Learn more. For all the undergraduates....

1. TOPIC
MANAGEMENT PLANNING
Foundations of Planning
Planning is one of the four functions of management. Planning involves defining the
Organization’s goals, establishing an overall strategy for achieving these goals, and developing
plans for organizational work activities. The term planning as used in this chapter refers to
formal planning.
Purposes of Planning
As a managerial function planning is important due to the following reasons:-
1) To manage by objectives: All the activities of an organization are designed to achieve
certain specified objectives. However, planning makes the objectives more concrete by
focusing attention on them.
2) To offset uncertainty and change: Future is always full of uncertainties and changes.
Planning foresees the future and makes the necessary provisions for it.
3) To secure economy in operation: Planning involves, the selection of most profitable
course of action that would lead to the best result at the minimum costs.
4) To help in co-ordination: Co-ordination is, indeed, the essence of management, the
planning is the base of it. Without planning it is not possible to co-ordinate the different
activities of an organization.
5) To make control effective: The controlling function of management relates to the
comparison of the planned performance with the actual performance. In the absence of
plans, a management will have no standards for controlling other's performance.
6) To increase organizational effectiveness: Mere efficiency in the organization is not
important; it should also lead to productivity and effectiveness. Planning enables the
manager to measure the organizational effectiveness in the context of the stated
objectives and take further actions in this direction.
Nature of Planning
i. Planning is goal-oriented: Every plan must contribute in some positive way towards the
accomplishment of group objectives. Planning has no meaning without being related to
goals.
ii. Primacy of Planning: Planning is the first of the managerial functions. It precedes all
other management functions.
iii. Pervasiveness of Planning: Planning is found at all levels of management. Top
management looks after strategic planning. Middle management is in charge of
administrative planning. Lower management has to concentrate on operational planning.
iv. Efficiency, Economy and Accuracy: Efficiency of plan is measured by its contribution
to the objectives as economically as possible. Planning also focuses on accurate
forecasts.

2. v. Co-ordination: Planning co-ordinates the what, who, how, where and why of planning.
Without co-ordination of all activities, we cannot have united efforts.
vi. Limiting Factors: A planner must recognize the limiting factors (money, manpower etc)
and formulate plans in the light of these critical factors.
vii. Flexibility: The process of planning should be adaptable to changing environmental
conditions.
viii. Planning is an intellectual process: The quality of planning will vary according to the
quality of the mind of the manager.
Characteristics/features of planning
1. Primary function
2. A dynamic process
3. Planning is based on objectives
4. Planning is a selective process
5. Pervades all managerial functions
6. Planning is an intellectual process
7. Planning is a continuous process
8. It concerns future activities
Planning and Performance
Although organizations that use formal planning do not always outperform those that do not
plan, most studies show positive relationships between planning and performance. Effective
planning and implementation play a greater part in high performance than does the amount of
planning done. Studies have shown that when formal planning has not led to higher performance,
the external environment is often the reason.
The Role of Goals and Plans in Planning
Planning is often called the primary management function because it establishes the basis for all
other functions. Planning involves two important elements: goals and plans.
Goals (often called objectives) are desired outcomes for individuals, groups, or entire
organizations.
TYPES OF GOALS
a. Financial goals versus strategic goals
Financial goals related to the financial performance of the organization while
Strategic goals are related to other areas of an organizations performance.
b. Stated goals versus real goals
Stated goals are official statements of what an organization says and what it
wants its various stakeholders to believe its goals are. Real goals are those that an organization
actually pursues, as defined by the actions of its members.
Types of Plans
Plans can be described by their breadth, time frame, specificity, and frequency of use
 On the basis of Breadth plans can be Strategic or operational plans. Strategic plans
(long-term plans) are plans that apply to the entire organization, establish the

3. organization’s overall goals, and seek to position the organization in terms of its
environment. Operational plans (short-term plans) are plans that specify the details of
how the overall goals are to be achieved.
 On the basis of Time frame plans can be Short-term or long-term plans. Short term
plans are plans that cover one year or less. Long-term plans are plans with a time frame
beyond three years.
 On the basis of Specificity plans can be Specific or directional plans. Specific plans are
plans that are clearly defined and leave no room for interpretation. Directional plans are
flexible plans that set out general guidelines.
 On the basis of Frequency of use plans can be Single-use or standing plans. A single-
use plan is a one-time plan specifically designed to meet the needs of a unique situation.
Standing plans are ongoing plans that provide guidance for activities performed
repeatedly.
Approaches to Establishing Goals
Goals can be established through the process of traditional goal setting or through MBO
(management by objectives).
Traditional goal setting is an approach to setting goals in which goals are set at the top level of
the organization and then broken into sub goals for each level of the organization. Traditional
goal setting assumes that top managers know what is best because of their ability to see the “big
picture.” Employees are to work to meet the goals for their particular area of responsibility. This
traditional approach requires that goals must be made more specific as they flow down to lower
levels in the organization. In striving to achieve specificity, however, objectives sometimes lose
clarity and unity with goals set at a higher level in the When the hierarchy of organizational
goals is clearly defined, it forms an integrated means end chain—an integrated network of goals
in which the accomplishment of goals at one level serves as the means for achieving the goals, or
ends, at the next level.
DEVELOPING PLANS (THE PLANNING PROCESS)
The process of developing plans is influenced by three contingency factors and by the particular
planning approach used by the organization. Three Contingency Factors in Planning are
 Manager’s level in the organization: Operational planning usually dominates the
planning activities of lower-level managers. As managers move up through the levels of
the organization, their planning becomes more strategy oriented.
 Degree of environmental uncertainty: The greater the environmental uncertainty, the
more directional plans should be, with emphasis placed on the short term. When
uncertainty is high, plans should be specific, but flexible. Managers must be prepared to
rework and amend plans, or even to abandon their plans if necessary.
 Length of future commitments: According to the commitment concept, plans should
extend far enough to meet those commitments made today. Planning for too long or for
too short a time period is inefficient and ineffective.
Steps in planning include

4. 1. Establishment of objectives to be attained-overall and departmental, sectional or
individual
2. Establishment of planning premises. Premises may be internal or external
3. Identification of alternatives, taking into mind the minimum preliminary criteria I.e.
capital investment, government, government controls, matching with present business
market conditions, skilled workers and techniques available
4. Evaluation of alternatives- done in terms of profitability, risks involved, capital
investment, gestation period, keeping in mind the negative and positive points of the plan
5. Choice of alternatives – the best one, more than one alternative may be selected
6. Formulating derivative plans for each segment of the company
7. Establishing sequence of activities
Criticisms of Planning
Although planning is an important managerial function with widespread use, five major
arguments have been directed against planning:
 Planning may create rigidity.
 Plans can’t be developed for a dynamic environment.
 Formal plans can’t replace intuition and creativity.
 Planning focuses managers’ attention on today’s competition, not on tomorrow’s
survival.
 Formal planning reinforces success, which may lead to failure.
The external environment is constantly changing. Therefore managers should develop plans that
are specific, but flexible. Managers must also recognize that planning is an ongoing process, and
they should be willing to change directions if environmental conditions warrant. Flexibility is
particularly important. Managers must remain alert to environmental changes that could impact
the effective implementation of plans, and they must be prepared to make changes as needed.
TOPIC
THE STAFFING FUNCTION
Staffing involves filling the positions needed in the organization structure by appointing
competent and qualified persons for the job.
The staffing process encompasses man power planning, recruitment, selection, and training.
a) Manpower requirements:
Manpower Planning which is also called as Human Resource Planning consists of putting right
number of people, right kind of people at the right place, right time, doing the right things for
which they are suited for the achievement of goals of the organization. The primary function of
man power planning is to analyze and evaluate the human resources available in the
organization, and to determine how to obtain the kinds of personnel needed to staff positions
ranging from assembly line workers to chief executives.
b) Recruitment:
Recruitment is the process of finding and attempting to attract job candidates who are capable of
effectively filling job vacancies. Job descriptions and job specifications are important in the

5. recruiting process because they specify the nature of the job and the qualifications required of
job candidates.
c) Selection:
Selecting a suitable candidate can be the biggest challenge for any organization. The success of
an organization largely depends on its staff. Selection of the right candidate builds the foundation
of any organization's success and helps in reducing turnovers.
d) Training and Development:
Training and Development is a planned effort to facilitate employee learning of job related
behaviors in order to improve employee performance. Experts sometimes distinguish between
the terms “training” and “development”; “training” denotes efforts to increase employee skills on
present jobs, while “development” refers to efforts oriented toward improvements relevant to
future jobs. In practice, though, the distinction is often blurred (mainly because upgrading skills
in present jobs usually improves performance in future jobs).
RECRUITMENT PROCESS
Recruitment is the process of finding and attempting to attract job candidates who are capable of
effectively filling job vacancies. The recruitment process consists of the following steps
• Identification of vacancy
• Preparation of job description and job specification
• Selection of sources
• Advertising the vacancy
• Managing the response
a) Identification of vacancy:
The recruitment process begins with the human resource department receiving requisitions for
recruitment from any department of the company. These contain:
• Posts to be filled
• Number of persons
• Duties to be performed
• Qualifications required
b) Preparation of job description and job specification:
A job description is a list of the general tasks, or functions, and responsibilities of a position. It
may often include to whom the position reports, specifications such as the qualifications or skills
needed by the person in the job, or a salary range. A job specification describes the knowledge,
skills, education, experience, and abilities you believe are essential to performing a particular
job.
c) Selection of sources:
Every organization has the option of choosing the candidates for its recruitment processes from
two kinds of sources: internal and external sources. The sources within the organization itself
(like transfer of employees from one department to other, promotions) to fill a position are
known as the internal sources of recruitment. Recruitment candidates from all the other sources
(like outsourcing agencies etc.) are known as the external sources of the recruitment.
d) Advertising the vacancy:

6. After choosing the appropriate sources, the vacancy is communicated to the candidates by means
of a suitable media such as television, radio, newspaper, internet, direct mail etc.
e) Managing the response:
After receiving an adequate number of responses from job seekers, the sieving process of the
resumes begins. This is a very essential step of the recruitment selection process, because
selecting the correct resumes that match the job profile, is very important. Naturally, it has to be
done rather competently by a person who understands all the responsibilities associated with the
designation in its entirety. Candidates with the given skill set are then chosen and further called
for interview. Also, the applications of candidates that do not match the present nature of the
position but may be considered for future requirements are filed separately and preserved. The
recruitment process is immediately followed by the selection process.
SELECTION PROCESS
Selecting a suitable candidate can be the biggest challenge for any organisation. The success of
an organization largely depends on its staff. Selection of the right candidate builds the foundation
of any organization's success and helps in reducing turnovers.
Though there is no fool proof selection procedure that will ensure low turnover and high profits,
the following steps generally make up the selection process
a)Initial Screening
This is generally the starting point of any employee selection process. Initial Screening
eliminates unqualified applicants and helps save time. Applications received from various
sources are scrutinized and irrelevant ones are discarded.
b) Preliminary Interview
It is used to eliminate those candidates who do not meet the minimum eligibility criteria laid
down by the organization. The skills, academic and family background, competencies and
interests of the candidate are examined during preliminary interview. Preliminary interviews are
less formalized and planned than the final interviews. The candidates are given a brief up about
the company and the job profile; and it is also examined how much the candidate knows about
the company. Preliminary interviews are also called screening interviews.
c) Filling Application Form
An candidate who passes the preliminary interview and is found to be eligible for the job is
asked to fill in a formal application form. Such a form is designed in a way that it records the
personal as well professional details of the candidates such as age, qualifications, reason for
leaving previous job, experience, etc.
d) Personal Interview
Most employers believe that the personal interview is very important. It helps them in obtaining
more information about the prospective employee. It also helps them in interacting with the
candidate and judging his communication abilities, his ease of handling pressure etc. In some
Companies, the selection process comprises only of the Interview.
e) References check
Most application forms include a section that requires prospective candidates to put down names
of a few references. References can be classified into - former employer, former customers,

7. business references, reputable persons. Such references are contacted to get a feedback on the
person in question including his behaviour, skills, conduct etc.
f) Background Verification
A background check is a review of a person's commercial, criminal and (occasionally) financial
records. Employers often perform background checks on employers or candidates for
employment to confirm information given in a job application, verify a person's identity, or
ensure that the individual does not have a history of criminal activity, etc., that could be an issue
upon employment.
g) Final Interview
Final interview is a process in which a potential employee is evaluated by an employer for
prospective employment in their organization. During this process, the employer hopes to
determine whether or not the applicant is suitable for the job. Different types of tests are
conducted to evaluate the capabilities of an applicant, his behaviour, special qualities etc.
Separate tests are conducted for various types of jobs.
h) Physical Examination
If all goes well, then at this stage, a physical examination is conducted to make sure that the
candidate has sound health and does not suffer from any serious ailment.
i) Job Offer
A candidate who clears all the steps is finally considered right for a particular job and is
presented with the job offer. An applicant can be dropped at any given stage if considered unfit
for the job.
TOPIC
DECISION MAKING
Everyone in an organization makes decisions, but decision making is particularly important in a
manager’s job. Decision making is such an important part of all four managerial functions that
decision making is said to be synonymous with managing.
Meaning
Decision making is the process of selecting one alternative among many available to achieve a
desired goal. It is a conscious and human process
Characteristics of DM
1. It is a selection process
2. It is a human and rational process
3. It is a dynamic process
4. Dm making is a goal oriented process
5. It implies freedom to the decision maker regarding their final choice
6. Dm is a continuous process
7. Dm may be positive or negative
The Decision-Making Process
A decision is a choice made from two or more alternatives. The decision-making process is a
set of eight steps that include the following:

8. • Identifying a problem: A problem is a discrepancy between an existing state and a
desired state of affairs. In order to identify a problem, a manager should be able to
differentiate the problem from its symptom; he should be under pressure to take action
and must have the authority and resources to take action.
• Identifying decision criteria: Decision criteria are criteria that define what Relevant is
in a decision.
• Allocating weights to the criteria: The criteria identified in the previous step of the
decision-making process may not have equal importance. So he decision maker must
assign a weight to each of the items in order to give each item accurate priority in the
decision.
• Developing alternatives: The decision maker should then identify viable alternatives
that could resolve the problem.
• Analyzing alternatives: Each of the alternatives are then critically analyzed by
evaluating it against the criteria established in Steps 2 and 3.
• Selecting an alternative: The next step is to select the best alternative from among
those identified and assessed. If criteria weights have been used, the decision maker
would select the alternative that received the highest score in Step 5.
• Implementing the alternative: The selected alternative is implemented by effectively
communicating the decision to the individuals who would be affected by it and their
commitment to the decision is acquired.
• Evaluating decision effectiveness: The last step in the decision-making process is to
assess the result of the decision in order to determine whether or not the problem has
been resolved.
Characteristics of Effective Decisions
An effective decision is one which should contain three aspects. These aspects are given below:
• Action Orientation: Decisions are action-oriented and are directed towards relevant and
controllable aspects of the environment. Decisions should ultimately find their utility in
implementation.
• Goal Direction: Decision making should be goal-directed to enable the organization to meet its
objectives.
• Effective in Implementation: Decision making should take into account all the possible
factors not only in terms of external context but also in internal context so that a decision can be
implemented properly.
Bases of decision making
Managers can make decisions on the basis of rationality, bounded rationality, or intuition.
1. Rational decision making. Managerial decision making is assumed to be rational—that is,
making choices that are consistent and value-maximizing within specified constraints. A rational
manager would be completely logical and objective. Rational decision making assumes that the
manager is making decisions in the best interests of the organization, not in his/her own

9. interests. The assumptions of rationality can be met if the manager is faced with a simple
problem in which
(1) Goals are clear and alternatives limited,
(2) Time pressures are minimal and the cost of finding and evaluating alternatives is low,
(3) The organizational culture supports innovation and risk taking, and (4) outcomes are
concrete and measurable.
2. Bounded rationality. As the perfectly rational model of decision making isn’t realistic,
managers tend to operate under assumptions of bounded rationality, which is decision-making
behavior that is rational, but limited (bounded) by an individual’s ability to process information.
Under bounded rationality, managers make satisfying decisions, in which they accept solutions
that are “good enough.” Managers’ decision making may be strongly influenced by the
organization’s culture, internal politics, power considerations, and by a phenomenon called
escalation of commitment— an increased commitment to a previous decision despite evidence
that it may have been wrong.
3. Intuitive decision making. Managers also regularly use their intuition. Intuitive decision
making is a subconscious process of making decisions on the basis of experience and
accumulated judgment. Although intuitive decision making will not replace the rational decision-
making process, it does play an important role in managerial decision making.
TYPES OF PROBLEMS AND DECISIONS
Managers encounter different types of problems and use different types of decisions to resolve
them. Problems can be structured problems or unstructured problems and decisions can be
programmed decisions or non programmed decisions.
Structured problems are straightforward, familiar, and easily defined. In dealing with
structured problems, a manager may use a programmed decision, which is a repetitive decision
that can be handled by a routine approach. Managers rely on three types of programmed
decisions:
a) A procedure is a series of interrelated sequential steps that can be used to respond to a
structured problem.
b) A rule is an explicit statement that tells managers what they can or cannot do.
c) A policy is a guideline for making decisions.
Unstructured problems are problems that are new or unusual and for which information is
ambiguous or incomplete. These problems are best handled by a non programmed decision that
is a unique decision that requires a custom made solution. At higher levels in the organizational
hierarchy, managers deal more often with difficult, unstructured problems and make non
programmed decisions in attempting to resolve these problems and challenges. Lower-level
managers handle routine decisions, using programmed decisions.
Decision-Making Conditions
Decision can be made under conditions of certainty, uncertainty and risk.
Certainty is a situation in which a manager can make accurate decisions because all outcomes
are known. Few managerial decisions are made under the condition of certainty.

10. More common is the situation of risk, in which the decision maker is able to estimate the
likelihood of certain outcomes.
Uncertainty is a situation in which the decision maker is not certain and cannot even make
reasonable probability estimates concerning outcomes of alternatives. In such a situation, the
choice of alternative is influenced by the limited amount of information available to the decision
maker. It’s also influenced by the psychological orientation of the decision maker.
1) An optimistic manager will follow a maximax choice, maximizing the maximum
possible payoff.
2) A pessimistic manager will pursue a maximin choice, maximizing the minimum
possible payoff.
3) The manager who desires to minimize the maximum regret will opt for a minimax
choice.
TOPIC
THE ORGANIZING FUNCTION
DEFINITION
According to Koontz and O'Donnell, "Organization involves the grouping of activities necessary
to accomplish goals and plans, the assignment of these activities to appropriate departments and
the provision of authority, delegation and co-ordination." Organization involves division of work
among people whose efforts must be co-ordinated to achieve specific objectives and to
implement pre-determined strategies.
NATURE OR CHARACTERISTICS OF ORGANIZING
From the study of the various definitions given by different management experts we get the
following information about the characteristics or nature of organization,
(1) Division of Work: Division of work is the basis of an organization. In other words, there can
be no organization without division of work. Under division of work the entire work of
business is divided into many departments .The work of every department is further sub-
divided into sub works. In this way each individual has to do the saran work repeatedly
which gradually makes that person an expert.
(2) Coordination: Under organizing different persons are assigned different works but the aim
of all these persons happens to be the some - the attainment of the objectives of the
enterprise. Organization ensures that the work of all the persons depends on each other’s
work even though it happens to be different. The work of one person starts from where the
work of another person ends. The non-completion of the work of one person affects the work
of everybody. Therefore, everybody completes his work in time and does not hinder the work
of others. It is thus, clear that it is in the nature of an organization to establish coordination
among different works, departments and posts in the enterprise.
(3) Plurality of Persons: Organization is a group of many persons who assemble to fulfill a
common purpose. A single individual cannot create an organization.

11. (4) Common Objectives: There are various parts of an organization with different functions to
perform but all move in the direction of achieving a general objective.
(5) Well-defined Authority and Responsibility: Under organization a chain is established
between different posts right from the top to the bottom. It is clearly specified as to what will
be the authority and responsibility of every post. In other words, every individual working in
the organization is given some authority for the efficient work performance and it is also
decided simultaneously as to what will be the responsibility of that individual in case of
unsatisfactory work performance.
(6) Organization is a Structure of Relationship: Relationship between persons working on
different posts in the organization is decided. In other words, it is decided as to who will be
the superior and who will be the subordinate. Leaving the top level post and the lowest level
post everybody is somebody's superior and somebody's subordinate. The person working on
the top level post has no superior and the person working on the lowest level post has no
subordinate.
(7) Organization is a Machine of Management: Organization is considered to be a machine of
management because the efficiency of all the functions depends on an effective organization.
In the absence of organization no function can be performed in a planned manner. It is
appropriate to call organization a machine of management from another point of view. It is
that machine in which no part can afford tube ill-fitting or non-functional. In other words, if
the division of work is not done properly or posts are not created correctly the whole system
of management collapses.
(8) Organization is a Universal Process: Organization is needed both in business and non
business organizations. Not only this, organization will be needed where two or mom than
two people work jointly. Therefore, organization has the quality of universality.
(9) Organization is a Dynamic Process: Organization is related to people and the knowledge
and experience of the people undergo a change. The impact of this change affects the various
functions of the organizations. Thus, organization is not a process that can be decided for all
times to come but it undergoes changes according to the needs. The example in this case can
be the creation or abolition of a new post according to the need.
IMPORTANCE OR ADVANTAGES OF ORGANIZING
Organization is an instrument that defines relations among different people which helps them to
understand as in who happens to be their superior and who is their subordinate. This information
helps in fixing responsibility and developing coordination. In such circumstances the objectives
of the organization can be easily achieved. That is why, it is said that Organization Is a
mechanism of management. In addition to that it helps in the other functions of management like
planning, staffing, leading, controlling, etc. The importance of organization or its merits becomes
clear from the following facts,
a) Increase in Managerial Efficiency: A good and balanced organization helps the
managers to increase their efficiency. Managers, through the medium of organization,
make a proper distribution of the whole work among different people according to their
ability.

12. b) Proper Utilization of Resources: Through the medium of organization optimum
utilization of all the available human and material resources of an enterprise becomes
possible. Work is allotted to every individual according to his ability and capacity and
conditions ant created to enable him to utilize his ability to the maximum extent. For
example, if an employee possesses the knowledge of modem machinery but the modem
machinery is not available in the organization, in that case, efforts are made to make
available the modem machinery.
c) Sound Communication Possible: Communication is essential for taking the right
decision at the right time. However, the establishment of a good communication system
is possible only through an organization. In an organization the time of communication is
decided so that all the useful information reaches the officers concerned which. in turn,
helps the decision-making.
d) Facilitates Coordination: In order to attain successfully the objectives of the
organization, coordination among various activities in the organization is essential.
Organization is the only medium which makes coordination possible. Under organization
the division of work is made in such a manner as to make all the activities
complementary to each other increasing their interdependence. Inter-dependence gives
rise to the establishment of relations which, in turn, increases coordination.
e) Increase in Specialization: Under organization the whole work is divided into different
parts. Competent persons are appointed to handle all the sub-works and by handling a
particular work repeatedly they become specialists. This enables them to have maximum
work performance in the minimum time while the organization gets the benefit of
specialization.
f) Helpful in Expansion: A good organization helps the enterprise in facing competition.
When an enterprise starts making available good quality product at cheap rates, it
increases the demand for its products. In order to meet the increasing demand for its
products an organization has to expand its business. On the other hand, a good
organization has an element of flexibility which far from impeding the expansion work
encourages it.
ORGANIZING PROCESS
Organization is the process of establishing relationship among the members of the enterprise.
The relationships are created in terms of authority and responsibility. To organize is to
harmonize, coordinate or arrange in a logical and orderly manner. Each member in the
organization is assigned a specific responsibility or duty to perform and is granted the
corresponding authority to perform his duty. The managerial function of organizing consists in
making a rational division of work into groups of activities and tying together the positions
representing grouping of activities so as to achieve a rational, well coordinated and orderly
structure for the accomplishment of work. According to Louis A Allen, "Organizing involves
identification and grouping the activities to be performed and dividing them among the
individuals and creating authority and responsibility relationships among them for the
accomplishment of organizational objectives." The various steps involved in this process are:

13. a) Determination of Objectives:
It is the first step in building up an organization. Organization is always related to certain
objectives. Therefore, it is essential for the management to identify the objectives before starting
any activity. Organization structure is built on the basis of the objectives of the enterprise. That
means, the structure of the organization can be determined by the management only after
knowing the objectives to be accomplished through the organization. This step helps the
management not only in framing the organization structure but also in achieving the enterprise
objectives with minimum cost and efforts. Determination of objectives will consist in deciding as
to why the proposed organization is to be set up and, therefore, what will be the nature of the
work to be accomplished through the organization.
b) Enumeration of Objectives:
If the members of the group are to pool their efforts effectively, there must be proper division of
the major activities. The first step in organizing group effort is the division of the total job into
essential activities. Each job should be properly classified and grouped. This will enable the
people to know what is expected of them as members of the group and will help in avoiding
duplication of efforts. For example, the work of an industrial concern may be divided into the
following major functions – production, financing, personnel, sales, purchase, etc.
c) Classification of Activities:
The next step will be to classify activities according to similarities and common purposes and
functions and taking the human and material resources into account. Then, closely related and
similar activities are grouped into divisions and departments and the departmental activities are
further divided into sections.
d) Assignment of Duties:
Here, specific job assignments are made to different subordinates for ensuring a certainty of
work performance. Each individual should be given a specific job to do according to his ability
and made responsible for that. He should also be given the adequate authority to do the job
assigned to him. In the words of Kimball and Kimball - "Organization embraces the duties of
designating the departments and the personnel that are to carry on the work, defining their
functions and specifying the relations that are to exist between department and individuals."
e) Delegation of Authority:
Since so many individuals work in the same organization, it is the responsibility of management
to lay down structure of relationship in the organization. Authority without responsibility is a
dangerous thing and similarly responsibility without authority is an empty vessel. Everybody
should clearly know to whom he is accountable; corresponding to the responsibility authority is
delegated to the subordinates for enabling them to show work performance. This will help in the
smooth working of the enterprise by facilitating delegation of responsibility and authority.
TOPIC
DIRECTING MANAGERIAL FUNCTION

14. DIRECTING is said to be a process in which the managers instruct, guide and oversee the
performance of the workers to achieve predetermined goals. Directing is said to be the heart of
management process. planning, organizing, staffing have got no importance if direction function
does not take place.
Directing initiates action and it is from here actual work starts. Direction is said to be consisting
of human factors. In simple words, it can be described as providing guidance to workers is doing
work. In field of management, direction is said to be all those activities which are designed to
encourage the subordinates to work effectively and efficiently. According to Human, “Directing
consists of process or technique by which instruction can be issued and operations can be carried
out as originally planned” Therefore, Directing is the function of guiding, inspiring, overseeing
and instructing people towards accomplishment of organizational goals.
"Activating deals with the steps a manager takes to get sub-ordinates and others to carry out
plans". - Newman and Warren.
After plans have been ready and the organization has been established and staffed, the
next step is to progress towards its distinct objectives. This role of manager can be called by
various names like "actuating", "leading", "directing", "motivating" and so on. But
whatsoever the name used to recognize it, in carrying out this function the manager clarify to his
people what they have to do and facilitate them do it to do the best of their capability. Directing
thus engages three sub-functions; they are communication, leadership and motivation.
Communication is the process of passing information and understanding from one person to
another person. Leadership is the process in which a manager guides and influences the effort of
his subordinates. Motivation means arousing desire or wish in the minds of workers to give their
greatest to the enterprise. It is the act of inspiring or rousing workers. If the workers of an
organization are appropriately motivated they will pull their weight efficiently, give their loyalty
to the enterprise, and perform their duty effectively. Motivation is classified under two broad
categories; financial and non-financial. Financial motivation takes the form of bonus, profit-
sharing, distribution of company share etc. whereas non-financial motivation takes the form of
opportunity of advancement, job security, recognition, praise, etc.
Directing in Management
Directing means giving instructions, guiding, counselling, motivating and leading the staff in an
organization in doing work to achieve Organizational goals. Directing is a key managerial
function to be performed by the manager along with planning, organizing, staffing and
controlling. From top executive to supervisor performs the function of directing and it takes
place accordingly wherever superior – subordinate relations exist. Directing is a continuous
process initiated at top level and flows to the bottom through organizational hierarchy
Importance of Directing
Directing function is the basis of management process and the accomplishment of goals depends
on this. This function is also known as actuating function of management as an enterprise’s

15. running really begins on the direction. Several benefits are provided to an organization because
direction is the central point of an organization and they are as follows:
Directing initiates actions: Directions is the beginning of the subordinate’s execution of their
work. Actions begin right from this function onward as the employees learn their jobs and carry
out the proper instructions that are given to them. Plans which are made can be carried out only
after the actual job begins and it is only then that the direction turns out to be helpful.
Directing integrates efforts: The superiors are capable of directing, inspiring and instructing the
employees to work only by directing. To do this, every person needs to work hard in order to
accomplish the goals of an organization. Every department’s efforts can be easily connected and
included along with the other departments through proper direction. This can also be achieved
through influential leadership and efficient communication. A concern achieves certain stability
only through effectively incorporating all the efforts made by all.
Directing is a means of motivation: The function of direction aids in achieving all the goals
effectively. A manager uses this motivation factor effectively in order to enhance the employee’s
performance in the organization. This can be easily achieved by giving proper salaries or rewards
and this in turn enables to help as a sort of ‘’Morale Booster’’ for the employees in an
organization. The employees can do their best through effective motivation and this in turn aids
in the eventual expansion of an organization.
Directing provides stability: An organization’s balance and constancy is very vital for
surviving in the market in the long run. The managers can achieve this effectively by using four
tools or essentials of direction, cautiously blending influential leadership skills, able
communication, a firm command and also a well-organized motivation. Stability is very vital as
it is an indication of the enterprise’s expansion. Hence, a manager can utilize all the four traits
within himself in order to uphold the standards of performance of an organization.
Directing will enable to cope with
the changes: It is normal for humans to resist any new changes that are brought in an
organization. However, in order to become a leader in the market, it is important to able to adapt
oneself to the ever-changing environment which in turn aids in supporting planned growth of an
organization. The function of direction is necessary for meeting the new challenges in a fast-
changing environment, both internally and externally. The changes in an environment can be
managed easily through effective communication. The manager’s role is to effectively
communicate all the contents and nature of new modifications explicitly to the employees. This
aids in clarifying, easily adapting and an enterprise’s smooth functioning. For instance, if an
enterprise changes from handlooms to doing power looms, it is necessary to bring about a vital
change in the methods of production. This results in a decrease of human labor and an increase in
using more machines for this purpose. Hence, in this case, the manager can explain to his
employees that it is important to bring about this change in order to benefit them. Production
increases as a result of utilization of more machines and this in turn results in more profits for the
enterprise. Hence, the subordinates are benefited indirectly through this change in the form of
high salaries being given to them.
Directing helps in efficient utilization of resources: The proper direction of money aids in

16. defining the roles and responsibilities of all the employees towards their own work. Utilization of
resources can be effectively done only when there is no duplication of any efforts, no wastage,
overlapping of achievements and so on. The roles of employees become defined only through
proper direction as the manager uses his control, guiding and instructional abilities and skills of
motivating and inspiring all his subordinates in the organization. This aids in the greatest
employment of resources pertaining to humans, materials, machines and finance and this further
aids in cost reduction and an increase in profits of an organization.
Elements of Direction
The elements of direction that are briefed here under are Supervision, Motivation, Leadership
and Communication.
Supervision: "Guiding and directing efforts of employees and other resources to accomplish
stated work outputs" - Terry and Franklin. "Day-to-day relationship between an executive
and his immediate assistant and covers training, direction, motivation, coordination, maintenance
of discipline etc"- Newman and Warren.
Supervision denotes the functions performed by the supervisors.
Motivation : "Motivation is the complex force starting and keeping a person at work in an
organization. Motivation is something that moves the person to action, and continues him in the
course of action already initiates." Dubin.
Motivation is the core of management. Technically, the term motivation can be traced to the
Latin word movere, which means 'to move'. Motivating is a term which implies that one person
induces another, to engage in action by ensuring that a channel to satisfy the motive becomes
available to the individual. Motive is energizer of action, motivating is the channelization and
activation of motives, motivation is the work behavior itself. Motivation depends on motives and
motivating. It is a complex process.
Leadership : "Leadership is essentially a continuous process of influencing behavior A leader
breathes life into the group and motivates it towards goals. The lukewarm desires for
achievement are transformed into burning passion for accomplishment".- George R. Terry.
Leadership is the process of influencing the behavior of others to work willingly and
enthusiastically for achieving predetermined goals. It is an essential ingredient for successful
organization.The successful organization has one major attribute that sets sets it apart from
unsuccessful organization that is dynamic and effective leadership.
Communication : "Communication is the transfer of information from one person to another
person. It is a way of reaching others by transmitting ideas, facts, thoughts, feeling sand values."
Newstrom and Davis.
Communication is regarded as basic to the functioning of the organization, in its absence, the
organization would cease to exist. It is the process through which two or more persons come to
exchange ideas and understanding among themselves.
Directing Characteristics
Direction has got following characteristics:
1. Pervasive Function - Directing is required at all levels of organization. Every manager
provides guidance and inspiration to his subordinates.

17. 2. Continuous Activity - Direction is a continuous activity as it continuous throughout the
life of organization.
3. Human Factor - Directing function is related to subordinates and therefore it is related to
human factor. Since human factor is complex and behaviour is unpredictable, direction
function becomes important.
4. Creative Activity - Direction function helps in converting plans into performance.
Without this function, people become inactive and physical resources are meaningless.
5. Executive Function - Direction function is carried out by all managers and executives at
all levels throughout the working of an enterprise, a subordinate receives instructions
from his superior only.
6. Delegate Function - Direction is supposed to be a function dealing with human beings.
Human behaviour is unpredictable by nature and conditioning the people’s behaviour
towards the goals of the enterprise is what the executive does in this function. Therefore,
it is termed as having delicacy in it to tackle human behaviour.