9 Functions of Managemer

9.1. INTRODUCTION
of functions. These
on-going activity consisting of number
are.
Management is an

1. Planning
2. Organising
3. Staffing
4. Directing
5. Motivating
6. Controlling
7. Co-ordinating
8. Communicating
9.2. PLANNING
Planning is the most basic of all management functions. Planning means thinking before din
other words, planning is the preparation for action. Every manager plans no matter at what level he onera.
It is a function to decide about what, where, when, who, why and how a particular activíty should be done
sets the objectives of the business, determines the different course of action to achieve these obieeti
evaluates each course of action and decides about the best course of action under the given conditions. It us
provides direction to the enterprise.
Planning defines the goals, sets the policies, procedures, programmes, develops strategies so that the
objectives of the enterprise can be aained most efficiently. It analyses all the difficulties that are likelyt
occur in running the business and decides in advance how these difficulties can be overcome.
Planning is a rational, economic, systematic way of making decisions today which will affect the future.
Planning helps to have a optimum utilisation of the available resources. Without planning the activities of an
enterprise may become confused, haphazard and ineffective. For example, if a company making refrigerators
does not plan in advance as to how many
refrigerators and of what capacity are to be made before summer
starts and if it does not procure
necessary materials, tools, supplies and personnel in time, it cannot approach
the production target and hence
may not run profitability.
Planning includes forecasting, formulation of objective, policies, programmes, schedules, procedures
and budgets. General long
range planning is undertaken by top management personnel.
Some of the definition of
planning given by different writers are as follows
Planning deciding advance what to do, how to do it, when to do it and who is to do it.
is in
bridges the gap from where we are, to Plann
would
where we
want to go. It makes it
possible for things to occur wnie
not otherwise happen"- Koontz and O'Donnell.
Planning is the thinking process, the organised foresight, the vision, based on facts and expeiieence
that is required for intelligent action'"-Alfred and Beatty.
Planning is deciding in advance what is to be done. It involves the selection of objectives, pOlicies,
procedures and programmes from among
A careful analysis alternatives"- MM.E.
Harley.
of these definitions reveals that
) Planning involves visualising future course of action and
putting ii in a logical way
(ii) Ilinvolves thinking and analysis of
information.
(ii) Itis concerned with
determination of
involves development of alternative objectives
and goals in the light of
(iv) It
courses of actin to achieve such
future.
(V) It involves decCiSion
making i.e. selection of best course of objectives
action among these altet
(114)
 is lo achieve better results.
) lts objecive

(V7i) lt is a continuous and integrated process.

Objectives of Planning
The inportant jectives of planning are
Planning Helps in Eifective Forecasting. The first and the most important objective of planning l5
I.
forecasting. Effective planning anticipate future and prepare themselves to meet the challanges ot
the future. A well thought out plan solves many of the problenms associated with the uncertan
Continuous planning by shows precisely
management what the wants to achieve
enterprise
future.
in a given period as well as how it intends to
accomplish the objectives formulated in advance.
,Planning Provides Certainty inthe Activities. Planning decides the policies, defines the procedures
makes the rules for the activities of all the employees of the organisation. This helps in bringing
and
certainty in the activities of the organisation.
the targets to be
3, Planning Provides Performance Standards. A good plan specifies clearly
accomplished. For example, five year plan of a company may prescribe that rate of return o
shareholders' investment must double with five years from 15 per cent to 30 per cent per annum
such a specific standard.
The performance of the company is measured and controlled on the basis of
standards on the measuring tools.
The specific objectives decided in advance themselves become
make
When you plan the events, you
4. Planning gives a specific direction to the Organisation. action it
decision regarding a future course of
them happen in a particular way. As a plan is a activities
It thus gives the specific direction to all the
specifies the sequence of event to be performed.
these activities well in advance.
of an organisation by preparing the outlines of
that plan have
the Organisation to tune with the Environment. In general, organisations
5. Helps the managers to control the events
rather
been the winners against the non-planners. Planning helps
a profitable relationship
can establish through planning
than being controlled by them. A manager
with the environment and minimize
risk and insecurity.
co-ordination among all the
6. It Provides Economy in thhe Management.
Planning establishes the
of the organisation
the management and all the employees
activities of the organisation. It guides checks all types of
effective control and discipline. It
in their activities. It helps in maintaining
an economy in management.
wastages and thus, brings in accomplishing
the Budgets. Planning helps the management
7. Itis very much helpful in preparing
in a logical manner.
pre-determined budgets of the enterprise
lives in a dynamic
constant change. A business enterprise
8. The need for planning arises from and
social, political and technological trends must be noted
and complex environment. Economic,
from time to time. An enterprise
account in the plans and policies
their influence must be taken into with each other continuously.
and its environment are mutually
interdependent - interacting
business planning, can anticipate,
meet and adopt creatively
Management through comprehensive the management to assure the
conditions and demands. It helps
to everchanging environmental environment.
keen competition and changing
Survival of the organisation under
main prupose of planning is to increase efficiency.
. directed towards efficiency. The
Planning is
maximum output and profit at the
minimum cost.
The of a
guiding principle plan is the
good
most successful enterprise". It aims at efficiency. Planning
action of the
"Planning is the foundation of best way of doing things; and
aim of which is (a) to suggest the
intellectual activity, the main
Thus, planning is directed towards efficiency by
IS an

(b) planning islinked to goals and objectives.

determination of best course of action.
achieving the objectives through
It should be noted that
Tailure to is planning to fail".
plan
16 INDUSTRIAL ENGINEERING AND PRODUCTION MAN.
ANAGEMENT
Planning is outlining a future course of action in order to acheive an objective"
"Planning is looking ahead"
Planning is getting ready do something tomorrow"
to
"Planning is a trap laid down to capture the future".
Steps in Planning:
The details of planning may differ depending upon the specific requirements of a
particular hus
However,
follows
in all the types of business, planning process involves certain necessary steps. summanes,as
1. Determination of Objectives. Planning is not possible without definite objectives. If
the ohient
of the business are clearly defined then only it is
possible to plan for future. Planning in fact he
with decisions about what the organisation wants to achieve
during a specified period. It is alr
desirable to express the objectives/goals in quantitative terms for all the lways
key areas of the busine
like production, profit, productivity, market share etc. The time frame in ness
to be achieved must also be which the objectives have
have
specified. Thus what, how and with what resources are a few
questions that should be answered at this stage. After important
business, it is necesssary to fix up
determining the overall objectives of the
and sections. These
departmental objectives and the objectives for sub-departments
objectives in harmony with overall objectives of the business.
are
Since goal/objective setting is the essential
step in planning, managers who fail to set
will be unable to make effective
plans. If Telco is able to retain its prominence in the meaningful goals
employees of the organisation know clearly that theHeavy Commercial
Vehicles Segment, it is because all the
is retaining the
leadership
in the industry. primary objective
2. Forecasting to assist Planning.
EstablishPlanning premises and constraints : Planning
made about the various elements of
the environment.
premises, in simple are the assumptions
the basic framework in
which plans operate. Thus it is aPlanning assumptions or premises provide
external to the forecast of conditions both internal and
organisation.
Internal Premises. The
important internal premises include sales
resources of the
organisation, skills, attitudes and beliefs of the forecasts, policies of the organisation,
success factor. For
instance, the accuracy of the people. Each of these elements is a critical
production scheduling and the marketing sales-forecast influences the procurement of resourcesy
External Premises. Important
strategies to be
adopted to achieve the objectives.
external
the
organisation. They include technological premises relate to all those factors in the environment outstu
business, socio-cultural changes,in general economic conditions, Government
and attitudes towards
in the market changes the society, political
availability of labour, material, power polc
It is evident that some of etc. stability, degree of competn
these factors are
is difficult,
anticipating future tangible while others are
reducing the risk; though not situations, intangible. Though accurate per nising
problems and opportunities would
completely definitely help ers in
3. Decide the Planning Period. eliminating it. the manag
In
months to a year, while in some some cases plans made for a short
are few
extend 5-10 years and eyen more.
other cases,
they
made are
to cover a
period, varying ro
anticipated. The lead tume Companies longer period. 1ne p Inmay
normally plan for a period that can be
time required to recover the involved in the development and
reasonably
can o ct and
of the plan. Again, in the capital investment
same (pay-back period) influence the commercialisation
of a
prouuth
Operational plans focus on theorganisation different plans periods choice o
n0ses.
4. Collection, Classificatiun and short-lerm, strategic plans focus onmay exist for
the long term.difrerc
factors that affect planning is Processing
of
Information. AIl
collected. Information relevant
helps interpretation and the cetablishment of must be information
classified, analysed and peised.
It
cause and effect prou
relationship.
N11ONSOF MANAGEMENT

Deciding alternative courses of action. The 117

action. For example, it we want to objective can be fulfilled by
sales keeping the price constant orincrease the profit, we can increase the more than one curse o
we can price, we can increase
techniques, reducing waste and by optimum reduce the cost of production by adopting the
shares by borrowing from financial
or utilisation of resources. We can raise improved
capital by selling
the planning of busincss. institutions. All such
possibilities must be explored during
Evaluation of Alternative. The advantages and
against the other disadvantages of cach alternative
alternatives. Cost benefit
analysis is made to evaluate each feasible then weighted
are

7 Selection of best Plan. After the alternative.

evaluation of different alternative
best, feasible and economical plan is selected. plans in terms of results; the
8. Subsidiary plans to aid Master Plan. After deciding the main
to successfully implement the master plan, subsidiary plans are constructed
plan. To implement the master plan each department head
prepares a plan of his department.

9. Controlling Plans. Plans and subsidiary plans are first tried on a

their success. The plan is then implemented. It is pilot basis to test the possibility of
constantly monitored and results are obtained as
feedback from time to time. The drawbacks or
plans are framed in the light of this experiend
shortcomings are removed as early as
possible. Future
Advantages of Planning:
1. Maximum utilisation of resources. Through proper planning it is possible to have a maximum
utilisation of resources. Al efforts are directed towards the desired goals, and an effective sequence
of activities is accomplished. Activities can be co-ordinated so as to achieve the pre-determined
goals or targets.
2. Minimisation of Unproductive work. As a result of planning unproductive work is minimized.
Since the planned activities are subjected to a careful scrutiny and only necessary activities are
taken up to accomplish the specified work.
3. Reduces uncertainty. Planning provides opportunity to a business manager to foresee various
uncertainties which may be caused by changes in Technology, taste and fashion of the people etc.
and the management can be prepared to face the change with reasonable success. It involves
of change
of future events and therefore, helps in reducing uncertainties. Management
anticipation
is based on
planning
. Basis for managerial action. Planning compels managers to visualise the whole picture of business
to see important relationships, gain full
Clearly and completely. This enables the management
actions.
understanding of each activity, and plan the managerial
involves not only the time
S.Basis for control. Planning also provides a basis for control. Planning
determines objectives and lays down standard
1or starting and finishing of each activity, but it also
and controlling.
close relationship between the function of planning
O performance. Thus, there is a all the problems likely to arise in
. Avoids bottlenecks in Production. Production planning analyses
as to how these difficulties can be overcome.
manufacture and decides in advance
function of
and Creativity. Planning is basically a deciding
Planning Encourages Innovation creative because many new
innovative and thinking among the managers
management. helps
It
It creates a forward looking
attitude
deas come to the mind of a manager when he is planning.
among the managers. members and all
ensures participation of all
t Improves Motivation. A good planning system
of workers because
they
their motivation. It improves the motivation
nanagers which will improve
know clearly what is expected of them.
 ENGINEERING AND PRODUCTIo
1ON
18 INDUSTRIAL
MANAGEGEMENT
.Facilitates effective delegation of Authority. Planning
effective delegatin
facilitates
ion of authority
act, removes communication difficulties, provides proper machinery for co-or
to dination an
integration of all functions. and
10. Planning gives Competitive Edge to the Enterprise. This is because plannine
expansion of capacity, changes in work methods, changes in quality, anticipation may nvola
fashion of people and technological changes, preparedness to meet uncertainties etc.
and
Limitations of Planning:
Though planning facilitates various management functions and brings orderliness, stahil
continuity of operation, it suffers from certain limitations as follows: ty and
1. Limitations of Forecast. Planning is future oriented activity which is based on foreca
period of planning increases the accuracy of forecast diminishes. Planning looses its forecast. As t
and adequate data is not available.
value if relia
2. Costly Affair. Planning is quite a costly and time consuming process. Unlimited amount of tima :

spent on forecasting, preparing estimates, collecting information and facts for is

analysis, evaluat
alternatives etc. ating
3. Influence of External Factors.
By the time a plan is established the environment may
this requires complete revision of the change and
plan. Moreover, sudden outbreak of war, government control
natural calamities and
many other factors are beyond the control of the
successful execution of plans very difficult. management. They make the
4. Resistance to
Change. The human element in
concerned about the present rather than the organisation always
resists change, they are more
future, which is uncertain. Planning
looking is always affected by this resistance to change. Sometimes. being forward
change and on other occasions they are afraid to bring planners themselves do not like
of the workers. This attitude makes change as it will create resistance on
the part
the planning process ineffective.
5. Rigidity and
Inflexibility. Planning implies strict adherence to
and programmes. This restricts pre-determined
individuals freedom, initiative and desire for policies, procedures
delays in decision making. creativity and causes
Following measures may be adopted to overcome the
. Set realistic and limitations of planning:
achievable goals.
2. Communicate the assumptions on which
concerned. plans are formulated to all the people and departments
3.
Encourage and make people participate in the
commitment. planning programme so as to ensure tne
g
4. Ensure
proper co-ordination between the short-term
considered and long-term
as
mutually exclusive. plans. They should no tbe
5. Encourage creativity in
planning. Creativity helps in
6. Pay attention to the resources identifying the best alternatives and
position of the organisation
when required. so as to ensure the
availability ad
a"
Elements/Components of Planning
The various or
Types of Plans:
components of planning are
() Goals
(iii) Policies ii) Objectives
(v) Procedures (iv) Rules
(vi) Schedule (vi) Programmes
(ix) Forecasting (vii) Budget
. Goals. A goal is any
achievement of an end point that may be stated in rms,
quantitative
 1ONS OF MANAGEMENT
R N
19

example of which is the manufacturing of 1000 refrigerators duringa given hts

the desired future conditions, which the period. Goal repres
organisation strives to achieve. Goals can be thoug
relatively longrun targels.
Objectives are derived from goals and are ordinarily short run, speci
milestones towards goals. An example of goal is manufacture of 3000 tractors the end ol
by
While, the example of objective is manufacture of 500 tractors by the end of current year. auu
2. Objectives. Objectives are the ends towards which the activities of an organisation are directed.
They are aims which management wish organisation to achieve in a
specific period. ojcu
provide direction to various activities. They serve as a bench-mark for measuring the efficiency an
effectiveness of the enterprise. Objectives make every human activity purposeful.

Primary or basic objectives are determined by the top management. Each department has its own
ectives within the framework of basic objectives. All other elements of Planning such as policies., procedures,
rules and budgets assist and guide in selecting those alternatives that permit the achievement of pre-determined
ohiectives in the most economical and efficient manner. Objectives may be short term, medium term, long

tem, economic, non-economic, external, internal, major minor etc.

3. Policies. Policy helps to keep work in line with the objectives. Policies provide the framework for
executive action on recurrent managerial problems. They serve as a guide to the thinking and
action of subordinates for the purpose of achieving the objectives of the business successfully.
According to George R. Terry "Policy is a verbal. written or implied overall guide setting u
boundaries that supply the general limits and directions in which managerial actions will take place".
in decision
According to Koontz and O'Donnel"Policies were identified as guides to thinking
boundaries".
making. They assume that when decisions are made, these will fall within certain channel towards
Policies take the form of general statements to lead managerial activity through proper
the objectives. For example, some of the examples of policies are
the first preference is
(a) A firm has policy of promotion from within. If vacancy exists, naturally
given to the existing employees if they meet the job requirements.
on cash basis.
(6) Enterprise may follow a policy of selling its products
over sixty years of age.
(c) Or may have a policy not to employ any person
for executive operation and provides ready answers
A policy assists in decision making. It is the basis
to all questions faced in running the enterprise.
chosen from alternatives. A rule specifies that a specific
4. Rules. Rules are the simplest type of plan
situation. Rules do not leave any scope for decision
action is to be taken or not taken in a given
be enforced rigidly and also a fine or penalty may be imposed
on
making or judgment. They are to smooth and safe operation of a
are essential for discipline and
ignoring them. Of course, rules
of a rule. A rule demands a specific action. It is more rigid
business. 'No Smoking' is an example
rules is generally associated disciplinary action.
than a policy and violation of the
a policy. Procedure tells how a particular activity
5. Procedure. Procedure is a means of implementing
of execution of orders will prescribe a sequence of steps that
is to be carried out. The proccdure
of an order till the dispatch of goods to the customer. These
must be followed after the receipt
tasks constitute procedure. A procedure lays down the m a n n e r
or
chronological series of steps or in a standard or uniform way. Once a procedure is
method by which work is to be performed
level of performance. It results in work simplification and
established it ensures uniformly high
duplication of efforts.
eliminates overlap or

policies and accomplish objectives. It gives

to accomplish
6. Programmes. A programme is desigtned
reachpre-determined targets. It is an instrument
step by step approach to guide
action
necessary to
table of action. Ag00d programme ensures smooth and efficient operation.
of co-ordination; i.e. a time in a
There may be a detailed programmes
or
personal selling, advertising, and sales promotion
A
inarketing campaign to uccomplisn tne segOaIs In sales to reach the particular market. programme
down u c oprauons to be carried out to accomplish a given work. I
is a precise plan which lays
 INDUSTRIAL ENGINEERING AND PRODUCTION MA
120
AGEMENT
includes all activities necessary to achieve the given objectives and prescribes how the.
the enterprises
resources should be used.
Scheduling is the process of establishing time sequence each work to be dans
of the
7. Schedule.
the time when of series of acti in
integral part of programming. A schedule specifies action
take place. should
8. Budget. A budget is a projection defining anticipated costs of attaining an objective. Itit is :
appraisal of expected expense against anticipated income for a future period. It mav he
time, materials,money or other units required to perform work and secure specified result. Buds
is an important part of overall planning as different kinds of budgets are prepared to utilizes
scarce
resources in the best possible manner. A budget as a plan is a statement of expected results expreced
in numerical terms like upee product units or man hours. It provides a standard by which actual
operations can be measured and by which variations can be checked.
The process of budgeting may involve the preparations of budgets of sales, purchase, materials, labour
manufacturing expenses etc. A budget is an advance numerical compilation of expected cash flow, expenses
and revenues, capital outlays or man or machine hour utilization.
9.3. FORECASTING (ESTIMATION OF
FUTURE WORK)
Forecasting is an important and essential part of effective planning. It refers to a systematic analysis of
past and present circumstances. It is essentially a technique of anticipation. It provides key information and
pertinent facts relating to thefuture. According to Fayol --the father ofmodern management "Forecasing
is the essence of management. The success of a business greatly depends upon the efficient forecasting and
preparing for future events". Forecasting is the very basis of planning and without it, planning is impossibility.
Definition. Some of the important definitions of forecasting are as follows:
Forecasting is defined asthe estimation of future activities, i.e. the estimation of type, quantiy
and quality of future work. These estimates provide the basis to plan the future requirements for
men, machines, materials, time, money etc.
in "Forecasting is a systematic attempt to probe the future by inference from known facts. The purpose
Isto provide management with information on which it can base planning decisions". - Allen LA.
(iii) Forecasts are predictions or estimate of change, if any in characteristic economic phenomena
which may affect one's business plans".
(iv) "Business forecasting refers to the statistical analysis of the past and current movements in the
given time series so as to obtain clues about the future pattern of these movements"
Forecasting may be done in connection with sales, production or any other
type of business
activitics
Forecasting begins with the sales forecast and is followed by production forecast and forecast for probadie
costs, finance, purchases, profit or loss etc.
Business action taken today must be based on
yesterday's plan and tomorrow's expectation. Fiand
future cannot be made without forecasting events and their
relationships. The forecast of one type of ev
may also be based on other forecasts. For example, the forecasts of national
income are used by the governn
to estimate its future revenue.
The survival of a manufacturing
enterprise depends on its ability to assess, with reasonable acu
the market trends several years ahead. Without
forecasting, there cannot be any planning. The planning P Ocess
starts with the assumption that the future will be how
different from the present, and it attempts to
the enterprise can take the advantage of determine
the difference. Therefore, it is clear that planning depenu pon
accurate forecasting
While making the forecast intention of etitors,
materials, fashion changes, policies of coin
new
unseasonable weather, threat of war and the general economic situation expected in the country aind
markets should be taken into consideration.
Characteristics of Forecasting
The analysis of definitions reveals the following characteristics of forecasting:
 OF MANAGEMENT
121
TIONSOF

(nIt is the
estimation
of probable future trend
T h e estimation is based on the analysis of past and present circumstances.

(ii) Scientific and systematic techniques are uscd for analysis of past trend and then estimating future.in
Forecasting cts/anticipates possible changes in order to bring accuracy and cxactness
()
decisions.
business
Mathematical and statistical inference provide a solid base with the help of which
()
usually done.
forecasting is
Business forecasting considers the presents circumstances in relation to the past.
Forecasting:
Importance of Business
Henry Fayol business forecasting is the most important tool of management. It is a
According to
into the future. The success of business depends upon the skill of management in
amatic effort to peep
systema.
forecasting.

a basis to plan the

future
It
1, Importance in planning. It is the very basis of planning. provides without forecasting is an
etc. Planning
requirements for men, machines, materials, time, money
impossibility.
accurate decisions
Decisions. Forecasting enables the manager to arrive at
2. Accuracy in Managerial
relating to the various aspects of the business.
disclose the
is essential for efficient managerial control as it can
3. Facilitates Control. Forecasting of production
Forecast of sales is a must in order to control the
costs
areas where control is lacking.
the where there is a
will help in anticipating areas
and the productivity of personnel. Forecasting
control the costs.
great need to be attentive to
future it assists in
the analysis of the past and estimation of
4. Formulating Future Policies. From
formulating business policies.
in the
5. Co-ordination is Developed. A forecasting
is a c o m m o n effort of many persons working
co-ordination in the efforts of subordinates.
team spirit, unity and
concern, it may facilitate in creating the best means of
all who take part in the process and is
The act of forecasting is a great benefit to
circumstances.
ensuring adaptability to changing
activities are governed and regulated by budget
such as
6. Helps in preparing budgets. Business
material budget, manpower budget etc. It helps in
sales budget, production budget, cash budget,
policies.
taking decision relating to financial and expansion
diversification and expansion. An accurate
for business growth,
Sales Forecasts. It provides a basis helps the company in production planning
forecast of probable demand for company's products,
and control, fixing prices etc.
to obtain maximum benefits
O. It contributes to business success. Forecasting enables the enterprise
to the overall success of business.
utilization of Thus forecasting contributes
by better resources.

9.4.ORGANIZING needed to fulfil thesc objeciives, grouping these activities

rganizing involves determining activities such
groups of activities to managers. Oraganising provides
fanageable units or departments and assigning integralCd and co-perative action by many people.
of management or a mechanism for positive,
nUnework
a what management wants to do, while organising provides
int effort to implement plan. Planning decides
vhus machine for achieving the plan or objectives.
e organising involves identification and grouping n c acuues to be performed and dividing them

arnong the individuals and creating authority and responsibilily, relalionship among them. Organisation, in
S a backbone of management, Wn vhich establishes relationship between people, work and resources. It co-
ordina maximum output is oDained effectively and efficiently with minimum
e s these factors in such a
tal cost.
way that
 INDUSTRIAL ENGINEERING AND PRODUCTION MANACE.
122
ANAGEMENT
Steps in Organising:
The Process of organisation involves the following steps
() Determination of activities.
(ii) Division of activities.
(i) Fitting individuals into jobs
(iv) Developing relationships in terms of authorities and responsibilities.
For details of organising refer chapter2.
9.5. STAFFING
Staffing involves filling the positions needed in the organisation structure by appointing compDete
and qualified persons for the jobs.
etent
The stafting involves (i) Recruitment (i) Selection (ii) Placement (iv) Training (v)
Development af
personnel (vi) Developing system for remuneration of personnel and evaluating their perfornmance
The Board of Directors of a company undertakes staffing function by
selecting, helping, developing
and appraising the chief executive who in turn
performs these functions in relation to the heads of
various
divisions or departments of the enterprises. The departmental heads also select, train and
appraise, their assist-
ants and so on. This function is
very important since people differ in their intelligence, knowledge, skills,
experience, physical condition, age and attitudes. Therefore, management must understand in addition to the
technical and operational competence, the sociological and
psychological structure of the work force. This
will enable them to select right man for the right job and train and motivate them to increase the
effectiveness and productivity.
organisational
9.6. DIRECTING
Directing is of great importance for the success and survival of the industry. This is an important
managerial function, because the managerial decisions are put into action through effective direction. Actual
activity starts only when manager issues directions to his subordinates as to what is to be done and how it
should be done.
Directing consists of guiding and supervising the subordinates in their activities. Only giving orders is
not directing.
Directing involves motivating, guiding and supervising subordinates towards company objectives. Good
planning may ensure the achievement of the predetermined objectives only
when human efforts, largely
diverse are co-ordinated, guided and directed for the
accomplishment of the objectives.
difficult task, since manpower resources are difficult to manage. In fact, the directing
This however, Is
ability of the manager in
theorganisation determines its efectiveness. Therefore, the person who directs must have
This work is done by the Director or General dynamic leadership.
Manager Managing Director.
or
The steps in directing function
are
as follows
1. Issue of orders and instructions.
2. Guidance and training of
subordinates.
3. Supervision of subordinates' work.
Supervision is necessary in order to ensure that:
(a) the work is going on as per the plan established.
(b) the workers (or subordinates) are
The position of the director
doing work as they were directed to do.
(person who directs) in a factory is like a captain of a ship.
Directions
notonly to be given, but also to be obeyed. Hence they must be definite, clear cut,
communicable and practicable. As far as possible these must be in understandadie
According to Drucker-Directing is that part of management writing.
members to work process which actuates the organisano
effectively and efficiently for the attainment of organisational
A manager can plan and objectives.
organise, but no tangible results can be achieved until he mplements
proposed course of action. This needs directing or actuating which n
literally means moving into action.
 NCTIONS OF MANAGEMENT 123

9.7. MOTIVATING

Motivation means
inspiring people to intensily their desire and willingness to perform their duties
fectively and co-operate for the achievement of common objectives of the business.
Motivation is the mental preparation of an individual to do a specific job. It is a desire to do something
According to Michael J. Jucius, "Motivation is the act of stimulating some one or oneself to get a desireu
courSe of action, to push the right button to get desired action".
As put forth by "Brech"- motivation is a general inspiration or process which puts the member of the

am to do their work effectively, to give their loyalty to the to carry out properly the tasks they have
teanm group,
accepted and generally to pay an effective part in the job that the group has undertaken.
As mentioned by Dalton Emcfarland, "The concept of motivation is mainly psychological. It relates to

those forces operating within the individual employee or subordinate which imputes hinm to act or not active
in certain ways".
Motivation and leadership are the master keys to successful management of any enterprise. They are
also responsible to ensure productivity of human resources. Motivation can set into motion a person to carry
oul certain activity. Motivation assumes unique importance in modern business managemenj' Dgmocratie
leadership heavily relies on motivation of employees, through financial and non-financial incentives. Effective
communication and participation enhance the power of motivation. Feedback of information (upward
communication) is necessary for effective motivation and direction.
Fundamentals of Motivation:
The first fundamental thing is that a person wants to exist and survive and for this he needs basic
necessities of life e.g. food, cloth, shelter, education and medical aid etc.
The second fundamental of motivation is the desire to achieve a goal, for satisfaction or bliss. Basically
people are motivated to put in sincere efforts if they are assured of fulfilling their needs. Such as psychological

needs, social needs, security needs, ego (needs for self-respect) etc.
Classification of Motivation:
() Internal motivation
(i) External motivation
1. Internal Motivation. The inner urge of a man for achieving a goal is called *"Internal motive".
There is no outside compulsion for doing a work in such cases. Examples of internal motivation are
interests, emotional attachments, burning desires, fighting spirit for some noble cause. For example,
a patriot sacrifices his life for the sake of motherland, a scientist may be totally absorbed in his

research work due to his inner desire, mental satisfaction.

A person who works with internal motives is a self-motivated person. He is mentally prepared to do a
Job and hence internal motive is more effective. The management has to win the workers' heart and mind. It
morale and satisfaction.
consists of increasing employees'
2. External Motivation. Some material benefit in the form of attractive salary, bonus, praise, incentive,
punishment, fear of loss of job will motivate the workers to do their jobs more effectively and

efficiently.
Functions of Motivation. Motivation performs the following three functions:

(i) It originates action.

(i) It directs activities in the direction of goal.
the goal is achieved.
(it) It helps to continue the activities till

Motivation is needed to create interest, initiaive, enthustasm, loyally and willingness to work. As a
Tesult of this, motivation helps to improve the producvity. The importance of motivation could be seen

under these heads.

1. Arouse desire to work. Person may be capaDie or doing a work, efficient possess the necessary
skill etc, still he cannot do the work allolted to him in right time, in right quantity and of righ
do so.
quality unless he is motivated to
 124 INDUSTRIAL ENGINEERING AND PRODUCTION
MANAGEL
GEMENT
Workers properly motivated may not mentally accept the orders
not or directions with the
objectives of the company may not be achieved efficiently and effectively. result the
resle

2. Appropriate use of factors of production. An organisation may have best instruments,

tools,raw materials in sufficient equipmen.
quantity. But these factors can only be used appropriately (effectivel
through sound motivation system.
3. Reduction in labour turnover. Labour does not try to
go to another
motivated. Not only this the talented
organisation if proper
the
personnels from other organisation are also attracted to inin
organisation in which motivation schemes are utilized. jon
. Increase in production and
productivity. Motivation increases the desire to work whole hearted
and hence leads to increase in
production and productivity.
5. Basis of co-operation. Motivation increases
the organisation increased. This
job satisfaction, so the workers' interest. loyalty for
helps maintain good employer-employee relations and develoos
to
the sense of
Thus without
co-operation.
motivation the workers will not discharge their duties
of absenteeism, poor quality of efficiently. There will be high rate
production, higher degree of turnover. Effective motivation is the secret of
improved quantity and quality.
Essentials of Sound Motivation System
1. Good wages. It is a
psychological fact that workers are primarily concerned with their
salary ar
wages. They need money to fulfil their needs. It is necessary to assess the
and make appropriate wages from time to time
changes.
2. Good Financial Incentive Scheme. It induces the workers to produce more and better.
3. Opportunities for achievement, growth and promotion.
4. Human relations. The management should maintain
good human relations and offer due praise for
good work.
5. Good working conditions : Good
working conditions improve workers' morale and create interest
in work.
6. Job satisfaction. It includes the level of
interest, the challenge, variety
opportunities and the for
carrying out the work from beginning to end. The degree to which job uses potential skill and
abilities leads to higher degrees of job satisfaction.
7. Job security.
9.8. CONTROLLING
Introduction. In management literature, the word "Control" has a
special
standards, measuring actual performance, and taking corrective action. It is more thanmeaning.
It means seting
mere evaluation, appraisal
or correction. It measures
performance against goals and plans, indicates where deviations exist and helps
accomplishment of objectives. It serves to determine personnel responsible for deviations to take necessary
steps to improve performance. In short, control means setting standards measuring performance and corrective
action with a view to achieve best results.
Definitions:
According to Henry Fayol. "Control consists in verifying whether everything occurs in conformit
with the plan adopted, the instructions issued and the principles established".
According to Koontz and O'Donell-"Controlling implies measurements of accomplishment against
the standard and the correction of deviations to ensure attainment of objectives
according to plans"
Ernest Dale in his book Theory and Practice of Management" has stated that -
"The modern concept of managerial control envisages a system that not only provides historical record
of what has happened to the business as a whole but also pin points the reasons why it has happened and
 125
HNCTIONS OF MANAGEMENT

he Iinds,
arOvides data that enable the chief executive or the departmental head to take corrective steps if
on the wrong
track"
is dardsds

According to E.FL. Breach, "Control is checking current performance against predeterminea stairda
conta
ntaincd in the plans, with a view to ensuring adequate progress and satisfactory performance.
Necessity of Controling:
Controlling is essential in order to ensure that every activity is carried out according to the plan z
to
directions. The orders may be mis-interpreted or delayed due to lack of control. Control enables a manager
of the company.
keep a check and co-ordinate the activities of his subordinates so as to meet the objectives
and effectively. Any variation between actual performance and the laid down goals, and
economically as to prevent
abiectives can immediately detected and corrective action can be taken by the manager so
be
in future. Control is effected through organisation structure. Controlling is a
continuous
such variations with the standards laid
actual results of the operations of an organisation in comparison
orocess of measuring
down as a guide.
The function of control is to match actual performance with the plans, and to point out defective works,
to rectily them and prevent recurrence. violated
Controlling is therefore, necessary to ensure thal orders are not misunderstood, rules are not

and objectives have not been unknowingly shifted.

cannot do the complete
Control is thus an important function of management. Without control, a manager
work done and controlling is
job of managing. All other functions are preparatory steps for getting the
ensures work accomplish-
with makingsure that there is proper execution of these functions. It
concerned
ment according to plans. It is essential feature of scientific and successful management.
Essential Steps in Controlling Procedure:
There three essential steps in the process of control
are
results can be measured. The standard
1. Setting Standards. Standards are fixed against which
established for the company as well as the individual departments may be stated in terms of output,
etc. These standards should be clear
quality, costs, production targets, time standards, sales quotas
standards with definite individuals in
and meaningful. It is essential to identify responsibility for
the organisation.
are thre methods of checking performance
2. Checking and Reporting on Performance. There
allow the work to proceed as planned.
(a) Prior approval by the executive to
realistic picture of the actual performance.
(b) Personal observation by the executive to get
(c) Checking the unexpected.
isneed for reports and corrective action. In the absence of
Only when unexpected results occur, there
a
Such reports, the management assumes that all activities are proceeding as planned.
3. Taking Corrective Action. The actual performance is compared with the plan. If there are any
are found out and analysed. Then necessary steps are
deviations then, the reasons for deviations
taken to get back on plan.
Types of Control:
classified as
Based upon the objectives controls can be
2. Financial control 3. Budgetary control
I. Physical control
I. Physical control secks to control quality and quantity, e.8. so many units of output must be produced

during the course of a month etc.

2. Financial controls are expressed in monetary terms e,g. coSt per unitof production, cost of material,

labour, indirect expenses etc.

3. In budgetary control, physical and Iinancial standards tor future are determined and results are

compared against these pre-determined standards.

Besides above classification, controls can be classilied on the basis of activities of the organisation
control, Overall control etc.
rOlicy control, Quality control, Inventory
 INDUSTRIAL ENGINEERING AND PRODUCTION MANME
126 NT

Objectives of Controlling:
The main objective of controlling is to
ensure a
high degree of efficiency of the business, This
This very
systematic ard effective way, Thne
objective helps the manager to attain the goals of the organisation
in a

following are the objectives of controlling:

(i) To ensure high efficiency of the business.
(ii) To understand what had happened or is happening, why and by whom is happening.
(iii) To ensure effective and proper communication between the management and workers at all levele

to achieve the objectives of the organisation.

(iv) To keep proper check and control over direct and indirect expenses.
(v) To reframe organisational, goals, policies and objectives.
(vi) To find out the various deviations from the planned and proposed targets and to take necessary
corrective action.
(vii) To make sure that all the activities are performed according to the pre-determined plans.
9.9.CO-ORDINATING
Definition of Co-ordination
Co-ordination may be defined as on-going process whereby a manager develops an integrated, orderly
and synchronized pattern of group effort among his subordinates and tries to attain unity of effort in the
pursuit of a common purpose.
"Co-ordination is the orderly arrangement of group effort, to provide unity of action in the pursuit of
common purpose"-Alan C. Reiley and James
D. Mooney
George R. Terry, in his book Principles of Management has said-"Co-ordination deals with the task
of blending efforts in order to ensure successful attainment of an objective. It is accomplished by means of
planning. organising, actuating and controlling".
Accordingto Ordway Tead, "Co-ordination is the effort to ensure a smooth interplay of the functions
and forces of all different component parts of an organisation to the end that its purposes will be realised with
a minimum of friction and a maximum of collaborative effectiveness".
According to E.FL. Brech. "Co-ordination is balancing and keeping the terms together, by ensuringa
suitable allocation of working activities to the various members and seeing that these are performed with due
harmony among the members themselves".
In simple terms-"Co-ordination is the
orderly arrangement of group effort, to provide unity ofaction
in the pursuit of common purpose".
Need for Co-ordination
Co-ordinating means achieving team spirit and unity of action amongst the subordinates for achieving
the common objectives. In a business unit, work is
centres. The individuals are doing numerous different
performed by numerous individuals, in various work
work. It is the function of management to see that the
jobs; many of them are highly specialised in their own
individuals in the organisation operate as a team.
Consider, for example,a cricket team having the best
is a lack of co-ordinated effort.
players known, may find it difficult to win if there
Similarly, the success for a commercial enterprise, is based on the collective
efforts of individuals. If properly co-ordinated these individuals
that the group can be more productive. If supplement each other's efforts to the extenn
they are not co-ordinated, the individuals, in pursuing their
duties, may undo or deter the effects of their particular
The need for
colleagues.
co-ordination by management arises
(i) Numerous persons at work. particularly because of the existence of:
(ii) Subdivisions and complexity of work.
iiy Delegation of authority and
(iv) Chances of
responsibility.
difference between executives and
(v) Human nature and their specialists.
problems.
(vi Growth in size of organisation
 127
T R N S OF MANAGEMENT

Tools of Co-ordination:
tools of co-ordination are as follows
The usual
(Clear cut objectives.
duues
Clear cut authority and responsibility of every subordinates so-that he knows his specitic
n
and obligations.
and workers
communication between the executive and his subordinates, supervisors
(/n Effective
( Good human relationship of the managers with their subordinates. subordinates.
the subordinates and between the executive and the
() Co-operation amongst
Types of Co-ordination:
different departments,
Co-ordination. Internal co-ordination means co-ordination among
1. Internal of different
also exists among employees
branches, sections and other parts of an enterprise. It
staff, managers, directors and other personnels.
departments, supervisory
customers, suppliers,
Co-ordination. It is mainly concerned with the co-ordination between
2. External concern has to deal with.
with whom the business
society, government and other outside agencies
bottom to top for
level to the bottom or from
3. Vertical Co-ordination. Co-ordination from top
common objective of the business is
called vertical co-ordination.
attaining
sales, accounts,
of different departments such as purchase,
4. Horizontal co-ordination. Where activities
horizontal co-ordination.
finance etc. are knit together is called

9.10. COMMUNICATING or information

are transmitted,
which instructions, ideas, thoughts
Communicating is a process by
received and understand, by
the persons working in organisation.

Components of Communication
communication are;
The basic components of
(sender)
Communication
(message)+ Feedback
=

(receiver) transmitted to the receiver. The

receiver must
prepare the message to be
The sender must appropriately until the sender knows that the message
Communication is never complete
understand the message clearly. receiver's behaviour.
either through feedback or observation of the
understood
has been received and to those to whom it is conveyed
communication is to supply
the information necessary
The purpose of the will to work. If the messages.
i.e. to develop the skill and
for better job performance and active co-operation; function also be executed
communicated, the management
etc. are effectively
and efficiently
decisions,
effectively and efficiently. 'common'
Latin word 'communis' that means
communication is derived from the
Definition. The term common of understanding. Literally,
ground
communication he establishes
a
and thus if person affects
a information.
or to spread
to tellI, to show
Communication means to inform, of thought or information to bring about
as an interchange
Thus communication may be interpreted unity of purpose, interest and
relations. It brings about
confidence for good industrial
understanding and
efforts in an organisation. which instructions, ideas, thoughts or informations
defined communication is a process by
already
As
and acted upon by the persons working
in the organisation.
are transmitted, received and understood
communication 1s getting the receiver and the sender
essence ol
Wibur Schramn has said that "the
luned' together for a particular message person does when he
Allen, "Communicalion is the sum oi all the things one
According to Louis A.
 INDUSTRIAL ENGINEERING AND PRODUCTION MANAGEMEN
128 NT

wants to create understanding in the mind of another. It involves a systematie and continuous proces
of
telling, listening and understanding.
According to Keith Davis"Il is the process of passing intormation and understanding from one
person to another. It is essentially a bridge of meaning between people. By using this bridge of meaning. a
person can safely eross the river of misunderstanding that separate all the people".
To conclude from the above definitions communication does not merely mean sending or receivino
message. It is much more than that. It includes proper understanding of the message, its acceptance and
action on it. It is the sum total of direct or indirect, consciously or unconsciously transmitted wonds, attitudes
feclings. actions. gestures and tones. Even silence is an effcctive form of communication. A twist in the fac
ace
is often more expressive than a 100 words put together.
Process or Machinery of Effective Communication:
For every communication, at least two persons are required i.e. a sender and a receiver. The various
steps involved in communication are as given in the communication model as shown in Fig. 9.1

Creating idea Encoding (designing) Transmission

Information need the message, ideas of message
by the sender into words over a channel

Idea creation Encoding Transmission-

Feedback

Action Decoding Receiving

Behaviour of Receiver analyses. Receiving the
action for interprets and message by
message decodes message Receiver
for understanding

Fig. 9.1. Process of Effective Communication. (Communication model)

These steps have been described as below:
1. Idea Creation. It is the preliminary step in communication where the sender creates an idea to
communicate. In other words, he thinks about the message or information required to be sent.
2. Encoding. Under this step, while encoding message, the sender assesses whether the receiver is
literate, illiterate, educated to know written words or spoken words, whether he has accustomed to
the data due to the context of his employment, whether he has actual experience of work. This
information helps the sender to choose proper codes printed, sounds, gestures, pictures. real objects
and events to encode his message for the receiver.
3. Transmission. The sender also selects certain channel or path for communication through whicha
s
message travel to the receiver. Selection of the proper channel in accordance with the message
necessary. Written report, letter, lecture, speech, illustrations, pictures. photographs, telegrams etc
serves as a vehicle or carrier for message. Channel selected should be free from barriers. The sender
has to view the information needs, background knowledge, experience of the receiver while selectung
a channel. Channel functions as a hardware while the message as a software.
4. Recciving. The receiver has to pay the necessary attention in receiving the message. Any neglect on
 EUNCTIONS OF MANAGEMENT 129

the part of the receiver may make the communication ineffective or it means the message is lost.
case of oral
l
message, the receiver should be a
good listener and willing to understand the messag
5. Decoding. Decoding means the act of translating the message by the receiver in his own words and
experience.
Decoding means translation of the message received into ideas for understanding. Understanding the
ssage by the receiver is the key to the decoding process. If the receiver does not understand the message or
messa

misunderstands it or pretends to misunderstand it he has understood it correctly, the

even though
communication is ineffective. Encoding is done by the sender, while decoding is done by the receiver.
Action. It is the response of the communication received from the sender. The receiver may like to
6.
assigned by the
ignore the message or to store the information received or to perform the task
sender through the message delivered.
Feed back. The receiver, after receiving the message from the sender, analyses, interprets it in
7.
accordance with his knowledge and experience. On perceiving and understandingthe message
to the sender is
and taking action if necessary, he sends response to the sender. This response
far his message 1s
nothing but feedback given by the receiver. It enables the sender to find out how
selection of the
followed by the receiver. It helps him to detect shortcomings and faults in the
the feedback thesender
modes of communication, selection of channel etc. On evaluating
the receiver for his full understanding.
restructures, modifies his message, if necessary and sends it to
Without feedback the process of interaction will not complete.
Methods of Communication:
1. Verbal or Written communication
2. Formal or Informal communication
communication
3. Downward, Upward or Horizontal
is oral. The examples of
Communication. In the case of verbal communication every thing
1. Verbal lectures, social
to face discussions, telephonic talk,
communication are orders and face
verbal
Verbal communication is quick simple
interviews audio-visual aids etc.
gatherings, conference, of emergency, when every
effective. It is the only way out during periods
and comparatively more
activity is to be quickened. Written communication is the only way
out
Written Communication.They are always in writing. whenever
alsoprovides a permanent record and
when both the communicator and the recipient are far off. It
as evidence.
necessary it can be referred in written. Formal
Communication. Formal communications are mostly
2. Formal and Informal of the communicator and the
associated with the particular position
communications are generally his
instructs his subordinates by virtue of
when the general manager
recipient in that structure, e.g. communication.
is formal
superior position, it other hand are free
from all sorts of formalities. Informal
communications on the
Informal smile and or silence. Example, conversion
be conveyed by simple glance; gesture,
a
Communications may
workers about feeling,
facts, rumors etc.
Detween and among of instructions and information from top
transmisSion
Communication. It is the
3. Downward
the lower grade employee.
executive to
Irom subordinates to the supervisors e.g. reports:
It is the flow ofinformalion
Upward Communication. inlormation between persons having the
It is the transmission o
Communication.
Horizontal exampie, production manager informing maintenance
samelevel of authority in the organisation. Or
of a machine.
breakdown
a
manager regarding
 Communication

Formal
Purpose of

Lateral
Upward - Information
Downward - Feedback - Co-ordination
Instructions
- Suggestions
-Rationale - Requests
Problem solving
- Polices
- Grievances
- Feedback
- Motivation communication.
of formal
Fig. 9.2. Purpose
Essentials of Communications:
communication the following points are important:
Foreffective Intention. For good
cominunication the ideas to be transmitted
and
1. It must be clear in Purpose The academic level of the workers, their
clear in the mind of communicator. the communication is
must be absolutely account, otherwise
etc. should also be taken into
power of grasping things,
likely to go in waste. communicatee (recipient) to listen,
to participate
Communicator should help the
2. Participation.
and co-operate. what to communicate and
Transmission. In this connection the
communicator must plan carefully
3.
how to communicate.

and language must be understandable and specific.

4. It must be simple,
5. Altach importance to action rather than words.
Effective communication requires a quality of leadership
6. Employer Employee Relations.
Cordial -

industrial relation, policies

with each other. It requires sound
between people immediately connected
trust and confidence
and practices, an all-round atmosphere
of friendly co-operation and a feeling of
from the top management to the workers.
throughout the organization, right
Characteristics of Communication: etc. are
Communication is way process because orders,
a two
instructions, directions, guidelines,
. etc. are
directed or communicated downwards while suggestions, complaints, grievances,
communicated upwards.
because it is necessary to have a congenial relationshp
2. No business can exist without communication
between the different employees working at different levels and that is why
it is a continuous process.
mediums.
3. It may be formal or informal and through different and
and messages are communicated
4. The communication process continues to the extent that ideas
received.
5. The communication should always be consistent with the plans, objectives, policies and programmes
of the organisation and not conflicting.
6. The information should be adequate and complete in all respects.
Importance of Communication in Management:
Communication is the flow of accurate information which people want, need and are entitled to have
for successful completion of the job'". It is an established fact that one of the foundation stones upon whic
organisation rests is a system of communication. Co-ordination is achieved largely through communications
i"
effective communication
No organisation exXists without communication network. The importance of
nagement is described below.
1. Smooth and un-restricted Running of the Enterprise. In the manufacturing concerns instructions
l0 ns
and information is being passed on continuously from one end to the other from a superior
NCTIONS OF MANAGEMENT 131

subordinaes, from the managing director to his executives. Therefore, the smooth and unrestricted
running of an enterprise depends on effective system of communication.
2. Quick Decisions and Implementation. Communication helps the administration in arriving at
vital decisions. Without communication it may not be possible for the top administrators to come in
closer contact with each other and discuss the important problems pertaining to the organisation.
Through communication, the management conveys targets, issues instructions, allocates jobs and
responsibilities and looks after the efficient performance of all activities.
3. Proper Planning and Co-ordination. Good communications are essential to co-ordination. They
are necessarily upward, downward and
sideways though all the levels of authority and advice for
thetransmission, interpretation and adoption of policies for the sharing of knowledge and information
and for he suitable needs of good morale and mutual understanding.
more

4. Maximum Productivity with Minimum Cost. Through communication the

employees can be
instructed, clearly what exactly to do and the way in which it is to be done efficiently and
economically. The management can sell their ideas, motivate the workers to work with a will and
build up
high moral in the company. This helps to increase the productivity.
a

5. Morale Building and Democratic Management. Under effective system of communication it is

quite convenient for the employees to express their difficulties, grievances if any, bring all their
problems to the notice of management. Therefore, it helps to build up a morale and democratic
management..