1. management 1483517986121

Chapter 1
MANAGEMENT
Subject In-Charge
Mr. A. R. Thakre
Assistant Professor in
Pharmaceutics
Priyadarshini J. L. College of
Pharmacy, Nagpur-16

CONTENTS:
• DEFINITION
• CONCEPT OF MANAGEMENT
• THEORIES OF MANAGEMENT
• WHAT ARE FUNCTIONS OF MANAGEMENT?
• PROCESS OF MANAGEMENT
• FUNCTIONS OF MANAGEMENT
• PLANNING,ORGANISING,STAFFING,
CONTROLLING AND DIRECTING.

MANAGEMENTS
• Management is a process of conducting and
coordinating various human activities.
• Management is a method of optimizing results with
minimum efforts so as to secure maximum efficiency
and growth of both, the employer and the employee.
• MANAGEMENT = MANAGE+MEN+T (TACTFULLY)

CONCEPTS OF MANAGEMENT
1. Functional concept
2. Human relation conceptctional
concept
3. Leadership and decision making
concept
4. Productive concept
5. Integration concept

1. Functional concept
Management basically is the task of planning, coordinating,
motivating and controlling the efforts of other towards the
goals and objectives of the organization. According to this
concept, management is what a manager does (planning,
executing, and controlling)
2. Human relation concept
According to this concept, Management is the art of getting
things done through and with people in organized groups. It
is the art of creating an environment in which people can
perform and individuals could cooperate towards attaining
of group goals. It is an art of removing blanks to such
performance a way of optimizing efficiency in reaching
goals.

3. Leadership and decision making concept
According to this concept, management is the
art and science of preparing, organizing,
directing human efforts applied to control the
forces and utilize the materials of nature for the
benefits to man.
4. Productive concept
According to this concept, management may be
defined as the art of securing maximum
prosperity with a minimum effort so as to secure
maximum prosperity and happiness for both
employer n employee and provide best services
thereby.

a. Management as a process:-
Management is a process. It includes the process of planning, controlling,
coordinating, motivating, and staffing. These processes are the series of
interrelated sequential functions. Processes refer to accomplish these
mentioned activities. Management is the efforts of organizational members
to accomplish the organizer’s objectives. This concept is very simple
because
i. It is very simple and very easy to understand
ii. It indicates functions of management as a process
iii. It recognizes management as a universal process
b. Management as a discipline
The term management is used as a subject of instructions. It is a specific
branch of knowledge which is studied in campuses and schools like
economics, sociology, mathematics, political science etc. the scholars of
management have found that the information and management are used in
practical life for better functioning. The scope of management is being
increased day to day as a discipline

c. Management as a noun:
The word management itself refers as a noun. There
are many kinds of employees in an organization .
some people are involved in managerial function and
some are involved in operating functions. The
individuals who manage the organization and
departments are managers. As a noun, the term
management is used as single name of managers,
board of directors, managing directors, departmental
managers etc are included in management.

Management Principle by Henry Fayol
"Management is to forecast, to
plan, to organize, to command,
to coordinate and control
activities of
others."………..Henry Fayol
He developed a general theory
of business administration that
is often called Fayolism. He
and his colleagues developed
this theory independently
of scientific management.

• Fayol's work was one of the first comprehensive
statements of a general theory of management. He
proposed that there were five primary functions of
management and fourteen principles of management.
• Functions of Management
• Planning
• Organizing
• Commanding
• Coordinating
• Controlling

• Principles of Management
• Division of work - The division of work is the course of tasks
assigned to, and completed by, a group of workers in order to
increase efficiency. Division of work, which is also known as
division of labour, is the breaking down of a job so as to have a
number of different tasks that make up the whole.
• Authority and Responsibility - Authority is the right to give
orders and obtain obedience, and responsibility is the corollary
of authority.
• Discipline - Employees must obey and respect the rules that
govern the organization. Good discipline is the result of effective
leadership.

• Unity of command - Every employee should receive orders
from only one superior or behalf of the superior.
• Unity of direction - Each group of organizational activities
that have the same objective should be directed by one
manager using one plan for achievement of one common
goal.
• Subordination - The interests of any one employee or
group of employees should not take precedence over the
interests of the organization as a whole.
• Remuneration - All Workers must be paid a fair wage for
their services.
• Centralization - Centralization refers to the degree to which
subordinates are involved in decision making.

• Scalar chain - The line of authority from top management to the
lowest ranks represents the scalar chain. Communications should
follow this chain.
• Order - this principle is concerned with systematic arrangement of
men, machine, material etc. There should be a specific place for
every employee in an organization
• Equity - Managers should be kind and fair to their subordinates.
• Stability of tenure of personnel - High employee turnover is
inefficient. Management should provide orderly personnel planning
and ensure that replacements are available to fill vacancies.
• Initiative - Employees who are allowed to originate and carry out
plans will exert high levels of effort.
• Esprit de corps - Promoting team spirit will build harmony and unity
within the organization.

Management Principle by F. W. Tayor
"Management is an art of
knowing what is to be done and
seeing that it is done in the
best possible manner."
(planning and
controlling)……..F.W. Taylor

• Taylor summed up his efficiency techniques in
his 1911 book The Principles of Scientific
Management. His pioneering work in applying
engineering principles to the work done on
the factory floor was instrumental in the
creation and development of the branch of
engineering that is now known as industrial
engineering.

• Taylor's scientific management consisted of following
principles:
1. Development of Science for each part of men’s job
(replacement of rule of thumb)
– This principle suggests that work assigned to any employee
should be observed, analyzed with respect to each and
every element and part and time involved in it.
– This means replacement of odd rule of thumb by the use
of method of enquiry, investigation, data collection,
analysis and framing of rules.
– Under scientific management, decisions are made on the
basis of facts and by the application of scientific decisions.

2. Scientific Selection, Training & Development of
Workers
– There should be scientifically designed procedure for the
selection of workers.
– Physical, mental & other requirement should be specified
for each and every job.
– Workers should be selected & trained to make them fit for
the job.
– The management has to provide opportunities for
development of workers having better capabilities.
– According to Taylor efforts should be made to develop
each employee to his greatest level and efficiency &
prosperity.

3. Co-operation between Management & workers or Harmony not
discord
– Taylor believed in co-operation and not individualism.
– It is only through co-operation that the goals of the enterprise can be
achieved efficiently.
– There should be no conflict between managers & workers.
– Taylor believed that interest of employer & employees should be fully
harmonized so as to secure mutually understanding relations between
them.
4. Division of Responsibility
– This principle determines the concrete nature of roles to be played by
different level of managers & workers.
– The management should assume the responsibility of planning the
work whereas workers should be concerned with execution of task.
– Thus planning is to be separated from execution.

5. Mental Revolution
– The workers and managers should have a complete change of outlook towards
their mutual relation and work effort.
– It requires that management should create suitable working condition and solve all
problems scientifically.
– Similarly workers should attend their jobs with utmost attention, devotion and
carefulness. They should not waste the resources of enterprise.
– Handsome remuneration should be provided to workers to boost up their moral.
– It will create a sense of belongingness among worker.
– They will be disciplined, loyal and sincere in fulfilling the task assigned to them.
– There will be more production and economical growth at a faster rate.
6. Maximum Prosperity for Employer & Employees
– The aim of scientific management is to see maximum prosperity for employer and
employees.
– It is important only when there is opportunity for each worker to attain his highest
efficiency.
– Maximum output & optimum utilization of resources will bring higher profits for
the employer & better wages for the workers.
– There should be maximum output in place of restricted output.
– Both managers & workers should be paid handsomely.

Levels of Management
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

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 -
– Top management lays down the objectives and broad policies of the
enterprise.
– It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
– It prepares strategic plans & policies for the enterprise.
– It appoints the executive for middle level i.e. departmental managers.
– It controls & coordinates the activities of all the departments.
– It is also responsible for maintaining a contact with the outside world.
– It provides guidance and direction.
– 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 -
– They execute the plans of the organization in accordance with the policies and
directives of the top management.
– They make plans for the sub-units of the organization.
– They participate in employment & training of lower level management.
– They interpret and explain policies from top level management to lower level.
– They are responsible for coordinating the activities within the division or
department.
– It also sends important reports and other important data to top level
management.
– They evaluate performance of junior managers.
– 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. In other words, they are
concerned with direction and controlling function of management. Their activities include -
– Assigning of jobs and tasks to various workers.
– They guide and instruct workers for day to day activities.
– They are responsible for the quality as well as quantity of production.
– They are also entrusted with the responsibility of maintaining good relation in the
organization.
– They communicate workers problems, suggestions, and recommendatory appeals etc
to the higher level and higher level goals and objectives to the workers.
– They help to solve the grievances of the workers.
– They supervise & guide the sub-ordinates.
– They are responsible for providing training to the workers.
– They arrange necessary materials, machines, tools etc for getting the things done.
– They prepare periodical reports about the performance of the workers.
– They ensure discipline in the enterprise.
– They motivate workers.
– They are the image builders of the enterprise because they are in direct contact with
the workers.

Objectives of Management
The main objectives of management are:
1. Getting Maximum Results with Minimum Efforts - The main objective of
management is to secure maximum outputs with minimum efforts &
resources. Management is basically concerned with thinking & utilizing
human, material & financial resources in such a manner that would result
in best combination. This combination results in reduction of various
costs.
2. Increasing the Efficiency of factors of Production - Through proper
utilization of various factors of production, their efficiency can be
increased to a great extent which can be obtained by reducing spoilage,
wastages and breakage of all kinds, this in turn leads to saving of time,
effort and money which is essential for the growth & prosperity of the
enterprise.
3. Maximum Prosperity for Employer & Employees - Management ensures
smooth and coordinated functioning of the enterprise. This in turn helps
in providing maximum benefits to the employee in the shape of good
working condition, suitable wage system, incentive plans on the one hand
and higher profits to the employer on the other hand.
4. Human betterment & Social Justice - Management serves as a tool for the
upliftment as well as betterment of the society. Through increased
productivity & employment, management ensures better standards of
living for the society. It provides justice through its uniform policies.

Importance of Management
1. It helps in Achieving Group Goals - It arranges the factors of production, assembles
and organizes the resources, integrates the resources in effective manner to
achieve goals. These resources are coordinated, directed and controlled in such a
manner that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management
provides maximum utilization of scarce resources by selecting its best possible
alternate use in industry from out of various uses. It makes use of experts,
professional and these services leads to use of their skills, knowledge, and proper
utilization and avoids wastage.
3. Reduces Costs - It gets maximum results through minimum input by proper
planning and by using minimum input & getting maximum output. Management
uses physical, human and financial resources in such a manner which results in best
combination. This helps in cost reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and
coordinated functions). Management fills up various positions with right persons,
having right skills, training and qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing
environment. It adapts organization to changing demand of market / changing
needs of societies. It is responsible for growth and survival of organization.
6. Essentials for Prosperity of Society

WHAT ARE THE FUNCTIONS OF
MANAGEMENTS?
• The act of getting people together to
accomplish desired goals and objectives.
• Resourcing encompasses the deployment and
manipulation of human resources, financial
resources, technological resources, and
natural resources.
• Distinct process of planning, organizing,
staffing, directing and controlling, performed

Primary Functions
of Management
1.Planning
2.Organizing
3.Staffing
4.Directing
5.Controlling
1. Decision
Making
2. Leadership
3. Innovation
4. Delegations
authority/
Responsibilities
Secondary Functions
of Management

1.Planning
• Planning means looking ahead and chalking out future
courses of action to be followed. It is a preparatory step.
It is a systematic activity which determines when, how
and who is going to perform a specific job. Planning is a
detailed programme regarding future courses of action.
• It is rightly said “Well plan is half done”. Therefore
planning takes into consideration available & prospective
human and physical resources of the organization so as
to get effective co-ordination, contribution & perfect
adjustment. It is the basic management function which
includes formulation of one or more detailed plans to
achieve optimum balance of needs or demands with the
available resources.

Steps in Planning Function
1. Establishment of objectives
– Planning requires a systematic approach.
– Planning starts with the setting of goals and objectives to be achieved.
– Objectives provide a rationale for undertaking various activities as well as
indicate direction of efforts.
– Moreover objectives focus the attention of managers on the end results to
be achieved.
– As a matter of fact, objectives provide nucleus to the planning process.
Therefore, objectives should be stated in a clear, precise and unambiguous
language. Otherwise the activities undertaken are bound to be ineffective.
– As far as possible, objectives should be stated in quantitative terms. For
example, Number of men working, wages given, units produced, etc. But
such an objective cannot be stated in quantitative terms like performance
of quality control manager, effectiveness of personnel manager.
– Such goals should be specified in qualitative terms.
– Hence objectives should be practical, acceptable, workable and
achievable.

2. Establishment of Planning Premises
– Planning premises are the assumptions about the lively
shape of events in future.
– They serve as a basis of planning.
– Establishment of planning premises is concerned with
determining where one tends to deviate from the actual
plans and causes of such deviations.
– It is to find out what obstacles are there in the way of
business during the course of operations.
– Establishment of planning premises is concerned to take such
steps that avoids these obstacles to a great extent.
– Planning premises may be internal or external. Internal
includes capital investment policy, management labour
relations, philosophy of management, etc. Whereas external
includes socio- economic, political and economical changes.
– Internal premises are controllable whereas external are non-
controllable.

3. Choice of alternative course of action
– When forecast are available and premises are established,
a number of alternative course of actions have to be
considered.
– For this purpose, each and every alternative will be
evaluated by weighing its pros and cons in the light of
resources available and requirements of the organization.
– The merits, demerits as well as the consequences of each
alternative must be examined before the choice is being
made.
– After objective and scientific evaluation, the best
alternative is chosen.
– The planners should take help of various quantitative
techniques to judge the stability of an alternative.

4.Formulation of derivative plans
– Derivative plans are the sub plans or secondary
plans which help in the achievement of main plan.
– Secondary plans will flow from the basic plan.
These are meant to support and expediate the
achievement of basic plans.
– These detail plans include policies, procedures,
rules, programmes, budgets, schedules, etc. For
example, if profit maximization is the main aim of
the enterprise, derivative plans will include sales
maximization, production maximization, and cost
minimization.
– Derivative plans indicate time schedule and
sequence of accomplishing various tasks.

5. Securing Co-operation
– After the plans have been determined, it is
necessary rather advisable to take subordinates or
those who have to implement these plans into
confidence.
– The purposes behind taking them into confidence
are :-
• Subordinates may feel motivated since they are
involved in decision making process.
• The organization may be able to get valuable
suggestions and improvement in formulation as
well as implementation of plans.
• Also the employees will be more interested in the
execution of these plans

6. Follow up/Appraisal of plans
– After choosing a particular course of action, it is put into
action.
– After the selected plan is implemented, it is important to
appraise its effectiveness.
– This is done on the basis of feedback or information
received from departments or persons concerned.
– This enables the management to correct deviations or
modify the plan.
– This step establishes a link between planning and
controlling function.
– The follow up must go side by side the implementation of
plans so that in the light of observations made, future
plans can be made more realistic.

Characteristics of Planning
1. Planning is goal-oriented.
2.Planning is looking ahead.
3.Planning is an intellectual process.
4.Planning involves choice & decision making.
5.Planning is the primary function of
management / Primacy of Planning.
6.Planning is a Continuous Process.
7.Planning is all Pervasive.
8.Planning is designed for efficiency.
9.Planning is Flexible.

Advantages of Planning
1. Planning facilitates management by
objectives.
2. Planning minimizes uncertainties.
3. Planning facilitates co-ordination.
4. Planning improves employee’s moral.
5. Planning helps in achieving economies.
6. Planning facilitates controlling.
7. Planning provides competitive edge.
8. Planning encourages innovations.

Disadvantages of Planning
1. Rigidity
2. Misdirected Planning
3. Time consuming
4. Probability in planning
5. False sense of security
6. Expensive

WHAT IS ORGANISING?
• Is the process of grouping together of men
and establishing relationship among them,
defining the authority and responsibility of
personnel by using the company’s other basic
resources to attain predetermined goals or
objectives.

A manager performs organizing function
with the help of following steps:-
1. Identification of activities - All the activities which have to be
performed in a concern have to be identified first. For example,
preparation of accounts, making sales, record keeping, quality
control, inventory control, etc. All these activities have to be
grouped and classified into units.
2. Departmentally organizing the activities - In this step, the
manager tries to combine and group similar and related activities
into units or departments. This organization of dividing the whole
concern into independent units and departments is called
departmentation.
3. Classifying the authority - Once the departments are made, the
manager likes to classify the powers and its extent to the
managers. This activity of giving a rank in order to the managerial
positions is called hierarchy.

The top management is into formulation of policies, the middle
level management into departmental supervision and lower
level management into supervision of foremen. This helps in
achieving efficiency in the running of a concern. This helps in
avoiding wastage of time, money, effort, in avoidance of
duplication or overlapping of efforts and this helps in bringing
smoothness in a concern’s working.
4. Co-ordination between authority and responsibility -
Relationships are established among various groups to
enable smooth interaction toward the achievment of the
organizational goal. Each individual is made aware of his
authority and he/she knows whom they have to take orders
from and to whom they are accountable and to whom they
have to report. A clear organizational structure is drawn and
all the employees are made aware of it.

Importance of Organizing Function
1. Specialization
2. Well defined jobs
3. Clarifies authority
4. Co-ordination
5. Effective administration Growth and
diversification
6. Sense of security
7. Scope for new changes

STAFFING
• Filling and keeping filled with qualified people all
positions in the business. Recruiting, hiring, training,
evaluating and compensating are the specific
activities included in the function. In the family
business, staffing includes all paid and unpaid
positions held by family members including the
owner/operators.
• The managerial function of staffing involves manning
the organization structure through proper and
effective selection, appraisal and development of the
personnels to fill the roles assigned to the
employers/workforce.

Nature of Staffing Function
1. Staffing is an important managerial function- Staffing function is the most
important managerial act along with planning, organizing, directing and
controlling. The operations of these four functions depend upon the manpower
which is available through staffing function.
2. Staffing is a pervasive activity- As staffing function is carried out by all mangers
and in all types of concerns where business activities are carried out.
3. Staffing is a continuous activity- This is because staffing function continues
throughout the life of an organization due to the transfers and promotions that
take place.
4. The basis of staffing function is efficient management of personnels- Human
resources can be efficiently managed by a system or proper procedure, that is,
recruitment, selection, placement, training and development, providing
remuneration, etc.
5. Staffing helps in placing right men at the right job. It can be done effectively
through proper recruitment procedures and then finally selecting the most
suitable candidate as per the job requirements.
6. Staffing is performed by all managers depending upon the nature of business, size
of the company, qualifications and skills of managers,etc. In small companies, the
top management generally performs this function. In medium and small scale
enterprise, it is performed especially by the personnel department of that concern.

Steps involved in Staffing
1. Manpower requirements- The very first step in staffing is to plan the
manpower inventory required by a concern in order to match them with the
job requirements and demands. Therefore, it involves forecasting and
determining the future manpower needs of the concern.
2. Recruitment- Once the requirements are notified, the concern invites and
solicits applications according to the invitations made to the desirable
candidates.
3. Selection- This is the screening step of staffing in which the solicited
applications are screened out and suitable candidates are appointed as per
the requirements.
4. Orientation and Placement- Once screening takes place, the appointed
candidates are made familiar to the work units and work environment through
the orientation programmes. placement takes place by putting right man on
the right job.
5. Training and Development- Training is a part of incentives given to the
workers in order to develop and grow them within the concern. Training is
generally given according to the nature of activities and scope of expansion in
it.

Steps involved in Staffing
6. Remuneration- It is a kind of compensation provided monetarily
to the employees for their work performances. This is given
according to the nature of job- skilled or unskilled, physical or
mental, etc. Remuneration forms an important monetary
incentive for the employees.
7. Performance Evaluation- In order to keep a track or record of the
behaviour, attitudes as well as opinions of the workers towards
their jobs. For this regular assessment is done to evaluate and
supervise different work units in a concern. It is basically
concerning to know the development cycle and growth patterns
of the employeesin a concern.
8. Promotion and transfer- Promotion is said to be a non- monetary
incentive in which the worker is shifted from a higher job
demanding bigger responsibilities as well as shifting the workers
and transferring them to different work units and branches of the
same organization.

DIRECTING
• Refers to the process of motivation, communication
and leadership
• The purpose of directing is to channel the behavior
of all personnel to accomplish the organization's
mission and objectives while simultaneously helping
them.
• DIRECTING is said to be a process in which the
managers instruct, guide and oversee the
performance of the workers to achieve
predetermined goals. Directing is said to be the heart
of management process. Planning, organizing,
staffing have got no importance if direction function
does not take place.

Direction has got following characteristics:
1. Pervasive Function - Directing is required at all levels of organization. Every
manager provides guidance and inspiration to his subordinates.
2. Continuous Activity - Direction is a continuous activity as it continuous
throughout the life of organization.
3. Human Factor - Directing function is related to subordinates and therefore it is
related to human factor. Since human factor is complex and behavior is
unpredictable, direction function becomes important.
4. Creative Activity - Direction function helps in converting plans into
performance. Without this function, people become inactive and physical
resources are meaningless.
5. Executive Function - Direction function is carried out by all managers and
executives at all levels throughout the working of an enterprise, a subordinate
receives instructions from his superior only.
6. Delegate Function - Direction is supposed to be a function dealing with human
beings. Human behavior is unpredictable by nature and conditioning the
people’s behavior towards the goals of the enterprise is what the executive
does in this function. Therefore, it is termed as having delicacy in it to tackle
human behavior.

Importance of Directing Function
1.It Initiates Actions
2.It Ingrates Efforts
3.Means of Motivation
4.It Provides Stability
5.Coping up with the changes
6.Efficient Utilization of Resources

Controlling
• Controlling consists of verifying whether everything
occurs in conformities with the plans adopted,
instructions issued and principles established.
Controlling ensures that there is effective and efficient
utilization of organizational resources so as to achieve
the planned goals.
• Controlling measures the deviation of actual
performance from the standard performance,
discovers the causes of such deviations and helps in
taking corrective actions
• Controlling has got two basic purposes
»It facilitates co-ordination
»It helps in planning

Features of Controlling Function
1. Controlling is an end function- A function which comes once the
performances are made in conformities with plans.
2. Controlling is a pervasive function- which means it is performed
by managers at all levels and in all type of concerns.
3. Controlling is forward looking- because effective control is not
possible without past being controlled. Controlling always look
to future so that follow-up can be made whenever required.
4. Controlling is a dynamic process- since controlling requires
taking reviewal methods, changes have to be made wherever
possible.
5. Controlling is related with planning- Planning and Controlling
are two inseparable functions of management. Without
planning, controlling is a meaningless exercise and without
controlling, planning is useless. Planning presupposes controlling
and controlling succeeds planning.

Process of Controlling
1. Establishment of standards- Standards are the plans
or the targets which have to be achieved in the
course of business function. Standards generally are
classified into two-
– Measurable or tangible - Those standards which can be
measured and expressed are called as measurable
standards. They can be in form of cost, output, expenditure,
time, profit, etc.
– Non-measurable or intangible- There are standards which
cannot be measured monetarily. For example- performance
of a manager, deviation of workers, their attitudes towards
a concern. These are called as intangible standards.

2. Measurement of performance-
The second major step in controlling is to measure the performance. Finding
out deviations becomes easy through measuring the actual performance.
Performance levels are sometimes easy to measure and sometimes difficult.
– Measurement of tangible standards is easy as it can be expressed in units,
cost, money terms, etc.
– Quantitative measurement becomes difficult when performance of
manager has to be measured.
– Performance of a manager cannot be measured in quantities. It can be
measured only by-
• Attitude of the workers,
• Their morale to work,
• The development in the attitudes regarding the physical environment,
and
• Their communication with the superiors.
– It is also sometimes done through various reports like weekly, monthly,
quarterly, yearly reports.

3. Comparison of actual and standard performance-
Comparison of actual performance with the planned targets is very
important. Deviation can be defined as the gap between actual
performance and the planned targets.
• The manager has to find out two things here- extent of deviation and
cause of deviation.
• Extent of deviation means that the manager has to find out whether the
deviation is positive or negative or whether the actual performance is in
conformity with the planned performance. Major deviations like
replacement of machinery, appointment of workers, quality of raw
material, rate of profits, etc. should be looked upon consciously
• Once the deviation is identified, a manager has to think about various cause
which has led to deviation.
• The causes can be-
– Erroneous planning,
– Co-ordination loosens,
– Implementation of plans is defective, and
– Supervision and communication is ineffective, etc.

4. Taking remedial actions-
Once the causes and extent of deviations are known,
the manager has to detect those errors and take
remedial measures for it.
• There are two alternatives here-
– Taking corrective measures for deviations which have
occurred; and
– After taking the corrective measures, if the actual
performance is not in conformity with plans, the manager
can revise the targets. It is here the controlling process
comes to an end.

Secondary Functions of management
• Decision is a choice whereby a person comes to a
conclusion about given circumstances/ situation. It
represents a course of behavior or action about what
one is expected to do or not to do.
• Decision- making may, therefore, be defined as a
selection of one course of action from two or more
alternative courses of action. Thus, it involves a
choice-making activity and the choice determines our
action or inaction.
1. Decision Making

Secondary Functions of management
• All managerial functions viz., planning, organizing, staffing,
directing, coordinating and controlling are carried through
decisions. Decision-making is thus the core of managerial
activities in an organization.
• 1. Decision–making is a selection process and is concerned with
selecting the best type of alternative.
• 2. The decision taken is aimed at achieving the organizational
goals.
• 3. It is concerned with the detailed study of the available
alternatives for finding the best possible alternative.
• 4. Decision making is a mental process. It is the outline of
constant thoughtful consideration.
• 5. It leads to commitment. The commitment depends upon the
nature of the decision whether short term or long term.

Characteristics of Decision-Making
1. Rational Thinking:
It is invariably based on rational thinking. Since the human brain with its
ability to learn, remember and relate many complex factors, makes the
rationality possible.
2. Process:
It is the process followed by deliberations and reasoning.
3. Selective:
It is selective, i.e. it is the choice of the best course among alternatives. In
other words, decision involves selection of the best course from among the
available alternative courses that are identified by the decision-maker.
4. Purposive:
It is usually purposive i.e. it relates to the end. The solution to a problem
provides an effective means to the desired goal or end.
5. Positive:
Although every decision is usually positive sometimes certain decisions may
be negative and may just be a decision not to decide.

Characteristics of Decision-Making
6. Commitment:
• Every decision is based on the concept of commitment. In
other words, the Management is committed to every decision
it takes for two reasons- viz.,
(i) it promotes the stability of the concern and
(ii) every decision taken becomes a part of the expectations of
the people involved in the organization.
• Decisions are usually so much inter-related to the
organizational life of an enterprise that any change in one area
of activity may change the other areas too.
7. Evaluation:
• Decision-making involves evaluation in two ways, viz.,
(i) the executive must evaluate the alternatives, and
(ii) he should evaluate the results of the decisions taken by him.

2. Leadership
• Leadership is an important element of the directing
function of management. Wherever, there is an
organized group of people working towards a common
goal, some type of leadership becomes essential.
• “The power of leadership is the power of integrating.
Leadership is the ability to build up confidence and zeal
among people and to create an urge in them to be led.
• To be a successful leader, a manager must possess the
qualities of foresight, drive, initiative, self-confidence
and personal integrity.
• Different situations may demand different types of
leadership.

Characteristics of Leadership
1. Leadership is a personal quality.
2. It exists only with followers. If there are no followers, there is no
leadership.
3. It is the willingness of people to follow that makes person a leader.
4. Leadership is a process of influence. A leader must be able to
influence the behaviour, attitude and beliefs of his subordinates.
5. It exists only for the realization of common goals.
6. It involves readiness to accept complete responsibility in all
situations.
7. Leadership is the function of stimulating the followers to strive
willingly to attain organizational objectives.
8. Leadership styles do change under different circumstances.
9. Leadership is neither bossism nor synonymous with; management.

Leadership Functions:
Following are the important functions of a leader:
1. Setting Goals:
A leader is expected to perform creative function of laying out goals and policies to
persuade the subordinates to work with zeal and confidence.
2. Organizing:
The second function of a leader is to create and shape the organization on
scientific lines by assigning roles appropriate to individual abilities with the
view to make its various components to operate sensitively towards the
achievement of enterprise goals.
3. Initiating Action:
The next function of a leader is to take the initiative in all matters of interest to the
group. He should not depend upon others for decision and judgment. He
should float new ideas and his decisions should reflect original thinking.
4. Co-Ordination:
A leader has to reconcile the interests of the individual members of the group with
that of the organization. He has to ensure voluntary co-operation from the
group in realizing the common objectives.

Leadership Functions:
5. Direction and Motivation:
It is the primary function of a leader to guide and direct his group
and motivate people to do their best in the achievement of
desired goals, he should build up confidence and zeal in the work
group.
6. Link between Management and Workers:
A leader works as a necessary link between the management and the
workers. He interprets the policies and programmes of the
management to his subordinates and represents the subordinates’
interests before the management. He can prove effective only
when he can act as the true guardian of the interests of his
subordinates.

Qualities of a Good Leader
Some of the qualities of a good leader are as follows:
1. Good personality.
2. Emotional stability.
3. Sound education and professional competence.
4. Initiatives and creative thinking.
5. Sense of purpose and responsibility.
6. Ability to guide and teach.
7. Good understanding and sound judgment.
8. Communicating skill.
9. Sociable.
10. Objective and flexible approach.
11. Honesty and integrity of character.
12. Self confidence, diligence and industry.
13. Courage to accept responsibility

Importance of leadership
1. It Improves Motivation and Morale:
Through dynamic leadership managers can improve motivation
and morale of their subordinates. A good leader influences the
behaviour of an individual in such a manner that he voluntarily
works towards the achievement of enterprise goals.
2. It Acts as a Motive Power to Group Efforts:
Leadership serves as a motive power to group efforts. It leads the
group to a higher level of performance through its persistent
efforts and impact on human relations.
3. It Acts as an Aid to Authority:
The use of authority alone cannot always bring the desired results.
Leadership acts as an aid to authority by influencing, inspiring and
initiating action.

Importance of leadership
4. It is Needed at All Levels of Management:
Leadership plays a pivotal role at all levels of management because in
the absence of effective leadership no management can achieve the
desired results.
5. It Rectifies the Imperfectness of the Formal Organisational
Relationships:
No organizational structure can provide all types of relationships and
people with common interest may work beyond the confines of
formal relationships. Such informal relationships are more effective
in controlling and regulating the behaviour of the subordinates.
Effective leadership uses there informal relationships to accomplish
the enterprise goals.
6. It Provides the Basis for Co-operation:
Effective leadership increases the understanding between the
subordinates and the management and promotes co-operation
among them.

Process or Techniques of Effective Leadership
1. The leader should consult the group in framing the
policies and lines of action and in initiating any radical
change therein.
2. He should attempt to develop voluntary co-operation
from his subordinates in realizing common objectives.
3. He should exercise authority whenever necessary to
implement the policies. He should give clear, complete
and intelligible instructions to his subordinates.
4. He should build-up confidence and zeal in his followers.
5. He should listen to his subordinates properly and
appreciate their feelings.
6. He should communicate effectively.
7. He should follow the principle of motivation.

3. Innovation
 Innovation is defined simply as a "new idea, device, or
method". However, innovation is often also viewed as
the application of better solutions that meet new
requirements, unarticulated needs, or existing market
needs.
 This is accomplished through more
effective products, processes, services, technologies, or
business models that are readily available
to markets, governments and society.
 The term "innovation" can be defined as something
original and more effective and, as a consequence,
new, that "breaks into" the market or society.

3. Innovation
Innovation is: production or adoption, assimilation,
and exploitation of a value-added novelty in economic
and social spheres; renewal and enlargement of
products, services, and markets; development of new
methods of production; and establishment of new
management systems. It is both a process and an
outcome.

Inter-disciplinary views
Business and economics
• In business and economics, innovation can be a catalyst
to growth.
• Entrepreneurs continuously look for better ways to
satisfy their consumer base with improved quality,
durability, service, and price which come to fruition in
innovation with advanced technologies and
organizational strategies.

Inter-disciplinary views
Organizations
 In the organizational context, innovation may be linked
to positive changes
in efficiency, productivity, quality, competitiveness,
and market share.
 Organizations can also improve profits and performance
by providing work groups opportunities and resources to
innovate, in addition to employee's core job tasks.
 All organizations can innovate, including for example
hospitals, universities, and local governments.

Sources of innovation
 There are several sources of innovation. It can occur as a
result of a focus effort by a range of different agents, by
chance, or as a result of a major system failure.
 Original model of three phases of the process of
Technological Change.

 Innovation by businesses is achieved in many ways, with
much attention now given to formal research and
development (R&D) for "breakthrough innovations".
R&D help on patents and other scientific innovations
that leads to productive growth in such areas as industry,
medicine, engineering, and government

4. Delegation of Authority
 A manager alone cannot perform all the tasks assigned
to him.
 In order to meet the targets, the manager should
delegate authority.
 Delegation of Authority means division of authority and
powers downwards to the subordinate.
 Delegation is about entrusting someone else to do parts
of your job.
 Delegation of authority can be defined as subdivision
and sub-allocation of powers to the subordinates in
order to achieve effective results.

Elements of Delegation
1. Authority -
 Authority can be defined as the power and right of a person to
use and allocate the resources efficiently, to take decisions and to
give orders so as to achieve the organizational objectives.
 Authority must be well- defined. All people who have the authority
should know what is the scope of their authority is and they
shouldn’t misutilize it. Authority is the right to give commands,
orders and get the things done.
 The top level management has greatest authority.
Authority always flows from top to bottom.
 It explains how a superior gets work done from his subordinate by
clearly explaining what is expected of him and how he should go
about it.
 Authority should be accompanied with an equal amount of
responsibility.

2. Responsibility -
 It is the duty of the person to complete the task assigned
to him.
 A person who is given the responsibility should ensure that he
accomplishes the tasks assigned to him. If the tasks for which
he was held responsible are not completed, then he should not
give explanations or excuses.
 Responsibility without adequate authority leads to discontent
and dissatisfaction among the person. Responsibility flows
from bottom to top.
 The middle level and lower level management holds more
responsibility.
 The person held responsible for a job is answerable for it

3. Accountability -
 means giving explanations for any variance in the actual
performance from the expectations set. Accountability can
not be delegated.
 For example, if ’A’ is given a task with sufficient authority, and
’A’ delegates this task to B and asks him to ensure that task is
done well, responsibility rest with ’B’, but accountability still
rest with ’A’.
 The top level management is most accountable.
 Being accountable means being innovative as the person will
think beyond his scope of job.
 Accountability, in short, means being answerable for the end
result.
 Accountability can’t be escaped. It arises from responsibility.

Delegation of authority
 Delegation of authority is the base of superior-subordinate
relationship, it involves following steps:-
1. Assignment of Duties –
The delegator first tries to define the task and duties to the
subordinate. He also has to define the result expected from the
subordinates. Clarity of duty as well as result expected has to be
the first step in delegation.
2. Granting of authority -
Subdivision of authority takes place when a superior divides and
shares his authority with the subordinate.
It is for this reason, every subordinate should be given enough
independence to carry the task given to him by his superiors.
The managers at all levels delegate authority and power which is
attached to their job positions. The subdivision of powers is very
important to get effective results.

3. Creating Responsibility and Accountability -
 The delegation process does not end once powers are granted
to the subordinates. They at the same time have to be obligatory
towards the duties assigned to them.
 Responsibility is said to be the factor or obligation of an
individual to carry out his duties in best of his ability as per the
directions of superior. Responsibility is very important. Therefore,
it is that which gives effectiveness to authority. At the same time,
responsibility is absolute and cannot be shifted.
 Accountability, on the others hand, is the obligation of the
individual to carry out his duties as per the standards of
performance. Therefore, it is said that authority is delegated,
responsibility is created and accountability is imposed.
 Accountability arises out of responsibility and responsibility
arises out of authority. Therefore, it becomes important that with
every authority position an equal and opposite responsibility
should be attached.

Principles of Delegation
1. Principle of result excepted-
Suggests that every manager before delegating the powers to the
subordinate should be able to clearly define the goals as well as results
expected from them. The goals and targets should be completely and
clearly defined and the standards of performance should also be notified
clearly.
2. Principle of Parity of Authority and Responsibility-
According to this principle, the manager should keep a balance between
authority and responsibility. Both of them should go hand in hand.
According to this principle, if a subordinate is given a responsibility to
perform a task, then at the same time he should be given enough
independence and power to carry out that task effectively.
This principle also does not provide excessive authority to the
subordinate which at times can be misused by him. The authority should
be given in such a way which matches the task given to him.
Therefore, there should be no degree of disparity between the two.

3. Principle of absolute responsibility-
This says that the authority can be delegated but responsibility cannot
be delegated by managers to his subordinates which means
responsibility is fixed. The manager at every level, no matter what is his
authority, is always responsible to his superior for carrying out his task
by delegating the powers. It does not means that he can escape from his
responsibility. He will always remain responsible till the completion of
task.
4. Principle of Authority level-
This principle suggests that a manager should exercise his authority
within the jurisdiction/framework given. The manager should be forced
to consult their superiors with those matters of which the authority is
not given that means before a manager takes any important decision, he
should make sure that he has the authority to do that on the other
hand, subordinate should also not frequently go with regards to their
complaints as well as suggestions to their superior if they are not asked
to do.
This principle emphasizes on the degree of authority and the level upto
which it has to be maintained.

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