Module 2 – Management Process Part 1

Contents:
• Basic roles and skills of manager
• Levels of management
• Overview of functions of management: planning, organizing,
staffing, directing and control
• Planning:
• Nature and elements of planning
• Planning types
• MBO
• Strategic planning and decision making
• Organizing:
• Division of labour and work specialization
• Delegation, Decentralization
• Span of management and Departmentation.

Contents
Introduction ...................................................................................................................... 3
Basic roles and skills of a managers ............................................................................ 3
Basic Roles ....................................................................................................................... 3
Interpersonal Roles: ..................................................................................................... 3
Informational Roles: ..................................................................................................... 3
Decisional Roles: ........................................................................................................... 3
Skills of Managers ........................................................................................................... 4
Levels of Management .................................................................................................... 5
Top-Level Management (Strategic Management): .......................................................... 5
Middle-Level Management (Tactical Management): ...................................................... 6
Lower-Level Management (Operational Management): ................................................. 6
Planning............................................................................................................................. 6
Nature of planning ........................................................................................................... 6
Elements of planning ....................................................................................................... 7
Types of plans / Planning ................................................................................................. 8
Based on use ................................................................................................................. 8
Based on Time frame .................................................................................................. 11
Based on Breadth ....................................................................................................... 11
Based on specificity .................................................................................................... 12
Management by Objectives .......................................................................................... 12
Features of MBO ............................................................................................................ 12
Benefits of MBO ............................................................................................................. 12
Process of MBO .............................................................................................................. 13
Challenges of MBO ........................................................................................................ 13
Strategic planning & Decision making...................................................................... 14
Components of strategic planning ................................................................................. 14
Features of strategic planning ....................................................................................... 14
Stages of strategic planning .......................................................................................... 15
Organizing ....................................................................................................................... 15
Importance ..................................................................................................................... 15
Process of organizing ..................................................................................................... 16
Three principles of organizing ....................................................................................... 16
Division of labour .......................................................................................................... 16
Benefits of division of labour ......................................................................................... 16
Work specialization ....................................................................................................... 17
Delegation and Decentralization ................................................................................ 17
Delegation ...................................................................................................................... 17
Decentralization ............................................................................................................. 17
Benefits ....................................................................................................................... 17
Drawbacks .................................................................................................................. 17
Differences between delegation and decentralization................................................... 18
Span of management / Span of control ...................................................................... 18
Factors affecting span of control.................................................................................... 18
Departmentation ............................................................................................................ 19
Importance / Features / Advantages of departmentation ............................................. 19
Basis of departmentation ............................................................................................... 20
Introduction
Management is a process which encompasses five different functions including
planning, organizing, Staffing, Directing and controlling.

Basic roles and skills of a managers

Basic Roles
Interpersonal Roles:
a. Figurehead: Managers perform ceremonial duties and represent the
organization in a symbolic capacity.

b. Leader: Managers provide guidance, direction, and support to their

teams, fostering a positive work environment.

c. Liaison: Managers establish and maintain connections both within and

outside the organization to facilitate communication and collaboration.

Informational Roles:
a. Monitor: Managers gather and assess information about the internal
and external environment to stay informed.

b. Disseminator: Managers share relevant information with their teams,

ensuring that everyone has access to necessary data.

c. Spokesperson: Managers communicate organizational policies,

decisions, and updates to external stakeholders and the public.

Decisional Roles:
a. Entrepreneur: Managers identify opportunities, initiate innovations,
and drive positive change within the organization.

b. Disturbance Handler: Managers address conflicts and crises, making

tough decisions to restore stability and resolve issues.

c. Resource Allocator: Managers allocate resources—such as time,

budget, and personnel—according to organizational priorities.

d. Negotiator: Managers engage in negotiations, both within the

organization and with external parties, to achieve mutually beneficial
outcomes.
Skills of Managers
Communication: Managers need strong communication skills to convey
information clearly, foster understanding among team members, and facilitate
efficient collaboration.

Leadership: Effective managers provide guidance, inspire their teams, and

motivate individuals to achieve common goals.

Problem-Solving: Managers analyze complex situations, identify challenges,

and develop practical solutions to overcome obstacles.

Decision-Making: Skillful decision-making involves evaluating options,

considering consequences, and making choices that align with organizational
objectives.

Time Management: Efficient managers prioritize tasks, allocate resources,

and meet deadlines to optimize productivity and achieve targets.

Adaptability: Adaptable managers embrace change, navigate uncertainty, and

adjust strategies to align with evolving circumstances.

Conflict Resolution: Managers mediate conflicts, foster constructive dialogue,

and facilitate solutions to maintain a harmonious work environment.

Delegation: Effective delegation involves assigning tasks based on team

members' strengths, fostering development, and optimizing work distribution.

Strategic Thinking: Managers think critically about long-term goals,

anticipate trends, and align actions with the organization's strategic direction.

Emotional Intelligence: Managers with emotional intelligence understand

and manage their own emotions while empathizing with others, enhancing
interpersonal relationships.

Motivation: Skillful managers inspire and empower team members,

cultivating a positive atmosphere that encourages high performance.

Negotiation: Proficient negotiation skills enable managers to navigate diverse

interests and reach agreements that benefit all parties involved.

Presentation Skills: Managers effectively convey ideas and information

through compelling presentations, enhancing communication and engagement.

Networking: Building professional relationships inside and outside the

organization enables managers to access resources, knowledge, and support.
 Conceptual Skills: Refers to the knowledge of theories and practice, Laws
related to management.

Human skills: Management of people including empathy, sympathy,

winning people

Technical skills: Presentation ability, Technical know-hows etc.

Levels of Management

Fig. 1 – Levels of management

Top-Level Management (Strategic Management):

◦ Role: Setting the overall direction, vision, and goals of the
organization. They focus on long-term planning and strategic
decision-making.

◦ Responsibilities: Formulating strategies, making major policy

decisions, setting objectives, overseeing the entire organization, and
representing the organization to external stakeholders.
Middle-Level Management (Tactical Management):
◦ Role: Bridge the gap between top-level and lower-level management.
They translate the strategic goals into actionable plans for various
departments or units.

◦ Responsibilities: Developing departmental plans, coordinating and

implementing strategies, managing resources, overseeing day-to-day
operations, and acting as a liaison between top-level and lower-level
managers.

Lower-Level Management (Operational Management):

◦ Role: Directly involved in executing the plans and strategies
formulated by top and middle-level management. They oversee the
operational activities of specific departments or teams.

◦ Responsibilities: Supervising and coordinating tasks, ensuring

efficient resource utilization, training, and evaluating employees,
and maintaining a productive work environment.

Planning
Planning is the first and foremost function of management. It bridges the gap
between where the company is and where the company wants to go.

Koontz and O'Donnell: "Planning is deciding in advance what to do, how to do,
when to do and who is to do it. Planning bridges the gap from where we are to
where we want to go. “

Nature of planning
❖ Goal Oriented: Planning is made to achieve desired objective of business.
It provides sense of direction to various activities

❖ Future oriented: It requires peeping in future, analyzing it and predicting

it. Thus planning is based on forecasting. It is a mental predisposition for
things to happen in future.

❖ Intellectual process: It is a mental exercise involving creative thinking,

sound judgement and imagination. It is not a mere guesswork but a rational
thinking. It is always based on goals, facts and considered estimates.

❖ Pervasiveness: Planning is present at all levels.

❖ Top level – Plans about whole

❖ Middle level – Departmental plans

❖ Lower level – Plans to implement department plans

 ❖ Choice & decision making: Many alternatives would be there. Selecting
and ideal one is the best.

❖ Primacy of planning: All other functions of management are based on the

primary function planning.

❖ Continuous Process: Planning is a never ending function due to the

dynamic business environment. Planning never comes into end till the
enterprise exists issues.

❖ Designed for efficiency: Accomplishment of objectives at the minimum

possible cost. It avoids wastage of resources and ensures adequate and
optimum utilization of resources.

❖ Flexibility: Since future is unpredictable, planning must provide enough

room to cope with the changes. Under changed circumstances, the original
plan of action must be revised and updated to make it more practical.

Elements of planning
❖ Goals and Objectives: Clear and specific statements that define what the
organization aims to achieve within a certain timeframe.

❖ Action Plans: Detailed steps, strategies, and tasks outlined to accomplish

the goals, including resource allocation and timeline.

❖ Resources Allocation: Determining the allocation of human, financial,

and material resources required for plan execution.

❖ Timeframe: Setting deadlines, establishing milestones, and creating a

timeline for each phase of the plan.

❖ Flexibility: Building adaptability into the plan to adjust strategies and

actions based on changing circumstances or unforeseen events.

❖ Risk Assessment: Identifying potential challenges, uncertainties, and

risks that may impact the success of the plan.

❖ Monitoring and Evaluation: Establishing mechanisms to track progress,

assess outcomes, and measure achievements against set targets.

❖ Contingency Plans: Developing backup plans or alternative courses of

action to address potential setbacks or unexpected developments.

❖ Communication: Ensuring effective dissemination of the plan to relevant

stakeholders, ensuring a common understanding of objectives and
expectations.

❖ Feedback Mechanisms: Establishing channels for receiving feedback

from stakeholders and team members to facilitate continuous improvement.
Types of plans / Planning

Based on use
1. Objectives:

What? Objectives may be defined as the targets people seek to achieve over
different time periods. Objectives give direction to human behavior and
effort.

Managers are required to set both general and specific objectives.

are general objectives of a business enterprise.

The specific objectives include the goals set for various departments,
divisions, groups and individuals.

The general objectives are long term in nature, where as the specific
objectives are short range, though the short range objectives are and
should be a part of long term objectives.

Example: Vision and Mission Statement; Departmental Objectives

2. Policies

What: A policy is a general statement that guides thinking, action and decision
making of managers for the successful achievement of organizational objectives.

Why ? Policies define the limits within which decision are to be made. This ensures
consistent and unified performance and exercise of discretion by managers.
A policy is not static and may be modified or reviewed in the light of changes
the environment. A policy may be verbal, written or implied.

A well defined policy helps the manager to delegate authority without undue
fear, because the policy lays down the limits for decisions by the subordinates.

Example: HR Policy, Code of Conduct policy, Return Policy etc.

3. Procedure

What? A procedure prescribes the sequence of steps that must be completed in

order to achieve a specific purpose.

Guide: A procedure is a guide to be followed rather than to thinking.

How to? It details the exact manner in which a certain activity must be
accomplished. Its essence is chronological sequence of required actions or steps.

A procedure is generally established for repetitive activity so that same steps are
followed each time when that activity is performed.

Procedures are used in all major functional areas.

E.g.: Grievance redressal procedure, Machine handling procedure etc.

4. Rules

What? A rule is a guide to action that must be followed

Definite: A rule tells us whether a definite action will be taken or will not be taken
in case of a given situation.

Rigid: Rules are definite and rigid because there must be no deviation from the
stated action, except in very exceptional cases.

Example: Customer's complaint must be replied within one day (under

customer satisfaction policy, No smoking in the factory

5. Strategy

What? Strategy is a pattern or plan that involves matching organization

competences (i.e. internal resources and skills)

A strategy is a complete and all-inclusive plan for achieving said objectives

Elements: Effective formal strategies contain three elements:

(i) The most important goals

(ii) The most significant policies

(iii) The major programmes

Strategy deals with unpredictable and unknowable.

✓ Helps to marshal and allocate and organization's resources into a unique

and viable posture

✓ Helps to maintain competitiveness

6. Programme

What? A programme can be defined as a comprehensive plan that includes

future use of different resources in an integrated pattern and establishes a
sequence of required actions and time schedules for each in order to achieve
stated objectives.

A Programme lays down the principal steps for accomplishing a mission and sets
an approximate time for carrying out each step.

A programme is made up of objectives, policies, procedures, task assignment,

budgets, schedules etc.

Examples: Expansion programme, moral improvement programme,

training programme, development of a new product programme,
advertising programme etc.

7. Project

What? Project is simply a cluster of activities that is relatively separate and

clear cut.

Projects are the extended version of programme. Many programmes having

similar objectives can be collectively clubbed as Project.

Project is a set of programmes and activities which will be planned to achieve

the objectives of the company.

• Examples: Building a hospital, designing a new package, building

a new plant.
• 8. Budget
• A budget is a statement or a plan of expected results expressed in
numerical terms, such as man hours, units of production, machine hours,
amount of expenditure or any other quantitatively measurable term.
• Then it may be expressed in time, money, materials or other quantitative
units. Budget is prepared prior to a definite period of time of the policy to
be pursued during that period for a purpose of a given objective.
• It introduces the idea of definiteness in planning.
• A budget is an important control device also because it provides
standards against which actual performance may be measured.
 • Examples: Production budget, Sales budget, Material budget, cash
budget, capital expenditure budget etc.

Based on Time frame

• Long-Term Plan (Strategic plan):

o Timeframe: Typically covers three to five years or more.

o Scope: Focuses on the organization's overarching goals,

vision, and strategic direction. It involves high-level
decisions that set the tone for the organization's future.

o Purpose: Provides a roadmap for achieving long-range objectives,

growth, and sustainable success.
• Intermediate Plan (Tactical Plan):

o Timeframe: Spans one to three years.

o Scope: Translates the long-term strategic goals into specific

actions for various departments, teams, or functional areas
within the organization.

o Purpose: Aims to ensure alignment between the strategic goals and

operational activities.
• Short-Term Plan (Operational Plan):

o Timeframe: Typically covers a few months to a year.

o Scope: Details the day-to-day activities, tasks, and processes

necessary to achieve the intermediate and long-term goals.

o Purpose: It provides specific instructions for employees to carry out

their work effectively and efficiently.

Based on Breadth
Based on specificity

Management by Objectives
Management by Objectives (MBO) is a process of defining objectives within an
organization so that management and employees agree to the objectives and
understand what they need to do in the organization. The process of setting
objectives in the organization to give a sense of direction to the employees is called
as Management by Objectives. It refers to the process of setting goals for the
employees so that they know what they are supposed to do at the workplace.

Features of MBO
• MBO involves joint recognition by superiors and subordinates that objective
development is a collaborative effort, outlining duties and responsibilities
together.
• MBO emphasizes measurable and agreed-upon goals set jointly, ensuring
both realism and achievability.
• MBO prioritizes defining goals over methods, with superiors and
subordinates jointly deciding methodologies, standards, and evaluation
norms.
• MBO is a systematic technique for optimizing results, granting
subordinates freedom for creative decisions and motivation.
• MBO encourages effective communication and support, where superiors act
as coaches, guiding subordinates toward goal achievement.

Benefits of MBO
• Improved communication: MBO helps to ensure that everyone in the
organization is working towards the same goals, which can improve
communication and collaboration between departments.

• Increased motivation: By involving employees in the goal-setting process,

MBO can help to increase employee motivation and engagement.
 • Better performance tracking: MBO provides a clear framework for
evaluating employee performance, which can help to identify areas for
improvement and provide opportunities for professional development.

• Greater accountability: MBO helps to clarify expectations and

responsibilities, which can lead to greater accountability at all levels of the
organization.

Process of MBO
1. Define Organizational Objectives

Establish organizational strategy and create measurable targets that align

with corporate goals.

2. Define Employee Objectives

Collaborate with employees to create SMART (Specific, Measurable,

Attainable, Relevant, Time-Bound) objectives aligned with organizational
objectives.

3. Monitoring

Ongoing tracking of progress and identification of potential issues.

4. Feedback

Provide feedback and support to employees to improve performance and ensure

alignment with organizational objectives.

5. Performance Appraisal

Evaluate employee performance based on established objectives.

6. Performance Evaluation

Assess the effectiveness of the MBO process and make improvements as

required.

Challenges of MBO
Strategic planning & Decision making
Strategic Planning: Strategic planning is a comprehensive and systematic
process through which an organization defines its long-term goals, formulates
strategies to achieve those goals, and allocates resources to implement the
strategies effectively.

• It is related to long term planning.

• Top level managers are responsible to create it.

Strategic planning and decision making are closely intertwined processes that
guide an organization's growth and success. Effective strategic planning informs
informed decision making, and well-executed decisions contribute to the
realization of strategic goals.

It's defining an organization's direction and allocating resources to pursue it.

It should be aligned with the strategic planning elements

Involve stakeholders, collaborate, and communicate effectively.

Components of strategic planning

Vision and Mission: Clearly defining the organization's vision (future desired
state) and mission (purpose and reason for existence) to guide strategic direction.

Environmental Analysis: Conducting a thorough analysis of the external

environment, including industry trends, market dynamics, competition, and
potential opportunities and threats. [PESTLE]

SWOT Analysis: Evaluating the organization's internal strengths, weaknesses,

as well as external opportunities and threats to identify strategic gaps.

Goal Setting: Establishing specific, measurable, achievable, relevant, and time-

bound (SMART) long-term goals that align with the organization's vision and
mission.

Features of strategic planning

• Systematic analysis of the organization's internal and external
environment

• Allocation of resources to support the achievement of goals and

objectives

• Monitoring and evaluate on of progress towards goals and objectives

• Long-term focus on the organization's mission and vision

• Development of clear and measurable goals and objectives

Stages of strategic planning
1. Assessment

Assess the organization's current situation, including strengths, weaknesses,

opportunities, and threats.

2. Strategy formulation

Develop a plan for achieving the organization's goals, taking into account its
mission, vision, and values.

3. Strategy implementation

Put the plan into action by allocating resources, communicating with stakeholders,
and monitoring progress.

4. Evaluation and control

Assess progress towards goals, make necessary adjustments, and ensure

accountability.

Organizing
According to Theo Haimann, 'Organizing is the process of defining and
grouping the activities of the enterprise and establishing authority
relationships among them'.

Effective organizing helps achieve an organization's goals by streamlining

operations and optimizing resources.

Organizing involves identifying tasks, grouping work together, and assigning

responsibilities.

Importance
• Reduces mistakes: Reduces the risk of errors and mistakes

• Better Decision making: Improves decision-making by providing clarity

and insight

• Collaboration: Makes it easier to collaborate and share information with

others

• Prioritization: Helps to prioritize tasks and responsibilities

• Controllable: Creates a sense of control over one's environment and

situation

• Tracking: Allows for easier tracking of progress and goals

Process of organizing
• Identification and division of work: The organizing function begins with
division of work into smaller units. Each such unit is called a job. One
individual is assigned only one job according to his capabilities and
qualification. This leads to systematic working and specialization.

• Departmentalization: Once the work is divided into smaller manageable

units, related jobs are grouped together and put under one department. The
most common ways of departmentalization are functional
departmentalization and divisional departmentalization.

• Assignment of duties: once departments are formed, each department is

put under the charge of an individual. The work must be assigned to those
who are best suited for it.

• Establishing reporting relationships: After assigning the duties, all

individuals must also be assigned matching authority.

Three principles of organizing

Principle of Specialization: According to the principle, the whole work of a
concern should be divided amongst the subordinates on the basis of qualifications,
abilities and skills.

Principle of Functional Definition: According to this principle, all the

functions in a concern should be completely and clearly defined to the managers
and subordinates.

Principles of Span of Control / Supervision: According to this principle, span

of control is a span of supervision which depicts the number of employees that can
be handled and controlled effectively by a single manager.

Division of labour
Definition: The division of labor is the breaking down of large tasks into smaller,
specialized tasks.

Benefits of division of labour

• Efficiency: Increases efficiency and productivity by allowing individuals to
specialize in specific tasks

• Less training: Reduces the need for extensive training as workers become
experts in their specific area of work

• Cost Reduction: Enables economies of scale, resulting in lower costs and

increased output

• Better innovation: Allows for greater innovation and progress as

individuals focus on improving specific tasks or processes
 • Team spirit: Encourages interdependence, cooperation, and teamwork
among workers

Work specialization
It is a positive outcome of division of labour.

Work specialization is a process in which employees are trained to perform specific

tasks to increase efficiency and speed up processes.

Work specialization reduces confusion, delays and errors in manufacturing

processes, leading to improved quality and speed of service.

Delegation and Decentralization

Delegation
Delegation is defined as a process of entrusting responsibility and authority to the
subordinates and creating accountability on those who are entrusted with the
authority and responsibility

Responsibility: Obligation of the subordinate to properly perform the work

assigned to him

Authority: The right of an individual to command his subordinates within

the scope of his position.

Accountability: It implies answerability of the subordinate for

accomplishment or non-accomplishment of job assigned.

Decentralization
Decentralization is the formal distribution of power and responsibility throughout
an organization to improve operational efficiency and decision-making.

Benefits
1. Reduction of burden: It reduces the burden of the top management by freeing
them from many operational decisions, and enables them to concentrate on their
strategic responsibilities

2. Higher motivation: It can contribute to staff motivation by enabling middle

and lower level managements to get a taste of responsibility

3. Innovation and creativity: Encourages the use of knowledge, innovation, and

initiative by all employees.

Drawbacks
1. Higher coordination required: It requires greater coordination by senior
management to ensure that individual units in the organization are not working
against the interests of the whole organization
2. Leads to inconsistency: It can lead to inconsistency of treatment of customers,
clients or public, especially in service industries; and

3. Lethargic attitude: Decentralization does require a plentiful supply of capable

and well-motivated managers, who are able to cope with increased responsibility
which decentralization brings about.

Differences between delegation and decentralization

Span of management / Span of control

The number of subordinates that can be managed by a superior effectively and
efficiently is called as span of management. There are two types:

• Wide span: Number of subordinates will be more (More than 5).

• Narrow span: Number of subordinates will be less (3-5)

Factors affecting span of control

• Job complexity: Subordinate jobs that are complex, ambiguous, dynamic
or otherwise complicated will likely require more management involvement
and a narrower span of management.
 • Similarity of subordinate jobs: The more similar and routine the tasks
that subordinates are performing, the easier it is for a manager to supervise
employees and the wider the span of management that will likely be
effective.

• Abilities of employees: Managers who supervise employees that lack

ability, motivation, or confidence will have to spend more time with each
employee. The result will be that the manager cannot supervise as many
employees and would be most effective with a narrower span of
management.

• Abilities of the manager: Some managers are better organized, better at

explaining things to subordinates, and more efficient in performing their
jobs. Such managers can function effectively with a wider span of
management than a less skilled manager.

Departmentation
Departmentation is the process of grouping activities and tasks within an
organization into distinct departments or units based on certain criteria or
functions.

Importance / Features / Advantages of departmentation

• Specialization: It allows for specialization and expertise in specific areas,

enhancing the efficiency and quality of work.

• Coordination: Departmentation facilitates better coordination among

employees with similar roles and responsibilities, reducing conflicts and
redundancies.

• Clear Reporting Structure: It creates a clear reporting structure,

making it easier to assign responsibilities, delegate authority, and establish
hierarchies.

• Efficient Resource Allocation: It helps allocate resources (such as

personnel, budget, and equipment) more efficiently by aligning them with
departmental goals and functions.

• Improved Communication: Departmentation fosters improved

communication within departments, making it easier to disseminate
information and foster collaboration.

• Accountability: It establishes clear lines of accountability, making it

easier to evaluate and hold individuals or teams responsible for their
performance.
 • Strategic Focus: Different departmental structures can be used to align
the organization with its strategic goals, such as product-based, market-
based, or process-based structures.

• Adaptability: It allows the organization to adapt to changes in the external

environment by reconfiguring departments or creating new ones as needed.

• Employee Development: Departmentation can provide opportunities for

employee growth and development within specialized roles.

• Customer Focus: Customer-centric departmentation can enhance

customer service by tailoring departments to specific customer needs and
preferences.

Basis of departmentation