Function of management

 Unit-II: Functions of Management

                        Planning Meaning. Definition & Nature, Steps in Planning

                        Organizing Meaning. Definition & Classification (Formal & Informal                                                organization,

                        Virtual organization)

                        Staffing: Meaning Definition & Functions

                        Controlling: Meaning, Steps and Types of Control

A) Planning :-

                        The planning is the most important and primary function of management. Duc to planning the objectives of the organization can be achieved very easily. The work is completed in time without disturbance because of proper planning. In this modem business worked the scale of business has become very large and so the planning is becoming essential. Planning means predetermination of future work regarding how and when to be done. Planning inc ludes 1ime table, scheduling and budgeting of work to be done. In short planning is a primary function of management which accelerates to other functions of management. 

Definition:

                  Koontz& O'Donnell: "Planning is an intellectual process, the conscious determination of course of action, the basing of decisions on purpose, facts and considered estimates.

                   Afford & Betty: "Planning is the thinking process, the organized foresight, the vision for any organization"

                    George Terry: "Planning is the selection and relating of facts and making and using of assumptions regarding the future in the visualization and of proponed activities believed necessary to achieve desired goals."

                    From the above definitions it is clear that planning bridges the gap between where we are and where we want to go. It is the thinking process and organized foresight based on past experience and analysis of present Situation.

Nature of Planning:

 1. Primary Function: Planning is a first and primary function of management. Due to planning the control function is possible. The essence of planning is assessing the future. Accurate forecasting leads to correct decisions about future course of action. 

2. Intellectual Process: Planning means forecasting of future and analysis of present situation. Under the planning the work scheduling and budgeting is done. For all this there is need of intellectual efficiency.

3. Related with Future: Planning deals with uncertainties in the future. Planning decides in advance the future course of action. The exact future can seldom be predicted.

4. Objectives Based: Each plan is based on objectives. In the planning process, organizational objectives or goals play an important part. Planning includes deciding of fore path based on certain concrete objectives.

5. Continuous Process: Planning is a continuous process. It is an activity related to future. In every present movement we have to plan for future. Planning is a never ending process. It is unending process to keep the organization as a going concern.

6. Base for the Control Activity: Planning is a basic activity. It accelerates all other activities of management. It helps to control process. Without planning control is impossible. Under controlling actual results are compared with plans.

                     Planning is co-ordinates the activities of various departments, sections and subsections. It helps to control the future actions.

Steps in Planning:  

                    To plan is to chart out the future course of action to achieve the desired goal. For this purpose, the following major steps are involved in planning process. Planning is a continuous process which is unending process which indicates the following systematic procedure. The steps in planning include the segmental procedure followed by the planning committee. The following are the steps.

1. Forecasting of Professional Opportunities: Planning needs to search for professional opportunities in the business. The objectives can be set after knowing the opportunities. The professional opportunity may be in the form of units of production, sales units. profit in rupees, and profit in percentage.

2. Establishment of objectives: Planning is closely associated with the objectives of the organization. If there are no objectives there is nothing to plan. Objectives must be laid down in the clearest possible item 

3. Forecasting: Forecasting means assessing the future on the basis of present situation and past experiences. Accurate forecasting leads to correct decisions about future course of action. Accurate forecasting helps to make accurate planning. 

 4. Establishing the sequence of Activities: Planning includes the forecasting of so many activities. The proper sequence for those activities is essential. In order to have a successful execution of the basic plan as also of the derivative plans proper sequence is decided.

5. Deterring of Alternative Courses: There are several alternatives available for achieving the organizational objectives. Therefore, the next step in the planning process is to search for and examine alternative courses of action. However the more common problem is not selection of alternative but reducing the number of alternatives. So that is the most promising option may be analyzed.

6. Selection of Alternative Course: After having searched and examined the alternative courses, the next step is to evaluate the alternatives taking into consideration their favourable and unfavourable problem as one alternative may have some favourable points and other alternative may have some other favourable points. 

7. Budgeting: A master budget for the when enterprise and other departmental budgets are prepared to give meaning to plans. Financial aspects are covered under budgeting. 

8. Follow-up: This is the last step in planning. After having adopted major and expected plans and they are brought into execution.

  It is necessary to make a provision to check that the actual work is being executed and obtained at each stage according to plans and in case of variances or differences to actual, corrective steps are taken immediately. 

B) Organizing:  

Meaning:  

                ng: As a basic function of management, organizing Is the continuous and dynamic process involving the identification and grouping of activities to be performed and defining and establishing the authority responsibility relationships. This enables people to work most effectively together in achieving business objectives. It is through the process of organizing that the tasks and responsibilities of people are determined. In a general sense, organizing consists of determining and arranging for men, material, machines and money required by an enterprise for the attainment of its goals.

Definitions:  

                Koontz and O'Donnell: Organizing involves the grouping of activities necessary to accomplish goals and plans, the assignment of these activities to appropriate departments and the provision tor authority delegation and coordination. 

                 Oliver Sheldon: "Organizing is the process of combining the work which individual and groups have to perform with the faculties necessary for its execution, so that they provide the best channels for efficient systematic, positive and coordinated application of the available effort. 

                 These definitions, if looked at carefully. point to some of the basic elements of organizing. involves, determination of objectives, identification and grouping of activities, allocation of duties and developing relationships.

Classifications of organization:  

  1. Formal Organization:  

                                        Chester I Bernard defines formal organization as a system of consciously coordinated activities or forces of two or more persons. It refers to the structure of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability." 

                        The essence of formal organization is conscious common purpose and comes into being8 when persons:

(a) Are able to communicate with each other 

 (b) Are willing to act, and

 (C) Share a purpose. 

Characteristic of Formal Organization:  

(a) Formal organisation structure is laid down by the top management to achieve organisational goals. (b) Formal organisation prescribes the relationships amongst the people working in the organisat ion. (c) The organisation structures is conseiously designed to enable the people of the organisation to work together for accomplishing the common objectives of the enterprise.                                                     (d) Organisation structure concentrates on the jobs to be performed and not the individuals who are to pertorm jobs.

e) In a formal organisation, individuals are fitted into jobs and positions and work as per the managerial decisions. Thus, the formal relations in the organization arise from the pattern of responsibilities that are created by the management. 

 (D

A formal organization is bound by rules, regulations and procedures.. 

 B) In a formal organisation, the position, authority. responsibility and accountability of each level are clearly defined. 

 h) Organisation structure is based on division of labour and specialisation to achieve efficiency n operanons. 

 () A fomal organisation is deliberately impersonal. The organisat ion does not take into consideration the sentiments of organisalional members. ) The authority and responsibility relat ionships created by the organisation structure are to be honoured by everyone.

 (k) In a formal organisation, coordinat ion proceeds according to the prescribed pattem. Advantages of Formal Organisation 

 (a) The formal organisation structure concentrates on the jobs to be performed. It, therefore, makes everybody responsible for a given task. 

 (6) A formal organisation is bound by rules, regulations and procedures. It thus ensures law and order in the organisation.

 (C) The organisation structure enables the people of the organisation to work together for accomplishing the common objectives of the enterprise. Disadvantages or Criticisms of Formal Organisation

 (a) The formal organisat ion does not take into consideration the sentiments of organisational members.

 (6) The fomal organisation does not consider the goals of the individuals. It is designed to achieve the goas of the organisation only.

 (C) The formal organization is bound by rigid rules, regulations and procedures. This makes the achievement of goals difficult.  

Disadvantages or Criticisms of Formal Organization  

(a) Informal organization is not established by any formal authority. It is unplanned and arises spontaneously. 

 (b) Informal organizations reflect human relationships. It arises from the personal and social relations amongst the people working in the organization. 

 (C) Formation of informal organizations is a natural process. It is not based on rues, regulations and procedures. 

 (d) The inter-relations amongst the people in an informal organization cannot be shown in an organization chart.

 Benefits of Informal Organization:    

  (a) It blends with the formal organisation to make il more effective.

 (b) Many things which cannot be achieved through formal organization can be achieved through informal organization. 

 (c) The presence of informal organization in an enterprise makes the managers plan and act more carefully.

 (d) Informal organization acts as a means by which the workers achieve a sense of security and belonging. It provides social satisfaction to group members.

 (e) An informal organization has a powerful influence on productivity and job sat is faction.

 (f) The informal leader lightens the burden of the formal manager and tries to fill in the gaps in the manager's ability.

 (g) Informal organization helps the group members to attain specific personal objectives.

i (h) Informal organization is the best means of employee communication. It is very fast. 

 (i) Informal organization gives psychological satisfaction to the members. It acts as a safety valve for the emotional problems and frustrations of the workers of the organization because they get a plat form to express their feelings. 

(j) It serves as an agency for social control of human behavior .

3) Virtual organization (VO):  

                    Virtual organization (VO) define as a set of co-operating (legally) independent organizations, which to the outside world provide a set of services and act as if they were one organization. It is also reconfigurable. The co-operation is supported by computer networks.

Advantages of Virtual Organization:  

                    Some benefits of virtual organizations include saving time such as time to market and reducing development process, spreading costs and risks with partners, improving quality factors such as performance and flexibility, exchange and share knowledge, and marketing in high scale matching virtual organizations with dynamic changes in marketing, access to new technology and new customers, access to new markets through partnership. and improving access to financial resources. In most cases a mixture of these will be the driver for operating and doing business in networks.

C) Staffing :- 

Meaning:- 

                Staffing is the management function that deals with recruitment. placement, training and development of organization members. It encompasses the selection, training and supervision of the activities of an efficient staff, with qualified understudies able to assume supervisory posit ions at all levels in case of promotions or absences. Staffing refers to the managerial function of determining and meeting the manpower requirements of an organization and of providing opportunities tor the continuous development of its manpower talent. It S a key managerial function which gives life and meaning to other managerial functions.

Definition:-

                Koontz and O'Donnell have defined "The managerial function of staffing involves meaning the organizational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure." 

 lt is the process of identifying. assessing. placing. evaluating and developing individuals at work. So the staffing function pertains to recruitment. se lection. training and development and appraisal of personnel in the organization.

Functions of Staffing :- 

() Procurement of Personnel :

                This is the first step in staffing. This involves the procurement of adequate number of qualified persons to fill up the various positions in the organization to achieve organizational goals. This involves manpower planning. recruitment, selection and placement. 

 Manpower planning is the process of determining the manpower requirements both in terms of number and quality of personal. Recruitment involves locating various sources of prospective candidates. Selection means choosing the right type of required number of persons out of the prospective candidates. Placement means assigning specific jobs to the selected Candidates.

(2) Development of Personnel:  

                This second step of staffing involves orientation, training and counselling of personnel Orientation is the socializing process of adjusting the newly hired employee in the organization. Training involves the process of improving the knowledge and skills of personnel. Development means preparing them for additional responsibility or advancement. All these are done to increase efficiency and to increase productivity.

(3) Compensation:  

                This step involves fixation of adequate and equitable remuneration of personnel The compensation or pay package involves both monetary and non-monetary payments. For this purpose the organization is to develop equitable wage and salary policy. 

 This is developed by considering basic needs of people. job requirements. provisions of wage laws, organization's capacity to pay, competitive wage evils etc. The policy should also provide for bonus, incentives. retirement benefits. perquisites, incentives etc. The wage policy should always be developed with the object of motivating people.

(4) Integration:  

                Integration means the development a sense of belongingness to the enterprise. This can be achieved by an effective Iwo way communication system. An ejective communication system achieves harmony and team spirit among employees. The management communicates with employees to tel them before-hand what is expected of them. 

 Similarly the employees can communicate to the management their grievances which can be redressed at the earliest. The effective interaction with employees and trade unions promotes harmony and discipline in the organization.

(5) Maintenance:  

                This involves the provision of such facilities and services which are required to maintain the physical and mental health of employees. So this includes the provision of health, safety and comfort of the employees. The employer may provide Laboure welfares activities like medical benefits, housing recreational facilities, rest room. canteen etc. This is done with the object of eliciting loyalty of employees. 

 Thus the staffing function involves manpower planning. recruit meant, selection and placement. training and development. performance appraisal and job changes.

D) Controlling:  

Meaning: 

                Control is any process that guide activity towards some predetermined goals. Thus control can be applied is n any field such as price control, distribution control pollution control etc. Thus control process tries to find out deviations between planned performance and actual performance and to suggest corrective action wherever these are needed. 

 J. Terry has defined control as follows "controlling is determining what is being accomplish, that is evaluating the performance and. if necessary, applying corrected measures so that the performance takes place according to plan" 

 Control is checking event performance against pre-determined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance.

Steps in Controlling:  

                The various steps in control process which are necessary for ts relationship to planning. These steps may broadly be classified into four parts. 

 (1) Establishment of control standards: Every function in the organizations begins with plans which are goals, objectives or targets to be achieved. In the light of these standards are established which are criteria against which actual results are measured. 

 (2) Measurement of performance: The second major step in control process is the measurement of performance. The step involves measuring the performance in respect of a work in terms of control standards. 

 (3) Comparing Actual and Standard Performance: The third major step in control process is the comparison of actual and standard performance. It involves two steps finding out the extent of deviations and - identifying the causes of such deviations. 

 (4) Correction of deviations: This is the last step in the control process which requires that actins should be taken to maintain the desired degree of control in the system or operation.

Types of Control:  

                To control the activities in the organization, managers can use variety tools and techniques or types. They are broadly grouped under two heads.

1. Traditional techniques and 

 2. Modern techniques 

1. Traditional techniques:  

                1. Traditional techniques: Traditional techniques are those which have long been used by the managers. Some of the important techniques under this heads are budgetary control, financial statement and ratio analysis, auditing, break-even analysis and report writing etc.

 "Budgetary control is a process of comparing the actual resuhs with the coresponding budgeting data in order to approve accomplishments or to remedy differences by either adjusting the budget estimates or correcting the cause of the difference." GEORGE R. TERRY The different budgets such as production budget, sales budget, overhead budget, labour budget etc. clearly indicate the limits for expenses and also the resuts to be achieved in a given period. It ensures effective co-ordination of the work of the entire organization. It promotes co operation and team spirit among the employees 

 Standard Costing is one of the techniques of cost control and it is being increasingly used by modern business concerns for the purpose of cost reduction and cost control. It involves a comparison of actual with the standards and the discrepancy is called variance. Break-even analysis is useful in planning and control because it emphasize the marginal cost and benefit concept. It helps to make profit estimation at the different levels of activity, ascertaining turnover for desire profit and estimat ing the impact of the variations of fixed and variable costs.It magnifies a set of relationships of fixed costs, variable cost. price, level of output and sales mix to the profitability of the organization. 

 Financial statement analysis such as Found Flow analysis, Cash Flow analysis and Ratio analysis help to know the financial performance and financial position of the business uni. The liquidity. profitability and solvency position of the business unit can be ascertained and efforts can be taken to maintain these factors in an optimum proportion,

 Auditing is the process of investigating financial and other operation of a business establishment. It may be carried out by internal and external members. It helps to scrutinizes the applicability and relevance of policy. procedure and method which have a tendency to become obsolete. This it helps in choosing a sutable working procedures and methods. 

 Adoption of reporting system helps to analyse a particular problem and to take necessary corrective action over it. Reports may be prepared regarding taxation, legislation and its effect on profit, make or buy decisions, replacement f capital equipment, social pricing analysis etc. A manager can also exercise effective control over his subordinates by observing them while they are engaging in work. Personal observation helps the managers not only in knowing the workers attitude towards work but also n corecting their work and method, if necessary.

2) Modern Techniques:  

                    These are of recent origin, which provide information not readily available with traditional methods. These techniques help to give sharper focus and promise increasing ly to improve the quality of control. Program Evaluation Review Technique (PERT) and Critical Path Method (CPM) are two major techniques coming under this head. PERT has been, developed by an U.S. Office in 1958 in connection with the Polaris Weapon System and is credited with reduction the completion time of the program by two years. CPM has been jointly developed by Dupain and Remington Rand USA in order to facilitate the control of large, complex industrial projects. These techniques are used to minimize total time, minimize to cost, minimize idle resources etc. It is helpful in solving problems of scheduling the activities of on-time projects. These tools are widely being used in construction industry, planning and launching new projects, scheduling ship construction etc. It ensures improved management of resources by facilitating better decision making. t aims to have future oriented control mechanism for the organization.

                    Management Information System provides needed information to each manager at the right time, in right form which aids his understanding and stimulate his action. MIS is a refined form of traditional information collection and supply to the organization points.

                    Management Audit is an evaluation of management as a whole. It examine the total managerial process of planning, staffing, directing and controlling. To evaluate the management achievement, the organization plans, policies, procedures, organization structure, system of control personnel relation should be measure with its end results.

Questions: 

 1) Explain the concept of °Planning'. 

 2) Give the importance of Planning. 

 3) Explain the Characteristics of Planning. 

 4) Give the steps in planning process. 

 5) What do you understand by organizing? 

 6) What are the levels of management? 

 7) What do you mean by staffing? State the functions of Staffing? 

 8) What is controlling? State the various types of controlling?