1. What are the functions and roles of a professional manager?

Define the responsibilities of a

manager.
Introduction:
Not all managerial jobs are the same. The demands and requirements placed on the CEO of Sony are
significantly different from those placed on the manager of your local restaurant.
As shown in below figure, there are four kinds of managers, each with different jobs and
responsibilities:
• Top managers: Top managers hold positions like chief executive officer (CEO), chief operating
officer
(COO), chief financial officer (CFO), and chief information officer (CIO) and are responsible for the
overall direction of the organization.
• Middle managers: Middle managers hold positions like plant manager, regional manager, or
divisional
manager. They are responsible for setting objectives consistent with top management’s goals and for
planning and implementing subunit strategies for achieving those objectives. One specific middle
management responsibility is to plan and allocate resources to meet objectives.
• First-line managers: First-line managers hold positions like office manager, shift supervisor, or
department manager. The primary responsibility of first-line managers is to manage the
performance of
entry-level employees who are directly responsible for producing a company’s goods and services.
Thus, first-line managers are the only managers who don’t supervise other managers. The
responsibilities of first-line managers include monitoring, teaching, and short-term planning.
• Team leaders: The fourth kind of manager is a team leader. This relatively new kind of
management job developed as companies shifted to self-managing teams, which, by definition, have
no formal supervisor. In traditional management hierarchies, first-line managers are responsible for
the performance of non-managerial employees and have the authority to hire and fire workers,
make job assignments, and control resources. In this new structure, the teams themselves perform
nearly all of the functions performed by first-line managers under traditional hierarchies
Functions of a manager:
The job of manager is to help an organization make the best use of its resources to achieve its goals.
They do
so by performing essential managerial functions which include:
▪ Planning
▪ Organizing
▪ Directing
▪ Staffing
▪ Controlling
Planning: It is the process of setting goals and objectives and showing how these goals and
objectives will
be accomplished.
Organizing: This refers to the process of establishing a structure of working relationships. It involves
grouping people into departments according to specific tasks performed and deciding how best to
coordinate organizational resources.
Directing: This is the process of communicating what has been planned by leading and motivating
the efforts of people towards attainment of goals
Staffing: This function refers to the process of filling positions with the right kind of people in the
right job at the right time.
Controlling: This refers to the process of evaluating how well an organization is achieving its goals
and how to maintain and improve performance.
Managerial roles
Managers play several management roles: a role is a set of specific tasks that a person is expected to
perform in the position they hold. According to Henry Mintzberg, managers play three major roles:
i) Interpersonal roles:
▪ Figurehead – a manager a representation or a symbol of the organization. They determine the
direction or mission of the organization. They inform stakeholders such as employees about
what the organization is seeking to achieve. They put up appearances on behalf of the
organization eg receiving guests at the workplace or attending an employee’s wedding.
▪ Leader – a manager occupies a position of influence, hence has to inspire and encourage
others to perform. They train, coach, counsel and mentor subordinates to reach their full
potential
▪ Liason – managers are the link between the organization and the larger society. They deal with
people outside the organization such as suppliers and customers and inside by coordinating the
activities of people in different departments.
ii) Informational roles: These roles are closely associated with the tasks necessary to obtain and
transmit and transmit information. The roles are:
▪ Monitor – managers analyze information from inside and outside the organization so that he
can effectively control and organize people and other resources.
▪ Disseminator – Managers transmit information to other members in the organization so as to
influence their work attitudes and behaviour
▪ Spokesperson – managers use information to promote the organization so that people inside
and outside the organization can respond positively to it
iii) Decisional roles: managers plan and lay strategies for achieving goals and utilizing resources.
They act as:
▪ Entrepreneurs: Managers decide which projects or programmes to initiate and how to invest
resources to increase organizational performance
▪ Disturbance handler: managers assume responsibility for handling unexpected events or crisis
that threatens the organizations access to resources. In this situation a manager also assumes
the roles of figurehead and leader to mobilize employees to help secure the resources needed
to avert the problem.
▪ Resource allocator: managers decide how best to use available resources to increase
organizational performance.
▪ Negotiator: managers work out agreements and contracts that will operate in the best interest
of the organization.

Managerial skills
Skills is what separates good managers from ordinary managers. Education and experience enable
managers to develop the skills they need to put organizational resources to their best use. There are
three types of skills:
i. Technical skills: These are needed to perform specialized tasks. They involve the ability to use
knowledge, methods, techniques and equipment necessary for the performance of specific tasks.
These skills are acquired from experience, education and training. They are more useful for lower
level management at supervisory levels because they train others in the actual job.
ii. Human skills: The ability to work with and through people including understanding of motivation
and application of effective leadership. Also includes the ability to mould individuals into a
cohesive team. Human skills are useful for middle managers as they link the top and the lower
levels of employees.
iii. Conceptual skills: This skill is demonstrated in the ability to analyze and diagnose a situation and
to distinguish between cause and effect. Involves understanding the complexities of the overall
organization and the various variables that influence its operations. It is about seeing the ‘big
picture’.
The appropriate mix of these skills varies as an individual advances in management from supervisory
to top management positions. The relationship between management level and skills needed is
illustrated below.
More conceptual skills are needed at executive levels as executives should be able to see how all
operative functions are interrelated in accomplishing organizational goals. Their focus is external and
global. Human skills are therefore crucial to all levels of management as attested by the following
statement:
“I will pay more for the ability to deal with people than any other ability under the sun” (John D.
Rockeffeler, American entrepreneur).
In other surveys, human skill has been rated higher than intelligence, decisiveness and knowledge
and job skills.
• Managerial levels
The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain of
command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories:
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the three levels
is discussed below:
1. Top Level of Management
It consists of board of directors, chief executive or managing director. The top management is the
ultimate source of authority and it manages goals and policies for an enterprise. It devotes more
time on planning and coordinating functions.
The role of the top management can be summarized as follows -
a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures, schedules
etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the performance of the
enterprise.
2. Middle Level of Management
The branch managers and departmental managers constitute middle level. They are responsible to
the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of middle level
of management but in big enterprises, there may be senior and junior middle level management.
Their role can be emphasized as -
a. They execute the plans of the organization in accordance with the policies and directives of the
top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better performance.
3. Lower Level of Management
Lower level is also known as supervisory / operative level of management. It consists of supervisors,
foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory management
refers to those executives whose work has to be largely with personal oversight and direction of
operative employees”. In other words, they are concerned with direction and controlling function of
management. Their activities include -
a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the organization.
e. They communicate workers problems, suggestions, and recommendatory appeals etc to the
higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.
i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact with the
workers.

• Strategic and operational decisions

The success of a business depends on the decisions made by key personnel in the organization.
However, these individuals can make poor decisions that will be detrimental to the organization.
Strategy and operationaldecisions address different aspects of the organization. Strategy influences
the overall direction of the organization, whereas operational decisions affect its day-to-day
operations.
Strategic Decisions
Strategic decisions consider the entire organization and represent a complex aspect of business
planning. Strategy entails making major changes for the organization and recognizing that the
business environment is not static and will continue to evolve. The goal of making strategic decisions
is to implement policy that aims to move the organization toward its long-term goals. Strategy takes
into account an organization's resources, threats to it and available opportunities.
Risk of Strategic Decisions
A business always assumes risk when deciding to change its methods. Strategic decisions always
represent at risk because these decisions deal with the future. While a company can make strategic
decisions based on relevant information, the organization can never predict the future with
certainty. Because of this, a business must take precautions when implementing strategic decisions.
Operational Decisions
Operational decisions relate to the daily operations of an organization. The countless interactions
that take place on a daily basis represent the result of operational decisions. These decisions,
therefore, can bog down an organization and make it ineffective. To prevent this, operational
decisions should be consistent with strategic decisions. Good operational decisions will have
measurable results such as higher revenues,increased profits, increased productivity and customer
satisfaction.

• Importance of informal organization

An informal organisation is formed under the formal organisation as a system of social relationship,
which comes into existence when people in an organisation, meet, interact and associate with each
other.
The importance of informal organization arises from the functions performed by informal groups.
The important functions of informal organization are as under:
(i) It serves as a very useful channel of communication in the organization. The informal
communication is very fast.
(ii) It blends with the formal organization to make it more
effective. It gives support to the formal organization.
(ii) The informal leader lightens the burden of the formal manager and tries to fill in the gap in
the manager's abilities.
(iii) Informal organization gives psychological satisfaction to the members. They get a platform
to express their feelings.
(iv) The presence of informal organization encourages the manger to plan and act carefully.
Thus, informal organization supports and supplements the formal organization.

5. ‘Management is a process of getting things done by others’. Explain it with the help of role and
functions of management.
The above definition of management in essence includes the purpose of management i.e. getting
people dothe work. It emphasizes the need and importance of joint-performance and common
goals. This has become a very popular definition of management for several reasons. Firstly, this
definition is very simple and easy to understand. Secondly, it highlights the indirect nature of a
manager's job. A manager does not operate a machine or sell a product himself. Rather he guides
others in producing and selling goods and services. Thirdly, this definition reveals that a manager is
the leader of people working under him. Fourthly, it states that management is basically an art or
practice of achieving results.
Management is the process of reaching organizational goals by working with and through people
and other organizational resources.
Management has the following 3 characteristics:
1. It is a process or series of continuing and related activities.
2. It involves and concentrates on reaching organizational goals.
3. It reaches these goals by working with and through people and other organizational resources.
Managerial roles:
(Same as Q1)
Management Functions:
Different experts have classified functions of management. According to George & Jerry, “There are
four fundamental functions of management i.e. planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O
for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting.
But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e.
Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each function
blends into the other & each affects the performance of others.

i. Planning
It is the basic function of management. It deals with chalking out a future course of action & deciding
in advance the most appropriate course of actions for achievement of pre-determined goals.
According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It
bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is
an exercise in problem solving & decision making. Planning is determination of courses of action to
achieve desired goals. Thus, planning is a systematic thinking about ways & means for
accomplishment of predetermined goals. Planning is necessary to ensure proper utilization of human
& non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding
confusion, uncertainties, risks, wastages etc.
ii. Organizing
It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals. According to Henry
Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw
material, tools, capital and personnel’s”. To organize a business involves determining & providing
human and non-human resources to the organizational structure. Organizing as a process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships
iii. Staffing
It is the function of manning the organization structure and keeping it manned. Staffing has assumed
greater importance in the recent years due to advancement of technology, increase in size of
business,
complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e.
square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell,
“Managerial function of staffing involves manning the organization structure through proper and
effective selection, appraisal & development of personnel to fill the roles designed un the structure”.
Staffing involves:
• Manpower Planning (estimating man power in terms of searching, choose the person and giving
the right place).
• Recruitment, Selection & Placement.
• Training & Development
• Remuneration
• Performance Appraisal
• Promotions & Transfer.
iv. Directing
It is that part of managerial function which actuates the organizational methods to work efficiently
for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it
in motion the action of people because planning, organizing and staffing are the mere preparations
for doing the work. Direction is that inert-personnel aspect of management which deals directly with
influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational
goals.
Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching
& directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one person to
another. It is a bridge of understanding.
v. Controlling
It implies measurement of accomplishment against the standards and correction of deviation if any
to ensure achievement of organizational goals. The purpose of controlling is to ensure that
everything occurs in conformities with the standards. An efficient system of control helps to predict
deviations before they actually occur. According to Theo Haimann, “Controlling is the process of
checking whether or not proper progress is being made towards the objectives and goals and acting
if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the
measurement & correction of performance activities of subordinates in order to make sure that the
enterprise objectives and plans desired to obtain them as being accomplished”. Therefore
controlling has following steps:
• Establishment of standard performance.
• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out deviation if any.
• Corrective action.
6. Explain the system approach to management.
Introduction:
In the 1960, an approach to management appeared which try to unify the prior schools of thought.
This approach is commonly known as ‘Systems Approach’. Its early contributors include Ludwing Von
Bertalanfty, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley and J.D.
Thompson. They viewed organisation as an organic and open system, which is composed of
interacting and interdependent parts, called subsystems. The system approach is top took upon
management as a system or as “an organised whole” made up of sub- systems integrated into a
unity or orderly totality.
Systems approach is based on the generalization that everything is inter-related and
interdependent. A system is composed of related and dependent element which when in
interaction, forms a unitary whole. A system is simply an assemblage or combination of things or
parts forming a complex whole. One its most important characteristic is that it is composed of
hierarchy of sub-systems. That is the parts forming the major system and so on. For example, the
world can be considered-to be a system in which various national economies are sub-systems.
In turn, each national economy is composed of its various industries, each industry is composed of
firms’ and of course a firm can be considered a system composed of sub-systems such as production,
marketing, finance, accounting and so on.
Features of Systems Approach:
(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts
arrangedin a manner that produces a unified whole.
(ii) The various sub-systems should be studied in their inter-relationships rather, than in isolation
from each other.
(iii) An organisational system has a boundary that determines which parts are internal and which are
external.
(iv) A system does not exist in a vacuum. It receives information, material and energy from other
systems as inputs. These inputs undergo a transformation process within a system and leave the
system as output to other systems.
(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to
change in its environment.
In the systems approach, attention is paid towards the overall effectiveness of the system rather
than the effectiveness of the sub-systems. The interdependence of the sub-systems is taken into
account. The idea of systems can be applied at an organisational level. In Appling system concepts,
organisations are taken into account and not only the objectives and performances of different
departments (sub-systems).
The systems approach is considered both general and specialised systems. The general systems
approach to management is mainly concerned with formal organisations and the concepts are
relating to technique of sociology, psychology and philosophy. The specific management system
includes the analysis of organisational structure, information, planning and control mechanism and
job design, etc. As discussed earlier, system approach has immense possibilities, “A system view
point may provide the impetus to unify management theory. By definitions, it could treat the various
approaches such as the process of quantitative and behavioural ones as sub-systems in an overall
theory of management. Thus, the systems approach may succeed where the process approach has
failed to lead management out of the theory of jungle.” Systems theory is useful to management
because it aims at achieving the objectives and it views organisation as an open system. Chester
Barnard was the first person to utilize the systems approach in the field o management.
Evaluation of System Approach:
The systems approach assists in studying the functions of complex organisations and has been
utilized as the base for the new kinds of organisations like project management organisation. It is
possible to bring out the inter-relations in various functions like planning, organising, directing and
controlling. This approach has an edge over the other approaches because it is very close to reality.
This approach is called abstract and vague. It cannot be easily applied to large and complex
organisations. Moreover, it does not provide any tool and technique for managers.

7. Management applies an efficient use of physical and human resources for the accomplishment
of objectives. Explain it.
Management encompasses a wide variety of activities that no one single definition can capture all
the facets of management. That is why, it is often said that there are as many definitions of
management as there are authors in the field. However, the definition given by James A.F. Stoner
covers all the important facets of management. According to him: “Management is the process of
planning, organizing, leading and controlling the efforts of organization members and of using all
other organizational resources to achieve stated organizational goals”.
The definition suggests:
➢ Management is a continuous process;
➢ Several interrelated activities have to be performed by managers irrespective of their levels to
achieve the desired goals;
➢ Managers use the resources of the organization, both physical as well as human, to achieve the
goals;
➢ Management aims at achieving the organisation’s goals by ensuring effective use of resources in
the best interests of the society.
Management facilitates optimum utilisation of available human and physical resources, which leads
to progress and prosperity of a business enterprise. Even wastages of all types are eliminated or
minimized. It is evident that the emphasis is on achieving the objectives by using material,
machinery, money and the services of men. These inputs are drawn from the environment in which
the organization exists. Whether an organization is engaged in business or non-business, the various
inputs are judiciously used to produce the outputs. The process involving the conversion of inputs
into outputs is common to all organizations.
Depending on the nature of business or activity that a firm is engaged in, the output of the firm may
be a physical product or service. Since a business organization is an economic entity, the justification
for its existence lies in producing goods and services that satisfy the needs of the people. As could be
seen in the figure, the organization draws several inputs from the environment, converts them into
products or services and sends them back to the environment. Environment here means the larger
system, i.e., the society in which the firm exists. Therefore, it goes without saying that how
effectively the goods and services are produced is a matter of concern for any society, given the
scarcity of resources. Effective management therefore plays a crucial role in this context.
Managers use resources effectively and efficiently to satisfy customers and to achieve goals.
◦ Efficiency: A measure of how well resources are used to achieve a goal.
◦ Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?),
and the degree to which they are achieved.
 Efficiency - getting the most output from the least amount of inputs
◦ “doing things right”
◦ concerned with means
◦ Achieving the objectives in time
 Effectiveness - completing activities so that organizational goals are attained
◦ “doing the right things”
◦ concerned with ends
◦ Achieving the objectives on time
Management involves efficient and effective utilisation of below mentioned 5Ms:
i. MANPOWER:
• The right personnel for the right position is a sure bet for organizational effectiveness and
efficiency.
Man in management is referred as a human resource.
• People make sure materials, machines, money and methods are utilized in a productive manner to
achieve goals and objectives of organizations.
ii. MATERIAL:
• Materials is a basic ingredient in housekeeping management, a service industry. Most of the
industry locate them self nearby to the availability of material. Without materials, human resource is
made redundant. Thus every right thinking and right planning organization knows that materials
needed for any business or service mist be in place before ‘man’ can be of use in any business
activity.
iii. MACHINERY:
• Machine are the basic tools to produce goods or to generate services. Selection of an appropriate
machine not only enhances efficiency but also saves times and increases revenue. Machines have
made man fulfill almost effortlessly various dreams of creating things that make a existence more
worthwhile.
• eg . Tools and equipment in laboratory Microscope: Microscopes are used to produce magnified
images of small objects such as bacteria etc. Centrifuge: A machine with a rapidly rotating container
that applies centrifugal force to its contents, typically to separate fluids of different densities (e.g.,
plasma from blood) or liquids from solids.
iv. MONEY:
• Meaning A medium that can be exchanged for goods and services and is used as a measure of their
values on the market • Without money, no venture or enterprise can motivate workers, get quality
and sufficient materials, get the right machines and maintain them or even ensure that time is
properly managed. Where there is not enough money, no good workers, materials, or machines can
be employed or purchased.
v. Method: production methods

Evolution of Management
Classical Theory Refer Book & Online pdf

Formal&Informal Refer online pdf

Management & Administration Refer Pdf

a. Strategic Plans:

Strategic plans are designed to meet the broad objectives of the organization – to implement the
mission that provides the unique reason for organization’s existence. They are set at the top
managerial level, and are meant to guide the whole organization. An organization’s strategic plan is
the starting point for planning. The aim of strategic planning is to help a company select and
organize its businesses in a way that would keep the company healthy in spite of unexpected upsets
occurring in any of its specific businesses or product lines. For example- in order to deal with
uncertainties of raw material availability, a company’s strategic plan may purport to acquire its own
facilities for generating raw material. Strategic plan serves as a guide to the development of sound
sub plans to accomplish the organizational objectives.

b. Tactical Plans:

Top level managers set the strategies that an organization should focus to achieve organizational
goals. Examples of strategies include set-up a plant to generate raw material for the organization’s
manufacturing activities, explore North-East market, and likewise. Middle managers interpret these
strategies and develop tactical plans for their departments that follow strategies in order to
contribute to the organizational goals.In order to develop tactical plans, middle management needs
detail reports (financial, operational, market, external environment). Tactical plans have shorter time
frames and narrower scopes than strategic plans, Tactical planning provides the specific ideas for
implementing the strategic plan. It is the process of making detailed decisions about what to do,
who will do it, and how to do it.
In short, tactical plans may be understood in following terms:
1. Tactical planning deals primarily with the implementation phase of the planning process
2. Tactical planning turns strategy into reality
3. Tactical planning usually has a 1-2 year time horizon
4. Tactical planning is usually tightly integrated with the annual budget process
c. Operational Plans:
The supervisor interprets the strategic and tactical management plans as they apply to his unit. This
way, he makes operational plans to support tactical plans. These plans provide the details of how the
strategic plans will be accomplished. Examples of planning by supervisors include scheduling the
work of employees and identifying needs for staff and resources to meet future changes. Operating
plans tend to be repetitive and inflexible over the short run. Change comes only when it is obvious
that plans and specific action steps are not working.

There are two main type of operational plans – Single use plans which are developed to achieve
specific purposes and dissolved when these have been accomplished; standing plans are
standardized approaches for handling recurring and predictable situations.
Note that Tactical plans are based on the organization’s strategic plan. In turn, operational plans are
based on the organization’s tactical plans. These are specific plans that are needed for each task or
supportive activity comprising the whole. Strategic, tactical, and operational planning must be
accompanied by controls.
Monitoring progress or providing for follow-up is intended to ensure that plans are carried out
properly and on time. Adjustments may need to be made to accommodate changes in the external
and/ or internal environment of the organization.

Relationship between planning and controlling

 Planning and controlling are two separate fuctions of management, yet they are closely related. The
scope of activities if both are overlapping to each other. Without the basis of planning, controlling
activities becomes baseless and without controlling, planning becomes a meaningless exercise. In
absense of controlling, no purpose can be served by. Therefore, planning and controlling reinforce
each other. According to Billy Goetz, " Relationship between the two can be summarized in the
following points
1. Planning preceeds controlling and controlling succeeds planning.
2. Planning and controlling are inseperable functions of management.
3. Activities are put on rails by planning and they are kept at right place through controlling.
4. The process of planning and controlling works on Systems Approach which is as folfollows:
Panning → Results → Corrective Action
5. Planning and controlling are integral parts of an organization as both are important for smooth
running of an enterprise.
6. Planning and controlling reinforce each other. Each drives the other function of management.
In the present dynamic environment which affects the organization, the strong relationship
between the two is very critical and important. In the present day environment, it is quite likely that
planning fails due to some unforeseen events. There controlling comes to the rescue. Once
controlling is done effectively, it give us stimulus to make better plans. Therfore, planning and
controlling are inseperate functions of a business enterprise.

Controlling Techniques
There are various techniques of managerial control which can be classified into two broad categories
namely- • Traditional techniques • Modern techniques

Traditional techniques are those which have been used by the companies for a long time now. These
include:
• Personal observation
• Statistical reports
• Break-even analysis
• Budgetary control
1. Personal Observation
This is the most traditional method of control. Personal observation is one of those techniques which
enables the manager to collect the information as first-hand information.
It also creates a phenomenon of psychological pressure on the employees to perform in such a
manner so as to achieve well their objectives as they are aware that they are being observed
personally on their job. However, it is a very time-consuming exercise & cannot effectively be used
for all kinds of jobs.
2. Statistical Reports
Statistical reports can be defined as an overall analysis of reports and data which is used in the form
of averages, percentage, ratios, correlation, etc., present useful information to the managers
regarding the performance of the organization in various areas.
This type of useful information when presented in the various forms like charts, graphs, tables, etc.,
enables the managers to read them more easily & allow a comparison to be made with performance
in previous periods & also with the benchmarks.
3. Break-even Analysis
Breakeven analysis is a technique used by managers to study the relationship between costs, volume
& profits. It determines the overall picture of probable profit & losses at different levels of activity
while analyzing the overall position. The sales volume at which there is no profit, no loss is known as
the breakeven point. There is no profit or no loss. Breakeven point can be calculated with the help of
the following formula:
Breakeven point = Fixed Costs/Selling price per unit – variable costs per unit
4. Budgetary Control
Budgetary control can be defined as such technique of managerial control in which all operations
which are necessary to be performed are executed in such a manner so as to perform and plan in
advance in the form of budgets & actual results are compared with budgetary standards.
Therefore, the budget can be defined as a quantitative statement prepared for a definite future
period of time for the purpose of obtaining a given objective. It is also a statement which reflects the
policy of that particular period.
The common types of budgets used by an organization.
Some of the types of budgets prepared by an organisation are as follows,
• Sales budget: A statement of what an organization expects to sell in terms of quantity as well as
value
• Production budget: A statement of what an organization plans to produce in the budgeted period
• Material budget: A statement of estimated quantity & cost of materials required for production
• Cash budget: Anticipated cash inflows & outflows for the budgeted period
• Capital budget: Estimated spending on major long-term assets like a new factory or major
equipment
• Research & development budget: Estimated spending for the development or refinement of
products & processes
Modern Techniques of Managerial Control
Modern techniques of controlling are those which are of recent origin & are comparatively new in
management literature. These techniques provide a refreshingly new thinking on the ways in which
various aspects of an organization can be controlled. These include:
• Return on investment
• Ratio analysis
• Responsibility accounting
• Management audit
• PERT & CPM
1. Return on Investment
Return on investment (ROI) can be defined as one of the important and useful techniques. It
provides the basics
and guides for measuring whether or not invested capital has been used effectively for generating a
reasonable amount of return. ROI can be used to measure the overall performance of an
organization or of its individual departments or divisions. It can be calculated as underNet income
before or after tax may be used for making comparisons. Total investment includes both working as
well as fixed capital invested in the business.
2. Ratio Analysis
The most commonly used ratios used by organizations can be classified into the following categories:
• Liquidity ratios
• Solvency ratios
• Profitability ratios
• Turnover ratios
3. Responsibility Accounting
Responsibility accounting can be defined as a system of accounting in which overall involvement of
different sections, divisions & departments of an organization are set up as ‘Responsibility centers’.
The head of the center is responsible for achieving the target set for his center. Responsibility
centers may be of the following types:
• Cost center
• Revenue center
• Profit center
• Investment center
4. Management Audit
Management audit refers to a systematic appraisal of the overall performance of the management
of an organization. The purpose is to review the efficiency &n effectiveness of management & to
improve its performance in future periods.
5. PERT & CPM
PERT (programmed evaluation & review technique) & CPM (critical path method) are important
network techniques useful in planning & controlling. These techniques, therefore, help in performing
various functions of management like planning; scheduling & implementing time-bound projects
involving the performance of a variety of complex, diverse & interrelated activities.
Therefore, these techniques are so interrelated and deal with such factors as time scheduling &
resources allocation for these activities.