BBA109_Principles of Management (1) - Copy

BACHELOR OF COMMERCE SEMESTER-II PRINCIPLES OF MANAGEMENT BCM107

First Published in 2020 All rights reserved. No Part of this book may be reproduced or transmitted, in any form or by any means, without permission in writing from Chandigarh University. Any person who does any unauthorized act in relation to this book may be liable to criminal prosecution and civil claims for damages. This book is meant for educational and learning purpose. The authors of the book has/have taken all reasonable care to ensure that the contents of the book do not violate any existing copyright or other intellectual property rights of any person in any manner whatsoever. In the even the Authors has/ have been unable to track any source and if any copyright has been inadvertently infringed, please notify the publisher in writing for corrective action. 2 CU IDOL SELF LEARNING MATERIAL (SLM)

CHANDIGARH UNIVERSITY Institute of Distance and Online Learning Course Development Committee Chairman Prof. (Dr.) Parag Diwan Vice Chancellor, Chandigarh University, Gharuan, Punjab Advisors Prof. (Dr.) Bharat Bhushan, Director – IGNOU Prof. (Dr.) Majulika Srivastava, Director – CIQA, IGNOU Programme Coordinators & Editing Team Master of Business Administration (MBA) Bachelor of Business Administration (BBA) Coordinator – Dr. Rupali Arora Coordinator – Dr. Simran Jewandah Bachelor Master of Computer Applications (MCA) of Computer Applications (BCA) Coordinator – Dr. Raju Kumar Coordinator – Dr. Manisha Malhotra Bachelor Master of Commerce (M.Com.) of Commerce (B.Com.) Coordinator – Dr. Coordinator – Dr. Aman Jindal Master Minakshi Garg of Arts (Psychology) Coordinator – Dr. Bachelor of Science (Travel & TourismManagement) Samerjeet Kaur Master of Arts Co-ordinator – Dr. Shikha Sharma (English) Coordinator – Dr. Ashita Bachelor of Arts (General) Chadha Co-ordinator – Ms. Neeraj Gohlan Academic and Administrative Management Prof. (Dr.) R. M. Bhagat Prof. (Dr.) S.S. Sehgal Executive Director – Sciences Registrar Prof. (Dr.) Abhishek Prof. (Dr.) Inderpreet Kaur Executive Director – Management Director – IDOL Prof. (Dr.) Manaswini Acharya Executive Director – Liberal Arts © No part of this publication should be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the authors and the publisher. SLM SPECIALLY PREPARED FOR CU IDOL STUDENTS Printed and Published by: SCHOOLGURU EDUSERVE PVT LTD B-903, Western Edge II, Western Express Highway, Borivali (E), Mumbai - 400066 Call Us: +91 22 4896 8005 Mail Us: [email protected] For: CHANDIGARH UNIVERSITY Institute of Distance and Online Learning

CONTENT UNIT -1 Introduction To Management..............................................................................................4 UNIT -2 Evolution Of Management Thought..................................................................................25 UNIT –3 Planning...............................................................................................................................42 UNIT –4 Decision Making................................................................................................................. 58 UNIT –5 Organizing...........................................................................................................................68 UNIT –6 Organizational Structure...................................................................................................84 UNIT –7 Delegation, Authority And Responsibilty.......................................................................105 UNIT –8 Staffing...............................................................................................................................121 UNIT -9 Motivation..........................................................................................................................132 UNIT –10 Leadership....................................................................................................................158 UNIT –11 Controlling...................................................................................................................... 178 3 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-1 INTRODUCTION TO MANAGEMENT Structure 1.0. Learning Objectives 1.1. Introduction 1.2. Concept of Management 1.3. Nature 1.4. Process of management 1.4.1 Important Features 1.4.2 Difference between the Functions of Managers and Non-managers 1.4.3 Difference between Managerial Functions and Skills 1.4.4 Management Process Approach 1.4.5 Management Functions 1.4.6 Classification of managerial functions 1.5. Managerial levels and roles of a Manager. 1.6. Summary 1.7. Key Words/Abbreviations 1.8. Learning Activity 1.9. Unit End Questions (MCQ and Descriptive) 1.10.References 1.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  State concept of management  Discuss the nature of management  Explain the process of management  Identify roles and levels of a manager 1.1 INTRODUCTION The basic unit of a society is the individual. But no individual can satisfy all his desires himself. Therefore, he unites with his fellow-beings and works in an organised group to achieve what he cannot achieve individually. It is primary force within the group or organisation which tends to lead it towards the group goal. Management is required to plan, organise, co-ordinate and control the affairs of the organisation. Without, management, resources of production remain resources merely and never become production. Management is a universal process in all organised social and economic activities. Wherever there is human activity, there is management. In business filed 4 CU IDOL SELF LEARNING MATERIAL (SLM)

management is not restricted to factory, shop or office but is also useful in government enterprises, educational institutions, health services, military organizations and so on. A manager applies his knowledge and skill in a wide variety of enterprises. Management is essential at all levels of an organisation. But the word management has been given different interpretations. It is used as a noun, a process, and a separate discipline. Management as a Noun: In general, and popular usage, management refers to a distinct group of people who direct the activities of other people and material resources toward the attainment of predetermined goals. Giving a broader meaning to it, one can look at management as a resource, a system of authority, and a class or elite.  Management as an economic resource: The economist's view of management is that it is a factor of production just like entrepreneurship, capital and labour. The managerial resource, to a large extent, determines organisational effectiveness and efficiency. Hence in a dynamic environment managerial development is more important and its use must be more intensive.  Management as a system of authority: Management is a system of authority in the sense that it consists of a team of managers who are responsible for making decisions and supervising the work of others. Managers at different levels possess varying degrees of authority. Higher level managers manage managers at middle levels. Middle and lower level managers supervise and control their subordinate managers and workers.  Management as a class or elite: Sociologists view management as a class and status system. Increasing complexity of management in the modern complex organisation has led to managers king regarded as a distinct class in society, who possess knowledge and skill of a high order. Access to managerial positions is based - on achievement criteria (i.e., on intellect and knowledge). rather than on ascriptive criteria (i.e., on family and social origins). This development is viewed by some as managerial revolution in which the managerial class threatens to become autonomous groups with increasing amount of power. Others view this development not with. alarm because increase in power of managers attracts more of them, which prevents managerial autocracy. Management as a Process Interpreted as a process, management consists of a series of inter-related managerial activities classified into various functions like planning, organising, staffing, leading and controlling. Managers undertake these functions with a systematic approach, so as to integrate physical and human resources into an effective operating unit. Management is, thus, regarded as the process by which a co-operative group directs action towards common goals. Management as a Discipline 5 CU IDOL SELF LEARNING MATERIAL (SLM)

Another connotation of management is that it is a separate discipline having a systematised body of knowledge which managers use in performing their jobs. As a separate field of study, management includes the principles and practice of general management as well as of the various functions of management. It has developed its own techniques and 'approaches. The theoretical foundations of management have evolved on the basis of experience, observation and scientific investigations. 1.2 CONCEPT OF MANAGEMENT The concept of management is as old as human civilisation. Management in today’s context has the most significant influence on modern life, giving a strong essence to the very purpose of management. The concept of management is useful and applicable to all types of organisations, whether profit-making or service-oriented. Therefore, it is said that management is a universal process. In other words, the concept of management integrates and transforms various resources into ultimate goals and objectives, i.e., maximisation of profits or services. It is primarily a process of integrating six Ms of management, viz., Men, Material, Machines, Methods, Money and Markets. The term management may be referred to a distinct process of allocating inputs by typical management functions for the purpose or achieving pre-determined objectives, viz., higher output and profits through customer satisfaction. It can be showed in the following diagram / process: Fig 1.1 Concept of management The traditional concept of management was restricted to the art of getting things done through others. According to modern views, management is not merely an art of getting things done through others, but it also covers a wide spectrum of business-related activities. According to modern thinkers, management is a process, an activity, a discipline and an effort to co-ordinate, control and direct individual and group efforts towards the attainment of cherished goals of business. 6 CU IDOL SELF LEARNING MATERIAL (SLM)

Definitions: The following are the authors can explain about the management in their different ways. “Management is knowing exactly what you men to do and then seeing that they do it in the best and cheapest way.” - Fredrick Winslow Taylor “To manage is to forecast, to plan, to organise, to command, to coordinate and to control.”- Henry Fayol “Management is defined as the creation and maintenance of an internal environment in an enterprise, where individuals, working together in groups, can perform efficiently and effectively towards the attainment of group goals.” - Koontz and O’ Donnell “Management is a distinct process consisting of planning, organising, actuating and controlling, performed to determine and accomplish stated goals by the use of human beings and other resources.” - George Terry 1.3 NATURE OF MANAGEMENT: An analysis of the various definitions of management indicates that management has certain characteristics. The following are the salient characteristics of management. 1. Management aims at reaping rich results in economic terms: Manager’s primary task is to secure the productive performance through planning, direction and control. It is expected of the management to bring into being the desired results. Rational utilisation of available resources to maximise the profit is the economic function of a manager. Professional manager can prove his administrative talent only by economising the resources and enhancing profit. According to Kimball, “management is the art of applying the economic principles that underlie the control of men and materials in the enterprise under consideration”. 2. Management also implies skill and experience in getting things done through people: Management involves doing the job through people. The economic function of earning profitable return cannot be performed without enlisting co-operation and securing positive response from “people”. Getting the suitable type of people to execute the operations is the significant aspect of management. In the words of Koontz and O’Donnell, “Management is the art of getting things done through people in formally organised groups”. 3. Management is a process: Management is a process, function or activity. This process continues till the objectives set by administration are actually achieved. “Management is a social process involving co-ordination of human and material resources through the functions of planning, organising, staffing, leading and controlling in order to accomplish stated objectives”. 7 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Management is a universal activity: Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required. 5. Management is a science as well as an art: Management is an art because there are definite principles of management. It is also a science because by the application of these principles predetermined objectives can be achieved. 6. Management is a profession: Management is gradually becoming a profession because there are established principles of management which are being applied in practice, and it involves specialised training and is governed by ethical code arising out of its social obligations. 7. Management is an endeavour to achieve pre-determined objectives: Management is concerned with directing and controlling of the various activities of the organisation to attain the pre-determined objectives. Every managerial activity has certain objectives. In fact, management deals particularly with the actual directing of human efforts. 8. Management is a group activity: Management comes into existence only when there is a group activity towards a common objective. Management is always concerned with group efforts and not individual efforts. To achieve the goals of an organisation management plans, organises, co-ordinates, directs and controls the group effort. 9. Management is a system of authority: Authority means power to make others act in a predetermined manner. Management formalises a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations. Since management is a process of directing men to perform a task, authority to extract the work from others is implied in the very concept of management. 10. Management involves decision-making: Management implies making decisions regarding the organisation and operation of business in its different dimensions. The success or failure of an organisation can be judged by the quality of decisions taken by the managers. Therefore, decisions are the key to the performance of a manager. 11. Management implies good leadership: A manager must have the ability to lead and get the desired course of action from the subordinates. According to R. C. Davis, “management is the function of executive leadership everywhere”. Management of the high order implies the capacity of managers to influence the behaviour of their subordinates. 12. Management is dynamic and not static: The principles of management are dynamic and not static. It has to adopt itself according to social changes. 13. Management draws ideas and concepts from various disciplines: Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology etc. 8 CU IDOL SELF LEARNING MATERIAL (SLM)

14. Management is goal oriented: Management is a purposeful activity. It is concerned with the achievement of pre-determined objectives of an organisation. 15. Different levels of management: Management is needed at different levels of an organisation namely top level, middle level and lower level. 16. Need of organisation: There is the need of an organisation for the success of management. Management uses the organisation for achieving pre-determined objectives. 17. Management need not be owners: It is not necessary that managers are owners of the enterprise. In joint stock companies, management and owners (capital) are different entities. 18. Management is intangible: It cannot be seen with the eyes. It is evidenced only by the quality of the organisation and the results, i.e., profits, increased productivity etc. Is Management a Science or an Art? A question often arises whether management is a science or art. It is said that “management is the oldest of arts and the youngest of sciences”. This explains the changing nature of management but does not exactly answer what management is? To have an exact answer to the question it is necessary to know the meanings of the terms “Science” and “Art”. What is “Science”? Science may be described, “as a systematic body of knowledge pertaining to an area of study and contains some general truths explaining past events or phenomena”. The above definition contains three important characteristics of science. They are: 1. It is a systematized body of knowledge and uses scientific methods for observation, 2. Its principles are evolved on the basis of continued observation and experiment, and 3. Its principles are exact and have universal applicability without any limitation. Judging from the above characteristics of science, it may be observed that:  Management is a systematized body of knowledge and its principles have evolved on the basis of observation.  The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element.  In management, it is not possible to define, analyse and measure phenomena by repeating the same conditions over and over again to obtain a proof.  The above observation puts a limitation on management as a science. Management like other social sciences can be called as “inexact science”. What is “Art”? 9 CU IDOL SELF LEARNING MATERIAL (SLM)

‘Art’ refers to “the way of doing specific things; it indicates how an objective is to be achieved.” Management like any other operational activity has to be an art. Most of the managerial acts have to be cultivated as arts of attaining mastery to secure action and results. The above definition contains three important characteristics of art. They are:  Art is the application of science. It is putting principle into practice.  After knowing a particular art, practice is needed to reach the level of perfection.  It is undertaken for accomplishing an end through deliberate efforts. Judging from the above characteristics of art, it may be observed that:  Management while performing the activities of getting things done by others is required to apply the knowledge of certain underlying principles which are necessary for every art.  Management gets perfection in the art of managing only through continuous practice.  Management implies capacity to apply accurately the knowledge to solve the problems, to face the situation and to realise the objectives fully and timely. The above observation makes management an art and that to a fine art. Management is both a Science as well as an Art Management is both a science as well as an art. The science of management provides certain general principles which can guide the managers in their professional effort. The art of management consists in tackling every situation in an effective manner. As a matter of fact, neither science should be over- emphasised nor should be the art discounted; the science and the art of management go together and are both mutually interdependent and complimentary. Management is thus a science as well as an art. It can be said that-” the art of management is as old as human history, but the science of management is an event of the recent past.” 1.4 PROCESS OF MANAGEMENT For an understanding of the job of managing, management scholars and theorists have, suggested that management should be regarded is a process. Let us understand what exactly we mean by management process. As a process, management consists of a series of interrelated functions or operations carried out by managers for achieving certain desired goals of the organisation. One popular classification of the functions of managers is: Planning, organising, staffing, directing and controlling, there are several other Iterative classification schemes of management functions. Whatever be the classification, the various managerial functions, and Overview considered as a whole, make up the management process. Management is often viewed as a social process, in the sense that managers are concerned with mobilising and coordinating the efforts and skills of individuals as members of work groups in the 10 CU IDOL SELF LEARNING MATERIAL (SLM)

organisation. It is a process of getting things done ' through people. Managers get things done by managing their subordinate managers, employees and workers. Getting things done through people requires social skills (abilities) such as: i) to understand people and to attend to their work-related problems, needs and sentiments ii) to get along with them, to interact. to communicate with and guide them, iii) to inspire confidence, to enthuse and motivate and to provide leadership to them, iv) to develop and to get the best out of them, and so on. Management is also a creative and dynamic process. It is a moving force that generates interaction, integration and harmony among the functions. Managers play an active role in making things happen, to direct events, to gain command over the force: of change and to create a whole that is greater than the sum of its parts. The dynamic nature of management process manifests itself by adjusting and adapting the elements of individual functions to the emerging requirements of the organisation and also to the requirements and realities of the external environment. 1.4.1 Important Features The process of management made up of a set of functions has several important features. These are: 1 Goal-oriented: The management process and the functions integral to it are goal-oriented and purposeful; they are not ending in themselves; rather, they are the means for achieving organisational objectives. They have value to the extent that they contribute to effective survival and success of organisations. Organisational purpose is the reason for the existence of the process and functions o fmanagement. 2 Depicts the nature of job: The process of management and their functions depict the nature of the job to be performed by the managers. They represent the description of the job to be performed by the managers. Managers do plan, organise, direct and control the employment of resources and human efforts in order to achieve pre-determined goals. 3 Functions follow one another: The functions which constitute the management process follow one another in a particular sequence and not in haphazard fashion. Conceptually at least, the process begins with planning, followed by organising ,staffing, directing and controlling. The sequence has its justification. For example, planning which involves determining the organisational objectives and the courses of action needed to achieve them, provides the basis for the subsequent functions. Planning, organising, staffing and directing would be wasteful without the follow-up function of controlling, to ensure that organisational results conform to organisational plans and are in accordance with the planned use of resources and efforts. However, the sequence of the functions may not be observed strictly in practice. Managers tend to give simultaneous attention to all the functions. A back-and-forth movement from one function to another also takes place. 11 CU IDOL SELF LEARNING MATERIAL (SLM)

4 Ongoing Process: The process of management is a continuous one. It is an ongoing, unending and interactive process. 5 Interrelationship: The functions of managers are closely related to each other. They collectively contribute to the achievement of organisational objectives. They are to be considered in totality. Each function gains meaning only in relation to other, functions and% relation to the contribution it makes to the total activity of which it is a part. In turn, the management process is only as strong as 'the properties of the individual functions, each function may be viewed: as a sub-process of the integrated management process which is shown in Figure, 1.2. Fig.1.2 Interrelationship of management function 6 Transformation of inputs and outputs: Management is a process that deploys and transforms the use of machines, skills, values, materials, money, knowledge, information \"techniques, and human efforts (known as 'inputs') into products, services, surpluses and satisfaction (known as 'outputs'). Management functions may be viewed as the elements of the transformation process which is to be efficiently carried out through certain techniques and skills. Management, as a transformation process, interacts with the relevant factors of the external environment (economic, social, cultural and technological factors) which affect the organisation in several ways as presented in Figure 1.3 12 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 1.3 Interaction with environment 7 Functions are applicable to one another: Some of the functions which constitute the management process are applicable to one another. For example, the planning function has to be properly organised and directed; the organising and directing functions have to be properly planned; the staffing function has to be properly controlled. 8 Common process of management: The functions of management are different from the functions of the organisation. The latter differ from organisation to organisation. For example, the major functions of business organisation are manufacturing and marketing. The major functions of a university are teaching, and research. The functions and process of management are generally common to all organisations. 9 Guides students and practitioners: The process of management provides a simplifying but valuable framework whereby students and practitioners of management may analyse and understand its complexity as also evaluate and improve the functions and process of management. Several principles of management have been evolved by management experts which are meant to serve as guidelines to managers in their performance of management functions. 1.4.2 Difference between the Functions of Managers and Non-managers It should be clear to You by now that the functions of a manager are different from those of a non- manager. Non-manager in an organisation, for example an ordinary factory worker, is accountable for performing his own tasks and duties. But a manager is accountable not only for performing his own tasks, but also for the quality of performance and work behaviour of his subordinates. He has to set goals for his unit, plan the courses of action to achieve the goals, assign tasks to his subordinates, impose obligations on them for performance, guide and supervise their work and make sure that the tasks are performed and goals are accomplished. 13 CU IDOL SELF LEARNING MATERIAL (SLM)

A manager may sometimes engage in non-managerial activities or functions, as for example, typing letters, filing correspondence, carrying files to his superior and so on. These are no typical managerial functions. 1.4.3 Difference between Managerial Functions and Skills Managerial functions are also different from managerial techniques and skills. Managerial techniques are the methods used by managers in performing their functions .For example, a manager may often take his subordinates into confidence, consult with them, seek ideas and suggestions from them, involve them to some extent in planning and controlling the operations of his work unit. This is known as the technique of' participative management'. Similarly, a manager may employ the technique of budgeting to plan and control the activities of his unit. Managerial skills are specific work-related abilities and expertise of managers which facilitate in discharging the job assigned to them. The range of managerial skills include: conceptual analytical skills, inter-personal skills, leadership skills, administrative skills,technical skills, and so on. For example, inter-personal and leadership skills enablemanagers to perform their function of directing. Administrative skills aid the managerial task of coordination. 1.4.4 Management Process Approach The idea that management is a process has developed into a major approach or school of management thought known as 'management process school' or 'approach'. It was originally enunciated by Henri Fayol in 1916. Fayol developed one of the earliest theories of management and gave a broad theoretical framework of management by identifying its functions as planning, organisation, command, coordination and control. Fayol described and analysed the job of the manager in terms of these management functions and also described 14 principles of management. The management process school gained wide popularity in course of time, and its proponents broadly adopted Fayol's functional framework of management, but made a few refinements and changes. The leading enthusiasts of the management process school were Harold Koontz and CyrilO'Donnell who developed the functional framework of management process in terms of planning, organising, staffing, direction and controlling functions. The management process approach is also known as 'traditional approach' or 'functional approach'. The basic elements of this approach may be outlined as follows: 1 It focuses on building a theory and science of management by organising knowledge based on what managers do in practice as managers. 14 CU IDOL SELF LEARNING MATERIAL (SLM)

2 It is based on the management's ability and willingness to draw pertinent knowledge from other related disciplines such as economics, behavioural sciences (Psychology,Sociology and anthropology), mathematics and so on, to enrich management knowledge. 3 It regards the practice of managing as an art, like medicine and engineering, backed by the science of managing. 4 It attempts to evolve several principles of management from the practice and functions of management. Principles are regarded as fundamental kuths having explanatory and predictive values; they form part of the theory of management and enrich the practice of managing. 5 It emphasises the universal or global nature of management fundamentals. It supports Fayol's argument that the functions and principles of management have genera lvalidity and applicability. For example, top managers carry out the same functions of planning,organising, directing, and controlling as the lower level managers in an organisation. Only the intensity and relative, emphasis on the functions differ to some extent from one level of management: to another. Similarly, management process is equally valid irrespective of the cultural setting in which an organisation exists whether the organisation operates in a developed western country or an under-developed eastern country. 1.4.5 Management Functions There are different viewpoints of scholars as regards the range of functions which constitute the process of management. The identification of functions of management is an attempt to divide the job of managing into its elements for purposes of in-depth analy fclassification of managerial functions. As we have seen earlier, Fayol classified thefunctions of management as planning, organisation, command, coordination and control. However, over the years even to those who belonged to the management process school, Fayol’s classification was not wholly acceptable. They modified Fayol's classificationsubstantially to fit into their own ideas and beliefs. Let us have a look at theclassification schemes of managerial functions developed by a few well-known writerson management. Luther Gulick: He is an early writer on management who outlined the variousfunctional elements of the work of a chief executive as planning, organising, staffing,directing, coordinating, reporting and budgeting. He named these functions as'POSDCORB' which is made up of their alphabets. Gulick based his classification onFayol's contribution but divided the function of controlling into reporting andbudgeting. Lydall Urwick: He is another early management thinker who made an important contribution to the understanding of management concepts, processes, principles andtheory. He supported Fayol's framework of functions, but emphasised the function offorecasting and separated it from the function 15 CU IDOL SELF LEARNING MATERIAL (SLM)

of planning. He added one morefunction-investigation i.e., search For or research on facts and ideas to generateinformation, which was the basis of the process of management. Ralph Davis: He was a professor of Management in an American University. Heclassified the basic functions of management as planning, organising and controlling. Hethought that the functions of commanding and coordinating were onlyphases of thecontrol function. Chester Barnard: Chester Barnard President of New Jersey Bell Telephone Companyfor several years, influenced the ideas of several management theorists. He identified theessential managerial functions as: (a) formulating and defining the purposes of theorganisation and the activities to be carried out to achieve the purposes, (b) establishingand maintaining a formal and informal communication system which confects all theunits of the organisation, and (c) employing personnel and securing best efforts andcontributions from them through a system of inducements and incentives. Thus, Barnard's formulation and classification of the functions of management weresomewhat new and did not conform to Fayol's framework. He laid primary emphasis oncommunication and motivation as key managerial functions. Other Classifications: Several other writers belonging to the management processschool have also offered their own classification of management functions. We may not examine their classifications in depth but note the following features common to all: 1 The functions of planning, organising and control are invariably included in all theclassifications. 2 A few writers have emphasised staffing and directing as important functions. 3 Decision-making and communication are viewed as integral to all functions ofmanagement rather than separate functions. However, decision-making is associatedmore with planning, while communication is associated more with the directing function that with other functions in general. 4 Motivation, innovation, representation and influence, though identified as keyfunctions by a few authors are not generally regarded as separate functions. They arerather regarded as sub-functions of some main functions: An outline of management functions It is clear from the above that there is a wide measure of agreement among scholars ofplanning, organising, staffing, directing and controlling as the basic functions ofmanagement. All these functions have been explained in depth in the units that follow. For the present, we may get a bird's eye view of these functions. Planning: planning is the process of determining the organisational objectives and theformulation of policies and programmes for achieving them. Planning is future-orientedand is concerned with charting out the desired future direction of organisational activities. Forecasting is one of the important elements in the planning process. 16 CU IDOL SELF LEARNING MATERIAL (SLM)

Organising: Organising refers to the formal grouping of people and activities to facilitate achievement of the firms objectives, Organising involves (1) determining the activities required to achieve goals, (2) grouping of these activities into departments or sections, (3) assignment of such groups of activities to a manager, (4) delegation of authority to carry them out and (5) provision for co-ordination of activities, authority, and information horizontally and vertically in the organisation structure. Staffing: Staffing is the process of determining the manpower requirements of the organisation and recruiting persons for both managerial and non-managerial positions. This involves steps such as inviting applications, selection, training and so on. It involves the task of matching jobs and people fitting the right person to the right job and of developing the human resources of the organisation. Directing: Directing is the process of activating the plans and group efforts in the desired direction. It is concerned with the implementation of plans and programmes on the basis of individual and group efforts of managers, employees and workers. Itinvolve5 leadership, supervision, communication and motivation, for achieving the goals of the organisation. Controlling: It is the process of checking, measuring and regulating the on-going activities of the organisation to ensure that they are in conformity with the pre-determined plans and produce the planned results. Though we have outlined the functions of management separately for analytical understanding, they should be viewed in their totality. As stated earlier, the process of management begins with making decisions on organisational objectives and the plans of action, to achieve them. The plans provide a basis for the proper arrangement of organisational activities and authority relations around specific job positions which have to be filled by the right type of persons. At every organisation level, managers and supervisors assign tasks to their subordinates, supervise and guide their job behaviour and performance. Control of operations and performance is ensured by setting standards which are derived from objectives and by establishing mechanisms for checking and correcting deviations from planned results. Integration of various functions and sub-functions of management takes place through regular communication channels which carry reports on progress and problems with regard to on-going operations. Often, managers in charge of operations of various levels get signals which prompt them to redefine goals, restructure tasks, reassign responsibilities, reconsider commitments, reallocate resources, reschedule operations and so on. The focus is always on achievement of objectives in an efficient and effective manner. In many cases, even objectives may have to be modified in tune with operational and environmental realities. Thus, the process of management and the functions that constitute it are dynamic in nature. 17 CU IDOL SELF LEARNING MATERIAL (SLM)

1.5 MANAGERIAL LEVELS AND ROLES OF A MANAGER In an industrial enterprise, managers at all levels of management have to perform more or less similar function. However, the scope, nature and importance of these functions may vary according to the level at which they operate. Generally, managers are divided into three broad categories depending upon the level at which they operate in the management hierarchy. It can beshowed in the following structure: Fig 1.4Managerial levels and roles of a manager Top Level Management: Top-level management is the ultimate authority, which is responsible to the shareholders, government and general public. Top-level management of an organisation consists of one of the following: • Board of Directors • General Manager • Chief Executive Manager • Managing Director • President Functions: • To define mission and fundamental goals. • To design appropriate organisational set-up • To develop master plans for different functional areas • To formulate master strategy and policies • To provide outstanding leadership • To achieve coordination and exercise overall control. Middle Level Management: Middle level management are the connecting links between the top and the first-time managers. 18 CU IDOL SELF LEARNING MATERIAL (SLM)

The middle level management consists of departmental heads viz., • Production manager • Sales manager • Marketing manager • Finance manager • Public relation officer Functions: • To explain to the lower management, the objectives, strategies and policies laid down by the top managers. • To communicate to the top management, the problems, suggestions and viewpoints of the lower management • To prepare departmental plans on the basis of board objectives and guidelines set by the top management • To design organisational set-up of various functional departments i.e., division of work and span of control • To control and coordinate the functioning of various functional departments in the organisation. • To submit a report to the top management on the performance of various departments and individuals. • To offer suggestions and recommendations to the top management for the improvement of overall functioning. Lower Level Management: Lower level management is also known as the first line management, because the management level begins with it. It is a vital link between the higher-level management and the rank and file of workers. They are important because they link managers with non-managers. They exercise a direct supervision over the entire workforce in factory, office and sales field, where results are obtained. Functions: • To day-to-day operational planning, as per the directives of the middle level managers. • To maintain high level of morale among workers and create conducive environment for them to perform. • To supervise work of employees and ensure that their performance conform to the predetermined standards. • To submit reports on the performance of workers and to recommend reward or punishment for them. 19 CU IDOL SELF LEARNING MATERIAL (SLM)

• To communicate to workers about the decisions of the top-level management and its policies. • To report to higher authority, the problems, feelings and expectations of the rank and file of workers Roles of Manager To achieve results, they shift gears and restructure and reorganise things continually. The diverser oles played by managers in discharging their duties have been summarised by Henry Mintz bergin the late 1960s, under three broad headings: interpersonal roles, informational roles anddecisional roles. Let us understand them one by one. Fig 1.5 Roles of Manager 1.Interpersonal roles: Three interpersonal roles help the manager keep the organisation running smoothly. Managers play the figurehead role when they perform duties that are ceremonial and symbolic in nature. These include greeting the visitors, attending social functions involving their subordinates (like weddings, funerals), handing out merit certificates to workers showing promise etc. The leadership role includes hiring, training, motivating and disciplining employees. Managers play the liaison role when they serve as a connecting link between their organisation and others or between their units and other organisational units. Mintzberg described this activity as contacting outsiders who provide the manager with information. Such activities like acknowledgements of mail, external board work, etc., are included in this category. 2. Informational roles: Mintzberg mentioned that receiving and communicating information are perhaps the most important aspects of a manager’s job. In order to make the right decisions, managers need information from various sources. Typically, this activity is done through reading 20 CU IDOL SELF LEARNING MATERIAL (SLM)

magazines and talking with others to learn about changes in the customers’ tastes, competitors’ moves and the like. Mintzberg called this the monitor role. In the disseminator role, the manager distributes important information to subordinates that would otherwise be inaccessible to them. Managers also perform the spokesperson role when they represent the organisation to outsiders. 3. Decisional roles: There are four decision roles that the manager adopts. In the role of entrepreneur, the manager tries to improve the unit. He initiates planned changes to adapt to environmental challenges. As disturbance handlers, managers respond to situations that are beyond their control such as strikes, shortages of materials, complaints, grievances, etc. In the role of a resource allocator, managers are responsible for allocating human, physical and monetary resources. As negotiators, managers not only mediate in internal conflicts but also carry out negotiations with other units to gain advantages for their own unit. 1.6 SUMMARY Various meanings assigned to the word 'management' add up consistently. Management is a distinct decision-making group which makes use of systematised body of knowledge relating to functions that make up the process. Definitions of management can be grouped under four different schools. The process school analyses the job of a manager and classifies managerial activities into distinct functions viz., planning, organising, staffing, leading and controlling. Human relations school, while emphasising human aspect of an organisation, gives more importance to managing people. The decision school focuses on decision-making involving the managerial activity of developing and choosing from among alternatives. Managerial responsibility of relating organisation to external environment is the subject matter of systems and contingency schools. Essential features that make up the nature of management, are also derived from the concepts and definitions of management. Management as a-distinct branch of knowledge with a clearly defined boundaries, confines itself to the managerial job conceptually divided into functions. While managerial functions are common to all enterprises, enterprise functions derived from the purposes of the enterprises vary according to their nature. Management, though not, an exact science, is progressing towards perfection. Art of management, which is an application of management science for achieving practical results, depends on the latter for its improvement. Thus, science and art of management are not mutually exclusive, but complementary to each other. Management is increasingly being regarded as a profession, as it has a body of knowledge the acquisition of which is compulsory for gaining access to managerial jobs in the modern complex organisations. Skill requirements for all levels of managers are identified as conceptual, human and technical. Human skill is important at all levels. Higher the managerial level the greater the need for conceptual skill. Technical skill which assumes greater importance at lower levels, is of less significance at higher levels. 21 CU IDOL SELF LEARNING MATERIAL (SLM)

1.7 KEY WORDS/ABBREVIATIONS  Art: It is the bringing about a desired result through the application of skills.  Administration: It is a higher-level function concerned with the determination of policies.  Code of conduct: It prescribed the norms of professional ethics for its members.  Economic Resource: Management, land, labour and capital.  Goal-oriented: Purposeful activity towards achieving the goals of the organisation.  Management: The art of getting things done.  Process: A series of functions that lead to the achievement of certain objectives.  Professionalisation: It means defining the duties and responsibilities of the managers to improve the quality of management education and training.  Science: A systematically organised body of knowledge including concepts, principles and theories.  Top management: Managers who are higher up in the hierarchy devoting more time on administrative functions. 1.8 LEARNING ACTIVITY 1. Management is a social and dynamic process'. Comment. ……………………………………………………………………………………………..…………… ………………………………………………………………………………………….. 2. What is the distinction between 'management process' and 'management process approach'? ……………………………………………………………………………………………..…………… ………………………………………………………………………………………….. 1.9 UNIT END QUESTIONS (MCQ AND DESCRIPTIVE) A. Descriptive Types Questions 1. “Management is getting things done through other people”. Is this definition adequate for the present-day concept of management? 2. Explain the features that determine the nature of management? 3. “Management is the force which leads, guides and directs an organisation in the accomplishment of pre-determined objectives”. Discuss and give suitable definition of management. 4. Explain concept of Management. 5. Discuss Process of Management. 6. Do you agree with the view that management is both a science and an art? Substantiate. 22 CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 1. A profession may be defined as an occupation backed by ____________and ___________ a. Profession, Training b. Education, Training c. Specialized Knowledge, Training d. Specialization, Knowledge 2. To be a successful manager, it is essential to acquire management skills through _________ education and training a. Informal b.Formal c. Vocational d.Distance 3. ____________ provides direction to enterprises activities a. Planning b. Directing c. Controlling d. Organizing 4One of the basic philosophies of management process school is: a. Management process is made up of a series of functions b. Management process is universally applicable c. Management is a scientific activity d. There should be more and more schools of management 5. ________ is concerned with the arrangement of an organization’s resources. 23 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Planning b. Controlling c. Directing d. Organizing Answers 1.c) 2. b) 3. a) 4.b) 5. d) 1.10 REFERENCES  Koontz, O Donnel and Weirich. (2001). Principles of Management. New Delhi: Tata McGraw Hill Publishing Company.  Chopra, R.K. (2005). Principles & Practices of Management. New Delhi: Sun India Publication.  Tripathi, P.C., and Reddy, P.N. (2006). Principles & Practices of Management. New Delhi: Tata McGraw Hill Publishing Company.  https://openstax.org/details/books/principles-management  https://open.lib.umn.edu/principlesmanagement/chapter/1-1-introduction-to-principles-of- management/ 24 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT-2EVOLUTION OF MANAGEMENT THOUGHT Structure 2.0. Learning Objectives 2.1. Introduction 2.2. Classical Management Approach 2.2.1 Scientific Management 2.2.2 Administrative Management 2.2.3 Bureaucratic Model of Organization 2.3. Behavioural Approach 2.3.1 Hawthorne Studies 2.3.2 Contribution of Behavioural Scientists 2.4. Modern Approaches 2.4.1 Quantitative Approach 2.4.2 Operational Approach 2.4.3 Systems Approach 2.4.4 Contingency Approach 2.5. Summary 2.6. Key Words/Abbreviations 2.7. Learning Activity 2.8. Unit End Questions ( MCQ and Descriptive) 2.9. References 2.0 LEARNING OBJECTIVES After studying this unit, you will understand:  Identify and acknowledge early contributors to the evolution and development of management  Discuss the classical approach to management  Outline the behavioural approach to management  Analyse classical and behavioural approaches to management  Explain modern approaches to management 2.1 INTRODUCTION The practice of management can be traced back to almost unlimited history. Looking back, we can trace stories of people working in olden civilizations have been writing about management and making their organizations more effective and efficient. People have been reshaping organizations for 25 CU IDOL SELF LEARNING MATERIAL (SLM)

many centuries. For example, a group of people in pre-historic times developed the wheel to transport heavy objects. Cranes or earth moving machinery were not present during that time. Even today the wheel is an example of prehistoric product research and development. This development was copied by other groups and exists even today. In prehistoric times the first developers of the wheel did not have any formal organization and they passed over this technology to all interested groups. An early strategy dates back to 1531, when Machiavelli an Italian thinker and a great believer in the virtues of a republic. In his book ‘Discourses’ he explained certain principles, which are true even in today’s modern management practices. The thoughts explained by him are: i. An organization is more stable if members have the right to express their differences and solve their conflicts within it. ii. An organization is lasting when the founder is left in the care of many and when many men desire to maintain it. iii. A weak manager must follow a strong one, but not another weak one and maintain authority. iv. A manager desiring to change an established organization must retain at least a shadow of ancient customs. The insights provided by Machiavelli teach us important lessons in the history and thought of management. Management did not originate in America or Europe in the 21s century. The term management came into existence during 1700. Management and organizations are a product of social structures and places having historical roots. Early management theory consisted of many attempts at knowing these organizations developed during the industrial revolution and to the new comers of 19th century in Europe and in USA. In this unit early management theories are explored for their importance in knowing the principles and concepts of management. While the approaches given by experts and researchers are studied, it is important to understand that human relationships take centre stage in the area of management. The unit presents different approaches and perspectives of management, the approaches covered are the classical approach which deals with scientific and administrative management, behavioural approach, quantitative approach, contingency approach and finally the IT based approach along with systems perspective. Management experts over the passage of time have found principles to deal with situation that keeps changing and new perspectives are developed over time. The unique knowledge gathered by understanding these approaches and perspectives have resulted in knowledge based on testing and using them in real-time situations. This knowledge has resulted in the “School of Management Thought”. The objective of this unit is to understand the major development of management thought. History helps us to understand on today’s management theories and practices and help to examine what has worked and what will not work correctly. Many historical endeavours and monuments were developed by people responsible for planning, organizing, leading, and controlling activities. These 26 CU IDOL SELF LEARNING MATERIAL (SLM)

practices have existed since historical times. For example, the Taj Mahal, Egyptian pyramids, the Great Wall of China, the Qutub Minar, and many others are examples of tangible evidence to project tremendous scope by employing tens of thousands of people and were completed in ancient times. In fact, pyramids were constructed by occupying more than 100,000 workers for 20 years. If we think how those projects are completed, we come across questions such as: i. Who told each worker what to do? ii. Who ensured tasks for workers and ensured sufficient resources are available at the site? The answer to the above questions is managers. Regardless of what these individuals were called, someone had to plan what was to be done, organize people and materials to do it, lead and direct the workers, and impose some controls to ensure that everything was done as planned. In 1776, Adam Smith published the book “The Wealth of Nations” in which he argued that economic advantages, organizations and society would gain is from the division of labour (or job specialization). This implies that there must be a method of breakdown of jobs into narrow and repetitive tasks. Using die pin industry as an example, Smith claimed that 10 individuals, each doing a specialized task, could produce about 48,000 pins per day among them. However, if each person worked alone, performing each task separately, it would be quite an accomplishment to produce even 10 pins per day! Smith concluded that division of labour increased productivity by increasing each worker’s skill and dexterity, saving time in changing tasks, and creating labour saving inventions and machinery. Specialized jobs continued to be popular. Other similar examples of team work can be found in manufacturing industries, IT software service companies, sports and so on. The next important event is the industrial revolution. This started in late eighteenth century when machine power was substituted for human power it became more economical to manufacture goods in factories than at home. These large, efficient factories needed someone to forecast demand, ensure that enough material was on hand to make products, assign tasks to people, direct daily activities, and so on. Here again managers were at centre stage in guiding people and running these large organizations. All these developments led to the formulation of management concepts and theories and the evolution of management practices in early 1900s. Management practices are found since the time when people started living in groups. In order to bring every human group into focus to channelize their energies, require management. This is because human beings are an organization by itself and is full of activity. However, the study of how managers achieve results by involving humans is predominantly a twentieth century phenomenon. In the earlier years, the application of management concepts was not given much importance and hence, researchers did not pay much attention to the area of business in ancient times. Researchers during that time felt that management as a study is unworthy; had an indifferent approach of other social scientists. Sociology and economics were gaining popularity as an interesting area for research 27 CU IDOL SELF LEARNING MATERIAL (SLM)

during early 19th century. The general understanding between researchers during that time was that management is considered an art and managers were born and not made. However, at the same time the subject of Psychology was emerging as an important research domain, and psychology had a significant role to play in management behaviour and human actions. In the beginning of 20th century especially during World War I, created the situation where people started thinking of solution to the problem of how limited resources could be applied in better way. Subsequently, World War II created the need for economic growth in nations across the world and complexity of managing large organizations involved in manufacturing goods, agriculture, etc. which further provided the pathways towards the development of systematic concept and principles in management. Recently, organizations face global competition and rivalry for markets, power and progress. This increasingly severe competition has arisen due to certain factors such as, i. Innovations in technology and their dissemination in business, ii. Growing technological obsolescence iii. Increase in capital investment iv. Freedom at national and international markets v. Increasing buyers’ sovereignty in markets Besides the growing competition in business, the complexity of managing business also has increased because of the following points, i. Increasing size of business organizations ii. High degree of division of labour and specialization iii. Increased government regulations and controls to make business more socially-oriented iv. Organized union activities to put pressures on management v. Pressure of various conflicting interest groups to meet their demands from the organizations. The above factors such as growing competition and complexity in managing business firms have created a demand for efficiency in management process which cannot be realized by mere by trial and error methods but by developing and applying sound management concepts and principles. Further, the above factors have emerged gradually which attracted attention from a variety of experts from different domains, intellectuals, economists, sociologists, psychologists, anthropologists, mathematicians, and management practitioners to study organizations and processes through which these organizations could be made more effective. Each of these groups of intellectuals viewed organizational activities and the processes in scientific ways and made recommendations accordingly. The final results are evident in the form of a variety of orientations and approaches in management with clear demarcation and overlapping processes. The evolution of management thought is shown in table 2-1 below: 28 CU IDOL SELF LEARNING MATERIAL (SLM)

Table 2-1: Table showing evolution of management thought Management Thought Period Early contributions Up to 19th century Scientific Management 1900-1930 Administrative, Operational Management 1916-1940 Human relations approach 1930-1950 Social systems approach 1940-1950 Decision theory approach 1945-1965 Management science approach 1950-1960 Human behaviour approach 1950-1970 Systems approach 1960 onwards Contingency approach 1970 onwards Management thought is classified as classical, neoclassical and modern. Classical approach refers to scientific management and administrative/operational management. Neoclassical approach includes human relations approach and some relevant part of Social systems approach, Decision theory approach, management science approach, and Human behaviour approach. Modern approach includes systems approach, contingency approach, and some relevant portion of the above approaches not included in neoclassical approach. Management classifications can be time specific because what is practiced today may not be continued in future. The next section discusses the importance of classical approach to management. 2.2 CLASSICAL MANAGEMENT APPROACH Classical approach to management is a set of homogeneous ideas on the management of organizations that evolved in 19th and early 20th century. The perspective of classical approach emerges from industrial revolution with focus on efficiency. During the later years of 19th century, factory production became pervasive and large-scale organizations came into existence. Management in those organizations looked for ways to motivate employees and increase productivity and profits. The need for management during that time was emphasized by experts namely Fredrick Taylor, 29 CU IDOL SELF LEARNING MATERIAL (SLM)

Henry Fayol, and Max Weber. The period of classical approach to management was from 1900 to 1930. Theories related to classical approach to management were first concentrated to develop a body of management thought. The management experts and writers participated in developing theories during that time were known as the pioneers of management study. Classical approach to management focuses on improving organizational efficiency in order to increase production and based on three distinct areas, i. Scientific management or lower level management analysis ii. Administrative management or the comprehensive analysis of management iii. Bureaucratic management The above three areas of classical approach to management is examined further below. The areas under the classical approach to management can be understood is summarized in Table 2-2. Table 2-2: The 3 major areas under classical approach to management and experts Classical Approach to Management Scientific Management Bureaucratic Management Administrative Management - Henry Fayol - Fredrich Taylor - Max Weber - Gilbreths - Henry Gantt 2.2.1 Scientific Management The focus of scientific management involves the application of scientific methods to increase individual workers’ productivity. For example, assembling a washing machine with least number of steps and avoiding wasted motions. Scientific management concentrates on the best way to perform a task by investigating how a task situation can be structured to get the highest production from workers. The technique of scientific management can be applied to all management levels; however, research applications and illustrations relate mostly to lower level managers. Due to this fact, the scientific management theory is also referred to as lower level management analysis. Scientific management consists of contributions by Fredrick Taylor, Frank and Lilian Gilbreth and Henry L. Gantt. Fredrick Taylor is commonly known as the father of scientific management because of his significant contributions. However, according to Robbins, Coulter and Vohra, the approach of Taylor can lead to mental revolution between both workers and managers by defining clear guidelines for improving production efficiency. Robbins et al, provided four principles that can foster prosperity for both workers and managers. The four principles are: 30 CU IDOL SELF LEARNING MATERIAL (SLM)

i. To develop a science for each element of an individual’s work to replace the old rule of thumb method ii. Develop the worker by coaching and training him/her scientifically iii. Provide all co-operation with the worker to ensure all work is done in accordance with the principles of science that is already developed iv. Divide the work and responsibility equally between management and workers. Management has more responsibility than workers. Further contributors to scientific management were made by Frank Gilbreth (1868-1924) and Lilian Gilbreth (1878-1972). Gilbreth provided discussions to include handicapped people also as normal workers like other workers to perform a job. Gilbreths did research using a motion study to establish job performance standards. The motion study involves reducing each job to the most basic movements possible. Henry L. Gant conducted studies to increase worker efficiency. Gantt presented a tool for scheduling activities for workers which are still in use today in Project Management. 2.2.2 Administrative Management Administrative management is the next area in the approach to classical management. Administrative management primarily concerns with how organizations must be managed and structured. Henry Fayol a French business man and Max Weber, a German scholar were the main contributors to administrative management. Fayol developed fourteen management principles through which management could engage in planning, organizing, commanding, coordinating and controlling. Weber presented an ideal form of bureaucracy to improve inefficient forms of organization that included using favouritism to promote workers. Weber’s recommendations had the idea of breaking down each job into simple, routine, and well-defined tasks. Administrative management focuses more on managerial performance and organizational efficiency. For instance, Henry Fayol’s book titled “General and Industrial Management” presents management philosophy that still guides modern managements. Fayol due to his writings on management principles and the book on management is regarded as the pioneer of administrative management. Fayol emphasized principles such as work, authority, discipline, unity of command, unity of direction, and subordination of individual interest to general interests, order, equity, stability, tenure of personnel, initiative and esprit de corps. Alfred D. Chandler, Jr. the business historian from Harvard University promoted the importance of classical approach to management. Chandler championed the study of modern bureaucratic administration and influenced the thinking of executives about organizing large business firms. Chandler explained many insights he gained based on individual experiences from companies such as Du Pont, General Motors, Exxon Mobil, Roebuck & Co and others. His studies were made during the period 1850 to 1920 and the results were presented in his comprehensive book titled “Strategy and Structure” in 1962. In this book Chandler demonstrates the link between a company’s strategy and its 31 CU IDOL SELF LEARNING MATERIAL (SLM)

structure. Chandler emphasizes that unless structure follows strategy there will be inefficiency. His contributions have been applied successfully in decentralization of many modern organizations. Let us consider an example of the company named Colgate Palmolive. The strategy of Colgate is to respond to personal care needs of people. In order to fulfil consumer needs the company has divided itself into divisions such as Oral Care, Personal Care and Home Care. Each division is further subdivided into products groups of its own. For instance, Personal Care will have products such as Deodorant for men and women, Body Wash, Liquid hand soap and so on for other divisions. If the company is not organized by divisions the company would consist of major departments such as manufacturing, research and development, finance, IT, marketing, etc. Colgate by having different divisions is able to manage their work in divisions easily and their administrative structure is decentralized. The core of management knowledge lies within the classical approach in this case. A similar structure can be found in another enterprise organization such as General Electric (GE) which is another example of classical principles. The classical approach to management provides a systematic way of managing people and work and has proved useful over time. However, it is important to note that classical approach is not well suited for rapidly changing situations. 2.2.3 Bureaucratic Model of Organization ureaucratic management is another area in the classical theory of management. Bureaucratic management as defined by Hodgetts et al states, “a formal system of organization that is based on clearly defined hierarchical levels and roles in order to maintain efficiency and effectiveness”. The theory of bureaucratic management was developed by Max Weber and used widely in management of both public and private sector organizations. R.N. Singh explains that this type of management creates strong lines of authority and control within the organization because organizations are divided into hierarchies. Max Weber developed the theory of authority structures characterized by division of labour, a clearly defined hierarchy, detailed rules and regulations and impersonal relationships. Bureaucratic management depends on administration and an ideal bureaucratic structure is shown in figure 2-1. Figure 2. 1: An ideal bureaucratic structure 32 CU IDOL SELF LEARNING MATERIAL (SLM)

Max Weber explains that bureaucratic management is based on four principles namely hierarchical positions, rules of system, division of labour for specialization and impersonal relationships. The principles provided by Weber are illustrated in figure 2-2. Figure 2. 2: Weber’s Bureaucracy Theory and key principles The classification of management functions provided by management theorists is provided in table 2- 3 below. Table 2-3: Table showing the managerial functions explained by famous theorists Management Theorists Managerial functions Henry Fayol Luther Gulick i. Planning, including forecasting. ii. Organizing. iii. Commanding iv. Coordinating v. Controlling i. Planning ii. Organizing iii. Staffing 33 CU IDOL SELF LEARNING MATERIAL (SLM)

Management Theorists Managerial functions Koontz and O’Donnell iv. Directing v. Coordinating vi. Reporting vii. Budgeting i. Planning ii. Organizing iii. Staffing iv. Directing v. Controlling 2.3 BEHAVIOURAL APPROACH The behavioural approach emphasizes on improving management using people’s behaviour that is, through the psychological makeup of people. The focus of behavioural approach to management is to understand the needs of the people. This approach is also called as human resources approach because it motivates workers to perform their jobs and become more productive. The behavioural approach to management is intended to reduce labour and management conflicts that are prevalent in classical approach to management. Behaviour and human resources include the concepts and attributes of communication, teamwork, motivation, conflict avoidance and leadership. Behavioural approach to management emphasizes on improving management through an understanding of the psychological make-up of people. The origins of behavioural approach started during 1930s by scholars namely Robert Owen and Mary Parker Follett as they wrote the importance human element in production industries. Owen explained that showing concerns for workers resulted in greater productivity and profitability. The companies also have the responsibility of reducing hardship for workers. Follett in her writings focused on the importance of groups in managing people. Follett argued that groups are the basis on which organizations must be formed and explained that to maximize profits, productivity and morale, managers must support work group efforts in the organization. The foundations of behavioural approach to management are based on Hawthorne studies and contributions by other scholars. 2.3.1 Hawthorne Studies In 1927 a research sponsored by General Electric involved performing a series of experiments in Western Electric Company (USA) to gain insights into individual and group behaviour. The focus of 34 CU IDOL SELF LEARNING MATERIAL (SLM)

this experimental study is to understand behaviour in the workplace. In this experiment, the effects of lighting in the workplace for its impact on productivity are done. The workers were divided into two groups, experimental group and control group. Lighting conditions for the experimental group varied in intensity from 24 to 46 to 70-foot candle unit of luminance. Control group had constant with lighting. While evaluating the performance for both the groups, the researchers found the performance of experimental group increased with each increase in light intensity. The performance of the control group also changed unexpectedly. The performance output of the control group increased at almost the same rate as that of experimental group. Later the lighting in experimental group was reduced, but the output continued to increase and so did the control group. The decline in productivity occurred finally but when the intensity of light was equal to moonlight. The researchers concluded that there is something other than illumination that caused changes in productivity. An experiment was conducted in the relay-assembly test room over a period of six years and showed similar results. In this experiment, the relationships between rest, fatigue, and productivity were investigated. First normal productivity was established with 48-hour week with no formal rest. In the next stage rest periods of varying length were introduced. As the length of rest periods increased, the productivity also increased. Finally, the original conditions were restored. While restoring original conditions productivity did not drop as expected, instead productivity remained at the same level. From these results, the researchers interpreted that workers involved in the experimented enjoyed being the centre of attention. Workers showed positive reaction because management cared about them. This is the phenomenon of Hawthorne Effect. In Hawthorne effect people show a tendency to behave differently whenever they are in focus as they respond to the needs of a situation. The researchers also mentioned that employees tend to perform better when they are part of a program, whether or not the program is valuable. Another useful lesson learned from Hawthorne studies is that managerial success is fully dependent on effective communication. 2.3.2 Contribution of Behavioural Scientists The Hawthorne experiments explained in earlier section was conducted by researchers to gain insights in the field of interpersonal and social relations among members of the organization. These social relations are known as human relations. Many studies done by scientists namely, Abraham H. Maslow, Douglas McGregor, Fredrick Herzberg Keith Davis, Rensis Likert and many others on the topic of human relation movement and behaviour. Human relation behaviour explains that workers ill primarily respond to social context of the workplace including social conditioning, group norms and interpersonal dynamics. Many psychologists and sociologists that include Chris Argyris, Homans Kurt Lewin, R.L. Katz Khan and others developed the field of organizational behaviour. Organizational behaviour is the study of attitudes, performance, and behaviour of individuals and groups within an organizational setting. This is also a main area in behavioural approach to management. In fact, organizational 35 CU IDOL SELF LEARNING MATERIAL (SLM)

behaviour is an extended and improved version of human relations movement. It is an interdisciplinary area in management with multidimensional applications of knowledge drawn from behaviour sciences such as psychology, sociology, anthropology, etc. as applied to behavioural science approach. The work of Douglas McGregor is widely quoted in the development of behavioural approach to management. McGregor’s work is based on the analysis of the assumption’s managers make about human nature. For instance, consider Theory X as a set of traditional assumptions about people. Managers holding assumptions about workers tend to be pessimistic about workers’ capabilities. Managers believe that workers dislike work, seek to avoid responsibility, workers are not ambitious and they must be closely supervised. McGregor recommended manages to challenge these assumptions because they are not true in most situations. Alternatively, Theory Y poses optimistic set of assumptions. These assumptions include the idea that people accept responsibility, exercise self-control, possess the capacity to innovate and consider work as a natural practice such as rest or play. McGregor emphasized that these assumptions accurately describe human nature in many situations than most managers believe and proposed that these assumptions must guide managerial practice. Abraham H. Maslow, a psychologist, provides the hierarchy based on needs for a human. Maslow suggested that humans are motivated by efforts to satisfy hierarchy of need ranging from basic needs to those of self-actualization or reaching one’s potential. Maslow’s need hierarchy influenced managers to think about approaches for satisfying worker needs in order to keep them motivated. The main aim of behavioural or human resources approach to management is that it encourages managers to take into account the human element. 2.4 MODERN APPROACHES Modern management approaches started during the 1950s and is still evolving. Management is present since the dawn of civilization. Modern management is growing with the growth of socioeconomics and scientific institution. Modern management explains the fact that a worker does work not for money but for their satisfaction and living style. In modern management non-financial reward is considered as a motivator. Modern management approaches focus on the development of the worker and the organization. In this approach, the emphasis is on scientific or mathematical techniques, analysis and strengthening the interrelationships of management and workers in all aspects. Modern management practices are made up of four different approaches as explained in the subsections below. 36 CU IDOL SELF LEARNING MATERIAL (SLM)

2.4.1 Quantitative Approach Quantitative approach is also referred to as management science or operations research (OR). Frequently used tools in quantitative techniques are Statistics, Operations Research (OR), Linear Programming, Network Analysis, Decision trees and Computer Simulations. These tools and techniques are used in making general decisions regarding inventory control, plant-site locations, quality control and range of other decisions where objective information is important. Some of the contributors to this quantitative approach include, Fredrick Taylor, Johan Mac Donald, George R. Terry and others. The main advantage of quantitative approach is that it enables managers to solve complex problems that cannot be solved by common sense alone. For example, techniques in management science investigate multiple factors simultaneously to make forecasts. It is important to note that the answers produced by quantitative tools are often less precise than they appear, and hence this is considered a weakness in this approach. It is important to note that though quantitative methods use precise approaches in data generation, much of the data is normally human estimates and may be unreliable. 2.4.2 Operational Approach The operational approach draws concepts, principles, techniques and knowledge from other managerial approaches. The objective is to develop science and theory with practical application. The operational approach distinguishes between managerial and non-managerial knowledge. The approach develops classification system built around managerial functions of planning, organizing, staffing, leading and controlling. Some experts explain co-ordination as a separate function. However, co-ordination is the essence of managerial function and is the purpose of organizing. 2.4.3 Systems Approach The systems approach is a way of viewing problems more than as a specific approach to management. The systems perspective will keep the manager focused on the external environment. Systems approach is based on the concept that the organization is a system or an entity of interrelated parts. If one part of the system is adjusted, other parts will be automatically affected. For example, if low compensation is offered to job candidates, the systems approach will influence low product quality. Another aspect of system theory is that it regards the organization as one open system or the one that interacts with the environment. An organization transforms inputs into outputs and supplies them to the outside world as illustrated in figure 2.4. 37 CU IDOL SELF LEARNING MATERIAL (SLM)

Systems Approach Input Process Output FEEDBACK Environment Figure 2. 4: An illustration of systems approach If the outputs are perceived as valuable, the organization will survive and prosper. The feedback loop indicates that the acceptance of outputs by society gives the organization new inputs or revitalization and expansion. Managers can use this diagram in figure 2-3, by recognizing that whatever work they undertake should contribute something of value to external customers and clients. The systems approach to management involves two influential concepts namely Entropy and Synergy. Entropy is the tendency of the system to run down and perish if it is not receiving fresh inputs from outside world to stay ahead of the environment. Synergy refers to various parts of the organization work together to produce more than they could by working independently. For example, Apple Corporation came up with the idea of iPhone consulted this idea of development with manufacturing, engineering, purchasing and dealers to discuss the feasibility of their idea. Hence, systems approach will take continuous inputs from the external environment and the organization will work as a whole. 2.4.4 Contingency Approach Contingency approach emphasizes the fact that there is no single best way to manage people or work in every situation. This method leads to high productivity or morale under one set of circumstances may not achieve the same results in another. The development of contingency theory is from the study of leadership and organizational structures. For instance, contingency approach in leadership will explain which style of leadership would work best in the situation as appropriate. For example, a manager can provide additional allowance to competent group of members. Studies of organizational structure indicate that in different environments certain structures are more effective. For example, a team structure can work best in a rapidly changing environment. In contingency approach common sense or judgment will moistly prevail. However, experienced managers understand that not all people and situations respond in the same way to identical situations. The advantage of this approach is that it encourages managers to examine individual and situational differences before deciding on a course of action. One problem is that it is often used as an excuse for not acquiring formal knowledge about management. If a situation determines the type of management, why study management theory 38 CU IDOL SELF LEARNING MATERIAL (SLM)

important? The answer to this question is that the study of management helps a manager decide that factors relevant in a given situation or condition. 2.5 SUMMARY In this unit the evolution and major developments of management thought is explained. Early management theories are explored for their importance in knowing the principles and concepts of management. Management approaches provided by experts and researchers are explained for their importance in organizational context and in the understanding of human relationships are highlighted. Human relationships take centre stage in the area of management. In this unit different perspectives and approaches to management are covered to include the areas of classical approach, behavioural approach, contingency and systems approach to management. It can be understood that management experts over the passage of time have found new principles to deal with situations that keeps changing over time. The unique knowledge gathered by understanding these approaches and perspectives have resulted in knowledge based on testing and using them in real-time situations. 2.6 KEY WORDS/ABBREVIATIONS  Administrative Approach: Analysis of the process of management in terms of management functions and skill requirements.  Behavioural Approach: Understanding individual and group behaviour in organisations.  Differential Piece Rate: Piece rates of wages which apply differently to efficient and inefficient workers.  Functional Foremanship: Supervision of work by different specialist foremen.  Hawthorne Studies: Experimental studies conducted to find out what factors motivate workers on the shop floor for improved performance.  Human Relations Approach: Motivating employees with a satisfying work environment and fulfilment of their social and psychological needs.  Motion Study: Observation of the movements required to perform a job so as to eliminate wasteful motions and decide on the best way of doing the job.  Scientific Management: Application of scientific methods to resolve Management problems in place of rule of thumb or trial and error methods.  Systems Approach: Understanding management as a balancing and integrating system.  Time Study: Technique used to analyse and measure the time taken in doing the various elements of job. 2.7 LEARNING ACTIVITY 1. Discuss Qualitative Approach of management 39 CU IDOL SELF LEARNING MATERIAL (SLM)

……………………………………………………………………………………………..…………… ………………………………………………………………………………………………………. 2. Name and explain the modern approaches to management ………………………………………………………………………………………………………… ………………………………………………………………………………………………………… 2.8 UNIT END QUESTIONS (MCQ AND DESCRIPTIVE) A. Descriptive Types Questions 1. Briefly discuss the origins and evolution of management. 2. Explain the terms: Classical approach to management, Scientific Management, Administrative Management. 3. Explain briefly the management theories provided by Fayol, Gulick, Mooney and Reilly. 4. Discuss with illustrations the bureaucratic model in an organization. 5. Describe why Hawthorne studies are important in behavioural approach to management. B .Multiple Choice Questions 1. Scientific management involves refers to a. Using computers in office b. Training the worker scientifically c. Applying mathematics d. Using technical tools e. None of the above 2. The emphasis of behavioural approach to management is a. Make employees behave correctly with discipline b. Improve management by understanding the psychological side of people c. The manager is responsible for people’s behaviour d. Behaviour is important for organizations e. All of the above 3. Quantitative approach to management uses tools such as a. Statistics, Operations Research, etc b. Hypothesis and assumptions c. Following past lessons blindly d. Meeting with employees e. None of the above 40 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Contingency theory in management refers to a. Managing in emergency b. Ensuring adequate backup c. Study of leadership and organizational structures d. Having a greater number of managers e. All of the above 5. Activity Analysis, Decision Analysis and Relation Analysis were identified by a. C.K. Prahalad b. George R. Terry c. Peter Drucker d. R.W. Griffin e. None of the above Answers 1. b)2. b)3. a) 4. c) 5. c) 2.9 REFERENCES  Koontz, O Donnel and Weirich. (2001). Principles of Management. New Delhi: Tata McGraw Hill Publishing Company.  Chopra, R.K. (2005). Principles & Practices of Management. New Delhi: Sun India Publication.  Tripathi, P.C., and Reddy, P.N. (2006). Principles & Practices of Management. New Delhi: Tata McGraw Hill Publishing Company  https://openstax.org/details/books/principles-management  https://open.lib.umn.edu/principlesmanagement/chapter/1-1-introduction-to-principles-of- management/ 41 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT –3PLANNING Structure 3.0. Learning Objectives 3.1. Introduction 3.2. Meaning 3.3. Importance of planning 3.4. Limitations of planning 3.5. Types of plans 3.6. Planning process 3.7. Summary 3.8. Key Words/Abbreviations 3.9. Learning Activity 3.10.Unit End Questions (MCQ and Descriptive) 3.11.References 3.0 LEARNING OBJECTIVES After studying this unit, you will be able to:  Explain the meaning, importance and limitations of planning  Gain familiarity with the various steps of the planning process  Describe the major types of planning  Enumerate and explain the principles on which planning is based. 3.1 INTRODUCTION Planning is the major function in management activity. Planning involves selecting objectives and strategies, policies, programs and procedures or achieving them. Planning is also decision making since it involves selecting among alternatives. Planning is critical because it contributes to the organization’s direction and purpose because every plan and its supporting plans must contribute towards accomplishing objectives for the enterprise. A manager must plan in order to know what kind of organizational relationship and method should be used by subordinates and the kind of control to be applied. Hence if planning is effective the managerial functions are carried out efficiently. Of late, there has been a vigorous surge of interest in planning all over the world - especially corporate, long-range and strategic planning.In this unit, you will learn the fundamentals of planning - its meaning, nature, characteristics, importance and limitations. You will also learn the elements and steps in the planning process, and the role of forecasting in planning. You, will further 42 CU IDOL SELF LEARNING MATERIAL (SLM)

learn the concepts of strategic planning, tactical planning, long-range planning, short-rangeplanning and the essential principles of planning. Definition of Planning: Bridging the Gap between Where One is and Where One Wants to Go: Koontz and O’ Donnell say planning is deciding in advance what to do, how and when to do it and who is to do it. Planning bridges the gap between where we are and where we want to go. It makes it possible for things to happen which would, but for planning, not happen. Fixing Objectives and Deciding Plans to Achieve them: Theo Haimann calls planning as the function that determines in advance what should be done. It begins with selection of organization objectives; the manager must decide which of the alternative plans to achieve the objectives are to be followed and executed. Planning is intellectual in nature. It is mental work. It is looking ahead and preparing for the future. McFarland describes planning as a concept of executive action that embodies the skills of anticipating, influencing and controlling the nature and direction of change. A plan is a commitment to particular course of action whereas planning is an activity consisting of a process. In the words of Haiman, “Planning is the function that determines in advance what should be done. It consists of selecting the enterprise objectives, policies, programmes, procedures and other means of achieving these objectives”. In the words of Hart planning is, “The determination in advance of a line of action by which certain results are to be achieved”, Kuntz and O’Donnell define planning as – “The selection from among alternatives for future courses of action for the enterprise as a whole and each department with it”. In the words of M.F. Yarlay, “Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programmes from among alternatives.” Planning is a process requiring the selection of a course of action. The ways and means required to achieve organisational goals form the essential part of planning. 3.2 MEANING OF PLANNING Most of us are fairly familiar with the meaning of 'Planning' in our everyday life. We do often decide in advance about the things to be done on a busy working day. Parents make advance decisions on the education of their children. As students, you may think in advance how to go ahead with the preparation for your examination, how to make use of your time in the best possible manner and so on. Laymen understand planning as some systematic way of deciding about and doing things in a purposeful manner. 43 CU IDOL SELF LEARNING MATERIAL (SLM)

However, in the context of formal organizations and their management, the concept of planning has a specific connotation. It means deciding in advance what is to be done in the future for a specific period and then taking the necessary steps to do the things decided upon. It means looking ahead into the future and trying to anticipate what it is Planning and Organizing likely to be, how it will affect the organization, what direction the organization should take, and how to cope with the future events. Planning also implies determination, of courses of action from among alternatives to achieve the goals of the organization, both in the immediate future and in the long run. The very notion of planning brings to mind such images as neat, orderly and disciplined approach to work, goal-oriented behavior, thinking about and arranging things in advance, careful allocation of scarce resources, and so on. In short, planning may be defined as the process of setting future objectives and deciding on the ways and means of achieving them. 3.3. IMPORTANCE OF PLANNING The importance of the planning function should have been clear after all that you have read about it till now. We may outline the importance of planning function as follows: i) Provides direction: Planning provides a clear sense of direction to the activities of the organisation and to the job behaviour of managers and others. It strengthens their confidence in understanding where the organisation is heading and what for, how best to make the organisation move along the chosen path, and when should they take what measures to achieve the goals of the organisation. ii) Provides opportunity to analyse alternative courses of action: Another source of importance of planning is that it permits managers to examine and analyse alternative courses of action with a better understanding of their likely consequences. If managers have an enhanced awareness of the possible future effects of alternative courses of action, for making a decision or for taking any action, they will be able to exercise judgement and proceed cautiously to choose the most feasible and favourable course of action. iii) Reduces uncertainties: Planning forces managers to shake off their inertia and insular outlook; it induces them to look beyond those noses, beyond today and tomorrow, and beyond immediate concerns. It encourages them to probe and cut through complexities and uncertainties of the environment and to gain control over the elements of change. iv) Minimize impulsive and arbitrary decisions: Planning tends to minimise the incidence of impulsive and arbitrary decisions and ad hoc actions; it obviates exclusive dependence on the mercies of luck and chance elements; it reduces the probability of major errors and fail~~res in managerial actions. It injects a measure of discipline in managerial thinking and organisational action. It improves the capability of the organisation to assume calculated risks. It increases the freedom and flexibility of managers within well-defined limits. 44 CU IDOL SELF LEARNING MATERIAL (SLM)

v) King pin function: As stated earlier, planning is a prime managerial function which provides the basis for the other managerial functions. The organisational structure of task and authority roles is built around organisational plans. The functions of motivation, supervision, leadership and communication are addressed to implementation of plans and achievement of organisational objectives .Managerial control is meaningless without managerial planning. Thus, Planning is the king-pin function around which other functions are designed vi) Resource allocation: Planning is a means of judicious allocation of strategic and scarce resources of the organisation in the best possible manner for achieving strategic goals of the organisation. The strategic resources include funds, highly competent executives, technological talent, good contacts with government ,exclusive dealer network and so on. If the organisation enjoys a distinct advantage in possession of such resources, a careful planning is essential to allocate them into those lines which would strengthen the overall competitive position of the organisation. vii) Resource use efficiency: For an ongoing organisation, planning contributes towards a more efficient functioning of the various work units. There is better utilisation of the organisation's existing assets, resources and capabilities. It prompts managers to close gaps, to plug loopholes, to rectify deficiencies, to reduce wastage and leakages of funds, materials, human efforts and skills so as to bring about an overall improvement in resource use efficiency. viii) Adaptive responses: Planning tends to improve the ability of the organisation to effectively adapt and adjust its activities and directions in response to the changes taking place in the external environment. An adaptive behaviour on the part of Fundamentals of Planning the organisation is essential for its survival as an independent entity. For a business, organisation, for example, adaptive behaviour is critical in technology, markets, products and so on. ix) Adaptive action: While adaptation is behaviour in reaction and response to some changes in the outside world, it is not enough in some situations. In recognition of this fact, planning stimulates management to act, to take bold initiatives, to anticipate crises, and threats and toward them off, to perceive and seize opportunities ahead of other competitors, and to gain a competitive lead over others. For the purpose, some enterprises establish environmental scanning mechanism as part of their planning systems. Thereby such enterprises are able to direct and control change, instead of being directed and controlled by the pervasive external forces of change. x) Integration: Planning is an important process to bring about effective integration of the diverse decisions and activities of the managers not only at a point of time but also over a period of time. It is by reference etc the framework provided by Planning that managers make major decisions on organisational activities, in an internally consistent manner. 3.4 LIMITATIONS OF PLANNING You have learnt the importance of planning Let us now discuss its limitations, 45 CU IDOL SELF LEARNING MATERIAL (SLM)

i) Based on certain assumptions: Planning is based on certain assumptions or premises derived from forecasts about the likely behaviour or relevant future events and variables. If such assumptions or premises turn out to be wide off the mark, the very basis of plans get affected. Afterall, forecasting is not an exact science. ii) Incomplete information: The information needed for planning is often incomplete. It may not be available in time and its reliability tends to be doubtful. In several situations, managers are forced to make planning decisions on the basis of partial knowledge because of time lags and credibility gaps in information iii) Lack of control: Managers have little knowledge and less control over several elements of external environment. There is often no way to bring external situations under the discipline of planning. Several external events tend to influence organisational activities and plans in random and perverse ways, as for example, natural calamities, sudden strikes, government policy changes, and soon. iv) Difficult to change with the changing environment: Planning, under conditions of rapid changes in the external environment tends to be a tough job. Plans would become quickly outdated and irrelevant even before they are implemented. Though flexible plans would be of some help under such conditions, there are also limits on injecting flexibility into organisational plans. v) Fluid process: Planning is essentially a 'fluid' process in the sense that it is always I in a state of flux. This is because of the march of the times and the subtle changes which characterise the future as it unfolds. Future is always a moving target. It is not easy to visualise an integrated and composite view of the past, present and future for planning purposes. vi) Delay in action: Since planning means thinking and deciding before doing things, it is likely to delay action. For one thing, thinking and deciding are somewhat slow, intellectual exercises. Many managers may not have the time or taste for such t exercises. For another, managers attach more importance to action and that too timely action wherein lies much activism and dynamism. vii) Rigidity: The plans produced through the planning process tend to introduce rigidity into the functioning of the organisation. Managers are likely to insist on strict compliance with pre- determined plans. This may sometimes mean foregoing new opportunities and better options. A faithful conformity with plans would stifle initiatives beyond the established ways and routines. viii) Plans might remain on paper: At the other extreme it is also likely that plans remain on paper as some sacred documents worthy to be respected and preserved are not followed or implemented. They may be far removed from realities such that managers regard them as 'untouchables'. Alternatively, managers may be too busy in struggling with crises to find time for going along planned courses. ix) Difficult to implement at unit level: It may be easy to formulate broad plans at the corporate level. Problems are likely to arise when managers try to prepare more detailed plans in physical and 46 CU IDOL SELF LEARNING MATERIAL (SLM)

financial terms at functional and unit levels for purposes of implementations. The detailed plans, if and when prepared, may not reflect the intents of the broad plans in a consistent manner. 3.5 TYPES OF PLANS Many different types of plans are adopted by managers to conduct operations, and monitor and control organisational activities. Three such most commonly used plans are hierarchical, frequency- of-use (repetitiveness) and contingency plans. Hierarchical Plans These plans are drawn at three major hierarchical levels, namely, the institutional, the managerial and the technical core. Strategic plans generally involve planning at the top institutional level of an organisation. Strategic plans define the organisation’s long-term vision and how the organisation intends to make its vision a reality. In short, strategic planning is the determination of the basic long- term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives, since this is the task of countless major and minor supporting programs. But they furnish a framework for guiding thinking and action. Strategic plans are intended to design tactics in order to achieve long-term objectives. Intermediate or administrative planning This planning is done at the level of middle management. It is done to allocate organisational resources and co-ordinate internal subdivisions of the organisation. It is also a process of determining the contributions that sub-units can make with allocated resources. Operational planning It is the process of determining how specific tasks can best be accomplished on time with available resources. This is also done to cover the day-to-day operations of an organisation. As such, many operating plans are designed to govern the workings of the organisation’s technical core. Frequency-of-use Plans Plans can also be categorised according to frequency or repetitiveness of use. They are broadly classified as standing plans and single-use plans. Standing plans are drawn to cover issues that managers face repeatedly. For example, managers may be facing the problem of late-coming quite often. Managers may, therefore, design a standing plan to be implemented automatically each time an employee is late for work. Such a standing plan may be called standard operating procedure (SOP). Policies, procedures, rules are some of the most common standing plans. Policies: In most cases, policies are standing plans. These are broad-based statements of understanding or general statement of intent. Policies define an area or provide limits within which decisions are to be made and ensure that the decision will be consistent with, and contribute to, an 47 CU IDOL SELF LEARNING MATERIAL (SLM)

objective. Policies are types of plans that allow decision- makers some discretion to carry out a plan. Otherwise, there will be no difference between policies and rules. Policies must allow for some discretion. Policies allow managers use their discretion within limited areas. Policies help decide issues before they become problems, and make it unnecessary to analyse the same situation every time it comes up. It permits managers to delegate authority and still maintain control over subordinates about the matter. There are many types of policies. Instances are found in the policies of hiring only university-trained engineers, promotion from within, encouraging an employee suggestion system for improved organisational performance, setting competitive prices etc. Policies anticipate and forestall problems. They allow managers to deal with contingencies at their own discretion but within certain limits. Some policies could originate from customary and general ways of behaviour in an organisation. Some of them are put in place through verbal statements or in writing. For example, there might be a policy in an organisation that “except for token gifts of very nominal value or advertising value, no employee shall accept any gift from any supplier.” Such formal policies are usually written down in company manuals or regulations for employees. Policy is a means of encouraging discretion and initiative, but within limits. The amount of discretion usually depends on the policy and the position and authority occupied in the organisation. Policies allow managers certain flexibility in dealing with their organisational problems. But, not being well-defined, policies can sometimes give rise to confusion. Since policies are general in nature, they provide guidelines as to how the employees will carry out their jobs. While policies provide managers with some flexibility in approaching various organisational problems, this generality again makes policies rather vague. Control becomes difficult when people start interpreting policy meaning and purpose differently. Rules: Like policies, rules, too, are standing plans that guide action. Rules spell out specifically what employees are supposed to do or not to do. For example, the no-smoking campaign launched by some organisations is supported by some organisational rules. As opposed to policies, rules do not permit exercise of individual discretion. Instead, rules specify what actions will be taken (or not taken) and what behaviour is permitted or not. Policies, on the other hand, tell people how to think about decisions to be made about actions. Unlike policies, rules do not allow discretion. Procedures: Like rules, procedures are standing plans that provide guidance for action rather than speculation. They are plans that establish a required method of handling future activities. Procedures establish customary ways for handling certain activities: hiring a clerk, participating in a co-operative housing society, obtaining a loan from a bank. The major characteristic of a procedure is that it represents a chronological sequencing of events. It specifies a series of steps that must be taken to accomplish a task. Specified series of steps one required to take for admission in the PG program of Chandigarh University is an example of procedure. Single-use plans 48 CU IDOL SELF LEARNING MATERIAL (SLM)

This are prepared for single or unique situations or problems and are normally discarded or replaced after one use. Generally, three types of single-use plans are used. These are programmes, projects and budgets. Programmes: Programmes are plans of action followed in proper sequence according to objectives, policies and procedures. Thus, a programme lays down the major steps to be taken to achieve an objective and sets an approximate time frame for its fulfilment. Programmes are usually supported by budgets. A programme may be a major or a minor one or long, medium or short term one. Since it is not used in the same form once its task is over it belongs to single-use plan category. Programmes determine major steps and set time frames for achieving objectives. Projects: A project is a particular job that needs to be done in connection with a general programme. So, a single step in a programme is set up as a project. A project has a distinct object and clear-cut termination. \"Projects have the same characteristics as programs but are generally narrower in scope and less complex. Projects are frequently created to support or complement a program.\" A project is a single step in a programme A budget is a programme expressed in measurable units of money, weight, time, etc. Budgets: \"A budget is a statement of expected results expressed in numerical terms.\" It is sometimes called numerised programme and most commonly expressed in terms of money i.e. taka, dollar etc. They may also be expressed in terms of any measurable units like hours, metric tons etc. It covers a particular period of time, and once the period is over, a new budget comes into being. Contingency Plans As we already know, the process of planning is based on certain premises about what is likely to occur in the environment of an organisation. Contingency plans are made to deal with situations that might crop up if these assumptions turn out to be wrong. Thus, contingency planning is the development of alternative courses of action to be taken if events disrupt a planned course of action. A contingency plan allows management to act immediately, if such unforeseen events as strikes, boycotts, natural disasters or major economic changes render existing plans inoperable or unsuitable 3.6 PLANNING PROCESS We have stated earlier that planning is a process consisting of certain steps or series of sequential activities. There is no generally accepted or standard format of the planning process. Different authors have their own ways of conceptualising the planning process. Let us discuss one of the conceptual schemes of the process of planning. 49 CU IDOL SELF LEARNING MATERIAL (SLM)