MERU INSTITUTE OF BUSINESS STUDIES

Principles of Management
Daniel Mati- 0707667019

TOPIC ONE: INTRODUCTION TO MANAGEMENT.

Management: Science or Art? • The Science of Management
– Assumes that problems can be approached using rational, logical, objective, and systematic ways.
– Requires technical, diagnostic, and decision-making skills and techniques to solve problems.

• The Art of Management

– Decisions are made and problems solved using a blend of intuition, experience, instinct, and personal insights.
– Requires conceptual, communication, interpersonal, and time-management skills to accomplish the tasks associated with
managerial activities.

Management has been described as a social process involving responsibility for economical and effective planning & regulation of
operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These
activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and
every manger irrespective of his level or status.

Purpose of Management
 It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the resources
in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals.
 Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy in
management. Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out
of various uses.
 Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting maximum
output. Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost
reduction.
 Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). 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 & responsibility relationship i.e. who is accountable to whom, who can give instructions to whom, who are superiors &
who are subordinates.
 Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing environment.
With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for growth and survival of organization.
 Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase the
welfare of people

Who is a Manager?
 Someone whose primary responsibility is to carry out the management process.
 Someone who plans and makes decisions, organizes, leads, and controls human, financial, physical, and information resources.
Qualities of Management

1. Management is Goal-Oriented: The success of any management activity is assessed 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 scarce resources.
2. Management 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.
3. 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.
4. 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.
5. 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 ABC & Co. is good refers to a group of
persons managing the enterprise.
Management by Level and Area

Most organizations have three management levels:

 Low-level managers;
 Middle-level managers; and
 Top-level managers.

These managers are classified in a hierarchy of authority, and perform different tasks. In many organizations, the number of managers in
every level resembles a pyramid.

Below, you’ll find the specifications of each level’s different responsibilities and their likely job titles.

1. Top-level managers (Strategic managers)

The board of directors, president, vice-president, and CEO are all examples of top-level managers.

These managers are responsible for controlling and overseeing the entire organization. They develop goals, strategic plans, company
policies, and make decisions on the direction of the business.

In addition, top-level managers play a significant role in the mobilization of outside resources.

Top-level managers are accountable to the shareholders and general public.

2. Middle-level managers.

General managers, branch managers, and department managers are all examples of middle-level managers. They are accountable to the top
management for their department’s function.
Middle-level managers devote more time to organizational and directional functions than top-level managers. Their roles can be emphasized
as:

 Executing organizational plans in conformance with the company’s policies and the objectives of the top management;
 Defining and discussing information and policies from top management to lower management; and most importantly
 Inspiring and providing guidance to low-level managers towards better performance.

Some of their functions are as follows:

 Designing and implementing effective group and intergroup work and information systems;
 Defining and monitoring group-level performance indicators;
 Diagnosing and resolving problems within and among work groups;
 Designing and implementing reward systems supporting cooperative behavior.

3. Low-level managers

Supervisors, section leads, and foremen are examples of low-level management titles. These managers focus on controlling and directing.

Low-level managers usually have the responsibility of:

 Assigning employees tasks;

 Guiding and supervising employees on day-to-day activities;
 Ensuring the quality and quantity of production;
 Making recommendations and suggestions; and
 Upchanneling employee problems.

Also referred to as first-level managers, low-level managers are role models for employees. These managers provide:
  Basic supervision;
 Motivation;
 Career planning;
 Performance feedback; and
 Staff supervision.

Management Levels: Hierarchical view of management in organizations

MANAGERIAL SKILLS
Skills for the Manager. They include the following:
Technical skills. – Skills necessary to accomplish or understand the specific kind of work being done in an organization.

• Interpersonal
– The ability to communicate with, understand, and motivate both individuals and groups.

• Conceptual
– The manager’s ability to think in the abstract. • Diagnostic
– The manager’s ability to visualize the most appropriate response to a situation.
• Communication
– The manager’s abilities both to convey ideas and information effectively to others and to receive ideas and information
effectively from others.
• Decision-Making
– The manager’s ability to recognize and define problems and opportunities correctly and then to select an appropriate
course of action to solve the problems and capitalize on opportunities.
• Design Skills
– Ability to conceptualize and design new things such as new product, design new production process etc
Other Skills Models

Strategic Skills
• Environmental assessment scanning
• Strategy formulation
• Mapping strategic intent and defining mission
• Strategy implementation
• Human resource congruency
Task Skills
• Setting and prioritizing objectives
• Developing plan of action and implementation
• Responding in a flexible manner
• Creating value
• Working through the organizational structure
• Allocating human resources
• Managing time efficiently
Other Skills Models

 People Skills •
• Delegating
• Influencing .
• Motivating
• Handling conflict
• Win-win negotiating • Networking
• Communicating
Management Functions
1. Planning involves establishing tasks that must be performed to attain organizational goals, outlining how these tasks must be
performed, and indicating when they should be performed, by who and the expected results .
Planning process
 Determining organizational goals and means to reach them
 Managers plan for three reasons
 Establish an overall direction for the organization’s future

 Identify and commit resources to achieving goals

 Decide which tasks must be done to reach those goals

 Evalute and control

2. Organizing. Organizing means assigning the planned tasks to various individuals or groups within the organization and cresting a
mechanism to put plans into action. Process of deciding where decisions will be made, who will perform what jobs and tasks, and who
will report to whom in the company

3. Staffing. The managerial function of staffing involves manning the organization structure through proper and effective selection,
appraisal and development of the personnels to fill the roles assigned to the employers/workforce.
According to Theo Haimann, “Staffing pertains to recruitment, selection, development and compensation of subordinates.”
Staffing Process Steps involved in Staffing
• Human Resource Planning involves forecasting and determining the future manpower demands and supply of the organization
• Recruitment- Creating a pool of qualified candidates from whom to select.
• Selection- the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as
per the requirements.
• Orientation and Placement- the appointed candidates are made familiar to the work units and work environment through the
orientation programs.
• Training and Development- the workers are developed by providing them extra benefits of in-depth knowledge of their functional
areas.
• Remuneration- It is a kind of compensation provided to the employees for their work performances.
• Performance Evaluation- Measuring employees output.
• Promotion and transfer- a non- monetary incentive in which the worker is shifted from a higher job demanding bigger responsibilities
as well as shifting the workers and transferring them to different work units and branches of the same organization.
4. Leading (Influencing) means guiding the activities of the organization members in appropriate directions. Objective is to improve
productivity. Getting others to perform the necessary tasks by motivating them to achieve the organization’s goals crucial element in
all functions.

5. Directing It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of
organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning,
organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals
directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has
following elements:

 Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing
work & workers.
 Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative,
monetary, non-monetary incentives may be used for this purpose.
 Leadership- may be defined as a process by which manager guides and influences the work of subordinates in
desired direction.
 Communications- is the process of passing information, experience, opinion etc from one person to another. It is a
bridge of understanding.

6. Motivation Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals.
It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating
 the people’s behavior can be It is One of the most important functions of management is to create willingness amongst the employees to
perform in the best of their abilities. Therefore the role of a manager is to arouse interest in performance of employees in their jobs. The
process of motivation consists of three stages:-
– A felt need or drive
– A stimulus in which needs have to be aroused
– When needs are satisfied, the satisfaction or accomplishment of goals.

1. Gather information that measures recent performance

2. Compare present performance to pre-established standards 3. Determine modifications to meet pre-established standards

7. Controlling. It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement
of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient
system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of
checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any
deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in
order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has
following steps:

a. Establishment of standard performance.

b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d. Corrective action.

ORGANIZATIONAL MANAGEMENT

Organization management refers to the art of getting people together on a common platform to make them work towards a common
predefined goal.

Organization management enables the optimum use of resources through meticulous planning and control at the workplace.
Organization management gives a sense of direction to the employees. The individuals are well aware of their roles and responsibilities and
know what they are supposed to do in the organization.

An effective management ensures profitability for the organization. In a layman’s language organization management refers to efficient
handling of the organization as well as its employees.

Need for Organization Management

 Organization management gives a sense of security and oneness to the employees.

 An effective management is required for better coordination among various departments.
 Employees accomplish tasks within the stipulated time frame as a result of effective organization management.
 Employees stay loyal towards their job and do not treat work as a burden.
 Effective organization management leads to a peaceful and positive ambience at the workplace.

Essential Features of Organization Management

1. Planning
 Prepare an effective business plan. It is essential to decide on the future course of action to avoid confusions later on.
 Plan out how you intend to do things.
2. Organizing
 Organizing refers to the judicious use of resources to achieve the best out of the employees.
 Prepare a monthly budget for smooth cash flow.
3. Staffing
 Poor organization management leads to unhappy employees who eventually create problems for themselves as well as the
organization.
 Recruit the right talent for the organization.
4. Leading
 The managers or superiors must set clear targets for the team members.
 A leader must make sure his team members work in unison towards a common objective. He is the one who decides what
would be right in a particular situation.
5. Control
 The superiors must be aware of what is happening around them.
 Hierarchies should be well defined for an effective management.
  The reporting bosses must review the performance and progress of their subordinates and guide them whenever required.
6. Time Management
 An effective time management helps the employees to do the right thing at the right time.
 Managing time effectively always pays in the long run.
7. Motivation
 Motivation goes a long way in binding the employees together.
 Appreciating the employees for their good work or lucrative incentive schemes go a long way in motivating the employees
and make them work for a longer span

TOPIC TWO. EVOLUTION OF MANAGEMENT THOUGHT

The evolution of management started from civilization. So, what we have now is refined and improved management thoughts and theories.
But knowing how this evolution came about is vital. It will help to improve one’s knowledge of the process and effectively utilize
management principles for the betterment of the organization.
Theories of management.

During the classical period, management thought was focused on job content, standardization, the division of labor, and a scientific approach
towards the organization. It also was closely related to the industrial revolution as well as the rise of large-scale enterprises.

The Neo-Classical Theory

This period of evolution of management thought is an improvement of the classical theory. In other words, it modified and improved upon
the classical theory. For instance, Classical theory focused more on the area of job content, including the management of physical resources,
while the neo-classical theory gave more profound emphasis on employee relationships in the work environment.

The Bureaucratic Model

A German Sociologist called Max Weber proposed this model. And it includes a system of rules, division of labor hinged on functional
specialization, legal authority, and power, the hierarchy of authority and placement of employees based on their technical competence.

System Theory
its creation, Systems Theory (or The Systems Approach) had nothing to with business management and everything to do with biology. The
premise of general systems theory is that a system is composed of interacting elements that are affected by their environment. Because of this
interaction, the system as a whole can evolve (develop new properties) and self-regulate (correct itself).

Scientific Management

Toward the end of the 19th century, Frederick Taylor (1856-1915) conducted controlled experiments to optimize his workers’ productivity.
The results of these experiments helped him form the belief that the scientific method — not judgment or discretion — is the best determiner
of efficiency in the workplace.

Scientific Management promotes standardization, specialization, assignment based on ability, and extensive training and supervision. Only
through those practices can a business achieve efficiency and productivity. This management theory attempts to find the optimal way to
complete a given task, often at the expense of the employees’ humanity.

Administrative Theory of Management

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
Fayol’s Principles of Administrative Theory
•Fourteen Principles of Management (Tools for Accomplishing Objectives)
1. Division of work - limited set of tasks
2. Authority and Responsibility - right to give orders
3. Discipline - agreements and sanctions
4. Unity of Command - only one supervisor
5. Unity of Direction - one manager per set of activities
6. Subordination of Individual Interest to General Interest
7. Remuneration of Personnel - fair price for services
8. Centralization - reduce importance of subordinate’s role
 9. Scalar Chain - Fayol’s bridge
10. Order - effective and efficient operations
11. Equity - kindliness and justice
12. Stability of Tenure of Personnel - sufficient time for familiarity
13. Initiative - managers should rely on workers’ initiative
14. Esprit de corps - “union is strength” “loyal members”
Weber’s Theory of Bureaucracy Max Weber (1864-1920)
– German Sociologist
– Theory of Social and Economic Organization (1947)
– 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
Three types of Legitimate Authority
– Traditional Authority - past customs; personal loyalty
– Charismatic Authority - personal trust in character and skills
– Rational Authority - rational application of rules or laws
TOPIC THREE: BUSINESS ENVIROMENT
Business Environment
Definition of Business Environment is sum or collection of all internal and external factors such as employees, customer’s needs and expectations,
supply and demand, management, clients, suppliers, owners, activities by government, innovation in technology, social trends, market trends,
economic changes, etc. These factors affect the function of the company and how a company works directly or indirectly. Sum of these factors
influences the companies or business organisations environment and situation.

Importance of the Study of Business Environment:

 Business environment helps in identifying business opportunities
 Tapping useful resources
 Assists in planning
 Improves the overall performance
 Assist the growth of organization
 Profitability of the business

SWOT ANALYSIS.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT Analysis is a technique for assessing these four aspects
of your business.

You can use SWOT Analysis to make the most of what you've got, to your organization's best advantage. And you can reduce the chances of
failure, by understanding what you're lacking, and eliminating hazards that would otherwise catch you unawares.

Strengths

Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the
advantages your organization has over other organizations. These might be the motivation of your staff, access to certain materials, or a strong
set of manufacturing processes.
Weaknesses

Now it's time to consider your organization's weaknesses. Be honest! A SWOT Analysis will only be valuable if you gather all the information
you need. So, it's best to be realistic now, and face any unpleasant truths as soon as possible.

Weaknesses, like strengths, are inherent features of your organization, so focus on your people, resources, systems, and procedures. Think
about what you could improve, and the sorts of practices you should avoid.

Opportunities

Opportunities are openings or chances for something positive to happen, but you'll need to claim them for yourself!

They usually arise from situations outside your organization, and require an eye to what might happen in the future. They might arise as
developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to
your organization's ability to compete and take the lead in your market.

Threats

Threats include anything that can negatively affect your business from the outside, such as supply chain problems, shifts in market
requirements, or a shortage of recruits. It's vital to anticipate threats and to take action against them before you become a victim of them and
your growth stalls.

Types of Business Environment

1. Micro Environment
The micro-environment of a business includes the (Controllable factors) in the immediate area of operation affecting its performance and
decision making freedom. They include competitors, customers, distribution channels, suppliers, and the public. These factors affect the
performance of the business in several ways and understanding them is important for strategy formulation. It also helps in organizational
planning for operational efficiency and financial success.
1. Customers: Customers are considered the most important factor in the microenvironment because of the impact they have on business.
Their importance has grown higher in the 21st century. Moreover, the better a business knows its customers, the healthier is its bottom
line. A company can create promotional strategies and campaigns to attract and retain its customers effectively by understanding them
better.
 2. Employees: Employees are one of the very important micro-economic factors affecting the performance of any business. The
performance of the employees is one of the primary drivers of organizational performance and productivity. Research has also
highlighted the key role HR plays in the success of a business. A large number of successful companies have excellent HR policies in
place.
3. Suppliers and distribution channels: Managing the supply chain and distribution network should also be a primary focus of businesses
that strive to be successful. A well-managed supply chain reduces operational costs and improves efficiency. Some companies that have
managed efficient supply chains have been able to pass the savings to their customers. For example, Costco and Walmart are large
retailers with well-managed supply chains.
4. Competitors: Competition is everywhere and in every industry. The level of competition in any industry has a major effect on profits.
The higher the number of your competitors, the lower is your market share. When several businesses are battling for winning market
share in a limited space, the chances of market growing saturated quicker are higher. Not just this, competition affects businesses in
other ways too.
5. Shareholders and Investors: Shareholders and investors are among the most important internal stakeholders for any business.
Businesses also exist for creating shareholder value. These people have helped you grow your business and expect returns on their
investment. You share both your risks and profits with them. So, any business must create healthy profits to keep its investors happy.
6. Public and Media: A company’s image also decides its fortune in the market. So, every brand in the 21st century needs a strong brand
image. It is why they are investing in social and environmental concerns to create a responsible social image. Often this also translates
into financial success for businesses. Brands with a good brand image are easily noticed and are therefore successful at attracting
customers. The public supports the companies that have an ethical image and if you are not a responsible business, chances of a poor
image in public and media are higher. Image means a lot in today’s environment and sometimes lost reputation can be very difficult to
regain.

2. Macro Business Environment.

Macro-environment consist of forces affecting the entire society or economy at large. Macro- environment influences entire industry as a
whole.The various variables of Macro-environment are as under:

DEMOGRAPHIC ENVIRONMENT.
It includes factors such as population growth, change in age-group, marriages, family sizes, movement of people from big cities to rural or
sub urban areas, literacy etc. It is essential for the market to understand the demographic forces in a country which helps him frame optimal
marketing-mix.
SOCIO-CULTURAL ENVIRONMENT:
  Sociological Factors Consumers being social animal and their life style is deeply influenced by the social set up. It is found to have deep
influence on consumer taste, temperament, life and living. The needs, desires, hopes and aspirations of the consumers are necessary to be
understood.

 Psychological The study about the behaviour, attitude, temperament, mentality and personality is must and how there wants and
needs can be best satisfied?

 Anthropological these factors are vital in noting the national and regional characters, cultures and sub cultures and the pattern of
living.
ECONOMIC ENVIRONMENT
It comprises of economic system of the country, affects the demand structure of any industry/ product. Changes in economic conditions provide
marketers with new challenges and threats. Various economic factors which directly affect the Marketing strategies are discussed below.

 Role of Govt: Marketing in greatly influenced by the role of govt. through fiscal policies, industrial regulations, economic
controls, import-export policies etc. Monetary and Non-Monetary policies of the Govt. also determine the tempo of economic
development.

 Consumers: Consumer welfare and interest should be taken into consideration while preparing marketing programme. The
marketer is to make available quality products at reasonable prices, in sufficient qualities, at required time interval.

 Competition: Healthy competition is always in the interest of customers whereas unhealthy competition is harmful and leads
toward increasing cost and waste.

 Price: It is determinant of the fate of any business. If the Price is too high, reduces the consumer and consumption and if too
low, the producers and marketers are left in the lurch.

ETHICAL ENVIRONMENT
In the race of earning more and more profits, business people disintegrate the ethical values from the business. This leads to adulteration,
limitation etc. resulting in socio-economic pollution of minds and relations.
POLITICAL/ LEGALENVIRONMENT
The legal environment for marketing decision is characterized by various laws passed by Central or State Govt. and even by local
administration. Govt. agencies, political parties, pressure groups and laws create tremendous pressure and constraints for marketer. Marketing
managers required full knowledge and understanding of political philosophy and ideologies of major political groups and legal environment
for framing marketing strategies and growth of business.
PHYSICAL ENVIRONMENT
It refers to the physical distribution of goods and services. It needs the in depth study of cost and convenience involved in the process of
physical distribution of products from producer to consumer end.
TECHNOLOGICAL ENVIRONMENT It helps to shape changes in living style of the consumers. It has the responsibility of relating
changing life- style patterns, values and changing technology to market opportunities for profitable sales to particular market segment.

TOPIC: PLANNING.

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity
which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action.

It is rightly said “Well plan is half done”. Therefore planning takes into consideration available & prospective human and physical resources
of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes
formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources

PROCESS OF PLANNING

1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
d. Moreover objectives focus the attention of managers on the end results to be achieved.
e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise
and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units
produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager,
effectiveness of personnel manager.
g. Such goals should be specified in qualitative terms.
h. Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises
 a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes
of such deviations.
d. It is to find out what obstacles are there in the way of business during the course of operations.
e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
f. 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.
g. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative course of actions have to be considered.
b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available
and requirements of the organization.
c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
d. After objective and scientific evaluation, the best alternative is chosen.
e. The planners should take help of various quantitative techniques to judge the stability of an alternative.
4. Formulation of derivative plans
a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
b. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.
c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization
is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost
minimization.
d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.
5. Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement
these plans into confidence.
b. The purposes behind taking them into confidence are :-
i. Subordinates may feel motivated since they are involved in decision making process.
ii. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation
of plans.
iii. Also the employees will be more interested in the execution of these plans.
6. Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise its effectiveness.
c. This is done on the basis of feedback or information received from departments or persons concerned.
 d. This enables the management to correct deviations or modify the plan.
e. This step establishes a link between planning and controlling function.
f. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be
made more realistic.

Types of Plans

1. Operational Planning

“Operational plans are about how things need to happen,” motivational leadership speaker Mack Story said at LinkedIn. “Guidelines of how to
accomplish the mission are set.”

This type of planning typically describes the day-to-day running of the company. Operational plans are often described as single use plans or
ongoing plans. Single use plans are created for events and activities with a single occurrence (such as a single marketing campaign). Ongoing
plans include policies for approaching problems, rules for specific regulations and procedures for a step-by-step process for accomplishing
particular objectives.

2. Strategic Planning

“Strategic plans are all about why things need to happen,” Story said. “It’s big picture, long-term thinking. It starts at the highest level with
defining a mission and casting a vision.”

Strategic planning includes a high-level overview of the entire business. It’s the foundational basis of the organization and will dictate long-
term decisions. The scope of strategic planning can be anywhere from the next two years to the next 10 years. Important components of a
strategic plan are vision, mission and values.

3. Tactical Planning

“Tactical plans are about what is going to happen,” Story said. “Basically at the tactical level, there are many focused, specific, and short-term
plans, where the actual work is being done, that support the high-level strategic plans.”

Tactical planning supports strategic planning. It includes tactics that the organization plans to use to achieve what’s outlined in the strategic
plan. Often, the scope is less than one year and breaks down the strategic plan into actionable chunks. Tactical planning is different from
 operational planning in that tactical plans ask specific questions about what needs to happen to accomplish a strategic goal; operational plans
ask how the organization will generally do something to accomplish the company’s mission.

4. Contingency Planning

Contingency plans are made when something unexpected happens or when something needs to be changed. Business experts sometimes refer to
these plans as a special type of planning.

Contingency planning can be helpful in circumstances that call for a change. Although managers should anticipate changes when engaged in
any of the primary types of planning, contingency planning is essential in moments when changes can’t be foreseen. As the business world
becomes more complicated, contingency planning becomes more important to engage in and understand.

Challenges

 Establishing shared mission, goals, and outcomes for coordinated entry that will be accepted by all participants

 Designing a system that is based on the stated shared mission, goals, and outcomes

 Creating political will to support establishment of countywide system

 Developing a communication plan that relays systems change to funders, providers, government, and the greater community/consumers

 Encountering resistance from providers (government and nonprofits) to embrace coordinated entry due to:

 A housing-first/rapid re-housing philosophy that is in stark contrast to years of “housing-ready” philosophy

 Entities having to give up control over referrals and enrollment
 Fear that new process may create more work for staff feeling already overworked
 Lack of trust between providers to fulfill duties
 Lack of trust between funders and providers
 Concern over privacy of client information, especially for domestic violence victims
 Fear of not understanding how to use HMIS or that its use will create more work
 Pull between securing funding for more staff or using well-trained volunteers and how to train and retain them

 Agreeing on one definition of homelessness to be used by all providers

 Budgeting—cost of implementing and sustaining the system

 HMIS capabilities; building capacity for intake, assessment, and evaluation data (link to current HMIS in use or build within HMIS)

 Designing an assessment tool (agreed on by partners) that collects information relevant to mission, goals, and outcomes, and matches database
fields
 Securing and affording interpretive services needed to serve non-English-speaking clients at intake and referral-agency level

 Existing funder requirements that conflict with requirements of coordinated entry system and associated services

 High demand and limited intake staff, service providers, and community resources, e.g., housing, jobs, training/education, and child care

 Inadequate community infrastructure such as Internet, cell phone service and transportation systems

 Creating collective impact: true, deep collaboration between governments, funders, and social services to establish a streamlined and efficient
coordinated system that moves the homeless or those at risk into housing stability

TOPIC FIVE: 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. According to Chester Barnard, “Organizing is a function by
which the concern is able to define the role positions, the jobs related and the co-ordination between authority and responsibility.

Organizing is the function that managers undertake to design, structure, and arrange the components of an organization’s internal environment
to facilitate attainment of organizational goals.

Organizing creates the framework needed to reach a company's objectives and goals.
Organizing is the process of defining and grouping activities, and establishing authority relationships among them to attain organizational
objectives.

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 first. For example,
preparation of accounts, making sales, record keeping, quality control, inventory control, etc. All these activities have to be grouped
and classified into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine and group similar and related activities into units
or departments. This organization of dividing the whole concern into independent units and departments is called departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to classify the powers and its extent to the managers.
This activity of giving a rank in order to the managerial positions is called hierarchy. The top management is into formulation of
policies, the middle level management into departmental supervision and lower level management into supervision of foremen.
4. Co-ordination between authority and responsibility - Relationships are established among various groups to enable smooth
interaction toward the achievment of the organizational goal. Each individual is made aware of his authority and he/she knows whom
they have to take orders from and to whom they are accountable and to whom they have to report. A clear organizational structure is
drawn and all the employees are made

Importance of Organizing

 Efficient Administration. It brings together various departments by grouping similar and related jobs under a single specialization. This
establishes coordination between different departments, which leads to unification of effort and harmony in work.It governs the
working of the various departments by defining activities and their authority relationships in the organizational structure. It creates the
mechanism for management to direct and control the various activities in the enterprise.
 Resource Optimization. Organizing ensures effective role-job-fit for every employee in the organization. It helps in avoiding confusion
and delays, as well as duplication of work and overlapping of effort.
 Benefits Specialization. It is the process of organizing groups and sub-divide the various activities and jobs based on the concept of
division of labor. This helps in the completion of maximum work in minimum time ensuring the benefit of specialization.
 Promotes Effective Communication. Organizing is an important means of creating coordination and communication among the various
departments of the organization. Different jobs and positions are interrelated by structural relationship. It specifies the channel and
mode of communication among different members.
 Creates Transparency. The jobs and activities performed by the employees are clearly defined on the written document called job
description which details out what exactly has to be done in every job. Organizing fixes the authority-responsibility among employees.
This brings in clarity and transparency in the organization.
 Expansion and Growth. When resources are optimally utilized and there exists a proper division of work among departments and
employees, management can multiply its strength and undertake more activities. Organizations can easily meet the challenges and can
expand their activities in a planned manner.
Types of organizational structures
They include the following:

1. Line organizational structure

2. Staff organizational structure
3. Line and Staff organizational structure
4. Functional organizational structure
5. Matrix organizational structure
6. Committee organizational structure

1. Line organization Structure

It is the most oldest and simplest method of administrative organization. According to this type of organization, the authority flows from top to
bottom in a concern. The line of command is carried out from top to bottom. This is the reason for calling this organization as scalar
organization which means scalar chain of command is a part and parcel of this type of administrative organization.

Features of Line Organization

1. It is the most simplest form of organization.

2. Line of authority flows from top to bottom.
3. Specialized and supportive services do not take place in these organization.
4. Unified control by the line officers can be maintained since they can independently take decisions in their areas and
spheres.
5. This kind of organization always helps in bringing efficiency in communication and bringing stability to a concern.

Merits of Line Organization

1. Simplest- It is the most simple and oldest method of administration.

2. Unity of Command- In these organizations, superior-subordinate relationship is maintained and scalar chain of command
flows from top to bottom.
3. Better discipline- The control is unified and concentrates on one person and therefore, he can independently make
decisions of his own. Unified control ensures better discipline.
4. Fixed responsibility- In this type of organization, every line executive has got fixed authority, power and fixed
responsibility attached to every authority.
 5. Flexibility- There is a co-ordination between the top most authority and bottom line authority. Since the authority
relationships are clear, line officials are independent and can flexibly take the decision. This flexibility gives satisfaction of
line executives.
6. Prompt decision- Due to the factors of fixed responsibility and unity of command, the officials can take prompt decision.

Demerits of Line Organization

1. Over reliance- The line executive’s decisions are implemented to the bottom. This results in over-relying on the line officials.
2. Lack of specialization- A line organization flows in a scalar chain from top to bottom and there is no scope for specialized
functions. For example, expert advices whatever decisions are taken by line managers are implemented in the same way.
3. Inadequate communication- The policies and strategies which are framed by the top authority are carried out in the same way.
This leaves no scope for communication from the other end. The complaints and suggestions of lower authority are not
communicated back to the top authority. So there is one way communication.
4. Lack of Co-ordination- Whatever decisions are taken by the line officials, in certain situations wrong decisions, are carried down
and implemented in the same way. Therefore, the degree of effective co-ordination is less.
5. Authority leadership- The line officials have tendency to misuse their authority positions. This leads to autocratic leadership and
monopoly in the concern.

2. Line and Staff Organization structures

Line and staff organization is a modification of line organization and it is more complex than line organization. According to this administrative
organization, specialized and supportive activities are attached to the line of command by appointing staff supervisors and staff specialists who
are attached to the line authority

Features of Line and Staff Organization

1. There are two types of staff :
a. Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
b. Staff Supervisor- Operation Control Manager, Quality Controller, PRO
2. Line and Staff Organization is a compromise of line organization. It is more complex than line concern.
3. Division of work and specialization takes place in line and staff organization.
4. The whole organization is divided into different functional areas to which staff specialists are attached.
5. Efficiency can be achieved through the features of specialization.
6. There are two lines of authority which flow at one time in a concern :
a. Line Authority
b. Staff Authority
 7. Power of command remains with the line executive and staff serves only as counselors.

Merits of Line and Staff Organization

1. Relief to line of executives- In a line and staff organization, the advice and counseling which is provided to the line executives divides
the work between the two. The line executive can concentrate on the execution of plans and they get relieved of dividing their attention
to many areas.
2. Expert advice- The line and staff organization facilitates expert advice to the line executive at the time of need. The planning and
investigation which is related to different matters can be done by the staff specialist and line officers can concentrate on execution of
plans.
3. Benefit of Specialization- Line and staff through division of whole concern into two types of authority divides the enterprise into parts
and functional areas. This way every officer or official can concentrate in its own area.
4. Better co-ordination- Line and staff organization through specialization is able to provide better decision making and concentration
remains in few hands. This feature helps in bringing co-ordination in work as every official is concentrating in their own area.
5. Benefits of Research and Development- Through the advice of specialized staff, the line executives, the line executives get time to
execute plans by taking productive decisions which are helpful for a concern. This gives a wide scope to the line executive to bring
innovations and go for research work in those areas. This is possible due to the presence of staff specialists.
6. Training- Due to the presence of staff specialists and their expert advice serves as ground for training to line officials. Line executives
can give due concentration to their decision making. This in itself is a training ground for them.
7. Balanced decisions- The factor of specialization which is achieved by line staff helps in bringing co-ordination. This relationship
automatically ends up the line official to take better and balanced decision.
8. Unity of action- Unity of action is a result of unified control. Control and its effectivity take place when co-ordination is present in the
concern. In the line and staff authority all the officials have got independence to make decisions. This serves as effective control in the
whole enterprise.

Demerits of Line and Staff Organization

1. Lack of understanding- In a line and staff organization, there are two authority flowing at one time. This results in the confusion
between the two. As a result, the workers are not able to understand as to who is their commanding authority. Hence the problem of
understanding can be a hurdle in effective running.
2. Lack of sound advice- The line official get used to the expertise advice of the staff. At times the staff specialist also provide wrong
decisions which the line executive have to consider. This can affect the efficient running of the enterprise.
 3. Line and staff conflicts- Line and staff are two authorities which are flowing at the same time. The factors of designations, status
influence sentiments which are related to their relation, can pose a distress on the minds of the employees. This leads to minimizing of
co-ordination which hampers a concern’s working.
4. Costly- In line and staff concern, the concerns have to maintain the high remuneration of staff specialist. This proves to be costly for a
concern with limited finance.
5. Assumption of authority- The power of concern is with the line official but the staff dislikes it as they are the one more in mental
work.
6. Staff steals the show- In a line and staff concern, the higher returns are considered to be a product of staff advice and counseling. The
line officials feel dissatisfied and a feeling of distress enters a concern. The satisfaction of line officials is very important for effective
result

3. Functional organization structures

The concept of Functional organization was suggested by F.W. Taylor who recommended the appointment of specialists at important positions.
For example, the functional head and Marketing Director directs the subordinates throughout the organization in his particular area. This means
that subordinates receives orders from several specialists, managers working above them.

Features of Functional Organization

1. The entire organizational activities are divided into specific functions such as operations, finance, marketing and personal relations.
2. Complex form of administrative organization compared to the other two.
3. Three authorities exist- Line, staff and function.
4. Each functional area is put under the charge of functional specialists and he has got the authority to give all decisions regarding the
function whenever the function is performed throughout the enterprise.
5. Principle of unity of command does not apply to such organization as it is present in line organization.

Merits of Functional Organization

1. Specialization- Better division of labour takes place which results in specialization of function and it’s consequent benefit.
2. Effective Control- Management control is simplified as the mental functions are separated from manual functions. Checks and
balances keep the authority within certain limits. Specialists may be asked to judge the performance of various sections.
3. Efficiency- Greater efficiency is achieved because of every function performing a limited number of functions.
4. Economy- Specialization compiled with standardization facilitates maximum production and economical costs.
5. Expansion- Expert knowledge of functional manager facilitates better control and supervision.
Demerits of Functional Organization

1. Confusion- The functional system is quite complicated to put into operation, especially when it is carried out at low levels. Therefore,
co-ordination becomes difficult.
2. Lack of Co-ordination- Disciplinary control becomes weak as a worker is commanded not by one person but a large number of
people. Thus, there is no unity of command.
3. Difficulty in fixing responsibility- Because of multiple authorities, it is difficult to fix responsibility.
4. Conflicts- There may be conflicts among the supervisory staff of equal ranks. They may not agree on certain issues.
5. Costly- Maintainance of specialist’s staff of the highest order is expensive for a concern

NOTE: Write notes on other Organizational Structures.

Delegation of Authority
Delegation of authority is a process in which the authority and powers are divided and shared amongst the subordinates. When the work of a
manager gets beyond his capacity, there should be some system of sharing the work. This is how delegation of authority becomes an important
tool in organization function.

Elements of Delegation

1. Authority - in context of a business organization, authority can be defined as the power and right of a person to use and allocate the
resources efficiently, to take decisions and to give orders so as to achieve the organizational objectives.
2. Responsibility - is the duty of the person to complete the task assigned to him. A person who is given the responsibility should ensure
that he accomplishes the tasks assigned to him. If the tasks for which he was held responsible are not completed, then he should not
give explanations or excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among the person.
Responsibility flows from bottom to top.
3. Accountability - means giving explanations for any variance in the actual performance from the expectations set. Accountability can
not be delegated. For example, if ’A’ is given a task with sufficient authority, and ’A’ delegates this task to B and asks him to ensure
that task is done well, responsibility rest with ’B’, but accountability still rest with ’A’. The top level management is most accountable.
Being accountable means being innovative as the person will think beyond his scope of job. Accountability, in short, means being
answerable for the end result. Accountability can’t be escaped. It arises from responsibility.

For achieving delegation, a manager has to work in a system and has to perform following steps : -

1. Assignment of tasks and duties

 2. Granting of authority
3. Creating responsibility and accountability

Delegation of authority is the base of superior-subordinate relationship, it involves following steps:-

1. Assignment of Duties - The delegator first tries to define the task and duties to the subordinate. He also has to define the result
expected from the subordinates. Clarity of duty as well as result expected has to be the first step in delegation.
2. Granting of authority - Subdivision of authority takes place when a superior divides and shares his authority with the subordinate. It is
for this reason, every subordinate should be given enough independence to carry the task given to him by his superiors. The managers
at all levels delegate authority and power which is attached to their job positions. The subdivision of powers is very important to get
effective results.
3. Creating Responsibility and Accountability - The delegation process does not end once powers are granted to the subordinates. They
at the same time have to be obligatory towards the duties assigned to them. Responsibility is said to be the factor or obligation of an
individual to carry out his duties in best of his ability as per the directions of superior.

The importance of delegation

1. Assists managers in allocating staffs and activities to be undertaken.

2. It helps a manager to prove his ability and skills in the best manner.
3. It ensures workflow in organization.
4. Helps the employees to learn more and improves their skills and knowledge.
5. It motivates the employees in organization.
6. It helps the managers to develop their talents and skills.
7. It increases the performance of organization

Committee
Committee means a body of persons entrusted with discharging some assigned functions as a group and in a corporate capacity. In the words
of H. Koonts, “Committee is a group of individuals to whom some matters are assigned as a group. It is this characteristic of group action that
sets the committee, apart from other organization devices.
Definition of E. Dale: “Committee is a group of people (usually not more than four who can sit around a table) which makes decisions or
present views points and whose conduct is governed by set of rules”
Principle features or characteristics of a committee
1. A committee is a gathering of people representing different functions or spheres of knowledge, who come together to promote a common
purpose or fulfill a common task or solve a problem, by interchanging of views.
2. The character and composition of a committee is often spelled out in the bylaws or administrative procedures of the company.
3. A committee usually has a fixed membership. In most cases, members are appointed, although sometimes, as with the board of directors,
they may be elected.
4. In its deliberations, a committee usually follows certain definite written rules and procedures. Some committees can function if a quorum
is complete; others only if all the members are present.
5. A committee may be granted authority to make or recommend decisions, or it may serve merely in an advisory capacity.
6. Committees maybe set up for different functions to be performed, such as
 for acting only rather than for advice (i.e., Control Committee);
 to help line executives in laying down plans, policies and objectives (such as Legislative Committee);
 to gather facts relating to a problem (such as Fact Finding Committee);
 to settle grievances or disputes and to determine the validity of the past and present courses of action (such as the Grievance or Judicial
Committee);
 to bring coordination among the activities of the organization members through interchange of views, opinions, and information (such as
Coordination Committee);
 to decide other personnel matters like wages, promotions, merit pay, compensation, leave etc. (such as Wage Committee).

Advantages of Committee Organization

1. There is group Deliberation and Judgement
2. There is fear of Authority
3. Representation of interested Group
4. Coordination of Functions
5. Transmission of Information
6. Consolidation of Authority
7. Motivation through Participation
9. It is educational Value
Disadvantages of Committees
1. High Cost in Time and Money
2. Indecisive Action
3. Compromising Attitude
4. Dominance of a Few
5. Suppression of Ideas
6. Splitting of Responsibilities
7. Political Decisions

TOPIC SIX : LEADING AND DIRECTING.

Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders,
their subordinates will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job
attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to
become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.

Leadership styles

i. Autocratic style. Managers who have developed an autocratic leadership style tend to make decisions without soliciting input from
subordinates. They exercise authority and expect subordinates to take responsibility for performing the required tasks without undue
explanation
ii. Democratic style. Managers who favor a democratic leadership style generally seek input from subordinates while retaining the
authority to make the final decisions. They’re also more likely to keep subordinates informed about things that affect their work.
iii. Authoritative Style. The phrase most indicative of this style of leadership (also known as "visionary") is "Follow me." The
authoritative leadership style is the mark of confident leaders who map the way and set expectations, while engaging and energizing
followers along the way.
iv. Affiliative Style. A phrase often used to describe this type of leadership is "People come first." Of all the leadership styles, the
affiliative leadership approach is one where the leader gets up close and personal with people. A leader practicing this style pays
attention to and supports the emotional needs of team members. The leader strives to open up a pipeline that connects him or her to the
team
v. Free-rein style. In practicing a free rein leadership style, managers adopt a “hands-off” approach and provide relatively little direction
to subordinates. They may advise employees but usually give them considerable freedom to solve problems and make decisions on their
own.
DIRECTING

Directing refers to a process or technique of instructing, guiding, inspiring, counseling, overseeing and leading people towards the accomplishment
of organizational goals. It is a continuous managerial process that goes on throughout the life of the organization.

Main characteristics of Directing are as follows:

i. Initiates Action. A directing function is performed by the managers along with planning, staffing, organizing and controlling in order to
discharge their duties in the organization. While other functions prepare a platform for action, directing initiates action.

ii. Pervasive Function. Directing takes place at every level of the organization. Wherever there is a superior-subordinate relationship, directing
exists as every manager provides guidance and inspiration to his subordinates.

iii. Continuous Activity.It is a continuous function as it continues throughout the life of organization irrespective of the changes in the
managers or employees.

iv. Descending Order of Hierarchy. Directing flows from a top level of management to the bottom level. Every manager exercises this
function on his immediate subordinate.

v. Human Factor. Since all employees are different and behave differently in different situations, it becomes important for the managers to
tackle the situations appropriately. Thus, directing is a significant function that gets the work done by the employees and increases the
growth of the organization.

Benefits of Directing
1. Initiates Action. Each and every action in an organization is initiated only through directing. The managers direct the subordinates about what to
do, how to do when to do and also see to it that their instructions are properly followed.

2. Ingrates Efforts. Directing integrates the efforts of all the employees and departments through persuasive leadership and effective
communication towards the accomplishment of organizational goals.

3. Motivates Employees. A manager identifies the potential and abilities of its subordinates and helps them to give their best. He also motivates
them by offering them financial and non-financial incentives to improve their performance.

4. Provides Stability. Stability is significant in the growth of any organization. Effective directing develops co-operation and commitment among
the employees and creates a balance among various departments and groups.

5. Coping up with the Changes. Employees have a tendency to resist any kind of change in the organization. But, adapting the environmental
changes is necessary for the growth of the organization.

6. Effective Utilization of Resources

Principles of Directing

1. Maximum Individual Contribution.

One of the main principles of directing is the contribution of individuals. Management should adopt such directing policies that motivate the
employees to contribute their maximum potential for the attainment of organizational goals.

2. Harmony of Objectives

Sometimes there is a conflict between the organizational objectives and individual objectives. For example, the organization wants profits to increase
and to retain its major share, whereas, the employees may perceive that they should get a major share as a bonus as they have worked really hard for
it.
Here, directing has an important role to play in establishing harmony and coordination between the objectives of both the parties.

3. Unity of Command

This principle states that a subordinate should receive instructions from only one superior at a time. If he receives instructions from more than one
superiors at the same time, it will create confusion, conflict, and disorder in the organization and also he will not be able to prioritize his work.

4. Appropriate Direction Technique

Among the principles of directing, this one states that appropriate direction techniques should be used to supervise, lead, communicate and motivate
the employees based on their needs, capabilities, attitudes and other situational variables.

5. Managerial Communication

According to this principle, it should be seen that the instructions are clearly conveyed to the employees and it should be ensured that they have
understood the same meaning as was intended to be communicated.

6. Use of Informal Organization

Within every formal organization, there exists an informal group or organization. The manager should identify those groups and use them to
communicate information. There should be a free flow of information among the seniors and the subordinates as an effective exchange of
information are really important for the growth of an organization.

7. Leadership

Managers should possess a good leadership quality to influence the subordinates and make them work according to their wish. It is one of the
important principles of directing.

8. Follow Through

As per this principle, managers are required to monitor the extent to which the policies, procedures, and instructions are followed by the
subordinates. If there is any problem in implementation, then the suitable modifications can be made.
MOTIVATION

Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of
stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behaviour can
be -

 desire for money

 success
 recognition
 job-satisfaction
 team work, etc

One of the most important functions of management is to create willingness amongst the employees to perform in the best of their abilities.
Therefore the role of a leader is to arouse interest in performance of employees in their jobs.

Theories of Motivation

 Maslow’s Hierarchy of Needs. It explains relies on the fact that people want to increase what they want to achieve in life and
their needs are prioritized according to their importance. Deriving from the hierarchy of needs by Maslow, content theories of job
satisfaction revolve around employees’ needs and the factors that bring them a reasonable degree of satisfaction. Based on the basic
physical, biological, social and psychological needs of human beings, Maslow came up with a five-stage theory that places the
needs of the individual in different categories and prioritizes their attainment. These categories, in order of decreasing priority, are:
• physiological needs (food, shelter, clothing);
• safety and security needs (physical protection);
• social needs (association with others);
• esteem needs (receiving acknowledgement from others); and
• self-actualisation needs (the desire for accomplishment or to leave behind a legacy).
Maslow’s hierarchy of needs forms the basis of theories that try to explain job satisfaction. Teachers, like all people, have needs
that have to be satisfied. Besides the basic needs for food, shelter and clothing, safety from physical, harm, and social interaction,
they also need the recognition and appreciation of students, colleagues, and parents.theories of motivation
 Herzberg’s Two-Factor Theory/Motivator-Hygiene. also known as Motivator-Hygiene, emanated from a study conducted
among accounts and engineers to determine what makes an individual feel good or bad about their job Herzberg noted that there
were five features of work that bring about satisfaction, namely achievement, recognition, the job itself, responsibility and
 advancement. At the other end of the spectrum, Herzberg identified institutional politics, the management approach, supervision,
pay, relationships at work and working conditions as factors that may demoralize employees.
 McGregor’s X and Y Theories. McGregor’s (1960) Theory X and Y models categorize employees as belonging to one of two
groups based on two sets of assumptions. Theory X assumptions take a negative perspective of people: People can have “an
inherent dislike for work and avoid it if possible; because of this, they must be coerced, controlled, directed and threatened with
punishment to make them work.
 McClelland’s Need Achievement Theory. McClelland’s need achievement theory postulates that some people are driven to
success through seeking “personal achievement rather than rewards
 The equity theory. Process theories explain ‘how’ satisfaction comes about, as opposed to ‘what’ causes motivation. The equity
theory postulates that employees will weigh their input into a job against the output they receive from it – the more the rewards, the
greater their satisfaction.
 Value – Percept Theory. Individual’s values determine their satisfaction on their job because employees in organizations hold
different value systems, therefore based on this theory, their satisfaction levels will also differ. Having a look at Value – Percept
theory, the assumption is that the difference between expectations and what is received can bring dissatisfaction depending on how
important the job is to the individual
 Vroom’s Expectancy Theory Vrooms’s expectancy theory stipulates that behavior is a product of choices that are available for to
be prioritized. The idea is to derive satisfaction and minimize dissatisfaction in employees. Individual factors such as personality
and skills determine performance

TOPIC SEVEN: STAFFING

The managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal and
development of the personnel to fill the roles assigned to the employers/workforce.
According to knootz and O’Donnell “The managerial function of staffing involves manning the organisational structure through proper and
effective selection, appraisal and development of personnel to fill the roles designed into the structure.”
Benjamin defined that “The process involved in identifying, assessing, placing, evaluating, and directing individuals at work.”

Staffing pertains to recruitment, selection, development and compensation of subordinates.”

Nature of Staffing Function

1. Staffing is an important managerial function- Staffing function is the most important mangerial act along with planning, organizing,
directing and controlling. The operations of these four functions depend upon the manpower which is available through staffing
function.
2. Staffing is a pervasive activity- As staffing function is carried out by all mangers and in all types of concerns where business activities
are carried out.
3. Staffing is a continuous activity- This is because staffing function continues throughout the life of an organization due to the transfers
and promotions that take place.
4. The basis of staffing function is efficient management of personnels- Human resources can be efficiently managed by a system or
proper procedure, that is, recruitment, selection, placement, training and development, providing remuneration, etc.
5. Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment procedures and then finally
selecting the most suitable candidate as per the job requirements.
6. Staffing is performed by all managers depending upon the nature of business, size of the company, qualifications and skills of
managers,etc. In small companies, the top management generally performs this function. In medium and small scale enterprise, it is
performed especially by the personnel department of that concern.

Advantages of Staffing
i. It helps in discovering and obtaining competent personnel for various jobs.
ii. It makes for higher performance by placing right persons in the right jobs.
iii. It improves job satisfaction and morale of employees through objective assessment and fair compensation of their contributions.
iv. It facilitates optimum utilization of human resources and in minimizing costs of manpower.
v. It ensures the continuity and growth of the organisation through the development of managers.
vi. It enables an organisation to cope with the shortage of executive talent.
Factors affecting staffing
(A). External Factors
1. Political Factors. Political stability, political parties and their political gimmicks, formation of new political parties, splits in trade union etc.
these changes in trade unions complicate the task of staffing.
2. Economic Factors. Number of economic factors affects staffing of an organisation by influencing system, national income, per capita
income, distribution of income and wealth etc.
3. Social Factors. Social environment consists of social roles, social values, caste structure, occupational structure, social forward and
backward sections, religions, culture etc. these factors are also effect the staffing.
4. Legal Factors. These are various provisions, which affect the staffing policy of an organisation. The act 1986, provide the restrictions of free
recruitment of child labour.
5.Customers. Any organisation depends upon customers for their survival and growth. Organisation’s services are less qualitative in which
customers may develop negative attitude towards the organisation.
(B). Internal Factors
1. Size of the Organisation. Staffing practices depends upon the size of the organisation. A small organisation cannot have the same staffing
practices, which a large organisation may have.
2. Organisational Image. The image of an organisation in human resources market depends on its staffing practices like facilities for training
and development, compensation and incentives, and work culture.
If all these factors are positive, an organisation may be in a better position to attract the candidates and customers.

3. Technological Factors. In technological changes technical personnel, skilled workers and machine operators are increasingly required while
the demand for other employees has reduced.

The procurement of skilled employees and their increase in numbers to match the changing job requirements has become a complicated task
 4.Changes in employee roles. Nowadays the relationship in which employees and management are partners in the organisation
the management improves the staffing process by:

 The provide various benefits to improve morale

 To introduce negotiating machinery to reduce grievances
 To encourage employee participation in decision-making.

5.Education. The well-educated employees always challenge and question the management’s decision and want to a voice in the company’s
affairs affecting their interest. Thus management of well-educated employee is a problem to the organisation though they make valuable
contributions.

TOPIC EIGHT: CONTROLLING

Controlling consists of verifying whether everything occurs in confirmities with the plans adopted, instructions issued and principles
established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals.
Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in
taking corrective actions

Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to
ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs.”

It is just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually
take reading to assure himself that his enterprise is on right course.”

Controlling has got two basic purposes

1. It facilitates co-ordination
2. It helps in planning

Features of Controlling Function

Following are the characteristics of controlling function of management-

 1. Controlling is an end function- A function which comes once the performances are made in confirmities with plans.
2. Controlling is a pervasive function- which means it is performed by managers at all levels and in all type of concerns.
3. Controlling is forward looking- because effective control is not possible without past being controlled. Controlling always look to
future so that follow-up can be made whenever required.
4. Controlling is a dynamic process- since controlling requires taking reviewal methods, changes have to be made wherever possible.
5. Controlling is related with planning- Planning and Controlling are two inseperable functions of management. Without planning,
controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling
succeeds planning.

Process of controlling

 Establishment of standards- Standards are the plans or the targets which have to be achieved in the course of business function. They can
also be called as the criterions for judging the performance. Standards generally are classified into two-

a. Measurable or tangible - Those standards which can be measured and expressed are called as measurable standards. They can be in
form of cost, output, expenditure, time, profit, etc.
b. Non-measurable or intangible- There are standards which cannot be measured monetarily. For example- performance of a manager,
deviation of workers, their attitudes towards a concern. These are called as intangible standards.

Controlling becomes easy through establishment of these standards because controlling is exercised on the basis of these standards.

 Measurement of performance- The second major step in controlling is to measure the performance. Finding out deviations becomes easy
through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of
tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when
performance of manager has to be measured. Performance of a manager cannot be measured in quantities. It can be measured only by-

a. Attitude of the workers,

b. Their morale to work,
c. The development in the attitudes regarding the physical environment, and
d. Their communication with the superiors.

It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.
 Comparison of actual and standard performance- Comparison of actual performance with the planned targets is very important. Deviation
can be defined as the gap between actual performance and the planned targets. The manager has to find out two things here- extent of deviation
and cause of deviation. Extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the
actual performance is in conformity with the planned performance. The managers have to exercise control by exception. He has to find out
those deviations which are critical and important for business. Minor deviations have to be ignored. Major deviations like replacement of
machinery, appointment of workers, quality of raw material, rate of profits, etc. should be looked upon consciously. Therefore it is said, “ If a
manager controls everything, he ends up controlling nothing.” For example, if stationery charges increase by a minor 5 to 10%, it can be called
as a minor deviation. On the other hand, if monthly production decreases continuously, it is called as major deviation.

Once the deviation is identified, a manager has to think about various cause which has led to deviation. The causes can be-

a. Erroneous planning,
b. Co-ordination loosens,
c. Implementation of plans is defective, and
d. Supervision and communication is ineffective, etc.

 Taking remedial actions- Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial
measures for it. There are two alternatives here-

a. Taking corrective measures for deviations which have occurred; and

b. After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is
here the controlling process comes to an end. Follow up is an important step because it is only through taking corrective measures, a
manager can exercise controlling.

Types of Control Techniques in Management

Budgetary Control

Budgeting simply means showcasing plans and expected results using numerical information. As a corollary to this, budgetary control means
controlling regular operations of an organization for executing budgets.
A budget basically helps in understanding and expressing expected results of projects and tasks in numerical form. For example, the amounts of
sales, production output, machine hours, etc. can be seen in budgets.

There can be several types of budgets depending on the kind of data they aim to project. For example, a sale budget explains selling and distribution
targets. Similarly, there can also be budgets for purchase, production, capital expenditure, cash, etc.

The main aim of budgetary control is to regulate the activity of an organization using budgeting. This process firstly requires managers to determine
what objectives they wish to achieve from a particular activity. After that, they have to lay down the exact course of action that they will follow for
weeks and months.

Standard Costing

Standard costing is similar to budgeting in the way that it relies on numerical figures. The difference between the two, however, is that standard
costing relies on standard and regular/recurring costs.

Under this technique, managers record their costs and expenses for every activity and compare them with standard costs. This controlling technique
basically helps in realizing which activity is profitable and which one is not.

Financial Ratio Analysis

Every business organization has to depict its financial performances using reports like balance sheets and profit & loss statements. Financial ratio
analysis basically compares these financial reports to show the financial performance of a business in numerical terms.

Comparative studies of financial statements showcase standards like changes in assets, liabilities, capital, profits, etc. Financial ratio analysis also
helps in understanding the liquidity and solvency status of a business.

Internal Audit

Another popular traditional type of control technique is internal auditing. This process requires internal auditors to appraise themselves of the
operations of an organization.
For example, it can also cover policies, procedures, methods, and management of an organization. Results of such audits can, consequently, help
managers take corrective action for controlling.

Break-Even Analysis

Break-even analysis shows the point at which a business neither earns profits nor incurs losses. This can be in the form of sale output, production
volume, the price of products, etc.

Managers often use break-even analysis to determine the minimum level of results they must achieve for an activity. Any number that goes below
the break-even point triggers corrective measures for control.

Statistical Control

The use of statistical tools is a great way to understand an organization’s tasks effectively and efficiently. They help in showing averages,
percentages, and ratios using comprehensible graphs and charts.

Managers often use pie charts and graphs to depict their sales, production, profits, productivity, etc. Such tools have always been popular traditional
control techniques.

TOPIC NINE: BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITIES

ETHICAL ISSUES IN BUSINESS

Ethics -refers to a set of values, principles and rules of acceptable behavior which influence how individuals, groups of people and the society
in general behave.
Business ethics-refers to acceptable behavior that should be displayed by business people. Business ethics helps businesses in deciding what
actions are right or wrong depending on circumstances.
Ethical issues-are the moral concerns that arise in the course of carrying out business.
Need for Ethical issues in Business
i. Ensures no discrimination in business-Business ethics ensures there is no discrimination in areas such as recruitment (hiring), promotion,
training, remuneration and assignment of duties. These processes should be objective and based on merit, qualification, experience and
 ability. -It ensures that everybody is given an equal opportunity (has equal chance) and is not discriminated against because of their sex,
religion, ethnicity, social background e.t.c.
ii. Ensures protection of the environment/Helps in avoiding environmental pollution-Business ethics prohibits business units from
carrying out activities that may cause pollution and degradation of the environment. Environmental degradation may be caused by human
activities such as logging and unplanned cultivation. Pollution may be caused by activities such as:
a) Damping effluents from production units into water masses thereby causing water pollution. Water pollution is disastrous to human health
and also to aquatic animals.
b) Emitting carbon dioxide and other gases into the atmosphere causing air pollution
c) Damping of waste material on the land surface causing solid waste pollution This creates terrible sites to watch and also breeding places for
dangerous insects such as flies.
iii. Ensures fair play in competition-Ethics ensures that businesses do not engage in unfair practices while competing with others. These
practices may include:
 Destroying a competitor’s product or promotional tools such as billboards
 Buying and destroying competitor’s products before they reach the market
 Giving false information about a competitor’s product
 Helps in avoiding environmental degradation-Ethics ensures that the physical environment is not degraded through business
activities. Such activities may include:
 Deforestation through logging
 Unplanned cultivation
 Helps in avoiding environmental pollution-Environmental pollution may be caused by activities such as:
 Releasing carbon dioxide and other gases into the atmosphere thereby causing air pollution
 Channeling effluents from factories to water masses thereby causing water pollution. Such pollution can be harmful to human health
and aquatic animals.
 Disposing of waste material such as paper and scrap metal on the land surface thereby causing solid waste pollution.
 Producing too loud noise which might be harmful to human beings hearings
 Emitting too strong light that may be harmful to our eyesight
iv. Ensures rights of employees are upheld-Ethics ensures that the employer does not violate the rights of employees especially as laid out in
their terms and conditions of employment. Such rights include payment of dues in time.
v. Eliminates use of unfair means of achieving business objectives-Ethics ensures that the business operations are carried out in a
professional way e.g. it is unethical to give or receive a bribe in order to win a business contract. Similarly, it is not ethical to hoard goods
awaiting their prices to go up.
vi. Avoids consumer exploitation-Ethics ensures that consumers are not exploited by the business. Consumers may be exploited through
practices such as:
a) Overcharging them
b) False advertisement
c) Selling poor quality goods and services
d) Selling wrong quantities
e) Selling harmful commodities

Corporate Social Responsibility

CSR is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions
with their stakeholders.

Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its
stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the
kind of impact they are having on all aspects of society, including economic, social, and environmental.

Benefits of Social Responsibility

 It leads to creation of a better social environment both for the society and the business
 It improves the value of the business shares on the stock exchange
 It improves the image of the business to the public
 It makes the business follow government regulations
 It makes business live up to the social expectations
 Such social actions are profitable to the business in the future
 The business can develop new measures from which the society benefits
Limitations of Social Responsibility

 It increases costs to the business

 It makes the business to spend resources and thus reduces profit
 Increased social responsibility cost is passed onto the consumers in form of higher prices
 Most businesses lack the skills to solve social problems
 The business might misuse its powers on the society
 The business may deviate from its main purpose of existence

CSR TO VARIOUS GROUPS IN ORGANIZATION

1) CUSTOMERS.
A business should show social responsibility by

a) Producing quality and safe products i.e. products should not be harmful to people’s health
b) Fairly pricing products – prices should not be exploitative
c) Having clear advertisements that do not misrepresent facts
d) Treating customers fairly
e) Offering clear credit terms and adequate product information
f) Responding quickly to customers complaints
g) Conducting research before allowing a product in the market
h) Proper labelling, packaging and presentation of products in a manner that the quality and quantity hazards of use and
limitations of use are clearly set.
i) Advising consumers about products and their use
2) TO THE GOVERNMENT
The business should be socially responsible to the government by:

a) Complying with the government laws and regulations

b) Paying proper taxes
c) Supporting the government in welfare and development programmes
3) TO EMPLOYEES
Business should show social responsibility to employees by:

a) Paying them fairly without delay and treating them humanly.

b) Safeguarding their health and safety by proving safe working environment such as offering safety gear e.g. dust coats, factory
boots etc.
c) Providing employees welfare through provision of recreational facilities, housing, transport and credit facilities
d) Offering equal opportunities in matters pertaining to promotions and training
e) Offering training and educational opportunities equally to employees
4) TO SUPPLIERS AND CREDITORS
Businesses should be socially responsible to suppliers through:

a) Fair and reasonable terms of purchase

b) Fairness in tender allocation
c) Paying suppliers for goods in time
d) Not defaulting in payments
e) Paying fair and reasonable interest rates to creditors
 f) Paying interest and principle amount in time to creditors
5) TO THE COMMUNITY /GENERAL PUBLIC
a) By supporting or providing welfare programmes for the aged, handicapped and the under nourished in the community
b) Making information concerning the business operations public
c) Ensuring that business activities of the business do not have harmful effects to the community
d) Providing educational recreational and healthy facilities
e) Offering employment opportunities to disadvantaged in the society and even handicapped members too. Thus offering equal
employment opportunities for employment to both males and females
f) Avoiding pollution of environment through such things as noise , and waste products
6) TO NATURAL ENVIRONMENT
A business should be socially responsible towards the environment by:

a) Recycling products – some of the materials that pollute the environment if thrown away carelessly can be taken back to the factory
for recycling. Such materials become raw materials when producing other products, e.g. used plastic materials can be reprocessed
into pellets which in turn can be used for furniture or trays thereby creating a healthy environment.
b) Reducing all types of pollution(noise, water, air etc.)
 Ways of reducing noise can be devised e.g. those operating in Jua kali castor may be supplied ear plugs
 Business in the manufacturing sector should get a way of getting rid of unwanted chemicals and other wastes instead of channelling
them into rivers
 Businesses should devise proper ways of disposing their gabbage, such waste pollutes the environment when disposed carelessly
and it may breed flies especially during rainy seasons.

TOPIC TEN: INTERNATIONAL MANAGEMENT.

International management is the management of business operations in an organisation serving markets and operating in more than one
country. It requires knowledge and skills beyond normal business expectations, such as familiarity with local market and competitive
conditions, the legal and financial environment, the capability to do multicurrency transactions and managing across borders.

International management is a critical area for any serious student of management because of globalization, the worldwide phenomenon
whereby the countries of the world are becoming more interconnected and where trade barriers among nations are disappearing. Companies of
all kinds are no longer limited to producing and selling their goods and services in domestic markets.

Terms used in International management

Globalization. Worldwide phenomenon whereby the countries of the world are becoming more interconnected and where trade barriers are
disappearing.
Trade agreements. Popular policy instruments that countries agree on to eliminate cross-border barriers to trade and to promote global
integration.
Tariffs. Extra charges that are added to the price of international products in the form of additional taxes or higher prices as a way to give
domestic companies a price advantage while also protecting these companies from foreign competition.
Foreign direct investment (FDI). Refers to deliberate efforts of a country or company to invest in another country through the form of
ownership positions in companies in another country.
Emerging markets. Those markets in countries that present tremendous potential for multinationals.
Emerging market multinationals. Influential companies from emerging markets that are competing head-on with established multinationals
and rewriting the rules of competition by using new business models.
E-commerce. Buying and selling of products using the Internet.
 Challenges in International management

 International company structure. The company may have large and complicated organizational structure with many managers
operating in different countries
 Foreign laws and regulations. may differ according to the state and affects the operations of the company.
 International accounting. Accounting strategy is key to maximizing revenue, and the location where your business is registered can
impact your tax liability.
 Cost calculation and global pricing strategy. Setting the price for your products and services can present challenges when doing
business overseas and should be another major consideration of your strategy. You must consider costs to remain competitive, while
still ensuring profit.
 Universal payment methods. Determining acceptable payment methods and ensuring secure processing must be a central
consideration for businesses who seeks to trade internationally.
 Currency rates. Monitoring exchange rates must therefore be a central part of the strategy for all international businesses. However,
global economic volatility can make forecasting profit especially difficult, particularly when rates fluctuate at unpredictable levels.
 Communication difficulties and cultural differences. Good communication is at the heart of effective international business
strategy but it may differ.
 Political risks. Issues such as ill-defined or unstable policies and corrupt practices can be hugely problematic in emerging markets.
Changes in governments can bring changes in policy, regulations, and interest rates that can prove damaging to foreign business and
investment.
Role of International Managers

Planning.

To do business internationally, managers must first plan their approach well. They have to decide how exactly they will be conducting their
activities.

This includes deciding whether they will export products or enter into joint ventures with a local business. They may even function as an MNC by
opening offices in various countries by operating from one location.

International planning always requires a thorough understanding of local political, social and economic environments. These factors also include
political stability, government pressure, intellectual property policies, competition, etc.

Organizing

It is not possible for an international business to operate in multiple countries using standard and common practices. International managers always
have to organize their business to adapt to local requirements of all countries.

Firstly, they have to create a command hierarchy that involves people operating in multiple countries. Then, they have to adhere to local laws and
regulations of the nations they operate in. Managers even have to keep local business practices and customs in mind while organizing.

Staffing

International managers next have to figure out whether they will hire local employees or send their own staff abroad. Consequently, they will need to
be aware of all local labour laws if they decide to hire employees locally.

Directing

Directing can often become very difficult when people from multiple countries work together. Since cultural differences influence people to work
differently, managers have to adapt themselves in every unique situation. Even language can become a barrier in cross-border business.
Controlling

The problems that affect the function of directing apply to the process of controlling as well. Controlling requires meetings between people which
helps in the exchange of information on a routine basis. Reporting and inspections are also important aspects of control.

Difference Between Domestic and International Business

Trade refers to the exchange of goods and services for money, which can be undertaken within the geographical limits of the countries or
beyond the boundaries. The trade which takes place within the geographical boundaries of the country is called domestic business, whereas
trade which occurs between two countries internationally, is called international business.

Key Differences

The most important differences between domestic and international business are classified as under:

1. Domestic Business is defined as the business whose economic transaction is conducted within the geographical limits of the country.
International Business refers to a business which is not restricted to a single country, i.e. a business which is engaged in the economic
transaction with several countries in the world.
2. The area of operation of the domestic business is limited, which is the home country. On the other hand, the area of operation of an
international business is vast, i.e. it serves many countries at the same time.
3. The quality standards of products and services provided by a domestic business is relatively low. Conversely, the quality standards of
international business are very high which are set according to global standards.
4. Domestic business deals in the currency of the country in which it operates. On the contrary, the international business deals in the
multiple currencies.
5. Domestic Business requires comparatively less capital investment as compared to international business.
6. Domestic Business has few restrictions, as it is subject to rules, law taxation of a single country. As against this, international business
is subject to rules, law taxation, tariff and quotas of many countries and therefore, it has to face many restrictions which are barriers in
the international business.
7. The nature of customers of a domestic business is more or less same. Unlike, international business wherein the nature of customers of
every country it serves is different.
 8. Business Research can be conducted easily, in domestic business. As against this, in the case of international research, it is difficult to
conduct business research as it is expensive and research reliability varies from country to country.
9. In domestic business, factors of production are mobile whereas, in international business, the mobility of factors of production are
restricted.

Global Theory of Management

1. The empirical approach. Now-a-days most writers purify the basics. That is, they make the basic concepts of management very simple and
clear. So, the trainee managers can understand the basics very easily. Secondly, whenever there is a problem, most experts first try to find out
the root cause of the problem.
2. System thinking. Most experts agree that the organisation is a unified, purposeful system which consists of many different parts. The
organisation is a part of the total environment.
3. Situational and contingency approach. Most experts believe that we cannot have universal styles of management, which can be used in all
situations. A manager must first study the situation very carefully then he must use a style of management, which is suitable for that situation.
4. Motivation and leadership theory.Most experts feel that the theories of motivation and leadership must be combined. They support
the Follower Theory of leadership. According to the follower theory, people will follow those leaders who will help them to satisfy their
wants. So, a leader will be successful only if he can satisfy the wants of his followers. Now-a-days leaders must combine both financial and
non-financial motivation plans.
5. Impact of technology. All experts agree that technology has a big influence on management. Management has to change according to the
changes in technology. Technology has a direct effect on the organisational structure, plant location, plant layout, production design and role of
manpower. As the technology changes, these factors will also change.
6. Merger of theory and practice. Most experts agree that the best way to teach management is to combine theory (fundamentals) and practice
(case studies). Management trainees all over the world read the same management books. They also read the same case studies. They are given
the same type of training. They also talk to other managers all over the world using advanced communication technology. Today, all multi-
national corporations (MNCs) use the same management techniques. This justifies the emergence of Global Theory of Management.
7. Unified development and behavior. Most experts feel that Organisation Development and Organisation Behaviour are both moving
towards the same direction. So, the experts are making uniform (same) theories for organisation development and behaviour. These theories are
used for managing MNCs all over the world.
8. Research supports the management process. Research all over the world, found that the management process (planning, organising,
directing, controlling) is the best way to manage an organisation. So, organisations all over the world are using the management process.
9. Common meaning for management terms. About twenty-five years ago, different management experts gave different meanings for the
same management terms. However, now this situation has stopped. Today, management terms have same meaning in all books.
TOPIC ELEVEN: EMERGING ISSUES IN MANAGEMENT

1. Globalization of Business

The globalization of business is the major emerging challenges for management. It occurs when an organization extends its activities to other
parts of the world, actively participates in other markets, and competes against organizations located in other countries. Transactions of
business organizations take place across national boundaries. Globalization made the world a global village. In this process, a manager’s job is
changing with.

All these factors and forces present a challenge to managers

 Increased foreign assignments

 Working with people from different cultures
 Coping with anti-capitalism backlash
 Overseeing movement of jobs to countries with low-cost labor
 There is external competition for markets, and also for resources.

2. Ethics and Social responsibility

The increasing concern of roles and state of ethics in business. Managers are concerned because of the complexity of ethics in decision making.
Society is generally expecting more from business organizations. These organizations expect to contribute to the quality of life and society.
Environmental issues have become matters of widespread concern. The manager will determine the extent to which these social responsibilities
and ethical issues are handled and managed.

3. Workforce diversity

The people in organizations are becoming more heterogeneous demographically (disability, gender, age, national origin, non-Christian, race,
and domestic partners). A diverse workforce includes women, physically disabled, senior citizens etc. Managing this diversity has become a
global concern.

Challenges facing by management is adapting to people who are different to make themselves more accommodating to diverse groups of people
by addressing their different lifestyles, family needs, and work styles.
Diversity is not managed properly. There is a potential for higher turnover, more difficult communication, more interpersonal conflicts.
Managers should recognize the differences among employees and respond to them in ways that will ensure employee commitment.

4. Empowerment

Decision making is pushed down to the operating level. Workers are now being given the freedom to make choice about the schedule,
procedures, and solving work-related problems. Earlier managers were encouraged to get their employees to participate in the work-related
decision. Now managers allow employees full control of their work. Thus managers engaged in empowering to employees. Similarly, the
manager provides more information to employees to make them aware of the problem and prospects of their organization.

5. Technology

The technological environment consists of innovations, techniques, and the organized knowledge of the way of doing things. The modern
business is characterized by newer and ever-changing technological developments. This calls for the technological perspective in management.
They need to recognize and anticipate technological changes. Technological changes result in a modification in products and services; in the
way, they are produced and marketed. The managers must, therefore grasp a proper understanding of these aspects of technological context.

6. Building a Competitive Advantage

Increasing Efficiency in Reducing the number of resources used to produce goods and services. Also, increasing Quality Introducing Total
Quality Management (TQM) to improve quality. Similarly, to increasing Speed, Flexibility, and Innovation Adapting to bring new products to
market faster. Increasing Responsiveness to Customers Empowering employees to deal with customers.

7. Development of the environment

Environmental issues are major issues in the management these days. These issues like deforestation, global warming, depletion of ozone layer,
toxic wastage, and pollution of land, air, and water. May not be these issues are a matter of to an enterprise. But, these matters draw the
attention of different social, business and political institutions.

8. Quality and productivity

It is practically the quality and productivity are supplementary or auxiliary to each other. Quality supports to maximize productivity and which
ultimately minimizes per unit cost of output. And, minimizing cost depends on the skills of the manager.