• Perspective Management

 Management is the process of designing and maintaining the environment in which individual
working together in groups, efficiently accomplish selected aims.

 people carry out functions of planning, organizing, staffing, leading and controlling.

 Management applies to any kind of organization

 It applies to managers all organizational level

 The aim of all managers is same : surplus

 Management is concerned with productivity i.e. effectiveness and efficiency

• What is Management?

A set of activities planning and decision making, organizing, leading, and controlling Directed at an
organization’s resources human, financial, physical, and information With the aim of achieving
organizational goals in an efficient and effective manner.

• Basic Purpose of Management

 EFFICIENTLY
Using resources wisely and in a cost-effective way

• The Management Process

 a social process - concerned with developing relationship among people

 an integrated process - undertakes the job of bringing together human, physical and financial
resources so as to achieve organizational purpose

 a continuous process - concerned with constantly identifying the problem and solving them by
taking adequate steps

 an iterative process

• Management- Science or an Art

 Management like any other practice medicine, engineering, accountancy, music composition is
an art( “know-how”).

 Managers work better by using organized knowledge about management.

 Organized knowledge underlying the practice may be referred to as a “Science”.

 As science improves , so should art as it happens in physical and biological science.

• Management Perspectives Over Time

• Classical Perspective: 3000 B.C.

● Rational, scientific approach to management – make organizations efficient operating machines

Scientific Management

Bureaucratic Organizations

• Administrative Principles

• Classical Management Perspective

 Scientific Management

– Concerned with improving the performance of individual workers (i.e., efficiency).

– Grew out of the industrial revolution’s labor shortage at the beginning of the twentieth
century.

– Frederick Taylor (1856-1915)

– “The Father of Scientific Management”

– Classical Management Perspective

 Administrative Management Theory

– Focuses on managing the whole organization rather than individuals.

 Henri Fayol (1845–1925)

– Was first to identify the specific management functions of planning, organizing, leading,
and controlling.

 Bureaucratic Organizations :

 Max Weber (1864–1920)

 His theory of bureaucracy is based on a rational set of guidelines for structuring

organizations.

• Scientific Management

 Frederick Taylor (1856-1915)

 “The Father of Scientific Management”

 Motive - Maximize worker capacity and profits

  PROBLEM: Get employees to work at their maximum capacity

 PRIMARY FOCUS: TASKS

 Scientific Management

 Frederick Taylor (1856–1915)

 Replaced old methods of how to do work with scientifically-based work methods to

eliminate “soldiering,”

 Believed in selecting, training, teaching, and developing workers.

 Background

 Deliberately working slowly as to avoid expanding more effort than deemed necessary

 Reasons

 Reduction in workforce due to decreased need

 Piecework system of remuneration - raise production requirements without

increasing pay

 Rule of thumb training methods - inefficient

• Elements of Scientific Management

 Scientific design of every aspect of every task

 Time and Motion Studies

 Developed standard method for performing each job.

 Supported workers by planning work and eliminating interruptions.

 Careful selection and training of every task

 Trained workers in standard method.

 Proper remuneration for fast and high-quality work

 Maximize output - increase pay

 Provided wage incentives to workers for increased output.

 Equal division of work and responsibility between worker and manager

  Selected workers with appropriate abilities for each job.

 Underlying Themes

 Managers are intelligent; workers are and should be ignorant

 Manager is responsible for planning, training, and evaluating

 Provide opportunities for workers to achieve greater financial rewards

 Workers are motivated almost solely by wages

 Maximum effort = Higher wages

• Scientific Management

Contributions

 Demonstrated the importance of compensation for performance.

 Initiated the careful study of tasks and jobs.

 Demonstrated the importance of personnel and their training.

Criticisms

 Did not appreciate social context of work and higher needs of workers.

 Did not acknowledge variance among individuals.

 Tended to regard workers as uninformed and ignored their ideas

 Application in the Modern Workplace

 Assembly Line Plants as Prototypical Examples

 “Prisoners of Taylorism”

 System of Remuneration

 Re-Design - Reengineering

 Benchmarking

 Data are used to refine, improve, change, modify, and eliminate organizational
processes

 Lean Manufacturing

 Henry L.Gannt
 Henry L. Gannt worked with taylor on several projects but when he went out on his own as a
consulting industrial engineer, Gannt began to reconsider tailors insensitive systems.

 Abandoning the differential rate system

 Every worker who finished days assigned work load, will win 50 percent bonus.

 Then he added a second motivation, the supervisor would earn a bonus for each workers who
reached the daily standard.

 plus a extra bonus if all the workers reached it.

 Going beyond this Gantt originated a charting system for production was translated into eight
languages and used through out the world .

 the"Ganttchart"is still in use today.

• THE GILBRETHS

 Frank B. and Lillian M. Gilbreth collaborated on fatigue and motion studies

 focus was on promoting the individual workers welfare.

 to them the ultimate aim of scientific management was to help workers reach their full potential
as human beings

• Fayol’s Administrative Theory

 Henri Fayol (1841-1925)

 General and Industrial Management

 Principles and Elements of Management - how managers should accomplish their

managerial duties

 PRIMARY FOCUS: Management (Functions of Administration)

 More Respect for Worker than Taylor

 Workers are motivated by more than money by Equity in worker treatment

• Fayol’s Administrative Theory

 Five Elements of Management -- Managerial Objectives to Keep machine functioning effectively

and efficiently

 Planning

 Organizing
  Command

 Coordination

 Control

 Replace quickly and efficiently any part or process that did not contribute to the objectives

• Fayol’s Administrative Theory

 Fourteen Principles of Management (Tools for Accomplishing Objectives)

 Division of work - limited set of tasks

The most people specialize the more efficiency they can perform their work. This principle is
characterized by the modern assembly line.

 Authority and Responsibility - right to give orders

Managers must give orders so that they can get things done while this format give them a right to
command

 Discipline - agreements and sanctions

need to respect the rules and agreement that govern the organization . Discipline leadership at all levels
of the organization is must, fair agreements and judiciously enforced penalties for infractions.

 Unity of Command - only one supervisor

Each employee must receive instruction from one person, fayol believe that if employee reported More
than one manager conflict in instruction and confusion in of authority would result.

 Unity of Direction - one manager per set of activities

Those operation with in the same organization that have the same objective should be directed by only
one manager using one plan.

 Subordination of Individual Interest to General Interest

In any undertaking the interest of employees should not take the precedence over the interest of
organization as a whole

 Remuneration of Personnel - fair price for services

Compensation of work done should be common to both employees and employers

 Centralization - reduce importance of subordinate’s role

Decreasing the role of subordinates in decision making is centralization, increasing their role is
decentralization.

 Scalar Chain - Fayol’s bridge

The line of authority in an organization should represent in the neat box and the line of chart runs in
order of rank from top management and lowest levels of enterprise.

 Order - effective and efficient operations

Materials and the order should be in the right place at the right time.

 Equity - kindliness and justice

Managers should be fair and friendly to their subordinate.

 Stability of Tenure of Personnel - sufficient time for familiarity

A high employee turnover rate undermines the efficient functioning of an organization

 Initiative - managers should rely on workers’ initiative

Subordinate should be given the freedom to conceive and carry out their plans even though some
mistake may result.

 Esprit de corps - “union is strength” “loyal members”

Promoting team spirit will give the organization a sense of unity. To fayol even the small factor help to
develop the spirit.

• Fayol’s Administrative Theory

 Positioned communication as a necessary ingredient to successful management

 Application in the Modern Workplace

 Fayol’s elements of management are recognized as the main objectives of modern

managers

 Functions of management

 Weber’s Theory of Bureaucracy

 Max Weber (1864-1920)

 German Sociologist

 Theory of Social and Economic Organization

  Principles and Elements of Management - describe an ideal or pure form of
organizational structure (general policy and specific commands)

 PRIMARY FOCUS: Organizational Structure

 Worker should respect the “right” of managers to direct activities dictated by

organizational rules and procedures

• Background

 Prior to Bureaucracy Organizations

 European employees were loyal to a single individual rather than to the organization or
its mission

 Resources used to realize individual desires rather than organizational goals

 Systematic approach –looked at organization as a whole

 Any goal oriented organization having thousands employees would require the carefully
controlled regulation of its activities

 so this theory stressed the need for a strictly defined hierarchy governed by clearly defined
regulations and lines of authority

• Weber’s Theory of Bureaucracy

 Concerned with describing the ideal structure of an organization

 Cornerstone: existence of written rules

 The rational application of written rules ensures the promotion of legitimate authority and the
effective and efficient functioning of the organization.

• Weber’s Theory of Bureaucracy

 Application in the Modern Workplace

 Large organizations guided by countless rules are bureaucracies

 Linked with inefficient, slow-moving organizations

 Organizations have several characteristics of bureaucracies

• Humanistic Perspective

 The behavioral school emerged partly because the classical approach did not archive sufficient
production efficiency and workplace harmony.
  To help ‘managers’ frustration

 People did not always follow predicted or expected patterns of behavior.

 Thus there was increased need in helping managers to deal more effectively with a people side
of their organizations.

• Humanistic Perspective

Emphasized understanding human behavior, needs, and attitudes in the workplace

● Human Relations Movement

● Human Resources Perspective

● Behavioral Sciences Approach

● Human Relations Movement

 Emphasized satisfaction of employees’ basic needs as the key to increased worker productivity

• Human Resource Perspective

 Suggests designing the jobs to meet higher-level needs of workers by allowing them to use their
full potential

• Behavioral Sciences Approach

 Applies social science in an organizational context

 Draws from economics, psychology, sociology, anthropology, and other disciplines

 Understand employee behavior and interaction in an organizational setting

 OD (Organization Development)

• Human Relations Movement

 Grew out of the Hawthorne studies.

 recognized the importance of behavioral processes in the workplace.

 Proposed that workers respond primarily to the social context of work, including social
conditioning, group norms, and interpersonal dynamics.

 Assumed that the manager’s concern for workers, would lead to increased worker
satisfaction and improved worker performance.

• The Hawthorne Studies

 Conducted by Elton Mayo and associates at Western Electric plant near chicago.

 Illumination study — to investigate relationship between workplace lighting and worker

productivity

 Group study (set of experiments) — increased wages, varied rest periods, shortening
work day –week, rest period of choice but performance rose then fell erratically.

 Hawthorne effect- Emphasized individual attitudes and behaviors, and group processes,
special attention, welfare, and sympathetic supervision resulted into increased
productivity.

 Old concept of “rational man”(personal economic needs) complemented by “Social

man”(social needs, rewards, work group pressure)

• Behavioral Management Perspective

 Abraham Maslow

 Advanced a theory that employees are motivated by a hierarchy of needs that they seek
to satisfy.

 Douglas McGregor

 Two alternative basic assumptions about people

 Proposed Theory X and Theory Y concepts

of managerial beliefs about people
and work.

 Dislike work –will avoid it

 Must be coerced, controlled, directed, or threatened with punishment

 Prefer direction, avoid responsibility, little ambition, want security

 Do not dislike work

 Self direction and self control

 Seek responsibility

 Imagination, creativity widely distributed

• Behavioral Science

 Important topics in organizational behavior research:

 Job satisfaction and job stress

  Motivation and leadership

 Group dynamics and organizational politics

 Interpersonal conflict

 The structure and design of organizations

• Management Science Perspective

 Quantitative Management

 Emerged during World War II to help the Allied forces manage logistical problems.

 Focuses on decision making, economic effectiveness, mathematical models, and the use
of computers to solve quantitative problems.

 Management Science

 Focuses on the development of representative mathematical models to assist with

decisions.

 Operations Research

 application of management science to new inventions through mathematical

modeling

 Operations Management

 Practical application of management science to efficiently manage the production and

distribution of products and services.

 Information Technology – reflected in management information systems

 Recent Historical Trends

 Systems Theory

 Contingency View

 Total Quality Management (TQM)

• System – derived from Greek word

Meaning “to bring together or to contribute”

• What is a system?
A set of interrelated and interconnected elements or components , which operate together to achieve
certain goals

• Systems View of Organizations

• Components of System

– Subsystem

– Synergy

– Open and closed system

– System Boundary

– Flow

– Feedback

• Contingency Theory

 Contingency theory is an outgrowth of systems design.

 Jay Galbraith (1973) states that in contingency theory there is no one best way to organize.

 Any way of organizing is not equally effective.

 Appropriate managerial actions depend on the particular parameter of the situation

 Contingency theory is based on hypothesis that organizations whose internal features best
match the demands of their environments will achieve the best adaptation.

 The termed was coined by Lawrence and Lorsch in 1967

 argued that the amount of uncertainty and rate of change in an environment impacts the
development of internal features in organizations.

 Universal Perspectives

 Include the classical, behavioral, and quantitative approaches.

 An attempt to identify the “one best way” to manage organizations.

 The Contingency Perspective

 Suggests that each organization is unique.

  The appropriate managerial behavior for managing an organization depends (is
contingent) on the current
situation in the organization.

• Contingency View of Management

 Total Quality Management

 Learning Organizations

• TOTAL QUALITY
MANAGEMENT

• Total Quality Management [TQM] is the system of activities directed at achieving delighted
customers, empowered employees, higher revenues and lower costs.

• TOTAL QUALITY
MANAGEMENT

Total Quality Management is a strategic approach to produce the best product and services through
constant innovation by doing the right thing right first time and all the times.

• Learning Organization

• "Organizations where people continually expand their capacity to create the results they truly
desire, where new and expansive patterns of thinking are nurtured, where collective aspiration
is set free, and where people are continually learning to learn together" (Peter Senge, 1990)

• Concepts

• Levels of Management

– The top level

• BODs, Chief executive, Sr.executive and functional heads

– The middle management

• Departmental heads, branch managers and superintendents

– The lower management

• first level supervisors, workers

• Management applies to managers at all organizational levels. All managers carry out managerial
function.

• Managerial skills
• Technical Skills

• Human skills

• Conceptual Skills

• Design Skills

• The importance of these skills may differ at various levels in the organization hierarchy.

• Technical Skills: It is the knowledge of and proficiency in activities involving methods, process
and procedures.

• Human skills: It is the ability to work with the people. It is the creation of an environment in
which person feels secure and free to express their opinion.

• Conceptual Skills: Ability to recognize the element in a situation and to understand the
relationship among the elements.

• Design Skills: It is the ability to solve the problem in such a way that it will benefit the
organization.

• Managerial skills and the organization hierarchy

• Lower level management: - technical skill are of greatest importance, human skills are also
helpful in interaction with subordinate but conceptual skills are normally not critical for them.

• Middle management: - the need for technical skills decreases, human skills are still essential
and the conceptual skills gain in importance.

• Top management: - For top management conceptual and human skills are very valuable but
there is very less need for technical abilities.

• Skills Vs Managerial Level

Lower Mgmt Middle Mgmt Top Mgmt

• Administration and Management

• Administration Function : Determinative function, one particular aspect of management process

• Management: Executive function

• Management function is classified as

– Administrative Management: represent higher level, charge of thinking function

– Functional or Operating Management: actual implementation of plans/policies

determine by administration
 – Forces Influencing
Organizations and Management

• Social Forces - values, needs, and standards of behavior

• Political Forces - influence of political and legal institutions on people & organizations

• Economic Forces - forces that affect the availability, production, & distribution of a society’s
resources among competing users

• Management Process

o As a process consists of a series of interrelated functions carried out by managers at different

levels, to achieve the organizational goals.

• Functional approach to Management

• Management process can best be understood by analyzing its function.

• It uses the managerial experience as the basis for developing certain generalizations or
principles

• It regards management as a universal process applicable to all kinds of enterprises and to all
levels of management.

• Features of Management Process

• Goal Oriented

• Depicts the nature of job

• Functions follow one another

• Perpetual Process (continuous)

• Interrelationship

• Transformation of inputs into output

• There are five functions of managers:

– Planning,

– Organizing,

– Staffing,

– Leading/Directing, and
 – Controlling.

The functions of managers provide a useful structure for organizing management knowledge.

Planning

• Basic function of management

• Deciding in advance what to be done and determination of course of action to achieve the
desired result.

• Planning involves selecting missions and objectives and the action to achieve them

• it requires decision making, that choosing future courses of action from among alternatives.

What is planning?

• According to Fayol, "The plan of action is, at one and the same time, the result envisaged, the
line of action to be followed, the stages to go through, and the methods to use. It is a kind of
future picture wherein proximate events are outlined with some distinctness....“

• Planning is deciding in advance what is to be done. It involves the selection of objectives,

policies, procedures and programs from among alternatives.

• A plan is a predetermined course of action to achieve a specified goal.

• In short, it is a blueprint for action.

• According to Louis A Allen - "Management planning involves the development of forecasts,

objectives, policies, programs, procedures, schedules and budgets".

• According to Theo Haimann –

"Planning is deciding in advance what is to be done. When a manager plans, he projects a course of
action for the future, attempting to achieve a consistent, co-ordinated structure of operations aimed at
the desired results".

• According to Koontz O’Donnell –

"Planning is an intellectual process, the conscious determination of courses of action, the basing of
decisions on purpose, acts and considered estimates"

THE NUTURE & PURPOSE OF PLANNING

The essential nature of planning can be defined by dividing it into following primary aspects.
 • The Contribution of planning to purpose and objective

• The Primacy of planning

• The Pervasiveness of planning

• The Efficiency, Economy and Accuracy of plans

THE CONTRIBUTION OF PLANNING TO PURPOSE AND OBJECTIVE

• Every plan and all its supporting plans should contribute to the accomplishment of the purpose
and objectives of the organization.

THE PRIMACY OF PLANNING

• planning logically precedes or help the accomplishment of all other managerial functions.

• Because Manager must plan in order to know what kinds of organization relationship and
personal qualifications are needed, which method should be used by subordinates and what
kind of control is to be applied.

• Management starts with planning and returns to planning for improvement and control .

THE PERVASIVENESS OF PLANNING

• Planning will differ as per Manager’s authority and with the nature of policies and plans outlined
by superiors.

• If Managers are not allowed a certain degree of discretion and planning responsibility they are
not truly Managers.

• If we recognize the pervasiveness of planning, we can more easily understand why some people
distinguish between the “manager” and the “administrator” or “supervisor”

• one manager, because of his or her authority or position in the organization, may do more
important planning than another, or the planning of one may be more basic than that of
another and applicable to a large portion of the enterprise.

• However, all managers from presidents to first level supervisors plan. Even the head of a road
gang or a factory crew plans in a limited area under fairly strict rules and procedures.

• A principal factor in a success of supervisors at the lowest organization level is their ability to
plan.

THE EFFIENCY, ECONOMY AND ACCURACY OF PLANS

 • Plans are efficient, if they achieve their purpose at a reasonable cost, when cost is measured not
only in terms of times or money or production but also in degree of individual and group
satisfaction.

• Many managers have followed plans whose costs were greater than the revenue that could be
gained.

• For example, one airline acquired certain aircraft with costs exceeding revenues. Companies
have also tried to sell products that were unacceptable to the market.

• if plans make enough people in an organization dissatisfied or unhappy then it is impossible to

achieve objects

• Secondary aspects:

– Planning - a continuous process.

– Planning - an intellectual process.

– Plans are arranged in hierarchy.

Types of planning

• Strategic Planning

• Operational Planning

Types of plans

• Mission or purpose
• Objectives or goals
• Strategies
• Policies
• Procedures
• Rules
• Programs
• Budgets

• Mission or purpose

• The basic function or tasks of an enterprise or agency or any part of it.

• E.g.

– The purpose of business generally is the production and distribution of goods and
services.

– The purpose of courts is interpretation of the laws and their applications.

 – The purpose of University is teaching, research, and providing services to community.

Some writers distinguish between mission and purpose.

• A business may have a social purpose of producing and distributing goods and services, it can
accomplish this by fulfilling a mission of producing certain line of products.
E.g.

– Reliance petrochemicals ltd has a mission of searching oil, to produce, refine, and
market petroleum and petroleum products.

– In the year 1960s the mission of National Aeronautics space Administration (NASA) was
to get a person to a moon before the Russians.

Objectives or goals

• Objectives or goals are the ends towards which an activity is aimed,

• Represent not only the end point of planning but also the ends towards which organizing,
staffing, leading and controlling are aimed.

Features of Objectives

• Plurality

• Hierarchy

• Long and short term

• Continual adjustment

• Stated and Actual

Types of Objectives

• Internal

• External

Strategies

• Implies the determination of basic long term objectives of an enterprise and the adoption of
courses of action and allocation and utilization of resources necessary to achieve these
objectives. – Alfred Chandler

• Facilitates actions and desired results which otherwise is difficult

• Provides with clear vision of purpose and objectives

formulation

• Industry

• Mission

• Strategic and performance objective

• Specific business strategy

• Implementation

• Review for effectiveness

Environment Analysis

• Internal

• External

– Political

– Legal

– Social- religious

– Competitive

– Technological

– Economical

Policies

• Policies are general statements or understandings that guide or channel thinking in decision
making.

• Not all policies are statements, they are often merely implied from the actions of managers.

• E.g.

– The president of the company may strictly follow the practice of promoting from within,
the practice may then be Interpreted as policy and carefully followed by subordinates.

– policies of hiring only university trained engineers, encouraging employee suggestions

for improved cooperation, promoting from within, setting competitive prices etc.

Procedures

• Procedures are the plans that establish a required method of handling future activities.
 • chronological sequences of required actions.

• They are guides to actions, rather than to thinking, and

• detail the exact manner in which certain activities must be accomplished.

• E.g.

– In a manufacturing company, the procedures for handling orders may involve the sales
department (For the original order), the finance department (for acknowledgement of
receipt of funds and for customer credit approval), the accounting department (for
recording the transaction), the production department (for the order to produce the
goods or the authority to release them from stock), and the shipping department( for
determination of shipping means and routes)

Rules

• Rules spell out specific required action or non actions, allowing no discretion.

• it reflects a managerial decision that a certain action must or must not be taken.

• Rules are different from policies in that policies are meant to guide decision making by marking
of areas in which managers can use their discretion, while rules allow no discretion in their
application.
Eg.

– “No smoking” is Rule that allows no deviation from stated course of action.

Programs and projects

• Programs are complex of goals, policies, procedures, rules, task, assignment, steps to be taken,
resource to be employed, and other elements necessary to carry out the given course of action.

Budgets

• A budget is a statement of expected results expressed in numerical terms. It may be called a

quantified plan.

• The financial operating budget is also called a profit plan.

• A budget may be expressed in financial terms, in terms of labor hours, unit of product, or
machine hours, or in any other numerically measurable terms.

• The budget is necessary for control, but it cannot serve as a sensible standard of control unless it
reflects plan.

Kinds of Goals
 • By Level

– Mission statement is a statement of an organization’s fundamental purpose.

– Strategic goals are goals set by and for top management of the organization that
address broad, general issues.

– Tactical goals are set by and for middle managers; their focus is on how to
operationalize actions to strategic goals.

– Operational goals are set by and for lower-level managers to address issues associated
with tactical goals.

• The Planning in an Oragnization

Steps in Planning

• Being aware of the opportunities

• Establishing objectives

• Developing premises

• Determining alternative course

• Evaluating alternative course

• Selecting a course

• Formulating Derivative plan

• Quantifying Plans By budgeting

Steps in Planning

Being aware of the opportunities:

• It precedes actual planning and is therefore not strictly a part of the planning process,

• It is an awareness of opportunities in the external environment as well as within the

organization is real starting point for planning.

• SWOT analysis will help organizations to

– know where they stand in light of their strengths and weakness,

– understand what problems they wish to solve and why,

– know what they expect to gain.

 • Setting realistic objectives depends on this awareness about

– market

– expected competition

– What customers wants

– their qualities and weakness

Establishing objectives:

• The second step in planning is to establish or set objectives for the entire enterprise and then
for each subordinate work unit.

• Objectives specify the expected results and indicate the end point of what is to be accomplished
by the network of strategies, policies, procedures, rules, budgets, and programs.

Developing premises:

• Premises are the assumptions about the environment in which the plan is to be carried out.

• It is important for all the managers involved in planning to agree on the premises.

• Principle of planning premises: the more thoroughly the individuals charged with planning
premises, the more coordinated enterprise planning will be.

• Forecasting is important in premising:

– What kind of markets will there be?

– What prices?

– What products?

– What volume of sales?

– What technical developments?

– What wage rates?

– What tax rates and policies?

– What new plants?

– What policies with respect to dividends?

– What political or social Environment?

– How will expansion be financed?

 – What are the long term trends? Etc.

Determining alternative course:

• the fourth step in planning is to search for and examine alternative courses of action, especially
those not immediately apparent.

• There is seldom any plan for which reasonable objectives do not exist and quite often an
alternative that is not so obvious proves to be the best.

Evaluating alternative course:

• After seeking out alternative courses and examining their strong and week points, the next step
is evaluate the alternatives by in the light of premises and goals.

Selecting a course:

• this is the real point of decision making, the point at which the plan is adopted.

• After identifying and evaluating alternative the manager has to decide one best alternative from
several alternative courses of action.

Formulating Derivative plan:

• Derivative plans are almost invariably required to support the basic plan.

such as to buy equipment, materials, hire and train workers and develop a new product.

Quantifying Plans By budgeting:

• the final step in giving them meaning, that is Quantifying by converting them into budgets.

• The overall budget of an enterprise represents the sum total of income and expenses with the
resultant profit or surplus, and the budgets of the major balance sheet items such as cash and
capital expenditure.

• Long-Range planning - directed towards the achievement of long-term objectives.

• Short Range Planning

Importance of Planning

• Basis for cooperative and coordinated effort

 • Reduces the need for crisis management

• Enables an organization to capitalize opportunities and face challenges

• Reduces uncertainties

• Promotes efficiency and criteria for decision

• Facilitates timely execution of complex tasks

• Basis for control

Limitations

• Difficulty of accurate premising

• Past decision

• Administrative problem

• Human problems

• Rapid change

• Expense and time