04/15/2304/15/23 11

MANAGEMENTMANAGEMENT

04/15/2304/15/23 22

What is Management?What is Management?What is Management?What is Management?

A set of activitiesA set of activitiesplanning and decision making, organizing, leading, and planning and decision making, organizing, leading, and controllingcontrolling

directed at an organization’s resources directed at an organization’s resources human, financial, physical, and informationhuman, financial, physical, and information

with the aim of achieving organizational goalswith the aim of achieving organizational goalsin an efficient and effectivein an efficient and effectivemanner.manner.

04/15/2304/15/23 33

What is a Manager?What is a Manager?

Someone whose primary responsibility is to Someone whose primary responsibility is to carry out the management process.carry out the management process.

Someone who plans and makes decisions, Someone who plans and makes decisions, organizes, leads, and controls organizes, leads, and controls human, financial, physical, human, financial, physical, and information resources.and information resources.

04/15/2304/15/23 44

Kinds of Managers by LevelKinds of Managers by Level Top ManagersTop Managers

The relatively small group of executives who The relatively small group of executives who manage the organization’s overall goals, strategy, manage the organization’s overall goals, strategy, and operating policies.and operating policies.

Middle ManagersMiddle ManagersLargest group of managers in organizationsLargest group of managers in organizations

Implement top management’s policies and plans.Implement top management’s policies and plans. Supervise and coordinate lower-level managers’ activities.Supervise and coordinate lower-level managers’ activities.

First-Line ManagersFirst-Line ManagersManagers who supervise and coordinate the Managers who supervise and coordinate the

activities of operating employees.activities of operating employees.

04/15/2304/15/23 55

Management in OrganizationsManagement in Organizations

Inputs from the environment• Human resources• Financial resources• Physical resources• Information resources

Planningand decision

making

Leading

Organizing

Controlling

Goals attained• Efficiently• Effectively

04/15/2304/15/23 66

Figure 1.2Figure 1.2The Management ProcessThe Management Process

04/15/2304/15/23 77

The Management Process The Management Process (cont’d)(cont’d)

Planning and Decision MakingPlanning and Decision MakingSetting an organization’s goals and selecting a course Setting an organization’s goals and selecting a course

of action from a set of alternatives to achieve them.of action from a set of alternatives to achieve them. OrganizingOrganizing

Determining how activities and resources are Determining how activities and resources are grouped.grouped.

Leading Leading Getting organizational members to work together to Getting organizational members to work together to

advance the interests of the organization.advance the interests of the organization. Controlling Controlling

Monitoring organizational progress towards goals.Monitoring organizational progress towards goals.

04/15/2304/15/23 88

Skills and Skills and the the

ManagerManager

Fundamental Fundamental Management Management

SkillsSkills

Fundamental Fundamental Management Management

SkillsSkills

Technical SkillsTechnical Skills

Interpersonal SkillsInterpersonal Skills

Conceptual SkillsConceptual Skills

Diagnostic SkillsDiagnostic Skills

Communication SkillsCommunication Skills

Decision-Making SkillsDecision-Making Skills

Time-Management SkillsTime-Management Skills

04/15/2304/15/23 99

Fundamental Management Fundamental Management SkillsSkills

TechnicalTechnicalSkills necessary to accomplish or understand the Skills necessary to accomplish or understand the

specific kind of work being done in an specific kind of work being done in an organization.organization.

InterpersonalInterpersonalThe ability to communicate with, understand, and The ability to communicate with, understand, and

motivate both individuals and groups.motivate both individuals and groups. ConceptualConceptual

The manager’s ability to think in the abstract.The manager’s ability to think in the abstract. DiagnosticDiagnostic

The manager’s ability to visualize the most The manager’s ability to visualize the most appropriate response to a situation.appropriate response to a situation.

04/15/2304/15/23 1010

Fundamental Management Skills Fundamental Management Skills (cont’d)(cont’d)

CommunicationCommunicationThe manager’s abilities both to convey ideas and The manager’s abilities both to convey ideas and

information effectively to others and to receive ideas information effectively to others and to receive ideas and information effectively from others.and information effectively from others.

Decision-MakingDecision-MakingThe manager’s ability to recognize and define The manager’s ability to recognize and define

problems and opportunities correctly and then to select problems and opportunities correctly and then to select an appropriate course of action to solve the problems an appropriate course of action to solve the problems and capitalize on opportunities.and capitalize on opportunities.

Time-ManagementTime-ManagementThe manager’s ability to prioritize work, to work The manager’s ability to prioritize work, to work

efficiently, and to delegate appropriately.efficiently, and to delegate appropriately.

04/15/2304/15/23 1111

Management: Science or Art?Management: Science or Art? The Science of ManagementThe Science of Management

Assumes that problems can be approached using Assumes that problems can be approached using rational, logical, objective, and systematic ways.rational, logical, objective, and systematic ways.

Requires technical, diagnostic, and decision-making Requires technical, diagnostic, and decision-making skills and techniques to solve problems.skills and techniques to solve problems.

The Art of Management The Art of Management Decisions are made and problems solved using a Decisions are made and problems solved using a

blend of intuition, experience, instinct, and personal blend of intuition, experience, instinct, and personal insights.insights.

Requires conceptual, communication, interpersonal, Requires conceptual, communication, interpersonal, and time-management skills to accomplish the tasks and time-management skills to accomplish the tasks associated with managerial activities.associated with managerial activities.

04/15/2304/15/23 1212

CONCEPTS OF MANAGEMENTCONCEPTS OF MANAGEMENT

DEFINITION: DEFINITION:

It is difficult to define ‘Management’ It is difficult to define ‘Management’ because it is looked in to by different scholars because it is looked in to by different scholars from different way from different way

04/15/2304/15/23 1313

The Economist consider Management as a The Economist consider Management as a resource like Land, Labour, Capital and resource like Land, Labour, Capital and Organisation.Organisation.

The Bureaucrats consider it as an authority The Bureaucrats consider it as an authority

The Sociologists consider managers as a part The Sociologists consider managers as a part of the class elite classof the class elite class

04/15/2304/15/23 1414

Henry L.SiskHenry L.Sisk

Defines Management is the coordination of all Defines Management is the coordination of all resources through the process of Planning, resources through the process of Planning, Organizing, Directing and Controlling in order Organizing, Directing and Controlling in order to attain stated objectivesto attain stated objectives

04/15/2304/15/23 1515

Ralph C.DavisRalph C.Davis

Defines Management as a function of Defines Management as a function of Executive LeadershipExecutive Leadership

Peter DruckerPeter DruckerDefines Management as a Multi purpose organ Defines Management as a Multi purpose organ that manager a business, Manager Mangers that manager a business, Manager Mangers and Managers workers and work.and Managers workers and work.

04/15/2304/15/23 1616

Concepts of ManagementConcepts of Management

The terms management has been interrupted The terms management has been interrupted in several ways as below.in several ways as below.

i.i. Management as an Activity:Management as an Activity:

It is an activity like playing, studying, It is an activity like playing, studying, teaching etc. It is an art of getting things teaching etc. It is an art of getting things done through the effort of othersdone through the effort of others

04/15/2304/15/23 1717

ii. Management as a Process:ii. Management as a Process:

It is include the process of Planning, It is include the process of Planning, Organizing, Staffing, Directing and Organizing, Staffing, Directing and Controlling functions. As a process the Controlling functions. As a process the management includes social process, management includes social process, integrated process, continuous process and integrated process, continuous process and interactive processinteractive process

04/15/2304/15/23 1818

iii. Management as an Economic Sources:iii. Management as an Economic Sources:

Management occupies the central Management occupies the central place among other 4 m’s Men, Machine, place among other 4 m’s Men, Machine, Material and MoneyMaterial and Money

Man Power

Money

Machine

Management Material

04/15/2304/15/23 1919

Management as a TeamManagement as a Team

Managers operate at different levels of Managers operate at different levels of authority like top, Middle, Operating etc. authority like top, Middle, Operating etc. Management is managing all these activities in Management is managing all these activities in a team sprit. Managers have become elite class a team sprit. Managers have become elite class in society occupying position with enormous in society occupying position with enormous power and prestige.power and prestige.

04/15/2304/15/23 2020

Management as an Academic Management as an Academic Discipline Discipline

Management has became a very popular field Management has became a very popular field of study since offers a very rewarding and of study since offers a very rewarding and challenging career.challenging career.

04/15/2304/15/23 2121

Management as a groupManagement as a group

Management means the group of persons Management means the group of persons occupying managerial position like executives, occupying managerial position like executives, departmental head, supervisor etc.departmental head, supervisor etc.

04/15/2304/15/23 2222

NATURE AND NATURE AND CHARACTERISTICS OF CHARACTERISTICS OF

MANAGEMENTMANAGEMENT

04/15/2304/15/23 2323

(i) Management as a goal oriented(i) Management as a goal oriented

The main goal of Management is to ensure The main goal of Management is to ensure efficiency and economy is the utilisation of efficiency and economy is the utilisation of human, physical and financial resourceshuman, physical and financial resources

04/15/2304/15/23 2424

(ii) Management is Universal(ii) Management is Universal

All type of organization like family, club, All type of organization like family, club, university, government, army, cricket team (a) university, government, army, cricket team (a) business, require managementbusiness, require management

04/15/2304/15/23 2525

(iii) Management is an interactive (iii) Management is an interactive forceforce

Management reconciles the individual goals Management reconciles the individual goals with organizational goals. It integrates human with organizational goals. It integrates human and other resourcesand other resources

04/15/2304/15/23 2626

(iv) Management is a social process(iv) Management is a social process

Management is done by the people, through Management is done by the people, through the people and for the people concerned with the people and for the people concerned with interpersonal relationship. A good manager is interpersonal relationship. A good manager is a leader and not a bossa leader and not a boss

04/15/2304/15/23 2727

(v) Management is Multidisciplinary(v) Management is Multidisciplinary

Management depends up on wide knowledge Management depends up on wide knowledge derived from several discipline like derived from several discipline like engineering, sociology, psychology, engineering, sociology, psychology, economics etc.economics etc.

04/15/2304/15/23 2828

(vi) Management is a Continuous (vi) Management is a Continuous processprocess

Management is a continuous process which Management is a continuous process which continues until the goal is achievedcontinues until the goal is achieved

04/15/2304/15/23 2929

(vii) Management is intangible(vii) Management is intangible

It is invisible force. It cannot be seen but its It is invisible force. It cannot be seen but its presence can be feltpresence can be felt

04/15/2304/15/23 3030

(viii) Management Art as well as (viii) Management Art as well as SciencesSciences

Management consists of theoretical knowledge Management consists of theoretical knowledge as well as practical application of such as well as practical application of such knowledgeknowledge

04/15/2304/15/23 3131

Objectives of ManagementObjectives of Management

(i)(i) Organisational objectives :- It includesOrganisational objectives :- It includes

(a) Reasonable Profit(a) Reasonable Profit

(b) Survival and solvency of business(b) Survival and solvency of business

(c) Growth and expansion of the enterprise(c) Growth and expansion of the enterprise

(d) Improve the Good will and reputation(d) Improve the Good will and reputation

04/15/2304/15/23 3232

(ii) Personal Objectives(ii) Personal Objectives

(a) Fair remuneration(a) Fair remuneration

(b) Reasonable working conditions(b) Reasonable working conditions

(c) Training and Development(c) Training and Development

(d) Participation is Management(d) Participation is Management

(e) Security of Service(e) Security of Service

04/15/2304/15/23 3333

(iii) Social Objectives(iii) Social Objectives

(i) Prompt payment of Taxes(i) Prompt payment of Taxes

(ii) Conservation of energy(ii) Conservation of energy

(iii) Preservation of ethical value(iii) Preservation of ethical value

04/15/2304/15/23 3434

LEVELS OF MANAGEMENTLEVELS OF MANAGEMENTBoard of DirectorBoard of Director

Managing Director Top LevelManaging Director Top Level

General ManagerGeneral Manager

Departmental ManagerDepartmental Manager

Middle Level Middle Level Deputy Manager Deputy Manager

Asst. ManagerAsst. Manager

SupervisorsSupervisors Lower Lower

LevelLevelWorkersWorkers

04/15/2304/15/23 3535

Figure 1.1 Figure 1.1 Kinds of Managers by Level Kinds of Managers by Level

and Areaand Area

04/15/2304/15/23 3636

Distinction Between Management Distinction Between Management and Administrationand Administration

Oliver Sheldon defines administration as a Oliver Sheldon defines administration as a function concerned with the determination of function concerned with the determination of corporate policies, the coordination of finance, corporate policies, the coordination of finance, production, distribution, structure under the production, distribution, structure under the ultimate control of the executiveultimate control of the executive

04/15/2304/15/23 3737

Distinction Between Management Distinction Between Management and Administration (Contd.)and Administration (Contd.)

On the other hand Management is concerned On the other hand Management is concerned with the executives of policy within the limit with the executives of policy within the limit set by the administration. Thus administration set by the administration. Thus administration is a thinking process and management as doing is a thinking process and management as doing process process

04/15/2304/15/23 3838

Three points of viewThree points of view

(i)(i) Administration is different from ManagementAdministration is different from Management

This view is largely held by American experts. This view is largely held by American experts. They held that administration is a higher level They held that administration is a higher level activity while management is a lower level activity while management is a lower level function. The administration involves decision function. The administration involves decision making while the management is concerned with making while the management is concerned with the execution of policies and supervision of work. the execution of policies and supervision of work. According to American school of thought According to American school of thought Administration is superior to management.Administration is superior to management.

04/15/2304/15/23 3939

(ii) Administration is a part of (ii) Administration is a part of ManagementManagement

According to European school of thought of According to European school of thought of management is inclusive of Administration and management is inclusive of Administration and Organisation.Organisation.

Management is the policy making including planning Management is the policy making including planning and guidance, where as Administration is executive and guidance, where as Administration is executive of above planning. Thus management is planning of above planning. Thus management is planning agency while administration is an implementation agency while administration is an implementation agency. Thus European just appropriate view of agency. Thus European just appropriate view of AmericansAmericans

04/15/2304/15/23 4040

(iii) Administration and Management (iii) Administration and Management are oneare one

Many writers like Henri Fayol, New man Many writers like Henri Fayol, New man viewed that the management and viewed that the management and administration are one and same used administration are one and same used interchangedly. The term Administration is interchangedly. The term Administration is more popular in Government and other Public more popular in Government and other Public sector organisation and the term Management sector organisation and the term Management is more commonly used in other business is more commonly used in other business world. world.

04/15/2304/15/23 4141

iii) Administration and Management iii) Administration and Management are one (Cont.d)are one (Cont.d)

To solve this conflict of Opinions between To solve this conflict of Opinions between administration and management. Management administration and management. Management classified into – classified into –

(i) Administrative Management(i) Administrative Management

(ii) Operative Management(ii) Operative Management

04/15/2304/15/23 4242

Distinguish Between Distinguish Between Administration and ManagementAdministration and Management

Points of Points of distinctiondistinction

AdministrationAdministration ManagementManagement

1.1. NatureNature It is a It is a determinative or determinative or thinking functionthinking function

It is an executive It is an executive or doing functionor doing function

2. Type of Work2. Type of Work It is concerned It is concerned with the with the determination of determination of majormajor

It is concerned It is concerned with the with the implementation of implementation of policiespolicies

3. Levels of 3. Levels of authorityauthority

It is mainly a top It is mainly a top level functionlevel function

It is largely a It is largely a middle and lower middle and lower level functionlevel function

04/15/2304/15/23 4343

Distinguish Between Distinguish Between Administration and ManagementAdministration and Management

4. Influence 4. Influence Decision are Decision are influenced by influenced by Public opinion Public opinion and outside forcesand outside forces

Decision influenced Decision influenced by Objectives and by Objectives and Policies of the Policies of the CompanyCompany

5. Direction of 5. Direction of Human EffortsHuman Efforts

Not directly Not directly concernedconcerned

Actively concernedActively concerned

6. Main 6. Main FunctionsFunctions

Planning and Planning and Control are main Control are main functionsfunctions

Directing and Directing and Organizing are main Organizing are main functionsfunctions

04/15/2304/15/23 4444

Distinguish Between Administration Distinguish Between Administration and Managementand Management

7. Skills required7. Skills required Conceptual and Conceptual and Human SkillsHuman Skills

Technical and Technical and Human SkillsHuman Skills

8. Usage 8. Usage Government and Government and Public sectorPublic sector

Business Business OrganizationsOrganizations

9. Illustrations9. Illustrations Commissioner, Commissioner, Registrar, Vice-Registrar, Vice-Chancellor, Chancellor, Governor etcGovernor etc

Managing Managing Director , General Director , General Manager, Sales Manager, Sales Manager, Branch Manager, Branch Manager etc.Manager etc.

04/15/2304/15/23 4545

04/15/2304/15/23 4646

Meaning of PlanningMeaning of Planning

Planning is the process of deciding in Planning is the process of deciding in advance what is to be done, how it is to be advance what is to be done, how it is to be done, where, when and whom.done, where, when and whom.

04/15/2304/15/23 4747

According to L.F.Ur WickAccording to L.F.Ur Wick

Planning is fundamentally a mental Planning is fundamentally a mental predisposition to do things is an orderly way, predisposition to do things is an orderly way, to think before and to act in the light of the to think before and to act in the light of the fact rather than of guesses.fact rather than of guesses.

04/15/2304/15/23 4848

Features of PlanningFeatures of Planning

a)a) Planning is good – orientedPlanning is good – oriented

b)b) Planning is future orientedPlanning is future oriented

c)c) Planning is an mental exercise involves creative Planning is an mental exercise involves creative thinking thinking

d)d) Planning is a primary functionPlanning is a primary function

e)e) Different planning is required for different levels of Different planning is required for different levels of organisation (Pervasiveness)organisation (Pervasiveness)

f)f) Planning is Continuous Planning is Continuous

g)g) Planning aims at efficiencyPlanning aims at efficiency

04/15/2304/15/23 4949

Importance of PlanningImportance of Planning

i)i) Make objectives clearMake objectives clear

ii)ii) Helps the organisastion a right pathHelps the organisastion a right path

iii)iii) It reduces risks and uncertaintyIt reduces risks and uncertainty

iv)iv) It improves efficiency of operationIt improves efficiency of operation

v)v) It provides the basis of controlIt provides the basis of control

vi)vi) It facilitate decision makingIt facilitate decision making

vii)vii) Effective co-ordinationEffective co-ordination

04/15/2304/15/23 5050

Limitation of PlanningLimitation of Planning

i.i. Assumptions not fully reliableAssumptions not fully reliableii.ii. The condition under which plans are The condition under which plans are

implemented may differ from assumed implemented may differ from assumed conditions.conditions.

iii.iii. Availability of time is a limiting factor for Availability of time is a limiting factor for planningplanning

iv.iv. Cost involved in planningCost involved in planningv.v. Mental attitudeMental attitude

04/15/2304/15/23 5151

Steps in PlanningSteps in Planning

04/15/2304/15/23 5252

Principles of PlanningPrinciples of Planning

a.a. Principles of contribution to objectivesPrinciples of contribution to objectives

b.b. Principles of PervasivenessPrinciples of Pervasiveness

c.c. Principles of Limiting factorPrinciples of Limiting factor

d.d. Principles of FlexibilityPrinciples of Flexibility

e.e. Principles of Navigational changePrinciples of Navigational change

04/15/2304/15/23 5353

Kinds of PlanningKinds of Planning

a.a. Long range PlanLong range Plan

b.b. Short range PlanShort range Plan

c.c. Strategic PlanningStrategic Planning

d.d. Operational PlanningOperational Planning

e.e. Functional PlanningFunctional Planning

04/15/2304/15/23 5454

Decision MakingDecision Making

Definition:Definition:

According to Lereitner :According to Lereitner :

Decision Making is a process of identifying Decision Making is a process of identifying and choosing alternative courses of action in a and choosing alternative courses of action in a manner appropriate to the demand of the manner appropriate to the demand of the situation situation

04/15/2304/15/23 5555

According to Peter Drucker:According to Peter Drucker:

Whatever Manager does, he does through Whatever Manager does, he does through Decision MakingDecision Making

04/15/2304/15/23 5656

Six Steps in Decision MakingSix Steps in Decision Making

Figure 7.4

04/15/2304/15/23 5757

Theories of Decision MakingTheories of Decision Making

1.1. Marginal Theory : This theory stresses an Marginal Theory : This theory stresses an profit maximizationprofit maximization

2.2. Psychological Theory : This theory stresses Psychological Theory : This theory stresses on customer satisfaction on customer satisfaction

3.3. Mathematical Theory: This theory arrives Mathematical Theory: This theory arrives decision making using models like Linear decision making using models like Linear Programming, Probability etc.Programming, Probability etc.

04/15/2304/15/23 5858

Problems in Decision MakingProblems in Decision Making

1.1. Correctness of DecisionCorrectness of Decision

2.2. Timing of DecisionTiming of Decision

3.3. Effective Communication of DecisionsEffective Communication of Decisions

4.4. Participation in Decision MakingParticipation in Decision Making

5.5. Decision EnvironmentDecision Environment

6.6. Implementation DecisionImplementation Decision

04/15/2304/15/23 5959

Modern Quantitative Techniques of Modern Quantitative Techniques of Decision MakingDecision Making

1.1. Linear programming : It is based on the Linear programming : It is based on the assumption that there exist a linear assumption that there exist a linear relationship between the variables.relationship between the variables.For Example:For Example:With the help of linear equation, optimum With the help of linear equation, optimum combination of cost, time and utilization of combination of cost, time and utilization of time can be compared. The main object of time can be compared. The main object of this techniques is to either maximize benefit this techniques is to either maximize benefit or to minimizes costor to minimizes cost

04/15/2304/15/23 6060

2. Probability Theory2. Probability Theory

This statistical device is based on the assumption This statistical device is based on the assumption that certain things are likely to happen in that certain things are likely to happen in future depending on assumed probabilities. Ex. future depending on assumed probabilities. Ex. Pay-off matrices, Decision trees.Pay-off matrices, Decision trees.

04/15/2304/15/23 6161

3.Queueing Theory3.Queueing Theory

It is based on the assumption that although It is based on the assumption that although delays are costly, eliminating them may be delays are costly, eliminating them may be even more costly. This techniques may be used even more costly. This techniques may be used in service organisations hospitals and banksin service organisations hospitals and banks

04/15/2304/15/23 6262

4.Simulation4.Simulation

For example : Instead of studying and For example : Instead of studying and analyzing transportation system of Chennai in analyzing transportation system of Chennai in a real life, its models can be prepared and real a real life, its models can be prepared and real solution can be simulated to it solution can be simulated to it

04/15/2304/15/23 6363

5. Net Work Techniques5. Net Work Techniques

The project evaluation and review techniques The project evaluation and review techniques (PERT) and critical path method (CPM) are (PERT) and critical path method (CPM) are used for planning, monitoring and used for planning, monitoring and implementing a project implementing a project

04/15/2304/15/23 6464

6. Decision Trees6. Decision Trees

It is a graphic method used for identifying the It is a graphic method used for identifying the alternatives and risk and outcome associated alternatives and risk and outcome associated with each alternativeswith each alternatives

04/15/2304/15/23 6565

DelegationDelegation

Definition :Definition :

According to Haimann “Delegation” of According to Haimann “Delegation” of authority merely means granting authority to authority merely means granting authority to subordinate to operate within prescribed limitssubordinate to operate within prescribed limits

04/15/2304/15/23 6666

The Process of DelegationThe Process of Delegation

1.1. Assignment of DutiesAssignment of Duties

2.2. Granting of AuthorityGranting of Authority

3.3. Creating of Responsibility Creating of Responsibility

04/15/2304/15/23 6767

Difference between Authority and Difference between Authority and Responsibility Responsibility

Sales Manager

Sales Manager

Sales Officer

Branch Manager

04/15/2304/15/23 6868

AccountabilityAccountability

It is the obligation of a subordinate to report It is the obligation of a subordinate to report back to his superior that the job entrusted to back to his superior that the job entrusted to him has been successfully completedhim has been successfully completed

04/15/2304/15/23 6969

Centralisation and DecentralisationCentralisation and Decentralisation

According to Henri Fayol “Every thing which According to Henri Fayol “Every thing which goes to increase the subordinates” roles is goes to increase the subordinates” roles is decentralisation, every thing which goes to decentralisation, every thing which goes to decrease it is centralisation”decrease it is centralisation”

In centralised administration, the staff In centralised administration, the staff depend on the top management for guidance on all depend on the top management for guidance on all matters. An organisation is said to be decentralised matters. An organisation is said to be decentralised where managers at middle and lower levels are where managers at middle and lower levels are given the authority to take decision on matters given the authority to take decision on matters relating to their functions.relating to their functions.

04/15/2304/15/23 7070

Centralisation and Decentralisation Centralisation and Decentralisation (Contd.)(Contd.)

For Example : For Example :

An organisation having An organisation having branches in different cities may be centralised. branches in different cities may be centralised. Similarly, a company may be decentralised Similarly, a company may be decentralised even things all its officer are located in one even things all its officer are located in one building.building.

04/15/2304/15/23 7171

Merits of Decentralisation Merits of Decentralisation

1.1. Reduces Burden of Top ExecutivesReduces Burden of Top Executives

2.2. Quick DecisionQuick Decision

3.3. Motivation to SubordinatesMotivation to Subordinates

4.4. Growth and DiversificationGrowth and Diversification

5.5. Management DevelopmentManagement Development

6.6. Diversion of RiskDiversion of Risk

7.7. Effective Supervision and Control Effective Supervision and Control

04/15/2304/15/23 7272

Demerits of Decentralisation Demerits of Decentralisation

1.1. Cadre of Coordination Cadre of Coordination

2.2. Difficult to ControlDifficult to Control

3.3. High cost of operationHigh cost of operation

4.4. Non Availability Talented ManagersNon Availability Talented Managers

5.5. External Constraints.External Constraints.

04/15/2304/15/23 7373

CONTROLLINGCONTROLLING

04/15/2304/15/23 7474

The Control ProcessThe Control Process

Establish objectives and standards.Establish objectives and standards. Measure actual performance.Measure actual performance. Compare results with objectives and standards.Compare results with objectives and standards. Take necessary action.Take necessary action.

04/15/2304/15/23 7575

Establish Objectives and Establish Objectives and StandardsStandards

There are two types of standards:There are two types of standards: Output StandardsOutput Standards - measures performance results - measures performance results

in terms of quantity, quality, cost, or time.in terms of quantity, quality, cost, or time. Input StandardsInput Standards - measures work efforts that go - measures work efforts that go

into a performance task.into a performance task.

04/15/2304/15/23 7676

Measuring Actual PerformanceMeasuring Actual Performance

Measurements must be accurate enough to Measurements must be accurate enough to spot deviations or variances between what spot deviations or variances between what really occurs and what is most desired.really occurs and what is most desired.

Without measurement, effective control is not Without measurement, effective control is not possible.possible.

04/15/2304/15/23 7777

Comparing Results with Comparing Results with Objectives and StandardsObjectives and Standards

The comparison of actual performance with desired The comparison of actual performance with desired performance establishes the need for action. performance establishes the need for action.

Ways of making such comparisons include:Ways of making such comparisons include: Historical / Relative / EngineeringHistorical / Relative / Engineering BenchmarkingBenchmarking

04/15/2304/15/23 7878

Taking Corrective ActionTaking Corrective Action

Taking any action necessary to correct or improve Taking any action necessary to correct or improve things.things.

Management-by-ExceptionManagement-by-Exception focuses managerial focuses managerial attention on substantial differences between actual attention on substantial differences between actual and desired performance.and desired performance.

04/15/2304/15/23 7979

Taking Corrective ActionTaking Corrective Action

Management-by ExceptionManagement-by Exception can save the can save the managers time, energy, and other resources, and managers time, energy, and other resources, and concentrates efforts on areas showing the concentrates efforts on areas showing the greatest need.greatest need.

There are two types of exceptions:There are two types of exceptions: ProblemsProblems - below standard - below standard Opportunities Opportunities - above standard- above standard

04/15/2304/15/23 8080

Effective ControlsEffective Controls

The Best Controls in OrganizationsThe Best Controls in Organizations

areare

Strategic and results orientedStrategic and results oriented UnderstandableUnderstandable Encourage self-controlEncourage self-control

04/15/2304/15/23 8181

Effective ControlsEffective Controls

The Best Controls in Organizations areThe Best Controls in Organizations are

Timely and exception orientedTimely and exception oriented Positive in naturePositive in nature Fair and objectiveFair and objective FlexibleFlexible

04/15/2304/15/23 8282

Types of ControlTypes of Control

PreliminaryPreliminary Sometimes called the Sometimes called the feedforwardfeedforward controls, controls,

they are accomplished before a work they are accomplished before a work activity begins.activity begins.

They make sure that proper directions are They make sure that proper directions are set and that the right resources are available set and that the right resources are available to accomplish them.to accomplish them.

04/15/2304/15/23 8383

Types of ControlTypes of Control

Concurrent Concurrent Focus on what happens during the work Focus on what happens during the work

process. Sometimes called process. Sometimes called steeringsteering controls, controls, they monitor ongoing operations and activities they monitor ongoing operations and activities to make sure that things are being done to make sure that things are being done correctly.correctly.

04/15/2304/15/23 8484

Types of ControlTypes of Control

PostactionPostaction Sometimes called Sometimes called feedback feedback controls, they controls, they

take place after an action is completed. They take place after an action is completed. They focus on end results, as opposed to inputs focus on end results, as opposed to inputs and activities.and activities.

04/15/2304/15/23 8585

Types of ControlsTypes of Controls

Managers have two broad options with respect Managers have two broad options with respect to control.to control.

They can rely on people to exercise self-They can rely on people to exercise self-control (control (internalinternal) over their own behavior.) over their own behavior.

Alternatively, managers can take direct action Alternatively, managers can take direct action ((externalexternal) to control the behavior of others.) to control the behavior of others.

04/15/2304/15/23 8686

Types of ControlsTypes of Controls

Managers have two broad options with respect Managers have two broad options with respect to control.to control.

They can rely on people to exercise self-They can rely on people to exercise self-control (control (internalinternal) over their own behavior.) over their own behavior.

Alternatively, managers can take direct action Alternatively, managers can take direct action ((externalexternal) to control the behavior of others.) to control the behavior of others.

04/15/2304/15/23 8787

Types of ControlTypes of Control

Internal ControlsInternal ControlsAllows motivated individuals to Allows motivated individuals to exercise self-control in fulfilling job exercise self-control in fulfilling job expectations.expectations.

The potential for self-control is enhanced The potential for self-control is enhanced when capable people have clear performance when capable people have clear performance objectives and proper resource support.objectives and proper resource support.

04/15/2304/15/23 8888

Types of ControlTypes of Control

External ControlsExternal ControlsIt occurs through personal supervision and the use of It occurs through personal supervision and the use of formal administrative systems.formal administrative systems. Performance appraisal systems, compensation and Performance appraisal systems, compensation and

benefit systems, employee discipline systems, and benefit systems, employee discipline systems, and management-by-objectivesmanagement-by-objectives..