1. II JAI SRIGURUDEV II
Sri Adichunchanagiri Shikshana Trust
SJB INSTITUTE OF TECHNOLOGY
BGS Health & Education City
Dr. Vishnuvardhana Road, Kengeri, Bengaluru - 560 060.
DEPARTMENT OF MBA
Principles of Management and Organizational Behaviour
23MBAC101
I SEM MBA
Module 2
Functions of Management
Prepared by : Dr Harshini C S
Designation : Associate Professor
2. Module-2
Functions of Management
Planning: Nature, Objectives, process, Types of Plans, Planning
Techniques Decision-making: Process, types of decisions and
Techniques
Organizing: Organization structure, Formal and informal
organizations, Principles of organizations
Directing: Definitions, Importance, Elements and Principles of
Directing
Controlling: Importance, Process, types of control, factors
influencing control effectiveness
• Case Study: Functions of Management in different
companies-McDonald, KFC etc.
• Textbook: Essentials of Management-Koontz, McGraw Hill,
8/e,2020
4. Planning
• Planning is the process by which managers establish
goals and define the methods by which these goals
are to be attained. Planning involves selecting
missions and objectives and the actions to achieve
them; it requires decision making, which is choosing
from among alternative future courses of action.
• According to Koontz and O’Donnell, planning is “an
intellectual process, the conscious determination of
courses of action, the basing of decisions on purpose,
facts and considered estimates.
5. Features/Nature/Characteristic of Planning
• 1. Planning contributes to Objectives
• 2. Planning is Primary function of
management
• 3. Pervasive
• 4. Planning is futuristic/Forward looking
• 5. Planning is continuous
• 6. Planning involves decision making
• 7. Planning is a mental exercise
9. Scope of Management
• The operational aspects of business
management, called the branches of
management, are as follows:
• 1. Production Management
• 2. Marketing Management
• 3. Financial Management.
• 4. Personnel Management and
• 5. Office Management.
10. Types of Planning
• The process of planning may be classified into different categories on the
following basis:
• 1. Nature
– a. Formal planning.
– b. Informal planning.
• 2. Duration of planning:
– a. Short term planning.
– b. Long term planning.
• 3. Levels of Management:
– a. Strategic planning.
– b. Intermediate planning.
– c. Operational planning.
• 4. Use:
– a. Standing plans (Standing plan is one, which is designed to be used over and over
again)
– b. Single-use plans (which sets a course of action for a particular set of circumstances
and is used up once the particular goal is achieved. Eg: Programs, Projects and Budgets)
11. Planning Tools and Techniques
• The useful tools and techniques
- Forecasting
- Contingency planning (time saved)
- Scenarios (Making assumptions)
- Bench marketing (Community driven development approach)
- Participative planning
- Use of staff planners
13. Essentials of a Good Plan
Nine Basic Features of a Good Management Plan
1. It should define objectives,
• 2.It should be simple,
• 3. It should be clear,
• 4. It should be comprehensive,
• 5. It should be flexible,
• 6. It should be economical,
• 7. It should establish standards,
• 8. It should be balanced,
• 9. It should be practicable
15. Introduction
• Quality of the decisions that managers make is
the yardstick of effectiveness.
• Management is decision making; however,
decision-making is also fundamentally a
people process.
16. Types of Decision Making
• Programmed and un-programmed
• Strategic and Routine
• Tactical and Operational
• Major and Minor
• Individual and Group
17. Decision making process
I. A Rational Decision Making Process
Decisions are organizational responses to problems
and outcomes of a dynamic process.
II. Alternatives to Rational Decision Making
18. Steps/Process in Rational Decision Making
1. Establishing specific goals and objectives and
measuring results
2. Problem identification and definition-The
problem comes to light when a gap exists between
performance levels specified by organizational objectives
and actual levels.
Types of problems:
i. Opportunities—these must be found.
ii. Crisis—problems of this kind find the manager.
iii. Routine problems
19. Steps/Process in Rational Decision Making
3. Establishing priorities-Scarce resources demand that
managers deal with problems in order of significance.
Significance determined by:
i. Urgency—time pressure.
ii. Impact—seriousness of the problem's effects.
iii. Growth tendency—future considerations.
4. Consideration of causes—the search for causes
often leads to a new and better problem statement.
5. Development of alternative solutions—a search
process constrained by time and cost factors.
20. Steps/Process in Rational Decision Making
6. Evaluation of alternative solutions— It should be:
• a. Guided by objectives (step 1).
• b. Assessed in terms of its potentially favorable and negative
outcomes.
• c. The alternative-outcome relationship is based on three
possible considerations:
– i. Certainty
– ii. Uncertainty
– iii. Risk
7. Solution selection: (With multiple objectives)
8. Implementation: It usually involves people. Decisions must
be transformed into behavior.
9. Follow-up-Involves periodically measuring the decision
results
21. Alternatives to Rational Decision
• Herbert Simon called this approach to decision-
making, Bounded Rationality.
• In this approach, the following assumptions are made:
– i. Decision makers rarely have all the information they need
or want.
– ii. Decision makers are not aware of all possible alternatives
and cannot predict consequences.
– iii. Early alternatives and solutions are quickly adopted
because of constraints and limitations.
– iv. The organization’s goals constrain decision-making.
– v. Conflicting goals of different constituents can restrict
decisions, forcing a compromise solution.
23. Different Decision Making Styles
• All individuals bring their style to the decision
making process. Research has found that there
are four broad types of styles:
• (1) Directive: fast decisions; focus on short term
• (2) Analytic: careful analysis; and tackle all
types of problems
• (3) Conceptual: Creative solutions; long range
focus
• (4) Behavioural: Team working; conflict
avoidance
24. Techniques of Decision Making
1. Rational Decision Making: This technique involves a
systematic, step-by-step process of defining the problem,
gathering relevant information, identifying various solutions,
evaluating those solutions based on predetermined criteria,
selecting the best solution, and implementing it.
2. Intuitive Decision Making: This technique relies on gut
feelings, instincts, and past experiences rather than extensive
analysis.
3. Cost-Benefit Analysis: This technique involves weighing
the costs and benefits of each decision option to determine
which one offers the highest overall value. It is particularly
useful in financial decision making but can also be applied to
other areas.
25. Techniques of Decision Making
4.SWOT Analysis: SWOT stands for Strengths, Weaknesses,
Opportunities, and Threats.
5.Decision Trees: Decision trees are visual tools that help map out
decision options and their potential outcomes. They are particularly
useful for complex decisions with multiple variables and
uncertainties.
6. Pareto Analysis: Also known as the 80/20 rule, Pareto analysis
involves identifying the most significant factors contributing to a
problem or situation and focusing on addressing those factors first to
achieve the most significant impact.
80% of bus delays stem from 20% of the possible causes of delay.
80% of service complaints arise from 20% of the services you offer.
80% of software crashes come from 20% of the potential computer
virus types.
26. Techniques of Decision Making
7. Nominal Group Technique (NGT): NGT is a group
decision-making technique that involves generating and
evaluating ideas from group members through
structured discussions and voting.
8. Delphi Technique: This technique involves gathering
input from a panel of experts anonymously and then
iteratively refining the decision based on their feedback.
It is useful for complex decisions requiring expert
knowledge and consensus building.
27. Techniques of Decision Making
9. Brainstorming: Brainstorming is a creative
technique that involves generating a large
number of ideas from a group of people without
initially evaluating them. It encourages creativity
and divergent thinking, which can lead to
innovative solutions.
10. Scenario Analysis: This technique involves
creating and analyzing different scenarios or
potential futures to understand their implications
and make decisions that are robust across
multiple possible outcomes.
29. Organizing
• Louis Allen: Organising is the process of identifying
and grouping work to be performed, defining and
delegating responsibility and authority and
establishing relationships for the purpose of enabling
people to work most effectively together in
accomplishing objectives.” In the words of Allen,
organization is an instrument for achieving
organizational goals. The work of each and every
person is defined and authority and responsibility is
fixed for accomplishing the same.
30. Organizing
Koontz and O’Donnell: The establishment of authority
relationships with provision for co-ordination between them, both
vertically and horizontally in the enterprise structure. These
authors view organization as a coordinating point among various
persons in the business.
Organising as a (i) structure and (ii) process.
(i) As a Structure:
• The relationship amongst people is both vertical and
horizontal.
(ii) As a Process:
• Organising defines relationships amongst people through a
process that aims to achieve organisational goals efficiently.
31. Nature of Organization
1. Common Goal
2. Division of Labour
3. Authority Structure
4. Group
5. Communication
6. Coordination
7. Environment
8. Rules and Regulations
32. Steps in organising the structure of an enterprise
• Step # 1. Knowledge of Objectives
• Step # 2. Division of Work into Activities
• Step # 3. Grouping the Activities
• Step # 4. Defining and Assigning Activities to Jobs
• Step # 5. Fitting Personnel into Jobs
• Step # 6. Delegation of Required Authority
• Step # 7. Creating Organisational Relationships
33. Functions of Organisation
The functions of organisation includes:
• 1. Determination of activities,
• 2. Grouping of activities,
• 3. Allotment of duties to specified persons,
• 4. Delegation of authority,
• 5. Defining relationships, and
• 6. The co-ordination of various activities.
35. Types of organisations
• a. A sole trader or a trading or a proprietary firm
• b. A partnership firm
• c. A co-operative society
• d. A joint stock company, which may be a public limited
company or a private limited company
• e. A holding company
• f. A subsidiary company
• g. A public sector company
36. Types of organisations
• h. A corporation
• i. An autonomous corporation/enterprise/
organisation
• j. A bank or financial institution
• k. A foreign company
• l. A joint venture company
• m. A multinational company (MNC)
38. Difference between Formal and Informal
Organisation
Criteria for difference
• Structure
• Communication
• Decision-Making
• Roles and Responsibilities
• Documentation
• Accountability
• Flexibility
• Conflict Resolution
• Performance Evaluation
• Culture
55. Directing
• Directing refers to a process or technique of
instructing, guiding, inspiring, counselling,
overseeing and leading people towards the
accomplishment of organizational goals. It is
a continuous managerial process that goes on
throughout the life of the organization.
68. Most Important Areas of Controlling
• 1. Control over Policies
• 2. Control over Organization
• 3. Control over Personnel
• 4. Control over Wages and Salaries
• 5. Control over Costs
• 6. Control over Methods
• 7. Control over Capital Expenditure
• 8. Control over Production
• 9. Control over Research and Development
• 10. Control over External Relations
• 11. Overall Control
69. Tools of control available to modern management
• 1. Budgetary Control
• 2. Cost Control
• 3. Statistical Control
• 4. Work Measurement and Production Control
• 5. Quality Control
• 6. Financial Control, and
• 7. Documentation
70. Important Requirements for Effective Control
1. Control should reflect plans, position and structures
2. Control should be designed to suit individual managers
3. Control system should be understandable
4. Control should be objective
5. Control system should be cost-effective
6. Control should identify only exceptions
7. Control system should be flexible
8. Control should lead to corrective action
9. Active Participation
10. Suggestive
11. Competent and Talented Staff
73. Traditional Techniques
1. Personal Observation
Personal observation is one of those techniques
which enables the manager to collect the
information as first-hand information.
– However, it is a very time-consuming exercise &
cannot effectively be used for all kinds of jobs
2. Budgetary Control
– The budget can be defined as a quantitative statement
prepared for a definite future period of time for the
purpose of obtaining a given objective
75. Traditional Techniques
4. Statistical Reports
•Statistical reports can be defined as an overall analysis
of reports and data which is used in the form of averages,
percentage, ratios, correlation, etc., present
useful information to the managers regarding the performance
of the organization in various areas.
83. Case Study Analysis
• Understand the Question
• Analyze the Case Study
• Apply Management Concepts
• Structure Your Response
• Provide Evidence and Examples
– Support your analysis and arguments with evidence from
the case study, such as data, quotes, or examples.
• Be Analytical and Critical
• Offer Recommendations or Solutions
• Conclude Effectively
84. Presentation Topics
• Functions of Management of any company
• Organizational Culture and climate of any
company
• Management Practices
• Evolution of Management of any company
• Recent trends adopted in Management of any
company
