Assignment Subject-Principles
of
Management
Course Code - 5414
Submitted By- MUHAMMAD
ASIM GULZAR
Student ID- 0000484957
Submitted To-
Ma’am Anam Kamal
BS Accounting and Finance
SEMESTER 1st SPRING 2023
Principles of Management
5414 Principles of Management
Question No (1)
Define Management & Describe its Functions:
Introduction to Management:
Frederick Taylor, A century ago defined a concept called management as "knowing exactly
what you want (people) to do and doing in best and cheapest way". This is the simplest
definition of management. With the passage of time, this concept accommodated many
complexities and challenges which broaden its scope. With all inherent complexities and
challenges management is defined as a process of integrating and coordinating the activities
toachieve goal efficiently and effectively.
Let's have a look on key components of definition.

A process:
Process is a set of activities linked together to achieve the goal. Management as a
process not only integrates the activities but it also sequences the activities and
establishes coordination to achieve the goal. Continuity is also the essence of a process. It
means management is continuous exercise. An organization does to achieve the set
targets.
 Efficiently:
This term refers to the best use of resources and "best use" means minimum
wastage of resources to get maximum output. For example, right person on right job and
in right number.
 Effectiveness:
Every organization or a business is working to achieve a certain target or goal.
Attainment of the set target or goal through doing right things is effectiveness.
Management Functions:
During early twentieth century, Henry Fayol proposed five functions of management including
planning, organizing, commanding, communication and controlling now these functions are
condensed to four:
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1. Planning
2. Organizing
3. Leading
4. Controlling
Planning:
Planning is very important pillar of a business. It involves setting of a goal and establish plan to
accomplish that goal. Goal setting is the initial step to start a business and it gives a clear
direction to follow. How to achieve that goal, is about devising strategies and mapping activities
necessary to achieve that goal.
Organizing:
Organizing is the process of arranging and allocating resources to implement the plans to achieve
the goal. This function includes number of activities such as defining tasks needed to be done,
prioritization of activities, roles of key players (employee), combining tasks to define a job,
grouping departments together, allocation and division of resources. Best organization of
activities, departments, resources, and procedures will increase the success of a business.
Leading:
Every organization is the collection of people who together to reach the goal. Leading is the
process to influence the behavior of people to get the work done. it involves energizing people at
work through motivation, providing them best working environment and inspire them to achieve
organization's goal.
Controlling:
Once an organization set a goal and devise plan (Planning), Organize resources (Organizing),
Engage and motivate People (Leading), then it needs to assess the performance to ensure that we
achieved what we want to achieve (goal). Controlling is the process of monitoring activities and
measuring performance to compare it with the set targets. It is a continuous process, management
at firm keep on monitoring the activities from start to end and take corrective actions to achieve
expected results towards goal.
These all functions are interconnected. For example, control function will tell you whether plans
and activities are working in right direction or not. IF plans are failed to achieve the goal, they
should be reconsidered. Similarly, leading function helps to engage and keep people motivated to
give their best to organization. These functions are performed at different managerial levelsbut
the Question is who will perform these functions?
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Question No (2)
Explain The Concepts of Certainty, Risk and Uncertainty for
Decision Making:
There are three different conditions managers face while doing decision,
1. Risk
2. Uncertainly
3. Certainty
Certainty:
One of the ideal situations of making decision.
 The outcome of every alternative is known, so managers can make decisions very smartly
and accurately.
 For instance, information regarding interest rate which each bank is offering and the
Earning on the funds is important to make decision to take loan from bank. It is certainty.
Risk:
The state of decision making in which the decision maker can estimate the chances of the
outcomes of certainty.
 Managers have data from past experiences or secondary data.
 For instance, a resort manager wants to add another lift, he has the past data of last 10
years i.e. one year of light snow fall, 4 years of heavy, and 5 years of normal snow fall
along having the data revenue generated each year. We can use this dada by calculating
expected value of each year.
Event
Expected revenue
Probability
Heavy snow fall
Normal snow fall
$800,000
$710,000
0.4
0.5
Light snow fall
Total
$325,000
0.1
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Expected value of each
alternative
$320,000
355,000
35,200
710,200
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Uncertainty:
In some of the situations we are not certain about the outcomes of the alternatives. Such
situations are known as uncertainty.
 In the situation mentioned above the managers need to take the decision on the basis of
the given data and on psychological orientation.
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Question No (3).
What do you mean By Planning and Discuss the process of planning
in a business Organization?
Planning:
Planning is the process by which managers establish goals and define the methods by which
these goals are to be attained. Planning involves selecting missions and objectives and the
actions to achieve them; it requires decision making, which is choosing from among alternative
future courses of action.
“Planning is deciding in advance what is to be done; that is a plane is a projected course of
action.”
Planning Process:
1.
2.
3.
4.
5.
6.
7.
8.
Recognizing Need for Action
Setting Objectives
Developing Premises
Identifying Alternatives
Examining Alternative Course of Action
Selecting the Alternative
Formulating Supporting Plan
Implementation of the Plan
1) Recognizing Need for Actions:
An important part of the planning process is to be aware of the business opportunities in the
firm’s external environment as well as within the firm. Once such opportunities get
recognized the managers can recognize the actions that need to be taken to realize them. A
realistic look must be taken at the prospect of these new opportunities and SWOT analysis
should be done.
2) Setting Objectives:
This is the second and perhaps the most important step of the planning process. Here we
establish the objectives for the whole organization and also individual departments.
Organizational objectives provide a general direction, objectives of departments will be more
planned and detailed.
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Objectives can be long term and short term as well. They indicate the end result the company
wishes to achieve. So, objectives will percolate down from the managers and will also guide
and push the employees in the correct direction.
3) Developing Premises:
Planning is always done keeping the future in mind however, the future is always uncertain.
So, in the function of management certain assumptions will have to be made. These
assumptions are the premises. Such assumptions are made in the form of forecasts, existing
plans, past policies etc.
These planning premises are also of two types- internal and external.
External assumptions deal with factors such as political environment, social environment,
the advancement of technology, competition, government policies, etc.
Internal assumptions deal with policies, availability of resources, quality of management etc.
These assumptions being made should be uniform across the organization. All managers
should be aware of these premises and should agree with them.
4) Identifying Alternatives:
The fourth step of the planning process is to identify the alternatives available to the
managers. There is no one way to achieve the objectives of the firm. There is a multitude of
choices. All of these alternative courses should be identified. There must be options available
to the manager.
Maybe he chooses an innovative alternative hoping for more efficient results. If he does not
want to experiment, he will stick to the more routine course of action. The problem with this
step is not finding the alternatives but narrowing them down to a reasonable number of
choices so all of them can be thoroughly evaluated.
5) Examining Alternate Course of Action:
The next step of the planning process is to evaluate and closely examine each of the
alternative plans. Every option will go through an examination where all their pros and cons
will be weighed. The alternative plans need to be evaluated in light of the organization
objectives.
For example, if it is a financial plan. Then it that Case its risk-return evaluation will be done.
Detailed calculation and analysis are done to ensure that then plan is capable of achieving the
objectives in the best and most efficient manner possible.
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6) Selecting the Alternative:
Finally, we reach the decision-making stage of the planning process. Now the best and most
feasible plan will be chosen to be implemented. The ideal plan is the most profitable one with
the least number of negative consequences and is also adaptable to dynamic situations.
The choice is obviously based on scientific analysis and mathematical equations. But
Managers intuition and experience should also play a big part in this decision. Sometimes a
few different aspects of different plans are combined to come up with the one ideal plan.
7) Formulating Supporting Plan:
Once you have chosen the plan to be implemented, managers will have to come up with one
or more supporting plans. These secondary plans help with the implementation of the main
plan. For example, plans to hire more people, train personnel, expand the office etc are
supporting plans for the main plan of launching a new product. So, all these secondary plans
are in fact part of the main plan.
8) Implementation of the Plan:
Finally, we come to the last step of the planning process, implementation of the plan. This is
when all the other functions of management come into play and the pan is put into action to
achieve the objectives of the organization. The tolls required for such implementation
involve the type of plans- procedures, policies, budgets, rules, standards etc.
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Principles of Management
Question No (4)
Define Decision Making and Discuss its Process
In our everyday life we make choices, what to study, what career to pick, which country to go.
Managers intheir professional life make many decisions. Decisions they make range from daily
operations to long term. Therefore, some decisions are quickly made whereas long-term
decision-making process involves multiple critical steps. Let’s discuss the decision-making
process in detail.
Decision Making Process:
Managers at different managerial levels make different decisions range from day to day to long
term. They make choices and choose the best from available options. Top managers investigate
the market and identify customer’s needs, wants and competitors’ actions so that they can take
decisions accordingly. But making decisions is not just an easy take as it looks, everybody at
different levels in the organization have to take decisions according to their designation.
Research recommends that to become an efficient manager in decision making, follow the
concept mentioned in the decision-making process.Although practicing these steps will not
always result into desired outcomes, because every stage is critical and require the correct inputs.
Let us try to understand with the example of a manager Mr. Mzmil, he has to decide which
laptops should be purchased for his sales team.
Step 1: Identification of A Problem:
In the modern era with speedy advancement and up gradation in technology, Mr. Mzmil
identifies that the old Technology based laptop is very slow and are not efficient in multi-tasking
which ultimately is affecting online sale process. Here the problem originates.
How does a manager find the problem? Most of the time the problem is not so clear like the
flashing signal light. In this case, Mr. Mzmil’s sales representative started complaining about
their computers, which was an alarming situation and needs to be addressed. Very few problems
are very much obvious therefore, managers must be vigilant in keeping the difference between
the problem and the symptoms of the problem. In the above examples, online sales are the
symptoms of the problem. Is a few percentages drop a problem? Or reduce in the sales
percentage is the symptom of the actual problem, such as marketing, poor quality product or high
prices. Keeping in mind the main subject is to identify the real problem here.
Step 2: Identifying Decision Criteria:
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Once the manager has found the problem, the next step is to figure out the decision
criteria to solve the problem. Being a decision maker, criteria guide to make clear decisions. In
the example mentioned above the Mr. Mzmil has set the following criteria to make a quick
decision such as battery, warranty, weight, cost screen size and reliability.
Step 3; Allocation of Weights to the Criteria:
If the Criteria set by manager is not equally important, then he or she must give weights
to the criterion indicators based upon the priority and importance,but how? The simplest way is
to give the weightage of 10 to the most important criterion and the weights to the rest based upon
the standard. Obviously, you can use any number to the highest weight.
1. Identification of a problem
Sale team need update
Laptops
2. Identifying decision criteria
Cost
Battery Storage
Warranties
Screen Size
Warranties
Reliability
3. Allocation of weights to criteria
Reliability…..........10
Battery Storage…08
Warranties……..…05
Weight……………..05
Cost………………….04
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Screen Size……...03
4. Development of alternatives
Acer, Hp, Sony, Toshiba, Dell,
Lenovo
5.
Analyzing alternatives
Acer, Hp, Sony, Toshiba,
Dell, Lenovo
6. Selection of Alternatives
Acer, HP, Sony, Toshiba, Dell,
Lenovo
7.
Implementation of alternative
Hp Inspiration
8. Evaluating decision effectiveness
Step 4: Development of Alternatives:
The fourth step is to identify or create all possible alternatives require to solve the
problem. In this step the job is to list the alternatives not to evaluate. Our sales manager Mr.
Mzamil has created all the possible choices as shown in the exhibit below such as Acer, Compaq,
Sony, Toshiba, HP and Dell.
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Step 5: Analyzing the Alternatives:
Once the alternatives have been identified by the decision maker, next step is to analyze
them but how? The answer is “criteria” made in Step 2. Manager Mzmil has assigned values
after doing research on the given alternatives as shown in exhibit 4.2. Different Criterion is used
to analyze the available alternatives. Values assigned inn this step will be multiplied to each
alternative with the weight given in next step to get weighted alternatives as shown in the exhibit
4.4
Choices
Memory
Storage
6
4
10
8
7
10
Acer
Compaq
HP
Sony
Toshiba
Dell
Exhibit 4.1
&
Battery Reliability
7
8
10
6
8
10
Warranty
Weight
Cost
8
7
8
10
7
6
8
9
10
6
8
10
7
8
6
5
8
10
Screen
Size
9
7
9
9
5
7
Step 6: Selection of an Alternative:
The sixth step in decision-making process is selecting the best alternative in all Aspects
look in exhibit 4.2, the alternative with highest score is HP and Dell. Mr. Mzmil has to choose
either HP or Dell because both has scored (321) highest among other alternatives.
Choices
Reliability
Acer
56
Compaq 64
HP
80
Sony
48
Toshiba
64
Dell
80
Exhibit 4.2
Memory
and
Battery Storage
60
40
100
82
70
100
Warranty
Weight
Cost
64
35
40
50
35
30
40
45
50
30
40
50
28
32
24
20
32
40
Screen
Size
27
21
27
27
15
21
total
275
237
321
255
256
321
Step 7: Implementation of the Alternative:
In this step, we have to implement the selected alternative or need to put decision in
action to resolve the identified problem. It is effective to involve the person who supposed to
implement the decision for timely and quick results.
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Step 8: Evaluation of Decision Effectiveness:
The last step of this process is to evaluate the results of the decision to find whether the
problem is solved or not. If the problem is fixed its good, and if not then manager needs to check
where it went wrong. Was the problem not properly defined? We errors occurred, while
implementing the decision. Answers will lead you towards the proper way or might be to follow
the process again.
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Principles of Management
Question No (5)
Define Planning How Does “Informal Planning”differ from “Formal
Planning”
Without planning, an organization is driven by every single change in its environment. This is
not good for the success of any business. Organizations are planning by keeping in view the
future forecasts of different mega environmental factors. Planning Is one of the key functions of
management that sets goal for the organization. It involves multi-stage process.
Planning is the process by which managers establish goals and define the methods by which
these goals are to be attained. Planning involves selecting missions and objectives and the
actions them; if requires decision making, which is choosing from among alternative future
courses of action.
“Planning is deciding in advance what is to be done; that is a plan is a projected course of action.
Planning refers to the process of setting goals, identifying the steps required to achieve those
goals, allocating resources, and creating a timeline for their completion. It involves foreseeing
potential obstacles, making decisions, and organizing efforts to accomplish desired outcomes
efficiently.
Formal & Informal Planning differ in several key aspects:
1.
2.
3.
4.
5.
6.
7.
Structure and documentation
Flexibility vs. rigidity
Scope and complexity
Communication and Collaboration
Accountability and Monitoring
Risk Management
Long-Term vs. Short-Term
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1. Structure and Documentation:
Informal Planning: It lacks strict structure and detailed documentation. Plans are often in
the form of mental notes, discussions, or informal conversations.
Formal Planning: It follows a structured approach with well-defined steps, documented
goals, action items, timelines, responsibilities, and resource allocations. Plans are usually
written down and easily accessible.
2. Flexibility vs. Rigidity:
Informal Planning: It is more flexible and adaptable to changing circumstances. Decisions
can be made on the spot based on personal judgment and immediate needs.
Formal Planning: It tends to be more rigid due to the predefined structure. Changes often
require formal revision of the plan, which can be time-consuming.
3. Scope and Complexity:
Informal Planning: Suited for smaller projects, simple tasks, or situations where the
environment is unpredictable and plans might need to be adjusted frequently.
Formal Planning: Better suited for larger projects, complex endeavors, and scenarios where
a comprehensive and detailed approach is necessary.
4. Communication and Collaboration:
Informal Planning: Relies heavily on informal communication and may lead to
misunderstandings or lack of clarity, especially in larger teams.
Formal Planning: Facilitates clear communication, as plans are documented and accessible
to all stakeholders. It encourages collaboration by providing a shared reference.
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5. Accountability and Monitoring:
Informal Planning: Accountability might be less defined, as responsibilities and
expectations might not be clearly established.
Formal Planning: Clearly defines responsibilities, making it easier to track progress,
measure success, and hold individuals accountable.
6. Risk Management:
Informal Planning: May lack a comprehensive assessment of potential risks and mitigation
strategies.
Formal Planning: Typically includes risk assessment and plans for managing potential
challenges and uncertainties.
7. Long-Term vs. Short-Term:
Informal Planning: Often focuses on immediate goals and short-term actions.
Formal Planning: Can encompass both short-term and long-term objectives, providing a
strategic vision.
In essence, informal planning is characterized by its flexibility, spontaneity, and lack of formal
documentation, while formal planning is characterized by its structure, documentation, and
comprehensive approach to achieving goals. The choice between these two approaches depends
on the context, goals, and complexity of the situation.
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