Unit one

DEFINITION OF Management
Management is a universal phenomenon. It is a very popular and widely used term. All organizations -
business, political, cultural or social are involved in management because it is the management which
helps and directs the various efforts towards a definite purpose. According to Harold Koontz,
―Management is an art of getting things done through and with the people in formally organized
groups. It is an art of creating an environment in which people can perform and individuals and can co-
operate towards attainment of group goals. Management is an art of knowing what to do, when to do
and see that it is done in the best and cheapest way.Management is a purposive activity. It is something
that directs group efforts towards the attainment of certain pre –determined goals. It is the process of
working with and through others to effectively achieve the goals of the organization, by efficiently using
limited resources in the changing world. Of course, these goals may vary from one enterprise to
another, e.g.: For one enterprise it may be launching of new products by conducting market surveys and
for other it may be profit maximization by minimizing cost.

Management as a discipline refers to that branch of knowledge which is connected to study of principles
& practices of basic administration. It specifies certain code of conduct to be followed by the manager &
also various methods for managing resources efficiently.

Any branch of knowledge that fulfils following two requirements is known as discipline:

1. There must be scholars & thinkers who communicate relevant knowledge through research and
publications.

2. The knowledge should be formally imparted by education and training programmes. Since
management satisfies both these problems, therefore it qualifies to be a discipline. Though it is
comparatively a new discipline but it is growing at a faster pace.

FEATURES OF Management:

Management is an activity concerned with guiding human and physical resources such that
organizational goals can be achieved. Nature of management can be highlighted as: -

i) Management is Goal-Oriented: The success of any management activity is accessed by its

achievement of the predetermined goals or objective. Management is a purposeful activity. It is a tool
which helps use of human & physical resources to fulfill the pre-determined goals. For example, the goal
of an enterprise is maximum consumer satisfaction by producing quality goods and at reasonable prices.
This can be achieved by employing efficient persons and making better use of scarceresources.

ii) Management is integrates Human, Physical and Financial Resources: In an organization, human
beings work with non-human resources like machines. Materials, financial assets, buildings etc.
Management integrates human efforts to those resources. It brings harmony among the human,
physical and financial resources.

iii) Management is Continuous: Management is an ongoing process. It involves continuous handling of

problems and issues. It is concerned with identifying the problem and taking appropriate steps to solve
it, e.g. the target of a company is maximum production. For achieving this target various policies have to
be framed but this is not the end. Marketing and Advertising is also to be done. For this policies have to
be again framed. Hence this is an ongoing process.

iv) Management is all Pervasive: Management is required in all types of organizations whether it is
political, social, cultural or business because it helps and directs various efforts towards a definite
purpose. Thus clubs, hospitals, political parties, colleges, hospitals, business firms all require
management. Whenever more than one person is engaged in working for a common goal, management
is necessary. Whether it is a small business firm which may be engaged in trading or a large firm like Tata
Iron & Steel, management is required everywhere irrespective of size or type of activity.

v) Management is a Group Activity: Management is very much less concerned with individual‘s efforts.
It is more concerned with groups. It involves the use of group effort to achieve predetermined goal of
management of an organization .

Following are the common Functions of Management:

1. PLANNING:

Planning means looking ahead and chalking out future courses of action to be followed taking into
consideration available & prospective human and physical resources. It is a systematic activity which
determines when, how and who is going to perform a specific job. It is rightly said ―Well plan is half
done. According to Koontz & O‘Donnell, ―Planning is deciding in advance what to do, how to do and
who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes
possible things to occur which would not otherwise occur.Planning requires administration to assess
appropriate course of action to attain the company‘s goals and objectives.

Steps IN PLANNING FUNCTION:

i) Establishment of objectives:

a. Setting of goals and objectives to be achieved.

b. Stated in a clear, precise and unambiguous language.

c. Stated in quantitative terms.

d. Should be practical, acceptable, workable and achievable.

ii) Establishment of Planning Premises:

a. Planning premises may be internal or external. Internal includes capital investment policy,
management labour relations, philosophy of management, etc. Whereas external includes socio-
economic, political and economical changes.

b. Internal premises are controllable whereas external are non controllable.

iii) Choice of alternative course of action:

a. A number of alternative course of actions have to be considered.

b. Evaluated each alternative in the light of resources available

c. Chose the best alternative.

iv) Securing Co-operation:After the plans have been determined, it is necessary rather advisable to take
subordinates or those who have to implement these plans into confidence. This motivates them,
valuable suggestions can come and employees will be more interested in the execution of these plans.

2. ORGANIZING:

Organizing is the function of management which follows planning. It is a function in which the
synchronization and combination of human, physical and financial resources takes place. All the three
resources are important to get results. Therefore, organizational function helps in achievement of
results which in fact is important for the functioning of a concern. Hence, a manager always has to
organize in order to get results.

A manager performs organizing function with the help of following steps:

1. Identification of activities - All the activities which have to be performed in a concern have to be
identified, grouped and classified into units.

2. Departmentally organizing the activities - dividing the whole concern into independent units and
departments is called departmentation.

3. Classifying the authority - Authorities bringing smoothness in a concern‘s working.

4. Co-ordination between authority and responsibility: Each individual is made aware of his authority
and knows whom they have to take orders from and to whom they are accountable and to whom they
have to report. Thus an organization structure should be designed to clarify who is to do what tasks and
who is responsible for what results and to furnish decision-making and communications networks
reflecting.

3. STAFFING:

The managerial function of staffing involves manning the organization structure through proper and
effective selection, appraisal and development of the personals to fill the roles assigned to the
employers/workforce. Staffing pertains to recruitment, selection, development and compensation of
subordinates.

NATURE OF STAFFING FUNCTION:

i) Staffing is an important managerial function

ii) Staffing is a continuous activity

iii) The basis of staffing function is efficient management of personals.

iv) Staffing helps in placing right men at the right job

v) Staffing is performed by all managers depending upon the nature of business, size of the company,
qualifications and skills ofmanagers, etc.

vi) Since, the success of the organization depends upon the performance of the individual, staffing
function of manager deserves sufficient care & attention of the management.

4. DIRECTING:

Directing is a process in which the managers instruct, guide and oversee the performance of the
workers to achieve predetermined goals. Planning, organizing, staffing has got no importance if direction
function does not take place.

CHARACTERISTICS OF DIRECTION:

i) Pervasive Function - Directing is required at all levels of organization.

ii) Continuous Activity - Direction is a continuous activity as it continuous throughout the life of
organization.

iii) Human Factor - Since human factor is complex and behavior is unpredictable, direction function
becomes important.

iv) Creative Activity - Direction function helps in converting plans into performance

v) Executive Function - Direction function is carried out by all managers and executives at all levels
throughout the working of an enterprise; To sum up, the plans may be the best feasible ones, the
activities may be systematically organized, the staff may be highly efficient, but the organization will not
succeed, if there is no proper direction. Mere planning, organizing and staffing are not sufficient to set
the tasks in motion. Directing involves not only instructing people what to do, but also ensuring that
they know what isexpected from them.

5. CO-ORDINATION

Co-ordination tries to achieve harmony between individual‘s efforts towards achievement of group
goals and is a key to success of management. Management seeks to achieve co-ordination through its
basic functions of planning, organizing, staffing, directing and controlling. Co-ordination is achieved
through planning, organizing, staffing, directing and controlling. Co-ordination is life-line of
management. It is required in each and every function and at each and every stage and therefore it
cannot be separated

6. CONTROLLING:

Controlling is measuring and correcting individual or organizational performance to ensure that event
confirm to plans. It involves measuring performance against set goals and plans showing where
deviations from the standards exist and helping to correct those deviations. The control process is
cyclical which means it is never ending. Employees often view controlling negatively No matter how
positive the changes may be for the organization, Controlling is a four-step process of establishing
performance standards based on the firm's objectives, measuring and reporting actual performance,
comparing the two, and taking corrective or preventive action as necessary.

1.4 IMPORTANCE OF MANAGEMENT

1. It helps in Achieving Group Goals – Management converts disorganized resources of men, machines,
money etc. into useful enterprise. It arranges, assembles, organizes and

ntegrates the factors of production. These resources are coordinated, directed and controlled in such a
manner that enterprise work towards attainment of goals.

2. Optimum Utilization of Resources – Management utilizes all the physical and human resources
productively. Management provides maximum utilization of scarce resources by selecting its best
possible alternate use in industry from out of various uses. This leads to optimum utilization of resources
and avoid wastage.

3. Reduces Costs – It gets maximum results through minimum input by proper planning and by using
minimum input and getting maximum output. Management uses physical, human and financial
resources in such a manner which results in best combination. This helps in cost reduction.

4. Establishes Sound Organization –To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfillment of this, it establishes
effective authority and responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors and who are subordinates.

5. Establishes Equilibrium – It enables the organization to survive in changing environment. It adapts

organization to changing demand of market / changing needs of societies. It is responsible for growth
and survival of organization.

6. Essentials for Prosperity of Society – Efficient management leads to better economical production
which helps in turn to increase the welfare of people.. It improves standard of living, increases the profit
which is beneficial to business and society will get maximum output at minimum cost by creating
employment opportunities which generate income.
Unit 2

THe DIFFIRENCE b/n ADMINISTRATION AND MANAGEMENT

1.ADMINISTRATION: is concerned withformulation of broad objectives, plans & policies,overall

determination of policies,setting of major objectives, the identification of general purposes and
lying down of broad programmes and projects‖. It refers to the activities of higher level. It lays
down basic principles of the enterprise, guidance, leadership and control of the efforts of the
groups towards some common goals.

2 .Management :is an art of getting things done through others by directing their efforts
towards achievement of predetermined goals.It is concerned with formulation of broad
objectives, plans & policies.

Manageral skill
1.Leadership — ability to influence others to perform tasks.

2. Self-objectivity — ability to evaluate yourself realistically.

3 .Analytic thinking — ability to interpret and explain patterns in information.

4.Behavioral flexibility — ability to modify personal Behavior to react objectively rather than
subjectively to accomplish organizational goals.

5.Oral communication — ability to express ideas clearly in words.

6.Written communication — ability to express ideas clearly in writing.

7.Personal impact — ability to create a good impression and instill confidence

8.Resistance to stress — ability to perform under stressful conditions.

9.Tolerance for uncertainty — ability to perform in ambiguous situations.

Role of Managerial
roles fall into three categories:

1.Interpersonal: This role involves human interaction.

2.Informational: This role involves the sharing and analyzing of information.

3.Decisional:This roleinvolve decisionmaking.

Unit 3 Development Theory

Theories of management and the problems they address

1) Theories of management skills

These Theories are the following.

A.The human relations school theories :Are The motivational problem.

B. The organisation behaviour schooltheories:Are Improving the integration of people into

organisations.

C. The information and decision school theories :Are The management decision-skills problem

1. 2),Theories of management functions

A.Scientific management : Are The human productivity problem

B.The quantitative school : AreThe application of objective functions to management

C.The strategic management school: AreThe organisation long-range planning problem.

3)Theories of organisation systems

A. Administrativemanagement: Are The organisation problem.

B. The organisation theory school: AreThe organisation design problem.

THE CONCEPT OF SEVEN SINS:

Mahatma Gandhi said that seven things will destroy us. All of them have to do with social and
political conditions. These seven Sins are:

1.Wealth Without Work

2.Pleasure Without Conscience

3.Knowledge Without Character

3.Commerce (Business) Without Morality (Ethics)

4.Science Without Humanity

5.Religion Without Sacrifice

6. Polices Without Principle

7.Politics Without Principle.

UNIT 4 THE ENVIRONMENTAL CONTEXT OF MANAGEMENT, SOCIAL RESPONSIBILITY AND
BUSINESS ETHICS

Business environment : may be defined as all those conditions and forces which are external to
the business and are beyond the individual business unit, but it operates within it. These forces
are customer, creditors, competitors, government, socio cultural organisations, political parties,
national and international organisations .

FEATURES OF BUSINESS ENVIRONMENT:

i) Totality of external forces: Business environment is the sum total of all things external to
business firms and, as such, is aggregative in nature.

ii) Specific and general forces: Business environment includes both specific and general forces.
Specific forces affect individual enterprises directly and immediately in their day-to-day
working. General force shaves impact on all business enterprises and thus may affect an
individual firm only indirectly.

iii) Dynamic nature: Business environment is dynamic in that it keeps on changing whether in
terms of technological improvement, shifts in consumer preferences or entry of new
competition in the market.

iv) Uncertainty: Business environment is largely uncertain as it is very difficult to predict future
happenings, especially when

environment changes are taking place too frequently as in the case of information technology
or fashion industries.

v) Relativity: Business environment is a relative concept since it differs from country to country
and even region to region. Political conditions in the USA, for example, differ from those in
China or Pakistan. Similarly, demand for sarees may be fairly high in India whereas it may be
almost non-existent in France.

TYPES OF ENVIRONMEN

1.INTERNAL ENVIRONMENT:

Are is the environment that has a direct impact on the busines.factor that affecta internal environment
are:

1. Value system

2.Mission and vision and objectives:

3.Management structure and nature:

1.EXTERNAL ENVIRONMENT:

refers to the environment that has an indirect influence on the business. The factors are uncontrollable
by the business. There are two types of external environme.micro environment and macro environment:

Following are the factors micro environment:

i) Suppliers:An important force in the micro environment of a company is the suppliers, i.e., those who
supply the inputs like raw materials and components to the company. The importance of reliable
source/sources of supply to the smooth functioning of the business is obvious.

ii) Customer:

The major task of a business is to create and sustain customers. A business exists only because of its
customers. The choice of customer segments should be made by considering a number of factors
including the relative profitability, dependability, and stability of demand, growth prospects and the
extent of competition.

iii) Competition:Competition not only include the other firms that produce same product but also those
firms which compete for the income

of the consumers the competition here among these products may be said as desire competition as the
primary task here is to fulfill the desire of the customers..The competition that satisfies a particular
category desire then it is called generic competition..

iv) Marketing Intermediaries:The marketing intermediaries include middlemen such as agents and
merchants that help the company find customers or close sales with them. The marketing
intermediaries are vital links between the company and the final consumers.

v) Financiers:The financiers are also important factors of internal environment. Along with financing
capabilities of the company .

Vi .Public:Public can be said as any group that has an actual or potential interest in or on an
organization‘s ability to achieve its interest.

2.Macro Environment:Macro environment is also known as General environment and remote

environmen.these factors are:

i) Economic Environment:Economic environment refers to the aggregate of the nature of economic

system of the country, business cycles, the socio-economic infrastructure etc. The successful
businessman visualizes the external factors affecting the business; anticipating prospective market
situations and makes suitable to get the maximum with minimize cost.
ii) Social Environment:The social dimension or environment of a nation determines the value system of
the society which, in turn affects the functioning of the business. Sociological factors such as costs
structure, customs and conventions, mobility of labour etc. have far- reaching impact on the business.
These factors determine the work culture and mobility of labour, work groups etc.

iii) Demographic Environment:Demography is the study of human populations in terms of size, density,
location, age, sex, race, occupation, and other statistics. Changes in the demographic environment can
result in significant opportunities and threats presenting themselves to theorganization.

iv) Political Environment:The political environment of a country is influenced by the epolitical

organizations such as philosophy of political parties, 4ideology of government or party in power, nature
and extent of bureaucracy influence of primary groups etc.

v) Legal Environment:Legal environment includes flexibility and adaptability of law and other legal rules
governing the business. It may include the exact rulings and decision of the courts. These affect the
business and its managers to a great extent.

vi) Technical Environment:The business in a country is greatly influenced by the technological

development.

vii) Ecosystem Environment:The ecosystem refers to natural systems and its resources that are needed
as inputs by marketers or that are affected by marketing activities.

BUSINESS ETHICS:

Business ethics are the principles and standards that: Define acceptable conduct inbusiness.

1. should underpin decision makingAn alternative definition is:the moral values which govern business
behavior and restrains companies from 2. pursuing the interest of the shareholder at the expense of all
other considerations. Some activities might be profitable and legal but nevertheless are considered to
be unethical

3.An ethical decision is one that is both legal and meets the shared ethical standards of the community.

Unit 5 FORECASTING AND DECISION MAKING

Forecasting : can be broadly considered as a method or a technique for estimating many future aspects
of a business or other operation.

Following steps are involved in process of forecasting.

1. Establishing the Business Need

2. Acquiring Data:

3. Building the Model:

4. Evaluating the Results

5. Applying the Forecast.

METHODS OF FORECASTING:

1. Genius forecasting:

2. Trend extrapolation:

3.Consensus methods:

4. Delphi technique

5.Scenario

6. Decision trees:

DEFINITION of Decision making

1. ―The process of identifying and selecting a course of action to solve a specific problem.

2. is a course of action which is consciously chosen for achieving a desired result.

The importance of decision making can be explained as follows:

1. Achievement of objectives

2. Optimum use of resources

3.Higher efficiency

4. Facilitates innovation

5. Motivation

6. Growth and expansion

7. Helps to face new challenges:

8. Encourages initiative: