Q.No.1 Define management and describe its functions?

ANS

Definition of Management: -

“Knowing exactly what you want (People) to do and doing in best and

cheapest way is called management’’. (Frederick Taylor)

“Management is a process of integrating and coordinating the activity to

achieve the goal efficiently and effectively”.

Management as a process is not only implemented in business but it is also

a part of everyday life. In everyday life we use to apply management

functions to achieve goals is life.

Functions of Management

During early twentieth century, Henry Fayol proposed five function of

management including planning, organizing, commanding, communication

and controlling now these functions are condensed to four; Planning,

Organizing, Leading and Controlling.

1-Planning:

Planning is very important pillar of a business. It involves setting of a goal

and establish plans to accomplish that goal. Goal setting is the initial step to

start a business and it gives a clear direction to follow. How to achieve that

goal is about devising strategies and mapping activities necessary to

achieve that goal.

2-Organizing:

Organizing is the process of arranging and allocating resources to

implement the plans to achieve the goal. This function includes number of
activities such as defining tasks needed to be done prioritization of activities

roles of key players (employee), combining tasks to define a job grouping

departments together allocation and division of resources. Best organization

of activities departments resources and procedures will increase the success

of a business.

3-Leading:

Every organization is the collection of people who together to reach the goal.

Leading is the process to influence the behavior of people to get the work

done. It involves energizing people at work through motivation, providing

them best working environment and inspire them to achieve organization’s

goal.

4-Controlling:

Once an organization set a goal and devise plan (planning), organize

resources (organizing), engage and motivate people (leading), then it needs

to assess the performance to ensure that we achieved what we want to

achieve (goal). Controlling is the process of monitoring activities and

measuring performance to compare it with the set targets. It is a continuous

process, management at firm keep on monitoring the activities from start to

end and take corrective actions to achieve expected results towards goal.

These all functions are interconnected. For example, control function will tell

you whether plans and activities are working in right direction or not. If plans

are failed to achieve the goal, they should be reconsidered. Similarly,

leading function helps to engage and keep people motivated to give their

best to organization.
Q.No.2 Explain the concepts of certainty, risk, and uncertainty for

decision making?

ANS

Ans: In the context of decision making, the concepts of certainty, risk, and

uncertainty describe different levels of knowledge or information available to

decision makers.

1- Certainty:

Certainty is one of the ideal situations of making decision. The outcome of

every alternative is known, so managers can make decisions very smartly

and accurately. For

instance, information regarding interest rate which each bank is offering and

the earning on the funds is important to make decision to take loan form

bank. It is called certainty.

2-Risk:

The state of decision making in which the decision maker can estimate the

chances

of the outcomes of certainty. In this case, the potential outcomes and their

probabilities are known or can be estimated based on historical data,

experience, or expert opinions. Decision makers can assess the likelihood of

various outcomes and make decisions makes based on risk appetite and

tolerance.

3-Uncertainty:
In some of the situations we are not certain about the outcomes of the

alternatives. Such situations are known as uncertainty. Uncertainty arises

when decision makers lack sufficient information to estimate probabilities or

access potential outcomes accurately. Decision makers may face

unforeseen risks, variables or event that cannot be reliably predicted or

quantified. In such case, Decision making becomes more challenging as

there is a high level of subjectivity and reliance on judgment, intuition or

qualitative analysis.

Q.No.3 What do you mean by planning? Discuss the process of

planning in a business organization?

ANS

Introduction:

Without planning, an organization is driven by every single change in its

environment. This is not good for the success of any business.

Organizations are planning by keeping in view the future forecasts of

different mega environmental factors. Planning is one of the key functions of

management that sets goal for the organization. It involves multistage

process.

Definition of Planning: -

“Planning is the process of defining organizations goals, making strategies

to get to those goals and developing plans to coordinate with work activities.

Planning is all connected with “what” we want to achieve and “how” to

achieve it”.
Planning refers to the process of setting goals, determining actions, and

organizing resources to achieve those goals. It involves thinking ahead and

deciding what needs to be done, when it should be done, and how it should

be done. Planning is an essential aspect of personal, professional and

organizational life as it helps create a plan for success and guides

individuals or groups towards desired outcomes.

Effective planning usually involves the following steps:

Goal setting:

Clearly defining the goals or results you want to achieve. Goals should be

Specific, Measurable, Achievable, Relevant and Time Bound (SMART).

Assessment of the current situation:

Evaluation of the current situation, identification of strengths and

weaknesses, opportunities and threats. This step helps to understand the

starting point and potential obstacles.

Strategy Development:

Creating a high-level plan or approach to achieving goals. Strategies outline

the main activities and resources needed to achieve the desired results.

Creating an action plan:

Breaking the strategy down into smaller, actionable tasks and establishing

timelines, responsibilities, and necessary resources for each task. This step

helps ensure a systematic and organized approach.

Implementation:

Implementing the action plan, putting proposed actions into practice and

monitoring progress along the way. Adjustments can be made as needed to

address issues or changing circumstances.

Evaluation and feedback:

Assessment of the results and outputs of the planning and implementation

process, comparing them with the original goals. Feedback and lessons

learned help improve future planning.

Planning can be used in a variety of areas, including personal goal setting,

project management, business operations, financial management, and even

event organization. It provides a structured framework for decision-making

and helps individuals and organizations to use their resources most

effectively and efficiently.

Environmental Analysis:

Environmental analysis, also known as business environmental scan or

external analysis, is a crucial step in the planning process of a business

organization. It involves assessing and understanding the external factors

that can significantly affect an organization's operations, performance and

success. By examining the business environment, organizations can identify

opportunities to exploit and threats to mitigate, enabling them to make

informed decisions and develop effective strategies.

Environmental analysis typically focuses on two key components:

External factors: -

Market Analysis:

This involves studying the industry in which the organization operates,

including market size, growth rates, customer demographics and trends. It

also includes an analysis of competitors, their strengths and weaknesses,

pricing strategies and market share.

Understanding market dynamics helps organizations identify market

opportunities, anticipate changes and develop competitive advantages.

Economic Factors:

Economic conditions such as GDP growth, inflation rates, interest rates,

employment levels and consumer spending patterns have a significant

impact on businesses. Economic factor analysis helps organizations gauge

the overall business environment and make informed decisions about

pricing, investment, and expansion plans.

Technological factors:

Assessing technological advancements and their impact on the industry is

essential. This includes assessing emerging technologies, automation,

digital transformation and their potential to disrupt traditional business

models. Organizations must adapt to technological changes to remain

competitive and identify opportunities for innovation.

Legal and Regulatory Factors:

Understanding the legal and regulatory framework relevant to the industry

and geographic location of the operation is vital. This includes industry-

specific laws, regulations, permits, licenses and compliance requirements.

Compliance with applicable regulations and up-to-date information on

changes helps organizations mitigate legal risks and maintain ethical

practices.

Sociocultural factors:

Analysis of social and cultural trends, values, attitudes and consumer

behavior provides insight into customer preferences and demands. Market

dynamics and consumer expectations are influenced by factors such as

demographic shifts, lifestyle changes, cultural diversity and social media

trends. Organizations need to align their strategies with these socio-cultural

factors to effectively target and engage their customer base.

Internal factors: -

Organizational Capabilities:

An assessment of an organization's strengths and weaknesses, including its

resources, core competencies, unique selling propositions, and reputation.

Understanding internal capabilities helps in identifying areas of competitive

advantage and areas that require improvement or development.

Financial Analysis:

Assessing the financial health of an organization through analysis of

financial statements, profitability, liquidity, solvency and cash flow. Financial

analysis helps determine an organization's ability to invest, expand, and

maintain its operations.

Human Resources:

An assessment of an organization's workforce, including its skills,

knowledge, experience and capabilities. Understanding human resources

enables organizations to assess their talent, identify skills gaps and plan for

recruitment, training and development needs.

Environmental analysis provides a comprehensive understanding of the

external and internal factors that can affect an organization's success. It

helps in identifying opportunities for growth, potential threats and areas

where the organization needs to adapt or innovate. The insights gained from

the analysis guide subsequent steps in the planning process, such as goal

setting, strategy development, and resource allocation, ensuring that the

organization's plans are well informed and aligned with the business

environment.
Q.No.4 Define decision making and discuss its process?

ANS

Decision making is the essence of managers and key pillar of management

sciences. Managers make decisions and pick the best from available

options. This is a time taking process and involves critical steps. An effective

decision making is considered as a key to success for a business. This unit

is about decision making and decision-making process.

Process of Decision Making

Managers at different managerial levels make different decisions, range from

day to day to long term. They make choices and choose the best from

available options. Top managers investigate the marke t and identify

customer’s needs, wants and competitors’ actions so that they can take

decisions accordingly. But making decisions is not just an easy task as it

looks. Everybody at different levels in the organization have to take

decisions according to their designation. Research recommends that to

become an efficient manager in decision making follow the concept

mentioned in the decision-making process. Although, practicing these steps

will not always result into desired outcomes because every stage is critical

and require the correct inputs.

Let us try to understand with the example of a manager Mr. Mzmil, he has to

decide which laptops should be purchased for his sales team.

So, there are following steps for this decision-making.

1-Identification of a Problem:

In a modern era with speedy advancement and upgradation in technology,

Mr. Mzmil identify that the old technology -based laptop is very slow and are
not efficient in multi-tasking which ultimately is affecting online sale process.

Here the problem originates.

How does a manager find the problem? Most of the time the problem is not

so clear like the flashing signal light. In this case, Mr. Mzmil’s sales

representative started complaining about their computers, which was an

alarming situation and needs to be addressed. Very few problems are very

much obvious therefore, managers must be vigilant in keeping the difference

between the problem and the symptoms of the problem. In the above

example, online sales are the symptoms of the problem. Is a few

percentages drop a problem? Or reduce in the sales percentage is the

symptom of the actual problem, such as marketing, poor quality product or

high prices. Keeping in mind the main subject is to identify the real problem

here.

2- Identifying Decision Criteria:

Once the manager has found the problem, the next step is to figure out the

decision criteria to solve the problem. Being a decision maker, criteria guide

to make clear decisions. In the example mentioned above the Mr. Mzmil has

set the following criteria to make a quick decision such as battery, warranty,

weight, cost, screen size and reliability.

3: Allocation of Weights to the Criteria:

If the criteria set by manager is not equally important, then he or she must

give weights to the criterion indicators based upon their priority and

importance. But how? The simplest way is to give the weightage of 10 to the
most important criterion and then the weights to the rest based upon the

standard. Obviously, you can use any number to the highest weight.

4: Development of Alternatives:

The fourth step is to identify or create all possible alternatives require to

solve the problem. In this step the job is to list the alternatives not to

evaluate. Our sales manager Mr. Mzmil has created all the possible choices

as shown in the Exhibit below such as Acer, Compaq, Sony, Toshiba, HP

and Dell.

5: Analyzing the Alternatives:

Once the alternatives have been identified by the decision maker, next step

is to analyze them but how? The answer is “criteria” made in Step 2.

Manager Mzmil has assigned values after doing research on the given

alternatives as shown in exhibit 4.2. Different criterion is used to analyze the

available alternatives. Values assigned in this step will be multiplied to each

alternative with the weight given in next step to get weighted alternatives as

shown in the exhibit 4.4.

Memory

& Screen

Choices Battery Reliability Warranty Weight Cost Size

Storage

Acer 6 7 8 8 7 9

Compaq 4 8 7 9 8 7

HP 10 10 8 10 6 9

Sony 8 6 10 6 5 9

Toshiba 7 8 7 8 8 5

Dell 10 10 6 10 10 7
 Exhibit 4.1

6: Selection of an Alternative:

The sixth step in decision-making process is selecting the best alternative in

all aspects, look in exhibit 4.2, the alternative with highest score is HP and

Dell. Mr. Mzmil has to choose either HP or Dell because both has scored

(321) highest among other alternatives.

Memor

y&
Scree
Choice Battery Reliabilit Warrant Weigh Cos Tota
n
s Storag y y t t l
Size
e

Acer 60 56 64 40 28 27 275

Compaq 40 64 35 45 32 21 237

HP 100 80 40 50 24 27 321

Sony 80 48 50 30 20 27 255

Toshiba 70 64 35 40 32 15 256

Dell 100 80 30 50 40 21 321

Exhibit 4.2

7: Implementation of the Alternative:

In this step, we have to implement the selected alternative or need to put

decision in action to resolve the identified problem. It is effective to involve

the person who supposed to implement the decision for timely and quick

results.
8: Evaluation of Decision Effectiveness:

The last step of this process is to evaluate the results of the decision to find

whether the problem is solved or not. If the problem is fixed its good, and if

not, then manager needs to check where it went wrong. Was the problem

not properly defined? Were errors occurred, while implementing the

decision. Answers will lead you towards the proper way or might be to follow

the process again.

Q.No.5 Define planning. How does “informal planning” differ from

“formal planning”?

ANS

Definition of Planning: -

“Planning is the process of defining organizations goals, making strategies

to get to those goals and developing plans to coordinate with work activities.

Planning is all connected with “what” we want to achieve and “how” to

achieve it”.

Informal planning refers to a less structured to planning. It typically involves

less documentation and relies more on intuition, experienced and personal

judgment. Informal planning may occur on an ad hoc basis without a

formalized process or dedicated time for planning activities. It often relies on

informal communication channel, such as conversation, brainstorming

sessions, or informal meetings.

On the other hand, formal planning is more structured and systematic

approach to planning. It involves the use of formalized processes, tools and

techniques to develop plans. Formal planning typically follows a specific

methodology or framework and often includes the creation of written

documents, such as strategic plans, project plans or operational plans. It

may involve the use of specialized planning software or templates to

facilitate the process.

The key difference between the formal planning and informal planning can

be summarized as follows:

Informal Planning Formal Planning

1-Structure

Formal planning follows a

Informal planning lacks a defined
structured approach with
structure or may be more flexible and
predefined steps and
dynamic.
methodologies.

2-Documentation

Informal planning tends to have Formal planning involves the

minimal documentation, relying more creation or written plans and

on verbal communication and tacit documents to capture goals,

knowledge. strategies, timeline and resource

allocation.

3-Process

Informal planning may occur Formal planning follows a defined

spontaneously, without a designated process which may include

planning process. It often happens as activities such as goal setting,

part of day-to-day decision-making data analysis, risk assessment

activities. and action planning

 4-Resources

Informal planning typically requires Formal planning may require more

fewer resources as it relies more on resources, such as dedicated

existing knowledge and informal time, personnel and tools to carry

discussions. out the planning activities

effectively.

Both informal and formal planning have their advantages and can be used in

different contexts. Informal planning may be more suitable in small-scale or

routine decision. On the other hand, Formal planning is suitable for complex

and long-term activities.