MCA 109

PRINCIPLES AND PRACTICES

OF MANAGEMENT

UNIT 2

INTRODUCTION TO
FUNCTIONS OF
MANAGEMENT

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FUNCTIONS OF MANAGEMENT
PLANNING:

Planning is a thinking process, the organized

foresight, the vision based on fact and experience, that is
required for intelligent action.
ORGANISING: Organization is the process of defining and
grouping the activities of the enterprise and establishing the
authority relationship among them
STAFFINF: Staffing involves the determination of manpower
requirements of the enterprise and providing it with adequate
competent people at all its level.
DIRECTING: Direction is a complex function that includes all
those activities, which are designed to encourage a subordinate
to work effectively
CONTROLLING:
Controlling is the process, by which
managers assure that resources are obtained and used
effectively in accomplishment of the organization's objective

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PLANNING
ACCORDING TO Killen:

Planning is the process of deciding

in advance what is to be done , who is to do it
, how it is to be done and when it is to be
done
Planning involves anticipation of future course
of event and deciding best course of action.
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NATURE OF PLANNING
PLANNING IS GOAL-ORIENTED:
Planning is made to achieve the desired
objectives of the business.
PRIMACY OF PLANNING:
Planning pervades all managerial activity, it
is the function of every manager. It facilitates
organising,staffing,directing,and controlling .
PLANNING IS AN INTELLECTUAL ACTIVITY:
Planning is an intellectual process and the
quality of planning will vary according to the quality of
the mind of the managers.
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ELASTICITY IN PLANNING:
The process of planning should be adaptable to changing
environmental conditions.
PLANNING AIMS AT COORDINATION:
Planning co-ordinates the what, who, how, where and why
of planning, without the co-ordination of different activities, one
cannot have united and synchronized efforts.
PLANNING IS A CONTINOUS PROCESS:
Planning is always continues in the organisation in one or
the other form. Plans are there modified and then certain
deficiencies also point out and framed accordingly, in this way
planning is a continuous process.
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OBJECTIVES AND SIGNIFICANCE OF PLANNING

MAXIMUM OUTPUT WITH MINIMUM COST:
An efficient manager achieves the maximum output at
minimum cost by making the best possible use of men,
machine, material, capital and equipment.
Reduces uncertainty: Planning helps in reducing uncertainty
because it involves anticipation of future. Effective
planning is result of deliberated thinking based on facts
and figures. Planning gives an opportunity to business
managers to foresee various uncertainties which may be
caused by changes in technology, taste and fashion of
people etc . sufficient provision is made in plan the plan to
offset these uncertainties.

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 Facilitates control: Planning helps the manager in performing their

function of control . Planning and control are inseparable in the

sense that unplanned action can not be control because control
involves keeping activities on the predetermined course by rectifying
deviation from plans.
Encourage Innovation and Creativity: it helps innovation and
creative thinking among the manager because many new ideas
come to the mind of a manager when he is planning . It creates
forward looking attitude in managers .
Improves Motivation : A good planning system ensures
participation of all managers which improves their motivation. It
improves motivation of workers also because they know clearly
what is expected to them . Planning also serves as a good training
device for future managers.
Improves competitive
strength: Effective Planning gives a
competitive edge to the enterprises over other enterprises that do
not have planning or effective planning . This is because planning
may involve expansion of capacity , change in work methods,
change in quality , anticipation technological changes.
SOCIAL JUSTICE AND HUMAN BETTERMENT:
Excellent remuneration improves the standard of living of workers.
The growth of business generates employment opportunities. Equal
pay for equal work without any discrimination brings social justice.
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IMPORTANCE OF PLANNING
1.
2.
3.
4.
5.
6.
7.
8.
9.

The business objectives can be easily secured through

planning.
Planning facilitates the process of decision-making.
Planning helps the management to implement future
programmes in a systematic manner.
Planning indirectly leads to large-scale economies by avoiding
waste of men, money, materials, and machinery.
Planning is the essence of all management activities: once
planning is done well, other activities automatically follow.
Establishing clear authority and responsibility.
Planning encourages the sense of involvement and team
spirit.
To secure economy in operation.
To help in co-ordination.

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TYPES OF PLANNING
STRATEGIC PLANNING: A strategic planning is

the process of deciding the objectives of the

organization and determining the manner in which
the resources of enterprises are to be deployed to
relies the objective of uncertain environment.
OPERATIONAL
PLANNING:
Operational plan
provide details of how strategic plan will be
accomplished. Operational planning is concerned
with the efficient use of the resources already
allocated and with the development of a control
mechanism to ensure efficient operations that
organizational objective are achieved.
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 FORMAL AND INFORMAL PLANNING: A planning

in BLACK and WHITE is known as formal planning.

Informal planning is only thinking about it and nothing
more.

TACTICAL PLANNING: These plans are made for

short-term moves and necessary for supporting the

strategic plans and achieving firms objectives.

FUNCTIONAL PLANNING: FP is segmental, and it

is undertaken for each major function of the

organisation like Production, Marketing, Finance,
Human resource, etc.

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 SHORT TERM AND LONG RANGE PLANNING:

STP
relates to a period of less than one year, e.g product
design , training of work force, reduction of inventory
level . MTP covers a period of over one year but less than
five year e.g. new product development, product publicity,
increasing return on investment. A planning for five years
to 20 years or more is known as long term planning. e.g.
globalization of production and marketing , increase in
market share , Public image.
PROACTIVE PLANNING: PP involves designing suitable
course of action in anticipation of likely changes in the
relevant environment. In India, cos like Reliance
Industries, Hindustan lever, etc have adopted this kind of
approach.
REACTIVE PLANNING: In RP, organization's response
come after the environmental changes have taken place.
After the changes take place, organizations start planning.
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PROCESSOFPLANNING
Establishm
Establishm
ent
entofof
objective
objective

Collection
Collectionofof
information
information
and
and
forecasting
forecasting

Development
Developmentofof
the
theplanning
planning
premises/
premises/
Assumptions
Assumptions

Search
Searchofofthe
the
alternatives
alternatives

Evaluation
Evaluation
and
andfollow
followup
up
Selection
Selectionofof
plan
planand
and
development
developmentofof
derivative
derivativeplans
plans
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Evaluation
Evaluationofof
alternatives
alternatives
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BARRIERS TO EFFECTIVE PLANNING

1. LACK OF RELIABLE DATA: Planning loses its value, if there
2.
3.
4.
5.

may be lack of reliable facts and figures.

LACK OF INITIATIVE: Planning is a forward looking, planners
must take the required initiative, otherwise he will not be able to
make good plans and makes planning process ineffective.
COSTLY PROCESS:
Planning is time consuming and
expensive process. If the management is not willing to spend
on planning the results may not be good.
PROBLEMS OF RAPID CHANGE: A complex and rapidly
changing environment, complications make planning extremely
difficult.
RIGIDITY IN ORGANISATIONAL WORKING:
Internal
inflexibility in the organisation may compel the planners to make
rigid plans, which may sometimes makes the planning process
ineffective.

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6.EXTERNAL LIMITATIONS: External factors are very

difficult to predict. Such as breakout of war, government
control, natural havocs and etc, which make the
execution of plans very difficult.
7. PSYCHOLOGICAL BARRIER:
Dynamic managers
always look ahead, but some people consider present
more important than future because present is certain.
This will make the planning process ineffective.
8. FAILURE OF PEOPLE IN PLANNING: Some of the
major reasons:-lack of commitment to planning, failure to
formulate sound strategies, lack of clear and meaningful
objectives, tendency to overlook planning premises,
failure to see the scope of plan and lack of adequate
control techniques. These factors are responsible for
inadequate planning.
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PLANNING PREMISES AND FORECASTING

Planning premises constitute the framework within which

planning is done
Assumptions denote the expected environment in future are
known as planning premises
Planning premises is divided into two parts:-

Planning
premises
Internal
Premises

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External
Premises

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 INTERNAL PREMISES:

Internal premises include

sales forecast, the existing policies and programs,
capital
investment
policies,
philosophy
of
management, etc.
External premises: External premises relate to the
political, economic, social and technological forces in
which the organization operates and the conditions
which influence the demand for the organizations
products.
SIGNIFICANCE OF PLANNING PREMISES: If the
premises are properly assessed, it will be possible to
develop reliable plans to future.
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FORECASTING
Forecasting is a systematic attempt to explore future

with the help of known facts.

SIGNIFICANCE OF FORECASTING.

Pivotal (central and important) in an organization.

Development of a business.
Primacy to planning.
Making and reviewing of forecasts on a continuous
basis will compel the managers to think ahead and to
search for the best possible decision with a dynamic
approach.

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LIMITATIONS OF FORECASTING
It should not be forgotten that all forecasts are

subject to a degree of error and they can

never be made with a hundred percent
accuracy.
Managers often neglect to examine whether
the forecasts are supported by reliable
information.
Managers must use their knowledge,
experience and available information with a
great degree of skill and take care to make
forecasts more dependable.
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PROCESS OF FORECASTING
1. UNDERSTANDING THE PROBLEM:
The first step in the FP is the understanding of real problem
about which forecasts are to be made. A manager must know
clearly the purpose of forecasting.
2. ESTIMATION OF FUTURE:
The prosperity of the future can be estimated with the help of
past experience and performance as well as the talents
possessed by top management executives.
2. COLLECTION OF RESULTS:
All the information can be collected. Relevant records
prepared and maintained to collect the results.

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4. COMPARISON OF RESULTS:
The actual results are compared with estimated
results to know deviations.
5. REFINING THE FORECASTS:
If any factors or conditions have changed during the
period understudy, then those factors or conditions
have to be taken in consideration for the future
estimation, this will help in refining the process of
forecasting.
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KEY TO PLANNING
PRINCIPLE OF CONTRIBUTION TO OBJECTIVES:

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

PRINCIPLE OF PERVASIVENESS OF PLANNING: Planning

is found at all level of management. Strategic planning is related

to top management while intermediate planning are the concern
of middle management.

PRINCIPLE OF LIMITING FACTORS: Planning must take the

limiting factors (man, machine, materials and management) into

account.
PROPER FORECASTING: One of the important steps in
planning is forecasting. Management must have a mechanism
of forecasting changes in environment which are influenced by
ECONOMIC, SOCIAL, POLITICAL factors.
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DECISION MAKING
ACCORDING TO McFarland A decision is an act of choice
wherein an executive forms a conclusion about what must be
done in a given situation . A decision represents a course of
behaviour chosen from a number of possible alternatives
Decision making is a process of selection from a set of alternative
course of action which is thought to fulfill the objectives of
decision problem more satisfactorily than others.

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CHARACTERISTICS OF A DECISION
Decision is the choice of the best course among

alternatives.

Decision is the end process preceded by reasoning.

Decision making is a mental process because the

final selection is made after thoughtful consideration.

Decision is aimed at achieving the objectives of the

organisation.

Decision relates the means to the end.

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DIFFICULTIES IN DECISION-MAKING
INCOMPLETE

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

INEFFECTIVE COMMUNICATION:

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

INCORRECT TIMING: If the decision is correct but the time is

inopportune, it will not serve any purpose.

UN-SUPPORTING ENVIRONMENT:

If there is all round

goodwill and trust, the manager is encouraged to take
decisions, On the other hand, under the opposite circumstances
he avoids decision-making.

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THANK
YOU
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