Overview of Management

Koontz and Weihrich offer an interesting perspective on management.

"Management is a process of designing and maintaining an environment in which individuals work together in groups to efficiently accomplish selected aims".

McFarland gives a holistic view on management.

"Management is a process by which managers create, direct, maintain and operate purposive organizations, through systematic, coordinated, cooperative human effort".

These definitions when expanded have these implications.

• The functions of managers include planning, organizing, staffing, leading and controlling.
• These functions are essential to any kind of organization.
• It applies to managers at all hierarchical levels.
• The aim of managers is to increase productivity, effectiveness and efficiency.

Management is thus a continuous effort aimed at shaping an organization and contributing to its overall growth.

Managerial Roles

In 1960, Henry Mintzberg conducted a study to understand about the managerial roles. He identified 10 managerial roles that are common to all managers. These 10 managerial roles are grouped under: Interpersonal, informational and decisional roles.

The interpersonal role is primarily social in nature; that is they are the roles in which the manager's main task is to relate to other people in certain ways. The informational role involves some aspect of information processing. The decision-making role makes significant use of the information. Managerial roles can be performed differently at different times, and the requirements for playing such roles can be fulfilled by the manager depending upon the level and function of management.

Interpersonal roles:  Three important interpersonal roles are the figure head, the leader and the liaison.

• Figurehead: Represents the company on social occasions. Attending the flag hosting ceremony, receiving visitors or taking visitors for dinner etc.
• Leader: In the role of a leader, the manager motivates, encourages, and builds enthusiasm among the employees. Training subordinates to work under pressure, forms part of the responsibilities of a manager.
• Liaison: Consists of relating to others outside the group or organization. Serves as a link between people, groups or organization. The negotiation of prices with the suppliers regarding raw materials is an example for the role of liaison.

Informational Roles: The key informational roles are the recipient, the disseminator and the spokesperson.

• Recipient:  Actively seeks information from subordinates and the external environment. He (Manager) keeps himself updated, with the latest developments which can be of value to the organization.
• Disseminator: The manager plays the role of a disseminator by circulating and transferring relevant information to subordinates, and to the top-level management.

For Example,  Communicating changes in the company policy (remuneration,       recruitment etc.) to subordinates.

• Spokesperson:  Transmits information to the people who are external to the organization, i.e., government, media etc.

For instance, a manager addresses a press conference announcing a new product launch or other major deal. 

Decisional roles: Four basic decision making roles are the entrepreneur, the disturbance handler, the resource allocator and the negotiator.

• Entrepreneur: Act as an initiator and designer and encourage changes and innovation, identify new ideas, delegate idea and responsibility to others.
• Disturbance handler: Take corrective action during disputes or crises; resolves conflicts among subordinates; adapt to environmental crisis.
• Resource allocator: Decides distribution of resources among various individuals and groups in the organization.

For instance, finalizes annual budgets of different departments, after a thorough discussion with the departmental heads. 

• Negotiator: Negotiates with subordinates, groups or organizations- both internal and external. Represents department during negotiation of union contracts, sales, purchases, budgets; represent departmental interests

For instance,  negotiates a contract with the suppliers for the purchase of raw materials.

FUNCTIONS OF MANAGER

Regardless of the type of the industry, the functions involved in an organization, or the organizational level at which one functions; every manager has to perform certain basic managerial functions such as planning, organizing, staffing, leading and controlling. 

• Planning is the process of setting goals, and charting the best way of action for achieving the goals. This function also includes, considering the various steps to be taken to encourage the necessary levels of change and innovation.

For example,  if a company is planning for a promotional campaign, then the manager responsible for the campaign has to chart out actions that are in the best interest of the firm.

• Organizing is the process of allocating and arranging work, authority and  resources, to the members of the organization so that they can successfully execute the plans.

In many retail outlets, departments are organized (inventory department etc.), based on the nature of the job (product packing, grading, pricing, inventory etc.,) 

• Staffing consists of recruiting, training and developing people, who form part of the organized efforts to contribute towards organizational growth.

For instance, recruiting programmers and analysts for a company. Training and developing them to achieve organizational goals forms a part of  the staffing activity. 

• Leading involves directing, influencing and motivating employees to perform essential tasks. This function involves display of leadership qualities, different leadership styles, different influencing powers, with excellent abilities of  communication and motivation. 

For instance, Sam Walton - founder of Walmart,  leadership style was instrumental for the roaring success achieved by the retail giant. He always enjoyed interacting with his employees. He also made it a practice to visit each store, at least once in an year. He also insisted that the top level executives should visit the stores, and interact with employees.  

• Controlling is the process of devising various checks to ensure that planned performance is actually achieved. It involves ensuring that actual activities confirm to the planned activities. Monitoring the financial statements,  checking the cash registers to avoid overdraft etc., form part of this process.

The Essentials of control activities are:

• Setting performance standards
• Determining the yard-stick for measuring performance
• Measuring the actual performance
• Comparing actuals with the standard
• Taking corrective actions, if actuals do not match with standards
  LEVELS OF MANAGEMENT AND TYPES OF MANAGERS
  Management can be classified into three levels. They are top management, middle management and supervisory or first-level management. The number of managerial jobs in an organization varies with the level of management.
  • Top management sets the goals of the organization, evaluates the overall performance of various departments involved in selection of key personnel and consults subordinate managers on subjects or problems of general scope.
  • Middle level management is responsible for developing departmental goals and initiate actions that are required to achieve organizational objectives.
  • Supervisory management takes charge of day-to-day operations at the floor level and is involved in preparing detailed short-range plans.
    There are three types of managers in an organization. They are: Top level managers, middle level managers and first-level mangers.
    • Top level managers: This level is appointed, elected or designated by the organization's governing body. Top managers are responsible for establishing objectives, strategies and operating policies. Top level managers carry titles such as: President, Chief Executive Officer (CEO), Managing Director etc. They are responsible for all the activities of the business and are accountable for their impact on society at large. Top managers have direct responsibility for the upper layer of middle level managers.
    • Middle level managers: Middle level managers are primarily responsible for implementing policies and plans that have been decided upon by the top management. They are also responsible for supervising and coordinating the activities of lower level managers. Middle level managers have titles such as manager, head of the department. They look to top management for direction and guidance and are answerable to top managers.
    • First level managers: First level or first line managers, are at the lowest level in the hierarchy of managers. They are responsible for activities of employees operating at the floor-level. Common titles of first level managers include, foreman, supervisor and office manager. In the organizational pursuit of achieving goals, First line managers form the crucial link in the managerial hierarchy, because they ensure that the day-to-day operations  of the organization are run smoothly. They are accountable for the operational output in terms of number of units produced, labor costs, inventory levels and quality control.  
    Example: First level manager could be a flight service manager, who is responsible to check the availability of flight attendants on each flight, besides handling passenger complaints.

ORGANISING

ORGANISING

Organising is the next important function of management after the planning. You know that
in case of planning a manager decides what is to be done in future. In case of organising,
he decides on ways and means through which it will be easier to achieve what has been
planned. Suppose, it is planned to start a new plant for soft drinks within six months. The
immediate task for the manager then is to identify and assign the various tasks involved,
and devise structure of duties and responsibilities so that things move smoothly and the
objective is achieved. All these tasks form part of organising function. Thus, organising
refers to the process of :
• Identifying and grouping the work to be performed.
• Defining and determining responsibility and authority for each job position.
• Establishing relationship among various job positions.
• Determining detailed rules and regulations of working for individuals and groups in
organisation.
IMPORTANCE OF ORGANISING

Organising is essential because it facilitates administration as well as operation of enterprise.
By grouping work and people properly, production increases, overload of work is checked,
wastage is reduced, duplication of work is restricted and effective delegation becomes
possible. Secondly, organising facilitates growth and diversification of activities through
clear division of work. It helps in developing a proper organisation structure and the extent
and nature of decentralisation can be determined. In addition to the above, organising also
provides for the optimum use of technical and human resources. It also encourages creativity
and enhances interaction among different levels of management which leads to unification
of efforts of all.

PROCESS OF ORGANISING
The process of organising consists of the following steps –
1. Identification of activities: Every enterprise is created with a specific purpose.
Based on this, the activities involved can be identified. For example, in a manufacturing
firm, producing goods and selling them are the major activities in addition to routine
activities like, paying salary to employees, raising loans from outside, paying taxes to
the government etc. And these activities vary when the organisation is a service concern
or a trading firm. Therefore, it is essential to identify various activities of an enterprise.
2. Grouping of activities: Once activities are identified, then they need to be grouped.
They are grouped in different ways. The activities which are similar in nature can be
grouped as one and a separate department can be created. For example – activities
undertaken before sale of a product, during the sale of the product and after the sale
of the product can be grouped under the functions of a marketing department. Normally,
all activities of a manufacturing unit can be grouped into major functions like purchasing,
production, marketing, accounting and finance, etc. and each function can be subdivided
into various specific jobs.
3. Assignment of Responsibilities: Having completed the exercise of identifying,
grouping and classifying all activities into specific jobs, they can be assigned to individuals
to take care of.
4. Granting authority: On the basis of responsibilities given to specific individuals, they
are also to be given the necessary authority to ensure effective performance.
5. Establishing relationship: This is a very important job of management as everybody
in the organisation should know as to whom he/she is to report, thereby establishing a
structure of relationships. By doing so, relationships become clear and delegation is
facilitated.

ORGANISATION STRUCTURE
The process of organisation culminates into an organisation structure which constitutes a
network of job positions and the authority relationships among the various positions. The
various factors that are usually taken into consideration for designing a good organisation
structure are job specifications, departmentation, authority-responsibility relationships, etc.
The whole structure takes the shape of a pyramid (look at the type of structure that follow)
and broadly indicates the tasks assigned, the hierarchical relationships and the patterns of
communication and coordination. Based on the arrangement of activities, two most
commonly used forms of organisation structure are (1) functional structure, and (2) divisional
structure. These are discussed hereunder.
1. Functional Structure
An organisation structure formed by grouping together all activities into functional
departments and putting each department under one coordinating head is called functional
structure. Thus, in any industrial enterprise the functions like manufacturing, marketing,
finance, personnel may constitute the major separate units (departments) of the enterprise;
and in case of a large retail store purchasing, sales and warehousing may be the major
units. It may be noted that the major units use are further divided into sub-units. For
example, the manufacturing department may be sub-divided into stores, repairs,
maintenance, production, etc.

This form organisation structure helps in developing functional specialisation in each unit
duly headed by an expert in that functional area. This facilitates the coordination within the
department since all are fully familiar with the various activities involved. However, this
type of structure is considered suitable for small and medium size organisations. In case of
large organisations, the units become too unwieldy and difficult to manage.

2. Divisional Structure
In large organisations dealing in multiple products and serving a number of distinctive
markets, the divisional structure is considered more suitable. Under such structure the organisation is divided into units entrusted with all activities related to different products on
different territories (markets). Each divisional head is required to look after all functions
related to the product or market territory.Under divisional structure, most activities associated with a product or product group can be well coordinated and its profitability easily ascertained. Moreover, it provides opportunity to divisional managers to take prompt decisions and resolve all sorts of problems without
much difficulty. However, this structure is expensive and gives rise to duplication of efforts.

FORMAL AND INFORMAL ORGANISATION
Formal organisation refers to the officially established pattern of relationship among
departments, divisions and individuals to achieve well-defined goals and is a consciously designed structure of roles. In other words, formal organisation clearly spells what a person
has to do, from who he has to take orders and what rules, policies and work procedures
are to be followed. Thus, it is a system of well defined jobs, each bearing a definitive
measure of authority, responsibility and accountability. This promotes order and facilitates
planning and controlling functions.
Informal organisations on the other hand, refers to relationship between individuals in the
organisation based on personal attitudes, likes and dislikes and originates to meet their
social and emotional needs and develops spontaneously. It represents natural grouping of
people in work situation and is supplementary to formal organisation as it serves the needs
not satisfied by formal organisation. The formal organisation does not provide opportunity
to members to exchange personal views and experiences and so they interact informally to
fulfill such interest and needs. In fact, informal organisation comes into being because of
the limitations of the formal structure and both are interlinked. However, they differ in
respect of their origin, purpose, structure, authority, channels of communication and
behaviour of members.
DELEGATION

In organisations, it is difficult on the part of a manager to complete all the jobs assigned to
him. He thus, can take help from others by asking them to do some of the work in a formal
way. It means, he can assign some of the work to his subordinate and give them authority
to carry on the work and at the same time make them accountable. For example, a
production manager may have the target to produce 1000 units in a weeks time. He can
distribute his work to three of his subordinates to produce 250 units each and keep 250 units for self to produce. And then he must also give them enough authority to use
organisational resources to produce. By doing so he also makes his subordinates answerable
to him for non-performance.
This active process of entrustment of a part of work or responsibility and authority to
another and the creation of accountability for performance is known as delegation. Thus,
there are three elements of delegation as follows.
1. Assignment of Responsibility: This is also known as entrustment of duties. Duties
can be divided into two parts: one part, that the individual can perform himself and the
other part, that he can assign to his subordinates to perform.
2. Granting Authority: Authority here simply refers to the official powers and position
required to carry on any task. When duties are assigned to subordinates then the
required authority must also be conferred on him. For example, when a manager asks
his subordinate to receive a guest of the company on his behalf then he must also grant
him some authority like carry the company vehicle, booking the company guest house
for accommodation etc.
3. Creating Accountability: This refers to the obligation on the part of the subordinates,
to whom responsibility and authority are granted to see to it that the work is done. In
other words, the delegatee is fully answerable to his superior for performance of the
task assigned to him. Thus, the superior ensures performance through accountability
by his subordinate.
 IMPORTANCE OF DELEGATION
Delegation is considered as one of the most important elements in the process of organisation
because, it reduces the load on managers as work is successfully shared by the subordinates.
This improves the managerial effectiveness because by delegating a good part of work to
the subordinate the managers are able to concentrate on important matters which require
them personal attention. Not only that, the organisations now-a-day are usually large in
size and complex in character, and no manager can claim to have all the skills and expertise
to handle all kinds of jobs himself. Moreover, the business activities are spread over a
larger area with several branches and units, which makes it difficult for him to look after
the supervise activities personally at all places. The delegation of responsibility with
commensurate authority offers a good workable solution. This also provides an opportunity
for subordinates to develop, and motivates and prepares them for taking up higher
responsibilities in future. It leads to creating a healthy work environment and harmony
among the employees. Thus, delegation facilitates organisational growth and prosperity.
 DECENTRALISATION
Decentralisation refers to a systematic effort to delegate authority at all levels of management
and in all departments. This shifts the power of decision making to lower level under a well
considered plan. Take the case of traffic police controlling movement of vehicles on road. He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.

He holds a lower level position in the organisation yet he has lot of authority given to him.
The senior concentrate on ways and means to improve traffic control. In case of business
units, the heads of departments have the authority to take decisions on most matters relating
to the functioning of their department. The top managers are confine themselves to policy
decisions like product lines to be added, further investment etc.
Decentralisation has number of benefits. Firstly, it reduces the workload of the top level
management. Secondly, it motivates the employees and gives them more autonomy. It
promotes initiative and creativity. It also helps employees to take quick and appropriate
decisions. In the process the top management is freed from the routine jobs and it enables
them to concentrate on crucial areas and plan for growth.

PLANNING NOTES

WHAT IS PLANNING?

When we talk of planning, it simply refers to deciding in advance what is to be done and
how it is to be done? For example, you decide in advance where to study and what to study (to go in for Business Studies and Accountancy or Physics and Chemistry) etc. and plan for the admission, transport arrangement and purchase of books and stationeries etc. Thus, planning is a systematic way of deciding about and doing things in a purposeful manner. In the context of business organisations and their
management it may be defined as the process of setting future objectives and deciding on
the ways and means of achieving them. In the words of M.E. Hurley “planning is deciding
in advance what is to be done in future. It involves the selection of objectives, policies,
procedures and programmes from among the alternatives”.
FEATURES OF PLANNING

The basic features of planning can be summarised as follows:
(a) Planning is the primary function of management as every activity needs to be planned
before it is actually performed. In other words, planning precedes all other managerial
functions and provides the very basis for organising, staffing, directing and controlling.
(b) Planning is always goal directed. A manager cannot plan anything unless he knows
what he wants to achieve. For example, you cannot plan for a journey unless you
know where you want to go. Thus, planning is taking such steps so as to achieve the
desired goal.
(c) Planning is pervasive at all levels of management and so also for all functional area.
Managers at the top level plan for the entire organisation. They make plans for a long
period and lay down the objectives for the organisation as a whole. Middle-level
managers make quarterly, half-yearly and yearly plans for the departments under them.
Foremen and office supervisors plan for a workshop or a section of the office. They
make plans for a short period, i.e., for the next day, next week or next month.
(d) Planning is always futuristic. It is deciding in advance what to do, how to do, etc. It
requires collection of information about various matters relating to business and then
choosing a course of action for the future. However, while planning for the future, it
does take past experience and current situation into consideration.
(e) Planning is an intellectual activity and requires certain conceptual skills to look ahead
into the future. It needs good foresight and sound judgment to anticipate future events,
develop alternative courses of action and make the right choice.
(f) Planning is a continuous process. In organisations plans are made for a specific period
followed by new plans for further period. Sometimes the conditions or circumstance
change requiring the plans to be revised. For example, a sugar factory situated in
upper regions of Uttar Pradesh had planned for 1,000 tonnes of sugar during the last
quarter of the year. Accordingly, the management planned for procurement of sugar
cane from the nearby areas. Unfortunately, there was snowfall leading to loss of crop.
This made the management to change their plan and procure sugarcane from far off
areas like Haryana and Rajasthan and also revise their planned production of 1000 to
800 tonnes. Thus, planning is a continuous activity in organisations.
(g) Planning basically involves making choices. Need for planning arises when goals/
objectives are many and alternatives to achieve them are also plenty. While planning,
alternatives are evaluated and a choice is made regarding which course of action is to
be followed.

(h) Planning is flexible. Planning is done on the basis of some forecasts which may not
materalise. Hence, plans have to be changed in accordance with the changed conditions.
Activities are planned with certain assumptions, which may not come true. Managers
must make provision for alternate strategies and plans as indicate in the earlier example
of a sugar factory.
IMPORTANCE OF PLANNING

Planning is the most importance of all the management functions. Some of the importance
are as follows:
(a) Planning reduces uncertainty, risk and confusion in operation. Through planning, the
future course of action is known to all and so, everybody knows exactly what needs
to be done. This gives a sense of direction resulting in efficiency in operations.
(b) Planning guides the decision making by the managers. Planning of goals to be achieved
and the course of action to be followed to achieve the goal act as a guide in their own
decision making and action plans.
(c) Planning helps in achieving coordination and facilitates control. Proper planning
integrates the tasks at the operational level, thereby making coordination more effective.
It also helps in identifying deviations and taking the corrective action.
(d) Planning with an element of flexibility makes the organisation adaptable. In other words
planning makes the organisation capable of coping with the changing environment and
facing challenges.
(e) Planning leads to economy and efficiency in operations. Best methods are selected
out of available choices, thus, reducing overlapping and wasteful activities.
(f) Planning begins with the determination of objectives and directed towards their
achievement. It keeps the executive alive and alert. Managers have to review the
progress periodically and recast their strategies to meet the objectives.
It should be noted that planning also has certain limitations, as the plans are based on
certain assumptions and incomplete information. Hence, the management has to be vigilant
and provide for necessary flexibility to take care of changed situations.
THE PLANNING PROCESS/STEPS IN PLANNING

Planning in organisation follows a step-by-step process without which it may be difficult
to build up proper plans and ensure their implementation. Such steps are as follows.
1. Establishment of Objectives
All of us know that every organisation has some goals that it wants to achieve. Planning
actually starts with defining these goals in more concrete, clear and unambiguous terms.
This enables the management in gaining clarity on what they have to achieve and then plan
all activities accordingly. Hence establishing organisational objective is a pre-requisite for
good and meaningful planning.
2. Making Assumptions (establishing premises) about the External and Internal
Conditions
Making assumptions about the future environment of business is the second step in planning.
For example, it may be assumed that there will not be any change in tax laws and that there
will be sufficient funds available to meet its financial requirements. These assumptions
about the future environment of the business are known as planning premises. These
premises may be external or internal. External planning premises relate to conditions
outside the business. Internal planning premises relate to conditions prevailing within the
organisation.
External planning premises include assumptions about the market demand and nature of
competition, laws affecting the business, availability of resources, and changes in technology.
If the management can visualise the likely changes in the external conditions, they can take
steps to solve problems arising there from and plan to take advantage of the emerging
business opportunities. Government policies and laws, for example, affect the decisions of
managers to a great extent. Advance knowledge of the likely changes in government policy
enables managers to plan their activities more appropriately.
Internal planning premises relate to conditions within an organisation. These conditions
include cost, methods and techniques of production, employees, type of machinery and
equipment, etc. All these constitute the internal resources which determine as to what the
organisation is capable of achieving.
The study of external conditions enables a business unit to know the opportunities available
in the market. Hundreds of opportunities are available to a business unit, but it cannot take
advantage of every opportunity. It has to decide what it will produce and distribute in the
light of what it can do i.e., on the basis of the study of internal factors and then plan
accordingly.

3. Development of Alternative Courses of Action
The next step in planning is to identify the alternative courses of action to achieve the
objectives set. For example, to achieve the objective of increasing the profits of a business
unit, any one or more of the following alternatives can be used:
• Increase the sale of its existing products
• Improve product quality
• Add new products/product lines
• Increase the prices of products
• Reduce costs
4. Evaluation of Alternatives
Evaluation of alternatives is the fourth step in planning. When alternative courses of action
are there before a manager, he has to examine the feasibility and the possible results of
each course of action before selecting the best course. Certain alternatives may not be
practicable. Management should ignore such alternatives. For example, to maximise profits
the management may not think of reducing the wages of workers as it may not be workable.
Similarly, if prices are increased, the business unit may not be able to face competition in
the market. So, the management should evaluate each of the remaining alternatives and
work out how far they help in meeting the objectives and whether these are workable in
the light of available resources.
5. Selecting the Appropriate Course of Action
After evaluating the alternatives the manager will select that alternative which gives maximum
benefit at minimum cost. In selecting the best course from among the alternatives, managers
should also keep in mind their own limitations of resources. So in making the final selection
from among the alternative courses of action, the management will ultimately be guided by:
(a) the opportunities provided by the external environment; and
(b) the ability of the business unit to take advantage of these opportunities.
6. Arranging for implementation
After the management has finalised their choice, it should build up the necessary strategies
and action plan for its implementation in due consultation with all key personnel who are to
implement it.