwise not be in a position to collect it.
3. Spokesperson Role: In this role, the manager represents his org. or unit while interacting with outsiders.
These may be customers, financiers, government, suppliers, or other agencies of the society.

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3. Decisional Role: Decisional role of a manager involves choosing the most appropriate alternative out of the
available ones so that the org. achieves its objectives when the chosen alternative is put into action.
There are four types of decisional roles.

1. Entrepreneur: As an entrepreneur, the manager assumes certain risk which is involved in terms of the
outcomes of an action because these are affected by a variety of external factors. Since these factors are
dynamic and change constantly, the manager is required to bring suitable changes in the organizational
processes to align these with the requirement of the environment.
2. Disturbance Handler: As a disturbance handler, the manager is required to contain those forces and
events which tend to disturb the organizational equilibrium and normal functioning. These forces and
events may be strike by employees, shortage of raw materials, employee complaints and grievances, etc.
3. Resource Allocator: As a resource allocator, the manager allocates resources—human, physical, and
financial—to various organizational units according to their needs.
4. Negotiator: As a negotiator, the manager negotiates with various interest groups in the org. such interest
groups are shareholders, employees, and outside agencies.

DISCLAIMER: This study material is prepared by Dr. Joe Mary George. The basic
objective is to supplement teaching and discussion in the classroom in the subject.
Students are required to go for extra reading in the subject through library work.

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