MANAGEMENT CONCEPTS AND

ORGANISATIONALBEHAVIOUR

KMBN-101
UNIT 1
Management is the administration of an organization. Management includes the
activities of setting the strategy of an organization and coordinating the efforts of
its employees to accomplishits objectives through the application of
available resources, such as financial, natural, technological, and human resources.
The term "management" may also refer to those people who manage an
organization - individually: managers.

Definitions-
 HenriFayol (1841-1925) stated: "to manage is to forecast and to plan, to
organize, to command, to co-ordinate and to control.”

 According to F.W. Taylor, ’Management is an art of knowing what to do when to

do and see that it is done in the best and cheapest way’.

 Harold Koontz, ‘Management is an art of getting things done through and with the
people in formally organized groups. It is an art of creating an environment in
which people can perform and individuals and can co-operate towards attainment
of group goals.’

Management can be defined in the following categories-

 Management as a Process
 Management as an Activity
 Management as a Discipline
 Management as a Group
 Management as a Science
 Management as an Art
 Management as a Profession

Purpose of management- To achieve MOST.

 M- mission- it provides a statement of what the company stands for.
 O- objective – it is based on mission and ends towards the activity is aimed.
 S – strategy – it is unified, comprehensive and integrated plan.
 T – tactics – it is an action programme through strategies are executed.

Management Practices from Past to Present

The evolution and growth of management as a discipline has change over the three
main eras of the past, present and the future. The foundational years before the
1990’s saw academics beginning to define and understand the very basics of
 change management and systems experiencing, reacting and learning to adapt to
change.

1910s-1940s: Management as Science

Management as Science was developed in the early 20thcentury and focused on

increasing productivity and efficiency through standardization, division of labor,
centralization and hierarchy.

1950s-1960s: Functional Organizations- In the 1950’s and 1960’s saw the

emergence of functional organizations and the Human Resource (HR) movement.

Managers began to understand the human factor in production and productivity and
tools such as goal setting, performance reviews and job descriptions.

1970s: Strategic Planning- In the 1970’s Strategic Planning (GE), Growth Share
Matrix (BCG) and SWOT were used to strategic planning processes. After several
decades of ‘best practice’ and ‘one size fits all’ solutions, academics began to
developing contingency theories.

1980s: Competitive Advantage- In the 1980’s Tools like Total Quality Management
(TQM), Six Sigma were used to measure processes and improve productivity.

1990s: Process Optimization- Benchmarking and business process reengineering

became popular in the 1990’s, and by the middle of the decade. TQM, Six Sigma
remained popular and a more holistic, organization-wide approach and strategy
implementation took the stage with tools such as Strategy Maps and Balance
Scorecards.

2000s: Big Data- Largely driven by the consulting industry under the banner of Big
Data, organisations in the 2000’s started to focus on using technology for growth and
value creation.

The Levels of Management

The main levels of management are:

1. Top level management.

2. Middle level management.

3. Supervisory level, operational or lower level of management.

1. Top Level Management- It includes group of crucial persons essential for leading
and directing the efforts of other people. The managers working at this level have
maximum authority. Top level managers are responsible for the overall management
and performance of the company. They formulate objectives, policies and strategies
of the company.

Main functions of top level management are: -

(a) Determining the objectives of the enterprise.

(b) Framing of plans and policies.

(c) Assembling all the resources

(d) Responsible for welfare and survival of the organization

2. Middle Level Management- People of this group are responsible for executing
the plans and policies made by top level. They act as a linking pin between top and
lower level management. They also motivate, leads and co-ordinate the activities of
lower level managers.

Main functions of middle level management are: -

(a) Interpretation of policies framed by top management to lower level.

(b) Organizing the activities of their department for executing the plans and policies.

(c) Motivating the persons to perform to their best ability.

(d) Controlling and instructing the employees, preparing their performance reports
etc.
 3. Supervisory Level/Operational Level

Managers of this group actually carry on the work or perform the activities according
to the plans of top and middle level management. Their authority is limited. They are
also called junior managers or supervisors.

Functions of lower level management are:

(a) Representing the problems or grievances of workers before the middle level
management.

(b)Maintaining good working conditions and developing healthy relations between

Superior and Subordinate.

(c) Looking to safety of workers.

Managerial skills-There are three types of managerial skills.

1) Technical skill – Technical skills refer to the ability and knowledge in using
the equipment, techniques and procedure involved in performing specific
tasks.
2) Human skill – Human skills refer to the ability of a manager to work
effectively with other people both as individual and as members of a group. It
is concerned with understanding of people.
3) Conceptual skill–These skills refer to the ability to visualize the entire
picture or to consider a situation in its totality. It helps the managers to
analyze the environment and to identify the opportunities.

Managerial Roles
To meet the many demands of performing their functions, managers assume
multiple roles. A role is an organized set of behaviours.

Henry Mintzberg has identified ten roles common to the work of all managers.

The ten roles are divided into three groups:

1. Interpersonal

2. Informational

3. Decisional
 • Figure head- head of the oraganisation.
• Leader- incharge of the organisation/
Interpersonal department.
roles • Liasion - perform the function of
motivation, communication and
encouraging the teamspirit.

• Monitor- gets the information by scanning

his environment.
• Disseminator- collects the information
Informational fromdifferent sources and through various
roles means.
• Spokesman's- some insider and outsiders
control the department and organisation

• Entrepreneur- appreciates newideas and

initiated new developements.
• Disturbance Handler- present the manager
as the involuntarily responding to
pressures.
Decisional roles • Resource Allocator- allocates his
subordinates to express thir opinion and
share their experiences.
• Negotiators- manager negotiate with
subordinates for the improvement and
loyality.

Functions of management- Management are the process of planning,

organizing, staffing, directing and controlling the efforts of organization members in
utilizing all resources to achieve organizational goal and mission.
 Planning

Controlling Organising

Directing Staffing

1. Planning- it is deciding in advance what should be done.

2. Organizing – it is the process of linking and arranging activities in sequence.
3. Staffing – utilizing the human resources which help the process of converting
input into output.
4. Directing – it involves leading, influencing and motivating the people to
perform their task.
5. Controlling– it is to make sure that the organization is moving towards its
mission and objective.

PLANNING
Planning is the beginning process of management. Planning can be defined as
“thinking in advance what is to be done, when it is to be done, how it is to be
done and by whom it should be done”. In simple words we can say, planning
bridges the gap between where we are standing today and where we want to reach.

Definition of Planning –
According to KOONTZ AND O’ DONNEL,” Planning is deciding in advance what to
do, how to do it, when to do it, and who is to do it. Planning bridges the gap from
where we are to where we want to go. It makes it possible for things to occur which
would not otherwise happen.”

According to HENRY FAYOL, “Planning is deciding the best alternatives among

others to perform different managerial operations in order to achieve the pre –
determined goals.”

Nature of Planning-
 Planning is goal oriented.
 Planning is primary function.
 Planning is pervasive.
 Planning is flexible.
  Planning is continuous.
 Planning is futuristic.
 Planning involves choice.
 Planning is a mental exercise.

Objective of planning-
1. Time-Related Objectives- One type of objective includes a time factor. These
objectives are short-term, medium-term or long-term, ranging from one month to
several years.

2. Monitoring Routine Objectives- Management monitors routine objectives for

deviations from the norm and to institute corrective action if necessary. Planning
specifies routine objectives and assumes the company will meet them as it has in the
past.

3. Development Objectives for New Initiatives- While time-related objectives deal

with normal activities within a time frame and routine objectives deal with regular
activities, development objectives result from new initiatives.

Process of Planning-
1) Recognizing Need of Action
2) Setting objectives and goals
3) Determining alternative courses
4) Evaluating alternative courses
5) Selecting a course
6) Formulating derivative plans
7) Implementing the plan

1. Recognizing Need for Action- An important part of the planning process is to be

aware of the business opportunities in the firm’s external environment as well as
within the firm. Say for example the government plans on promoting cottage
industries in semi-urban areas. A firm can look to explore this opportunity.

2. Setting Objectives- Here we establish the objectives for the whole organization and
also individual departments. Organizational objectives provide a general direction;
objectives of departments will be more planned and detailed.

3. Identifying Alternatives- There is no one way to achieve the objectives of the firm,
there is a multitude of choices. All of these alternative courses should be identified.
There must be options available to the manager.

4. Examining Alternate Course of Action- The next step of the planning process is to
evaluate and closely examine each of the alternative plans. The alternative plans
need to be evaluated in the light of the organizational objectives.

5. Selecting the Alternative- Finally, we reach the decision making stage of the
planning process. The best and most feasible plan will be chosen to be
implemented.
6. Formulating Supporting Plan- Once you have chosen the plan to be implemented,
managers will have to come up with one or more supporting plans. These secondary
plans help with the implementation of the main plan. For example, plans to hire more
people, train personnel, expand the office etc. are supporting plans for the main plan
of launching a new product

7. Implementation of the Plan-This is when all the other functions of management

come into play and the plan is put into action to achieve the objectives of the
organization.

Types of Planning-
(i) Operational Planning- “Operational plans are about how things need to happen,”
This type of planning typically describes the day-to-day running of the company.
Operational plans are often described as single use plans (like marketing campaign)
or ongoing plans (step by step).

(ii) Strategic Planning- “Strategic plans are all about why things need to happen,” It
starts at the highest level with defining a mission and casting a vision.”Strategic
planning includes a high-level overview of the entire business. It’s the foundational
basis of the organization and will dictate long-term decisions.

(iii) Tactical Planning- “Tactical plans are about what is going to happen,”.
“Basically at the tactical level, there are many focused, specific, and short-term
plans, where the actual work is being done, that support the high-level strategic
plans. “Tactical planning supports strategic planning.

(iv) Contingency Planning- Contingency plans are made when something

unexpected happens or when something needs to be changed. Business experts
sometimes refer to these plans as a special type of planning. Contingency planning
can be helpful in circumstances that call for a change.

Management by Objectives
Management by objectives (MBO) is a strategic management model that aims to
improve the performance of an organization by clearly defining objectives that are
agreed to by both management and employees. Management by objectives
(MBO) is the establishment of a management information system to compare actual
performance and achievements to the defined objectives.

management by objective has been defined as a result –oriented, non –

specialist, operational managerial process for the effective utilization of
material, physical and human resources of the organization, by integrating the
individual with the organization and organization with the environment.

In other words, MBO is a process by which managers at different levels and their
subordinates work together in identifying goals and establishing objectives,
consisting with these goals and attaining them. Thus, MBO is not only an aid to
planning but also a motivating factor.
 Process of MBO
Preliminary setting of objectives

Clarification of goals

Setting of sub- ordinates objectives

Recycling of objectives

Performance appraisal

Decision Making
Decision making is the process of choosing best alternative from among the
alternative solutions under a given set of circumstances.
The analysis of this definition presents the following facts----
 Identify the purpose or goal
 Analyze the set of circumstances, conditions which sets the norms for
decision making.
 Collecting information and data regarding problem.
 Develop alternative solutions
 Evaluate alternative solutions and choose best solution.
 Implement the selected solution.

Types of Decision Making

1) Programmed and non-programmed decisions: -Programmed decisions are
concerned with the problems of repetitive nature or routine type matters.
Non-programmed decisions relate to difficult situations for which there is no
easy solution.
2) Routine and strategic decisions: -Routine decisions are related to the
general functioning of the organisation. They do not require much evaluation
and analysis and can be taken quickly. Strategic decisions are important
which affect objectives, organizational goals and other important policy
matters. These decisions usually involve huge investments or funds.
3) Tactical (Policy) and operational decisions: -Decisions pertaining to
various policy matters of the organisation are policy decisions. These are
taken by the top management and have long term impact on the functioning of
the concern.
 4) Organizational and personal decisions: -When an individual takes decision
as an executive in the official capacity, it is known as organizational decision.
If decision is taken by the executive in the personal capacity (thereby affecting
his personal life), it is known as personal decision.
5) Major and minor decisions: -Another classification of decisions is major and
minor. Decision pertaining to purchase of new factory premises is a major
decision. Major decisions are taken by top management. Purchase of office
stationery is a minor decision which can be taken by office superintendent.
6) Individual and group decisions: -When the decision is taken by a single
individual, it is known as individual decision. Usually routine type decisions
are taken by individuals within the broad policy framework of the organisation.
Group decisions are taken by group of individuals constituted in the form of a
standing committee. Generally, very important and pertinent matters for the
organisation are referred to this committee.

Process and Techniques of Decision Making

Process of Decision Making
Following are the important steps of the decision making process.

1. Identification of the purpose of the decision

2. Information gathering
3. Principles for judging the alternatives
4. Brainstorm and analyse the different choices
5. Evaluation of alternatives
6. Select the best alternative
7. Execute the decision
8. Evaluate the results

Step 1: Identification of the purpose of the decision- There are a couple of

questions one should ask when it comes to identifying the purpose of the decision.

 What exactly is the problem?

 Why the problem should be solved?

 Does the problem have a deadline or a specific time-line?

Step 2: Information gathering- In the process of solving the problem, through

collecting the as much as information related to the factors and stakeholders
involved in the problem.

Step 3: Principles for judging the alternatives- In this step, the baseline criteria
for judging the alternatives should be set up.

Step 4: Brainstorm and analyse the different choices- In this step, brainstorming
to list down all the ideas is the best option. Before the idea generation step, it is vital
to understand the causes of the problem and prioritization of causes.
Step 5: Evaluation of alternatives- In this step, experience and effectiveness of the
judgement principles come into play. You need to compare each alternative for their
positives and negatives.

Step 6: Select the best alternative- In addition, the selection of the best alternative
is an informed decision since you have already followed a methodology to derive and
select the best alternative.

Step 7: Execute the decision- Convert your decision into a plan or a sequence of
activities. Execute your plan by yourself or with the help of subordinates.

Step 8: Evaluate the results- Evaluate the outcome of your decision. See whether
there is anything you should learn and then correct in future decision making. This is
one of the best practices that will improve your decision-making skills.

Techniques of Decision-Making
1. Marginal Analysis- This technique is used in decision-making to figure out how
much extra output will result if one more variable (e.g. raw material, machine, and
worker) is added. Marginal analysis is particularly useful for evaluating alternatives in
the decision-making process.

2. Financial Analysis- This decision-making tool is used to estimate the profitability

of an investment, to calculate the payback period and to analyse cash inflows and
cash outflows.

3. Break-Even Analysis- This tool enables a decision-maker to evaluate the

available alternatives based on price, fixed cost and variable cost per unit.

4. Ratio Analysis- It is an accounting tool for interpreting accounting information.

Ratios define the relationship between two variables. The basic financial ratios
compare costs and revenue for a particular period.

5. Operations Research Techniques- One of the most significant sets of tools

available for decision-makers is operations research. An operation research (OR)
involves the practical application of quantitative methods in the process of decision-
making. When using these techniques, the decision-maker makes use of scientific,
logical or mathematical means to achieve realistic solutions to problems. Several OR
techniques have been developed over the years.Waiting-line Method, Game
Theory, Decision Tree
 Making Decision Effective
Step 1: Identify the decision- You realize that you need to make a decision. Try to
clearly define the nature of the decision you must make. This first step is very
important.

Step 2: Gather relevant information- Collect some pertinent information before you
make your decision: what information is needed, the best sources of information, and
how to get it. This step involves both internal and external “work.”

Step 3: Identify the alternatives- As you collect information, you will probably
identify several possible paths of action, or alternatives. In this step, you will list all
possible and desirable alternatives.

Step 4: Weight the evidence- Once the alternatives identify, assign the weightage
to each alternatives with proper information. Evaluate whether the need identified in
Step 1 would be met or resolved through the use of each alternative. Finally, place
the alternatives in a priority order, based upon your own value system.

Step 5: Choose among alternatives- Once you have weighed all the evidence, you
are ready to select the alternative that seems to be the best one for you. You may
even choose a combination of alternatives. Your choice in Step 5 may very likely be
the same or similar to the alternative you placed at the top of your list at the end of
Step 4.

Step 6: Take action- You’re now ready to take some positive action by beginning to
implement the alternative you chose in Step 5.

Step 7: Review your decision & its consequences

In this final step, consider the results of your decision and evaluate whether or not it
has resolved the need you identified in Step 1. If the decision has not met the
identified need, you may want to repeat certain steps of the process to make a new
decision.

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