MCA 109PRINCIPLES AND PRACTICES

OF MANAGEMENT

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UNIT 2

INTRODUCTION TO FUNCTIONS OF MANAGEMENT

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FUNCTIONS OF MANAGEMENT

PLANNING: Planning is a thinking process, the organized foresight, the vision based on fact and experience, that is required for intelligent action.

ORGANISING: Organization is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them

STAFFINF: Staffing involves the determination of manpower requirements of the enterprise and providing it with adequate competent people at all its level.

DIRECTING: Direction is a complex function that includes all those activities, which are designed to encourage a subordinate to work effectively

CONTROLLING: Controlling is the process, by which managers assure that resources are obtained and used effectively in accomplishment of the organization's objective

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PLANNING ACCORDING TO Killen:

Planning is the process of deciding in advance what is to be done , who is to do it , how it is to be done and when it is to be done

Planning involves anticipation of future course of event and deciding best course of action.

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NATURE OF PLANNINGPLANNING IS GOAL-ORIENTED:

Planning is made to achieve the desired objectives of the business.

PRIMACY OF PLANNING: Planning pervades all managerial activity, it

is the function of every manager. It facilitates organising,staffing,directing,and controlling .

PLANNING IS AN INTELLECTUAL ACTIVITY: Planning is an intellectual process and the

quality of planning will vary according to the quality of the mind of the managers.

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ELASTICITY IN PLANNING: The process of planning should be adaptable to changing

environmental conditions.

PLANNING AIMS AT COORDINATION: Planning co-ordinates the what, who, how, where and why

of planning, without the co-ordination of different activities, one cannot have united and synchronized efforts.

PLANNING IS A CONTINOUS PROCESS: Planning is always continues in the organisation in one or

the other form. Plans are there modified and then certain deficiencies also point out and framed accordingly, in this way planning is a continuous process.

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OBJECTIVES AND SIGNIFICANCE OF PLANNING

MAXIMUM OUTPUT WITH MINIMUM COST: An efficient manager achieves the maximum output at

minimum cost by making the best possible use of men, machine, material, capital and equipment.

Reduces uncertainty: Planning helps in reducing uncertainty because it involves anticipation of future. Effective planning is result of deliberated thinking based on facts and figures. Planning gives an opportunity to business managers to foresee various uncertainties which may be caused by changes in technology, taste and fashion of people etc . sufficient provision is made in plan the plan to offset these uncertainties.

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Facilitates control: Planning helps the manager in performing their function of control . Planning and control are inseparable in the sense that unplanned action can not be control because control involves keeping activities on the predetermined course by rectifying deviation from plans.

Encourage Innovation and Creativity: it helps innovation and creative thinking among the manager because many new ideas come to the mind of a manager when he is planning . It creates forward looking attitude in managers .

Improves Motivation : A good planning system ensures participation of all managers which improves their motivation. It improves motivation of workers also because they know clearly what is expected to them . Planning also serves as a good training device for future managers.

Improves competitive strength: Effective Planning gives a competitive edge to the enterprises over other enterprises that do not have planning or effective planning . This is because planning may involve expansion of capacity , change in work methods, change in quality , anticipation technological changes.

SOCIAL JUSTICE AND HUMAN BETTERMENT: Excellent remuneration improves the standard of living of workers. The growth of business generates employment opportunities. Equal pay for equal work without any discrimination brings social justice.

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IMPORTANCE OF PLANNING1. The business objectives can be easily secured through

planning.2. Planning facilitates the process of decision-making.3. Planning helps the management to implement future

programmes in a systematic manner.4. Planning indirectly leads to large-scale economies by avoiding

waste of men, money, materials, and machinery.5. Planning is the essence of all management activities: once

planning is done well, other activities automatically follow.6. Establishing clear authority and responsibility.7. Planning encourages the sense of involvement and team

spirit.8. To secure economy in operation.9. To help in co-ordination.

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TYPES OF PLANNING STRATEGIC PLANNING: A strategic planning is

the process of deciding the objectives of the organization and determining the manner in which the resources of enterprises are to be deployed to relies the objective of uncertain environment.

OPERATIONAL PLANNING: Operational plan provide details of how strategic plan will be accomplished. Operational planning is concerned with the efficient use of the resources already allocated and with the development of a control mechanism to ensure efficient operations that organizational objective are achieved.

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FORMAL AND INFORMAL PLANNING: A planning in BLACK and WHITE is known as formal planning. Informal planning is only thinking about it and nothing more.

TACTICAL PLANNING: These plans are made for short-term moves and necessary for supporting the strategic plans and achieving firms objectives.

FUNCTIONAL PLANNING: FP is segmental, and it is undertaken for each major function of the organisation like Production, Marketing, Finance, Human resource, etc.

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SHORT TERM AND LONG RANGE PLANNING: STP relates to a period of less than one year, e.g product design , training of work force, reduction of inventory level . MTP covers a period of over one year but less than five year e.g. new product development, product publicity, increasing return on investment. A planning for five years to 20 years or more is known as long term planning. e.g. globalization of production and marketing , increase in market share , Public image.

PROACTIVE PLANNING: PP involves designing suitable course of action in anticipation of likely changes in the relevant environment. In India, cos like Reliance Industries, Hindustan lever, etc have adopted this kind of approach.

REACTIVE PLANNING: In RP, organization's response come after the environmental changes have taken place. After the changes take place, organizations start planning.

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Establishment of objective

Establishment of objective

Evaluation and follow up

Evaluation and follow up

Evaluation of alternatives

Evaluation of alternatives

Selection of plan and development of derivative plans

Selection of plan and development of derivative plans

Development of the planning premises/ Assumptions

Development of the planning premises/ Assumptions

Search of the alternatives

Search of the alternatives

Collection of information and forecasting

Collection of information and forecasting

PROCESSOFPLANNING

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BARRIERS TO EFFECTIVE PLANNING

1. LACK OF RELIABLE DATA: Planning loses its value, if there may be lack of reliable facts and figures.

2. LACK OF INITIATIVE: Planning is a forward looking, planners must take the required initiative, otherwise he will not be able to make good plans and makes planning process ineffective.

3. COSTLY PROCESS: Planning is time consuming and expensive process. If the management is not willing to spend on planning the results may not be good.

4. PROBLEMS OF RAPID CHANGE: A complex and rapidly changing environment, complications make planning extremely difficult.

5. RIGIDITY IN ORGANISATIONAL WORKING: Internal inflexibility in the organisation may compel the planners to make rigid plans, which may sometimes makes the planning process ineffective.

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6.EXTERNAL LIMITATIONS: External factors are very difficult to predict. Such as breakout of war, government control, natural havocs and etc, which make the execution of plans very difficult.

7. PSYCHOLOGICAL BARRIER: Dynamic managers always look ahead, but some people consider present more important than future because present is certain. This will make the planning process ineffective.

8. FAILURE OF PEOPLE IN PLANNING: Some of the major reasons:-lack of commitment to planning, failure to formulate sound strategies, lack of clear and meaningful objectives, tendency to overlook planning premises, failure to see the scope of plan and lack of adequate control techniques. These factors are responsible for inadequate planning.

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PLANNING PREMISES AND FORECASTING

Planning premises constitute the framework within which planning is done

Assumptions denote the expected environment in future are known as planning premises

Planning premises is divided into two parts:-

Planningpremises

Internal Premises

External Premises

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INTERNAL PREMISES: Internal premises include sales forecast, the existing policies and programs, capital investment policies, philosophy of management, etc.

External premises: External premises relate to the political, economic, social and technological forces in which the organization operates and the conditions which influence the demand for the organizations products.

SIGNIFICANCE OF PLANNING PREMISES: If the premises are properly assessed, it will be possible to develop reliable plans to future.

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FORECASTING

Forecasting is a systematic attempt to explore future with the help of known facts.

SIGNIFICANCE OF FORECASTING.

Pivotal (central and important) in an organization. Development of a business. Primacy to planning. Making and reviewing of forecasts on a continuous

basis will compel the managers to think ahead and to search for the best possible decision with a dynamic approach.

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LIMITATIONS OF FORECASTING

It should not be forgotten that all forecasts are subject to a degree of error and they can never be made with a hundred percent accuracy.

Managers often neglect to examine whether the forecasts are supported by reliable information.

Managers must use their knowledge, experience and available information with a great degree of skill and take care to make forecasts more dependable.

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PROCESS OF FORECASTING1. UNDERSTANDING THE PROBLEM:

The first step in the FP is the understanding of real problem about which forecasts are to be made. A manager must know clearly the purpose of forecasting.

2. ESTIMATION OF FUTURE: The prosperity of the future can be estimated with the help of past experience and performance as well as the talents possessed by top management executives.

2. COLLECTION OF RESULTS: All the information can be collected. Relevant records

prepared and maintained to collect the results.

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4. COMPARISON OF RESULTS:The actual results are compared with estimated results to know deviations.

5. REFINING THE FORECASTS:If any factors or conditions have changed during the period understudy, then those factors or conditions have to be taken in consideration for the future estimation, this will help in refining the process of forecasting.

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KEY TO PLANNING PRINCIPLE OF CONTRIBUTION TO OBJECTIVES: For

efficient planning well-defined objectives are needed. Objectives are to be rational (sensible) and understandable.

PRINCIPLE OF PERVASIVENESS OF PLANNING: Planning is found at all level of management. Strategic planning is related to top management while intermediate planning are the concern of middle management.

PRINCIPLE OF LIMITING FACTORS: Planning must take the limiting factors (man, machine, materials and management) into account.

PROPER FORECASTING: One of the important steps in planning is forecasting. Management must have a mechanism of forecasting changes in environment which are influenced by ECONOMIC, SOCIAL, POLITICAL factors.

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DECISION MAKINGACCORDING TO McFarland A decision is an act of choice

wherein an executive forms a conclusion about what must be done in a given situation . A decision represents a course of behaviour chosen from a number of possible alternatives

Decision making is a process of selection from a set of alternative course of action which is thought to fulfill the objectives of decision problem more satisfactorily than others.

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CHARACTERISTICS OF A DECISION

Decision is the choice of the best course among alternatives.

Decision is the end process preceded by reasoning.

Decision making is a mental process because the final selection is made after thoughtful consideration.

Decision is aimed at achieving the objectives of the organisation.

Decision relates the means to the end.

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DIFFICULTIES IN DECISION-MAKING

INCOMPLETE INFORMATION: Lack of information in decision-making, makes the process incomplete.

INEFFECTIVE COMMUNICATION: IC makes implementation difficult. The manager should therefore care to communicate all decisions to the employees in clear, precise and simple language.

INCORRECT TIMING: If the decision is correct but the time is inopportune, it will not serve any purpose.

UN-SUPPORTING ENVIRONMENT: If there is all round goodwill and trust, the manager is encouraged to take decisions, On the other hand, under the opposite circumstances he avoids decision-making.

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THANKYOU

MCA 109 PRINCIPLES AND PRACTICES OF MANAGEMENTUNIT 2FUNCTIONS OF MANAGEMENTPLANNINGNATURE OF PLANNINGSlide 6OBJECTIVES AND SIGNIFICANCE OF PLANNINGSlide 8IMPORTANCE OF PLANNINGTYPES OF PLANNINGSlide 11Slide 12Slide 13BARRIERS TO EFFECTIVE PLANNINGSlide 15PLANNING PREMISES AND FORECASTINGSlide 17FORECASTING LIMITATIONS OF FORECASTING PROCESS OF FORECASTINGSlide 21KEY TO PLANNINGDECISION MAKINGCHARACTERISTICS OF A DECISIONDIFFICULTIES IN DECISION-MAKINGSlide 26