Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Module-1
Management and Planning
Management is the act of getting people together to accomplish desired goals and objectives
using available resources efficiently and effectively. Management
comprises planning,organizing, staffing, leading or directing, and controlling an organization (a
group of one or more people or entities) or effort for the purpose of accomplishing a goal.
Resourcingencompasses the deployment and manipulation of human resources,
financial resources, technological resources and natural resources.
Since organizations can be viewed as systems, management can also be defined as human action,
including design, to facilitate the production of useful outcomes from a system. This view opens the
opportunity to 'manage' oneself, a pre-requisite to attempting to manage others.
Basic roles

▪ Interpersonal: roles that involve coordination and interaction with employees, networking.
▪ Informational: roles that involve handling, sharing, and analyzing information.
▪ Decisional: roles that require decision-making.
Management skills

▪ Political: used to build a power base and establish connections.

▪ Conceptual: used to analyze complex situations.
▪ Interpersonal: used to communicate, motivate, mentor and delegate.
▪ Diagnostic: the ability to visualize most appropriate response to a situation .
Formation of the business policy

▪ The mission of the business is the most obvious purpose—which may be, for example, to make
soap.
▪ The vision of the business reflects its aspirations and specifies its intended direction or
future destination.
▪ The objectives of the business refer to the ends or activity at which a certain task is aimed.
▪ The business's policy is a guide that stipulates rules, regulations and objectives, and may be used
in the managers' decision-making. It must be flexible and easily interpreted and understood by
all employees.
▪ The business's strategy refers to the coordinated plan of action that it is going to take, as well as
the resources that it will use, to realize its vision and long-term objectives. It is a guideline to
managers, stipulating how they ought to allocate and utilize the factors of production to the
business's advantage. Initially, it could help the managers decide on what type of business they
want to form.
Implementation of policies and strategies

▪ All policies and strategies must be discussed with all managerial personnel and staff.
▪ Managers must understand where and how they can implement their policies and strategies.
Dr NAGESH H Department of EEE, Acharya I T
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

▪ A plan of action must be devised for each department.

▪ Policies and strategies must be reviewed regularly.
▪ Contingency plans must be devised in case the environment changes.
▪ Assessments of progress ought to be carried out regularly by top-level managers.
▪ A good environment and team spirit is required within the business.
▪ The missions, objectives, strengths and weaknesses of each department must be analysed
to determine their roles in achieving the business's mission.
▪ The forecasting method develops a reliable picture of the business's future environment.
▪ A planning unit must be created to ensure that all plans are consistent and that policies and
strategies are aimed at achieving the same mission and objectives. All policies must be discussed
with all managerial personnel and staff that is required in the execution of any departmental
policy.
Organizational change is strategically achieved through the implementation of the eight-step plan
of action established by John P. Kotter: Increase urgency, form a coalition, get the vision right,
communicate the buy-in, empower action, create short-term wins, don't let up, and make change
stick.

Policies and strategies in the planning process

▪ They give mid- and lower-level managers a good idea of the future plans for each department
in an organization.
▪ A framework is created whereby plans and decisions are made.
▪ Mid- and lower-level management may adapt their own plans to the business's strategic ones.

Levels of management
Most organizations have three management levels: low-level, middle-level, and top-level
managers.[citation needed] These managers are classified in a hierarchy of authority, and perform
different tasks. In many organizations, the number of managers in every level resembles a pyramid.
Each level is explained below in specifications of their different responsibilities and likely job tit les.
Top-level managers
Consists of board of directors, president, vice-president, CEOs, etc. They are responsible for
controlling and overseeing the entire organization. They develop goals, strategic plans, company
policies, and make decisions on the direction of the business. In addition, top-level managers play a
significant role in the mobilization of outside resources and are accountable to the shareholders and
general public.
According to Lawrence S. Kleiman, the following skills are needed at the top managerial level.

▪ Broadened understanding of how: competition, world economies, politics, and social

trends effect organizational effectiveness .

Dr Nagesh H Department of EEE, Acharya I T Page 2

Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Middle-level managers
Consist of general managers, branch managers and department managers. They are accountable to
the top management for their department's function. They devote more time to organizational and
directional functions. Their roles can be emphasized as executing organizational plans in
conformance with the company's policies and the objectives of the top management, they define and
discuss information and policies from top management to lower management, and most importantly
they inspire and provide guidance to lower level managers towards better performance. Some of their
functions are as follows:

▪ Designing and implementing effective group and intergroup work and information systems.
▪ Defining and monitoring group-level performance indicators.
▪ Diagnosing and resolving problems within and among work groups.
▪ Designing and implementing reward systems supporting cooperative behavior.
low-level managers
Consist of supervisors, section leads, foremen, etc. They focus on controlling and directing. They
usually have the responsibility of assigning employees tasks, guiding and supervising employees on
day-to-day activities, ensuring quality and quantity production, making recommendations,
suggestions, and upchanneling employee problems, etc. First-level managers are role models for
employees that provide:

▪ Basic supervision.
▪ Motivation.
▪ Career planning.
▪ Performance feedback.
▪ Supervising the staffs.
It's both.
ART because you have to deal with people. You have to study organization behaviour and know
what motivates people and what puts people off. You have to know Maslow's hierarchy of need etc.
This is more qualitative.
SCIENCE because you have to know how to be accountable. You have to count how many people
are in the office, the turnover rate, profit and loss, accounting etc. It's more quantitative.

Management as a Science:

Science is an organized or systematized body of knowledge pertaining to a particular field of enquiry.

Science is systematized in the sense that it establishes cause and effect relationship between different
variables.

Levels of management
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

The term ―Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain of
command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories: -

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels
is discussed below:

LEVELS OF MANAGEMENT

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.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

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. According to R.C. Davis,
―Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees‖. In other words, they are concerned
with direction and controlling function of management. Their activities include -

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.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

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.

Modern Management approaches

A worker does not work for money only. Non-financial rewards such as affection and respect for
co-workers are also important factors. The emphasis was on employee-centered, democratic and
participative style of supervisory leadership as this is more effective than task centered leadership.
This approach was however criticized for its emphasis on the importance of symbolic rewards and
not on material rewards. The belief of this approach that an organization can turn into one big
happy family where it is always possible to find solutions which satisfies everybody has also been
questioned.
Behavioral Approach:
An approach that recognizes the practical and situational constraints on human rationality for making
decisions>
Behavioral scientists attach great importance to participative and group decision making. They are
highly critical of the classical organization structures built on traditional concepts and prefer more
flexible organization structures.
Two major theorists, Abraham Maslow and Douglas Mcgregor, came forward with ideas that
managers found helpful.
⮚ Abraham Maslow: He developed the theory of motivation that was based on three
assumptions. First, human beings have needs that are never completely
satisfied.
⮚ Second, human action is aimed at fulfilling the needs that are satisfied at a
given point in time.
⮚ Third, needs fit into a hierarchy, ranging from basic and lower level needs
at the bottom to higher level needs at the top.
Douglas McGregor: He developed a concept of Theory X versus Theory Y dealing with possible
assumptions that managers make about workers. Theory X managers tend to assume that workers are
lazy, need to be coerced, have little ambition and are focused mainly on security needs. Theory Y
managers assume that workers do not inherently dislike work, are capable of self control, have
capacity to be creative and innovative and generally have higher level needs. This approach helped
managers develop a broader perspective on the nature of workers and new alternatives for interacting
with them.
Quantitative Approach:
An approach that focuses on the use of quantitative tools for managerial decision making.
The quantitative management viewpoint focuses on the use of mathematics, statistics and information
aids to supports managerial decision making and organizational effectiveness. Three main branches
have evolved: operations research, operations management and management information systems.
Operations Research: Operations Research is an approach aimed at increasing decision effectiveness
through the use of sophisticated mathematical models and possibilities as they can accomplish
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

extensive calculation. Some operations research tools are linear programming, querying, waiting line,
routing and distribution models.

Operations management: Operation management is a field that is responsible for managing the
production and delivery function of an organization’s products and services. Operations management
is generally applied to manufacturing industries and uses tools such as inventory analysis, statistical
quality control, networking etc.
Management Information System: Management Information System refers to the designing and
implementing computer based information systems for use by the management. Such systems turn
raw data into information that is required and useful to various levels of management.
Contingency Approach: A view point which believes that appropriate managerial action depends on
the peculiar nature of every situation.
This approach is a viewpoint which argues that there is no best way to handle problems. Managerial
action depends on the particular situation. Hence, rather than seeking universal principles that apply
to every situation, this theory attempts to identify contingency principles that prescribe actions to take
depending on the situation.

Systems Approach to management:

Systems theory is an approach based on the notion that organizations can be visualized as systems.
A system is a set of interrelated parts that operate as a whole in pursuit of common goals. Every
system has four major components:
1. Inputs are the various resources required to produce goods and services.
2. Transformation processes are the organization managerial and technological abilities that are
applied to convert inputs into outputs.
3. Outputs are the products, services and other outcomes produced by the organization.
4. Feedback is information about results and organizational status relative to the
environment. Resources: (1) Human (2) Materials (3) Equipment (4) Financial (5)
Informational
Managerial and Technological Abilities: (1) Planning (2) Organizing (3) Leading (4) Controlling
(5) Technology
Outcomes: (1) product and services (2) Profits and losses (3) Employee growth and satisfaction.

Expected Questions:
1. Define management. What are the nature and characteristics? Explain its function.
( june10, june11, dec09, june09)
2.Is management a science, art or profession? Explain. (June10, june11, jan10, july09, dec08)
3. What are the modern management approached? Explain briefly the contingency
approaches of management. (June10, july09)
4. Explain the various roles of a manager (june10, july09, jan09)
5. Explain the contribution of FW Taylor to the theory of
management (jan10,dec10)
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Planning

Meaning and Definition of Planning

Planning is the primary function of management. It focuses on the future course of action. It
specifies the objectives to be achieved in future and selects the alternative course of action to reach
defined objectives. It also involves many activities like analyzing and decision making about
technical, personnel, financial, and other elements essential to implement predetermined course of
action. Thus, planning is mental and paper activities which look ahead for drawing the future course
of action.

―Planning is that function of manner in which he decides in advance what he will do. It is a
decision making process of a special kind, its essence is futurity.‖ Hayness and Massie

―Planning is deciding in advance what to do, how to do, when to do and who is to do it.
Planning bridges a gap between from where we are to where we want to go‖

Procedure of Planning
For systematic approach to planning, it is essential to complete some procedures or steps.
The major steps of planning are as follows:
Procedure of Planning
1. Analyze Opportunities:Generally, this is not a step of planning. It is known as
pre-step of planning. It is essential to make a successful plan. The management has to analyze
strengths; weakness, opportunities and threats (SWOT) of changing environment of the
business.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

2. Setting objectives: This is the first and real starting point of planning. The
objectives must be specific, clear and practical. They should be time bound and expressed in
numerical terms. They should not be idealistic or over ambitious. A minor mistake in setting
objectives might affect in implementation of plan.
3. Determination of premises: After setting objectives, another step of planning is
to determine premises. Premises are the assumptions about the future (a) Tangible
and intangible: Tangible premises involve capital investment, unit of production, units sold, cost
per unit, time available etc.

4. Determination of alternatives: The next step, after establishment of objective and

premises of the planning is to discover the various alternative courses of action for the achievement
of organizational objectives.
5 Evaluation of alternatives: This is another step after determination of alternative
courses of action to evaluate them from their expected cost and benefits.
6 Selecting a course of action: Next step of the planning after evaluation of
alternative courses of action is to select a best course of action.
7 Formulation of derivative plans: This is the next logical step after the selection of a
course of action. After the selection of course of action, it is essential to formulate action plans for
each step of work and to all departments of the organization. These action plans involve formulation
of policies, rules, schedule and budget to complete defined objectives.
8 Implantation of plans: This is one of the significant steps of planning. Without this
step, other this procedure of plan will remain as paper work.
9 Reviewing the planning process: The planning procedure is continuous function up
to the attainment of defined objectives.
Types of planning
The following are the major types of plan prepared in the
organization: I, Corporate or strategic plan
Ii Tactical or Division plan
Iii Operational or Unit plan

i. Corporate or Strategic Plan: This plan is prepared by the top level management by taking the
long term objectives of the organization into consideration. It clearly defines the objectives of the
organization and strategies to achive the defined objective. Here goal focuses on the result that an
organization wants to achieve. It is the end point of planning.
ii Tactical or Division Plan: Tactical plan is prepared by the middle level management It is
consistent with corporate plan. In simple words, it is the sub-division of corporate plan to implement
in practical field. Here, divisional managers identify the priorities of the works. They focus to allocate
work and resources on the basis of programs.

iii Operational or Unit Plan: This plan is prepared by the lower level management. It is
consistent with tactical plant. In simple sense, it is the action plan of each and every activit y of the
department.
Advantages (Benefits/Importance) of Planning
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Planning is the foundation of the organization. It is the primary function of management

which clearly defines the organizational objectives and line of action. The quality of planning is
important for successful operation of the organization. The following points clarify the importance
of planning in the organization:
Advantages of Planning
Goal Focus
Minimize Uncertainty
Improve efficiency
Facilitates to Control
Innovation and Creativity
Better Coordination
Ensures Commitment
Aid to Business Success
Brings Systematization
Strategy and Business policy

Strategy is meant to fill in the need of organizations for a sense of dynamic direction, focus and
cohesiveness .Objectives alone do not fill in the need of organization. Strategy provides an integrated
framework for the top management to search for evaluation of opportunities, to perceive and meet
threats and crises to make full use of resources to make major decision.
Strategy may be defined as long range blueprint of an organization’s desired image, direction and
destination what it wants to be, what it wants to do and where it wants to go.
The concept of strategy is ancient. The word itself comes from the Greek Strategeia, which means
the art or science of being general. The connection that managers today make between business and
strategy is a relatively recent one. Only since World War II has emerged that strategic planning and
acting on those plans constitute a separate management process- the process we call Strategic
management.
Strategic management provides a disciplined way for managers to make sense of the environment in
which their organization operates, and then to act.
Stages in formulation of strategy
A number of framework have been developed for identification the major strategic alternatives that
organization should consider when choosing their business – level strategies. The several stages
involved in formulating a strategy.
1. Determination of corporation vision, mission, and purpose
2. External environmental appraisal
3. Internal environmental appraisal
4. Gap analysis
5. Strategic search
6. SWOT analysis

Types of Strategies
1. Stability strategy
2. Growth strategy
3. Diversification strategy
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

4. Acquisition strategy
5. Retreat strategy
6. Combination strategies
The Importance of Planning
Importance of planning function as follows:
Provides Direction: Planning provides a clear sense of direction to the activities of the
organization and to the job behavior of managers and others. It strengthens their confidence in
understanding where the organization is heading and what for, how best to make the organization
move along the chosen path, and when should they take what measures to achieve the goals of the
organization.

Provides opportunity to analyze alternative courses of action: Another source of importance of

planning is that it permits managers to examine and analyze alternative course of action with a
better understanding of their likely consequences. If managers have an enhanced awareness of the
possible future effects of alternative courses of action, for making a decision or for taking any
action, they will be able to exercise judgment and proceed cautiously to choose the most feasible
and favorable course of action.

Reduces uncertainties: Planning forces managers to shake off their inertia and insular outlook; it
induces them to look beyond those noses, beyond today and tomorrow, and beyond immediate
concerns. It encourages them to probe and cut through complexities and uncertainties of the
environment and to gain control over the elements of change.

Minimizes impulsive and arbitrary decisions: Planning tends to minimize the incidence of
impulsive and arbitrary decisions and ad hoc actions; it obviates exclusive dependence on the
mercies of luck and chance elements; it reduces the probability of major errors and failures in
managerial actions. It injects a measure of discipline in managerial thinking and organizational
action. It improves the capability of the organization to assume calculated risks. It increases the
freedom and flexibility of managers withing well-defined limits.

King-pin function: As stated earlier, planning is a prime managerial function which provides the
basis for the other managerial functions. The organizational structure of task and authority roles is
built around organizational plans. The functions of motivation, supervision, leadership and
communication are addressed to implementation of plans and achievement of organizational
objectives. Managerial control is meaningless without managerial planning. Thus, planning is the
king-pin function around which other functions are designed.

Resource Allocation: Planning is means of judicious allocation of strategic and scarce resources of
the organization in the best possible manner for achieving strategic goals of the organization. The
strategic resources include funds, highly competent executives, technological talent, good contacts
with government, exclusive dealer network and so on. If the organization enjoys a distinct advantage
in possession of such resources, a careful planning is essential to allocate them into those lines which
would strengthen the overall competitive position of the organization.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Resource use efficiency: For an ongoing organization, planning contributes towards a more efficient
functioning of the various work units. There is better utilization of the organization's existing assets,
resources and capabilities. It prompts managers to close gaps, to plug loopholes, to rectify
deficiencies, to reduce wastage and leakages of funds, materials, human efforts and skills so as to
bring about an overall improvement in resource use efficiency.

Adaptive responses: Planning tends to improve the ability of the organization to effectively adapt
and adjust its activities and directions in response to the changes taking place in the external
environment. An adaptive behavior on the part of the organization is essential for its survival as an
independent entity. For a business organization, for example, adaptive behavior is critical in
technology, markets, products and so on.

Anticipative action: While adaptation is a behavior in reaction and response to some changes in the
outside world, it is not enough in some situations. In recognition of this fact, planning stimulates
management to act, to take hold initiatives, to anticipate crises and threats and to ward them off, to
perceive and seize opportunities ahead of other competitions, and to gain a competitive lead over
others. For the purpose, some enterprises establish environmental scanning mechanism as part of
their planning systems. Thereby such enterprises are able to direct and control change, instead of
being directed and controlled by the pervasive external forces of change.

Integration: Planning is an important process to bring about effective integration of the diverse
decisions and activities of the managers not only at a point of time but also over a period of time. It
is by reference to the framework provided by planning that managers make major decisions on
organizational activities, in an internally consistent manner.
Nature and Characteristics of Planning management
Managerial function has some unique characteristics of its own which separate it from other
functions. They are:
Primacy of Planning: Planning is the first and foremost activity of Managerial function.
Planning a Process: Planning is a process of management which starts with identification of
mission and goals of the organization and ends with making arrangements for fulfilling the goal.
Ubiquity/pervasiveness of Planning: Planning is an function which exists in all levels of
managerial hierarchy.
Future orientation: Planning are always future oriented. It is a process which look ahead or think
ahead and making provision to tackle future event.
Information base: Information is the basis of planning. Without information planning is not
possible.
Rationality: Planning is done based on reasons rather than emotions.
Formal and informal Nature: Normally planning is of formal and informal nature.
Intellectual Process: Planning is a process which needs the ability to think in a logical way and
understanding things.
Pragmatic, action-orientation: Even if it is an intellectual process, it needs practical, flexible and
sensible way of action rather than a fixed ideas or theories.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

Decision making: Planning involves decision making and problem solving.

Dynamism: Planning is a dynamic process and it is based on the external and internal changes of
environment
Levels and of planning: On the basis of scope there are two levels:
1. Corporate Planning covering the entire organization

2. Sub-corporate or functional Planning – within the various divisions or

units. On the basis of significance we may divide planning into

1. Strategic planning

2. Tactical or operational planning.

On the basis of time we can divide planning into:

1. Long term planning covering periods of more than one year.

2. Short term planning covering a period of one year or less.

Even if we divide planning into different levels to analyze, it must be coordinated and balanced to
support one another and attain the objectives of the organization.

Types of plans: Plans are categorized into two groups:

1. Single use pans – those which are designed to meet specific, non-repetitive and unique
situations

2. Standing Plans – those which are fairly stable and are meant to handle a wide range of
repetitive situations over a period of time.
5 essential objectives of economic planning in India

Planning without an objective is like driving without any destination. There are generally two sets of
objectives for planning, namely the short-term objectives and the long-term objectives. While the
short-term objectives vary from plan to plan, depending on the immediate problems faced by the
economy, the process of planning is inspired by certain long term objectives. In case of our Five Year
plans, the long-term objectives are:(i) A high rate of growth with a view to improvement in standard
of living.(ii) Economic self-reliance;

(iii) Social justice and(iv) Modernization of the economy(v) Economic stability

Planning Premises
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

What Is a Planning

Hierarchy? Definition

A planning hierarchy represents the organizational levels and units in your company for which you
want to plan. A planning hierarchy is a combination of characteristic values based on the
characteristics of oneinformation structure.

Planning hierarchies provide a framework for your planning activities in consistent planning and
level-by-level planning. With these planning methods, a planning hierarchy must exist for the
information structure before you can plan its key figures. You can create only one planning hierarchy
for an information structure. However, a hierarchy can have as many different branches as you like.
See also Planning Hierarchies Containing Product Groups.

You can create one or more planning hierarchies automatically when you install Release 3.0, with
the Master Data Generator.

You can also create a planning hierarchy manually (see Creating a Planning Hierarchy). It consists
of one or more planning levels to which you assign characteristic values.

You maintain planning hierarchies in much the same way as you maintain product groups, on a level-
by-level basis, and define the aggregation factor and the proportional factor of each characteristic
value just as you define them for the members of a product group. For more information, see Planning
Hierarchy Maintenance Functions.

Example of a Planning Hierarchy

Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

You might extend this planning hierarchy to include further branches, such as branches to represent
the organizational structure of the company in sales organizations South, East, and West.

Expected Questions:

1. What is planning? Explain the steps involved in planning. And give the importance and
purpose of planning process june10, june11, jan09
2. briefly explain the types of planning. June10, june11, july09
3. Explain the process and steps involved in decision making and planning
june10, june11, july09,model paper, dec10, jan09
4. Explain hierarchy of planning june10, dec10,
5. Differentiate between strategic planning and tactical planning june10
6. what are planning premises? Explain the classification of planning premises. Jan10
7. what are the different types of decision? Explan briefly july09
8. discuss the limitations and importance of planning july09.

SUMMARY

MANAGEMENT: A SCIENCE OR ART?

There is great controversy whether management is science or art. It is an art in the sense of possessing of
managing skill by a person. It is a science also because of developing principles or laws which are applicable in a
place where a group of activities are coordinated. In fact management is both science and art.

Management as science: Science is a systematized body of knowledge. We call a discipline scientific if its
(1) Methods of inquiry are systematic and empirical.
(2) Information can be ordered and analyzed; and
(3) Results are cumulative and communicable.
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

‘Systematic’ means, being orderly and unbiased. Moreover, enquiry must be empirical and not merely an
armchair speculation. Scientific information collected in the raw form is finally ordered and analyzed with
statistical tools. It is communicable which permits repetition of study. When study is replicated then the second
try produces the results similar to the original. In management we have to study man and number of factors
affecting him. Therefore, management is in the category of behavioural science.

Management is an art: Management is the art of getting things done through others in dynamic situations. A
manager has to coordinate various resources against several constraints to achieve predetermined objectives in the
most efficient manner. The theoretical lessons on principles, concepts and techniques learnt by a manager in
classroom is not enough to get the aimed results unless he possess the skill (or art) of applying such principles to
the problems. The knowledge has to be applied and practised. It is like the art, who achieves the desired results
with his own skill which comes by practice.
A comparison between science and art:

Management uses both scientific knowledge and art in managing an organization. As the science of
management increases so should the art of management. A balance between the two is needed.

MANAGEMENT: A PROFESSION
According to McFarland, “Profession” possesses the following characteristics:
(1) Existence of an organized knowledge.
(2) Formalized method of acquiring training and expertise.
(3) Existence of professional association.
(4) Existence of an ethical code to regulate the behaviour.
(5) Charging of fees based on service with due regard to social interest.

Management does not possess all the above characteristics of profession. Management has no fixed norms
for managerial behaviour. There is no uniform code of conduct or licensing of managers. There are no restrictions
to individuals to possess an academic degree. Unlike medical or legal professionals, a manager need not possess
an academic degree. In the light of absence of these characteristics, management cannot be called as profession.
However, ‘professionalization’ of management started and it is essential nowadays to acquire some professional
knowledge or training. In this regard government of India has started six national institutes of management and a
number of universities and institutions are offering MBA programmes.

MANAGEMENT AND ADMINISTRATION

The term administration and management are used synonymously. Some writers urge that running of a
business requires skills, which is known as management and functioning of government departments and non-
profit institutions requiring skill is known as administration.
Various views expressed by thinkers of management led to the emergence of there approaches:
(1) Administration is above management.
(2) Administration is a part of management.
(3) Management and administration are same.

According to classical thinkers, Administration is above management so far as different in the organization
are concerned. Management on the other hand is an executive function which is primarily concerned with carrying
of broad policies laid down by the administration”. This implies that administration deals with establishing
objectives and policies and is done by the top level whereas management is the execution of these policies by the
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

middle and lower organizational level.

Differences between administration and management

ROLE OF MANAGEMENT
A manager performs planning, organizing, directing and controlling to achieve the organizational
objectives. It has been questioned whether these functions provide an adequate description of the management
process. Henry Mintzberg has identified ten roles of manager which are classified into three broad categories.

Interpersonal Role: This role is concerned with his interacting with people both organizational members and
outsiders. There are three types of interpersonal roles:
(1) Figure head role: In this role manager has to perform duties of ceremonial nature such as attending social
functions of employees, taking an important customer to lunch and so on.
(2) Leader role: Manager’s leader role involves leading the subordinates motivating and encouraging them.
(3) Liaison: In liaison role manager serves as a connecting link between his organization and outsiders. Managers
must cultivate contacts outside his vertical chain to collect information useful for his organization.

Information Roles: It involves communication. There are three types of informational roles:
(1) Monitor: In his monitoring role, manager continuously collects information about all the factors which affects
his activities. Such factors may be within or outside organization.
(2) Disseminator: In the disseminator role, manager possesses some of his privileged information to his
subordinates who otherwise not be in a position to collect it.
(3) Spokesperson: As a spokesperson manager represents his organization while interacting with outsiders like
customers, suppliers, financers, government and other agencies of the society.

Decisional Roles: Decisional role involves choosing most appropriate alternative among all so that organizational
objectives are achieved in an efficient manner. In his decisional role manager perform four roles:
1. Entrepreneur: As an entrepreneur, a manager assumes certain risks in terms of outcome of an action. A manager
constantly looks out for new ideas and seeks to improve his unit by adopting it to dynamic environment.
2. Disturbance handler: In this role manager works like a fire-fighter manager contains forces and events which
disturb normal functioning of his organization. The forces and events may be employee complaints and grievances,
strikes, shortage of raw materials etc.
3. Negotiator: In his role of negotiator, manager negotiates with various groups in the organization. Such groups
Engineering Management and Entreprenuership-BEE501-Dr Nagesh H Dept of EEE

are employees, shareholders and other outside agencies.

4. Resource Allocator: in this, the manager concerned with allocating resources to every employee, project and
also estimates the resources required & expenditures.

⮚ Planning- Planning is deciding in advance what to do and how to do. It is one of the basic managerial
functions. Planning therefore involves setting objectives and developing an appropriate course of action
to achieve these objectives.
⮚ Importance of Planning- Planning provides directions, reduces risks of uncertainty, reduces
overlapping and wasteful activities, promotes innovative ideas, facilitates decision making, establishes
standards for controlling.
⮚ Features of Planning- Planning focuses on achieving objectives; It is a primary function of
management; Planning is pervasive, continuous, futuristic and involves decision making; It is a mental
exercise.
⮚ Limitations of Planning -Planning leads to rigidity; reduces creativity; involves huge costs; It is a time
consuming process; Planning does not work in a dynamic environment; and does not guarantee success.
⮚ Planning Process
⮚ Setting objectives: Objectives may be set for the entire organisation and each department or unit within
the organisation.
⮚ Developing premises: Planning is concerned with the future which is uncertain and every planner is
using conjucture about what might happen in future.
⮚ Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the next
step would be to act upon them.
⮚ Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative.
⮚ Selecting an alternative: This is the real point of decision making. The best plan has to be adopted and
implemented.
⮚ Implement the plan: This is concerned with putting the plan into action.
⮚ Follow-up action: Monitoring the plans are equally important to ensure that objectives are achieved

Types of Plans
⮚ Objectives: Objectives therefore can be said to be the desired future position that the management would
like to reach.
⮚ Strategy: A strategy provides the broad contours of an organisation’s business. It will also refer to future
decisions defining the organisations direction and scope in the long run.
⮚ Policy: Policies are general statements that guide thinking or channelise energies towards a particular
direction.
⮚ Procedure: Procedures are routine steps on how to carry out activities.
⮚ Rule: Rules are specific statements that tell what is to be done.
⮚ Programme: Programmes are detailed statements about a project which outlines the objectives, policies,
procedures, rules, tasks, human and physical resources required and the budget to implement any course
of action.
⮚ Budget: A budget is a statement of expected results expressed in numerical terms. It is a plan which
quantifies future facts and figures.

Questions
1. Why is it that organizations are not always able to accomplish all their objectives?
2. What are the main features to be considered by the management while planning?
3. What are the steps taken by management in the planning process?
4. Is planning actually worth the huge costs involved? Explain.