Exit Exam course for management department

1. Introduction To Management
2. Principle Of Marketing
3. International Marketing
4. Human Resources Management
5. Organization Behaviour
6. Leadership and Change Management
7. Entrepreneurship
8. Management Information Systems
9. Strategic Management
10. Project Management
11. Business Research Method
12. Statistics for Management 1and 2
13. Operations Management
14. Financial Management
15. Operations Research
 CHAPTER ONE

INTRODUCTION TO MANAGEMENT

FUNDAMENTALS OF MANAGEMENT
1.1. Introduction

Management is the integrating force in all kinds of organized activity. It is not unique to
business organizations but common to all kinds of organizations. Every organization has
problems to be solved and opportunities to be maximized. They need skilled managers to be
successful.

High performance requires the efficient and effective use of organizational resources, which
can be realized through the application of management. This unit introduces a number of
important concepts about management. It invites you to the subject matter of management
and explains what is really needed to be a successful manager. It tries to look
at the importance of management, the functions of management, the skills, roles, and
activities of management, the universality of management and many others.

1.2. Definition of Management

There are several definitions of management given by different authors in the field. The
various definitions of management can be conveniently classified as follows:

1. Functional School

According to functional school, management is a process consisting of planning, organizing,

actuating and controlling to determine and accomplish the objectives by the use of people and
resources. To manage is to forecast and to plan, to organize, to command, to coordinate and
to control.

2. Human Relations

School According to the human relations school, management is a social process. It is a

social process because managerial actions are principally concerned with relations
between people; management is essentially concerned with the development of people and
not the direction of things.

 Management is the accomplishment of results through the effects of other people.

 Management is the art of getting things done through and with people in a formally
organized group.
3. Decision Making School

In the words of Peter Drucker (1974), the life of a manager is a perpetual choice making
activity. Whatever a manager does, he does through decision- making only.

According Decision Making School

 Management means decision making

 Management is simply the process of decision- making and control over the action of
human beings for the express purpose of attaining pre-determined goals.
4. System and Contingency School

According to this school, organizations like any living organism must adapt themselves to
their environments for survival and growth. Thus, management involves designing
organizations adaptable to changing markets, technology and other critical environmental
factors. The systems theory of organizations are organic and open systems
consisting of interacting and interdependent parts and having a variety of goals. Managers
are supposed to maintain balance among the conflicting objectives, goals and activities of
members of the organization. He must achieve results efficiently and effectively. According
Contingency School there is no best way to design organizations and manage them. Managers
should design organizations, define goals and formulate policies and strategies in accordance
with the prevailing environmental conditions.

Based on the above definitions let us wind up the precise definition of management.

Management may be defined as the process of planning, organizing, directing (leading) and
controlling to accomplish organizational objectives through the coordinated use of human
and material resources. It is a process of efficiently getting activities completed with and
through other people. It is a process by which human and non-human resources are
coordinated to accomplish a set of objectives.

1.2. Significance of management

It helps in Achieving Group Goals - It arranges the factors of production, assembles

and organizes the resources, integrates the resources in effective manner to achieve goals. It
directs group efforts towards achievement of pre-determined goals. By defining
objective of organization clearly there would be no wastage of time, money and effort.
Management converts disorganized resources of men, machines, money etc. into useful
enterprise.
Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these
services leads to use of their skills, knowledge, and proper utilization and avoids
wastage. If employees and machines are producing its maximum there is no under
employment of any resources.

Reduces Costs - It gets maximum results through minimum input by proper planning and by
using minimum input & getting maximum output. Management uses physical,
human and financial resources in such a manner which results in best combination.
This helps in cost reduction.

Establishes Equilibrium - It enables the organization to survive in changing environment. It

keeps in touch with the changing environment. With the change is external environment, the
initial co-ordination of organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for growth and survival of
organization.

Essentials for Prosperity of Society - Efficient management leads to better

economical production which helps in turn to increase the welfare of people. Good
management makes difficult task easier by avoiding wastage of scarce resource. It improves
standard of living. It increases the profit which is beneficial to business and society will get
maximum output a minimum cost by creating employment opportunities which
generate income in hands. Organization comes with new products and researches
beneficial for society.

1.4. Managerial Functions an Overview

Managers are known by the work they do, the functions they perform. According to the
functions approach, originated by Heneri Fayol (1949), in every organization managers
perform certain functions in order to achieve the results. Nowadays these functions may be
broadly classified into four categories; planning, organizing, leading, and controlling. A brief
discussion of the four basic functions is presented here.

1. Planning

Planning is the first function that all mangers engage in because it lays the groundwork for all
other functions. It identifies the goals and alternatives. It maps out courses of action those
will commit individuals, departments, and the entire organization for days, months, and years
to come. Planning is concerned with future. Planning anticipate and precedes
action. It is basically concerned with determining the objectives of the firm and the means
for achieving them. It is choosing an effective course of action from among various
alternatives. Generally speaking, plans permit:

 The organization to obtain and commit the resources needed to reach its objectives
 The members of organization to carry on activities consistent with the objectives
chosen, and
 The progress toward the objectives to be mentioned and measured, so that
corrective measures may be taken, if the rate of progress is unsatisfactory.
2. Organizing

Organizing as a management function is concerned with

1. Assembling the resources necessary to achieve the organization’s objective and

2. Establishing the activity-authority relationships of the organization.

Planning has established the goals of the company and how they are to be achieved; now,
organizing develops the structure to reach these goals. The activities necessary to
achieve the objectives are grouped into working divisions, departments, or other
identifiable units primarily by clustering similar and related duties. The result is a network of
interdependent units. Each unit and each person in the unit should have clearly defined
authority, or a clearly defined list of duties, and one person to whom to report.

3. Directing/Leading

Directing is aimed at getting the members of the organization to move in the direction that
will achieve its objectives. Directing builds a climate, provides leadership, and
arranges the opportunity for motivation.

4. Controlling

Ensuring that the objectives and plans of the organizations are achieved is known as
controlling function. Controlling is devising the ways and means of ensuring
planned performance is actually achieved. Essentially controlling function involves the
following elements:

 Setting of standard against which work progress is measured.

 Comparing actual performance against the standard.
  Identifying and initially examining causes of deviations between the standard
and the actual performance
 Taking corrective actions to eliminate causes of unfavourable deviations.

1.5. Levels of Management and Types of Managers

1.5.1. Levels of Management

Levels are hierarchical arrangement of managerial positions in an organization. The number

of levels of management, among other things, depends on the size of the organization. In
general, there are three managerial levels.

i. Top level management,

ii. Middle level management,
iii. First level (operating level) management

Top – Level Management:

Encompasses small group of individuals who are at the highest level of management and
responsible for making decisions and formulating polices that affect all aspects of the
organizations. In most cases strategies and general guidelines of activities are going to be set
at this level of management. Functions of top management include:

- Establishing broad objectives,

- Designing major strategies,
- Outlining principal policies
- Providing effective organizational structure that insures integration
- Providing overall leadership and direction
- Making overall control of the organization
- Dealing with external parties such as the government, community,
business etc. Byre presenting the organization, and
- Analysing the changes in the external environment and respond to it.

Middle – Level Management

Middle level of management encompasses all management levels below top level
management and above operational level of management. Middle – level management
includes heads of the different functional areas and their assistants: divisional heads,
department managers, section heads, plant managers, branch managements, etc. managers in
this level are specialists and their activities are limited to a particular area of operation or to a
section or department. The major functions of middle level management are:
  Acting as intermediary between top and operating level management
 Translating long-term plans of top management into medium range plans,
 Developing specific targets in their areas of responsibility;
 Develop specific schedules to guide actions and facilitate control,
 Coordinating inputs, productivity and outputs of operating level managements.

Operating Level Management (First – Level Management)

This is the last step of the ladder in the hierarchy of management. The subordinates of
Operating

Level Managers are non- management workers. Operating level mangers direct a small team
of workers and keep a check on their performance so that short-term production and work
targets are achieved. The typical titles in this level are section chief, office
manager, foreman, supervisor, etc. the major functions of Operating Level Management are:

 Planning daily and weekly activities and accomplishments based on the

monthly, quarterly, and yearly plans;
 Assigning operating employees to specific tasks;
 Issuing instructions at the work place, following – up, motivating and evaluating,
workers and reporting to their superiors.

1.5.2. Types of Managers

Managers are found at multiple levels in an organization. They may lead an entire
organization or they may head functions, departments, or units. Mangers are distinguished or
classified based on the scope of the activities they manage into Frontline, Functional and
General Managers. Frontline Mangers Frontline managers are managers who manage
employees who are themselves are not managers. They are found at the lowest level of the
management level. Functional Mangers Functional mangers supervise with specialized
skills in a single area of operation, such as accounting personnel, finance, marketing,
and production. All these functions are necessary for the success of the organization. General
Mangers General Managers are responsible for the overall operations of a more complex unit,
such as accompany or a division. General Managers hold functional management accountable
for their specialized areas and usually coordinate two or more departments. In
their jobs, general managers have to deal with major uncertainties, great
diversity, and a large volume of information.
1.6. Managerial Roles and Skills1.

6.1. Managerial Roles

Managers perform the basic managerial functions by playing a variety of managerial roles.
A roles an organized set of behaviours. Henry Mintzberg studied a variety of managerial jobs
and arrived at the ten most common roles of top managers. The ten roles are classified into
three categories: interpersonal roles, informational roles, and decisional roles. However:

i. Every manager’s job consists of some combination of roles

ii. These roles often influence the characteristic of managerial work
iii. Although we describe them separately for simplicity, these roles actually are
highly interrelated
iv. The relative importance of each role varies considerably by managerial
level of function

Interpersonal Roles

Interpersonal roles arise directly from a manger’s formal authority, involves

interpersonal relationships. Managers play the following three interpersonal roles.

Figurehead Role: in the figurehead role, the manger represents the organizations at
ceremonial and symbolic functions. It is the most basic and the simplest of all managerial
roles. The supervisor who attends the wedding of the machine operator, the sales manager
who takes an important customer to lunch all are performing ceremonial duties
important to the organization’s image and success. While these duties may not seem
important, they are expected of managers. They symbolize management’s concern for
employees, customer and the community.

Leadership Role: the leadership role involves responsibility for directing and coordinating
the activities of subordinates in order to accomplish original objectives. Some
aspects of the leadership role have to do with staffing: hiring, promoting. Other aspects
involve motivating subordinates to meet the organization’s needs. Still other aspects relate to
creating a vision that company employees can identify with.

Liaison Role: The liaison role refers to dealing with people outside the organization, such as
clients, government officials, customers, and suppliers. It also refers to dealing with mangers
in other departments, staff specialists, and other departments’ employees.
In the liaison role, the manger seeks support from people who can affect the departments
and the organization’ success.

Informational Roles: Managers should collect, disseminate and transmit information both
from internal and external environment of their organization. In order to make the
right decisions, managers need information from various sources. Effective mangers
build networks of contacts for sharing information. Because of these contacts, managers
emerge as the nerve system centres of their organizations. In this regard, monitoring,
dissemination, and spokesperson roles are described below under this category.

Monitor Role: the Monitor role involves seeking out, receiving, and screening information.
Justas a radar unit scans the environment; managers scan their environments for information
that may affect their organizations. Since much of the information received is oral (from
gossip and hearsay, as well as formal meetings), managers must evaluate and decide whether
to use this information.

Disseminator Role: in the Disseminator role, the manager shares information with
subordinates and other members of the organization. Sometimes the manager
passes along special or “privileged” information to certain subordinates who would not
originally have access to it and who can be trusted not to let it go further. In practice passing
information along to subordinates is often difficult and time consuming. Therefore, the
manager must decide which and how much information will be useful.

Spokesperson Role: in the spokesperson role managers transmit information other,

especially those outside the organization, as the official position of the company. The
manager is the person who speaks for his or her work unit or organization to
people outside the work unit or organization.

Decisional Roles:

Managers use information to make decisions about when and how to commit their
organization to new objectives and actions. Decisional roles are perhaps the most important
of the three categories of roles. Managers are the core of the organization’s decision-making
system since they plays the following four decisional roles.

Entrepreneurial Role: this role involves designing and initiating planned change in order to
improve the organization’s position. Managers play this role when they initiate new projects,
launch a survey, test a new market, or enter a new business.
Disturbance handler Role: managers play the disturbance handler role when dealing
with problems and changes beyond their immediate control. Typical problems include strikes
by labour, bankruptcy or major suppliers, or breaking of contracts by customers. Sometimes
disturbances may arise because a poor manger ignores the situation until it becomes a crisis.
However, even good mangers can’t possibly anticipate all the consequences of their decisions
or control the actions of others.

Resource Allocator Role: this role involves choosing among competing demands for money
equipment, personnel, and other’s demands on manager’s time. What portion of the
budget should be earmarked for advertising ad what portion for improving an existing
product line? Should she/he add a second shift or pay overtime to handle new orders? For
example, one may choose among allocating resources to automate certain plants, close others
down, etc.

Negotiator Role: closely linked to the resource allocator role is the negotiator role. In this
role mangers meet and discuss their difference with individuals or groups for the purpose of
reaching an agreement. Negotiations are an integral part of a manager’s job. Especially
managers need to be tough when he/she must deal with others (such as unions or political
action groups) who don’t share his/her objectives.

1.6.2. Managerial Skills

In order to be effective a manager must possess and develop several essential skills. Skill is
ability to do something expertly and well. It is meant ability related to performance that is not
necessarily inborn but which can be developed or acquired. For the purpose of
discussion, managerial skills are classified into four distinct categories: technical,
interpersonal, conceptual, and communication skills. However, in practice these skills are
closely related and it may be difficult to tell where one begins and the other ends.

Technical Skills

Technical skills involve the ability to apply specific methods, procedures, and techniques in a
specialized field. Technical skill is considered to be very crucial to the effectiveness of lower
level (operational) managers because these persons have direct contact with
employees performing work activities within the firm. It is easy to visualize the technical
skills of design engineers, market researchers, accountants, musicians, and computer
programmers.
Interpersonal Skills

Interpersonal skills include the ability to lead, motivate, manage conflicts, and work with
others. Whereas technical skills emphasize working with things (techniques or physical
objects.) Interpersonal skills focus on working with people. In the long run organizations
have only one true resource, people. Thus, interpersonal skills are a vital part of every
manager’s job regardless of level of function.

Conceptual Skills

Conceptual skill involves the ability to view the organization as a whole and recognize
its relationships to the larger environment (business world). In other words,
conceptual skill involves visualizing the different parts of an organization as one big whole
and to understand the wholes interaction with its relevant environment. More specifically:

 How the organization’s various parts and functions depend on each other and thus,
how changes in one area can affect other areas?
 How each part contributes to the achievement of the overall organizational goal?

Communication Skills

Communication skills reflect a managerial ability to send and receive information, thoughts
feelings, and attitudes. Middle and operating level managers spend a large portion of their
time communicating. The basic communication skills are classified into writing, oral and
non-verbal (facial expressions, body posture, etc.,) communication skills are very crucial to
all mangers. No matter what wise ideas a manger has it is meaningless unless he is able to
communicate it in a wise way. Communication skills are necessary for effectively displaying
interpersonal, technical and conceptual skills.

1.7. Universality of Management

Although the problems, other organizational constrains, and natures of different organizations
vary widely, the functions performed by each manger are nearly the same.
This means to successfully attain the objectives of any organization, managers must plan,
organize, staff, lead, and control. These are the basic managerial functions. To be more
specific, management is regarded as a universal activity because of the following factors:

I. In all kinds of organization, the basic managerial functions are used to make individuals
contribute to group objectives. Management thus applies to any type of organization.

a) From small to large and complex,

 b) In profit making and non-profit making,

c) In manufacturing and service giving,

d) In all political systems socialist, capitalist, etc.

II. Mangers in all levels of organizational hierarchy perform the same basic managerial
functions. What varies from level to level is that the various management levels require
different amounts of time for each function are different. Except for this all mangers
perform the same functions.
III. The principles of management are universal. They are applicable to any kind
of organization wherever there is the coordinated effort of human beings. The
type of enterprise is not significant. The managerial principles are also
transferable from department to department and from level to level. Therefore, since at
higher levels of management the operating non-managerial component of the job is fewer
and the job is more of managerial, there is great possibility of transferability of
management from organization to organization and forms department to department.

1.8. Is Management Science or Art Profession?

The question whether management is an art or a science has been an issue of debate for a
long period of time. Science may be defined as a systematized knowledge derived from
observation, study, and experimentation carried on in order determining the nature and
principles of the subject under study. Since management has a structured body of knowledge
with its own distinct concepts and principles that are developed with reference to the general
truths underlying the management practice, management is a science.

Although we recognized management as a science, it is not as comprehensive or as exact as

the other sciences such as physical sciences. This is because the variables with which
mangers deal are complex and management mostly deals with the human elements. Human
beings are not standardized and their behaviour is unpredictable. As a result experiments
cannot be repeated under standardized conditions. They cannot be subject of controlled
laboratory experiment. Art is the application of knowledge that constitutes the science.
Chester I. Barnard pointed out that it is the function of the science to explain the phenomena,
the events, the situation of the past, and that their aim is not to produce specific events,
effects, or situations, but explanations, which we call knowledge. However, it is the function
of the arts to accomplish concrete ends, effect results, produce situations that would not come
about without the deliberate effort to secure them.
Like all other practices, management is an art. It is known how, it is the
application of knowledge, and it is doing things in the light of the realities of
the situation. Therefore, management is both a science and an art. This is not a
contradiction in terms, for art and science complement each other – go hand in hand, and are
not mutually exclusive. If a manager attempts to manage without the science (structured body
of management principles and concepts) he/she must rust luck, intuition, or what he/she did
in the past. Similarly, without the art of management, if one tries to manage by memorization
of principles, diagnose by the books, he/she will neglect practical reality. Management is a
profession because to say a given field is a profession it must fulfil the following
criteria.

 Specialized knowledge
 Competent application
 Community application
 Social responsibility
 Self-control so, management is a profession because it fulfils the above criteria.
 CHAPTER TWO

THE PLANNING FUNCTION

Introduction
Planning has been practiced by human beings since times immemorial. In fact
we cannot conceive of human civilization without some elements of planning. In order to
progress in life an individual must plan. That is he/she must plan today in order to flourish
tomorrow. Planning enables individuals to bridge the gap between aim and achievement.
“Planning is a thinking process, an organized foresight and vision based on fact and
experience that is required for an intelligent action”. In most cases, it is the foundation of
other managerial functions and without which it is impossible to carryout manner.2.1.
Concepts and need for planning

2.1.1. Concepts of planning

Planning can be defined as, determining objectives and outlining the course of actions needed
to achieve these objectives. Planning involves determination of objectives, formulation of
programs and courses of action for their attainment, development of schedules and timing of
action and assignment of responsibilities for their implementation.

Planning encompasses defining the organization’s objectives or goals, establishing an overall

strategy, and developing a comprehensive hierarchy of plans to integrate and coordinate. It is
concerned with ends (what is to be done) and with means (how it is to be done).

 In planning managers:
- Assess the future
- Determine objectives of the organization and develop the overall strategies.
- Determine resources needed to achieve the objectives

Planning answers six basic questions in regard to any intended activity what, when, where,
who, how, and how much.

2.1.2. Need for planning

Planning is important for every organization irrespective of its size, objectives, and location.
Because decisions without planning would become random this may lead to failure of entire
organization.
Planning is important for several reasons:

1. It provides direction for an organization by specifying objectives

2. It reduces risk and uncertain of the future
3. It allows organizational members to concentrate on common organization's objective
4. It provides criteria for decision making
5. It provides basis for control or it facilitates control

2.2. Types of Plans

Plan can be classified in to different types based on various criteria (basis): repetitiveness,
time dimension and scope or breadth dimension.

A. Classification of plans based on repetitiveness

On the basis of repetitiveness plans can be classified in to three:

i. Single use plans

ii. Standing plans

I. Single use plans

Single use plans are designed to accomplish objectives usually within a relatively short
period of time. Single use plans are non-recurring in nature and deal with problems that
probably will not be repeated in the same form in future. Single use plan include;

- Programs and schedules

- Projects
- Budgets

Program- is set of goals, policies, procedures, rules, job assignments, resources to be

employed, and other elements necessary to carry out a given course of action.

- Is set of activities used to accomplish objectives or used to solve some problem.

Project- is specific action plan formulated to complete various aspects of a program which
can be distinctly identified as a clear-cut grouping of activities with definite
objectives and completion time.

Budget - is a statement of expected results expressed in numerical terms. It may be referred

to asa “numerated” program. In fact, the financial operating budget is often called a “profit
plan.” A budget may be expressed in financial terms; in terms of labour hours, units of
product, or machine– hours; or in any other numerically measurable term. It may deal with
operations, as the expense budget does; it may reflect capital outlays, as the capital
expenditures budget does; or it may show cash flow as the cash budget does. Sometimes
called as ‘numerical plan’ as they are quantitative in nature.

II. Standing Plans

Standing plans are type of plans which can be used again and again once they made. They
remain useful for long period in dealing with repetitive situations. These plans ones
established continue to apply until they are modified or abandoned. They include: policies,
procedure, andrules.

i. Policy; is a general statement designed to guide employees' actions

(administrative action) in recurring situations. It establishes broad limits,
provides direction. Thus, policies are guidelines.
- Policies are guidelines to decision making. Policies establish abroad framework
within which managers at different levels make decisions.
- are general guide to thinking and action

Policies are important for an organization as they:

 Provide guidance to decision making

 Channels all decisions toward the attainment of objectives.
 Ensure consistency and uniformity in decision making.
ii. Procedures; are well thought out course of action. It prescribes the specific way in
which a piece of work is to be done. Procedures are called ‘action
guidelines’. They are generally derived from policies, where policies define a broad
field; procedures show sequence of activities with in that area. The emphasis is on
chronological step by step of required actions.
iii. Rules; are on-going specific plans influencing human behaviour or conducts at
workplace. Are very specific and detailed guide to action. A rule is an established
guide for conduct. Rules include definite things to do and not to do. There are no
exceptions to the rules.
 Rules are fixed plans and define what should and what should not be done.
(Guide to action).
 Unlike polices, rules don't allow for interpretation or decisions. Decisions are
needed only in making the rules. . An example of a rule is "No Smoking”.

Generally, there is no scope for discretion or judgment in rules. Rules must be followed
precisely and observed strictly.
B. Classification of plans based on time dimension

Taking time in consideration a plan can be categorized in to three. Basically planning deals
with future and the future is measured in time. Hence it is convenient and acceptable to
think of different kinds of planning in terms of the time periods for which the planning is
intended.

I. Long range plans

Long range plans are those plans which have longer time horizon; they are concerned with
distant future than immediate future. The time may range from 5 to 10 years based on the
size and the type of organizations.
II. Intermediate plans
Intermediate range plans are those plans with a time horizon between one and five years.
They range between long and short-term plans.
III. Short range plans
Short range plans are those plans with time dimension it is not possible to have a right
time horizon guide line. For a plan to be short range or long range, it depends on the
size of an organization and nature of business of an organization. So short range plan for
one organization may be an intermediate or long range plan for the other organization.
Note: what is long – range or what is short-range cannot be generally defined. In most of
thecases it depends on the size of the organization and the type of business of the
organization.
C. Classification of plans based on scope (Breadth)

Based on their scope or breadth plans can be classified in to three types: strategic plans,
tactical plans, and operational plans.

i. Strategic plan

Strategic plan contains the answers to who, what, When, Where, how and how much for
achieving strategic goals which is; long-term, companywide goals established by top
management.

Strategic planning is the process of developing and analysing the organization's

mission, overall goals, general strategies, and allocating resources. A strategy is a course
of action created to achieve a long-term goal. The time length for strategies is arbitrary,
but is probably two, three, or perhaps as many as five years. It is generally determined
by how far in the future the organization is committing its resources. Goals focus on
 desired changes. They are the ends that the organization strives to attain. Generally,
Strategic plans are;

 Performed by top-level management

 Mostly long range in its time frame
 Expressed in relatively general terms
 Type of planning that provides general future based direction to organization.
ii. Tactical plans

Tactical plans are concerned with implementing strategic plans by coordinating the work
of different department in the organization. They try to integrate various organizational
units’ and ensure commitment to strategic plans. Tactical plans have more details shorter
time frame and narrower scopes than strategic plans; they usually have span of one year
or less. Tactical plan- is a plan used to develop means needed to activate and implement
strategy. It is the process of making detailed decisions about what to do, which will do it,
and how to do it. Tactical planning is the process of developing action plans through
which strategies are executed. It is usually set by middle level managers. Middle
managers interpret these goals and develop tactical plans for their departments that can be
accomplished within one year or less. In order to develop tactical plans, middle
management needs detail reports (financial, operational, market, external environment).

Generally, Tactical plans:

 performed by middle level managers

 Have shorter time frame, more detail and narrower scope than strategic plans
 Guide subunits of an organization

iii. Operational plans

Operational planning is most specific and detailed. It is made at the operational level and
is concerned with the day-to-day, week-to-week activates of the origination. It is mainly
of short-range and more specific and detailed. Examples are: production schedules, sales
plans lesson plans.

To sum up, Operational plans:

 Are first line managers' tools for exciting daily, weekly, and monthly activities?
 Performed by operational level managers.
 Are Specific and more detail than others.
 2.3. Planning process

Planning is not something which is made all once at a time. The planning process is
rational and amenable to the scientific approach to problem solving. It consists of a
logical and orderly series of steps. A person involved in planning pass through number of
steps to make effective plans.

Process of planning indicates the major steps taken place in planning. The
steps generally involved in planning are:

i. Setting objective

The first step in planning is to establish objectives for the enterprise and
then for each subordinate work unit. Objectives are the driver of planning
processes. Objectives are established at all levels of the structure, beginning at the top
level and running down to first line managers. Strategic goals and objectives are
developed to bridge the gap between current capability and the mission. They are
aligned with the mission and form the basis for the action plans. Objectives are sometimes
referred to as performance goals.

Objectives specify the expected results and indicate the end points of what is to be done,
where the primary emphasis is to be placed, and what is to be accomplished by the
network of strategies, policies, procedures, rules, budgets, and programs.

Objectives should possess the following characteristics. The characteristics can be read as
SMART in short.

 Specific; Objectives should state the exact level of performance expected specifically. An
objective must be specific with a single key result. If more than one result is to be
accomplished, more than one objective should be written. Just knowing what is to be
accomplished is a big step toward achieving it. What is important to you? Once you
clarify what you want to achieve, your attention will be focused on the objective that you
deliberately set. You will be doing something important to you.
 Measureable; as much as possible objectives should be expressed quantitatively,
therefore, it is possible to easily determine whether or not goals have been achieved. An
objective must be measurable. Only an objective that affects behaviour in a measurable
way can be optimally effective. If possible, state the objective as a quantity. Some
objectives are more difficult to measure than others are. However, difficulty does not
mean that they cannot be measured. Treatment of salespeople might be measured by
looking at the absenteeism and turnover rates among the sales force. Also, salespeople
 could be asked to fill out a behavioural questionnaire anonymously giving their
observations of the supervision they receive.
 Achievable or acceptable; objectives should be prepared in suitable, acceptable manner.
 Realistic but challenging: objectives should be attainable or real rather than fantasy. An
objective must be attainable with the resources that are available. It must be realistic.
Many objectives are realistic. Yet, the time it takes to achieve them may be unrealistic.
For example, it is realistic to want to lose ten pounds. However, it is unrealistic to want to
lose ten pounds in one week. What barriers stand between you and your objective? How
will each barrier be overcome and within what time frame? It is also better to
have challenging objectives as far as they could motivate workers if attained.
 Time bounded: objectives should be set with in specific time limits or target dates for
their attainment. The objective should be traceable. Specific objectives enable
time priorities to be set and time to be used on objectives that really matter. Are the time
lines you have established realistic? Will other competing demands cause delay? Will you
be able to overcome those demands to accomplish the objective you've set in the time
frame you’ve established?
ii. Environmental Analysis and Forecasting

The next point for planning is an awareness of environment, both internally and
externally. Organization should maintain a continual assessment of the environment to
determine its own weaknesses and strengths internally and to be aware of opportunities and
threats in external environment. Based on this analysis of internal and external environment
forecasting (predicting) of different environmental factors such as economics, technological,
political etc. can be made to assist real planning. Conduct a situation or SWOT
analysis by assessing strengths and weaknesses and identifying opportunities
and threats. A situation or SWOT (Strengths, Weaknesses, Opportunities, and Threats)
analysis is critical to the creation of any strategic plan. The SWOT analysis begins with a
scan of the external environment. Organizations must examine their situation in order to seek
opportunities and monitor threats. Sources of information include customers (internal and
external), suppliers, governments (local, state, federal, international), professional or trade
associations (conventions and exhibitions), journals and reports (scientific, professional, and
trade).

iii. Determining Alternative course of Action.

Once objectives are set, the management must identify alternative ways for reaching
them. When developing alternatives. A manager should try to create as many roads to each
objective as possible. In fact, in most cases the challenging is not to find alternative ways but
to decide which ones are best. To decide on best ones it requires evaluation.

IV. Evaluating the alternatives

Each alternative needs to be evaluated to determine which one best achieves the objectives.
In evaluating managers should assess cost (disadvantages) and benefits (advantages) of all
alternatives. The assessment may include both financial and non-financial considerations.

V. Select the best alternatives

After evaluating all possible alternatives, managers will select alternative that remains better
than others. It may be an alternative with least disadvantages and most advantages.VI.
Implementing the plan after the alternative course of action selected, it is important to
develop an action plan to execute the plan. In this step method for implementation will be
suggested.

VI. Controlling and evaluating the results

Once the plan is implemented it needs monitoring. Managers should monitor the progress
being made, evaluate the reports made based on results, and make any
necessary modifications, because factors in environment are constantly changing, plans
must be modified to cope up with changes.

2.4. Planning Techniques

Managers Can Improve the Quality of their planning by applying variety of planning tools
and techniques. The important fanciful of planning is management by objectives
(MBO).Management by Objective (MBO) MBO is a system in which specific performance
objectives are jointly determined by subordinates and their superiors, progress toward
objectives is periodically reviewed, and rewards are allocated on the basis of this progress.
An effective planning tool to help the supervisor set objectives is Management by Objectives
(MBO). MBO gained recognition in1954 with the publication of Peter Drucker’sbook The
Practice of Management. MBO is a collaborative process whereby the manager and each
subordinate jointly determine objectives for that subordinate. To be successful MBO
programs should include commitment and participation in the MBO process at all levels,
from top management to the lowest position in the organization.

MBO begins when the supervisor explains the goals for the department in a meeting. The
subordinate takes the goals and proposes objectives for his or her particular job. The
supervisor meets with the subordinate to approve and, if necessary, modify the
individual objectives. Modification of the individual's objectives is accomplished
through negotiation since the supervisor has resources to help the subordinate commit to
the achievement of the objective. Thus, a set of verifiable objectives for each individual are
jointly determined, prioritized, and formalized. The supervisor and the subordinate
meet periodically to review the latter's progress. Communication is the key factor in
determining MBO's success or failure. The supervisor gives feedback and may authorize
modifications to the objectives or their timetables as circumstances dictate. Finally, the
employee's performance is measured against his or her objectives, and he or she is rewarded
accordingly. Elements of MBO

1. Top level goal setting; effective MBO begins with the objective being set by top managers
which is open for discussion by managers and subordinates to reach up on the common
objectives.

2. Individual targets- in an effective MBO each manager and subordinate has clearly
defined responsibilities or expected results

3. Participation- both managers and subordinates are participating in objective setting.

4. Autonomous of individuals- Once the objective is set, subordinates have a right to select
methods of attaining the objectives.

5. Performance review- managers and subordinates periodically meet to review progress

toward the objectives.

6. Reward- those individuals who meet the objectives in performance review are
rewarded. The rewords may be recognition, praise, pay increase etc...

Shortly MBO Principles

 Cascading of organizational goals and objectives

 Specific objectives for each member
 Participative decision making
 Explicit time period
 Performance evaluation and feedback.

Steps in MBO Effective MBO passes through different steps:

1. Setting individual objectives and plans with each subordinate the manager jointly set
objectives the participation of subordinates in the objective setting process is a way of
strengthen their commitment to achieve their goals.
2. Giving feedback and evaluating performance Employees must know how much they are
progressing toward their objectives. Thus, managers and subordinates should meet
frequently to review progress and evaluate performance communication is key factor in
determining success of failure of MBO

3. Rewarding according to performance employees' performance should be measured against

their objectives. Employees who meet their objectives should be rewarded through
recognitions, praises. Pay rises and so on.

Research has demonstrated that when top management is committed and personally involved
in implementing MBO programs, they significantly improve performance. This finding is
not surprising when one considers that during the MBO process employees determine what
they will accomplish. After all, who knows what a person is capable of doing better than the
person does him or herself?