EKLAVYA PAPER 2 BUSINESS MANAGEMENT PART 2.pdf

BUSINESS MANAGEMENT

1. EKLAVYA ACADEMY
COMMERCE &MANAGEMENT
BUSINESSMANAGEMEN
By,
Mrs.Abhilasha.N
Mcom, MPhil, NET-JRF,SET, (Ph.D. in commerce),
Contact No: 9620925899

2. MEANING OFPLANNING
Planning and plan, there is a little difference between them, planning is an activity or a
process while plan is a commitment to a particular course of action believed necessary to
achieve specific results. Plan are prepared through planningprocess.
Planning as a process involves the determination of future course of action, that is why
an action, what action, how to take action and when to take action. It is afuturistic.
Some of the important featuresare:
•Plans done by topmanagement
•Deciding in advance aboutfuture
•It’s a continuousprocess
•Futuristicbased
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3. PLANNINGPROCESS
➢Establishingobjectives
➢Planning premises(Assumption)
➢Identifying alternative course ofactions
➢Evaluating of alternatives
➢Selecting the best possiblealternatives
➢Implementation ofplan
➢Follow ofplan
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4. SIX P’S OFPLANNING
➢Purpose
➢Plan
➢Policies
➢Promise
➢Priorities
➢Philosophy
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5. TYPES OFPLANNING
➢ON THE BASIS OF COVERAGE OF ACTIVITIES–
1)CorporatePlanning-planningatthetoplevelalsoknownascorporatelevelwhichcover
theentireorganizationalactivities.Longtermobjectivesitisalsousedassynonymousto
longtermplanningorstrategicplanning.Itisintegrative(holisticapproach)
2)Functionalplanning-Itissegmentalandisundertakenforeachmajorfunctionof
organizations.
➢ON THE BASIS OF DIRECTION OF ACTIONS–
1)Strategic Planning-It sets long term direction of organizations in which it wants to
proceed is external to the environment, time period 3-5 years and formulated at the top level
ofmanagement.
2)Operationalplanning-ItisalsoknownasTacticalPlanningorShortTermPlanning
usuallycovers1year.Itbasicallyincludesdaytodayoperations.Itfocusontheinternal
organizationsandformulatedatmiddleandlowerlevelofmanagement.
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6. ➢ON THE BASIS OF TIMEPERIOD
1)Long Term Planning-It is of strategic nature and involves more than 1 year period extending
to 20 years, more common is 3-5 years. It is external to the environment also known as strategic
planning.
2)Short term planning-It is also known as operational or tactical planning usually covers 1year.
➢ON THE BASIS OF APPROACH ADOPTED –
1)Proactive Planning-In this, organizations do not wait for environment to change buttake
actions in advance of environmentalchange.
2)Reactive planning –In this organizations responses come after the environmental changes have
taken place.
➢ON THE BASIS OF DEGREE OF FORMALIZATIONS
1)Formal planning-It is the form of well structural process involving different steps. Large
organizations undertake planning in formal way. Monitor external environment on continuous
basis. The planning process that is adopted is rational, systematic, well documented &regular.
2)Informal planning-It is taken by smaller organizations based on memory, intuitions, gut
feelings. • Plan-It is a commitment of resources to a particular course of action believed
necessary to achieve specificresults.
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7. TYPES OFPLAN
STANDING PLAN/LONGTERM/STRATEGIC
“It provide guidelines for further courseof
action and are used over a longer periodof
time”
SINGLE USE/SHORTTERM/OPERATIONAL
“This plan are relevant for a specified timeand
after the lapse of that time these plansare
formulated again for the nextperiod”
Mission/purpose Rules
Objectives Programmes
Strategies Projects
Policies Budgets
Procedures Quota
Target
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Hierarchy of plans:
Mission---objectives ---strategies ---policies –procedure and rules ---programme and
project ----budget ---quota and target
Major plan –Projects and budget Minor plan --quotes and target

8. •Policy –The term policy is derived from the Greek word Pliteia meaning citizen and
Latin word Politis meaning polished that is to say clear. A policy is the statement or
general understanding which provides guidance in decision making to members ofan
organization in respect to any course ofaction
•Procedures-a procedures prescribes the chronological sequence in which anactivity
should be performed to achieve the objective of theactivity.
•Methods-itisdefinedasaprescribedmannerforperformingagiventaskwithadequate
considerationtotheobjective,facilitiesavailable,andtotalexpendituresoftime,money
andeffort.
•Rules-It is prescribed guide for conduct or action. Rules are plan as they are a course of
action which is chosen from among the alternatives. A rules provides definite action tobe
taken or not taken with respect to asituation.
•Project-It is a single use plan which can be thought of in terms of planned actions
integrated into a unity and designed to bring about a stated objectives. It is a schemefor
investing resources which can be analyzed and appraisal reasonably andindependently.
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9. •Philosophy –It consists of an integrated set of assumptions & beliefs about theway
things are, the purpose of the activities and the way these shouldbe.
•Vision-It is the mental perception of the kind of environment a person desires to create
within a broad time horizon and the underlying conditions for the actualization of the
perception. It represents the imagination of future events and prepares the organization for
thesame.
•Target:A target isthe desired level of performance for a specific performance indicator.
Performance indicators and targets are mechanisms to operationaliseobjectives.
•Quota:Aquotais thelimitednumber or quantity of something which is officially allowed.
•Objectives-It is used to specify the end results which an organization wants toachieve.
Objectives are expressed in quantitative and absoluteterms.
•Budget-A budget is a kind of single use plan of expected results expressed in numerical
terms. These results are expected to be achieved within specified time period which is
generally 1 year. The term budget has been derived from the French word bougette denoting
a leather pouch in which funds are appropriate for meeting anticipatedexpenses
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10. ORGANISING
Organizing involves analyzing of activities to be performed for achieving organizational
objectives, grouping these activities into various divisions, departments and sections so
that these can be assigned to various individuals & delegating them appropriateauthority
so that they are able to carry on their workeffectively.
Organizing includes following elements departmentation, linking departments,defining
authority & responsibility, prescribing authorityrelationships.
Organization structure establishes relationship between people and work withinwhich
managerial and operating tasks are performed to achieve organizationalobjectives.
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11. STEPS INORGANISING
➢Identifying theactivities
➢Grouping theactivities
➢Assignment ofactivities
➢Delegation ofauthority
➢Establishment ofrelationship
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12. SPAN OFMANAGEMENT
It means number of subordinates which should be put under one superior or it refersto
the number of subordinates who can be managed effectively by a superior. It is also
known as Span Of Control And Span Of Supervision. Number of subordinates
reporting to a superior isfixed.
Factors affecting span ofmanagement
1)Capacity ofsuperiors
2)Capacity ofsubordinates
3)Nature ofwork
4)Degree ofdecentralization
5)Degree ofplanning
6)Communicationtechniques
7)Use of staffassistance
8)Supervision fromothers
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13. STAFFING
“Process of hiringeligiblecandidatesintheorganizationfor specificpositions”
Process ofstaffing:
1.Manpowerplanning
2.Recruitment
3.Selection
4.Placement
5.Training
6.Development
7.Promotion
8.Training
9.Appraisal
10.Determination ofrenumeration
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14. ManpowerPlanning:Manpowerplanningisthequantitativeandqualitativemeasurementofthemanpower
thatisrequiredinanorganisation.Itinvolvesevaluationandcreationofthemanpowerinventoryandalsoto
developthenecessarytalentsamongtheemployeesthatareselectedforobtainingpromotion.
Recruitment:Recruitmentistheprocessoffindingthepotentialemployeesofanorganisationandpersuading
themtoapplyfortheavailablepositionsintheorganisation.Iftherecruitmentprocessisfollowedscientifically,
thenitwillresultinbetterwages,highmoraleandhigherproductivityamongtheemployees.
Selection:Selectionistheprocessofshortlistingofpotentialcandidatesandeliminatingthecandidatesthatare
notsuitableforthepositionsavailableintheorganisation.Thepurposeofselectionistohiretherightcandidate
fortherightposition,whichwillleadtoefficientrunningofoperationsfortheorganisation.
Placement:Placementreferstotheprocessofintroducinganemployeetothejobforwhichhewashiredinthe
organisation.Theemployeewillbeprovidedwithabasicorientationaboutthecompanyanditsworkareas.
Training:Trainingistheprocessofprovidingthenewlyrecruitedemployeesanideaaboutthetypeofworkthat
theyaregoingtodoandhowtodothat.Thisfallsunderthetrainingdepartment.Trainingisanessentialpartof
hiringasithelpskeeptheemployeesupdatedonthewayofworkinanorganisation.Alsoduetoadvancesin
technology,newertechnologieswillevolve,thatmakesitnecessaryforemployeestobeupdatedwiththelatest
development.

15. Development:Developmentreferstotheopportunityofgrowthoftheemployeesintheorganisation.
Theorganisationmustprovideampleopportunitiesforthedevelopmentoftheemployees,without
whichtheemployeesmaybecomefrustrated.
Promotion:Promotionisreferredtoastheprocessofgivingtheemployeesaraiseinsalary,
designationorboth.Theraiseindesignationisassociatedwitharaiseinwagesorbonusorincentives.
Therecanbesomeinstanceswherethechangeindesignationdoesnotresultinincreaseinpay.
Transfer:Transferistheprocessofshiftingofanemployeefromonepositiontoanotherinthe
organisationwithoutanymonetarybenefit,oranyincreaseintheresponsibilities.Thisfunctionneeds
tobeevaluatedfromtimetotime.
Appraisal:Appraisalistheprocessofcheckingtheprogressoftheworkdonebythesubordinates.It
alsostudieshumanbehaviorandalsotheattitudeandaptitudeoftheemployeetowardsperforming
thejob.
DeterminationofRemuneration:Theremunerationofanemployeeisveryimportantfor
sustenance.Itisregardedasoneofthedifficultfunctionstoperformasthereexistsnotoolswhichcan
accuratelydeterminewages.

16. DIRECTING
“Process in which the managers instruct, guide and oversee the performance of the
workers to achieve pre-determinedgoals.
It covers
a)Leadership
b)Motivation
c)Communication
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Leadership is the ability of an individual or a group of individuals to
influence and guide followers or other members of an organization.
Motivation is the word derived from the word 'motive' which meansneeds,
desires, wants or drives within the individuals. It is the process of
stimulating people to actions to accomplish the goals.
a process by which information is exchanged between individuals
through a common system of symbols, signs, or behavior

17. CONTROLLING
“Ensuring that activities in an organizations are performed as per theplans”
PROCESS OFCONTROLLING:
•Establishing ofstandards
•Measurement ofperformance
•Comparing actual performance withstandards
•Analyzing the cause fordeviations
•Taking correctiveactions
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18. REPORTING
“Providing information to various levels ofmanagement”
BUDGETING
“Management makes estimation of revenue and expenses for future
goals ofbusiness”
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