PRINCIPLES OF

MANAGEMENT
SEMESTER 3
UNIT - 2

HI COLLEGE
SYLLABUS
UNIT - 2

HI COLLEGE
 PLANNING
Planning is an important function of management that involves setting goals,
identifying necessary resources, and creating strategies to achieve those goals.
It helps organizations optimize their resources, minimise waste, respond to
market changes, and achieve success.

Purpose
The purpose of planning is to steer a business in the right direction. It provides
clarity on the objectives to be achieved, for what purpose, and in what manner.
Planning helps businesses make informed decisions, allocate resources
effectively, and anticipate and manage risks.

Process
Identify and analyze the current situation: This includes an assessment of
internal strengths and weaknesses as well as external opportunities and
threats.

Define goals and objectives: Based on the analysis, goals and objectives need
to be clearly defined, measurable, and time-bound.

Develop strategies: Strategies are specific plans of action that help achieve the
defined goals and objectives.

Identify and allocate resources: Resources such as finances, personnel, and

technology need to be identified and allocated to support the strategies.

Develop action plans: Action plans outline the specific steps needed to
implement the strategies.

Implement the plans: Once the action plans are developed, they need to be
executed.

Monitor and evaluate progress: The progress should be continuously

monitored and evaluated to identify if any changes need to be made to the
plans.

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 Adjust plans as needed: Based on the evaluation, the plans may need to be
adjusted to ensure they remain effective in achieving the goals and
objectives.

DECISION MAKING
Decision making is the process of choosing the best alternative from among
several available options. It is a crucial function of management that affects the
success of an organization. The process involves evaluating alternatives,
weighing pros and cons, and selecting the best option.

Process
Identify the problem: The first step is to identify the issue that needs a decision
to be made.

Gather information: Relevant information needs to be collected to evaluate the

alternatives.

Create alternatives: Possible courses of action need to be generated and

evaluated.

Evaluate alternatives: Each alternative needs to be weighed against the criteria

established in the previous step.

Choose and implement the best alternative: The alternative that best meets
the established criteria is selected, and plans are made to execute it.

Monitor and evaluate the decision: The selected alternative needs to be

implemented and monitored continuously to ensure it is effective.

Adjust as needed: Based on the evaluation, any changes may be made to the
decision to ensure it remains effective.

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 ORGANIZING
Organizing is the process of arranging resources and tasks to achieve
organizational goals. It involves dividing work into manageable parts,
delegating authority, and coordinating activities to attain objectives. The
process of organizing includes the following steps:

Process
Identification of activities: The first step is to identify the various activities
necessary to achieve organizational objectives. It involves analyzing the
business environment and determining the activities required to produce
goods or services.

Departmentalization: The second step involves grouping similar activities

together into departments or work units. This helps to streamline operations
and optimize efficiency.

Assigning tasks: The next step is to assign tasks to different departments or

teams. Tasks should be assigned based on the skills and abilities of the
employees and the requirements of the job.

Delegation of authority: Once tasks are assigned, authority is delegated to the

appropriate individuals or teams. This involves giving employees the power to
make decisions and take action within the limits of their job responsibilities.

Coordinating activities: Coordinating activities is the process of ensuring that

all departments and teams are working together in harmony towards the
achievement of organizational objectives. This involves establishing
communication channels, establishing guidelines and procedures, and
monitoring performance.

Establishing channels of communication: This involves establishing formal

communication channels among various departments, teams, and individuals.
This ensures that everyone is aware of what is expected of them, and it
facilitates the timely exchange of information.

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 DEPARTMENTATION
Departmentation is the process of grouping similar activities together into
separate units or departments within an organization. It enables efficient
management of complex and diverse business operations by dividing the work
into smaller components and assigning it to various departments based on
their functions, products, customers, or geographic locations. The main types of
departmentation include:

Functional departmentation: This involves grouping similar activities together

based on their functions, such as marketing, finance, HR, production, and
operations. It is the most common type of departmentation used in
organizations.

Product or service departmentation: This involves grouping activities together

based on the products or services provided, such as product lines, divisions, or
services.

Customer departmentation: This involves grouping activities together based

on the types of customers served, such as consumer, industrial, or government
customers.

Geographic departmentation: This involves grouping activities together based

on geographical locations, such as regions, countries, or cities, where the
organization operates.

Matrix departmentation: This involves grouping activities together based on

both functional and product-based criteria. It is a hybrid form of
departmentation designed to facilitate teamwork and cross-functional
communication.

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 AUTHORITY & RESPONSIBILITY RELATIONSHIPS

Authority and responsibility are two important concepts that are closely related
in organizational management. Authority refers to the right to make decisions,
take action and give directions, while responsibility refers to the obligation to
perform assigned duties and be accountable for the results.

In an organization, authority and responsibility are interdependent and linked

by a line of communication. Authority is delegated from higher to lower levels
of the organization, while responsibility flows upwards from lower to higher
levels. The relationship between authority and responsibility can be described
in the following ways:

Authority and responsibility should always be equal: An employee should be

given as much authority as he or she has responsibility for. For example, a
manager who is responsible for managing a team should have the authority to
make decisions that affect that team.

Authority cannot be given without responsibility: It is essential that an

employee who is given authority also has the corresponding responsibility for
carrying out the tasks and achieving the outcomes.

Responsibility cannot be assigned without authority: Employees should not

be held responsible for tasks over which they have no control. For example, a
supervisor cannot be held responsible for the productivity of a team unless he
or she has the authority to manage that team.

Authority and responsibility should be clearly defined: Roles and

responsibilities should be well-defined to avoid any confusion or
misunderstanding. This helps to ensure that each employee knows what duties
he or she is responsible for and what level of authority he or she has.

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 DECENTRALIZATION

Decentralization refers to the process of transferring decision-making power

and authority from higher levels of an organization to lower levels. It is a
strategic management concept that determines how much authority and
decision-making responsibility should be delegated to lower levels of an
organization.

In a decentralized organization, decision-making authority is distributed across

various levels of the organization, and employees at lower levels are
empowered to make decisions and take actions within their areas of
responsibility. This results in more individuals in an organization having a say in
the decision-making process and increases their ability to act in a flexible and
efficient manner

Quicker decision making: Decision making can be faster in a decentralized

organization since decisions can be made closer to the source of the
information.

Improved communication: Decentralization ensures better communication

between different levels of an organization, increasing the ability to convey
information and ideas effectively.

Enhanced employee motivation: Decentralization can lead to improved

employee motivation and job satisfaction since employees have greater control
over their work and feel more valued.

Localized decision making: Decentralization allows decision-making to be

done on the spot, giving individuals at lower levels increased flexibility to adapt
to local needs.

Increased customer satisfaction: Decentralization gives employees direct

accountability to customers, leading to increased customer satisfaction.

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 STAFFING
Staffing and Directing are two important functions of management that are
closely related to each other.

Concept and Nature of Staffing:

Staffing refers to the process of selecting, recruiting, training, and developing
employees in an organization. It is a critical function of management as it
ensures that the right people are in the right positions, and it sets the
foundation for the organization's success. Staffing involves identifying the
organization's staffing needs, job analysis, job descriptions, and job
specification. It also involves attracting talented people to fill these positions,
evaluating them, and maintaining an appropriate workforce.

The nature of staffing is complex as it involves dealing with people, who are
unique and cannot be replicated like machines. Staffing involves
understanding the organizational culture, communication styles, and
interpersonal skills needed to manage employees effectively. Therefore,
staffing requires the HR department to be highly sensitive and responsive to
changes in the organization's operations, environment, and workforce

Importance of Staffing:
Staffing is essential for any organization for the following reasons:

Recruitment of Skilled Workforce: Staffing ensures the availability of

competent and skilled employees in the organization(both internally and
externally) that are required to fulfill the organizational objectives.

Achievement of Organizational Goals: Effective staffing ensures that the right

people are in the right positions, which enables the organization to achieve its
objectives.

Ensuring Employee Satisfaction: Staffing ensures that an organization's

employees are properly trained, motivated, and are provided opportunities for
career growth, increasing employee satisfaction.

Helps in Retaining High Performing Employees: Staffing provides

opportunities to high performing employees for promotion within the
organization, minimizing the turnover rate, and increasing employee retention.

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Concept of Directing:
Directing refers to the process of guiding, leading, motivating, and supervising
employees in achieving organizational objectives. This function is concerned
with the task of supervising and communicating with employees, ensuring
they are aware of their roles, setting up performance goals, and providing
feedback. Directing involves coordinating activities among employees and
ensuring cooperation amongst team members, which is essential for the
smooth functioning of the organization.

Nature of Directing
The Nature of Directing is dynamic, as it involves the management of people
and teams, who are ever-changing in their work ethics and behavior. The
directing function of management requires a high degree of emotional
intelligence, interpersonal communication, and team-building skills.

Importance of Directing:
Achieving Goals and Objectives: Directing ensures that employees are
effectively guided, motivated, and encouraged to achieve the organization's
goals and objectives.

Effective Communication: Directing ensures the effective communication of

information within the organization, which allows for the smooth functioning
and cooperation of all departments and functions.

Establishing Clear Accountability: Directing ensures that all employees are

aware of their responsibilities, performance goals, and also are aware of the
consequences of failing to meet these expectations.

Growth and Development: Directing ensures a supportive work environment,

providing employees opportunities for growth and development, which
enhances their skills and capabilities.

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