UNIT-I HISTORICAL DEVELOPMENT The Definition of Management 1.

The process of getting activities completed efficiently with and through other people; 2. The process of setting and achieving goals through the execution of five basic management functions: planning, organizing, staffing, directing, and controlling; that utilize human, financial, and material resources. 3.The process of planning, leading, organizing and controlling people within a group in order to achieve goals; also used to mean the group of people who do this.
4.the process of achieving the objectives of the business organization by bringing together

human, physical, and financial resources in an optimum combination and making the best decision for the organization while taking into consideration its operating environment.

Nature of Management

1. Universality: Management is an universal phenomenon in the sense that it is common and essential element in all enterprises. Managers perform more or less the same functions irrespective of their position or nature of the organization. The basic principles of management can be applied in all managerial situations regardless of the size, nature and location of the organization. Universality of managerial tasks and principles also implies that managerial skills are transferable and managers can be trained and developed.

2. Purposeful: Management is always aimed at achieving organizational goals and purposes. The success of management is measured by the extent to which the desired objectives are attained. In both economic and non-economic enterprises, the tasks of management are directed towards effectiveness (i.e., attainment of organizational goals) and efficiency (i.e., goal attainment with economy
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of

resource

use).

3. Social process: Management essentially involves managing people organized in work groups. It includes retaining, Developing and motivating people at work, as well as taking care of their satisfaction as social beings. All these interpersonal relations and interactions makes the management as asocial process.

4. Coordinating force: Management coordinates the efforts of organization members through orderly arrangement of inter-related activities so as to avoid duplication and overlapping. Management reconciles the individual goals with the organizational goals and integrates human and physical resources.

5. Intangible: Management is intangible. It is an unseen force. Its presence can be felt everywhere by the results of its effort which comes in the form of orderliness, adequate work output, satisfactory working climate, employees satisfaction etc.

6. Continuous process: Management is a dynamic and an on-going process. The cycle of management continues to operate so long as there is organised action for the achievement of group goals.

7. Composite process: Functions of management cannot be undertaken sequentially, independent of each other. Management is a composite process made up of individual ingredients. All the functions are performed by involving several ingredients. Therefore, the whole process is integrative and performed in a network fashion.

8. Creative organ: Management creates energetics effect by producing results which are more than the sum of individual efforts of the group members. It provides sequence to operations, matches jobs to goals, connects work to physical and financial resources. It provides creative ideas, new imaginations and visions to group efforts. It is not a passive force adopting to external environment but a dynamic life giving element in every organization.

Scope And Functions Scope of Management Functions Scope of Management functions and relationship with the controlling Management is a term variously defined by different authors. For this reason, below we first present some of its definition to be able to export them from links. Thus, Donnelly, Gibson and Ivancevich Management define as the process as it is made by one or more persons, and consists in coordinating the activities of other persons in order to achieve the results that one person could not achieve alone. Weihrich and Koontz in addition define it as the process of shaping and maintaining an environment in which individuals, working together in groups, efficiently achieve desired outcomes. James A. OBrien Management function describes as a leadership process that involves managerial functions of planning, organizing, directing and controlling. In doing so, managers plan organizational activities, organize the staff and activities, direct and control own management activities by using feedback loops. Feedback has a duty to point out the discrepancies and to direct towards the implementation of necessary modifications in order to achieve business goals . Also the definition of management can be quoted with definition in the lexicon of Economics, where was stated activity aimed at achieving specific, pre-set goals, but with the efforts of other people. Management is the process of guiding the behavior of others toward the execution of a task, it combines the factors of production to achieve certain goals and deals with overcoming complexity. Basic functions of management scope are: planning, organizing, setting up staff, leadership and control . Looking at these definitions as basic scope of management functions (and others not listed here) can be noticed that all emphasize that the scope of management is process, in which individuals are joining forces with the aim of achieving a more efficient target. This goal can be expressed quantitatively (profit contribution of cover, income) and qualitatively (environmentally friendly production, high product quality, employee care, good post-sales service of products). In general, these goals are overlapping, so a high quality product delivers a positive image of a business
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entity, and that indirectly brings higher profits due to higher sales. To accomplish the desired goals, that persons (hereinafter to be called managers) are responsible for managing and performing certain functions, as already stated in the definition of the lexicon of Economics. List of Management functions

Briefly, there are 5 core functions that constitute Scope of Management functions: Planning, Organizing, Staffing, Leadership and Controlling.

Scope of Management

1. Planning

The first management function in scope of management functions that managers must perform is PLANNING. Within this function plan is created to accomplish the mission and vision of the business entity. Under the mission is considered the reason for the establishment, while under the vision is considered where is business entity aiming. The plan must define the time component and to plan necessaryresources to fulfill the plan. Here can also be shaped goal / s that want s to
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be achieved and strategy to be used at the same time. Accordingly plan of organization is developed together with required personnel, method of leading people is defined and controlling instruments for monitoring the realization of plans. The guiding idea in the making of mentioned items is the realization of the objectives and fulfilling the mission and vision of the business entity. As is evident from the previous paragraph, each organization should make a good first step, a good plan, because without it the organization takes a great risk of mistakes and thus compromising their business.

2. Organizing

Organizing is the second function manager, where he had previously prepared plan, establish an appropriate organizational structure in business organization. In part, it determines the ranges of management, type of organizational structure, authority in the organization, types and ways of delegating and developing lines of communication. The organization and its subsystems are placed under the plan, which was created as part of functions, ie planning. In performing construction and organization in particular must pay attention to formal and informal lines of communication, because if these lines are not adequately monitored the possibility of collision between them, resulting in delays and / or even failure to achieve the goal.

3. Staffing

Staffing, as the next function of management, consists of a selection of appropriate staff for the organization to reach a goal / goals easier and more efficient. According to todays experience is well known that it is difficult to financially evaluate, quality and efficient staff. Staff is one of the more valuable, if not the most valuable resource in any successful organization. For this reason, good planning of personnel policies, as a function of management, and corresponding execution of that selection of high quality people is becoming increasingly important. The task of this
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management function is to set rules related to employment and personnel policies. Within rules following items are determined:

policy of employment (whether the target organizations development of own staff to develop within the organization or the staff mostly taken from other organizations),

required expertise and theoretical knowledge to perform certain tasks (identification of necessary skills),

the policy of promotion , assessment of employees, training of staff, conflict resolution, and other settings of personnel policies.

4. Leadership

Leadership as the penultimate function is the cornerstone of management. As part of this function methods are determined of encouraging people (staff) to achieve their common goal / s of a business entity. Entity (unit, division, department and etc.) on its head must have the person who is ready to lead and to transfer to assistants and colleagues own enthusiasm for the goal / goals. Briefly, this means to motivate them. Otherwise there is a great opportunity and

incentive to report a jump ball in the final achievement of results which lead to a miscarriage of goals. There are many motivation theories, among them Maslows famous hierarchy of needs and the Herzberg Two-Factor Theory. All of them aim to try to explain a way of encouraging staff to perform tasks more efficiently, and to find factors that will give personnel satisfaction, to motivate them. To perform this function, managers are often additionally educated in the field of psychology because the motivation and motivators are very complex issue. The reason for this is the individuality of each person, and therefore a combination of motivators for everyone else affected. For example, certain individuals may be motivated by the possibility of promotion (which is closely related to personnel functions), while others may be motivated by a pleasant business
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environment (organizational function) and / or better bonuses (including organizational function). For defining leadership also should be stressed that there are different ways (styles) of leadership that are still classified versatile by different authors. So, if we look at the styles of authority there are three basic types: autocratic style of leadership, democratic or participative style and laissez faire.

The Evolution Of Management Thought Current management theory and practice did not just eventuate. It evolved over many years. The evolution of the discipline of management has helped to develop a body of knowledge about the practice of management. Within the field of management, eight schools of thought have contributed significantly to the development of management. The following table brings together the theories of management and the issues that they address. You should be aware that the main features and theoretical perspectives of each school are not necessarily mutually exclusive and in many cases a particular theory has built upon and refined the work of researchers in other areas. Theories of management and the problems they address Theories of management skills the human relations school the organisation behaviour school the information and decision school Theories of management functions the motivational problem improving the integration of people into organisations the management decision-skills problem

scientific management the quantitative school the strategic management school Theories of organisation systems administrative management the organisation theory school

the human productivity problem the application of objective functions to management the organisation long-range planning problem

the organisation problem the organisation design problem

The following chapter of your textbook discusses the historical origins of management principles and practices. Included are the diverse schools of management thought. The background for each school, its effect on management and its main contributors are identified. Conclusion The role of the manager involves continually balancing the needs of the task and the needs of the individual and the whole team. At the same time a manager must be able to focus on the immediate specific issues that require attention. A manager works with groups and individuals towards goals within the constraints of the organisation and the external environment. Managers make decisions, allocate resources and coordinate the activities of others to achieve goals. One common thread comes through in all of the definitions and textbooks regarding functions to be performed and the skills required of a manager - the importance of managing people. Think about this - the challenge of management is to create an environment so that people want to come to work in the morning. A positive attitude on your part will improve that relationships with those you work.

HENRY FAYOL PRINCIPLES Henry Fayol suggested 14 principles of management as explained:

Division Of Work: Division of work means dividing the total work into small convenient components and giving each component to one employee. This brings specialisation and enables people to concentrate effectively on the assigned responsibility. This improves performance, ability and accuracy in the work.

Authority and Responsibility: Authority should be equal to responsibility. These two terms are integral aspects of the managerial process AND inter-related as responsibility is the corollary of authority. Those who have authority to give orders must be willing to accept responsibility for the results. Responsibility arises when the authority is used and hence authority and responsibility cannot be separated.

Discipline: Discipline is the obedience and outward mark of respect shown by an employee. Fayol considers that discipline is absolutely essential for smooth and orderly running of a business unit. For proper discipline, attention needs to be given to good supervision,fair agreements and judicious use of Penalty. His 14 principles are:

Division of work - specialisation provides the individual to build up experience, continuous improvement in skills, and thereby be more productive.

Authority - the right to issue commands, along with which must go the balanced responsibility for its function

Discipline - which is two-sided, for employees only obey orders if management play their part by providing good leadership.

Unity of Command - each worker should have only one boss with no other conflicting lines of command.
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Unity of direction - people engaged in the same kind of activities must have the same objectives in a single plan

Subordination of individual interest to general interest - management must see that the goals of the firms are always paramount.

Remuneration - payment is an important motivator although by analysing a number of possibilities, Fayol points out that there is no such thing as a perfect system

Centralisation or decentralisation - this is a matter of degree depending on the condition of the business and the quality of its personnel

Scalar chain (line of Authority) - a hierarchy is necessary for unity of direction but lateral communication is also fundamental as long as superiors know that such communication is taking place.

Order- both material order and social order are necessary. The former minimises lost time and useless handling of materials. The latter is achieved through organisation and selection.

Equity - in running a business a 'combination of kindliness and justice' is needed in treating employees if equity is to be achieved.

Stability of tenure - this is essential due to the time and expense involved in training good management.

Initiative - allowing all personnel to show their initiative in some way is a source of strength for the organisation even though it may well involve a sacrifice of 'personal vanity' on the part of many managers

Esprit de corps - management must foster the morale of its employees. He further suggests that,
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"real talent is needed to coordinate effort, encourage keenness, use each person's abilities, and reward each one's merit without arousing possible jealousies and disturbing harmonious relations." Harmony and pulling together among personnel.

UNIT - II PLANNING DEFENITION A basic management function involving formulation of one or more detailed plans to achieve optimum balance ofneeds or demands withthe available resources. The planning process (1) identifies the goals or objectives to be achieved, (2) formulates strategies to achieve them, (3) arranges or creates the means required, and (4)implements, directs, and monitors all steps in their proper sequence. 2. The control of development by a local authority, throughregulation and licensing for land use changes and building Planning :- In simple words, planning is deciding in advance what is to be done, when wherei how and by whom it is to be done. Thus, a plan is a determined course of action. It is an attempt on the part of a manager to anticipate the future in order to achieve better performance. Nature-of-Planning :I think the planning has the following inherent characteristics:

1. Planning is an intellectual process :- Planning as an intellectual process, the conscious determination of course of action. Thus, it is an intellectual stimulation. It possesses an element
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of day-dreaming. In the initial stage it may involve what might be called vision. It involves foreseeing future development, making forecasts or predictions and then taking decisions. Thus, it becomes an important mental exercise.

2. Planning contributes to the objective :- A plan starts with the setting of objectives and in order to realize it develops policies, procedures, and strategies, etc. Obviously, without setting the goals to be reached and lines of action to be followed, there is a continuous and never-ending activity of a manager to keep the enterprise going.

3. Planning is a selecting process :- Planning is a selective process. It involves the study and a careful analysis of various alternatives and then selecting the best one. It not only pertains to defining a problem which immediately confronts the manager, but often it mentally searches the possibilities for problems that might appear in the future.

IMPORTANCE OF PLANNING The importance of the planning function should have be clear to you. We can outline the importance of planning function as follows: Provides Direction: Planning provides a clear sense of direction to the activities of the organization and to the job behavior of managers and others. It strengthens their confidence in understanding where the organization is heading and what for, how best to make the

organization move along the chosen path, and when should they take what measures to achieve the goals of the organization. Provides opportunity to analyze alternative courses of action: Another source of importance of planning is that it permits managers to examine and analyze alternative course 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 judgment and proceed cautiously to choose the most feasible and favorable
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course

of

action.

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.

Minimizes impulsive and arbitrary decisions: Planning tends to minimize 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 failures in managerial actions. It injects a measure of discipline in managerial thinking and organizational action. It improves the capability of the organization to assume calculated risks. It increases the freedom and flexibility of managers withing well-defined limits.

King-pin function: As stated earlier, planning is a prime managerial function which provides the basis for the other managerial functions. The organizational structure of task and authority roles is built around organizational plans. The functions of motivation, supervision, leadership and communication are addressed to implementation of plans and achievement of organizational objectives. Managerial control is meaningless without managerial planning. Thus, planning is the king-pin function around which other functions are designed.

Resource Allocation: Planning is means of judicious allocation of strategic and scarce resources of the organization in the best possible manner for achieving strategic goals of the organization. The strategic resources include funds, highly competent executives, technological talent, good contacts with government, exclusive dealer network and so on. If the organization 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 organization.

Resource use efficiency: For an ongoing organization, planning contributes towards a more efficient functioning of the various work units. There is better utilization of the organization'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.
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Adaptive responses: Planning tends to improve the ability of the organization to effectively adapt and adjust its activities and directions in response to the changes taking place in the external environment. An adaptive behavior on the part of the organization is essential for its survival as an independent entity. For a business organization, for example, adaptive behavior is critical in technology, markets, products and so on.

Anticipative action: While adaptation is a behavior 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 hold initiatives, to anticipate crises and threats and to ward them off, to perceive and seize opportunities ahead of other competitions, 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.

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 to the framework provided by planning that managers make major decisions on organizational activities, in an internally consistent manner. STEPS IN PLANNING

There are eight applicable steps in planning which should be followed by managers in connection with major programs and in any other through planning. 1. AWARENESS OF OPPERTUNITIES

An awareness of opportunities in the external environment as well as within the organization is the real starting point for planning. All managers should take look at future opportunities and see them clearly and completely. They should know where they stand in light of their strengths and weakness, understand what problems they wish to solve and why, and know what they expect to gain. Setting realistic objectives depends on this awareness.
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(i) About market (ii) About expected competition (ii) What customers wants (iv) Awareness about their qualities and weakness

2. SETTING OBJECTIVES

The second step in planning is to establish or set objectives for the entire enterprise and then for each subordinate work unit. Objectives specify the expected results and indicate the end points of (i) What is to be done (ii) Where the primary emphasis is to be placed (iii) What is to be accomplished by the network of strategies, policies, procedures, rules, budgets and programs 3. DEVELOPING PREMISES

The third logical step in planning is to establish planning premises. Such as forecasts, applicable basic policies and existing company plan. The are assumptions about the environment in which the plan is to be the carried out. It is important for all the managers involved in planning to agree on the premises.Forecasting is important in premising: What kind of markets will be there? What volume of sales? What prices? What products? What technical developments? What cost? Etc

4. INDENTIFYING ALTERNATIVE COURSES OF ACTION

The forth step in planning is to search and examined alternative courses of actions. The planner must usually make preliminary examination alternative courses to accomplish the goal.

5. EVALUATING ALTERNATIVE COURSES

After determining alternative courses and examining their strong and weak points, the next step is to evaluate the alternatives. That which alternative will give the best of meeting goals at the lowest cost and highest profit in a given period.

6. SELECTING A COURSE

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Selecting an alternative is the real point of decision making. This is the point at which the plan is adopted. After identifying and evaluating alternative the manager has to decide one best alternative or several alternative courses of action.

7. FORMULATING DERIVATIVE PLANS

The seventh step in planning is formulating derivative plans. When a decision is made next step is to formulate a supporting plan, such as to buy equipment, materials, hire and train workers and develop a new product.

8. NUBERISING PLANS BY MAKING BUDGETS

After decision making and formulating plans the final step in planning is to numberise decision and plan by converting them into budgets. The overall budgets of an enterprise represent the sum total of income and expenses with resulting profit. Budgets are important thing in planning process. TYPES OF PLANNING The failure of some managers is inability to recognize the several types of plans. This makes difficulty in making planning effective. Plans are classified as:1. PURPOSE AND MISSIONS & OBJECTIVES This mission identifies the basic functions or tasks of an enterprise. However, an objective is the end toward which an activity is aimed. Objectives in other words. Are ends toward which organizational and individual activities or directed. Objectives are the end point toward which all managerial functions, (Planning, Organizing, Leading, Staffing, and Controlling) are aimed. Objectives form a hierarchy ranging from individual objectives to broad aims. 2. STRATEGIES & POLICIES Strategies and policies are the basis of operational plans and framework for plans. Both gives direction and are closely related. The word strategy is derived from a Greek word STRATEGOS meaning General. Strategies is the determination of the basic long term
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objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals policies are general statements or understandings that guide managers thinking and decision making. 3. PROCEDURE & RULES Procedures are plans that establish a required method of handling future activities. Briefly, procedures guide actions. Rules are those required actions or non-actions allowing no discretion. Rules are simply called simple plans. 4. PROGRAMMS Programs are a complex of goals, policies, procedures, rules, tasks and steps to be taken, resources to be employed and other elements necessary to carryout a given course of action and normally supported by capital and operating budgets. 5. BUDGET A budget is a numerized program. It is a statement of plans and expected results expressed in numerical terms or forms. The budget of an enterprise represents the sum total of income and expenses with profit or surplus. 1. THE CONTRIBUTION OF PLANNING TO PURPOSE AND

OBJECTIVE: Every plan and all its supporting plans should contribute accomplishment of the purpose and objectives of the enterprise. This concept an use in organized enterprise which try to accomplishment of group purpose through deliberate cooperation. 2. THE PRAMACY OF PLANNING: Since managerial functions like organizing, Staffing, Leading and controlling support to the accomplishment of enterprise objectives, planning logically precedes or help the accomplishment of all other managerial functions. Because Manager must plan on order to know what kinds f organization relationship and personal qualifications are needed, which method should be fild by

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subordinates and what kind of control is to applied. All the other Managerial functions must be planned if they are to be effective. 3. THE PERVASIVENESS OF PLANNING: Planning is the function of all Managers, although the character and breadth of planning will vary with each Managers authority and with nature of polices and plans outlined by superiors. If Managers are not allowed a certain degree of discretion and planning responsibility they are not truly Managers. If we recognize the pervasiveness of planning, we can more easily understand why some people distinguish between the manager and the administrator or supervisor one manager, because of his or her authority or position in the organization, may do more important planning than another, or the planning of one may be more basic than that of another and applicable to a large portion of the enterprise. However, all managers from presidents to first level supervisors plan. Even the head of a road gang or a factory crew plans in a limited area under fairly Objectives : Meaning and Definition Objectives may be defined as the future results or a desired state of affairs which the organization seeks and strives to achieve. Objectives provide the organization with a purpose that keeps its attention and efforts focused in a particular direction so that it is capable of steering a steady course towards their accomplishment, taking corrective action when necessary to avoid obstacles. MANAGEMENT BY OBJECT (MBO) Management by objectives (MBO) is now practiced all over the world. Yet, despite its wide applications, it is not always clear what is meant by MBO. Some says that it is an appraisal tool; other sees it is a motivational technique; still others consider MBO a planning and control device. In other words, definitions and applications of MBO differ widely. MBO process consists of setting goals at the highest level of the organization, clarifying the rules of responsible persons for achieving the goals. Some still define MBO in a very narrow, limited way.

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BENEFITS OF MBO There are four benefits of MBO. 1. MBO IMPRVOES MANAGEMENT: All the objectives of management by objective can be summarized by saying that it results in greatly improved Management. objective can not be establish without planning.MBO force Managers to think about planning for results.MBO also requires that Managers think about the way from which they will accomplish results. They will think about need of assistance to achieve the objectives. 2. MBO CLASSIFY ORGANIZATION MBO classify the organizational roles and structure. It force managers to delegate authority according to the results they expect. 3. MBO INCOURAGE PERSONAL COMMITMENTS; One of the great advantages of management by objective is that it encourages people to commit themselves to their goals. Because of MBO people can understand their area of discretion, there authority, the part in setting their objectives. 4. MBO DEVLOPES EFFECTVE CONTROL MBO help people to develop effective control. As MBO guides in setting result oriented planning. It is also guides people to develop effective control towards the accomplishment of the goals. WEAKNESSES OF MANAGEMENT BY OBJECTIVES With all its advantages, MBO has a number of weaknesses. There are several weakness of MBO. 1. MBO FALIURE TO EXPLIAN PHILOSPHY MBO As MBO emphasis self-control and self direction therefore sometimes managers fail to explain the philosophy of MBO to their subordinates. Managers often fail to explain about MBO that it

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is? How it works? Why it is being done? What part in performance appraisal? How participants can benefits 2. MBO FAILURE TO GIVE GUIDE LINES FOR GOAL SETTING One of the weaknesses of MBO is that it fails to give guide line for goal setting to managers. Managers need planning premises and knowledge of major company polices. People must have some assumptions about future. They should have some understanding about objectives affecting their areas of operations. They should know about objectives and programes.MBO fails to give guideline to Managers. 3. DIFFICULTY OF SETING GOALS Truly verifiable are difficult to set. MBO difficult and verifiable goals. 4. EMPHASIS ON SHORT TIMES GOALS In most MBO programs, managers set goals for the short term for yearly or quarterly. Emphasis on short term goals lead to danger more expensiveness as of the longer range. 5. DANGER OF INFLAXIBILITY In MBO program managers often hesitate to change objectives. Change in objective can affect results. So in MBO managers often hesitate to know flexibility. OTHER WEAKNESSES There are some other dangers and difficulties in MBO. 1- There may be a danger of overuse of quantitative goals or low gradation of important goals. 2- Difficulty in applying goal oriented planning. 3- Difficulty of converting broad objective into subordinate objectives. 4- Difficulty in measuring performance. 5- Difficulty in providing feedback.
6- Difficulty in setting long-range objectives and planning. 7- Difficulty in adjusting to the fast changing environment

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DECISSION MAKING Decision making is defined as the selection of course of action from among alternative. It is the core of planning. A plan cannot be said to exist unless a decision has been made. Managers sometimes see decision making as their central job because they must constantly choose what is to be done, who is to do it and when, where and how it will be done. Decision making is the part of planning and everyones daily living. RATIONAL DECISION MAKING; It is the rational decision making that goals cannot be attain without action. People acting or deciding rationally are attempting to reach some goal that cannot be attained without action. They must have a clear understanding of alternatives. Thy must have ability and information to analyze and evaluate alternatives in order to achieve goals. Finally they must have desire to come the best solution by selecting alternative. STEPS IN DECISION MAKING There are three steps in decision making. 1- THE SEARCH FOR ALTERNATIVES. The first steps of decision making are to develop alternatives. There are almost always alternatives to any course of action. If we think of only one course of action, clearly we have not thought hard enough. The ability to develop alternatives is often as important as being able to select correctly from among them. One of the other hand ingenuity research and common sense will often unearth so

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many choices that all of them cannot be evaluated. The manager needs help in this situation, and this help can be solved by decision making. 2- EVALUATION OF ALTERNATIVES. When an appropriate alternative has been found, the next steps in planning one best alternative to achieve the goals. There are three ways of evaluated decision making. 1- QUANTITIVE AND QUALITIVE FACTOR Quantitative factor can be measured in numerical terms. This factor is vary important but the success of the venture would be endangered qualitative factors were ignored. Qualitative factor are those that are difficult to measure numerically such as the quality of labor relations, the risk of technological change etc. 2- MANAGERIAL ANALYSIS In evaluating alternatives managerial analysis is very important. Marginal analysis can be used in comparing factors other then costs and revenue. For example to find the best output of a machine, inputs could be varied against outputs until the additional input equals the additional output. 3- COST EFFECTIVENESS ANALYSIS Cost effectiveness analysis seeks the best ratio of benefits and costs. For example finding the least costly way of reaching objectiveness is a technique for choosing the best plan. SELECTING AN ALTERNATIVE During the selection among the alternatives, managers can use three basic approaches (1) Experience (2) Experimentations (3) research and analysis. Experimentation

Reliance on past

How to select from among alternatives. Research and analysis

Choice made

Bases for selecting from among alternatives

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EXPERIENCE Reliance on past experience plays a larger part in decision making to some extent, experience is the best teacher. The very fact that managers have reached there position appears to justify their past decisions. Moreover, the process of thinking problems through making decisions and seeing programs succeed or fail. EXPERIMENTATION One way of deciding among alternatives is to try one of them and see what happens. Experimentation is often used in scientific theory. The experimental technique can be most expensive, especially if a program requires heavy expenditures firm cannot afford to attempt several alternatives. RESEARCH AND ANALYSIS One of the most effective techniques for selecting from alternatives is research and analysis of decisions. This approach means solving problems by first comparing it. It is pencil and paper approach to decision making POLICY A policy is typically described as a principle or rule to guide decisions and achieve rational outcome(s). The term is not normally used to denote what is actually done, this is normally referred to as either procedure[1] or protocol. Whereas a policy will contain the 'what' and the 'why', procedures or protocols contain the 'what', the 'how', the 'where', and the 'when'. Policies are generally adopted by the Board of or senior governance body within an organization where as procedures or protocols would be developed and adopted by senior executive officers.

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A Policy can be considered as a "Statement of Intent" or a "Commitment". For that reason at least, we can be held accountable for our "Policy" The term may apply to government, private sector organizations and groups, and individuals. Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all examples of policy. Policy differs from rules or law. While law can compel or prohibit behaviors (e.g. a law requiring the payment of taxes on income), policy merely guides actions toward those that are most likely to achieve a desired outcome. Policy or policy study may also refer to the process of making important organizational decisions, including the identification of different alternatives such as programs or spending priorities, and choosing among them on the basis of the impact they will have. Policies can be understood as political, management, financial, and administrative mechanisms arranged to reach explicit goals. Distributive policies Distributive policies extend goods and services to members of an organization, as well as distributing the costs of the goods/services amongst the members of the organization. Examples include government policies that impact spending for welfare, public education,highways, and public safety, or a professional organization's benefits plan. Regulatory policies Regulatory policies, or mandates, limit the discretion of individuals and agencies, or otherwise compel certain types of behavior. These policies are generally thought to be best applied when good behavior can be easily defined and bad behavior can be easily regulated and punished through fines or sanctions. An example of a fairly successful public regulatory policy is that of a speed limit.
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Constituent policies Constituent policies create executive power entities, or deal with laws. Constituent policies also deal with Fiscal Policy in some circumstances.[citation needed] Miscellaneous policies Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints have to be implemented, often with unexpected results. Social policies are what happens 'on the ground' when they are implemented, as well as what happens at the decision making or legislative stage. When the term policy is used, it may also refer to:

Official government policy (legislation or guidelines that govern how laws should be put into operation)

Broad ideas and goals in political manifestos and pamphlets A company or organization's policy on a particular topic. For example, the equal opportunity policy of a company shows that the company aims to treat all its staff equally.

The actions the organization actually takes may often vary significantly from stated policy. This difference is sometimes caused by political compromise over policy, while in other situations it is caused by lack of policy implementation and enforcement. Implementing policy may have unexpected results, stemming from a policy whose reach extends further than the problem it was originally crafted to address. Additionally, unpredictable results may arise from selective or idiosyncratic enforcement of policy.[citation needed]

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Types of policy analysis include:

Causal (resp. non-causal) Deterministic (resp. stochastic, randomized and sometimes non-deterministic) Index Memoryless (e.g. non-stationary) Opportunistic (resp. non-opportunistic) Stationary (resp. non-stationary)

These qualifiers can be combined, so for example you could have a stationary-memoryless-index policy. Types

Company Policy Communications and Information Policy Human resource policies Privacy policy Public policy

Defense policy Domestic policy Economic policy Education policy

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Energy policy Environmental Policy Foreign policy Health policy Housing policy Information policy Macroeconomic policy Monetary policy Population policy Public policy in law Science policy Social policy Transportation policy Urban policy Water policy

STRATEGY: "Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs ofmarkets and to fulfil stakeholder expectations".
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Strategy at Different Levels of a Business Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it. Corporate Strategy - is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement". Business Unit Strategy - is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. Operational Strategy - is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc. How Strategy is Managed - Strategic Management In its broadest sense, strategic management is about taking "strategic decisions" decisions that answer the questions above. In practice, a thorough strategic management process has three main components, shown in the figure below:

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Strategic Analysis This is all about the analysing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including

UNIT - III ORGANISING ACCORDING TO SHELDON "Organization is the process of so combining the work which individuals or groups have to perform with facilities necessary for its execution, that the duties so performed provide the best channels for efficient, systematic, positive and coordinated application of available effort." In the words of Chester I Bernard, "Organization is a system of co-operative activities of two or more persons."
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MC FERLAND HAS DEFINED Organisation as, "an identifiable group of people contributing their efforts towards the attainment of goals". ACCORDING TO LOUIS A ALLEN, "Organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing Relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. ACCORDING TO NORTH WHITEHEAD Organisation is the adjustment of diverse elements, so that their mutual relationship may exhibit more pre-determined quality. IN THE WORDS OF THEO HAIMANN Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organizing function, the manager defines, departmentalizes and assigns activities so that they can be most effectively executed. IN THE WORDS OF MOONEY AND RAILEY, "Organisation is the form of every human association for the attainment of a common purpose. THE NATURE AND PURPOSE OF ORGANIZING It is often said that good people can make any organization pattern work. Some even assert that vagueness in organization is a good thing in that it forces teamwork, since people know that they must cooperate to get anything done. However, there can be no doubt that good people and those
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who want to cooperate will work together most effectively if they know the roles they are to play in any team operation and the way their roles relate to one another. This is as true in business or government as it is in football or in a symphony orchestra. Designing and maintaining these systems of roles is basically the managerial function of organizing. For an organizational role to exist and be meaningful to people, it must incorporate (1) Verifiable objectives, which, as indicated in part, are a major part of planning; (2) a clear idea of the major duties or activities involved, and (3) An understood area of discretion or authority so that the person filling the role knows what he or she can do to accomplish goals. In addition, to make a role work out effectively, provision should be made for supplying needed information and other tools necessary for performance in that role. It is in this sense that we think of organizing as (1) the identification and classification of required activities, (2) the grouping of activities necessary to attain objectives, (3) the assignment of each grouping to a manager with the authority (delegation) necessary to supervise it, and (4) the provision for coordination horizontally (on the same or similar organizational level) and vertically (e.g. corporate headquarters, division, and department) in the organization structure. An organization structure should be designed to clarify who is to do what tasks and who is responsible for what results, to remove obstacles to performance caused by confusion and uncertainty of assignment, and to furnish decision-making and communication networks reflecting and supporting enterprise objectives. Organization is a word many people use loosely. Some would say it includes all the behavior of all participants. Others would equate it with the total system of social and cultural relationships.
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Still others refer to an enterprise, such as the United States Steel Corporation or the Department of Defense, as an organization. But for most practicing managers, the term organization implies a formalized intentional structure of roles or positions. In this article the term is generally used in reference to a formalized structure of roles, although it is sometimes used to denote an enterprise. What does intentional structure of roles mean? In the first place, as already implied in defining the nature and content of organizational roles, people working together must fill certain roles. In the second place, the roles people are asked to fill should be intentionally designed to ensure that required activities are done and that activities fit together so that people can work smoothly, effectively, and efficiently in groups. Certainly most managers believe they are organizing when they establish such an intentional structure. ORGANIZATIONAL THEORIES There are several theories which explain the organization and its structure Classical organization theory includes the scientific management approach, Weber's bureaucratic

approach, and administrative theory. The scientific management approach is based on the concept of planning of work to achieve efficiency, standardization, specialization and simplification. The approach to increased productivity is through mutual trust between management and workers. Taylor (1947) proposed four principles of scientific management: science, not rule-of-thumb; scientific selection of the worker; management and labour cooperation rather than conflict; and scientific training of workers. Classical organization theory Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal organization and concepts to increase management efficiency. Taylor presented scientific management concepts, Weber gave the bureaucratic approach, and Fayol developed the administrative theory of the organization. They all contributed significantly to the development of classical organization theory.
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Taylor's scientific management approach The scientific management approach developed by Taylor is based on the concept of planning of work to achieve efficiency, standardization, specialization and simplification. Acknowledging that the approach to increased productivity was through mutual trust between management and workers, Taylor suggested that, to increase this level of trust, the advantages of productivity improvement should go to workers, physical stress and anxiety should be eliminated as much as possible, capabilities of workers should be developed through training, and the traditional 'boss' concept should be eliminated. Taylor developed the following four principles of scientific management for improving productivity: Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach to each element of a person's work. Scientific selection of the worker Organizational members should be selected based on some analysis, and then trained, taught and developed. Management and labour cooperation rather than conflict Management should collaborate with all organizational members so that all work can be done in conformity with the scientific principles developed. Scientific training of the worker Workers should be trained by experts, using scientific methods. Weber's bureaucratic approach Considering the organization as a segment of broader society, Weber (1947) based the concept of the formal organization on the following principles: Structure In the organization, positions should be arranged in a hierarchy, each with a particular, established amount of responsibility and authority. Specialization Tasks should be distinguished on a functional basis, and then separated according to specialization, each having a separate chain of command. Predictability and stability The organization should operate according to a system of procedures consisting of formal rules and regulations. Rationality Recruitment and selection of personnel should be impartial.

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 Democracy Responsibility and authority should be recognized by designations and not by persons. Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity, impersonality, displacement of objectives, limitation of categorization, self-perpetuation and empire building, cost of controls, and anxiety to improve status. Administrative theory The elements of administrative theory (Fayol, 1949) relate to accomplishment of tasks, and include principles of management, the concept of line and staff, committees and functions of management. Division of work or specialization This increases productivity in both technical and managerial work. Authority and responsibility These are imperative for an organizational member to accomplish the organizational objectives. Discipline Members of the organization should honour the objectives of the organization. They should also comply with the rules and regulations of the organization. Unity of command This means taking orders from and being responsible to only one superior. Unity of direction Members of the organization should jointly work toward the same goals. Subordination of individual interest to general interest The interest of the organization should not become subservient to individual interests or the interest of a group of employees. Remuneration of personnel This can be based on diverse factors such as time, job, piece rates, bonuses, profit-sharing or non-financial rewards. Centralization Management should use an appropriate blend of both centralization and decentralization of authority and decision making. Scalar chain If two members who are on the same level of hierarchy have to work together to accomplish a project, they need not follow the hierarchy level, but can interact with each other on a 'gang plank' if acceptable to the higher officials. Order The organization has a place for everything and everyone who ought to be so engaged. Equity Fairness, justice and equity should prevail in the organization. Stability of tenure of personnel Job security improves performance. An employee requires some time to get used to new work and do it well.
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 Initiative This should be encouraged and stimulated. Esprit de corps Pride, allegiance and a sense of belonging are essential for good performance. Union is strength. The concept of line and staff The concept of line and staff is relevant in organizations which are large and require specialization of skill to achieve organizational goals. Line personnel are those who work directly to achieve organizational goals. Staff personnel include those whose basic function is to support and help line personnel. Committees Committees are part of the organization. Members from the same or different hierarchical levels from different departments can form committees around a common goal. They can be given different functions, such as managerial, decision making, recommending or policy formulation. Committees can take diverse forms, such as boards, commissions, task groups or ad hoc committees. Committees can be further divided according to their functions. In agricultural research organizations, committees are formed for research, staff evaluation or even allocation of land for experiments. Functions of management Fayol (1949) considered management as a set of planning, organizing, training, commanding and coordinating functions. Gulick and Urwick (1937) also considered organization in terms of management functions such as planning, organizing, staffing, directing, coordinating, reporting and budgeting. Neoclassical theory Neoclassical theorists recognized the importance of individual or group behaviour and emphasized human relations. Based on the Hawthorne experiments, the neoclassical approach emphasized social or human relationships among the operators, researchers and supervisors (Roethlisberger and Dickson, 1943). It was argued that these considerations were more consequential in determining productivity than mere changes in working conditions. Productivity increases were achieved as a result of high morale, which was influenced by the amount of individual, personal and intimate attention workers received. Principles of the neoclassical approach The classical approach stressed the formal organization. It was mechanistic and ignored major aspects of human nature. In contrast, the neoclassical approach introduced an informal organization structure and emphasized the following principles: The individual An individual is not a mechanical tool but a distinct social being, with aspirations beyond mere fulfilment of a few economic and security works. Individuals differ from each other in pursuing these desires. Thus, an individual should be recognized as interacting with social and economic factors.

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 The work group The neoclassical approach highlighted the social facets of work groups or informal organizations that operate within a formal organization. The concept of 'group' and its synergistic benefits were considered important. Participative management Participative management or decision making permits workers to participate in the decision making process. This was a new form of management to ensure increases in productivity. Note the difference between Taylor's 'scientific management' - which focuses on work - and the neoclassical approach - which focuses on workers. Modern theories Modern theories tend to be based on the concept that the organization is a system which has to adapt to changes in its environment. In modern theory, an organization is defined as a designed and structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The contemporary approach to the organization is multidisciplinary, as many scientists from different fields have contributed to its development, emphasizing the dynamic nature of communication and importance of integration of individual and organizational interests. These were subsequently re-emphasized by Bernard (1938) who gave the first modern and comprehensive view of management. Subsequently, conclusions on systems control gave insight into application of cybernetics. The operation research approach was suggested in 1940. It utilized the contributions of several disciplines in problem solving. Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems theory which is accepted as a basic premise of modern theory. Some of the notable characteristics of the modern approaches to the organization are: a systems viewpoint, a dynamic process of interaction, multilevelled and multidimensional, multimotivated, probabilistic, multidisciplinary, descriptive, multivariable, and adaptive. Modern understandings of the organization can be broadly classified into: the systems approach, socio-technical theory, and a contingency or situational approach.

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The systems approach The systems approach views organization as a system composed of interconnected - and thus mutually dependent - sub-systems. These sub-systems can have their own sub-sub-systems. A system can be perceived as composed of some components, functions and processes (Albrecht, 1983). Thus, the organization consists of the following three basic elements (Bakke, 1959): (i) Components There are five basic, interdependent parts of the organizing system, namely: the individual, the formal and informal organization, patterns of behaviour emerging from role demands of the organization, role comprehension of the individual, and the physical environment in which individuals work. (ii) Linking processes The different components of an organization are required to operate in an organized and correlated manner. The interaction between them is contingent upon the linking processes, which consist of communication, balance and decision making. Communication is a means for eliciting action, exerting control and effecting coordination to link decision centres in the system in a composite form. Balance is the equilibrium between different parts of the system so that they keep a harmoniously structured relationship with one another. Decision analysis is also considered to be a linking process in the systems approach. Decisions may be to produce or participate in the system. Decision to produce depends upon the attitude of the individual and the demands of the organization. Decision to participate refers to the individual's decisions to engross themselves in the organization process. That depends on what they get and what they are expected to do in participative decision making. (iii) Goals of organization The goals of an organization may be growth, stability and interaction. Interaction implies how best the members of an organization can interact with one another to their mutual advantage. Socio-technical approach It is not just job enlargement and enrichment which is important, but also transforming technology into a meaningful tool in the hands of the users. The socio-technical systems approach is based on the premise that every organization consists of the people, the technical system and the environment (Pasmore, 1988). People (the social system) use tools, techniques and knowledge (the technical system) to produce goods or services valued by consumers or users (who are part of the organization's external environment). Therefore, an equilibrium among the social system, the technical system and the environment is necessary to make the organization more effective.
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ORGANIZATION STRUCTURE

president

Manager Purchases

Manager Finance

Manager Production

Manager

Sales

Dept by process Heat treatment

section

welding section

Assembling section

finishing

ADVANTAGES 1- It simplifies training. 2- Achieve economic advantage. 3- Uses specialized technology. DISADVANTAGES 1- Coordination of departments is difficult. 2- Responsibility for profit is at the top. 7- DEPARTMENTATION BY PRODUCT This type of departmentation used in organization where more than one product is producing. In this department all the sources and authority are placed under the control of one manager.Departmentlization by product assembles all functions needed to make and market a particular product are placed under one executive. For instance, major department stores are structured around product groups such as home accessories, appliances womans clothing, mens clothing and children clothing.

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SPAN OF CONTROL (1) Span of control refers to the number of immediate subordinate who report a manager. (2) Different level of organization level is also called span of control. FACTORS DETERMINING AN EFFECTIVE SPAN There are several factors which influence the span of management. 1- TRAINING OF SUBORDINATES The better training of subordinates increases the necessary superior subordinates relationship. Well trained subordinates require less time of their managers also they have less contact with their managers. Training programs increase in new and more complex industries. 2-CLARITY OF DELEGATION OF AUTHORITY Although training enables managers to reduce the frequency of time consuming contact but delegation of authority should be clear. If a manager clearly delegates authority to task with a minimum of the managers time and attention. But if a manager delegates authority unclearly than subordinate give his maximum. 3-CLARITY OF PLANS If plans are well defined if they are workable, if the delegation of authority toward plan is clear, if the subordinate understands what expected than little of a supervisor time will be required on the other hand if plan cannot be drawn accurately and subordinates do much of their own planning, they may require considerable guidance. 4- USE OF OBJECTIVE STANDARD A manager must find out, either by personal observation or through the use of objective standards, whether subordinates are following plans. Obviously, good objective standards enable managers to avoid many time consuming contact. 5- RATE OF CHANGE

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Certain enter rises change much more rapidly than others. The rate of change is very important in formulating and maintaining policies. It may explain the organization structure of companys railroad, banking and public utility companies. 6- COMMUNICATION TECNIQUES Communication techniques also influence the span of management. If every plan, instruction, order or direction has to be communicated by personal contact than managers time will be heavily burdened. An ability to communicate plans and instructions clearly and concisely also tends to increase a managers span. 7- AMOUNT OF PERSONAL CONTACT NEEDED Many instances, face to face meetings are necessary. Many situations cannot be completely policy statements planning documents or other communications that do not involves personal contact. An executive may and valuable informations by meeting to subordinates and by discuss problems with them. Some problems can be handled only in face to face meeting so the best way of communicating problems, instructor, and subordinates is to spend time in personal contact. 8- VARIATION BY ORGANIZATION LEVEL Several research projects have found that the size of the most effective span differs by organizational level. For example, it was studied that when a greater number of specialties were supervised, effective spans were narrower at lower and middle levels of organization but were increased at upper levels. 9- COMPETENCY OF MANAGERS A manager who is competent and well trained can effectively supervise more people than who is not. 10- MATURITY AND MOTIVATION OF SUBORDINATES The more mature subordinates may delegate more authority, thus widening the span.

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TABLE: - FACTORS INFLUCING THE SPAN OF CONTROL NARRO SPAN RELATED TO: WIDE SPAN RELATED TO: 1-little or no training. 1-through training of subordinate. 2-unclear authority, delegation. 2-Clear delegation of authority. 3-nonverefiyable objectives & standard. 3-Will define plans. 4-fast changes in external and internal environment. 4-Slow changes in external and eternal 5-use of communication techniques. Environment 6-ineffectiv interrogation of superior and subordinate.5-use of appropriate techniques such as written, 7-greater number of specialization at lower and oral communication. 6effetive interaction between superior & Middle level. superiors. 8-Infactive meetings. 7-Number of specialist at upper levels. 9-Incompletent & untrained managers. 8-Effective meetings. 10-Complex task. 9-Competent & train managers. 11-Imature subordinate. 10-Simple task. 11-mature subordinates.

LINE & STAFF CONCEPT

LINE AUTHORITY
Line authority gives a superior a line of authority over subordinates. It exists in all organizations. Line authority can also be defined as the superior subordinate authority relationship where by a superior makes decision and tells them to a subordinate who is turn makes decision and tells to his subordinates and on from a line from top to low level of organization structure. This line of authority is known as line of authority. It is directly from superior to his subordinate.

LINE AUTHORITY CHAIN OF COMMAND

President Voice President Supervisor Employee
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STAFF CONCEPT The nature of the staff relationship is advisory. The function of people in pure staff capacity is to investigate research and give advice to line managers. In other words, staff functions are those that help the line persons work more effectively in accomplishing the objectives. PRESIDENT

Voice president

Director research

Director Production

Director public relation

Voice President

Manager Accountin g

Manager Cash control

Manager Purchasin

Manager Factory

Manager Personnel

Manager domestic sales

Manager Advertisig

Manager foreign sale

Supervisor Production Control

Supervisor Parts Production

Chief Assembling

Chief maintenance

LINE & STAFF ORGANIZATION OF A TYPICAL NATURE OF LINE & STAFF CONCEPT Line authority gives a superior a line of a authority over a subordinate. Line authority is that relationship in which superior exercises direct supervision over a subordinate. On the other hand the nature of the staff relationship is advisory. The function of a person in staff capacity is to investigate research and give advice to line manager.

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BENEFITS OF STAFF Provide highly specialized knowledge indifferent areas, i-e- economics, technical, legal etc. 2. Specialist staff avails lines to analysis collected data and make advice for managers. 3. Staff analysis and advices help in resolving problems arrised during process WEAKNESSES OF STAFF 1. Danger of understanding line authority. 2. Lake of staff responsibility. Thinking in a vacuum 1. Managerial problems

DELEGATION OF AUTHORITY Delegation is necessary for an organization to exist. Authority is delegated when a superior gives a subordinate discretion to make decision. Clearly , supervisors cannot delegate authority they do not have ,whether they are board members, Presidents, Voice Presidents or superiors. The process of delegation involves. 1. Determining the results expected from a position. 2. Assigning tasks to the positions. 3. Delegating authority to accomplishment of the tasks. 4. Holding the persons in that position responsible for the accomplishing meat of the tasks. 5. Authority is delegate from higher level to lower level.

STEPS IN DELEGATING SPLINTERERD AUTHORITY Splintered authority exits whenever a problem cannot solve. In day to day operations of any company. There are many cases of splintered authority. Many Managerial Conferences are held because of the necessity of splintered authority to make decisions. RECOVERY OF DELEATED AUTHORITY A manager who delegates authority does not permanently dispose of it , delegated authority can always be regained. Re organization involves reorganization, rights are recovered by the

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responsible head of the firm or a departments, to head of a new department may receive authority formally held by other Managers. THE ART OF DELEGATIONOF AUTHORITY The most failure in effective delegation occurs not because Manager does not understand the nature and principles of delegation because they are unable to apply them. There are many reasons for poor delegation. PERSONAL ATTITUDE TOWARD DELEGATION There are many kinds of personal attitudes which cause poor delegation of authority so Managers should fallow these steps. 1- RESPECTIVENESS Decision making always involves some discretion and a subordinates decision is not likely to be exactly the one superior would have made the manager who known how to delegate must be able to help other and to compliment on their ingenuity. 2- WILLINGNESS TO LET GO A manager who will effectively delegate authority must be willing to release the right to make decisions to subordinates. A major fault of some managers is that they want to continue to make decisions for the positions they have left. Corporate president and vice presidents who insist on confirming every purchase do not realize that doing so takes their time and attention away from more important decisions. 3- WILLINGNESS TO LET OTHER MAKE MISTAKES Since every one makes mistakes, a subordinate must be allowed to make some, and their cost must be considered an investment in personal development serious or repeated mistakes can be largely avoided without multifying delegation. 4- WILLINGNESS TO TRUST SUBORDINATES Superiors have no alternative to trusting their subordinates; for delegation implies a trustful attitude among them. A superior may put off delegation will the thought that subordinates have not yet experienced enough, they cannot handle people, they have not developed Judgment etc. Sometimes these considerations are true but then a superior or should either train subordinates or else select others who are prepared to assume the responsibility.

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5- WILLINGNESS TO ESTABLISH AND USE BROAD CONTROLS Superiors should not delegate authority unless they are willing to find means of getting feed back. Obviously, controls cannot goals, policies and plans are used as basic standard for judging the activities of subordinates. GUIDES FOR OVERCOMING WEAK DELEGATION The following guide can overcome weak delegation. 1- Define assignments and delegate authority in the light of results expected. 2- Select the person in light of the job to be done. 3Maintain open lines of communication. 4- Establish proper control. 5- Reward effective delegation and successful assumption of authority

UNIT - IV DIRECTING

Directing : Meaning and Definition Directing as a function of management is concerned with instructing, guiding and inspiring people in the organization to achieve its objectives. It involves overseeing people at work, making provision for the necessary facilities and creating a work environment, whereby employees may perform to the best of their abilities. It consists of issuing orders and instructions by a superior to his subordinates. It also includes the process of m9otivation subordinates and providing leadership with an understanding of their hopes, beliefs and behavior pattern. Through the directing function managers bring about a balance between individual interests of employees and the interests of the organization as a whole. Directing is a function of all managers of the organization. It is an ongoing activity of managers. According to William Newman and E. Kirby Warren, Directing deals with the steps a manager takes to get subordinates and others to carry out plans. According to Koontz and ODonnel, Direction is a complex function that includes all those activities which are designed to encourage subordinates to work effectively and efficiently in both the short and long run. Characteristics of Direction The following characteristics emerge from the above definitions of Direction:
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(1) (2) (3) (4)

(5)

Direction is managerial function performed by all the managers at all levels of the organization. Through directions management initiates actions in the organization. Direction is a continuing function; it continues throughout the life of the organization. Direction initiates at the top level in the organization and follows to bottom through the hierarchy. It emphasizes that subordinate is to be directed by him own superior only. Direction kills two birds with the same stone; on the one hand, it activises the subordinates to do things as originally planned and on the other, it provides opportunities before the superiors to do some more important work which their subordinates cannot do.

DEFINING LEADERSHIP Leadership has different meanings by different authors. Leadership is influence. Leadership is the art or process of influencing people so that they will contribute willingly. And whole hardly toward the achievement of group goals. Ideally. People should be encouraged to develop not only zeal and confidence. Zeal is intensity in the execution of works; Confidence reflects experience and technical ability. Leaders help a group to attain objectives through the maximum application of its capabilities. They do not stand behind a group but they inspire the group to accomplish organizational goals. A good example is an orchestra leader, whose function is to produce coordinated sound and correct tempo through the integrated efforts of the musicians. Depended on the quality of directors leadership, the orchestra will respond. Leadership is a great quality and it can create and convert anything. There are many definitions of leadership. Some of the definitions of leadership are reproduced below:"LEADERSHIP" ACCORDING TO ALFORD AND BEATTY "is the ability to secure desirable actions from a group of followers voluntarily, without the use of coercion". ACCORDING TO CHESTER I BARNARD "It (leadership) refers to the quality of the behavior of the individual whereby they guide people on their activities in organized efforts".

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ACCORDING TO TERRY "a leader shows the way by his own example. He is not a pusher, he pulls rather than pushes". ACCORDING TO KOONTZ AND O'DONNELL Managerial leadership is "the ability to exert interpersonal influence by means of communication, towards the achievement of a goal. Since managers get things done through people, their success depends, to a considerable extent upon their ability to provide leadership". In the words of R.T. Livingston - Leadership is "the ability to awaken in others the desire to follow a common objective". ACCORDING TO PETER DRUCKER Leadership "is not making friends and influencing people i.e., salesmanship. Leadership is the lifting of man's vision to higher sights, the raising of man's performance to higher standards, the building of man's personality beyond its normal limitations". INGREDIENTS OF LEADERSHIP Every group of people that performs job has same person as its head who is skilled in art of leadership. This skill seems to be a compound at least four major ingredients. 1. Power 2. Fundamental understanding of people. 3. Ability to inspire fowler 4. The ability to act in a manner That will develop a conducive climate to responding and rousing motivations. 1. POWER The first ingredient of leadership is power. Power may be define as a strong influence on the direction of an individuals behavior. There are five kind of power. 1. LEGITMATE POWER The official position of a person is organization is known as legitimate power. 2. COERECTIVE POWER A persons ability to create fear in other individuals is known as coercive power.

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3. REWARD POWER This power arises from ability of some to grant reward is known as reward power. 4. EXPERT POWER This power comes from the expertness of a person or a group. 5. REFERENT POWER This is the power of admiring high esteemed leader by individuals. 6. DECISION MAKING POWER This power arises from the power of positions. 2- FUNDAMENTL UNDERSTANDING F PEOPLE The second ingredient of leadership is fundamental understanding of people. A manager or any other leader who knows the present state of motivation theory and understands the elements of motivation is more aware of the nature and strength to define and design ways satisfaction. 3- ABILITY TO INSPIRE FALLOWERS The third ingredient of leadership is an ability to inspire followers to apply their full capabilities to a project. Inspirations also come from group heads. They may have qualities of charm and appeal that increase loyalty, deviation and strong desire in followers that the leaders want. This is not a matter of need satisfaction; it is a matter of people giving unselfish support to a chosen objective.

Motivation & Motivators: Motivation:

Motivation is a general term applying to the entire class of drives, desire needs similar forces. To say that managers motivate their subordinates is to say that they do those things which they hope will satisfy these drives and desire and induce the subordinates to act in a desired manner.

THE NEED WANT SATISFACTION CHAIN:

Motivation can be explain by a chain reaction: Felt needs give rise to want or goal sought which cause tensions (that is unfulfilled desired), which give rise to action toward achieving goals which finally result in satisfaction. This chain can be explained by figure.
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Needs want- satisfaction chain Needs Give Rise to Wants Which cause Tension

Give Rise to

Action

Which result in

Satisfaction

The chain explanation is complex. In the first place, except for physiological needs, such as food, need are not independent of person's environment. Many physiological needs are stimulated by environmental factors the small of food may cause hunger, a lower thermometer reaching may cause chills. Environment has a major influence on our perception of secondary needs. The promotion of a colleague may arouse one's desire for higher position. In second place, the need want satisfaction chain does not always operate as simply as portrayed. Needs do cause behavior but needs also may result from behavior. Satisfying one deed may lead to a desire to satisfy more needs. COMPLEXITY OF MOTIVATIONS: In individuals motives maybe quite complex and often conflicting. A person maybe motivated by a desire for economy goods and services (a better house, a new car or a trip and these desires may be complex and conflicting. Should one buy a new house or a new car?) Motivators are things that induce an individual to perform motivators sharpen the drive or need to satisfy wants. Motivators are also the means by which conflicting needs may be reconciled. A manager can do much to sharpen motive by establishing an environment. So the motivator is some thing that influences an individuals behavior. In any organization are any enterprise, managers must be concerned about motivators, and also inventive in their use. People can often satisfy their wants in a variety of ways. SPECIAL MOTIVATIONAL TECHNIQUES: There are many motivational techniques: 1: Money: Money is important in form of wages, prince work, stock options, bonuses, company paid, insurance etc. Many are often more then monetary value. It can also mean status or power.
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Tended to place money high on the scale of motivators or an high scare of motivators, while behavioral scientists tends to place it on low sale. But if money is to be kind of motivator then managers must remember several things. First, money, as money is likely to be more important to people who are raising and family. Second, it is quite true that in most kinds of business and other enterprises, money is used as mean of keeping an organization staffed. Third money becomes dull if salaries of many managers in a company are similar. Fourth, if is to be an effective motivator, people in various positions must be given salaries and bonuses that reflect their individual performance. It is almost certainly true the money can motivate only if payment is large relative to persons income. What Makes A Good Leader? Although there are some generic leadership qualities that all leaders need to develop, the leadership qualities that are required to make a good leader can vary in different companies, teams and situations. This can be illustrated in both art and modern leadership models. For example, the fact thatleadership qualities are dependent on context is demonstrated in the play The Admirable Crichton and the film Twelve O'Clock High. In "The Admirable Crichton", written in 1902, the Lord and butler swap their roles as leader and servant as the situation changes. On a desert island, the butler's practical skills are essential for survival, whereas the Lord's knowledge of English politics is of no value. In the film "Twelve O'Clock High", produced in 1949, as a squadron starts to suffer increasing losses during the war, the leader's people-oriented approach starts to fail. He is replaced by a dictatorial bully who turns the squadron round and restores their pride (in a modern setting, such leadership behaviour would often be regarded as unacceptable). Leadership Styles In theory, the ideal scenario is for a leader to have infinite flexibility. That means you are able to adapt your leadership style according to the situation and/or the state of the team - eg: to be an executive leader when a team is Forming but to be aparticipative leader when a team is
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Performing (the different leadership styles for different situations are described on ourleadership styles page). This need to change one's leadership style according to the circumstances is one of the fundamental principles underlying popular models such as Situational Leadership (develop by Blanchard and Hersey in the late 1960s). However, modern leadership theory has begun to realise that the perfect, flexible leader does not exist. Everyone has strengths and weakness, and there is a need to strike a balance using the individual's preferred styles and meeting the needs of the situation. The modern goal is to develop 'good enough' leadership. Perspective How you look to develop leadership qualities will depend on whether you are looking at the subject from the perspective of an organisation or an individual. The former is driven by need, the latter by talent. Organisations need leaders who will support the organisational culture and aims. For them, therefore, leadership development involves:

identifying the leadership characteristics and/or profile of people who will enhance organisational performance

selecting/recruiting individuals whose character, skills and potential closely match that profile

developing the particular skills/abilities within those individuals so they can fulfil their leadership potential within the organisation

For example, leadership in the emergency services requires strong executive and management skills. However, if you, as an individual, are seeking to develop into a position of leadership then you need to build on your own natural talents - trying to be a type of leader that is unnatural for you can lead to stress, executive burnout and poor performance. That is, you need to:

discover your natural leadership style and qualities develop those qualities into tangible skills

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find a role or organisation that matches your leadership talents, where what you have to offer will be valued

For example, leadership in a sports team requires physical fitness, sporting prowess and the ability to lead by example. Definition of Morale

Morale or esprit de corps is an intangible that refers to the ability of a group of people to maintain confidence in an institution, goal or practice. If a specific group---which can be as large as a nation or the employees of a company, to as small as a neighborhood or family---has faith it is moving in the right direction, then morale is said to be high or good. If the group begins to losing faith, that is when morale becomes low or bad. Morale is not related to "morality" or knowing the difference between right and wrong.

INCENTIVES FOR MOTIVATION Incentive is an act or promise for greater action. It is also called as a stimulus to greater action. Incentives are something which are given in addition to wagers. It means additional remuneration or benefit to an employee in recognition of achievement or better work. Incentives provide a spur or zeal in the employees for better performance. It is a natural thing that nobody acts without a purpose behind. Therefore, a hope for a reward is a powerful incentive to motivate employees. Besides monetary incentive, there are some other stimuli which can drive a person to better. This will include job satisfaction, job security, job promotion, and pride for accomplishment. Therefore, incentives really can sometimes work to accomplish the goals of a concern. The need of incentives can be many:1. To increase productivity, 2. To drive or arouse a stimulus work, 3. To enhance commitment in work performance, 4. To psychologically satisfy a person which leads to job satisfaction, 5. To shape the behavior or outlook of subordinate towards work,

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6. To inculcate zeal and enthusiasm towards work, 7. To get the maximum of their capabilities so that they are exploited and utilized maximally. Therefore, management has to offer the following two categories of incentives to motivate employees:1. Monetary incentives- Those incentives which satisfy the subordinates by providing them rewards in terms of rupees. Money has been recognized as a chief source of satisfying the needs of people. Money is also helpful to satisfy the social needs by possessing various material items. Therefore, money not only satisfies psychological needs but also the security and social needs. Therefore, in many factories, various wage plans and bonus schemes are introduced to motivate and stimulate the people to work. 2. Non-monetary incentives- Besides the monetary incentives, there are certain nonfinancial incentives which can satisfy the ego and self- actualization needs of employees. The incentives which cannot be measured in terms of money are under the category of Non- monetary incentives. Whenever a manager has to satisfy the psychological needs of the subordinates, he makes use of non-financial incentives. Non- financial incentives can be of the following types:a. Security of service- Job security is an incentive which provides great motivation to employees. If his job is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps since he is very far off from mental tension and he can give his best to the enterprise. b. Praise or recognition- The praise or recognition is another non- financial incentive which satisfies the ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The employees will respond more to praise and try to give the best of their abilities to a concern. c. Suggestion scheme- The organization should look forward to taking suggestions and inviting suggestion schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be done by publishing various articles
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written by employees to improve the work environment which can be published in various magazines of the company. This also is helpful to motivate the employees to feel important and they can also be in search for innovative methods which can be applied for better work methods. This ultimately helps in growing a concern and adapting new methods of operations. d. Job enrichment- Job enrichment is another non- monetary incentive in which the job of a worker can be enriched. This can be done by increasing his responsibilities, giving him an important designation, increasing the content and nature of the work. This way efficient worker can get challenging jobs in which they can prove their worth. This also helps in the greatest motivation of the efficient employees. e. Promotion opportunities- Promotion is an effective tool to increase the spirit to work in a concern. If the employees are provided opportunities for the advancement and growth, they feel satisfied and contented and they become more committed to the organization. The above non- financial tools can be framed effectively by giving due concentration to the role of employees. A combination of financial and non- financial incentives help together in bringing motivation and zeal to work in a concern. Positive Incentives Positive incentives are those incentives which provide a positive assurance for fulfilling the needs and wants. Positive incentives generally have an optimistic attitude behind and they are generally given to satisfy the psychological requirements of employees. For example-promotion, praise, recognition, perks and allowances, etc. It is positive by nature. Negative Incentives Negative incentives are those whose purpose is to correct the mistakes or defaults of employees. The purpose is to rectify mistakes in order to get effective results. Negative incentive is generally resorted to when positive incentive does not works and a psychological set back has to be given to employees. It is

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negative by nature. For example- demotion, transfer, fines, penalties.

Techniques of Coordination in an Organization Coordination within an organization is critical to that organization's success. If information does not have a smooth way of traveling between the various parts of the company, then important data can be lost and productivity suffers as the data must be recovered. Taking the time to develop good coordination techniques within your organization can make projects run smoother, improve productivity and it can also help add more profit to the company's bottom line. 1. Hierarchy
o

One of the overriding coordination strategies in any organization is a hierarchy. When there is a recognized hierarchy in place, the members know who is in charge, and how far up the corporate ladder information needs to travel. Respecting a corporate hierarchy means that employees know how to address issues that may arise with their immediate supervisor or departmental manager. Allowing employees to use the company hierarchy to help deal with managerial issues within their own department can help the company to evaluate managers and executives that are ineffective.

By Department
o

Autonomy is very important within any organization, and the structure of a department becomes one of the more critical coordination strategies the company will have. Each department is assigned various tasks they are responsible for, and in order for the company to succeed, those departments must work towards executing their responsibilities. A good departmental manager knows how to coordinate his department's activities and make sure that there is open communication among everyone within his group.

The departmental coordination method feeds directly into the hierarchy discussion in the previous section, as each departmental manager becomes the spokesperson for her department, and they use the hierarchy within the company to resolve issues and work together to improve productivity.

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By Responsibility
o

Sometimes a coordination effort must be done based on someone's individual responsibilities. For example, there may be a departmental secretary in each department that can request checks for payments but only one person in the company is actually allowed to cut those checks. Coordinating tasks based on individual responsibility can allow the more important daily activities to run smoother. When everyone in the company knows which person is responsible for something, it is much easier to get that activity completed in a timely manner.

UNIT - V CONTROLLING The objectives and process of control

THE SYSTEM &PROCESS OF CONTROLLING DEFINATIONS There are many definitions of controlling. 1. Controlling is the process of determining what is being accomplished. 2. Controlling is evaluating the performance and if necessary applying corrective measures so that the performance takes place according to plans. 3. Controlling is measurement and correction of performance in order to make sure that enterprise objectives and the plane advised to attain then are being accomplish. 4. Controlling is looking behind planning bears a close relationship to controlling. 5. Effective controlling assists to regulate actual performance to assure that it takes place as planned.

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6. Controlling exists at every management level from president to supervisor of a company Control is the process through which managers assure that actual activities conform to planned activities. ACCORDING TO BREACH "Control is checking current performance against predetermined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance." ACCORDING TO GEORGE R TERRY "Controlling is determining what is being accomplished i.e., evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to plans." ACCORDING TO BILLY E GOETZ "Management control seeks to compel events to conform plans". ACCORDING TO ROBERT N ANTHONY "Management control is the process by which managers assure that resources are obtained and used effectively and efficiently." The Organizational Control Process The information can be defined as the knowledge communicated by others or obtained from investigation of study. However, all data received in the process are not information unless these are processed into a usable form. With increasing use of electronic devices, particularly computers, a great deal of attention has been given to the development of information systems which provide relevant information to the managers concerned for the controlling authority. The flow of information is made regular by information system, commonly known as management information system (MIS). Thus, management information system can be defined as the system of providing needed information to each manager at the right time, in right form, and relevant one which aids his understanding and stimulates his action. The designing of computer-based MIS is based on the recognition of the fact that many items of input data may be useful for a number of different outputs. Thus, data are not gathered independently for special purposes, rather the same basic input data should be made available for multiple uses. For example, data on inventory can be used by managers in production accounting, and purchase departments. Moreover, some data are developed in large part as a kind of by product from the operation of procedures designed to get something done. As a consequence of these multiple uses of data, there is a need to develop a complete system for gathering, processing and flowing information.
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Dearden and his associates have given a framework for designing MIS. The factors that determine what an organisation does and how it performs would determine the major characteristics of MIS. However, a framework for MIS should consist of an analysis of four factors in the organisation: (i) the organisations opportunities, strategy, and structure; (ii)the management and decision-making process; (iii) the available information sources; and(vi) the problems and opportunities of information system administration.

1. Break Even System : The break-even system has become an excellent tool for profit planning and controlling by studying the effects of changes in costs, volume, price and product mix. The system no only furnishes the break even point, but also provides management with a number of vital information for decision making on profit variables. The mere finding of break-even point pales into insignificance once the other data are available for selecting the best course of action to maximize profits. The break even point however, represents the point or level of sales at which fixed and variable costs are just equalized by the amount of sales revenues with neither any profit nor any loss. Sales below this point bring loss to the business and sales over the point generate profit. 2. Profit and Loss Control: Profit and loss control indicates the amount of profit which a particular unit is expected to contribute to the enterprise. This form of control is applicable to an entire enterprise or to the self-sufficient unit of and enterprise which alone can contribute a separate profit of its own to the business. To be precise, in a divisional organization structure with distinct profit centres, profit and loss control becomes the tolls in the hands of top management for controlling overall performance of autonomous divisions. 3. Budget Summaries : Like any control system, control through budget summaries involves three distinct steps, viz., establishment of standards, evaluation of performance and adoption of corrective actions. Standards of performance prescribed in budgeting are available in handy form in budget summaries. For control purposes, the manager is only required to communicate the appropriate standards to subordinates concerned.

4. Return on investment: As a control device, return on investment is well designed for controlling operations of large organizations. The performance of decentralized units with separate assets and physical facilities can be evaluated in a significant manner by means of return on investment. An absolute amount of profit is no measure of business success in many cases. Capital utilized to earn profit must be taken into consideration for judging the adequateness or otherwise of profits in a business. The percentage of profit earned on invested capital is expressed by the tool of return on investment. 5. Internal Audit: Internal audit is a means of controlling overall performance in the organization. Internet audit is carried on regularly by the the managers themselves or by a special staff appointed for the purpose. The object of internal audit is to appraise financial and operational aspects of a company's work on a continuous basis.
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6. Management Self audit. It is management that can keep a business running and thriving in the midst of endless difficulties. All facilities in the form of men, machines, money and materials are utilized by management for achieving certain results, and they produce as much results in any organization as they are directed an controlled by its management. In a sense, management represents the whole business, because decisions of an enterprise mean decisions of its management, performances of the organization imply managerial performance, or leadership of the concern stems from leadership of its management. Accordingly, failures of the enterprise must also be ascribed to its management team.

The control process involves carefully collecting information about a system, process, person, or group of people in order to make necessary decisions about each. Managers set up control systems that consist of four key steps: 1. Establish standards to measure performance. Within an organization's overall strategic plan, managers define goals for organizational departments in specific, operational terms that include standards of performance to compare with organizational activities. 2. Measure actual performance. Most organizations prepare formal reports of performance measurements that managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data. 3. Compare performance with the standards. This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for th e reporting period alongside the actual performance for the same period and by computing the variancethat is, the difference between each actual amount and the associated standard. 4. Take corrective actions. When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and qualitycentered environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth stepcorrective action. The most effective course may be prescribed by policies or may be best
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left up to employees' judgment and initiative. Effective Organizational Control Systems The management of any organization must develop a control system tailored to its organization's goals and resources. Effective control systems share several common characteristics. These characteristics are as follows:

A focus on critical points. For example, controls are applied where failure cannot be tolerated or where costs cannot exceed a certain amount. The critical points include all the areas of an organization's operations that directly affect the success of its key operations.

Integration into established processes. Controls must function harmoniously within these processes and should not bottleneck operations.

Acceptance by employees. Employee involvement in the design of controls can increase acceptance.

Availability of information when needed. Deadlines, time needed to complete the project, costs associated with the project, and priority needs are apparent in these criteria. Costs are frequently attributed to time shortcomings or failures.

Economic feasibility. Effective control systems answer questions such as, How much does it cost? What will it save? or What are the returns on the investment? In short, comparison of the costs to the benefits ensures that the benefits of controls outweigh the costs.

Accuracy. Effective control systems provide factual information that's useful, reliable, valid, and consistent.

Comprehensibility. Controls must be simple and easy to understand.

ROLE OF INFORMATION IN CONTROL Information is the life-blood of an organization, particularly in the case of systems approach management. he information can be defined as the knowledge communicated by others or obtained from investigation of study. However, all data received in the process are not information unless these are processed into a usable form. With increasing use of electronic devices, particularly
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computers, a great deal of attention has been given to the development of information systems which provide relevant information to the managers concerned for the controlling authority. The flow of information is made regular by information system, commonly known as management information system (MIS). Thus, management information system can be defined as the system of providing needed information to each manager at the right time, in right form, and relevant one which aids his understanding and stimulates his action.

The designing of computer-based MIS is based on the recognition of the fact that many items of input data may be useful for a number of different outputs. Thus, data are not gathered independently for special purposes, rather the same basic input data should be made available for multiple uses. For example, data on inventory can be used by managers in production accounting, and purchase departments. Moreover, some data are developed in large part as a kind of by product from the operation of procedures designed to get something done. As a consequence of these multiple uses of data, there is a need to develop a complete system for gathering, processing and flowing information.

Dearden and his associates have given a framework for designing MIS. The factors that determine what an organisation does and how it performs would determine the major characteristics of MIS. However, a framework for MIS should consist of an analysis of four factors in the organisation: (i) the organisations opportunities, strategy, and structure; (ii)the management and decision-making process; (iii) the available information sources; and(vi) the problems and opportunities of information system administration.

Important of devices for controlling

1. Break Even System : The break-even system has become an excellent tool for profit planning and controlling by studying the effects of changes in costs, volume, price and product mix. The system no only furnishes the break even point, but also provides management with a number of vital information for decision making on profit variables. The mere finding of break-even point pales into insignificance once the other data are available for selecting the best course
61

of action to maximize profits. The break even point however, represents the point or level of sales at which fixed and variable costs are just equalized by the amount of sales revenues with neither any profit nor any loss. Sales below this point bring loss to the business and sales over the point generate profit.

2. Profit and Loss Control: Profit and loss control indicates the amount of profit which a particular unit is expected to contribute to the enterprise. This form of control is applicable to an entire enterprise or to the self-sufficient unit of and enterprise which alone can contribute a separate profit of its own to the business. To be precise, in a divisional organization structure with distinct profit centres, profit and loss control becomes the tolls in the hands of top management for controlling overall performance of autonomous divisions.

3. Budget Summaries : Like any control system, control through budget summaries involves three distinct steps, viz., establishment of standards, evaluation of performance and adoption of corrective actions. Standards of performance prescribed in budgeting are available in handy form in budget summaries. For control purposes, the manager is only required to communicate the appropriate standards to subordinates concerned.

4. Return on investment: As a control device, return on investment is well designed for controlling operations of large organizations. The performance of decentralized units with separate assets and physical facilities can be evaluated in a significant manner by means of return on investment. An absolute amount of profit is no measure of business success in many cases. Capital utilized to earn profit must be taken into consideration for judging the adequateness or otherwise of profits in a business. The percentage of profit earned on invested capital is expressed by the tool of return on investment.

5. Internal Audit: Internal audit is a means of controlling overall performance in

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the organization. Internet audit is carried on regularly by the the managers themselves or by a special staff appointed for the purpose. The object of internal audit is to appraise financial and operational aspects of a company's work on a continuous basis.

6. Management Self audit. It is management that can keep a business running and thriving in the midst of endless difficulties. All facilities in the form of men, machines, money and materials are utilized by management for achieving certain results, and they produce as much results in any organization as they are directed an controlled by its management. In a sense, management represents the whole business, because decisions of an enterprise mean decisions of its management, performances of the organization imply managerial performance, or leadership of the concern stems from leadership of its management. Accordingly, failures of the enterprise must also be ascribed to its management team. Communication in management and the role of information in controlling Organizational Control Techniques Control techniques provide managers with the type and amount of information they need to measure and monitor performance. The information from various controls must be tailored to a specific management level, department, unit, or operation. To ensure complete and consistent information, organizations often use standard ized documents such as financial, status, and project reports. Each area within an organization, however, uses its own specific control techniques, described in the following sections. Financial controls After the organization has strategies in place to reach its goals, funds are set aside for the necessary resources and labor. As money is spent, statements are updated to reflect how much was spent, how it was spent, and what it obtained. Managers use these financial statements, such as an income statement or balance sheet, to monitor the progress of programs and plans. Financial statements provide management with information to monitor financial resources and activities. The income statement shows the results of the organization's operations over a period of time, such as revenues, expenses, and profit or loss. The balance sheet shows what the organization is worth (assets) at a single point in
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time, and the extent to which those assets were financed through debt (liabilities) or owner's investment (equity). Financial audits , or formal investigations, are regularly conducted to ensure that financial management practices follow generally accepted procedures, policies, laws, and ethical guidelines. Audits may be conducted internally or externally. Financial ratio analysis examines the relationship between specific figures on the financial statements and helps explain the significance of those figures:

Liquidity ratios measure an organization's ability to generate cash. Profitability ratios measure an organization's ability to generate profits. Debt ratios measure an organization's ability to pay its debts. Activity ratios measure an organization's efficiency in operations and use of assets.

In addition, financial responsibility centers require managers to account for a unit's progress toward financial goals within the scope of their influences. A manager's goals and responsibilities may focus on unit profits, costs, revenues, or investments. Budget controls A budget depicts how much an organization expects to spend (expenses) and earn (revenues) over a time period. Amounts are categorized according to the type of business activity or account, such as telephone costs or sales of catalogs. Budgets not only help managers plan their finances, but also help them keep track of their overall spending. A budget, in reality, is both a planning tool and a control mechanism. Budget development processes vary among organizations according to who does the budgeting and how the financial resources are allocated. Some budget development methods are as follows:

Top-down budgeting. Managers prepare the budget and send it to subordinates. Bottom-up budgeting. Figures come from the lower levels and are adjusted and coordinated as they move up the hierarchy.

Zero-based budgeting. Managers develop each new budget by justifying the projected allocation against its contribution to departmental or organizational goals.

Flexible budgeting. Any budget exercise can incorporate flexible budgets, which set meet or beat standards that can be compared to expenditures.

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Marketing controls Marketing controls help monitor progress toward goals for customer satisfaction with products and services, prices, and delivery. The following are examples of controls used to evaluate an organization's marketing functions:

Market research gathers data to assess customer needs information critical to an organization's success. Ongoing market research reflects how well an organization is meeting customers' expectations and helps anticipate customer needs. It also helps identify competitors.

Test marketing is small-scale product marketing to assess customer acceptance. Using surveys and focus groups, test marketing goes beyond identifying general requirements and looks at what (or who) actually influences bu ying decisions.

Marketing statistics measure performance by compiling data and analyzing results. In most cases, competency with a computer spreadsheet program is all a manager needs. Managers look at marketing ratios, which measure profitability, activity, and market shares, as well as sales quotas, which measure progress toward sales goals and assist with inventory controls.

Unfortunately, scheduling a regular evaluation of an organization's marketing program is easier to recommend than to execute. Usually, only a crisis, such as increased competition or a sales drop, forces a company to take a closer look at its marketing program. However, more regular evaluations help minimize the number of marketing problems. Human resource controls Human resource controls help managers regulate the quality of newly hired personnel, as well as monitor current employees' developments and daily performances. On a daily basis, managers can go a long way in helping to control workers' behaviors in organizations. They can help direct workers' performances toward goals by making sure that goals are clearly set and understood. Managers can also institute policies and procedures to help guide workers' actions. Finally, they can consider past experiences when developing future strategies, objectives, policies, and procedures. Common control types include performance appraisals, disciplinary programs, observations, and training and development assessments. Because the quality of a firm's personnel, to a large degree, determines the firm's overall effectiveness, controlling this area is very crucial.
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Computers and information controls Almost all organizations have confidential and sensitive information that they don't want to become general knowledge. Controlling access to computer databases is the key to this area. Increasingly, computers are being used to collect and store information for control purposes. Many organizations privately monitor each employee's computer usage to measure employee performance, among other things. Some people question the appropriateness of computer monitoring. Managers must carefully weigh the benefits against the costs both human and financial before investing in and implementing computerized control techniques. Although computers and information systems provide enormous benefits, such as improved productivity and information management, organizations should remember the following limitations of the use of information technology:

Performance limitations. Although management information systems have the potential to increase overall performance, replacing long-time organizational employees with information systems technology may result in the loss of expert knowledge that these individuals hold. Additionally, computerized information systems are expensive and difficult to develop. After the system has been purchased, coordinating it possibly with existing equipment may be more difficult than expected. Consequently, a company may cut corners or install the system carelessly to the detriment of the system's performance and utility. And like other sophisticated electronic equipment, information systems do not work all the time, resulting in costly downtime.

Behavioral limitations. Information technology allows managers to access more information than ever before. But too much information can overwhelm employees, cause stress, and even slow decision making. Thus, managing the quality and amount of information available to avoid information overload is important.

Health risks. Potentially serious health-related issues associated with the use of computers and other information technology have been raised in recent years. An example is carpal tunnel syndrome, a painful disorder in the hands and wrists caused by repetitive movements (such as those made on a keyboard).

Regardless of the control processes used, an effective system determines whether employees and various parts of an organization are on target in achieving organizational objectives.
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PERFORMANCE MEASUREMENT Performance measurement is the process whereby an organization establishes the parameters within which programs, investments, and acquisitions are reaching the desired results.[1]

Performance Reference Model of the Federal Enterprise Architecture, 2005.[2] This process of measuring performance often requires the use of statisticalevidence to determine progress toward specific defined organizational objectives. Fundamental purpose behind measures is to improve performance. Measures that are not directly connected to improving performance (like measures that are directed at communicating better with the public to build trust) are measures that are means to achieving that ultimate purpose (Behn 2003). Behn 2003 gives 8 reasons for adapting performance measurements: 1. To Evaluate how well a public agency is performing. To evaluate performance, managers need to determine what an agency is supposed to accomplish. (Kravchuk & Schack 1996). To formulate a clear, coherent mission, strategy, and objective. Then based on this information choose how you will measure those activities. (You first need to find out what are you looking for). Evaluation processes consist of two variables: organizational performance data and a benchmark that creates a framework for analyzing that data. For organizational information, focus on the outcomes of the agencys performance, but also including input/ environment/ process/ outputto have a comparative framework for analysis. It is helpful to ask 4 essential questions in determining organizational data:

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Outcomes should be directly related to the public purpose of the organization. Effectiveness Q: did they produce required results (determined by outcomes). Cost-effective: efficiency Q (outcome divided by input). Impact Q: what value organisation provides. Best-practice Q: evaluating internal operations (compare core process performance to most effective and efficient process in the industry).

As in order for organization to evaluate performance its requires standards (benchmark) to compare its actual performance against past performance/ from performance of similar agencies/ industry standard/political expectations. 2. To Control How can managers ensure their subordinates are doing the right thing. Today managers do not control their workforce mechanically (measurement of time-and-motion for control as during Taylor) However managers still use measures to control, while allowing some space for freedom in the workforce. (Robert Kaplan & David Norton) Business has control bias. Because traditional measurement system sprung from finance function, the system has a control bias. Organisation create measurement systems that specify particular actions they want execute- for branch employess to take a particular ways to execute what they want- branch to spend money. Then they want to measure to see whether the employees have in fact taken those actions. Need to measure input by individual into organisation and process. Officials need to measure behavior of individuals then compare this performance with requirements to check who has and has not complied. Often such requirements are described only as guidelines. Do not be fooled. These guidelines are really requirements and those requirement are designed to control. The measurement of compliance with these requirements is the mechanism of control. 3. To Budget Budgets are crude tools in improving performance. Poor performance not always may change after applying budgets cuts as a disciplinary actions. Sometimes budgets increase could be the answer to improving performance. Like purchasing better technology because the current ones are outdated and harm operational processes. So decision highly influenced by circomstance, you need measures to better understand the situation. At the macro level, elected officials deciding which purpose of government actions are primary or secondary. Political priorities drive macro budgetory choices. Once elected officials have established macro political priorities, those responsible for micro decisions may seek to invest their limited allocation of resources in the most cost-effective units and activities.
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In allocating budgets, managers, in response to macro budget allocations (driven by political objectives), determin alloactions at the micro level by using measures of efficiency of various activities, which programs or organisations are more efficient at achieving the political objectives. Why spend limited funds on programs that do not guarantee exceptional performance? Efficiency is determined by observing performance- output and outcome achieved considering number of people involved in the process (productivity per person) and cost-data (capturing direct cost as well as indirect) 4. To Motivate Giving people significant goals to achieve and then use performance measuresincluding interim targets- to focus peoples thinking and work, and to provide periodic sense of accomplishment. Performance targets may also encourage creativity in developing better ways to achieve the goal (Behn) Thus measure to motivate improvements may also motivate learning. Almost-real-time output (faster, the better) compared with production targets. Quick response required to provide fast feed-back so workforce could improve and adapt. Also it is able to provide how workforce currently performing. Primary aim behind the measures should be output, managers can not motivate people to affect something over which they have little or no influence. Once an agencys leaders have motivated significant improvements using output targets, they can create some outcomes targets.

output- focuses on improving internal process. outcome- motivate people to look outside the agency (to seek way to collaborate with individuals & organisations may affect the outcome produced by the agency)

5. To Celebrate Organisations need to commemorate their accomplishments- such ritual tie their people together, give them a sense of their individual and collective relevance. More over, by achieving specific goals, people gain sense of personal accomplishment and selfworth (Locke & Latham 1984). Links from measurement to celebration to improvement is indirect, because it has to work through one of the likes- motivation, learning... Celebration helps to improve performance because it brings attention to the agency, and thus promotes its competence- it attracts resources.
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Dedicated people who want to work for successful agency. Potential collaborators. Learning-sharing between people about their accomplishments and how they achieved it.

Significant performance targets that provide sense of personal and collective accomplishement. Targets could ones used to motivate. In order for celebration to be a success and benefits to be a reality managers need to ensure that celebration creates motivation and thus improvements.

By leading the celebration.

6. To Promote How can public managers convince political superiors, legislators, stakeholders, journalists, and citizens that their agency is doing a good job. (National Academy of Public Administrations center for improving government performance NAPA 1999) performance measures can be used to: validate success; justifing additional ressources; earn customers, stakeholder, and staff loyalty by showing results; and win recognition inside and outside the organisation. Indirectly promote, competence and value of goverement in general. To convince citizens their agency is doing good, managers need easily understood measures of those aspects of performance about which many citizens personally care. (National Academy of Public Administration-NAPA in its study of early performancemeasurement plans under the government performance and results Act) most plans recognized the need to communicate performance evaluation results to higher level officials, but did not show clear recognition that the form and level of data for these needs would be different than that for operating managers. Different needs: Department head/ Executive Office of President/ Congress. NAPA suggested for those needs to be more explicitly defined- (Kaplan & Nortan 1994) stress that different customers have different concerns(1992). 7. To Learn Learning is involved with some process, of analysis information provided from evaluating corporate performance (identifying what works and what does not). By analysing that information, corporation able to learn resons behind its poor or good performance. However if there is too many performance measures, managers might not be able to learn anything. (Neves of National Academy of Public Administration 1986)

Because of rapid increase of performance measures there is more confusion or noise than useful data.

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Managers lack time or simply find it too difficult to try to identify good signals from mass of numbers.

Also there is an issue of black box enigma (data can reveal that organisation is performing well or poorly, but they dont necessarily reveal why). Performance measures can describe what is coming out of black box as well as what is going in, but they do not reveal what is happening inside. How are various inputs interacting to produce the output. What more complex is outcome with black box being all value chain. Benchmarking is a traditional form of performance measurement which facilitates learning by providing assessment of organisational performance and identifying possible solutions for improvements. Benchmarking can facilitate transfer of knowhow from benchmarked organisations. (Kouzmin et al. 1999) Identifying core process in organisation and measuring their performance is basic to benchmarking. Those actions probably provide answer to issue presented in purpose section of the learning. Measurements that are used for learning act as indicators for managers to consider analysis of performance in measurements related areas by revealing irregularities and deviations from expected data results. What to measure aiming at learning (the unexpected- what to aim for?) Learning occurs when organisation meets problems in operations or failures. Then corporations improve by analysing those faults and looking for solutions. In public sector especially, failure usually punished severely- therefore corporations and individuals hide it. 8. To Improve What exactly should who- do differently to improve performance? In order for corporation to measure what it wants to improve it first need to identify what it will improve and develop processes to accomplish that. Also you need to have a feedback loop to assess compliance with plans to achieve improvements and to determine if those processes created forecasted results (improvements). Improvement process also related to learning process in identifying places that are need improvements. Develop understanding of relationships inside the black box that connect changes in operations to changes in output and outcome. Understanding black box processes and their interactions.
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How to influence/ control workforce that creates output. How to influence citizens/ customers that turn that output to outcome (and all related suppliers)

They need to observe how actions they can take will influence operations, environment, workforce and which eventually has an impact on outcome. After that they need to identify actions they can take that will give them improvements they looking for and how organisation will react to those actions ex. How might various leadership activities ripple through the black box. Principles of performance measurement All significant work activity must be measured.

Work that is not measured or assessed cannot be managed because there is no objective information to determine its value. Therefore it is assumed that this work is inherently valuable regardless of its outcomes. The best that can be accomplished with this type of activity is to supervise a level of effort.

Unmeasured work should be minimized or eliminated. Desired performance outcomes must be established for all measured work. Outcomes provide the basis for establishing accountability for results rather than just requiring a level of effort. Desired outcomes are necessary for work evaluation and meaningful performance appraisal. Defining performance in terms of desired results is how managers and supervisors make their work assignments operational. Performance reporting and variance analyses must be accomplished frequently. Frequent reporting enables timely corrective action. Timely corrective action is needed for effective management control.

If we dont measure

How do you know where to improve? How do you know where to allocate or re-allocate money and people? How do you know how you compare with others? How do you know whether you are improving or declining? How do you know whether or which programs, methods, or employees are producing results that are cost effective and efficient?

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Common problems with measurement systems that limit their usefulness:

Heavy reliance on summary data that emphasizes averages and discounts outliers. Heavy reliance on historical patterns and reluctance to accept new structural changes (or redesign of processes) that are capable of generating different outcomes, like measuring the time it takes them to do a task. Heavy reliance on gross aggregates that tend to understate or ignore distributional contributions and consequences. Heavy reliance on static, e.g., equilibrium, analysis and slight attention to time-based and growth ones, such as value-added measures. Performance Measurement topics

Most of us have heard some version of the standard performance measurement cliches: what gets measured gets done, if you dont measure results, you cant tell success from failure and thus you cant claim or reward success or avoid unintentionally rewarding failure, if you cant recognize success, you cant learn from it; if you cant recognize failure, you cant correct it, if you cant measure it, you can neither manage it nor improve it," but what eludes many of us is the easy path to identifying truly strategic measurements without falling back on things that are easier to measure such as input, project or operational process measurements. Performance Measurement is addressed in detail in Step Five of the Nine Steps to Success methodology. In this step, Performance Measures are developed for each of the Strategic Objectives. Leading and lagging measures are identified, expected targets and thresholds are established, and baseline and benchmarking data is developed. The focus on Strategic Objectives, which should articulate exactly what the organization is trying to accomplish, is the key to identifying truly strategic measurements. Strategic performance measures monitor the implementation and effectiveness of an organization's strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency. Good Performance Measu

Focus employees' attention on what matters most to success Allow measurement of accomplishments, not just of the work that is performed Provide a common language for communication Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value(targets), and thresholds
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Are valid, to ensure measurement of the right things Are verifiable, to ensure data collection accuracy Practice

Several performance measurement systems are in use today, and each has its own group of supporters. For example, the Balanced Scorecard (Kaplan and Norton, 1993, 1996, 2001), Performance Prism (Neely, 2002), and the Cambridge Performance Measurement Process (Neely, 1996) are designed for business-wide implementation; and the approaches of the TPM Process (Jones and Schilling, 2000), 7-step TPM Process (Zigon, 1999), and Total Measurement Development Method (TMDM) (Tarkenton Productivity Group, 2000) are specific for teambased structures. With continued research efforts and the test of time, the best-of-breed theories that help organizations structure and implement its performance measurement system should emerge. Although the Balanced Scorecard has become very popular, there is no single version of the model that has been universally accepted. The diversity and unique requirements of different enterprises suggest that no one-size-fits-all approach will ever do the job. Gamble, Strickland and Thompson (2007, p. 31) list ten financial objectives and nine strategic objectives involved with a balanced scorecard. Problems in Performance Appraisals:

discourages teamwork evaluators are inconsistent or use different criteria and standards only valuable for very good or poor employees encourages employees to achieve short term goals managers has complete power over the employees too subjective produces emotional anguish

Solutions

Make collaboration a criterion on which employees will be evaluated

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Provide training for managers; have the HR department look for patterns on appraisals that suggest bias or over or under evaluation Rate selectively(introduce different or various criteria and disclose better performance and coach for worst performer without disclosing the weakness of the candidate) or increase in frequency of performance evaluation. Include long term and short term goals in appraisal process Introduce M.B.O.(Management By Objectives) Make criteria specific and test selectively{Evaluate specific behaviors or results} Focus on behaviors; do not criticize employees; conduct appraisal on time.

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2.

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