CHAPTER 2&3 PLANNING , (3).pptxvguiiiugfdd

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1. Chapter -2 Functions of management : planning

2. FUNCTIONS OF MANAGEMENT : 1 Planning 2 Organising 3 staffing 4 Directing 5 Controlling

3. Planning It is the basic /primary /fundamental function of management Before taking any action, a manger has to decide what he wants to achieve and how he is going to achieve .This is called planning Planning is the process of thinking before doing. It refers to deciding in advance what to do, when and how to do it.

4. MEANING & DEFINITION Planning is the process of setting objectives and determining what should be done to accomplish them. Joseph M assie- “planning as a process by which a manager looks to the future and discovers alternative course of action open to him” Richard L Daft and Dorothy M arcic “planning is the act of determining the organisation’s goals and the means for achieving them” In short , planning is deciding in the present what is to be done in the future. It bridges the gap between the present and future.

5. FEATURES/ NATURE OF PLANNING INTELLECTUAL PROCESS GOAL – ORIENTED BASIC TO ALL MANAGERIAL FUNCTIONS(PRIMACY OF PLANNING) PERVASIVE CONTINUOUS PROCESS FUTURISTIC INVOLVES CHOICE AIMS AT EFFICIENCY MAKES CONTROL EFFECTIVE

6. Importance of Planning It helps in achieving objectives It minimizes risk and uncertainty It makes control effective It promotes efficiency in the organization It encourages innovation and creative thinking It improves competitive strength of an enterprises It helps in co-ordination It guides decision- making It improves motivation and morale Bridge between present and future

7. LIMITATIONS OF PLANNING Expensive and time consuming . Based on assumptions (these assumption may be wrong). When the environment changes frequently , the planning will become difficult. It makes the organisational structure rigid. It may fail due to lack of commitment, lack of clear and meaningful objectives ,etc. The executives have a natural resistance to change. They have more regard for the present than for the future.

8. Types of plan ( elements or components of planning) Components of planning are collectively called “plans”. Depending on use it may be 2: Single use plans:(adhoc plan) - one –time plan - designed to achieve a specific objective -prepared for particular purpose . - when the purpose is over, it will not be used again. -e.g. : budgets, programmes, strategies 2. Standing plans :(multi- use plan /repeated use plan) - an ongoing plan -used again and again (permanent plan) -prepared by mangers at different levels. It is usually made for a long period of time - formulated for handling similar types of problems and situations. -e.g. Objectives ,policies, procedure, methods, rules

9. Single use plan Standing plan It is made to achieve a particular goal It is made to meet a situation which is of recurring nature When a goal is reached it is discarded It is used again and again It is used for a particular situation only It is used for meeting repetitive situations It deals with only one aspect of business It is concerned with the company as a whole It is used for non-repetitive problems It is used for repetitive problems e.g. : budgets, programmes, strategies e.g. Objectives ,policies, procedure, methods, rules

10. OBJECTIVES STRATEGIES POLICY PROCEDURE METHODS RULES PROGRAMME BUDGET

11. 1 . objectives: Objectives are the ends which the management seeks to achieve by using its operations. Therefore, an objective simply stated is what you would like to achieve. Eg : increasing sales by 10%. 2 . Strategies: A strategy is a comprehensive plan for accomplishing an organisational objective. This will include 3 dimensions: Determining long term objectives Adopting a particular course of action Allocating resources necessary to achieve the objective. It is the plans made in the light of the plans of a competitor

12. 3 . Policy Policies are general statements that guide thinking or channelize energies towards a particular direction. Eg : pricing policy 4 . Procedure : procedures are routine steps on how to carryout activities. Eg : procedure to produce a product 5.Methods: Method provide the prescribed ways or manner in which a task has to be performed considering the objective. Eg : for the valuation of stock, the organisation must decide in advance what method has to be adopted(LIFO or FIFO) 6. Rules : Rules are specific statements that inform what is to be done. Eg : no smoking, no admission without permission

13. 7.Programme: Programmes are detailed statements about a project which outlines the objectives,policies,procedures, rules, tasks, human and physical resources required. Eg : programmes for construction of shopping mall. 8. Budget: A budget is a statement of expected results expressed in numerical terms. Eg : sales budget

14. Planning Process or Steps in Planning

15. PLANNING PROCESS FORECASTING DETERMINATION OF OBJECTIVES ESTABLISHING PLANNING PREMISES DETERMINING ALTERNATIVE COURSES OF ACTION EVALUATING THE ALTERNATIVE COURSES OF ACTION SELECTING THE BEST COURSE OF ACTION FORMULATING DERIVATIVE PLANS IMPLEMENTING THE PLAN AND REVIEWING IT

16. Forecasting: Planning is concerned with the attainment of objectives in future. Predicting the future environment (both internal and external) is known as forecasting. It is process of predicting the future events like general economic conditions, sales, technology, population growth ,competition, political conditions ,etc. 2. Determination of objectives : The next step in planning is the establishment of objectives on the basis of various kinds of forecasts. The organisational objectives may be growth , profitability , innovation, etc. The objectives will be determined for each department. The objectives must be clear and specific.

17. 3. Establishing planning premises: Planning is done for the future which is uncertain. C ertain assumptions and predictions are made about the future environment. These are known as planning premises . E.g . A business is anticipating increase in the sales of computers assuming that sales tax on computers will be decreased by the government . 4.Determining alternative course of action: There are alternative ways for achieving the same goal . E.g . To increase sales, different ways are there, like advertisement, reducing prices, improve quality ,offering more discount ,etc. These alternative course of action are developed on the basis of objectives and planning premises.

18. 5. Evaluating the alternative course of action : The positive and negative aspects of each alternative should be evaluated based on their feasibility and consequences . A comparative study of each alternative is made with a view to find the best alternative .. 6. Selecting the best alternatives After analysing the merits and demerits of each alternative , the most appropriate one is to be selected by evaluating cost ,risk, benefit to organization ,etc . This is the real point of decision making.

19. 7. Formulating derivative plans : In this step, sub- plans are developed. In order to support the basic plan, several sub plans are required. such sub-plans are derivative plans that are prepared for each area or segment of the enterprise like materials , production, marketing, finance etc. 8. Implementation of plans and reviewing it Implementation means putting plans into action to achieve the objective . For the successful implementation , the plans are to be communicated to the all levels at every stages . After implementation , Plans are to be evaluated regularly to check whether they are proceeding in right way , shortfalls can be located and remedial actions can be taken well in advance.

20. Barriers to effective planning Inappropriate goals Dynamic and complex environment(forecasting the environment) Reluctance to establish goals : some managers are fails to set goals for their organization. The reasons are- - unwillingness to abandon alternative goals - fear of failure(not take risk) - lack of information and they may not make new plans - lack of confidence

21. 4.Resistance to change - uncertainty about the causes and effect of change -unwillingness to give up existing benefits - awareness of weaknesses in the changes proposed 5. Other constraints - attitude of owner- managers towards planning - lack of consensus on planning issues ( communication gap) - managerial conflicts

22. CHAPTER 3 Functions of management : Organising

23. Meaning and definition of organisation Organisation is a collection of people working together to achieve a common goal. Organisation means an institution. It is made by people , so it is the network of human relationship. Eg : Business enterprises, school, colleges, hospitals ,etc. M A Cameroon “organisation is the framework of duties and responsibilities through which an undertaking works” Organisation is a group of people working together to achieve common goal. There are 3 sense in which the term organisation is used: 1. As a structure 2. As a process 3. As a system

24. 1. As a structure Organisation refers to a network of relationships among individuals in an organisation 2. As a process Organisation refers to brining together material and human resources effectively to achieve the objectives. It is the process of identifying , classifying ,grouping and assigning various activities required to achieve the objectives. When the term organisation is used as a process, then it is known as organising. 3. As a system Organisation is a system in which individuals play specific roles assigned to them with the several roles being coordinated to form an integrated pattern.

25. Nature /element of organisation 1.People- Organisation is of the people, by the people and for the people . 2. Common purpose- An organisation exists to achieve some common goals. 3. Co-ordination- It helps in and harmonising the different parts and activities. It also avoids duplication and delays 4. Co-operative efforts- An organisation creates co-operative relationship among various members of the group 5. Authority and responsibility- Authority and responsibility are well-defined for each position. 6. Division of work - The total work is divided into functions and sub-functions . Each function or sub –function is assigned to each person. 7. Environment – Organisation is influenced by the external environment. 8.Communication- Channels of communication are necessary for mutual understanding and co-operation among the members of the organisation.

26. Purpose of organisation To serve as a foundation of sound management To increase production The ensure co-operation To facilitate growth and diversification To enable optimum utilization of resources

27. Meaning and definition of organising Organising means dividing and grouping activities and resources . It is the process of dividing , grouping and co-ordinating tasks and resources to achieve a common purpose . It is concerned with bringing together the necessary physical and human resources to achieve the organisational objectives. Louis A Allen “organising is a process of identifying and grouping the work to be performed, defining and delegating responsibility and authority and establishing a pattern of relationship for the purpose of enabling people to work most effectively together in accomplishing objectives”

28. Nature or characteristics of organising Goal –directed activity Integration of human and non-human resources to attain organisational goals Grouping of activities into units like department , team etc. Encourages teamwork Foundation of management. Success of any institution depends upon its sound organisation.

29. Importance of organising or organisation Facilitates other managerial functions Ensure optimum use of resources Co-ordinates diverse activities Avoids duplication of work Facilitates growth and diversification Helps in increasing production and productivity through specialisation Creates better human relations

30. Principles of organisation Division of labour Unity of objectives Span of control (span of management) Functional definition Co-ordination Unity of command Unity of direction Scalar chain Efficiency Balance Flexibility Responsibility Other principles: - continuity , communication , delegation , authority , exception

31. ORGANISATION STRUCTURE Organisation structure is the arrangement of jobs within an organisation. An organization structure is the pattern of authority – responsibility relationships among various levels of management. It helps in knowing who is responsible to whom and for what. It is the frame work within which manager and other employees perform their various functions. TYPES OF ORGANISATION STRUCTURE: 1. Line organisation 2. Functional organisation 3. Line and staff organisation

32. 1.LINE ORGANISATION Simplest and oldest form of organisation Authority flows from top to bottom vertically ( in an unbroken line) Every person exercises a direct authority over his subordinates . The subordinates in turn are directly responsible to their superior. Authority and responsibility flow in an unbroken straight line , that is why it is known as line organization. Also known Military or scalar organisation.

33. BOARD OF DIRECTORS CHIEF EXECUTIVES GENERAL MANAGER MANAGER SUPERINTENDENT FOREMAN WORKERS FIGURE: LINE ORGANISATION

34. Features : Direct vertical relationship Authority flows from top to lowest level Each members knows from whom he has to receive orders and to whom he has to give orders A superior exercises direct command over his subordinates(direct relationship) No managerial specialization The superior will take decisions within the scope of his authority Suitability : Where the size of the business is small with small number of subordinates Where the work is largely of routine nature and methods of operation are simple Where continuous processes are followed Where automatic machine are installed Where labour problems are not very complex

35. 2.FUNCTIONAL ORGANIZATION D eveloped by FW.Taylor. Under functional organisation the organisation is divided into a number of functional areas (or departments) e.g. purchase, production , marketing, finance, quality control, etc. Each function or department is managed by a functional expert in that area . Every functional head enjoys functional authority over subordinates in other departments. Within a functional department every operating executive receives orders from several functional specialists.

36. Chief Executive Production H.R. Marketing Finance Manager Manager Manager Manager Superintendents Superintendents Supervisor Supervisor

37. Features : 1.The entire activities of the organization are divided into specific functions. 2. An expert (specialist) is appointed to look after each function or department 3 . There is high degree of specialization 4. Subordinates get instructions not only from their own boss but also from bosses in other departments 5. It is suitable for large enterprises.

38. A dvantages Division of labour and specialisation Economies of scale Efficient use of resources Better control and supervision Reduction in workload Disadvantages or Demerits 1 Complex organisation structure 2 . Lack of unity of command (subordinate is responsible to more than one boss ) 3 Delay in decision-making 4 . High cost to maintain different departments 5 Chances of confusion and conflict among departments

39. 3. Line and Staff Organization C ombination of line and functional organizations L ine authority moves down in the same manner as in the line organization. But in addition, specialists (known as staff) are attached to l ine managers to advise them on important matters . The line managers are not specialists. So the specialists (staff) give advice and assistance to line managers as and when required. This enables the line manager to carry out their activities better The staff officers (experts or specialists) do not have any power of command in the enterprise. They are employed only to provide advice to the line officers. The staff officers are experts in their field.

40. Board of Directors Chief Executive Industrial Engineer General Manager R&D Engineer Legal Advisor Manager Public Relation Officer Superintendent Foreman Workers

41. S uitability 1 Where the business is carried on large scale . 2 Where there are large number of complex managerial tasks . 3 Where there are scientific activities . 4 Where we want to eliminate the defects of simple line organization . Advantages 1 Greater efficiency of line executives as a result of expert advice from staff officer . 2 Reduction in the work load of line executives . 3 Less wastage of resources 4 Improved quality of production 5 Better, balanced and more sound decisions on account of information and expert advice 6 More flexible as compared to the line organization

42. Disadvantages 1. Chance of conflict between line and staff 2 . Chance of confusion if duties and responsibilities are not clear 3 . Not suitable for small organizations 4 . Centralization of authority in a few heads 5 Expensive because of higher salaries of experts 6 . Lack of initiative on the part of line managers due to too much dependence on staff officer

43. Line Organisation Line and Staff Organisation S pecialisation is altogether missing Specialisation exists in line and staff Organisation Strict discipline is followed Discipline is loose. staff relations can be absent staff-line relations exist within departments Line officers plan and execute work related to all field s line officers are helped by staff experts for doing different activities Line organisation is meant for a small firm line and staff organisation is essential for a medium large firms.

44. Functional Organisation Line and Staff Organisation T he lines of authority become diagonal L ines of authority are vertical as well as horizontal In functional organisations all departments have an equal status In line and staff organisation, it is not so. Functional managers enjoy complete authority in their areas in functional organisation I t is not enjoyed by specialists The principle of unity of command is not at all followed This organisation makes a subordinate responsible to only one superior Suitable for large enterprise suitable for medium and large enterprises

45. Formal Organization Informal Organisation Created deliberately by management Created spontaneously and naturally C reated to achieve objectives of the organisation It is created to meet the social, cultural and psychological needs of the members It is quite large in size. It is small in size (formed within the formal group). It is more or less rigid or stable. It may continue for a very long period of time. It is flexible. It may not continue for long because members may form alternative groups. Behaviour of the members is guided by formal rules and regulations. Behaviour of the members is guided by norms, beliefs and values of the group. It has a clear and well-defined structure (official) It does not have a clear and well defined structure (unofficial). It makes more use of formal communication It makes more use of informal communication.