Management Process

Management Process (Contd.)

 Management process is defined as the process, composed
of interrelated social and technical functions and activities
(including roles), occurring in a formal organizational setting for
the purpose of accomplishing predetermined objectives through the
utilization of human and other resources.

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 Elements/Components of Management
Process
The essential elements/components of Management Process
are four which are actually basic functions of management:
 Planning
 Organising
 Directing and
 Controlling.
We may add some more elements in the management
process as follows:
 Motivating
 Co-coordinating
 Staffing and
 Communicating.
Planning
 “Planning involves selecting mission and objectives and
the actions to achieve them; it requires decision-making
that is, choosing from alternative courses of action.”
- Heinz and Koontz

 “A plan is a trap laid to capture.”

-Allen
 Planning Process

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 Types/Elements of Planning
Standing Single Use
Plans Plans

Mission Programmes

Objectives Budgets

Policies Schedules

Procedures Projects

Rules Standards

Strategies

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 Continued…
 Corporate Planning

 Short-range and long-range plans

 Short-range plans = 1 year or less
 Intermediate-range plans = 1 to 2 years
 Long-range plans = 3 or more years

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 Continued…
 Strategic and operational plans
 Strategic plans — set broad, comprehensive, and longer-term
action directions for the entire organization.

 Operational plans — define what needs to be done in specific

areas to implement strategic plans.
 Production plans
 Financial plans
 Facilities plans
 Marketing plans
 Human resource plans

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Continued…
 Proactive Planning

 Reactive Planning

 Formal Planning

 Informal Planning
 Limitations Of Planning
 Time consuming and expensive
 Rigidity
 Absence of correct information
 False sense of security
 Resistance to change
 Environmental constraints
 Dynamic conditions

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 Management By Objective (MBO)

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 Objectives
 Objectives are the goals which the management wishes the
organization to achieve. (Specific Targets)

 Objective should be distinguished from other words “Vision”,

”Purpose” and “Mission”

 Vision: is the dream that an entrepreneur creates in his /her waking

hours of his/her preferred future.

 Purpose: The primary role defined by the society in which it

operates. (Broad Aim)

 Mission: It is the unique aim that sets the organisation apart from
others of its types. (specialization)

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 S.M.A.R.T Objectives

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 Management By Objectives (MBO)
 A method whereby managers and employees
define objectives for every department, project,
and person and use them to monitor subsequent
performance.

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 Process of MBO
Setting Formulation of Setting
organizational departmental subordinates
objectives objectives objectives

Periodic review Developing Establishing

progress action plans check points

Performance Employee
appraisal counseling

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 
Case study
The Marketing manager of AMK Enterprises, Roopali Deshmukh (Deshmukh) stepped out of the conference hall
in a pensive mood after an important meeting called by the CEO. The meeting was attended by the heads of
various departments in the company and was convened to discuss the targets for the coming assessment year.
Deshmukh had a formidable sales target to achieve and wondered how she would be able to meet those
seemingly impossible goals. This fear was further aggravated by the fact that the productivity levels of employees
in the company had been falling. Deshmukh was under tremendous pressure from the management to improve
the performance of her team. She also had to deal with the decreasing levels of employees’ morale in her 24-
member team. As a first step, Deshmukh informed her team members about a meeting that she planned to hold
the next day. She then drafted a plan of action that she intended to discuss with her team.
 The next day, Deshmukh began the meeting by informing her team members about the corporate meeting she
had attended. She then said, “We have a difficult task ahead for this year, and your participation and involvement
is essential to achieve the goals”. She then invited suggestions from her team members regarding the role to be
played by each of them. The meeting then progressed on to setting of individual targets for by each team member
as, it was felt that this would help in accomplishing the organizational goals. Specific goals were, therefore, set
and agreed upon by all the team members. The team aimed to increase the organizational profits by 18% over the
next six months. They sketched out a plan of action to achieve the targets set for the team and decided that they
would meet once every two months to monitor their progress.

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  Two months later, the team met again and received their progress. Deshmukh also gave a feedback on the
performance of every member of the team. The team then collectively identified the areas of
improvement and decided upon the measures they would take to overcome their deficiencies. This
continued for the rest of the year. The final review meeting was held just before the yearly corporate
meeting attended by the top management. The team was surprised to see that they had achieved their
targets.
 Thus, effective planning and control mechanisms helped the team achieve their short term goals, and this
in turn, helped in the achievement of the organizational objectives. Besides, the employees were also
motivated as the management gave adequate recognition to their involvement and participation in
achieving team goals. The target to be achieved by the team was highly challenging. This further motivated
the team members as they had better opportunities to prove their problems solving skills. Thus, the
outstanding performance of the sales team helped the organization achieve in the long term.

Questions :
1. Roopali Deshmukh followed the practice of management by objectives (MBO) while setting goals for team
members. Discuss the various phases of the MBO process that helped her team achieve its goals.

2. Explain briefly the process of MBO and the various advantages of implementing MBO in organizations.

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Organizing
Meaning of Organizing
 The process of arranging people and other resources to work together to
accomplish a goal.

 It is the process of establishing relationship among the people working in an

organization.
Definition
 Organizing is the process of identifying and grouping the work to be
performed, defining and delegating the responsibility and authority and
establishing a pattern of relationship for the purpose of enabling people to work
most effectively to accomplish objective.
 Louis Allen
 Organization Structure
 The system of tasks, workflows, reporting relationships, and
communication channels that link together diverse individuals
and groups.

 Organisational chart: it is a diagrammatic presentation of

relationships in an enterprise.

 FORMAL ORGANISATION
 INFORMAL ORGANISATION
Formal Organization
 The structure of the organization in its official state.

 The formal organization is a system of well defined jobs, each

bearing a definite measure of authority, responsibility and
accountability.
Informal Organization
 A “shadow” organization made up of the unofficial, but often
critical, working relationships between organization members.

 It is a joint personal activity without conscious common purpose

through contributing to joint results
Centralization
 Centralization occur in small enterprise where, the manager
handles all the situation, takes decision himself and entrusts only
implementation to the subordinates.

 There is a direct link between the proprietor and his employees.

 He personally supervises all managerial functions.

Decentralization
 Decentralization means the division of a group of functions and
activities into relatively autonomous units with overall authority
and responsibility for their operation delegated to a head for each
unit.
Departmentation
 According to James and Stoner, “Departmentation is the
grouping of work functions so that similar and logically
related activities occur together.”
Bases of Departmentation
 Functional
 Product
 Geographical
 Process
 Customer
 Time
 Alpha Numerical
 Functional Departmentation

Board of directors

Managing/general
manager

Personnel Dept Finance Dept Production Dept Marketing Dept

Product Departmentation
Board of
directors

Managing
director

Passenger cars Jeeps trucks

Marketing research

Advertising

Sales
 Geographical Departmentation

Head Office

Western Eastern Southern Northern

zone zone zone zone

Jalendhar Chandigarh New Delhi Ajmer

division division division Division

Branch
Process Departmentation
Board of
directors

Managing director

Production Finance General Manager Sales manager

Manager Manager

Spinning

Dyeing

Bleaching

printing
Customer Departmentation
Board of
directors

Managing director

Production Finance General Marketing

Wholesale

Retail

Exports
Time Departmentation
Supervisor

Day Shift Evening Shift

Night Shift
Authority
 Authority is the right to give orders and the power to exact
obedience.

 There are three kinds of authority:

 Authority of knowledge

 Authority of position

 Legal authority
Sources of Authority
 Formal authority Theory

 Acceptance Theory

 Competency Theory
Responsibility
 The obligation to perform assigned tasks.

 Supervisors may have authority, but may have trouble getting others to act in
the desired way.

 By accepting the position, supervisors are accepting the responsibility to

achieve the goals of the organization.

 A supervisor’s success is dependent on his or her ability to meet the

organization’s objectives.

 The supervisor has the authority and responsibility to accomplish the tasks and
is held accountable for the outcome.
Accountability
 It is the liability for the proper discharge of duties by the subordinate.

 It is the obligation to carry out responsibility and exercise authority in terms of

performance standards established

 “Accountability is the obligation of an individual to report formally to his superior about

the work he has done to discharge the responsibility.”
 McFarland
Delegation of Authority
 By means of delegation, the manager extends his area of
operations, for without delegation, his actions are
confined to what he himself can perform.
STAFFING
Preliminary interview

Application blank

Selection test

Employment interview

Medical Examination

Reference Checks

Final Selection
Directing
 Issuing orders and instructions
 Providing continuing guidance
 Maintaining discipline
 Motivating subordinates
Leading
 Leading subordinates
 Managers need to be good leaders
 Guiding
Coordinating]
 Develops team spirit
 Brings unity of direction
 Raises morale
 Optimum utilization of resources
 Facilitates prompt achievement
 Cordial relations
 Favorable corporate image
Communication
 Two way process
 Feedback mechanism
 Continuous process
 Pervasive function
 Administrative in nature
Motivating
 Encouraging
 Creating pleasant working conditions
 Developing effective communication
 Reducing employee grievances
 Recognizing positive efforts
Budgeting
 Sales budget
 Finance budget
 Cash budget
 Manufacturing budget
 Capital expenditure budget
 Cost budget
Reporting and Controlling
 Control process:
 Establish standards
 Measure actual performance
 Compare actual performance with standard performance
 Introducing suitable corrective measures
 Taking follow up action
Techniques of Controlling
 Budgetary control
 Management audit
 PERT and CPM
 MBO
 Direct supervision
 Self control
 Break even analysis
 MIS
Recent trends in CRM in Banking and
Insurance Industry
 ATM
 Debit card
 Credit card
 Internet banking
 Reminder for paying premium
 Grace period
 Duplicate policy
 Revival
 Surrender
 Claims settlement