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Administration
Meaning of Administration
The word administer is derived from the Latin
word ad+ ministraire means to care for or tolook after people- to manage affairs.
Definitions of Administration
According to Pfiffner and
PresthusAdministration is the organization anddirection of human and material resources to
achieve desired ends.
According to Marx Administration is determined
action taken in the pursuit of a conscious
purpose. It is the systematic ordering of affairsand the calculated use of resources aimed at
making those things happen which one wants to
happen- and forestalling everything to the
contrary.
According to Luther Gullick Administration hasto do with getting things done; with the
accomplishment of defined objectives.
According to Herbert A Simon Administration is
the activities of groups co-operating to
accomplish common goals.
According to Goel Administration may be
defined as the management of affairs with the
use of well thought out principles and practices
and rationalized techniques to achieve certain
objectives.
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Philosophy of Administration: Administration
is a moral act and also a moral agent.
The philosophy underlying the whole field ofadministration , particularly as it applies to
health work, is based on the following key
points:
1.Administration Believe in Cost-
Effectiveness2.Administration Believes in Execution
and Control of work Plans
3.Administration Beliefs in Delegation of
Responsibility and authority.
4.Administration beliefs in human
relations and Good Morale5.Administration beliefs in effective
communication
6.Administration beliefs in flexibility in
certain situation
Elements / Functions of Administration
Administration may be defined as all the actions
rationally performed by one person or a number
of persons in concert to fulfill a common
purpose set by someone else of their
accomplishment.
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Professor Luther Gullick (1937) summed up
certain principles or elements in the word POSDCORB.
1.Planning
2.Organising
3.Staffing
4.Directing
5.Co-ordinating6.Reporting
7.Budgeting
Management:
Definitions : According to Joseph Massie:
Management is defined as the process by which
a co-operative group directs action towards
common goals.
According to George : Management is distinctprocess consisting of planning , organizing,
actuating, activating, and controlling, performed
to determine and accomplish the objectives by
the use of people and resources.
According to O Tead : Management is theprocess and agency which directs and guides the
operations of an oragnisation in realizing
established aims.
According to James Lunde : Management is
principally the task of planning , co-ordinating,
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motivating and controlling, the efforts of others
towards a specific objective.
Concept of Administration and Management
Both Administration and Management areprocesses. Both are concerned with attainment
of certain pre-determined objectives . As the
science of administration and management
started developing , particularly after the second
world war, different viewpoints concerning
these two terms emerged. Some managementexperts hold that these two are synonymous.
Some others hold that these are two distinct
terms. Besides, the term Management is used
in many different ways.
Let us examine these concepts under
i) Administration and Management
considered as synonymous
ii) Different interpretations of the term
management
iii) Administration and Managementconsidered as two distinct terms.
i) Administration and Management
considered as synonymous
This viewpoint holds that all administrators ormanagers perform the same managerial
functions depending on the levels of
management they belong to. In an
organization two sets of people one
designated as administrators and the other as
managers are never required. What we find is
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that the top level administrators or managers
are engaged in performing the administrative
functions whereas the first level managers are
involved in caring out the executive functions.
ii) Management and Administration are
Synonymous : There is no distinction
between the terms management and
administration . The term managementis used for higher executive functions like
determination of policies , planning,
organizing , directing, and controlling, in
the business circles, while the term
administration is used for the same set of
functions in the Government circles. Sothere is no difference between these two
terms and they are often used
interchangeably.
Manager spends a part of his time in
performing administrative managementfunctions and the remaining time on
operative management functions . However,
the managers who are higher up in the
hierarchy devote more time on
administrative functions. They are known as
top management, . Top managementdevotes a major portion of its time in
determination of objectives and laying down
of policies. Managers at the lower levels in
the hierarchy devote comparatively less time
on administrative functions and they are
concerned more with directing, coordinating
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Management
Administr
ation
and control functions of management for the
achievement of organizational objectives.
iii) Different interpretations of the term
Management
The term management has been interpreted
a)as a process b)as adiscipline and c) as a noun
a)A a noun , management is referred to as:
i) A system of authority lying in a team of
managers who are responsible for making
decisions and accountable for theconsequence of their decision making and
supervising the work of the subordinates.
b) As a process , management is
considered to be that process which is
involved with executing differentinterrelated activities within an organization
for realizing the organizational objectives in
accordance with the organizational plans
and policies.
c)As a discipline : Management has been
considered as a distinct discipline since it
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has a systematized body of knowledge and
requires specific skills and use of available
decision making tools.
ii) administration and management as two
distinct terms . This distinction is madea) on the basis of the nature of
organization and b) on the basis of the
levels of administration / management.
a) Differentiation based on he nature of
organizationIn accordance to this view, Administration
should relate to government and other
organizations concerned with social and
political goals and Management should
relate to business enterprises concerned with
the objective of surplus generation.
b) Differentiation based on the level of
administration / management
Two schools of thought exist in this regard
viz. the American School of Thought and theBritish School of Thought. Both relate to the
levels of administration or management.
The American School of Thought hold
administration as a broader concept concerned
with the thinking function within anorganization resting with the top level
administrators for determining objectives of
the enterprises, making plans for the
organization and formulating organizational
policies.
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Management on the other hand is considered
as the force that gives leadership and direction
in realizing the predetermined objectives
according to the guidelines given in the
organizational policies and executes the plans
of action and thereby concerned with thedoing function.
The British School of Thought on the contrary
considers management as a wider concept
concerned with the functions of the top level
managers and administration concerned withthe executive functions of the lower level
managers.
A reconciliation between the two schools of
thought has been brought about by classifying
management as follows:
i) Administrative Management : Involve
with planning functions resting with top
management level.
ii) Operative management : Involves with
planning functions resting with the middleand first management levels.
Discussions on the different viewpoints
From the above discussion it is clear to you
that barring the interpretations of managementbeing a discipline, a class and an authority, all
viewpoints state that:
a)Both administration and management are
processes.
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b) Administrative functions vary according
to the levels of administration
c)There are two broad categories of functions
in the process of administration, viz.:
The thinking functions
The doing functionsThe thinking functions primarily relate to
planning and organizing including planning
and organizing for staffing.
The doing functions relate to staffing ,
directing, coordinating and controlling.
Inference
Administration and management , both can
basically be considered as a process which is
undertaken to attain laid down objectives of an
organization.
Propose and scope of Administration
Purpose: The main purpose of administration
is to facilitate or help the functioning within
an organization maintaining a high standard of
performance.
Administration Administrative Management
A thinking function involving
Formulation of objectives, plan and policies
(Rests with top level mangers)
Management Operative Management
A doing function involving executive function
(Rests with middle and first level management)
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Scope any organization be it
A business enterprise under the public or
private sector
A Govt. undertakingAn educational institution
A hospital
As association
A charitable organization
A social or service club
A trustA Govt. or Non-Governmental organization
A public library
A newspaper establishment
Different departments within an organization
in a community organization under a local
body or municipality
Levels of Administration
Top Management Level
Middle Management Level
First Management or Operating Management
Level
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Skills required for administrators and mangers
fall into three main categories which are
termed as
i) Intellectual skills
ii) Human skills
iii) Technical skills
Intellectual skills will include:
The thinkig skills- both critical and
analytical
Conceptual skills (ability to formulateconcepts) and
Decision making skills
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Human skills are the skills concerned with
effective communication empathy .
Technical skills are concerned with dexterity
professional skills and expertise. (Injection)
Skills Management levels
Categories Top MiddleFirst
______________________________________
_______________________
Intellectual skills ++++++ ++++
+++
Human skills +++ ++++++
+++++
Technical skills +++ +++
++++++Diagram of skill mix at
Management Levels
Process and nature of administration
Process of Administration
Nature of Administration
The nature of administration is:
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i) Universal and Holistic : Administration
is universal irrespective of the nature of
the organization and objectives of the
organization.
Holistic : The process of administrationembraces the organization
and its function in entirely
ii) Intangible : Administration is abstract, it
cannot be seen but its effect can be felt.
iii) Continuous and ongoing :
Administration continues in anorganization , if it stops its functions,
chaos will result in the organization.
iv) Goal Oriented : Administration always is
striving to obtain the laid down goals or
objectives of an organization.
v) Social and Human : The administrativeprocess basically handles different groups
of people who belong to the organization
vi) Dynamic : Administration has the
elements of flexibility and adaptability
and adjustability rising to the needs and
demands of different situations. Henceadministration cannot remain as static.
vii) Creative or Innovative : To be effective
the administrative process gets away from
stereotypes.
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Important Features of the Administrative
Process
i) Goal orientation : The entire process is
for realizing the goals or objectives of anenterprise
ii) Depicts the nature of job : The process
determines the nature of job be carried out
by the managers in order to fulfill the pre-
determined goals of the organization.
iii) Continuity : The process is ongoing andcontinuous
iv) Existence of sequence in management
functions
v) Interrelationship: All administrative
functions are interrelated . None of these
functions take place in isolation or inparts.
vi) Applicability of one function to another
vii) Common to all organizations : The
administrative process is common to all
organizations irrespective of the purpose
for which the organization is establishedviii) Providing framework for guidance .
Effective administration and Management :
Effective administration not only helps in
doing so but also provides the required
satisfaction to the employees as well as to the
management as the targets are fulfilled,
schedules are honoured , positive image is
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Principles of Administration
Principles which serve as certain criteria in the
administrative and management process, Henri
Fayol has identified fourteen such principles andthese are:
i) Division of work
ii) Authority, responsibility and
accountability
iii) Disciplineiv) Unity of command
v) Unity of Direction
vi) Subordination of individual interest to
organizational interest
vii) Remuneration of personnel
viii) Centralizationix) Hierarchy or scalar chain of command
x) Order
xi) Equity
xii) Stability of tenure of personnel
xiii) Initiative
xiv)Esprit de corps
Theories of Administration :
Abraham Maslow 1940( hierarchy ofneeds )
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Higher Self Actualization needs
Self esteem needs
Social needs
Medium
Security / safety
needs
lower Physiological needs
( Survival needs)
1.Physiological needs : includes the basic
things necessary for human survival,once these satisfied individual no longer
strives hard to obtain these and he
himself is motivated to work hard for
organization
2.Security needs include job security or
safety and the work place, thus giving
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psychological security to human beings.
Once safety and security is ensured ,
they no longer motivate the human
being.
3.Social needs : represent the relationship
between and among groups of peopleworking in the organization. This need
provides emotional security to people
and also gives a sense of belongingness
and association.
4.Esteem needs represent higher level
needs of human beings. At this level ,
they strive for power, achievement and
status.
5. Self actualization is a higher levelneed represents culmination of all other
needs. The fulfillment of this need gives
a higher degree of satisfaction to
individual in work and life.
Physiological needs of the employees aremet in the form of salary and other
amenities
He expects satisfactory safety and security
needs. Here the management of the
organization can provide proper safetyaccording to their placement or positions
and nature of work and also job security
is must for all employees in the far fixing
tenure of employment. Human beings are
social beings which includes employees ,
acceptance in the organization.
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The fulfillment of esteem needs gives self-
confidence to people and prepares them to
take up leadership positions, guidance to
others and appraising the performance of
others.
It improves the persons performance in
the organization. A self- actualized person
has fulfilled all his potential. It is the
responsibility of the administration, to
fulfill the needs of its employees.
Henri Fayol (1841- 1925) Henri Fayol was
born in France, educated as an Engineer at the
National School of Mines, and employed as
Mining Engineer and then as General Manager
of a coal and steel company. He divided allactivities in an organization into following sic
groups i.e. technical, commercial, financial ,
security, accounting and administrative. Fayol
broke down the key function of administration
into five main aspects; to plan, to organize, to
command , to co-ordinate and to control.
Fayols experience as famous French
industrialist led him to develop the following
propounded fourteen principles of
administration:
1.Division of work: There should be division
of work and task specialization than
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different workers consistently carrying out
different job responsibilities.
2.Authority : Each worker should be given
authority to commensurate with the amount
of his responsibility.
3.Discipline : Each worker and managementshould maintain proper discipline,
voluntarily according to their placement.
4.Unity of command : Each employee should
receive orders from one supervisor only.
5.Unity of Direction : One person should
direct all activities that support a singleobjective.
6.Subordination of individual interest to
general interest: i.e. the interest of the
individual work, should be subordinate to
the interest of the total work group.
7.Remuneration : Proper remuneration whichincludes salaries, allowance and other
incentives to be given to all employees
according to their level of performance and
responsibility by the management or
employee.
8.Centralization and decentralization:certain powers and functions reserved with
top level authorities and other powers and
functions are distributed to executives and
co- executives and workers also to some
extent.
9.Scalar chain : There should be an unbrokenscalar chain / hierarchy of authority
extending from the top executives and
workers also to some extent.
10. Order :
There should be proper policies, rules and
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regulations to maintain an orderly situation
in the organization .
11. Equity: All
employees should be treated with equity and
justice.
12. Stability andtenure there should be prescribed tenure
which is needed for all employees.
13. Initiative all
employees and management should take
proper initiation to achieve the objectives of
the organization.14. Esprit de
corps : The group spirit and group morale
can be cultivated among employees and
employer to accomplish objectives.
Luther Gulick
Luther Gulick a classicist was influenced by
Taylor and Fayol. He used Fayols five elements
of administration viz. Planning , organizing,
command, co-ordination and control as a frames
work for his neutral principles. Gulickcondensed the duties of administration into a
famous work for his acronymPODSCORB.
1.Planning
2.Organizing
3.Staffing4.Directing
5.Coordinating
6.Reporting
7.Budgeting
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Gulick was very much influenced by Fayols 14basic elements of administration in expressing
his principles of administration as follows:
1.Division of work or specialization
2.Bases of departmental organization
3.Co-ordination through hierarchy4.Deliberate co-ordination
5.Coordination through committees
6.Decentralization
7.Unity of command
8.Staff and line
9.Delegation and10. Span of control
In assigning functions to groups of people, the
division of work principle is homogenicity based
on four factor (4 Ps of Gulick) well suit to
nursing, i.e. the Purposes they serve (function),the process they use, the persons or things which
they deal with (clientele ) and the place where
they work.
Lyndal Urwick
Lyndal Urwick also one among classical
theorist, attached more importance to the
structure of organization than the role of the
people in the organization. He stressed the
importance of design in organization unless this
factor isolated. He further considered lack of
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design as illogical, cruel, wasteful and
efficient.
Urwick also concentrated his efforts on the
discovery of principles and identified eight
Principles of Administration applicable to allorganizations as given below:
1.The Principle of Objective- that all
organizations should be expression of a
purpose.
2.The Principle of Correspondence- that
authority and responsibility must be co-equal.
3.The Principle of Responsibility That the
responsibility of higher authorities for the
work of subordinate is absolute.
4.The Scalar Principle That a pyramidical
type of structure is built up in anorganization.
5.The Principle of Span of control
6.The Principle of Specification- Limiting
ones work to single function.
7.The Principle of Co-ordination
8.The Principle of Definition- Clearprescription of every duty.
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Objectives of Management
The main purpose of business is to earn
reasonable profits for survival and growth in
the competitive environment by providingwant satisfying products to the customers.
i) Efficient Use of Resources: Management
seeks to obtain maximum output with
minimum resources and efforts.
ii) Satisfaction of Customers: Thecustomers must be satisfied by offering
them quality products and better service.
iii) Adequate Return on Capital:
Management must achieve a reasonable
rate of return for the owners of the
business.iv) Satisfied Workforce: Satisfied workers
are cooperative and contribute to the goals
of the organization.
v) Good Working Condition: Management
seeks to achieve a system to ensure fair
wages for the work, security ofemployment and better working
conditions for the workforce.
vi) Good Relationship with Suppliers:
Management seeks to achieve good
relations with the supplies of raw
materials and capital so as to continue inproduction.
vii) Contribution to National Goals: The
management must contribute to the
national goals . It should use the judicious
use of scarce resources of the country.
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Distinction between Administration and
Management
Basis Administration Management1. Meaning Administration is
concerned with
the formulation
of objectives,
plans and
policies of theorganization.
Management
means getting
the work done
through and
with others
2. Nature Administration
relates to the
decision
making . It is a
thinking function.
Management
relates to
execution of
decisions. It is
a doingfunction .
3. Scope It is concerned
with
determination of
major objectives
and policies .Administrators
are basically
concerned with
planning and
control.
It is concerned
with
implementation
of policies.
Managers areconcerned
mainly with
organization
and direction
of human
resources.4. Decision
Making
Administration
determines what
is to be done and
when it is to be
done.
Management
decides who
shall
implement the
administrative
decisions .
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5. Direction
of Human
Resources
It is concerned
with leading and
motivation of
middle level
executives.
It is concerned
with leading
and motivation
of operative
workforce for
the executionof plans.
6.
Environment
Administration
has direct
interaction with
external
environment ofbusiness and
make strategic
plans to deal
effectively with
the
environmentalforces.
Management is
mainly
concerned with
internal forces,
i.e., objectives,plans and
policies of the
organization.
7. Status Administration
refers to higher
levels of
management
Management is
relevant at
lower levels of
management .
8. Usage ofTerm
The term administration is
often associated
with government
offices, public
sector and non-
businessorganizations
The termManagement
is widely used
in business
organizations
in the private
sector.
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Significance of Management :
1.Determination of Objectives : The
objectives of any organization are
determined by the management . They
are put into writing and communicatedto all employees in the organization.
2.Achievement of objectives :
Management is an important force for
the accomplishment of the objectives of
any group. Efficient management
provides leadership to the business andhelps in achieving its objectives.
3.Efficient Use of Resources : The role of
professional managers has increased
these days. They can ensure the efficient
use of various resources and increase the
productivity of the enterprise.4.Coordinated Human Efforts :
Management provides leadership and
guidance to the workers . It also
motivates them with the help of various
incentive schemes.
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5.Meeting Challenges: Management is
the brain of any enterprise. It helps in
predicting what is going to happen I
future which will influence the working
of the enterprise. It also steps to ensure
that the enterprise is able to meet thedemands of changing environment.
6.Economic Development : According to
Peter Drucker Management is the
crucial factor in economic and social
development.
Herzbergs Two Factor Theory
This theory was developed in 1959. This theory
was formulated based on the realization that
work motivation and job- satisfaction are two
dimensions that influence the productivity of anemployee. Herzberg stressed with adequate
research that good working conditions, adequate
salary , good physical facilities, good human
relations, quality of supervision might contribute
to job satisfaction of employees, which are
hygiene factors. Whereas factors likerecognition of work done, status, opportunities
for growth, challenging task, play an important
role in creating work motivation factors.
House and Wigdor ranked these motivators as
follows :i) Achievement
ii) Recognition
iii) Work itself
iv) Responsibility
v) Advancement
vi) Policy and Administration
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vii) Technical Supervision
viii) Working Conditions
ix) Interpersonal relations
x) Salary
He argued that interpersonal relation between
the Nurse and her supervisor plays an
important role in work motivation influencing
her job satisfaction.
Some believe in using negative force by
criticizing one before others, finding faults in
his/ her work, humiliating in others presence,
which will motivate the person to improve his/
her work for avoiding such unpleasantsituations. Some managers believe in using
positive force by appreciating an employees
contribution , praising before others,
encouraging which make the person to do
even better to get more and more appreciation
and recognition.
In some situations , the managers are
autocratic , meaning, demanding D as I say .
Some may follow laissez faire style. Some
may use participatory style by involving
employees or subordinates in all the decisionmaking.
Nature and Process of Planning
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Planning is the most basic of all management
functions since it involves deciding of future
course of action .
Overview
The most challenging and vital of theadministrative functions , perhaps is planning,
which encompasses all the remaining five
functions. This is an intellectual process where
you have to visualize and foresee a situation
with its related activities prior to its taking
place , anticipate its outcome, possibleadvantages and disadvantages based on the data
available on prevailing resources, human,
material and financial as well as other
constraints.
Definition of Planning
Planning is the first function of administration
and management , undertaken to fulfill the
purpose for which an organization is
established . It is a pivotal process inadministration and management involving
conceptual skills, skills of analytical and critical
thinking , decision making and problem solving..
According to Killen , Planning is the process ofdeciding in advance what is to be done, who is
to do it , how is to be done and when is to be
done.
In words of Koontz, ODonnel and Weihrich ,
Planning is an intellectually demanding process ,
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it requires the conscious determination of
courses of action and the basing of decisions and
purpose, knowledge and considered estimates.
Characteristics of Planning
Characteristics of Planning which reflect the
nature of the planning process, are:
Primacy
The prime function of administration is
planning which provides the very basis for theorganizational function as a whole as also for the
other five functions of administration.
Futuristic orientation
Planning projects into the future , address itself
to the futuristic needs and demands, lookingahead to make provisions for future
development, for handling future events and
situations.
Pervasiveness
Managers at all levels are involved with theplanning function i.e. pervades all the levels-
from the top first levels of management .
Flexibility and Dynamism
Planning is involved with ongoing assessmentof the organizational goals and objectives, the
direction the organization is giving and thereby
changing its tenets as required.
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Unity of Purpose and Direction
Planning always takes into consideration the
organizational goals in their totality providing a
common focus in planning of administrative and
managerial actions, and thereby rendering unity
of purpose and direction in the process.
Nature of Planning
The nature of planning can be highlighted by
studying the following characteristics:
1.Planning is an intellectual activity:
Planning involves vision and
foresightedness to decide the things to be
done in future. It bridges the gap between
where we are and where we want to go.
2.Planning involves selection among
alternatives. Planning is a choice activity .
The planning process involves finding of
alternatives and selection of the best
alternative to achieve specified objectives .
Thus, decision making is an integral part ofplanning.
3.Planning is forward looking : Planning
means looking ahead . it is carried out to
achieve some objectives in future.
4.Planning is related to objectives . Every
plan specifies the objectives to be attained in
the future and the steps necessary to reach
them.
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5.Planning is the most basic of all
management functions . Since managerial
operations in organizing staffing, leading
and controlling are designed to support the
accomplishment of enterprise objectives,
planning logically precedes the execution ofall other managerial functions.
6.Planning is a pervasive function of
management . Planning is a function of all
managers, although the character and
breadth of planning will vary with theirauthority and with the nature of policies and
plans outlined by their superiors.
Benefits of Planning
Effective planning can result in the followingadvantages :
i) Focuses Attention on Objectives .
ii) Ensures Economical operation .
Planning involves a lot of mental exercisewhich is directed towards achieving
efficient operation in the enterprise.
iii) Reduces Uncertainty: Planning helps in
reducing uncertainties of future because it
involves anticipation of future events.
iv) Facilitates Control :
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v) Encourages Innovation and creativity :
It helps innovative and creative thinking
among the managers because many new
ideas come to the mind of a manager when
he is planning . It creates a forwardlooking attitude among the mangers.
vi) Improves Motivation: Planning serves as
a good training device for future
managers.
vii) Improves competitive strength :
Effective planning gives a competitive
edge to the enterprise over other
enterprises that do not have planning or
have ineffective planning.
viii) Achieves Better Coordination :
Planning
Is the conductor and band master of theorchestra of administrative functions,
providing thereby the framework for
giving direction to the different
functions within the organization.
Serves as an integral part of otheradministrative functions.
Ensures order and control
Avoids arbitrary decisions
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Provides flexibility and makes provision
for future growth and development.
Limitations of Planning
i) Lack of reliable data . Planning loses its
value if reliable information is not
available or if the planner fails to utilize
the reliable information.
ii) Lack of initiative . Planning is a forwardlooking process.
iii) Costly process . Planning is time
consuming and expensive process.
iv) Rigidity in organizational working .Internal inflexibility in the organization
may compel the planners to make rigid
plans.
v) Non acceptability of change.
vi) External limitations : Sudden breakout
of war, government control, natural
havocs and many other factors are beyond
the control of management. This makes
the execution of plans very difficult.
vii) Psychological barriers.
Principles of Planning
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The important principles of planning are
discussed below:
1.Principle of contribution to objectives:
The purpose of plans and their components
is to develop and facilitate the realization oforganizational aims.
2.Principle of pervasiveness of planning .
3.Principle of limiting factors: Planning
must take the limiting factors (manpower,money, machines, materials and
management) into account by concentrating
on them when developing alternative plans,
strategies, policies, procedures and
standards.
4.Principle of flexibility: Flexibility should
be built into organization plans. The
principle of flexibility states that
management should be able to change and
existing plan because of change in
environment without undue cost or delay sothat activities keep moving towards
established goals.
5. Principle of Navigational change. It is the
duty of the navigator to check constantly
whether his ship is following the rightdirection in the vast ocean to reach the
destination as scheduled. The navigator
changes the path of the ship in case it is it is
not going on the right path. In the same way,
a manager should check his plans to ensure
that these are progressing as required. He
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should change the direction of his plans if
he faces unexpected events.
6.Principle of Commitment . It suggests that
the time period covered by planning should
be related to the commitments of theorganization.
Kinds of Planning
We can classify planning on the basis of the
following dimensions:
1.Organizational Level : Corporate, divisional
and functional planning.
2.Focus : Strategic , operational and tactical
planning.
3.Time Period : Long- range , medium range
and short range planning.
Levels of Planning
i) Corporate Planning (Top Level) : It
usually covers a long period of five yearsor even more than this.
ii) Divisional Planning (Middle Level) :
Divisional planning relates to a
particular division or department . For
instance , financial planning is theresponsibility of finance manger and sales
budget that of marketing manger.
iii) Sectional Planning (Lower Level ) :
Sectional or unit planning is highly
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specific as it is done to achieve the
divisional objectives.
Focus of Planning
i) Strategic Planning . Strategic planning is
the process of deciding the objectives of the
organization and determining the manner in
which the resources of the enterprise are to be
deployed to realize the objectives in theuncertain environment .
ii) Operational Planning . Operational
planning is concerned with the efficient use of
the resources already allotted and with the
development of a control mechanism to ensureefficient operation so that organizational
objectives are achieved. An operational plan
(also called tactical planning ) involves laying
down how resources of the organization will be
used to help the firm achieve its objectives.
iii) Tactical Planning : Tactical plans are made
for short term moves and maneuvers necessary
for supporting the strategic plans and achieving
firms objectives. For instance, tactical plans
may be made to handle a sudden fall in the
demand of firms products of unexpected moveby a competitor.
Range or Time Span of Planning
i) Long-range Planning . Long range
planning is the process of establishing long-term
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goals, working out strategies , policies and
programmes to achieve these goals. It generally
covers a period ranging from 5 years to 20 years
or even more.
ii) Intermediate or Medium rangeplanning . Intermediate plans are made to
support the long term plans. They may relate
to development of new products and markets,
product publicity, increasing return on
investment from the existing products and
markets.
iii) Short range Planning . Short range
planning relates to a period of upto one year,
generally . Such plans are made to achieve short-
term goals.
Steps in Planning Process
1) Establishing Objectives . Objectives provide
direction to various activities in the enterprise.
2) Collection and Forecasting of Information :The collection and forecasting of information
should be done in terms of external and internal
environment . The assessment of external
environment should include consideration of
competition now and in the future. The
assessment of internal environment mayconsider the strong and weak points of the
organization . Collection of information and
making forecasts serve as an important basis of
planning.
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3) Development of Planning Premises : This
step involves making assumptions concerning
the behaviour of internal and external factors
mentioned in the second step .
4) Search of Alternatives: Usually, there areseveral alternatives for any plan.
5) Evaluation of Alternatives :
6) Selection of Plan and Development of
Derivative Plans.
Establishment
of Objectives
(Forecasting
demand
competition,
governmentpolicy , etc.
Planning
Premises
Appraisal
of Plans
Formulation pf
Derivative
Plans
(Objectives,Policies
Procedures,
Methods,
Rules, etc.
Selection
of Best
Alternative
Developing
Alternatives
Evaluation
of
Alternatives
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Fig. Steps in Planning
Essential Requirements of an Effective Plan
1. Should be Specific
2. Should be Logical
3. Complete and Integrated
4. Flexible
5. Capable of being controlled
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Nature and Process of Organization
Organization is the backbone of management . A
Carnagie, an American industrialist , Take
away our factories, take away our trade , ouravenues of transportation , our money . Leave
nothing but our organization , and in four years
we shall have re-established ourselves.
Sound organization brings about the
following advantages:
1. Facilitates attainment of the objectives of the
enterprise
2. Optimum use of resources and new
technological developments.
3. Growth and diversification4. Stimulates creativity and innovation
5. Effectives communication
6. Encourages better relations between the
labour and the management
7. Increase employees satisfaction and decreases
employee turnover.
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Definition
1. Sociologists organization means a study of the
interactions of the people , classes , or the
hierarchy of an enterprise ;2. Psychologist, organization means an attempt
to explain , predict and influence behaviour of
individuals in an enterprise;
3. Top executive , it may mean the weaving
together of functional components in the best
possible combination so that an enterprise canachieve its goals.
i) Organization as a group of persons
ii) Organization as a structure of
relationship
iii) Organization as a function ofmanagement ; and
iv) Organization as process
1. Organization as a group of Persons
Barnard defined organization as an identifiablegroup of people contributing their efforts
towards the attainment of goals.
2. Organization as a Structure of
Relationships
Organization is no more than the framework
within which the responsibilities of management
of an enterprise are discharged.
3. Organization as Function of Management
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Thus, organization is a process of integrating
and coordinating the efforts of human , financial
technological and other resources for the
accomplishment of certain objectives.
4. Organization as a process
Organization involves identification and
grouping the activities to be performed and
dividing them among the individuals and
creating authority and responsibility
relationships among them for theaccomplishment of organizational objectives.
Steps in Organizing
Organizing involves the following interrelated
steps :
i) Determination of objectives
ii) Identification and grouping of activities
iii) Assignment of Dutiesiv) Developing Authority- Responsibility
Relationships
Nature of Organization
1) An organization connotes group of
persons
2) Communication is the nervous system of
organization
3) Organizing is a basic function of
management
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4) Organizing is a continuous process
5) Organizing is always related to certain
objectives
6) Organization connotes a structure of
relationships.
7) Organization involves a network ofauthority and responsibility relationships.
Significance of Organisation structure
contributes in the following ways.
1.Clear-cut Authority Relationships
2.Pattern of communication
3.Location of Decision centers.
4.Proper Balancing
5.Stimulating creativity
6.Encouraging growth7.Making Use of Technological
Improvements.
Principles of Organisation
1.Consideration of Objectives
2.Division of Work and Specialization
3.Definition of Jobs
4.Separation of Line and staff Functions
5.Chain of command
6.Parity of Authority and Responsibility7.Unity of command
8.Exceptional Matters
9.Span of supervision
10. Balancing of Various factors
11. Communication
12. Flexibility
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13. Continuity
Direction
According to Dale, Direction is telling people
what to do and seeing that they do it to the
best of their ability. It includes making
assignments, explaining procedures, seeing
that mistakes are corrected , providing on the
job instructions, and, of course, issuingorders.
Directing is the interpersonal aspect of
management process by which organizational
members are led to understand and contribute
effectively and efficiently to theaccomplishment of organizational objectives.
4. Elements of Direction
i) Issuing of orders that are clear,
complete and within the capabilities ofsubordinates to accomplish;
ii) Continuous training activity in
which subordinates are instructed to
carry out the particular assignment in
the existing situation;
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iii) Motivation of subordinates to try to
meet the expectations of the manager;
and
iv) Maintaining discipline and
rewarding those who perform
properly.
Features of Direction
1.Managerial Function : Direction is an
important function of management . A good
plan may have been chalked out, to directthe people in the use of planning and
organization.
2.Continuous Activity : Direction is a
continuous activity . It does not stop so long
as the execution of plans is in process.
3.Pervasive Function : Like other functionsof management , direction is also performed
by the managers at all levels.
4.Communication : Giving of instructions
and orders is an indispensable part of
direction . Managers may elicit two types of
behavior from the subordinates when theyissue orders, viz., linear and circular. Linear
behaviour is obtained when there is one-way
transmission of orders from superior to
subordinates, incase of circular behaviour ,
there is full scope for the subordinates to
convey their feelings upward.
Principles of Direction
1.Principle of Harmony of Objectives
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Every individual is assigned a particular task
which he is responsible to accomplish.
2.Principle of Maximum Individual
Contribution : Direction should be such
which inspires the people to contribute fully
for the well being of the organization.3.Principle of Unity of Command : This
principle is not only important in
organization but also in direction . It states
that a subordinate should get orders and
instructions from one boss only.
4.Principle of Direct Supervision : Directsupervision by the boss and his direct advice
to the subordinates boosts their morale
resulting into renewed and vigorous effort .
This also increases loyalty among the
subordinates which is better for direction.
5.Principle of Effective Communication : Agood system of communication between the
boss and his subordinates is better for
coordination. Effective communication is an
instrument of effective direction.
6.Principles of effective Leadership :
Subordinates are happy if they get effectiveleadership from their boss. The boss must
possess the qualities of a good leader if he is
to get the work done from the workers. As a
leader, the boss should guide and counsel
the workers not only on the work problems
but also the personal problems of thesubordinates.
Coordination
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The basic function of coordination in an
enterprise is the same as that of an orchestra
conductor who directs the activities of the
orchestra party in such a manner that it
produces harmony in music.
Coordination has been viewed by different
management experts in different ways.
HenriFayol considers coordination as a
Function of a Manager.
James D. Mooney considers coordination asthe first principle of organization .
Ralph C. Davis looks upon coordination
primarily as a vital phase of controlling.
In short , it is the essence of management.
Definition of CoordinationCoordination is the orderly synchronization of
efforts of the subordinates to provide the
proper amount, timing and quality of
execution so that their united efforts lead to
the stated objective.
In the words of Mooney and Railey,
Coordination is the orderly arrangement of
group efforts to provide unity of action in the
pursuit of a common purpose.
Objectives of Coordination
i) Reconciliation of Goals. This can be
done by coordination only. The
conflict of goals arises because
everybody perceives the
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organizational goals differently and
tries to achieve them in his own way.
ii) Total Accomplishment . It has been
observed that the total
accomplishment of ten employees of a
department whose efforts are properlycoordinated will be far greater than
the mathematical sum of their
individual accomplishment. This
happens because through
coordination, duplication of efforts is
prevented and the time and energythus saved are better utilized in more
creative tasks.
iii) Economy and Efficiency .
Coordination will avoid duplication of
efforts due to which there will beeconomy in labour, time and
equipment . When the activities are
properly integrated, there will be least
delays which bring efficiency in the
business organization.
iv) Good Personnel Relations : Good
coordination gives job satisfaction to
the employees which keeps their
morale high . moreover, there are
good human relations because the
authority- responsibility relationshipare clear.
v) Retention of Managerial and other
Personnel : It has been pointed out
that sound coordination has a
significant effect on the development
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and retention of good personnel in
business.
Types of Coordination
Coordination can be classified into two broadcategories , one on the basis of its shape in the
organization and the other on the basis of its
scope and coverage . On the former basis, it can
be classified into vertical and horizontal
coordination; and on the latter basis, into
internal and external coordination.
1.Vertical and Horizontal Coordination :
The term vertical coordination is used
when coordination is to be achieved between
various links or different levels of the
organization . The term horizontalcoordination is used when coordination has
to be achieved between departments on the
same level in the managerial hierarchy .
2.Internal and External Coordination .
Coordination may be internal and external to
the organization . Coordination is internalwhen it is achieved between different
departments, sections and units of an
enterprise. External coordination also
involves interaction with other business,
economic and research institutions to have
the benefits of latest information andtechnological advances.
Techniques of Effective Coordination or
Steps to achieve effective coordination
i) Clearly defined goals
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ii) Clear lines of authority and
responsibility
iii) Precise and comprehensive
programmes and policies.
iv) Cooperation
v) Effective communication.vi) Effective leadership and supervision
Principles of Coordination : According to
Mary Parker
i) Principle of Direct Contact . Theactivities of different individuals can be
coordinated effectively through direct
personal contacts. This helps in
exchanging the opinions and ideas in a
better way and clarifying the
misunderstandings more easily.ii) Principle of Early Start . Coordination
can be achieved easily during the early
stages of planning and policy making . It
becomes difficult to secure coordination at
the execution stage.
iii) Principle of Reciprocal Relationship .For instance, when A works with B, each
finds himself influenced by the other and
both are influenced by the other persons
and factors in the total situation.
iv) Principle of Continuity . Coordination
should be viewed as a never- endingprocess and every manager should strive
for it constantly .
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Some Important Measures: Which could
help in brining this effective cooperation and
in turn coordination, are:
To have direct contact with people
To begin this actively at a very early
stage To maintain continuity in this activity
To be clear and make the objectives
clear to the subordinates
To work out clear delineation of
authority
To simplify the procedures in the
organization
To maintain effective communication
style and motivate others to develop a
sense of involvement.
To provide effective leadership andsupervision.
Control
Control is an important function of
management . It is the process that measurescurrent performance and guides it towards some
predetermined objectives.
Definition of Control
Control is a basic managerial function which
implies measurement and correction ofperformance of subordinates to ensure that the
predetermined objectives are accomplished.
According to Koontz and Weihrich , The
managerial function of controlling is the
measurement and correction of the performance
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in order to make sure that enterprise objectives
and the plans devised to attain them are
accomplished .
Characteristics of Control
1.Pervasive Function: Managers at all levels
have to perform this function to contribute
to the achievement of organizational
objectives.
2. Review of Past Events : This is also
known as feedback information3.Forward Looking :
4. Action Oriented :
5.Continues Process :
6.Dynamic Process : Control is a dynamic
process. It is flexible and not rigid.
7.Control does not curtail the rights ofindividuals : to some people control is
opposite of freedom . It is not so. It is
preventive action so that losses may be
avoided in future.
Significance of Controlling
1.Coordination
2.Corrective Action
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3.Decision making
4.Better Planning
5.Decentralization of Authority
6.Effective Supervision
Principles or Requirements of A Good
Control System.
1.Emphasis on Objectives : The control
system must be directed towards the
potential or actual deviation from plans earlyenough to permit effective corrective action.
2. Efficiency of control Techniques : Control
techniques and approaches are efficient
when they detect deviations from plans and
make possible corrective action with the
minimum of unsought consequences.3.Responsibility for Control : Should rest in
the manager
4.Direct Control : Any controlsystem should
be designed to maintain direct contact
between the controller and controlled.
5.Suitability : Controls should be tailored tofit the needs of the organization
6.Flexibility : A good control system must
keep pace with the continuously changing
pattern of a dynamic business world. It must
be responsive to changing conditions.
7.Self- Control : Units may be planned tocontrol themselves . If a department can
have its own goals and control system, much
of the detailed controls can be handled
within the department.
8.Control by Exception : This is also known
as management by exception . According
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to this principle , only significant deviations
from standards, whether positive or
negative, require managements attention as
they constitute exceptions.
9.Strategic Point Control
10. Corrective Action : Merely pointing ofdeviations is not sufficient in a good control
system.
11. Forward looking Control : The
control system should be directed towards
future. It should report all the deviations
from the standards quickly in order tosafeguard the future.
12. Human Factor : A good system of
control should find the persons accountable
for results, whenever large deviations take
place. They must be guided and directed, if
necessary.13. Economical: The systems of control
must be worth their costs. They must justify
the expenses involved.
14. Objective Standards : As far as
possible , standards should be objective. If
they are subjective, a managers or asubordinates personality may influence
judgments of performance.
Relationship between Control and
Coordination :
Control and coordination are twins of
Management. Control and coordination are
closely related in many ways. Firstly ,
authority is the basis of both the process.
Secondly , both are performed by the
managers at all levels. Thirdly , both are
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aimed at achieving organizational goals.
Fourthly , both are necessary for achieving
stability , continuity and growth of the
organization and consistency , precision and
discipline concepts in the sense that seek to
relate organizational means withorganizational ends or goals. They strive to
maintain organizations as rational systems,
relatively free from conflict, confusion and
chaos.
Significance of Controlling
1.Coordination
2.Corrective Action : taking corrective action
may lead to modification of planning,
organizing , and directing . Control will also
check the mistakes being repeated in future.3.Decision Making : The process of control is
complete when corrective actions are taken.
This involves making a right decision as to
what type of follow up action is to be taken.
4.Better Planning : control is the only means
to ensure that the plans are beingimplemented in the real sense . It points out
the shortcomings of planning by comparing
the actual performance with the planned
standards AND suggests steps to improve
planning.
5.Decentralization of Authority6.Effective Supervision : Control facilitates
effective supervision by pointing out
significant deviations . It keeps the
subordinates under check and brings
discipline among them.
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