Module B: Basic Management Concept, Environment and Process

Management Function and Businesses; Define the management functions and business
processes that create value for an organization; Define the management functions and business
processes that create value for an organization; Identify management policies, practices, and
procedures that influence group and individual dynamics in organizations; Patterns of
Management Analysis. Internal Environment, External Environment and Management Process
(Planning, Staffing, Organizing, Leading and Controlling); Time and stress management; The
system and process of controlling basic control process, critical control points, standards, and
benchmarking; Control techniques budget as a control technique, time-event network analysis,
balanced scorecard.
Management
"Management is what a manager does." From L.A. Allen’s definition, we cannot derive a clear
concept of management. Therefore, we need to discuss it in detail, such as:
Management is the process of planning, organizing, Staffing and controlling an organization’s
resources—including human, financial, and material resources—to achieve organizational goals
efficiently and effectively.
According to Peter Drucker, the father of management, "Management is a multi-purpose organ
that manages business, manages managers, and manages workers and work.“
Father of Modern Management Henry Fayol Says: “ To Manage is to Forecast and plan, to
organize, to command, to co-ordinate and control.”
So, It is a dynamic process consisting of various elements and activities. These activities are
different from operative functions like marketing, finance, purchase etc
Definition:
Management is the process of planning, organizing, leading, and controlling an organization’s
resources—including human, financial, and material resources—to achieve organizational goals
efficiently and effectively.
Key Components of Management:
Planning: Setting objectives and determining the best course of action to achieve them.
Organizing: Allocating resources and assigning tasks to ensure the smooth execution of plans.
Staffing: Staffing is the process of recruiting, selecting, training, and retaining the right
personnel to fill positions within an organization
Directing : Directing ensures that employees are motivated, focused, and working towards the
overall objectives of the organization.
Controlling: Monitoring and evaluating progress to ensure that goals are achieved and taking
corrective action if needed.
Management By Objectives (MBO)
MBO (Management by Objectives) is a management concept where managers and employees
work together to set clear, measurable objectives within a defined timeframe. It emphasizes
aligning individual and organizational goals, ensuring that everyone is focused on achieving the
same targets. MBO was first introduced by Peter Drucker in 1954 and is based on the principle
that employees are more likely to be productive when they have clear, well-defined objectives
that they actively contribute to setting.
The process typically involves the following steps:
Setting Objectives: Managers and employees jointly set specific, measurable, and time-bound
goals that align with organizational priorities.
Action Plans: Employees develop action plans to achieve these objectives.
Monitoring Progress: Regular check-ins and assessments are made to track progress toward the
goals.
Performance Evaluation: At the end of the time period, performance is evaluated based on
whether the objectives were met, and any necessary adjustments are made for future goals.
Feedback and Rewards: Constructive feedback is provided, and rewards or recognition are
given for achieving objectives.
Functions of management
According to George & Jerry, “There are four fundamental functions of management i.e.
planning, organizing, actuating and controlling”.
According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”.
Luther Gullick has given a keyword ’POSDCORB’ where :
P stands for Planning,
O for Organizing,
S for Staffing,
D for Directing,
Co for Co-ordination,
R for reporting &
B for Budgeting.
But the most widely accepted are functions of management given by KOONTZ and O’DONNEL
that are Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.
Planning:
“ Planning is the trap to capture the future” From L. A. Allen’s definition we get a simple
concept. In order to get broad concept we have to discuss it in detail as follows:
It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre- determined
goals.
According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do.
It bridges the gap from where we are & where we want to be”. A plan is a future course of
actions. It is an exercise in problem solving & decision making.
Organizing:
“Organizing is the process of arranging resources and tasks in a structured way to achieve the
goals of an organization. It involves determining what tasks need to be done, who will do them,
how the tasks will be grouped, who will report to whom, and where decisions will be made.
Key Components of Organizing:
 Defining Organizational Structure
 Job design
 Departmentalization
 Resource Allocation
 Delegation
 Coordination:
 Establishing Control Systems
STAFFING
Staffing is a critical function of management that involves the recruitment, selection, training,
development, and retention of employees to fill the roles necessary for an organization to
achieve its goals.
Key Elements of Staffing:
 Human Resource Planning
 Recruitment
 Selection
 Training and Development
 Promotion and Transfer
 Performance Appraisal
 Retention
 Succession Planning
The Importance of Staffing: Achieving Organizational Goals
Placing the right people in the right positions, staffing ensures that the organization can
effectively achieve its objectives.
Employee Satisfaction: Proper staffing ensures that employees' skills align with their roles,
leading to higher satisfaction and retention.
Flexibility: Staffing helps organizations adapt to changing business conditions, ensuring they
have the necessary talent for new challenges.
Reducing Turnover: Effective recruitment, training, and retention strategies help reduce
employee turnover and the associated costs.
Directing
Direction is that inter-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
 Motivation
 Leadership
 Communication
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.
Therefore controlling has following steps:
 Establishment of standard performance.
 Measurement of actual performance.
 Comparison of actual performance with the standards and finding out deviation if any.
 Corrective action.
Business Process
A business process is defined as a collection of business tasks and activities that when
performed by people or systems in a structured course, produce an outcome that contributes to
the business goals.
A business process includes at least one of, but not limited to, the following elements:
 task/ activity
 system
 employee(s)
 workflow
 data
Difference between Business Process and Business Task:

Aspect Business Process Business Task

Definitio A sequence of related activities aimed at A specific activity or step within a
n achieving a goal. process.
 Scope Broader, involving multiple tasks and Narrower, focuses on a single action
people. or activity.
Focus Focuses on the overall outcome of the Focuses on completing a specific part
process. of the process.
Difference between Business Process and Procedures:

Aspect Business Process Procedure

Scope Broad, covers entire workflows and Narrow, focuses on specific tasks within
business goals. a process.
Purpose Achieves a business outcome or Standardizes the execution of a task or
objective. activity.
Focus Can adapt or change based on evolving Focuses on the steps to be followed in
business needs. executing a task.
Flexibilit Can adapt or change based on evolving Should remain consistent to ensure
y business needs. uniformity.
example Order fulfillment process, hiring Invoice approval procedure, payment
process, production process. processing procedure.

Tips to help team perform better

Set Clear Goals and Expectations
Foster Open Communication
Build Trust and Collaboration
Provide Continuous Feedback and Recognition
Encourage Innovation and Creativity
Offer Training and Development
Opportunities
Manage Conflicts Effectively
Provide Adequate Resources and Support
Lead by Example
Monitor Progress and Adjust Strategies
Empower Decision-Making
Promote Work-Life Balance
Common Terms Related To Business Processes
Business Process Management
Business process management is defined as a discipline in operations management in which
people use various methods to discover, model, analyze, measure, improve, optimize, and
automate business processes.
Business Process Improvement
Business Process Improvement is defined as a management practice used to improve the
efficiency and effectiveness of business processes by discovering, mapping, documenting,
analyzing, and redesigning processes. We will learn more about why you should invest in
improving your business processes further in this article.
Business Process Mapping
Business process mapping is defined as the activity of creating a workflow diagram of a process
to gain a clear understanding of the process and how it overlaps with other processes. It is a
business process documentation tool that uses visual aids to document and communicate the
details of a process across the company.
Business Process Documentation
Business process documentation is the process of outlining a detailed description of how a
process needs to be executed. It is a technique undertaken by businesses to make their
processes learnable, viewable, and improvable.
Business Process Discovery
Business process discovery is defined as a set of techniques that build a representation of an
organization's current business processes, which include their workflows, structures, and
elements.
Business Process Automation
Business process automation is defined as the practice of using technology to automate
complex and redundant business processes and workflows. It helps businesses save manual
efforts, reduce costs, improve efficiency, and optimize process performance.
Business Process Handoffs
Business process handoffs are defined as the transfer of information, responsibilities, or people
in your business from one entity to another. They are critical to the smooth running of your
business operations in case of employee resignations, team restructures, etc.
Need for improving Business Processes
 Increase Efficiency and Productivity
 Enhance Customer Satisfaction
 Reduce Costs
 Improve Adaptability
 Ensure Regulatory Compliance and Risk Management
 Foster Employee Satisfaction and Engagement
 Support Digital Transformation
 Drive Continuous Improvement
 Enhance Decision-Making
 Gain Competitive Advantage
Time Management: Time management is the process of planning and controlling how much
time to allocate to specific activities to maximize productivity and achieve goals efficiently.
Key Elements of Time Management

 Effective Planning
 Setting goals and objectives
 Delegation of responsibilities
 Setting deadlines
 Prioritizing activities as per their importance
 Spending the right time on the right activity
Time Wasters or Barriers of Time Management (PP II STF)

 Poor communication (written and verbal)

 Procrastination
 Inability to say ‘no’
 Inadequate planning
 Stress
 The disorganized personality
 Failure to delegate

Process of Time Management

 Set your own priorities
 Personal
 professional
 Determine your goals for each priority
 Plan the steps for goal attainment
 Allocate time appropriately for each step
 Use time management tools/techniques
Stephen Covey’s Matrix

Urgent Not Urgent

I Activities II Activities

- Crisis - Preparation
Important

- Pressing Problems - Relationship Building

- Deadline driven Projects - Planning
- Searching New opportunities
 Not Important III Activities IV Activities

- Interruptions - Details
- Some mail, Meetings - Some Phone Calls
- Some calls - Time Waster
- Popular Activities - Pleasant activities
Benefits of TM Matrix
 Clarifies Roles and Responsibilities
 Improves Communication
 Ensures Accountability
 Increases Process Efficiency
 Facilitates Task Tracking
 Enhances Transparency
 Supports Training and Development
 Promotes Continuous Improvement
 Facilitates Workload Balancing
 Improves Decision-Making
Stress Management

Stress Management refers to techniques and strategies used to control an individual’s level of
stress, especially chronic stress, to improve mental and physical well-being. Managing stress
effectively is crucial for maintaining overall health, enhancing productivity, and improving
quality of life.

Causes of Stress (Stressors):

Work-Related Stress: High workload, tight deadlines, role ambiguity.

Personal Stress: Financial issues, family conflicts, or relationship challenges.
Environmental Stress: Noise, pollution, or uncomfortable living conditions.
Lifestyle Factors: Poor sleep, unhealthy diet, or lack of exercise.
Symptoms of Stress:
Physical Symptoms: Headaches, muscle tension, fatigue, rapid heartbeat, or digestive issues.
Emotional Symptoms: Anxiety, irritability, depression, or feelings of overwhelm.
Cognitive Symptoms: Difficulty concentrating, forgetfulness, or negative thoughts.
Behavioral Symptoms: Procrastination, social withdrawal, changes in eating or sleeping
patterns.
Job-Related Causes of Stress:

1) Work overload
2) Time pressures, time deadlines
3) Poor quality of supervision
4) Insecure job climate
 5) Inadequate authority to match responsibilities
6) Role conflict and ambiguity
7) Differences between company and employee values
8) Change of any type, especially when ii is major or unusual
9) Frustration

Benefits of Stress Management

Improved Mental Health: Reduces anxiety and depression.

Better Physical Health: Lowers the risk of cardiovascular diseases and strengthens the immune
system.
Increased Productivity: Improves concentration, decision-making, and efficiency.
Better Relationships: Enhances communication and reduces conflict with others.
Higher Resilience: Increases your ability to handle future stressors.
Stress and Job Performance

Stress and Job Performance refers to how an employee's stress impacts their work
efficiency, productivity, and mental or physical health.

Excessive stress can overwhelm an employee, leading to reduced focus, poor decision-
making, decreased performance, and intense physical and mental fatigue. On the other hand,
moderate or the right amount of stress can provide motivation in some tasks, making the
employee more focused and driven to perform their responsibilities.

However, prolonged and excessive stress can lead to burnout, negatively affecting the
employee's job performance and overall effectiveness.

Stress and Job Performance: Stress Vulnerability

Two major factors help determines how stress will affect employee performance differently
across similar jobs. Worker vulnerability to stress is a function of both internal (organizational)
and external (non-work) stressors.

 Stress threshold: One internal factor is an employee's stress threshold the level of
stressors (frequency and magnitude) that the person can tolerate before negative
feelings of stress occurs and adversely affects performance. Some people have a low
threshold, and the stress of even relatively small changes or disruptions in their work
routines causes a reduction in performance.

 Perceived Control: The second internal factor affecting employee stress is the amount of
perceived control they have over their work and working conditions. Employees who
 have a substantial degree of independence, autonomy, and freedom to make decisions
seem to handle work pressures better.

Type A and Type B People:

Stress vulnerability is often related to type A and B characteristics.

 Type A people are aggressive and competitive, set high standards, are impatient with
themselves and others, and thrive under constant time pressures. They make excessive
demands on themselves even in recreation and leisure. They often fail to realize that
many of the pressures they feel are of their own making rather than products of their
environment Because of the constant stress that they feel, some type A's are more
prone to physical ailments related to stress, such as heart attacks.

 Type B people appear more relaxed and easy-going. They accept situations and work
within them rather than fight them competitively. Type B people are especially relaxed
regarding time pressures, so they are less prone to have problems associated with stress.
Still, type B individuals can be highly productive workers who meet schedule
expectations; they simply obtain results in a different manner.

Approaches to Stress Management

Both organizations and individuals are highly concerned about stress and its effects. In
attempting to manage stress, they have three broad options, three approaches:

Prevent or control
Escape from it
Learn to adapt
Different Approaches to Stress Management

Stress management involves various strategies and techniques to help individuals and
organizations effectively cope with stress. There are three broad approaches to managing stress:

1. Prevent or Control Stress

This approach focuses on taking proactive measures to prevent or reduce stress before it
becomes overwhelming.
Time Management: Prioritizing tasks, setting realistic goals, and avoiding procrastination can
minimize stress.
Healthy Lifestyle Choices: Regular exercise, a balanced diet, and adequate sleep help in stress
prevention.
Improved Work Environment: Organizations can reduce workplace stress by fostering open
communication, providing clear job roles, and offering employee support programs.
Stress Reduction Techniques: Practicing mindfulness, meditation, and deep breathing exercises
can help prevent stress from escalating.
2. Escape from Stress

Sometimes, avoiding or stepping away from a stressful situation can be an effective approach.
Taking Breaks: Short breaks during work can help refresh the mind and improve focus.
Job Transfers or Career Change: If work stress is excessive, switching roles or seeking new
employment can be an option.
Vacation or Sabbaticals: Taking time off from work can help individuals recharge and return
with a fresh perspective.
Engaging in Hobbies: Activities like reading, traveling, or creative arts can serve as an escape
from daily stressors.
3. Learning to Adapt to Stress

Since some stress is inevitable, learning how to adapt and cope effectively is essential.
Developing Resilience: Building emotional strength and a positive mindset helps individuals
manage stress more effectively.
Cognitive Behavioral Therapy (CBT): This psychological approach helps individuals change
negative thought patterns that contribute to stress.
Social Support: Connecting with friends, family, or support groups provides emotional strength
and reduces feelings of isolation.
Relaxation Techniques: Techniques like yoga, progressive muscle relaxation (PMR), and
biofeedback help in managing stress responses.
Effective Stress Management Techniques:

Physical Techniques:
Exercise Regularly: Engages the body’s natural mood boosters and reduces stress hormones.
Deep Breathing Exercises: Calms the nervous system and promotes relaxation.
Progressive Muscle Relaxation (PMR): Systematically tenses and relaxes muscle groups.
Cognitive Techniques:
Mindfulness Meditation: Promotes present-moment awareness and reduces negative thoughts.
Positive Thinking: Helps reframe stress-inducing thoughts into more positive perspectives.
Time Management: Prioritizes tasks and avoids unnecessary stress caused by procrastination.
Lifestyle Changes:
Healthy Diet: Supports energy levels and brain function.
Adequate Sleep: Improves mood, concentration, and physical health.
Social Support: Sharing concerns with friends or family reduces emotional burdens.
Workplace Techniques:
Delegation: Avoids taking on too much work by sharing responsibilities.
Breaks: Taking short breaks helps refresh the mind and body during work.
Setting Boundaries: Avoids over-committing or working beyond reasonable hours.
Professional Help:
Therapy: Cognitive Behavioral Therapy (CBT) is particularly effective for managing stress.
Coaching or Counseling: Helps develop personalized strategies for stress reduction.
Support Groups: Sharing experiences with others facing similar challenges can be therapeutic.
 Questions

1) What do you mean by business process improvement? Why business process

improvement is necessary in a financial institution? Explain in brief. (98)
2) Discuss the basic functions of business management in brief. (96)
3) What are the differences between process and procedure in the context of Financial
Institutions? (96)
4) Discuss the difference between business process management and business process
improvement. (96)
5) Why business process improvement is necessary in the context of a bank? (96)
6) "Business processes are intended to derive and contribute to organizational goals."-
Briefly explain the statement from your experience. (96)
7) SN: Business Process Management (98, 97)
8) Define time management. Explain Stephen Covey's Time Management Matrix (98)
9) Define time management. Discuss the benefits of time management in the context of
financial institutions (97)
10) Discuss the primary elements of time management in a financial institution (97)
11) Briefly discuss the key elements of time management in the context of banks (96)
12) What are the benefits of Using time management Matrix? (96)
13) Explain the importance of Time and Stress Management for effective leadership in Banks
and Financial Institutions. (99)
14) Discuss the importance of stress management in banks and non-bank financial
institutions. (98)
15) Discuss the relationship between stress and job performance. Explain different
approaches of stress management. (97)
16) Mention the five internal and five external stressors for a bank employee. (97)
17) What is the relationship between stress and job performance? (96)
18) SN. Stress Management (96)
19) SN. Management By Objectives (96, 98)
20) What is MBO? What are the steps to implement a successful MBO program? (99)