Management Process
Meaning
Management process is a process of setting goals, planning and/or controlling the organizing and
leading the execution of any type of activity, such as:
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a project (project management process) or
a process (process management process, sometimes referred to as the process performance
measurement and management system).
An organization's senior management is responsible for carrying out its management process. However,
this is not always the case for all management processes, for example, it is the responsibility of the
project manager to carry out a project management process.
Steps
Planning, it determines the objectives, evaluate the different alternatives and choose the best
Organizing, define group's functions, establish relationships and defining authority irresponsibility
Staffing, recruitment or placement and selection or training takes place for the development of
members in the firm.
Planning
Meaning
In simple words, planning is deciding in advance what is to be done, when where, how and by whom it is
to be done. Planning bridges the gap from where we are to where we want to go. It includes the
selection of objectives, policies, procedures and programmes from among alternatives. A plan is a
predetermined course of action to achieve a specified goal. It is an intellectual process characterized by
thinking before doing. It is an attempt on the part of manager to anticipate the future in order to
achieve better performance. Planning is the primary function of management.
Definitions
According to Alford and Beatt, "Planning is the thinking process, the organized foresight, the vision
based on fact and experience that is required for intelligent action."
According to Theo Haimann, "Planning is deciding in advance what is to be done. When a manager
plans, he projects a course of action for further attempting to achieve a consistent co-ordinate structure
of operations aimed at the desired results.
Importance of Planning
1) Better Utilization of Resources: An important advantage of planning is that it makes effective
and proper utilization of enterprise resources. It identifies all such available resources and
makes optimum use of these resources.
2) Increases Organizational Effectiveness: Planning ensures organizational effectiveness.
Effectiveness ensures that the organisation is in a position to achieve its objective due to
increased efficiency of the organisation.
3) Reduces the Cost of Performance: Planning assists in reducing the cost of performance. It
includes the selection of only one course of action amongst the different courses of action that
would yield the best results at minimum cost. It removes hesitancy, avoids crises and chaos,
eliminates false steps and protects against improper deviations.
4) Concentration on Objectives: It is a basic characteristic of planning that it is related to the
organizational objectives. All the operations are planned to achieve the organizational
objectives. Planning facilitates the achievement of objectives by focusing attention on them. It
requires the clear definition of objectives so that most appropriate alternative courses of action
are chosen.
5) Helps in Co-ordination: Good plans unify the interdepartmental activity and clearly lay down the
area of freedom in the development of various sub-plans. Various departments work in
accordance with the overall plans of the organisation. Thus, there is harmony in the
organisation, and duplication of efforts and conflict of jurisdiction are avoided.
6) Makes Control Effective: Planning and control are inseparable in the sense that unplanned
action cannot be controlled because control involves keeping activities on the predetermined
course by rectifying deviations from plans. Planning helps control by furnishing standards of
performance.
7) Encouragement to Innovation: Planning helps innovative and creative thinking among the
managers because many new ideas come to the mind of a manager when he is planning. It
creates a forward-looking attitude among the managers.
8) Increase in Competitive Strength: Effective planning gives a competitive edge to the enterprise
over other enterprises that do not have planning or have ineffective planning. This is because
planning may involve expansion of capacity, changes in work methods, changes in quality,
anticipation of tastes and fashions of people and technological changes etc.
9) Delegation is Facilitated: A good plan always facilitates delegation of authority in a better way to
subordinates.
Types of Plans
1. Strategic Management Plans: It involves proper planning and far-sightedness for conceptualizing
the strengths and weaknesses of the organization, pertaining to the environment in which it
exists. Strategic Management Plans deals with the envisioning of at least three to five years in
the future and deciding what are the pathways that the organization intends to take and create
new vistas of opportunities. It strongly involves the basic elements of market research and
financial projections with detailed study of promotional planning and taking all the necessary
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steps to fulfill the operational requirements. It is the best way to find out the amount of capital
to be raised, expansion target and optimum use of the available resources. Strategic
management plans also deals with relationship management as in today’s world, management
and the correct use of contacts is very important.
Operational Management Plans: It is the interim period which deals with Operational
Management Plans. This is also termed as Tactical Planning and it also deals with the aspects
that involve the concept of an annual budget. Operational Management Plans entirely focuses
on making sure that a given task is completed. It is irrespective of whether it is driven by the
entire organization’s budget, any personal budget or any functional area of responsibility. It can
also be said that operational management plans are indirectly derived from strategic
management plans. It is an outflow of a detailed strategic management plan and can be seen as
a part of the initiating and implementation stage of a more comprehensive long term plan.
Policies: It focuses on accomplishing the organization’s objectives by furnishing the broad
guidelines for the correct course of action.
Procedures: Procedures outline a more specific set of actions and deals with the implementation
of a set of related actions in order to finish a particular task.
Rules: Rules are a set of guidelines that show the way and manner in which a task is to be
accomplished. It lays down the do's and don’ts that are to be strictly followed by the members
of the organization without any deviation.
Programs: Programs deal with the guidelines that are set for accomplishing a special project
within the organization. The project may not be in existence for the entire tenure of the
organization, but if the project is accomplished, it might result in short-term success of the
organization which might ultimately prove to be extremely helpful.
Budget: A Budget represents a specific period of time which indicates it as a single user financial
plan. It is a complete set up indicating the process of procuring the funds and channelizing the
funds. It shows in details how funds are to be utilized on labor, raw materials, capital goods, and
marketing and information systems.
Organizing
Organising or Organizing in management refers to the relationship between people, work and resources
used to achieve the common objectives (goals).
Definitions
According to Theo Haimann, "Organising is the process of defining and grouping the activities of the
enterprise and establishing the authority relationships among them."
According to Louis Allen, "Organising is the process of identifying and grouping the work to be
performed, defining and delegating responsibility and authority and establishing relationships for the
purpose of enabling people to work most effectively together in accomplishing objectives."
Principles of Organizing
1. 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. It is through
division of work specialization can be achieved which results in effective organization.
2. 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. This can be done
by clearly defining the duties, responsibilities, authority and relationships of people towards
each other.
3. 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. According to this principle, a manager should be able to handle
what number of employees under him should be decided. This decision can be taken by
choosing either froma wide or narrow span.
4. Principle of Scalar Chain: Scalar chain is a chain of command or authority which flows from top
to bottom. With a chain of authority available, wastages of resources are minimized,
communication is affected, overlapping of work is avoided and easy organization takes place. A
scalar chain of command facilitates work flow in an organization which helps in achievement of
effective results. As the authority flows from top to bottom, it clarifies the authority positions to
managers at all level and that facilitates effective organization.
5. Principle of Unity of Command: It implies one subordinate-one superior relationship. Every
subordinate is answerable and accountable to one boss at one time. This helps in avoiding
communication gaps and feedback and response is prompt. Unity of command also helps in
effective combination of resources, that is, physical, financial resources which helps in easy coordination and, therefore, effective organization.
Types of Organizations
Meaning
Any operating organization should have its own structure in order to operate efficiently. For an
organization, the organizational structure is a hierarchy of people and its functions.
The organizational structure of an organization tells you the character of an organization and the values
it believes in. Therefore, when you do business with an organization or getting into a new job in an
organization, it is always a great idea to get to know and understand their organizational structure.
Depending on the organizational values and the nature of the business, organizations tend to adopt one
of the following structures for management purposes.
Functional Structure
The organization is divided into segments based on the functions when managing. This allows the
organization to enhance the efficiencies of these functional groups. As an example, take a software
company.
Software engineers will only staff the entire software development department. This way, management
of this functional group becomes easy and effective.
Functional structures appear to be successful in large organization that produces high volumes of
products at low costs. The low cost can be achieved by such companies due to the efficiencies within
functional groups.
In addition to such advantages, there can be disadvantage from an organizational perspective if the
communication between the functional groups is not effective. In this case, organization may find it
difficult to achieve some organizational objectives at the end.
Divisional Structure
These types of organizations divide the functional areas of the organization to divisions. Each division is
equipped with its own resources in order to function independently. There can be many bases to define
divisions.
Divisions can be defined based on the geographical basis, products/services basis, or any other
measurement.
As an example, take a company such as General Electrics. It can have microwave division, turbine
division, etc., and these divisions have their own marketing teams, finance teams, etc. In that sense,
each division can be considered as a micro-company with the main organization.
Formal Organizations
It is formed when two or more persons come together. They have a common objective or goal. They are
willing to work together to achieve this similar objective.
Formal Organisation has its own rules and regulation. These rules must be followed by the members
(employees and managers). A formal organisation has a system of co-ordination. It also has a system of
authority. It has a clear superior-subordinate relationship. In a formal organisation, the objectives are
specific and well-defined. All the members are given specific duties and responsibilities. Examples of
formal organisation are:- a company, a school, a college, a bank, etc.
Informal Organization
It exists within the formal organisation. An informal organisation is a network of personal and social
relationships. People working in a formal organisation meet and interact regularly. They work, travel,
and eat together. Therefore, they become good friends and companions. There are many groups of
friends in a formal organisation. These groups are called informal organisation.
An informal organisation does not have its own rules and regulation. It has no system of co-ordination
and authority. It doesn't have any superior-subordinate relationship nor any specific and well-defined
objectives. Here in informal organisation, communication is done through the grapevine.