Technological Innovation Management And Entrepreneurship-1.pdf

Dr. Tanuja P Dr. Ambedkar Institute of Technology, Bengaluru 1
UNIT-1 Nature and Functions of
Management
Prepared by
Dr. TANUJA P B.Tech, M.tech, PhD, Post Doc
Email-Id: tanujaharish13@gmail.com/tanujapatgar.ec@drait.edu.in
https://vidwan.inflibnet.ac.in/profile/156217 ,
Orcid Id0000-0002-2130-5167 Scopus Id88126521564 ,
Researcher IdBBU-4356-2020, Google Scholar dVhDTUWAAAAAJ
Department of Electronics and Communication Engineering
Dr. Ambedkar Institute of Technology, Bangalore
(An Autonomous institution, Affiliated to VTU, Belgaum and Aided by Government of Karnataka)
Near Jnana Bharathi campus, Bangalore -560056

Organizations have a plethora of goals which usually directs their energies and
resources to achieve these goals. Organizations possess human as well as non-
human resources (plant, equipment, land, money, etc.) that are put to use in
the accomplishment of target oriented and time bound goals. Management is
the force that unifies resources in the service of organizational goals. It is a
process of getting results with and through people.
Management is needed whenever people work together in an organization. The
managerial functions which includes planning, organizing directing and
controlling must be performed by a person who is capable of managing
organized efforts, whether it is a business enterprise, religious organization,
military outfit or a social. These functions are performed at all levels in an
organization, regardless of its type or size. The services of management are
essential in all cooperative endeavors.
Definition of Management
It is not easy to define the term management. There are as many definitions of
management for the following reasons:
 Management is a vast and extensive subject. It is therefore, not possible
to put all the essential features of management in a single formula.
 Management is concerned with human beings, who are highly
unpredictable in terms of behavior.
 Management is a young developing discipline whose concepts are
dynamic.
Most definitions of the term „management‟ emphasise on one common idea: it
is concerned with the accomplishment of objectives through the conscious
efforts of the people performing certain functions.

Figure 1 Management unifies all resources
Let us look into these definitions:
 Management is the accomplishment of results through the efforts of
other people. (Lawrence. A. Appley).
 Management is the art of getting things done through and with the
people in formally organized groups. (Koontz. H).
 Management is a process of planning, organizing, actuating and
controlling to determine and accomplish the objectives by the use of
people and resources. (Terry G)
 Management is the process by which managers create, direct, maintain
and operate purposive organizations through systematic, coordinated,
cooperative human effort. (Mc Fariand)
 It is the coordination of all resources through the process of planning
organizing, directing and controlling in order to attain stated objectives.

Some authorities on the subject have defined management as a decision-
making, rule-making, and rule-enforcing body. According to Prof. Moore,
management means decision-making. Others like Appley call it personnel
administration. For the sake of simplicity and convenience, we can broadly
define it as: "Management is concerned with resources, tasks and goals". It is
the process of planning organizing, staffing, directing and controlling to
accomplish organizational objectives through the coordinated use of human
and material resources.
Nature of Management
Management is related to regulating human and physical resources in order to
achieve organizational goals.
The nature of management can be highlighted as:
1. Management is Goal-Oriented: The accomplishment of several
management activities advances by its appearance of its planned aims or
objective. Management is involved in descriptive action. It continues a
facility which supports the operation of communal as well as corporal
revenues to fulfill the pre-determined approaches. For simulation, the
objective of a business is to claim maximum customer engorgement by
developing specialty article additionally at feasible charges. This can be
apprehended by exercising desirable persons furthermore bringing about
favorable usage connectedly minimal reserves.

Figure 2 Management is Goal Oriented
2. Management integrates Human, Physical and Financial Resources: In
an organization, communal presence functions with non-human reserves like
instruments, components, financial inventories, frameworks etc. The entire
establishment sticks together communal actions with those reserves. It carries
about a conspicuous consonance among the communal, corporal as well as
financial reserves.
3. Management is Continuous: Management is basically an on-going
approach which encompasses responding of difficulties as well as handling
various consequences. It exists while considering the determination of
difficulties which will achieve adequate grades to recognize it. It is analyzed
that the objective of an establishment continues as utmost development
mechanism. For arresting this destination, complex mechanisms are to be
conveyed away furthermore which endures without conclusion. Marketing and
broadcasting continues furthermore to be endeavored for comprehension
generally which instructions acquire to be arranged, so this is called as an on-
going mechanism.
4. Management is all Pervasive: Management continues imperative in
conclusive categories of organizations whether it continues political, communal

and cultural or business which will handle and commands complex behaviors
towards a perfect approach. We see that clubs, hospitals, political parties,
colleges, hospitals, business firms all require management. If more that an
individual person is engaged in common work, then under such situation,
management plays an important role. It is immaterial of the small firm in
trading or large firm, all requires management.
5. Management is a Group Activity: Management is not as concerned with
individual efforts as it is about groups and team work. It involves the use of
teamwork to achieve predetermined goal of management.
6. Principles are Dynamic in Nature: Principle is a fundamental truth, which
establishes cause and effect relationships of a function within a set- up. Based
on integration and supported by practical evidences, the management has
framed certain principles. However, these principles are flexible in nature and
keep changing with the environment in which the organization exists. Because
of the continuous development in the field, many older principles are replaced
by new principles. Continuous researches are being carried out to establish
principles in changing society and no principle can be regarded as a final truth.
In fact, there is nothing permanent in the landslide of management.
7. Principles are Relative, not absolute: Management principles are relative,
not absolute and they should be applied according to the need of the
organization. The organizational difference between organizations may exist
because of time, place, socio-cultural factors, etc. However, individuals working
within the same organization may also differ. Thus, a particular management
principle has different strengths in different conditions. Therefore, principles of
management should be applied in the light of prevailing conditions. Allowance
must be made for different changing environment.

8. Management is a Science, Art and Profession: There is a controversy
whether management is science or art. However, management is both a science
and an art because it follows principles of science and requires the skills of an
art. Management has been regarded as a profession by many while many have
suggested otherwise.
9. Management is Decision-Making: Management process involves decision-
making at various levels. This usually includes delegation of work. Decision-
making basically involves selecting the most appropriate alternative out of the
several alternatives available. If there is only one alternative, the question of
decision-making does not arise. The quality of the alternative that a manager
selects determines the organization’s performance and the future of the entire
organization rests on the degree of right decisions are made by this class of
executives. Therefore, the success or failure of managers can be judged by the
quality of decisions that they make.
The nature of management suggests that:
 It is a multidisciplinary phenomenon.
 Its principles are flexible, relative and not absolute.
 It is both science and art.
 It can be taken as a profession.
 Finally, it is universal.
 It is an organized activity involving decision making, with existence of
objectives.
It is working with the people, through establishing goals by utilizing available
resources.

Management as a Process
When considering management as a process, management refers to a series of
inter–related functions. It is the process by which management creates,
operates and directs purposive organization through systematic, coordinated
and co-operative human efforts. According to George R. Terry, “Management is
a distinct process consisting of planning organizing, actuating and controlling,
performed to determine and accomplish stated objective by the use of human
beings and other resources.” As a process, management consists of three
aspects:
1. Management is a social process: Since the human factor is most important
among the other factors, management is concerned with developing
relationships among people. It is the duty of the management to make
interaction between people productive and useful for obtaining organizational
goals.
2. Management is an integrating process: Management undertakes the job of
bringing together human physical and financial resources so as to achieve the
end-organizational purpose. Therefore, it is an important function to bring
harmony between various factors.
3.Management is a continuous process: As a never ending process,
Management is concerned with constantly identifying the problems and solving
them by taking adequate steps. It is an on-going process.

Figure 3 Management process
Importance of Management
The importance of management may be traced in the following contexts:
1. Effective Utilization of Resources: Management tries to make effective
utilization of various resources. The resources are scarce in nature and to meet
the demand of the society, their contribution should be maximum for the
general interests of the society. The management not only decides in which
particular alternative a particular resource should be used, but also takes
actions to utilize it in that particular alternative in the best way.
2. Development of Resources: Management develops various resources. This
is true with human as well as non-human factors. Lawrence Appley has
emphasized that, management is the development of people. However, most of
the researches for resource development are carried on in an organized way
and management is involved in these organized activities. Thus, through the
development of resources, management improves the quality of lives of people
in the society.

3. To Incorporate Innovations: Today, changes are occurring at a very fast
rate in both technology and social process and structure. These changes need
to be incorporated to keep the organizations alive and efficient. Business
organizations are moving from primitive to sophisticated. Therefore, they
require high degree of specialization, high level of competence and complex
technology. All these require efficient management so that organizations work
in the most efficient way.
4. Integrating Various Interest Groups: In the organized efforts, there are
various interest groups and they put pressure over other groups for maximum
share in the combined output. For example, in the case of a business
organization, there are various pressure groups such as shareholders,
employees, government, etc. These interest groups have pressure on an
organization. In a more advanced and complex society, more such pressure is
on the organization. Management has to balance these pressures from various
interest groups.
5. Stability in the Society: Management provides stability in the society by
changing and modifying the resources in accordance with the changing
environment of the society. In the modern age, more emphasis is on new
inventions for the betterment of human beings. These inventions make old
systems and factors mostly obsolete and inefficient. Management provides
integration between traditions and new inventions and safeguards society from
the unfavorable impact of these inventions so that continuity in social process
is maintained.

Management Functions
1. Planning: Planning is the foremost feature of a management which behaves
with plans for future course of action and decides for the most correct course of
actions in getting fixed goals. According to Koontz, planning is the advance
preparation of action to be taken related to any work. This will link from the
starting of a phase to the implementation phase. It is a future direction to be
taken which could be worked in problem solving exercises and decision
making. It is studied that planning shows related course of action to meet the
required goals which involves straight and clear thinking about ways and
means for doing fixed goals. Planning serves as a correct usage among human
as well as non-human resources.
Figure 4 Functions of Management
2. Organizing: Organizing is related to involvement of physical, financial,
human resources as well as development of productive relationships which
appears amongst themselves for obtaining organisational criteria‟s. Henry
Fayol relates organisation as arranging a business which will give everything
required for working and functioning. Practically, organising a business needs

finding and showing human and non-human constituents for organisational
arrangements. The process of Organising includes:
 Exploring activities
 Classifying activity groups
 Declaration of responsibilities
 Delegating authority and responsibility
 Functioning with authority and coordination
3. Staffing: It involves association of manpower to support an organization
function. With the advent of new technologies and spreading of business
avenues, staffing play an important role in catering services rendered by
organizations. The idea of staffing is assign right job for right people. Kootz and
O‟Donell explained staffing as manpower involvement in an organization as per
desired selection Staffing involves:
 Recruitments after planning
 Processes related to recruitment, selection along with placement
 Activities related to Training and development
 Basic remuneration to be offered
 Appraisals
 Promotions and transfers Nature and Functions of Management
4. Directing: This is the sector of managerial function which allows
organizational methods to work correctly and efficiently in obtaining
organizational challenges. This is an inter-personnel concern of a management
that influences, guide, supervise and motivate sub-ordinates for obtaining
organizational parameters. Direction has the following elements:
 Supervision: Inspecting the work of sub-ordinates with the help of
superiors.
 Motivation: This involves the work of a superior to inspire, stimulate
and encourage with passion to work.

 Leadership: It is the capability which shows the guidance given by
mangers to his subordinate to work in certain direction.
 Communications: This involves sharing, communicating and passing of
related information from one person to another. This serves as a bridge
of understanding.
5. Controlling: It implies measurement of approach against particular
standards with alterations in deflection, if any, will make sure the approach of
organizational objectives. The idea behind controlling is to make sure that all
will come in conformity with particular standards. A good effective mechanism
will handle to think about deflection earlier at times when it actually occurs.
Controlling, as per Theo Haimann is basically a mechanism of analyzing
progress that happens towards particular aims and objectives if required to
correct any deflection. Koontz and O‟Donell explained controlling as
mechanism that involves correction of activities of subordinates to ensure
about enterprise objectives with related plans to get them arrived. Therefore,
controlling has the following steps:
 Establishing constant measures
 Measure real performance
 Comparing performances with standards and locating deviations
 Corrective action
Levels of Management
In an organization, there are certain levels defined by the management wherein
each level is confined with its nature and activities involved. The levels of
management can be classified in three broad categories:

 Top level / Administrative level
 Middle level / Executor level
 Low level / Supervisory / Operative / First-line managers
It is seen that different levels has different work area and functions. The role
of managers at all the three levels is discussed below:
Figure 5 Levels in Management
Top Management
 Determines objectives and policies.
 Designs the basic operating and financial structure of an organisation.
 Provides guidance and direction.
 Lays down standards of performance.
 Maintains good public relations.
Middle Management
 Interprets and explains the policies framed by the top.
 Issues detailed instructions.
 Participates in operating decisions.
 Trains other managers.

Lower Management
 Plans day-to-day operations.
 Assigns jobs to workers.
 Provides supervision and control over work.
 Arranges material tools and equipment.
 Maintains discipline
Point of
Distinction
Top-Level
Management
Middle-Level
Management
Lower-Level
Management
Action Focus A small group of policy
makers deciding the
fate of an organization
Act as a liaison between
top and lower level
people and manage
activities of other
managers
The managers are
in direct contact
with employees
Representation Chief Executive Officer
President, Chairman
Managing Director, etc.
Functional Heads
(Marketing Manager,
Personnel Manager,
etc.)and immediate
subordinates
Section Head,
Supervisor, First-
Line manager, etc
Nature of work They generally spend
most of their time with
peers, outsiders and to
lesser extent,
subordinates. A top
managers schedule is
typically hectic.
The managers are far
less physically active
and far more involved
in paper work and
meeting. Their job is
less hectic, more
reflective and more
frustrating.
The managers are
physically active,
experience request
interruption, often
shift back and
forth between
tasks and spend
most of their time
with subordinates
and peers caring
for monetary
problems.

Role of a Manager
1. Interpersonal Role
 Figurehead: This includes the traditional role akin to that of the head of
a big family; these gestures go a long way in building a rapport with the
employees. This role would expect the manager to perform duties of
welcoming and felicitating dignitaries, going for business lunches and
attending important functions of employees.
 Leader: As a leader, every manager must encourage and persuade his
employee to work. He must try to bring together their interpersonal
needs with the goal of organization. He is the sole motivator of the
employees working under him which means he must enjoy not just their
trust but also their respect.
 Liaison: In his role as a liaison, every manager must develop contacts
outside his perpendicular chain of command to collect information for
his organization.
2. Informational Role
 Monitor: As a monitor, the manager has to constantly scan his
environment for information, debrief his contacts and his subordinates
and decide on unsolicited information, where much of it a result of the
network of personal contact developed.
 Disseminator: In the role of a disseminator, the manager passes some
information openly to his subordinates who would otherwise have no
access to it.

 Spokesman: In this role, the manager informs to satisfy various groups
and people who influence his organization. He assures his shareholders
of financial performance. He assures consumer groups that the
organization is fulfilling its social responsibilities. He satisfies the
government that the organization is abiding laws.
3. Decision Role
 Entrepreneur: In this role, the manager is an idea- seeker who seeks to
improve his unit by adapting it to changing conditions in the
environment.
 Disturbance Handler: In this role, the manager is expected to seek
solutions of various unforeseen problems – for example if there is a
strike, lockdown or a major customer goes bankrupt it is the duty of the
manager to find a solution.
 Resource Allocator: In this role, the manager must divide work and
delegate authority among his subordinates. He must decide who will get
what.
 Negotiator: The manager has to spend considerable time in negotiation.
As a representative of his company it is the duty of the manager to
negotiate with the management for the welfare of the workers, he needs
to negotiate with the union leader if there is a strike issue, or the
foremen may negotiate with the workers on any grievances they may
have.

Managerial Skills
A professional association of practicing managers, the American Management
Association, has identified important skills for managers that encompass
conceptual, communication, effectiveness and interpersonal aspects. These are
briefly described below:
 Technical skills: Adequate Knowledge of and proficiency in a certain
specialized field, such as engineering, computers, financial and
managerial accounting or manufacturing is essential.
 Human skills: This includes ability to serve well individually or in group
since the idea is that managers interact directly with people.
 Conceptual Skills: This involves using logic to solve problems, locating
opportunities, finding problems and locating faults. This skill will help in
selecting critical information among lots of data by understanding
technology and business structure.
 Communication Skills: This skill involves transposing thoughts into
words or action. It serves to improve image among colleagues and
subordinates with interaction involved among various grounds.
 Effectiveness Skills: This involves contribution or sharing missions or
objectives with focus on customer relation, project management and
setting and maintaining performance levels.
 Interpersonal Skills: It involves regulation and mentoring with
diversified factors related to people and culture, to help cultivate a
network inside an establishment along with commitment and
cooperation. In today's demanding and dynamic workplace, employees
who are invaluable to an organisation must be willing to constantly
upgrade their skills and take on extra work outside their own specific job

areas. There is no doubt that skills will continue to be an important way of
describing what a manager does. An up gradation of individual skills helps
in the overall improvement of the organisation as a whole. It gives it the
cutting edge over all other contemporaries.
 Design skill: Koontz and Weibrich added one more skill to the above list.
Design skill is the ability to solve problems in ways that will help the
organisation. At higher levels, managers should be able to move beyond
perceiving a potential problem. They are expected to design a workable
solution to a problem in the light of realities they face. If managers
merely see a problem and become problem watchers, they will fail.
Figure 6 Managerial Skills
Management and Administration
According to Theo Haimann, “Administration means overall determination of
policies, setting of major objectives, the identification of general purposes and

lying down of broad programmes and projects.” It refers to the activities of
higher level. It lays down basic principles of the initiative. According to
Newman, “Administration means guidance, leadership and control of the efforts
of the groups towards some common goals.”
Management involves conceiving, initiating and bringing together the various
elements and coordinating, actuating, integrating the diverse organisational
components while sustaining the viability of the organisation towards some
pre-determined goals. In other words, it is an art of getting things done with
the help of others in formally organised groups. The difference between
management and administration can be summarised under two categories:
 Functions
 Usage / Applicability
Difference between Management and Administration on the basis of
Functions
basis Management Administration
Meaning Management is an art wherein
the efforts of others are redirected
to achieve a particular goal via
team work.
It is concerned with
formulation of broad objectives,
plans and policies.
Nature Management is an executing
function.
Administration is a decision-
making function
Process Management decides who should
do something and how he should
do it.
Administration resolves what is
to be done and when it is to be
done. There is no questioning
them.
Function Management is a doing function
because managers get all the
work completed under their
supervision.
Administration is a thinking
function because plans and
policies are determined under
it.
Skills Technical and Human skills Conceptual and Human skills
Level Middle and lower level function Top level function

Difference between Management and Administration on the basis of Usage
Basis management administration
Applicability It is applicable to business
concerns i.e. profit-making
organisations.
It is applicable to non-
business concerns i.e. clubs,
schools, hospitals etc.
Influence The management decisions are
predisposed by the values,
opinions, and beliefs and
decisions of the managers.
The administration is inclined
to abide by public opinion,
government policies, religious
organisations, customs etc.
Status Management constitutes the
employees of the organisation
who are paid a fixed monetary
remuneration (in the form of
salaries and wages).
Administration represents
owners of the enterprise who
earn return on their capital
invested and profits in the
form of dividend.
Practically, there is no difference between management and administration.
Every manager is concerned with both – administrative management function
and operative management function. However, the managers who are higher up
in the hierarchy devote more time on administrative function and the lower
level devote more time on directing and controlling worker‟s performance, i.e.
management
Figure 7 Management and Administration

The Figure above clearly shows the degree of administration and management
performed by the different levels of management.
Management as a Science and an Art
Management is a wide concept which is not restricted to limited region but
plays an important role in our everyday life. It begins with self-arrangement
and serves as a mixture of planning organising, controlling, directing as well as
coordinating. It involves both science and an art which stands clear among
them with several strong constituents.
Management as a Science
Management continues as a science in experience which is accurate, scientific
as well as correct arrangements possessing as comprehended as well as
digested. Many custodians will acquire a favourable control of assured
quantitative mechanisms by encompassing financial as well as geometric
documentation along with below scientific as well researched are checked as
constituents which is similar as communal stimulation along with the
consequence of contradictory incentive systems based on operation of no
uniform assignments. In extension, it may additionally describe a science
which depends on additional enclosed establishment of truisms which for time
being approximated as outclass behaviours with their emphasis on calculation
as well as explanation of assessments against contexts along with regions. It
believes that management describes as science since it consists relevantly of
balanced as well as accounted operations.
In acquisition, it endures science since of the measure to which caretakers are
agreeable to invest in acquisition of information along with their acquiescence

on which the management activity is based upon in form of critical operation of
information. Management claims a comprehensively elaborated thinking to
arrange as well as command the operation of the organisation's reserves, an
understanding that existed precisely relevant in intervals of economic critical
moments.
Figure 8 Management as a Science
It can be called as science since the organisations led to expert handling and
monitoring that can achieve better adaptability to have good planning for
running and maintaining business goals. Management uses precise
measurement, research and planning which makes 'scientific' disciplines to
gear up in getting faster response.

Management as an Art
We can say that management behaves as an art related to fixed and definite
structures, which led to use of creativity, imagination, initiative and invention
in the overall sphere of the occupation.
Figure 9 Management is an Art
In management, creativity is required. Skills and the techniques describe the
art of management as described below:
 Managers will fight for resources from all other organisations with correct
skills and methods.
 Managers should only design that gives great value.
 Inventors should be rewarded.
 Purchase apart from what is there and label it again.
 Combine internal and external products in order to have more value.
 Retain employees by being successful.

 Become powerful and challengeable in the market.
 Management can be an art if they possess:
 Logical reasoning with step by step achievement of goals and purposes.
 Clear and attractive development policies to attain goals.
 Control of desired resources.
 Logical design organisation, direction as well as monitoring of activities
and resources for particular purposes.
 Rewarding and Boosting qualities in getting work done.
It is seen that management is a mixture of both economic and cultural
activities that aims to be applied everywhere. If the above combination gets
disturbed than management will not function properly.
Management as Profession
It has been a topic of debate whether management by itself can be labeled as a
profession. The word profession has been given a variety of meanings and
different people attach different characteristics to it. For example, in an early
definition, Carr-Saunders claims that a profession, “may perhaps be defined as
an occupation based upon specialized intellectual study and training, the
purpose of which is to supply skilled service or advice to others for a definite
fee or salary.”
Characteristics of a Profession
The list of characteristics that follows is extensive, but does not claim to
include every characteristic that has ever been attributed to professions, nor do
all of these features apply to every profession:

1. Skill based on theoretical knowledge: Professionals are presumed to
possess extensive theoretical knowledge (e.g. architecture, medicine, law and
scripture) and to retain skills based on that knowledge that they are able to
apply in practice.
2. Professional association: Professions generally prefer to have professional
bodies organized by their members, which are intended to enhance the status
of their members and are carefully controlled entrance requirements.
3. Testing of competence: For membership of a professional body, there is a
requirement to pass prescribed examinations based on mainly theoretical
knowledge. These are specialized examinations targeted to get committed and
dedicated individuals to work in the profession.
4. Institutional training: In addition to examinations, there is usually a
requirement for a long period of institutionalized training where aspiring
professionals acquire specified practical experience in some sort of trainee role
before being recognized as a full member of a professional body. Continuous
upgrading of skills through professional development is also mandatory these
days. This happens post training period. It is a continuous process and is
essential for the individual and institution’s growth.
5. Licensed practitioners: Professions seek to establish a registration or
membership so that only those individuals so licensed are recognized as bona
fide.
6. Work autonomy: Professionals tend to retain control over their work, even
when they are employed outside the profession in commercial or public
organizations. They also gain control over their own theoretical knowledge.

7. Code of professional conduct or ethics: Professional bodies usually have
codes of conduct or ethics for their members and disciplinary procedures for
those who infringe the rules.
8. Self-regulation: Professional bodies tend to insist that they should be self-
regulating and independent from government. Professions tend to be policed
and regulated by senior, respected practitioners and the most highly qualified
members of the profession.
9. Public service and altruism: The earning of fees for services rendered can
be defended because they are provided in the public interest, e.g. the work of
doctors contributes to public health.
10. High status and rewards: The most successful professions achieve high
status, public prestige and rewards for their members. Some of the factors
included in this list contribute to such success.
11. Indeterminacy of knowledge: Professional knowledge contains elements
that escape being mastered and communicated in the form of rules and can
only be acquired through experience.
12. Mobility: The skill, knowledge and authority of professionals belong to the
professionals as individuals, not the organizations for which they work.
Professionals are, therefore, relatively mobile in employment opportunities as
they can move to other employers and take their talents with them.
Standardization of professional training and procedures enhances this
mobility.

Management as an Emerging Profession
The above-mentioned points show that management possesses only certain
characteristics of a profession while others are missing. Therefore, it cannot be
said to be a profession, though it is emerging as a profession and the move is
towards management as profession.
Reiss has classified professions into five categories in contemporary industrial
society. They are as follows:
1. Old established professions founded upon the study of a branch of learning,
e.g. medicine
2. New professions founded upon new disciplines, e.g. chemists, social
scientists
3. Semi-professions based upon technical knowledge and practice, e.g. nurses,
teachers, social workers
4. Would-be professions with familiarity with modern practices in business etc.
and aspiring to achieve professional status, e.g. personnel directors, sales
directors, engineers
5. Marginal professions based upon technical skill, e.g. technicians,
draughtsman. It is quite clear that management fulfills several essentials of a
profession; even then, it is not a full-fledged profession because:
a. It does not restrict the entry in managerial jobs for account of one standard
or other.
b. No minimum qualifications have been prescribed for managers.
c. No management association has the authority to grant a certificate of
practice to various managers.
d. All managers are supposed to abide by the code formulated by AIMA.

e. Competent education and training facilities do not exist.
f. Managers are responsible to many groups such as shareholders, employees
and society. A regulatory code may curtail their freedom.
g. Managers are known by their performance and not mere degrees.
h. The ultimate goal of a business is to maximize profit and not social welfare.
That is why Haymes has rightly remarked, “The slogan for management is, He
who serves best, also profits most.”
Management, does not seek to control the entry in the manner as many of the
old established professions do but the educational requirement of future
managers may provide a similar consequence. Moreover, the professional
status of management should not be viewed in the context of controlled entry.
This may be against the development of management itself.
Meaning and Definition of Planning
Planning is deciding in advance what to do, how to do it, when to do it and who
is to do it. Successful managers try to envisage the problems before they turn
into emergencies. As pointed out by Terry, “successful managers deal with
foreseen problems and unsuccessful manager’s struggle with unforeseen
problems. The difference lies in planning.” Manager’s best owed with
responsibility of achieving definite targets do not waste time waiting for future.
Instead they carve the future through a creative collaboration of thoughts by
removing present difficulties, anticipating future problems, changing the goals
to suit the internal and external changes, experiment with creative ideas and
take the initiative, attempting „to shape the future and create a more desirable
environment.

Figure 10 Planning and Forecasting
A plan is a forecast for accomplishment. It is a prearranged course of action for
tomorrow’s activity. In other words, to plan is to prepare a blue print for future
action, to bring about specific results at a specific cost in a specific period.
Management thinkers have defined the term in two ways:
Based on futurity:
 Planning is a trap laid down to capture the future. (Allen)
 Planning is deciding in advance what is to be done in future. (Koontz).
 Planning is informed anticipation of future. (Haimann)
 Planning is „anticipatory‟ decision-making. (R.L, Ackoff)
Based on thinking:
 Planning is a thinking process, an organised foresight, a vision based on
fact and experience that is required for intelligent action. (Alford and
Beatt)
 Planning is deciding in advance what to do, how to do it, when to do it
and who is to do it. (Koontz and O‟Donnell) A plan is a specific,

documented intention consisting of an objective and an action statement.
The objective portion is the end and the action statements represent means
to that end. Stated another way, objectives give management targets to
shoot at, whereas action statements provide the arrows for hitting the
targets. Properly conceived plans give a fair idea of how things are to work
out.
Features of Planning
Planning has a number of characteristics:
Planning is goal-oriented
 Planning is the core of business.
 Goals established should be worked out to make.
 Planning locates action which leads to goals quickly and economically.
Planning shows a sense of direction to various activities.
Planning is looking ahead
 It is done for future.
 It requires peeping in future, analyzing it and predicting it.
 It is based on forecasting. It is a synthesis of forecast.
 It is a mental predisposition for things to happen in future.
Planning is an intellectual process
 It is a mental exercise which includes lucrative thinking, judgment and
imagination.
 It involves not mere guesswork but rotational thinking.

 It depends on goals, facts and considered estimates.
Planning involves choice and informed decision-making
 It basically involves selecting from various alternatives.
 It is not applicable in single course of action as it attains no choice.
 The decision-making involves an integral part of planning.
 It gives more options to managers to select the best as per needs.
 It basically involves selecting from various alternatives.
It is not applicable in single course of action as it attains no choice.
 The decision-making involves an integral part of planning.
 It gives more options to managers to select the best as per needs.
Planning is the primary function of management / Primacy of Planning
 It lays the foundation for other functions of management.
 It serves as guide for organizing, staffing, directing and controlling.
 It carries complete functions of management inside a framework.
 It is the main function of management.
Planning is a continuous process
 It serves as never-ending process due to dynamic business environment.
 It is prepared for particular time and is subject to revaluation and review.
 It remains continuous.

Planning is all-pervasive
 It is needed at every level of management and everywhere in enterprise.
 It varies with scope of work.
 Top level involves in planning, middle level involves in departmental
plans while lower level will implement the same plan.
Planning is designed for efficiency
 It leads to complete objectives at lowest cost.
 It avoids wastage of resources and ensures good use of resources.
 It is worth or useless till it results in value of cost which occurs.
 It results in saving time, effort and money.
 It leads to correct use of men, money, materials, methods and machines.
Planning is Flexible
 It should give enough room to cope with changes occurs with customer
demand, competition, government policies, etc.
 The original plan should keep on updating if any circumstance for
change occurs.

Importance of Planning
Planning facilitates management by objectives
 Planning starts with finding of an objective.
 It shows the reason for starting different activities.
 With this, the objective becomes clear and particular.
 With planning, an employee will be more focused towards objectives and
goals.
 There will be no path, if there is no planning.
Planning minimizes uncertainties
 In business, there occur lots of uncertainties.
 Because of such uncertainties, there occurs risk factor in every business.
 With planning, the uncertainties can be lowered as it anticipates any
future occurrences.
 Since future cannot be predicted 100%, so with the help of planning, the
management will come to know about future activities.
Planning facilitates co-ordination
 It is seen that planning moves around organizational goals.
 In this, all activities are aimed at common goals.
 There is a combined effort all the way in an enterprise
in departments and groups.
 It keeps away from replication of efforts which results
in good co-ordination.
 It solves the problems related to work performance which aims as
altering the same.

Planning improves employee’s morale
 With planning, an atmosphere of order and discipline originates that
takes it as a serious aspect.
 Through planning employees will come to know what is required from
them which results in obtaining conformity.
Planning helps in achieving economy
 Good planning results in safer economy as it leads to allocation of
resources.
 It makes admissible for correct use of resources for economic operations.
 There will no wastage of resources if choosing correct use will can add to
objectives of an enterprise.
Planning facilitates controlling
 With planning it is possible to proceed with fixed planned goals and
standards of presentation.
 The basic of controlling is provided.
 An operative system of controlling is unmanageable without presence of
good thought plans.
Planning encourages innovations.
 With planning process, managers will be able to suggest ways and
different means in order to improve performance.
Planning provides competitive edge

 Planning uses change in work methods, quality, quantity designs,
extension of work, redefining of goals etc.
 The forecasting will secure the future of an enterprise and at the same
time calculate the future motives of competitors.
 It is the decision making function which accommodates creative thinking
and imagination which shows innovative methods and growth operations
of an enterprise
Types of Plans
The network of various plans facilitates and guides the decision-making and
actions on the part of managers. Knowledge regarding single use and standing
plan, appreciating the distinction between policies and strategies, policies and
procedures and objective and strategy is very important for a manager before
he starts the process of planning.
To provide guidance to the managers to make decisions, take action and solve
problems, various plans are drawn up. These plans help the managers in
managing day-to-day affairs, exploiting resources of organization to good effect
efficiently and in regulating the work behavior of subordinates. Some of the
plans do provide unifying and consistent base for managerial decision and
action. These may be grouped into single use plan and standing plans.

Figure 11 Types of Plans
1. Single Use Plans
Objective: Future destination or desirable undertakings.
Strategy: Course of action developed by relating strengths and weaknesses of
an organisation with opportunities and threats arising out of a mutable
environment.
Programme: A network of policies procedures, rules and budgets designed to
meet specific situations and all other needful actions mandatory for
implementing a given course of action is included in this phase.
Budget: This is a numerical expression of plan in terms of expected revenue
and expenditure over a given period of time.

2. Standing Plans
Policies: General statement that guides decision-making.
Procedure: Administrative action guide, which sets the chronological sequence
for action.
Method: Detailed manner in which a specific activity will be performed.
Rules: Directives for regulating and controlling the working behaviour of the
employees.
Types of Planning
There are four types planning which are:
Operational Planning An operational planning is a diminutive variety planning
which works with daily maintenance activities that are completed at particular
unit or a departmental level that will be operated in the overall strategic
planning. The basic steps involved in operational planning involve:
 Setting up of goals and objectives
 Setting priorities
 Explain with assumptions
 Review all if required
 Create main and back-up plans
 Workout with the plans
 Establish a control system with follow up on development

Intermediate Planning Intermediate planning principally involves time
perspective that can be from one year to five years. Since the time duration is
unclear with longer duration plans, intermediate plans are normally the main
objective in many organizations. It is seen that intermediate planning are
normally worked on and created by top managers who work in coordination
with middle managers.
Contingency Planning Contingency Planning is related to certain activities
that are persuaded to make sure about proper and direct follow-up steps that
will be taken care by management as well as workers on emergency. The main
motto of Contingency Planning is to make sure about:
 containment of damage or loss of personnel and property
 continuity of key operations of organization
Strategic Planning Following are the steps involved in preparing contingency
plan which are:
 To maintain business operations
 Define time periods
 Identify the trigger
 Keep the plan simple
 Consider related resource restrictions
 Identify everyone's needs
 Define success
 Include contingency plans in standard operating procedures
 Manage your risks
 Identify operational inefficiencies
 This will develop healthy attitude in work, which further boost the
morale and efficiency of employees.

 It leads to pre-determined goals that will helped to compare actual
performance.
Advantages and Disadvantages of Planning
Advantages
 Planning forces the manager to generate a blueprint of line of action for
doing objectives.
 With planning, there exists order and reasonableness in an organization.
 It encourages the employees to deliver best which led to earning of
reward.
 It is seen that planning and controlling are opposite sides of a coin.
 With planning, best use of resources, good quality production and
aggressive strength of enterprise can be enhanced.
Disadvantages
 With planning the administration becomes inflexible.
 It requires progressive policies, procedures and programmes.
 It is circumscribed to individual freedom.
 It is restricted to individual interests not for an enterprise.
 Due to assemblage of data, it is a time consuming process.
 It does not work at time of emergency or crisis when faster decisions are
needed.
 Planning depends on thought which is not accurate as a result of future
stability.
 Planning is not cost effective as lot of time and money spends on
collection, analysis and evaluation of information.

Meaning of Decision Making
Decision-making can be considered as the cognitive process resulting in the
selection of a course of action among several available alternatives. It is found
that all decision making process will generate a final choice where the output
can be perceived as an opinion. Precisely, decision making relates to the study
of discovery and selection of various alternatives which depends on values and
choice of a decision maker. Further, decision making shows an option that is
taken care of where the manager could simply narrow down on two factors:
 Highest possibility of success
 Excellent match of goals, desires, lifestyle with values. In the decision
making process, an uncertainty will be lower and doubt related to
alternatives will make a good choice.
Figure 12 Decision Making

The above explanation focuses on the information gathering functions which
results for making decision. In such cases, the uncertainty will be lowered
instead of eliminated. Under such situations, fewer decisions are made with
complete confirmation as entire knowledge of all alternatives is rarely feasible.
So all decision uses a certain level of risk some higher than the rest. If there is
no uncertainty, you do not have a decision; you have an algorithm- a set of
steps or a recipe that is followed to bring about a fixed result.
Characteristics of Decision-Making
The important characteristics of decision-making may be listed thus:
Goal-oriented: Decision-making is a goal-oriented process. Decisions are
usually prepared to attain some purpose or goal. The intention is to move
towards some anticipated state.
Alternative: A decision should be viewed as „a point reached in a stream of
action.‟ It is characterized by two activities- search and choice. The manager
searches for opportunities, to arrive at decisions and for alternative solutions,
so that action may take place. Selecting an alternative and abiding by it leads
to decision making. Thus, an alternative is found fit to solve a particular
problem. When no alternatives exist, the manager does not need to arrive at a
decision. When uncertainty concerning a particular outcome is confronted, the
manager has no choice but to put on his decision making hat.
Analytical-Intellectual: Decision-making is not only an intellectual process
but also an intuitive one. It involves conscious and unconscious aspects. Part
of it can be learned, but part of it depends upon the personal characteristics of
the decision maker.

Dynamic Process: Decision-making is characterized as a process, rather than
as one static entity. It is a process of using inputs effectively in the solution of
selected problems and the creation of outputs that have utility. Moreover, it is
a process concerned with „identifying worthwhile things to do‟ in a dynamic
setting.
Pervasive Function: Decision-making permeates all management and covers
every part of an enterprise. Decision-making is the crux of a manager’s job.
Everything that the manager does is backed by the power of decision – making.
Continuous Activity: The life of a manager is a perpetual choice-making
activity. He decides things as per the gravity of the situation on a continual and
regular basis. It is not a one shot deal.
Commitment of Time, Effort and Money: Decision-making implies
commitment of time, effort and money. The commitment may be short term or
long-term, depending on the type of decision (e.g. strategic, tactical or
operating). Once a decision is made, the organization moves in a specific
direction in order to achieve the goals.
Human and Social Process: Decision-making is a human and social process
involving intellectual abilities, intuition and judgment. The human as well as
social impacts of a decision are usually taken into account while making the
choice from several alternatives. For example, in a labour-surplus, capital-
hungry country like India, managers cannot afford to suddenly shut down
plants, lop off divisions and lay off thousands of workers in the face of intense
competition.
Integral Part of Planning: As Koontz indicated, „decision making is the core of
planning.‟ Both are intellectual processes, demanding discretion and

judgment. Both aim at achieving goals. Both are situational in nature. Both
involve choice among-alternative courses of action. Both are based on forecasts
and assumptions and about future risk and uncertainty.
The Decision-Making Process
Making a good decision is a difficult exercise. It is the product of deliberation,
evaluation and thought. To make good decisions, managers should invariably
follow a sequential set of steps as shown in this figure.
Figure 13 Decision making process

1. Awareness of the problem
The first step in the decision-making process is recognizing the problem. The
manager should be vigilant enough to know that a problem exists and that it is
important enough for managerial action. Problems generally arise because of
disparity between what is and what should be. To identify the gaps between the
current and desired state of affairs, managers should look for problems that
need solving. They must look for occasions to arrive at decisions. The existence
of a problem thus steps up the need for decision making.
In order to recognize problems, a manager is expected to monitor the decision-
making environment, understand the possible causes and try to define the real
problem carefully.
2. Diagnose and state the problem
A successful manager must have the ability to weed out the wheat from the
chaff before deciding on a specific course of action. Once aware of a problem,
he must state the real problem. He must try to solve the problem, not just note
down the symptoms. Quite often, managers waste time developing solutions to
the wrong problem. This is because opportunities and problems in the
environment do not surface so easily.
Some questions that you need to ask include:
 What is the problem? What is the difference between what is and what
should be?
 Which problems should be solved?
 What is the real cause of the problem? To avoid the danger of prescribing
a wrong antidote for the organisation, the manager should consider all
aspects of the issue and the decision environment properly.

For example, a high employee turnover in an organization may be due to low
salaries, poor working conditions, tight supervision, poor scheduling,
dissatisfaction with the jobs etc. The manager should analyses all these causes
thoroughly before defining the real problem. An attitude survey may be
undertaken to find out why employees are leaving the organization. This would
give an insight into what are the unknown issues left unresolved.
3. Develop the alternative
Quite often, executives try to take up the first feasible option. The statement of
the problem in clear, measurable terms enables executives to develop
alternatives.
The capability to expound alternatives is as important as making a right
decision when selecting among alternatives. Ingenuity, research and creative
imagination are required to make sure that the best alternatives are considered
before a course of action is selected.
4. Evaluate the alternatives
In this step, the decision maker attempts to summarise the advantages and
disadvantages of each alternative. The consequences if any, of each alternative
must also be considered. Sometimes, the alternatives developed may meet
internal demands but may fail to meet environmental conditions. In such
cases, a manager may be forced to make a „less than optimal-decision.‟
The primary objective of evaluation is not to find out one magic solution but to
find out a workable solution that would help to eliminate the problem for good.
The attempt is made chiefly to limit the alternatives to a manageable and
economically feasible number.

5. Select the best alternative
In this step, the decision maker selects the alternative that will maximise the
results in terms of existing objectives. Fortunately, Peter Drucker has offered
the following criteria for making the right choice among available alternatives:
 The risk: The manager always plays the game of calculated risks as he
has to weigh the risks of each course of action against the expected
gains.
 Economy of effort: The alternative that will give the greatest output for
the least inputs in terms of material and human resources is obviously
the best one.
 Timing: If the situation has great urgency, the best alternative is the one
that the decision maker finds fit.
6. Implement and verify the decision Limitation of resources: Physical,
financial and human resources impose a limit on the choice of selection. If
adequate resources are not currently available, the decision should be deferred.
After making a decision, the manager must implement it. He must see whether
it has worked out or not in practicality. In other words, he must seek feedback
regarding the effectiveness of the implemented solutions.
Guidelines for Making Effective Decision
Categorical Interpretation: At the very outset, it may be emphasized that
logical decisions can be made if the real problem is interpreted and identified
with in depth study and observation.
Application of Limiting Factor: In choosing from among alternatives, the
more a manager recognizes and solves for those factors, which are limiting and
critical to the attainment of desired objectives, the more clearly and accurately
he can select the most desirable alternative.

Adequate Information: Information is the lifeblood of an organisation because
all conclusions are based on this. The more the quantity of reliable
information, higher is the validity of decision.
Considering Others’ Views: While arriving at a decision, it is desirable that all
alternatives are considered before arriving at a decision.
Timeliness: A decision, to be effective, must be made at proper time. A delay in
decision-making may result into loss of opportunities in this fast-changing
environment.
Types of Decision
There are basically 3 types of decisions are
1. Strategic decisions: are big choices of identity and direction. Who are we?
Where are we heading? These decisions are often complex and multi-
dimensional. They may involve large sums of money, have a long-term impact
and are usually taken by senior management.
2. Tactical decisions: These decisions are about how to manage performance
to achieve the strategy. What resources are needed? What is the timescale?
These decisions are idiosyncratic but within clearer boundaries. They may
involve important resources, have medium-term implications and may be taken
by senior or middle managers.
3. Operational decisions: are more routine and follow known rules. How
many? To what specification? These decisions involve more limited resources,
have a shorter-term application and can be taken by middle or first line
managers.

Figure 14 Types of decisions

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