Unit 2:

MIS: A Tool for Management Process

 organization Structure
• The first meaning of organization is an institution
or a functional group.
• A business organization, a hospital, a school, a
university are some such institutions.
• There is another meaning of ‘organization’, that
is an arrangement of people in an institution
keeping in view the concept of division of labor,
authority, responsibility and decision making.
• The organization structure is built by
arrangement of organization subsystem.
 Principles of organization structure

• Hierarchy of authority
• Specialization
• Standardization (Formalization)
• Centralization
 organization as a System
• The individuals in the organization are selected in
terms of number, quality and ability and are
placed in hierarchical order to plan and execute
the business activities to achieve certain goals
and objectives.
• This is the justification that calling the
organization a system.
• A system is an assembly of elements arranged in
a order to achieve certain objectives.
• The management theorists, identified more
elements in the system.
 organization as a System

H. J. Leavitt identified three additional elements :

• Task
• Technology
• Structure
• Culture
 organization as a System
• Task: The arrangement of task in terms of process
and work design is dependent on the people.
• Technology: The choice of technology of handling
the task is dependent on the people. They choose
the best technology and well designed work.
• Structure: These are (Task & Technology)to be
arranged in proper structure.
The task has to be designed as an open system
capable of adjusting itself to the changing
environment.
• Culture: The culture is a collective behavioral result
of the people (manager, worker). Attitude must be
positive
 organization as a System
• organization is a socio-technical system whose
sub-system are task, people, technology, culture
and structure.
• Each system having its own input and output
satisfying objectives and goals.
• If sub-system goals and objectives are not
congruent with the goals and objectives the
organizations, poor performance, resistance to
change and non-attainment of corporate goals
will be the consequences.
 organizational Behavior
• organizational Culture :- (attitudes, Beliefs, values,
norms, understandings) reflects (philosophy, policy,
strategy, goals, managerial style)
• organizational Power :- (use of human and material
resources)
• organizational Change :- (changes between starting
to ending)
• organizational Learning :- (rules, systems,
procedures)
• organizational Motivation :- (Monitoring &
supportive)
 Modification to basic model of
organization Structure
• There are four modification to the basic model of
organization structure :
– Functional organization
– Product/Market/Service organization
– Project organization
– Matrix organization
 Modification to basic model of
organization Structure
• Functional organization
The organization business can be split into clear
divisions of activity and all of them are equally
important.
for ex. Marketing, Manufacturing, Finance,
Personnel.
strength of people and hierarchy of functional
organization depends size and number of activities.
Decisions can be taken by the head of the
organization.
 Modification to basic model of
organization Structure
this type of organization is most suited where each
function is a speciality and call for an expertisa in the
field.
where coordination is of a very low order and can be
handled easily by top management.
 Modification to basic model of
organization Structure
• Product/ Market/ Service organization
When the organization grows large in turnover and
strength and when the decision making relates to
either product/ Market/ Service.
In this organization, all responsibility is on the
product/ Market/ Service head, he expected to take
all decisions of finance, material and etc.
It is speed in to take decisions, no conflicts, measure
profit earned by the product, more man power and
specialized in one technology.
Modification to basic model of
organization Structure
 Modification to basic model of
organization Structure
• Project organization
It is special case of product organization where the
common service like finance, purchase are organised
at the functional level.
the necessary resources, authority are allocated to
the project manager.
 Modification to basic model of
organization Structure
• Matrix organization
It is the combination of all type of organization, in
this all the functions are integrated.
There are integrated responsibilities.
It is used in big companies having diverse business
activities.
the business units known as strategic business units,
set by the head of unit.
Modification to basic model of
organization Structure
Strategic Management of Business
Strategic management provides overall direction to
the enterprise and involves specifying the
organization's objectives, developing policies and
plans designed to achieve these objectives, and then
allocating resources to implement the plans.

Strategic management involves the formulation and

implementation of the major goals and initiatives
taken by a company's top management on behalf of
owners, based on consideration of resources and an
assessment of the internal and external
environments in which the organization competes
Strategic Management of Business
Strategy is defined as "the determination of the basic
long-term goals of an enterprise, and the adoption of
courses of action and the allocation of resources
necessary for carrying out these goals.“

Strategies are established to set direction, focus

effort, define or clarify the organization, and provide
consistency or guidance in response to the
environment.
Strategic Management of Business
Strategic management involves setting objectives,
analyzing the competitive environment, analyzing the
internal organization, evaluating strategies, and
making sure that the strategies are rolled out across
the organization.

It includes Strategic planning and strategic thinking.

Strategic planning is analytical in nature and refers to

formalized procedures to produce the data and
analyses used as inputs for strategic thinking, which
synthesizes the data resulting in the strategy.
Strategic Management of Business
Corporate planning :
A plan is a predetermined course of action to be
taken in future.
It is an document containing the details of how the
action will be execute and it is made in a time scale.
The goals and objectives that a plan is supposed to
achieve , are the pre-requisites of a plan.
Goal and objectives are important to define because
without these plan is not possible.
Planning means deep look into the future and
accessing the likely events in the total business
environment and taking a suitable action to meet any
eventuality.
Strategic Management of Business
Dimensions of Corporate planning :
There are five dimensions:
Time :- Long range or short range.
It is made on rolling basis.
Every year extended by one year.

Entity :-Thing on which the plan is focussed.

Could be about the finance, marketing, capacity,
manpower or the research and development

organization :- It would deal with the company as a

whole, but it has to be broken down for its
subsidiaries, and give a responsibility.
Strategic Management of Business
Elements :- The plan is made out of several element.
It starts with mission and goal the organization would
like to achieve.
It may provide vision statement for all to understand
as also the purpose, focus and direction the
organization would like to move towards.

Characteristics :- Choice of characteristics is a matter

of convenience helping to communicate to
everybody concerned in the organization.
The typical characteristics of a corporate plan are the
goals, resources, milestones, investment details.
 Strategic Management of Business
Essentiality of Strategic Planning
Following reasons make planning an essential
management process to keep the business planning :
Market Forces
Technological Change
Complex diversity of business
Competition
Environment (Threats, Challenges, Opportunities)

Market Forces :- The trend of the market growth, the

consumer behaviour and the choices, the emergence of
new product and new product concepts.
 Strategic Management of Business
The market forces affect the sales, the growth and the
profitability. With the problems arising out of market
forces.

Technological Changes :- There are so many technological

through and changes which have threatened the current
business creating new business opportunities.
The emergence of the microchip, plastic, laser technology,
fibre optics tech., nuclear energy etc are the examples
which have made some product obsolete, threatening
the current business and new opportunities as well.
 Strategic Management of Business
Complex Diversity of Business :- external factors like
transport, communication, and manufacturing resources
brings complexity in the management.
Many are uncontrollable and unless there in plan,
prepared with due diverse and complex nature of
business.
During the expansion-vertical or horizontal, integration-
forward or backward, diversification- in the same line or in
the diverse line of business are the issues which the
management is required to handle.
These issues are investment-oriented and have a far
reaching on growth.
 Strategic Management of Business
Competition :- It means fighting on a no. of fronts.
Competition could be direct or indirect.
Competition is natural phenomenon in business, and it
has to be dealt with in a proper manner to protect
business interest. This means that the management has to
continuously evolve new strategies to deal with the
competition.
It is related to the management to look on new product,
new strategy, new market, new technology in the market
for the stability.
 Strategic Management of Business
Environment :- The social, business, industrial,
technological environment affects the business.
Some points affects the business like widespread
education, values and attitude, Forecasting, Business
planning.
 Development of the Business
Strategies
Long-range Strategic Planning :-
 Types of Strategies
There are some Strategies:-

Overall Company Strategy

Growth Strategy
Product Strategy
Market Strategy
 Types of Strategies
Overall Company Strategy
 Types of Strategies
Growth Strategy
 Types of Strategies
Product Strategy
 Types of Strategies
Market Strategy
 Short-Range Planning
Short range plans or the operational plans are concerned
with the day to day functioning and their focus is on short
run operating period, generally a year or season. It is
usually done at lower levels of management and involves
gathering of information and selecting the most effective
course of action after evaluating this information.

Short range plans are generally guided by standing plans

and single use plans. The policies procedures and rules
followed in the organization come under standing plans
and single use plans are use for a specific period and
includes market plans financial plans and production
plans.
 Short-Range Planning
Short-term planning looks at the characteristics of the
company in the present and develops strategies for
improving them.
Examples are the skills of the employees and their
attitudes.
The condition of production equipment or product
quality problems are also short-term concerns.
To address these issues, you put in place short-term
solutions to address problems.
Employee training courses, equipment servicing and
quality fixes are short-term solutions.
These solutions set the stage for addressing problems
more comprehensively in the longer term.
 Short-Range Planning
It deals with the targets and objectives of the
organization.
It provides the scheme for implementation of the long-
range.
Short-Range Planning
 Tools of Planning
Planning, long-range, Short-range or tactical, involves a
series of decisions to be taken by the managers in the
organization.
Decision relate to several aspects of corporate business
planning.
There are a number of alternatives, choices and option
available while planning.
There is a selection of resources and allocation in
optimum manner.
There are different methods.
 Tools of Planning
Creativity :-
 Tools of Planning
System Approach :-
 Tools of Planning
Sensitivity Analysis :-
 Tools of Planning
Sensitivity Analysis :-

Modeling :- Physical (static and dynamic)

Static :- ex. Statistical regression, research programming.
Dynamic :- ex. Forecasting model,