Planning: concept and process

“If you fall to plan, you plan to fail”

Meaning of planning:  Planning forms that part of management which lays down the objectives and various activities to be done for the attainment of those objectives. Under this it is decided what has to be done? How is to be done? When is to be done? Deciding about all these things is called planning.  A problem about taking decisions on these matters arises when there are, more than one possible answer.  Therefore, it can be said to be a process of choosing.

According to M.E.HARLEY,” planning is deciding in advance what is to be done. It involves to selection of objectives, polices, procedures and programmes from among alternatives.”

According to koontz and o’donnel,” planning is deciding n advance what to do, how to do it, when to do it, and who is to do it.”

Characteristics or nature of planning:

1.     Planning is an intellectual process: planning is chiefly an intellectual process which means thinking before doing.  The success of planning depends on the manager and his ability to collect the facts which are like to affect planning whether these facts are connected with the present situation or the estimated future changing; how correctly he studies and evaluates these facts; and how correctly he takes his decision on their basis.  The whole process happens to be intellectual and for the successful completion of all these activities the planner should have far sightedness, imaginative power and decision making capacity.  A planner should mainly consider the following questions:

*what is to be done?

*how is it to be done?

*when is it to be done?

*by who, is it to be done?

Taking decisions on all these questions depend on the competence of the planner.  therefore it can be said that planning requires thinking at every step.  Hence, it can be considered as an intellectual process.

2.     Planning is selection of the best alternative: the second important characteristic of planning is the selection of the best alternative.  There can be many ways of doing a work and the planner selects the best possible alternative. Therefore, it can be said that planning involves the selection of the best alternative and rejection of the inappropriate ones.

3.     Planning is all pervasive: it will be appropriate to describe planning as all pervasive because it operates at all the levels of management in an enterprise.  It is an important function of every manager to plan things whether he is a managing director or simply a foreman in a factory.  Some people are of the opinion that planning is the job of only the high level managers but it is not true.  It can, however, be admitted that the high level , managers spend more time in comparison to the middle level or lower level managers in the work of planning. It is, therefore, clear that all the managers working in an enterprise have to plan their activities.

4.     Planning is the primary function of the management:  planning is the primary function of management and all other function like organising, staffing, leading, and controlling come later.  In the absence of planning no other function of management can be completed.  Undoubtedly planning is the first function of management but it does not mean that after planning when other function of management.  Without planning neither organization can be created, nor staffing can be done.  Similarly, planning is needed in case of leading and controlling.

5.     Planning is forecasting:  planning always takes into consideration the future.  Under planning, on the basis of collected facts, the future is anticipated and proper decision taken, thus, we can say that forecasting is the essence of planning.

6.     Planning is a continuous process:  planning is that process which begins with the establishment of the organisation and ends with the organization.  In the other words, the process of planning continues so long as the organization continues to exist.  A manager starts planning before the work is started and when one work is accomplished planning for the other begins and this process continues.  Thus, planning is a continuous process.

7.     Planning is flexible:  planning involves forecasting the future which is uncertain.  It is quite possible that the basis of the forecast made by the manager or the facts on which he makes his planning under ago some changes in his planning according to the changed facts or situations, it can thus be said that planning is a flexible process.

8.     Planning is goal oriented: an enterprise in establishment with some pre determined objectives and planning tells us how to achieve them.  Therefore, it is clear that planning without some objectives is meaningless.

9.     Planning is an interdependent process:  the activities of an enterprise are divided into many departments like purchase department. Sales department, production department, finance department, personnel department, etc.  all these departments have their own separate plans which are the parts of a master plan of a particular department due to some reason, the plans of all other department have to be ,modified accordingly.  For example, if the sales department achieves more sales than the anticipated quantity, its plans shall have to be modified resulting in more purchases and production to cope with the demand of the sales department. This, in turn, necessitates changes in the plans of the purchase and production departments as well.  Thus the departmental planning depends on one and other.

10.         Planning leads to efficiency and economy: planning makes it possible to utilize the available human and material resources in the most favourable manner in an organization.  Capital, labour, material, , machinery, etc., are utilized in a manner to produce the maximum quantity of the best quality goods with minimum cost.

11.         Planning considers limiting factors:  the quantity of available resources of production has to be kept in mind before planning.  If a manager ignores the limited resources, planning is bound to fail.  For example, if the raw material will be limited factor, only after its availability is decided, the other activities like production, sales, etc., can be thought of.

12.         Planning creates coordination:  in any organization coordination of all the activities is necessary to run the work unhindered.  With the help of planning what, why, who, where, when, etc. of every things is clarified.  Doubts are cleared and coordination is established. Planning makes it clear as to what is to be done, why it is being done, who will do it, where it will be done and when it will be done. On the other hand, without planning nobody will know what is to be done and what is not to be done.

ORGANISING

“ A  POOR ORGANISATION COULD RUN A GOOD PRODUCT INTO THE GROUND AND THAT A GOOD ORGANISATION WHICH HAS COMPATATIVELY POOR PRODUCT COULD RUN A GOOD PRODUCTD OUT  OF THE MAKET”

After having decided about the first function of management i.e., planning and after having determined what is to be done, how it is to be done, and by whom it is to be done.  It however, remains to be seen as to how all these business activities can be done in a planned manner.  On other words, how the objectives determined under planning can be successfully achieved.  For the successful achievement of these objectives determined under planning can be successfully achieved.  For the successful achievement of these objectives it is necessary to divide the main activity into various sub activities and determine the relationship between those persons who are to perform those activities or functions.  For examples in an enterprise under planning it has been planned to produce t.v sets. Now in order to achieve this objective the main activity will be sub divided into various activities among the sales department, production department, marketing department, finance department, etc. various persons appointed on various posts in all these departments

Will work for this purpose.  Now it will be decided about all these persons as to what will be their authority and responsibility and who will be the superior and who will be the subordinates.  In this way an effort is made to achieve the objectives of the enterprises by dividing the main work into sub work and deciding the relationship between the persons engaged in these activities. Doing this all is called organization.

   

    MEANING OF THE ORGANISATION:

  The word organizing is derived from the word organism which means that a unit with many parts and each part of it, even though working independently, as a define relationship with the main unit.  In a business all the departments or posts have their separate function but they are all related to the main objective of the business.  In others words, organization means deciding about the various departments and the posts in these departments and the relationship between them, morever, in order to run their work smoothly, their authority and responsibility have to be prescribed. It must be made clear that the need for an organization arises only even the number of people working in an enterprises is more than one.  If there is only one person.  He is expected to perform all the function single handed and there will be no need to divide the work.  In the absence of division of work, organization is meaningless.

SIGNIFICANCE OR ADVANTAGES OF ORGANISING

    Organisation is an instrument that defines relations among different people which helps them to understand  as to who happens o be their superior and who is their information helps in fixing responsibility and developing coordination.  In such circumstances the objectives of the organization van be easily achieved. That is why, it is said that, organization is a mechanism of management.  In addition to that it helps in the other functions of management like planning, staffing, leading, controlling, etc.  the importance of organization or its merits becomes clear from the following facts:

1.       INCREASE IN MANAGERIAL EFFICIENCY: A good and balanced organization helps the managers to increase their efficiency.  Managers, through the medium of organization, make a proper distribution of the whole work among different people according to their ability.  Relation among different people come to be established, available resources stat getting used efficiently and thus the pre determined objectives can be easily achieved.

2.       PROPER UTILASATON OF RESOURCES: Through the medium of organisation optimum utilisation of all the available human and material resources of an enterprise becomes possible.  Work is alloted to every individual according to his ability to the maximum extent.  For example if an employee possesses the knowledge of modern machinery but the modern machinery is not available  in the organization, in that case, efforts are made to make available the modern machinery.

3.       SOUND COMMUNICATION POSSIBLE: Communication is essential for taking the right decision at the right time.  However, the establishment of a good communication system is possible only through an organization.  In an organization the time of communication is decided so that all the useful information reaches the officers concerned  which, in turn, helps the decision making.

4.       FACILITATES COORDINATION: In order to attain successfully the objectives of the organization, coordination among various activities in the organization is essential.  Organization is only medium which makes coordination possible.  Under organization the division of work is made in such a manner as to make all the activities complementary to each other increasing their inter dependence.  Inter dependence gives rise to the establishment of relation which in turn, increases coordination.

5.       INCRESE IN SPECIALISATION:  Under organisation the whole work is divided into different parts.  Competent persons are appointed to handle all the sub works and by handling a particular work repeatedly they become specialists.  This enables them to have maximum work performance in the minimum the organization gets the benefit of specialization.

6.       HELPFUL IN EXPANSION: A good organization helps the enterprises in facing competition.  When an enterprise starts making available good quality product at cheap rates, it increases the demand for its products.  In order to meet the increasing demand for its product an organization has to expand its business.

7.       CHECK ON CORRUPT PRACTICES: In a good oganisation all the employee are assigned work according to their ability and they get their remuneration according to their work.  In such a situation they work hard and with honesty leaving no scope for corruption to breed.

8.       DECREASES EMPLOYEES TURNOVER: In good organization employees get job satisfaction, therefore, they never think of leaving it.  Thus, there is a decrease in the employees turnover and the organization saved of the trouble of recruiting new employees and giving them training which results in economy.

9.       BETTER HUMAN RELATION: A good organization we have the right man at the right job.  This gives a complete information about the ability and capacity of the employees, arrangement for giving him training is made.  The word development is used for the managers.  Managers are provided with information for facing future problems along with special development facilities in the particular wards.

10.   DEVELOPING OF NEW IDEAS:   in a good organisation employees are comparatively mentally satisfied.  New and independent ideas are born in such a situation, every employee makes efforts to find out new technique in his work performance which leads to increase in the productivity of an organization.

11.   INCREASE IN SPECIALISATION:  Under organization the whole work is divided into different parts.  Competent persons are appointed to handle all the sub works and by handling a particular work repeatedly they become specialists.  This enables them to have maximum work performance in the minimum time while the organization gets the benefit of specialization.

12.   FACILITATES PROMOTION:  In the organization every body knows fully well his position in the organization.  He also knows the qualifications required for the post above his own rank.  When a higher post falls vacant the possibility of his promotion becomes apparent.

    It becomes clear from the above mentioned facts that organization has the same importance for management as a structure of bones in a human body.  In other words, organizing Is a very important function of management.

Departmentation

We divided the dimesions jof a formal organisational structure into two parts- vertical dimensions and horizontal dimensions.  The horizontal dimensions of the organisation structure is based on the process of specialisation.  It means that the whole work is divided into many groups on the asis of similar with of work so that an officer with special ability and proficiency can be appointed for each work group.  Because of specialization there  is decrease in the work load of not only every offcier or manager of each work. group but each officer can perform his function more efficiently, dividing work on the basis of specialization is known as departmentation, and the work groups thus established are called departments.

For example: a manufacturing concern can cancern can have production, marketing , financial and personnel departments.  Before establishing these departments the  work is dicided on the basis of the aims or objectives of the enterprises.  All the activities of a similer  nature are put together in a work group of department. 

NEED AND IMPORTANCE OF DEPARTMENTATION:

1.       DEVELOPMENT OF MANAGERIAL SKILL:  Because of departmentation the managers perform certain function tome and again, and remaining within their limit take decision about them.  They become expert in their department within a short span of the time.  Their being expert in their field helps them in their work performance which is not only good but is also done within the minimum time.

ESTABLISHMENT OF MANAGEABLE UNIT

DECISION MAKING: CONCEPT AND PROCESS

IF THERE IS ANY UNIVERSAL MARKS OF A MANAGER, IT IS DECISION MAKING.”

Meaning of decision making

   Decision making means  analyzing different alternatives and arriving at decision in the face of a particular situation about what to do and what not to do.  In this way decision making means reaching a conclusion or final decision which can be implemented as a solution of a problem.  Since the managers are invariably faced with some problem or the other for which they have to find a solution, it is said that decision making is perpetually needed and simon has very pertinently observed that “ to make decision is management”

According to GEORGE R.TERRY,” decision making is the selection based on some criteria from two or more possible alternatives.”

Characteristics or nature of decision making:

1.        It is a process of selecting the best from the alternatives: the first characteristic of decision making is that under it the best alternative is selected out of the many available ones.  There are many ways to sole a problem.  The manager selects the best one out of them all  for example, if an organization has the problem of increasing sales, there can be many ways of solving this problem like reducing prices, more and good advertisement, making available the facility of selling goods on credit, etc.  the manager has to select the best appropriate alternative out of them.

2.       DECISION MAKING IS BASED ON RATIONAL THINKING: ration thinking is considered to be essence of decision making because the conclusions arrived at with the help of decision making and their success depends on rational thinking or intensive study.

3.       DECISION MAKING IS ALWAYS RELATED TO SOME PROBLEM OR CONFLICT: since the purpose of decision making is to find out solution to problems or conflicts, it is naturally related to them.  In other words, if there are no problems or conflicts, decision making ad manager will both come to their importance. In this context it is said that problems are diet or food upon which a manager lives and prospers.

4.       IT INVOLVES THE EVALUATION OF VARIOUS AVAILABLE  ALTERNATIVES:  it is evident that in case there is only one solution to a problem, decision making is not needed.  There should be many alternatives for taking a decision.  When there will be many alternatives, they will be evaluated through the medium of decision making.  In other words, the best alternative will be chosen after taking into consideration merits and demerits.

5.       DECISION MAKING IS AIMED AT ACHIEVING ORGANISATIONAL GOALS: decision making is not a futile exercise because through its medium efforts are made to achieve the goals of an organization successfully.

6.       DECISION MAKING INVOLVES COMMIMENT:  Every decision taken by a manager is a promise.  In other words, a manager through the medium of decision, tells us that the consequences of the decisions taken by him will be good.

7.       IT IS BASICALLY A HUMAN ACTIVITY: One of the special characteristics of decision making is that it is a human activity.  Decisions are taken by men and are meant for them.

8.       DECISION MAKING IS BOTH A MANAGERJIAL FUNCTION AND AN ORGANISATIONAL PROCESS: It is a managerial function because decision making is the chief responsibility of all the managers.  It is called organizational process because there are many decisions which a manager cannot take single handed and they need a group of managers or a committee of managers.

9.       DECISION MAKING IS THE CORE OF PLANNING: Although decision making is needed for  all the managerial functions, yet planning is completely dependent on decision making because all the chief or major decisions are taken here.  When under planning the functions of determining objectives, policies, procedures, rules, etc., are performed, decision making has a special importance.

10.   DECISION STRARTS ACTION: When a problem arises, work is immediately  suspended and till a decision is taken the work cannot recommence.  Therefore, the future activity starts only after a decision is taken.

11.   UNCERTAINTY OF RESULTS: It is true that the best alternative is chosen only after an analysis of the various alternatives but the consequences of the best alternative are uncertain as it an imaginative action with reference to future.

12.   IT IS A UNIVERSAL MARK OF A MANAGER: Decision making is a universal mark of a manager. It means whatever a manager does is based on decision making and this speciality is found every where and in every manager.

13.   IT MAY BE NAGATIVE: Decision can both be positive and negative, positive decision means deciding to do something while negative decision means doing nothing.

                  OCCASIONS FOR DECISION MAKING

1.       AT THE TOME OF GETTING ROUTINE INFORMATION: The first opportunity to take decision is provided to the manager at the time of getting daily routine information.  For example, on the basis of sales information, a decision has to be taken regarding the declining sales and; taking decision to take action against the regular absentees on the basis of the attendance register for the employees.

2.       AT THE TIME OF GETTING SPECIAL INGORMATION: Apart from routine information, the managers sometimes get special information from the subordinates:  an occasion for decision making arises when the subordinates are helpless in solving a problem or the subordinates have not been given any specific instruction regarding that problem.  For example, when a supervisor requests the manager to purchase some new machinery particularly when it has not been working satisfactorily even after having been repeatedly repaired, it will be treated as a special information and on the basis of this information a decision will be taken by the manager.

3. AT THE TIME OF INITIATIVE OF THE EXECUTIVE CONCERNED: It is not only the routine information of  the special information which alone provides occasions for decision making, but sometimes managers, keeping in view the business situations, take decision on their own initiative.  For example, a manager can take decision to provide some special facilities to the employees of the organization if he finds that some rival organization is going to do so.  Similarly, if a manager gets information about some modern machinery being available, he can take a decision to replace the old machinery.

              DECISION MAKING IN PRACTISE

      The practice of decision making for a business organization is no secret. various managerial functions are performed only through decision making.  On its basis it can be asserted that it is not a new idea but is as old as the business itself.  The only difference is that previously decision making depended on unscientific methods but in modern times with the development of business there is a corresponding increase in its complexities and, therefore, modern techniques.  The obvious answer is in the nature of the business. It is, however, a different matter that all he managers do not have the knowledge on the modern techniques.  When they start getting information about these techniques they can be expected to utilize it in the solution of their problems

Departmentation

We divided the dimesions jof a formal organisational structure into two parts- vertical dimensions and horizontal dimensions.  The horizontal dimensions of the organisation structure is based on the process of specialisation.  It means that the whole work is divided into many groups on the basis of similar with of work so that an officer with special ability and proficiency can be appointed for each work group.  Because of specialization there  is decrease in the work load of not only every offcier or manager of each work. group but each officer can perform his function more efficiently, dividing work on the basis of specialization is known as departmentation, and the work groups thus established are called departments.

For example: a manufacturing concern can cancern can have production, marketing , financial and personnel departments.  Before establishing these departments the  work is decided on the basis of the aims or objectives of the enterprises.  All the activities of a similer  nature are put together in a work group of department. 

NEED AND IMPORTANCE OF DEPARTMENTATION:

1.       DEVELOPMENT OF MANAGERIAL SKILL:  Because of departmentation the managers perform certain function tome and again, and remaining within their limit take decision about them.  They become expert in their department within a short span of the time.  Their being expert in their field helps them in their work performance which is not only good but is also done within the minimum time.

2.       ESTABLISHMENT OF MANAGEABLE UNIT: Under depamentation all the activities in an enterprise are divided into different departments.  It becomes easier to manage these small departments.  A head of each department  is appointed who has the knowledge and experience of that particular department.  Manager or head with the help of their knowledge and experience of that particular department.  Manager or heads with the help of the it knowledge and experience perform their function in time and in an economical manner.  This increase the goodwill of the enterprise.

3.       FIXATION OF RESPONSBILITIES:  Under departmentation it becomes possible to define the responsibilities of every head of the department.  If an empliyee is assigned the work of the whole enterprise rather than one particular work, it becomes difficult to fix his responsibilities.  In that case each employee tries to shift responsibility for unfavourable results to others.  On the contrary, when responsibility is fixed it becomes velar to all the managers as to what they are expected to do or avoid doing.  Thus, their whole attention gets riveted to one direction, and consequently their efficiency increase.

4.       PERFORMANCE APPRAISAL POSSIBLE: After the division of work the performance of each department can be assessed.  Standards for all departments are laid down and the actual work performance is compared with the standards laid down and an attempt is made to find out the deviations.  Thus, the knowledge about the unfavourable results is obtained in time and corrective action initiated and the persons concerned can be held responsible.

5.       BUDGETING FACILATATED: Because the cost in each department can be estimated, it becomes easier to frame the departmental budget.

6.       CONTROL EXPENDITURE: If the enterprise is run as a single unit it becomes difficult to have a control over the expenses, while the expenses can be controlled by dividing the whole enterprises into smaller units,  all the activities of a department are performed under supervision of one ndividual and he knows what expenses are necessary or otherwise.  In this way departmentation helps in keeping control over expenses.

7.       ADVNAAGE OF SPECIALISATION: Specialisation is the basis of departmenbtation and it is, therefore, natural for the enterprises to have the advantages of specialization.  When a particular individual performs a job repeatedly he becomes an expert and does his job well, in the minimum time and less cost. this is the advantages of specialization which an enterprise gets through the medium of departmentation.

FACTORS TO BE CONSIDERED IN DEPARTMENTATION:

1.       SPECIALISATION: Specialisation is the foundation of departmentation and, therefore, whatever may be the method of departmentation  it must have a place for specialization.

2.       COORDINATION: A department should have the function of the same nature so that coordination remains intact.  Unnecessary and opposing functions should be excluded.

3.       CONTROL: That method of departmentation happens to be good which can ensure control.  Such a system should be established as can ensure the control of one man’s work by another person.

4.       SOGNIFICANCE OF ACTIVITIES: Departmantation should be done in manner so as to ensure more attention to the more significant activities.  For example, if the advertisement happens to be a significant activity.  For example, if the advertisement happens to be a significant activity, it should be kept separate from the marketing department so that special attention can be given to it.

5.       FACILITIES AVAILABLE: While going through the process of departmetation the facilities available in the concern should be kept separate from the marketing department so that special attention can be given to it.

6.       ECONOMY: The number of departments in a business organisation inincreases administrative expenses.  Therefore, it should be thoroughly considered as to how many departments are needed in a concern so that unnecessary expenses are avoided, for example by not having a separate accounts department, it can be combined with finance department and economy can be affected.

7.       TO SEE THE COMPETITORS: During the process of departmentation care should taken to0 know about the basis of departmentation in the other business concerns having the same business.  If that basis appears appropriate it should be adopted.

Thus, we find that departmentation is not an essay job.  Many factors have to studied deeply to complete  this process.  Only after such a deep study the decision taken can prove to useful.

BUSINESS MANAGEMENT

meaning of the business:-

                          in the restricted sense of the term, business will be treated as the purchase and sale of the things.  But in the broader sense of the term, business of the sum total of all the activities which starts which starts from the production of good and services seen to the task of taking them to the consumers.  here service mean those activities which are connected with the carrying of goods from the place of production and taking them to the place of the consumption.  For example, they included transport and communication, insurance, storing, banking etc.

characteristics of business:-

     *An economic activity

     *Exchange of goods and services

     *Regularity in dealings

     *profit motive

     *Element of the risk

     *Creation of the utility

     *Consumers satisfaction

NATURE OF THE BUSINESS:-

1.       BUSINESS AS A SOCIAL  ACTIVITY:  One of the important aspect of nature of business is that it is a social activity.  Social activity is one which is related with the creature living n society.  Business is for the society.  By the society. Business cannot be done without society.  For instance, if someone decides to do business in a jungle he cannot do so.  Business exist due to the factors provided by society,  business gets raw material, man power, capital and other sources from society,  it produces and distributes the goods which are used by the society in exchange of some consideration,  hence, it is evident  that business is social activity and integral part of society.  In light of all these evidences, one can safely say that business has certain responsibilities towards society, which business must fulfill.  The main objective of business is to provide good quality of product at reasonable price and in proper quantity to its customer, besides this expectation and feeling of employees and other people associated with business cannot be overlooked.

2.       BUSINESS AS AN ECONOMIC ACTIVITY: The another aspect of nature of business is that it is an economic activity.  Economic activity is an activity which is performed to earn money,  business is also an economic activity.  Economic activity is an activity which is performed to earn money,  now the question is how business earn money? Business produces good and services and in exchange of some consideration, transfer them to consumer.  In this manner, business earn money.  No one wants to do a business which is not making profits.  Hence, business and earning money go and n hand.  As soon as objective of earning money is separated from economic activity, it does not remain an economic activity, it does not remain an economic activity anymore.  It becomes a non-economic activity and any non-economic activity cannot be business. hence, what is required for calling any activity a business activity is presence of motive of profit earning.  Hence, whatever activities are performed in business., their main objective is to earn profit.  So it can be concluded is an economic activity.

3.       BUSINESS  IS NOT A PROFESSION: In important question which can be asked regarding the nature of business is whether it is a profession? The answer is –no.  business cannot be put in the category of profession. On needs to have a specific knowledge.  For instance, doctor, advocate, engineers, etc.,  needs field, is known as profession.  for running a business, that is not at all required.  Hence, it is clear that nature of business is not that of profession.

4.       BUSINESS A SYSTEM: System is a group of many small sub- system. In other words, a group is formed by merger of many small units which is called as system  in this sense, business is also a sales, purchase, production, distribution, marketing, research, finance, etc., are included. All sub activities are independent in themselves but are related with each other for  one or other reason.  In this manner, all related sub-system form a large which is called as business.  The detailed explanation of this aspect of nature of business has been made in the next heading “BUSINESS SYSTEM IS A PART OF AN ECONOMIC SYSTEM”.

BUSINESS SYSTEM IS A PART OF A ECONIMIC SYSTEM

     The main question related to business system and economic system is whether business system is a part of an economic system?  for getting the answer of the question, there items are to be understood carefully.  These are system economic system and business system. 

OBJECTIBE OF THE SYSTEM :

1.       PROPER UTILISATION OF RESOURCES: By studying about a system, it is possible to achieve maximum and efficient utilasation of various limited resources.

2.       KNOWLEDGE OF INEFFICIENT ELEMENT: the another objective of studying a system is to ger the information about  ineffective unit of system.

     *Knowledge of the inefficient elements

MEANING OF THE ECONOMIC SYSTEM:

     Economy system or economy means that system under which limited resourses of the country are utilised in the most efficient manner to satisfy the unlimited wants of people.  Under  economic system it is decided that who will own the asset, who will own factors of production,  what will be the roll of the government, how the production and distribution of commodities will take place and how the prices of commodities will be determined?

TYPES OF THE ECONOMY:- 

     *Capital economy

     *Sociliest economy

     *Mixes economy

MEANIG OF THE BUSINESS SYSTEM:-

                                the business system is a combination of all resources, organisation and institution which are directly or indirectly related to be production and distribution of goods and services for the satisfaction of human needs.     

CONCEPTS OF BUSINESS:

1.       MAXIMUM PROFIT CONCEPT: The oldest concept of business is that maximum profit should be earned.  A per this concept, in any case, maximum profit must be earned, this is , no doubt, is correct motivation him to expand business.  Some scholers have conflicts for this concept.  Some are in favour of it and some are against it.

·         By earning maximum profit, trade cycle can be faced.

·         Maximum profit is a motivator for expansion of business.

·         Maximum profit is a motivator for expansion of business.

·         Maximum profit is a sign of glory.

·         Social welfare can be achieved by maximum profit.

·         Maximum profit is scale for success of business.

2.       REASONABLE PROFIT CONCEPT:  As per tis concept, objectives of business should be to earn reasonable profit instead of maximum profit.  Business should earn profit as much is required to live longer, develop itself and increase in respect and reputation of business.  Following facts support this concepts.

·         Reasonable profit enhance the respect and reputation of business.

·         Future mishappenings can be faced by reasonable profit.

·         Society is not exploited by reasonable profit. Reasonable profit reduces the inequality of wealth. Concept of  reasonabel profit teaches to work for national interest.

3.       SOCIAL RESPOSNSIBILITY CONCEPT:  Since business organisatons are a part of society they must have a positive attitude towards the needs of society.  Business is only a sub system of society and this sub system must contribute to the welfare of the main system. 

Management: an art or a science

·        

Management as an art:  to perform a job in the best possible way is art.  it decides the method of doing a thing and tells us how to achieve our objectives.  Art is an individual process because every artist has is own way of doing things.  In reality, art is a creative process and its success can be measured by the result achieved by the artist.  The manufacture of furniture by a carpenter and ornaments by a goby a goldsmith are examples of art.  Art can be improved with the help of continuous practice.  Some scholars have given the following definition of the art:

   

 According to G.R.TERRY ,”Art is bringing about of a desired result through application of skill”

Characteristics of the art:

1.      Personal skill:  in this context management is an art because in order to achieve the objectives of an organization, the manager makes use of his personal skill to overcome all the obstacles hindering the way of successful attainment of the objectives of the organization.  Thinking and taking decision are important in the work of management and these +qualities are found in varying degree among different managers.  Consequently, their style of getting work out of other people is also different. The quality of the personal skill being a characteristic of art is present in case of the management.

2.      Practical knowledge:  art point towards practical knowledge and is related with its actual application. Management is also practical knowledge. In business the importance of a manager is known from the fact of his applying the principals of management efficiently and effectively. The amount and extent of knowledge of the principles of management that a manager possesses is not of much value.  Performance of managerial functions requires a manager to have the power of making decision, efficient conduct and quality of leadership.

3.      Concrete result oriented approach:  the basis of art is the attainment of meaningful results.  In this context management also consists of the same concepts because management is also concerned with the achievement of realizing objectives.  For management meaningful results are getting maximum profit with the minimum of investment and labor; achieving the objectives of production and sales; ensuring appropriate profit on capital; etc. The success of a manager is determined by the fact that how efficiently and economically he has the pre determined objectives of the organization.

4.      Development through practice; just as art can be embellished with the help of practice, in the same way managerial skill also improves with practice.  Every manager has a desire to become a complete expert in his field.  He can fulfill his desire by continuous practice.  A fully developed manager not only, moulds the organization according to the changing circumstances but also has the capacity to change the outer circumstances according to his will.  Thus, management possesses this characteristic of art too.

5.      Creating power:  art possesses the inherent power of creativity.  Similarly management has the quality of creative art.  In management the work is completed by motivating other people and establishing coordination between their objectives is to create an atmosphere in which all people can perform their function efficiently. 

        Management as a science

 After having accepted the nature of management as an art, it remains to be seen whether it a science or not.  Before accepting or rejecting the claim of management to be considered as a science it is important to understand the meaning of science.

  Science is that systematic body of knowledge which man has acquired on the basis of observation and experiments and verification of this knowledge is possible.  The chief difference between art and science that under art we come to acquire the knowledge of how to accomplish something.  In other words what is the system of realizing the pre determined objectives?  Science on the other hand, tells us why is being done?  In other words, what is the secret of laying down of principles. Some chief definition of science is given below:

According to Keynes, ”science is a systematised body of knowledge which establishes relationship between cause and effect.”

1.      SYSTEMISED BODY OF KNOWLEDGE:  it is necessary for science to be a systematized body of knowledge, management is also a systematized body of knowledge because it come to be recognized after years of research and experimentation by management experts.

2.      Based on collection of facts, analysis and experiments:  after applying this characteristic of science to management we find that development of management took years for the collection of facts, their analysis and experiments.  In other words, management came into existence because of the continuous and encouraging labour of the theorists and various people concerned.

3.      Universal application: scientific principles are based on truth and they can be applied at every time in every situation.  Thus, its universal application is possible.  In the field of the management too, managerial knowledge and principals of management are considered to be based on truth and they, too, can be applied any where and in every situation.

4.      Cause and effective relationship: scientific principles always explain the relationship between cause and effect.  When its applied to management we come to know that the principles of management also establish this relationship between cause and effect. For example. Poor planning and the principle of distribution of work explain the correct or proper distribution as the cause and increase in efficiency as the result. In this way, we find these characteristics of science in management.

5.      Verification of the validity and prediction of results possible: more collection of knowledge and facts is not science. For science validity and prediction of results is important. The validity of the principal of management can also verified and result can be predicted on application of any special principal. Thus, the principal of management, like the principal of unity of command when put to practice tells us that a subordinate who gets commands from more than one officer to give him command will be more efficient than the other subordinate who gets commands from more than one officer. on the other hand, because of the relationship between cause and effect.  The possible results of the application of any principle can be predicted. For example, the application of the principle of the unity of command gives us the knowledge of possible results.

           On the strength of the above mentioned facts it can be said that management has both the characteristics of art and science, but it cannot be classified as a science of the nature of physics and chemistry.  He science of management is related to human beings and their conduct is subject to constant changes.  In other hand, the subject matter of management is man who jis an intelligent and sensitive being and whose behavior or conduct changes according to the changing situations.  Therefore no permanent principle like the principle of physics and chemistry can be enunciated in relation to his conduct or behavior.   That is why, the science of management, like all other social sciences is based on available situations and its results can never be permanent like the result of physics and the chemistry.  Clearly the science of management cannot be called a true science but it should be described as an applied science whose principles are subject to change according to time, situation and the nature of a man.

Management: an Introduction

    Management: an Introduction

Different experts have defined management on the basis of its features.  Some experts defined management as an ‘art of getting things done’, while others give more importance to its function oriented form.  In the same manner, same experts think management is related to ‘decision making ‘while others are of the opinion that ‘productivity and efficiency’ are its basis.  Following are the main definition of the management.

According to HAROLD KOONTZ,       ”Management is the art of getting things done through others and with formally organized groups”

WHAT IS MANAGEMENT????

     Management is the process conducting a set of functions planning, organizing, staffing, directing, controlling to get the work done efficient and effective manner. 

Nature and Characteristics of management

·         It is a group effort.

·         It is goal oriented process.

·         It has a distinct entity.

·         It is an intangible force.

·         It is a process.

·         It is an inborn and acquired ability.

·         It is a universal activity.

·         It is multidisciplinary.

·         It is a social science.

·         It is a system.

·         It is a dynamic system.

·         It involves social responsibility.

·         It is a profession.

·         It is a science or it is an art also.

Significance of the management

In the ancient times business was dime on a small scale and management had no special importance.  Now business is done on a big scale and consequently, various, complexities confront us.  The need of management has been felt in view of these complexities and their solution.  Now management has established itself as an art and with its help minimum effort can result in maximum prosperity.  In this regard the views of some modern management experts are given bellows:

According to ducker, management is a dynamic and life giving element of every business. In its absence the means of production remain merely the means and can never be the producers.

1.       ACHIEVING PRE-DETERMINED OBJECTIVES:  each organization is established with certain aims.  Management is the only medium and power which can help in the successful attainment of these aims.  A manager with the help of his expertise and cleverness makes an assessment of the future events.  He makes plans, creates an organization, distributers work, grants, and requisite authority, directs the employees and controls them.  By a critical assessment or appraisal he tries to find out deviation and finally by his corrective action makes the impossible look simple.

2.       ENSURING MAXIMUM UTILIZATION OF RESOURCES OF THE PRODUCTION:  management is that power which by establishing an effective coordination between the various resources of production makes an optimum use of these resources.  It is therefore clear that the most efficient use of the limited resources is the key to the successful business.  This fact can be converted into reality with the help of the management.

3.       OVERCOMING COMPETITION:  these days business is not localized but it has assumed national or even international dimensions, competition is increasing with the widening of area and larger competition with the widening of the area and larger dimension of the business.  A modern producer faces competition not only from a local producer or competition at the national level but international competition is also getting sharper. Only an efficient and clever manager can make it a reality and save the reputation of an organization.

4.       ENSURING INTEGRATION WITH CHANGING ENVIRONMENT: management is not only limited to various internal functions of an organization but it has to compromise with the outer atmosphere also.  On the one hand technical experts are devising new ways of production and while on the other hand progressive organizations are applying modern marketing techniques. With the help of efficient and effective management a co ordination between the new and prevalent work system and methods can be established to save the reputation of an organization.

5.       ENSURING SMOOTH RUNNING OF LARGE SCALE BUSINESS: keeping in view the profits of large scale production will also be required on a large scale.  Apart from this, business shall have to face various legal formalities.  To perform these functions efficiently and in a controlled manner, the need of an efficient manager is paramount.  Therefore, without an efficient manager smooth running of large scale business is not possible.

6.       MAINTAINING A SOUND ORGANISATIONAL STRUCTURE: a sound organizational structure is needed for the success of any enterprise.  A sound organizational structure means defining a clear relationship between the superiors and their subordinates.  It has to be decided what work will be done by various persons and what rights and duties they enjoy. It will lead to the creation of a team spirit and keep the work atmosphere clean and healthy.  All the superiors and subordinates will work without any tension. A sound organizational structure can be created by an efficient manager.

7.       ESTABLISHMENT GOOD LABOUR OWNER RELATIONSHIP:  labour and capital are the two main resources of production. The owners invest capital and determine objectives while the labour tries to transform those objectives into reality.  Therefore, existence of a sweet relationship between the two is of paramount importance. There was a time when there were no labour unions and the owners thought it fit to exploit the labour to the maximum possible extent.  Now the labour unions exist and they are sufficiently organized to expert pressure on the owners to get theirs demands conceded industrialists too have realized their importance.  It is clear to them that without the efficiency of labour more profits cannot be expected.  The efficiency of the labour can be increased only when their problems are effectively solved.  This can be possible only through management.  An efficient manager, with the help of the knowledge and experience understand the feelings of labour and tries to remove their grievances.  He makes arrangement for their training to increase their efficiency. 

8.       GIVING IMPORTANCE TO RESEARCH AND INVESTIGATION:  a recent research has brought out the fact that only those companies or business enterprises which are constantly taking interest in research activities are developing fast.  In the context of business, research and investigation mean finding out new products and new markets for the extensions of the business field, new methods of the distribution and adaption the use of new techniques to solve the financial problems and using new techniques in the field of the communication.  Efficient managers invariably establish resource and investigation department to achieve this important purpose.

9.       FULFILLING THE SOCIAL RESPONSIBILITY: A business establishment starts its activities in society prospers and reaches the climax of development in the same social surroundings.  Thus no organization can remain aloof from society and yet survive.  That is why every enterprise is considered as an integral part of the society.  When an enterprise is so much indebted to society it should also realize its responsibilities towards society.  The social responsibilities of a business organization include ensuring the safety of the capital and sufficient profit, proper remuneration and work condition for the employees, make available to the consumers good of good quality at the right time and proper prices, making available opportunity of employment to the people and making efforts to raise their standard of living.

10.   AIMING AT INCREASED PROFITS:  in order to increase profits of any organization it is basic principle either to increase the sales revenue or reduce costs.  Increasing the sales revenue is beyond the controls of an organization and it can certainly be accomplished with the help of good quality raw material modern machinery and trained employee.