Fundamental Of Management

                                           Assignment :01

1. Explain Management(Definition,Nature,Significance,Scope)?

Ans:-Definition:The term 'management ' has been used in different sensed sometimes it refers to the process of plannings ,organizing,staffing,directing,coordinating and controlling at other times it is use to describe it as a function of managing people. It is also referred to as a body of knowledge,a practice & discipline.

Nature Of management:

Universal process: Wherever there is human activity, there is management. Without efficient management, objectives of the company can not be achieved.

Factor of production: Qualified and efficient managers are essential to utilization of labor and capital.

Goal oriented: The most important goal of all management activity is to accomplish the objectives of an enterprise. The goals should be realistic and attainable.

Supreme in thought and action: Managers set realizable objectives and then mastermind action on all fronts to accomplish them. For this, they require full support form middle and lower levels of management.

Group activity: All human and physical resources should be efficiently coordinated to attain maximum levels of combined productivity. Without coordination, no work would accomplish and there would be chaos and retention.

Dynamic function: Management should be equipped to face the changes in business environment brought about by economic, social, political, technological or human factors. They must be adequate training so that can enable them to perform well even in critical situations.

Social science: All individuals that a manager deals with, have different levels of sensitivity, understanding and dynamism.

Important organ of society: Society influences managerial action and managerial actions influence society. Its managers responsibility that they should also contribute towards the society by organizing charity functions, sports competition, donation to NGO’s etc.

System of authority: Well-defined lines of command, delegation of suitable authority and responsibility at all levels of decision-making. This is necessary so that each individual should what is expected from him and to whom he need to report to.

Profession: Managers need to possess managerial knowledge and training, and have to conform to a recognized code of conduct and remain conscious of their social and human obligations.

Process: The management process comprises a series of actions or operations conducted towards an end.

Significance Of Management:

1.Encourages Initiative:

Management encourages initiative. Initiative means to do the right thing at the right time without being told or influenced by the superior. The employees should be encouraged to make their own plans and also to implement these plans. Initiative gives satisfaction to employees and success to organization.

2. Encourages Innovation

Management also encourages innovation in the organization. Innovation brings new ideas, new technology, new methods, new products, new services, etc. This makes the organization more competitive and efficient.

3. Facilitates growth and expansion

Management makes optimum utilization of available resources. It reduces wastage and increase efficiency. It encourages team work and motivates employees. It also reduces absenteeism and labour turnover. All this results in growth, expansion and diversification of the organization.

4. Improves life of workers

Management shares some of its profits with the workers. It provides the workers with good working environment and conditions. It also gives the workers many financial and non-financial incentives. All this improves the quality of life of the workers.

5. Improves corporate image

If the management is good, then the organization will produce good quality goods and services. This will improve the goodwill and corporate image of the organization. A good corporate image brings many added benefits to the organization.

6. Motivates employees

Management motivates employees by providing financial and non-financial incentives. These incentives increase the willingness and efficiency of the employees. This results in boosting productivity and profitability of the organization.

7. Optimum use of resources

Management brings together the available resources. It makes optimum (best) use of these resources. This brings best results to the organization.

8. Reduces wastage

Management reduces the wastage of human, material and financial resources. Wastage is reduced by proper production planning and control. If wastage is reduced then productivity will increase.

9. Increases efficiency:

Efficiency is the relationship between returns and cost. Management uses many techniques to increase returns and to reduce costs. Higher efficiency brings many benefits to the organization.

10. Improves relations

Management improves relations between individuals, groups, departments and between levels of management. Better relations lead to better team work. Better team work brings success to the organization.

11. Reduces absenteeism and labour turnover

Absenteeism means the employee is absent without permission. Labour Turnover means the employee leaves the organization. Labour absenteeism and turnover increases the cost and causes many problems in the smooth functioning of the organization. Management uses different techniques to reduce absenteeism and labour turnover in the organization.

12. Encourages Team Work

Management encourages employees to work as a team. It develops a team spirit in the organization. This unity bring success to the organization

Scope Of Management:

Although it is difficult to precisely define the scope of management, yet the following areas are included in it:

1.  Subject-matter of management: Planning, organizing, directing, coordinating and controlling are the activities included in the subject matter of management.

2.  Functional areas of management: These include:

Financial management includes accounting, budgetary control, quality control, financial planning and managing the overall finances of an organization.

Personnel management includes recruitment, training, transfer promotion, demotion, retirement, termination, labor-welfare and social security industrial relations.

Purchasing management includes inviting tenders for raw materials, placing orders, entering into contracts and materials control.

Production management includes production planning, production control techniques, quality control and inspection and time and motion studies.

Maintenance management involves proper care and maintenance of the buildings, plant and machinery.

Transport management includes packing, warehousing and transportation by rail, road and air.

Distribution management includes marketing, market research, price-determination, taking market­ risk and advertising, publicity and sales promotion.

Office Management includes activities to properly manage the layout, staffing and equipment of the office.

Development management involves experimentation and research of production techniques, markets, etc.

3. Management is an inter-disciplinary approach: For the correct implementation of the management, it is important to have knowledge of commerce, economics, sociology, psychology and mathematics.

4. Universal application: The principles of management can be applied to all types of organizations irrespective of the nature of tasks that they perform.

5. Essentials of management: Three essentials of management are:

• Scientific method
• Human relations
• Quantitative technique

6. Modern management is an agent of change: The management techniques can be modified by proper research and development to improve the performance of an organization.

Ques:2. What is the function of management ? Is management a science or an art ?

Ans:-Functions of Management

Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

1. Planning

   It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

   It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:
   • Identification of activities.
   • Classification of grouping of activities.
   • Assignment of duties.
   • Delegation of authority and creation of responsibility.
   • Coordinating authority and responsibility relationships.

3. Staffing

   It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:
   • Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
   • Recruitment, Selection & Placement.
   • Training & Development.
   • Remuneration.
   • Performance Appraisal.
   • Promotions & Transfer.

4. Directing

   It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:
   • Supervision
   • Motivation
   • Leadership
   • Communication
   Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.
   Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
   Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
   Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.

5. Controlling

   It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:
   1. Establishment of standard performance.
   2. Measurement of actual performance.
   3. Comparison of actual performance with the standards and finding out deviation if any.
   4. Corrective action.

(functions-of-management)

IS MANAGEMENT IS A SCIENCE OR AN ART ?

Management is oldest of Art and Youngest of Science

It is said that "management is the oldest of arts and the youngest of sciences". This explains the changing nature of management but does not exactly answer what management is? To have an exact answer to the question it is necessary to know the meanings of the terms "Science" and "Art".

What is "Science"?

Science may be described- "as a systematic body of knowledge pertaining to an area of study and contains some general truths explaining past events or phenomena".

The above definition contains three important characteristics of science. They are

1. It is a systematized body of knowledge and uses scientific methods for observation
2. Its principles are evolved on the basis of continued observation and experiment and
3. Its principles are exact and have universal applicability without any limitation.

Judging from the above characteristics of science, it may be observed that-

1. Management is a systematized body of knowledge and its principles have evolved on the basis of observation.
2. The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element.
3. In management, it is not possible to define, analyse and measure phenomena by repeating the same conditions over and over again to obtain a proof.

The above observation puts a limitation on management as a science. Management like other social sciences can be called as "inexact science".

What is "Art"?

'Art' refers to "the way of doing specific things; it indicates how an objective is to be achieved." Management like any other operational activity has to be an art. Most of the managerial acts have to be cultivated as arts of attaining mastery to secure action and results.

The above definition contains three important characteristics of art. They are-

1. Art is the application of science. It is putting principle into practice.
2. After knowing a particular art, practice is needed to reach the level of perfection.
3. It is undertaken for accomplishing an end through deliberate efforts.

Judging from the above characteristics of art, it may be observed that-

1. Management while performing the activities of getting things done by others is required to apply the knowledge of certain underlying principles which are necessary for every art.
2. Management gets perfection in the art of managing only through continuous practice.
3. Management implies capacity to apply accurately the knowledge to solve the problems, to face the situation and to realise the objectives fully and timely.

The above observation makes management an art and that to a fine art.

Management is both a Science as well as an Art

Management is both a science as well as an art. The science of management provides certain general principles which can guide the managers in their professional effort. The art of management consists in tackling every situation in an effective manner. As a matter of fact, neither science should be over-emphasised nor art should be discounted; the science and the art of management go together and are both mutually interdependent and complimentary.

Management is thus a science as well as an art. It can be said that-"the art of management is as old as human history, but the science of management is an event of the recent past."

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Question 3.Explain planning and decision making ?

Planning:

Planning means looking ahead. It is deciding in advance what is to be done. Planning includes forecasting. According to Henry Fayol - "purveyance, which is an essential element of planning, covers not merely looking into the future but making provisions for it. A plan is then a projected course of action". All planning involves anticipation of the future course of events and therefore bears an element of uncertainty in respect of its success. Planning is concerned with the determination of the objectives to be achieved and course of action to be followed to achieve them. Before any operative action takes place it is necessary to decide what, where, when and who shall do the things. Decision making is also an important element of planning. Planning determines both long-term and short-term objectives and also of the individual departments as well as the entire organisation. According to Fayol - "The plan of action is, at one and the same time, the result envisaged, the line of action to be followed, the stages to go through, and the methods to use. It is a kind of future picture wherein proximate events are outlined with some distinctness...." Planning is a mental process requiring the use of intellectual faculties' imagination, foresight, sound judgement etc.

Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programmes from among alternatives. A plan is a predetermined course of action to achieve a specified goal. It is a statement of objectives to be achieved by certain means in the future. In short, it is a blue print for action.

According to Louis A Allen - "Management planning involves the development of fore casts, objectives, policies, programmes, procedures, schedules and budgets".

According to The OHaimann - "Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action, for the future, attempting to achieve a consistent, co-ordinated structure of operations aimed at the desired results".

According to Koontz O'Donnel - "Planning is an intellectual process, the conscious determination of courses of action, the basing of decisions on purpose, acts and considered estimates".

Decision Making

Decision making is a daily activity for any human being. There is no exception about that. When it comes to business organizations, decision making is a habit and a process as well.

Effective and successful decisions make profit to the company and unsuccessful ones make losses. Therefore, corporate decision making process is the most critical process in any organization.

In the decision making process, we choose one course of action from a few possible alternatives. In the process of decision making, we may use many tools, techniques and perceptions.

In addition, we may make our own private decisions or may prefer a collective decision.

Usually, decision making is hard. Majority of corporate decisions involve some level of dissatisfaction or conflict with another party.

Ques. 4. Explain types of plan and process of planning .

Planning is based on the theory of “thinking before acting”. Planning is an integral part of our life. We make plans in each and every step of life whether it be to go to school or to buy household goods during shopping. We make plans according to the limitations of our budget and resources to get maximum satisfaction and to fulfill goals from out activities.

source:www.dreamstime.com

Planning is the most basic and primary function of management. It is the pre-decided outline of the activities to be conducted in the organization. Planning is the process of deciding when, what, when where and how to do a certain activity before starting to work.

It is an intellectual process which needs a lot of thinking before a formation of plans. Planning is to set goals and to make certain guidelines achieve the goals. Also, Planning means to formulate policies, segregation of budget, future programs etc. These are all done to make the activity successful.

All other function of management is useless if there is not proper planning system in an Organization. So planning is the basis of all other functions. Thus Planning is the map or a blueprint for the organization.

According to Theo Haimann, “Planning is deciding in advance, what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated structure of operations aimed at the desired results.”

According to Alford and Beaty, “Planning is the thinking process, the organized foresight, the vision based on fact and experience that is required for intelligent action.”

According to ME. Hurley, “Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programs from among alternatives.”

Types of Planning

Any organization can have different plans. We can classify the types of plans in the following ways:

On the basis of Nature

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• Operational Plan: Operational plans are the plans which are formulated by the lower level management for short term period of up to one year. It is concerned with the day to day operations of the organization. It is detailed and specific. It is usually based on past experiences. It usually covers functional aspects such as production, finance, Human Resources etc.
  
• Tactical Plan: Tactical plan is the plan which is concerned with the integration of various organizational units and ensures implementation of strategic plans on day to day basis. It involves how the resources of an organization should be used in order to achieve the strategic goals. The tactical plan is also known as coordinative or functional plan.
  
• Strategic Plan: Strategic plan is the plan which is formulated by the top level management for a long period of time of five years or more. They decide the major goals and policies to achieve the goals. It takes in a note of all the external factors and risks involved and makes a long-term policy of the organization. It involves the determination of strengths and weaknesses, external risks, mission, and control system to implement plans.

On the basis of managerial level:

• Top level Plans:Plans which are formulated by general managers and directors are called top-level plans. Under these plans, the objectives, budget, policies etc. for the whole organization are laid down. These plans are mostly long term plans.
  
• Middle-level Plans: Managerial hierarchy at the middle level includes the departmental managers. A corporate has many departments like purchase department, sales department, finance department, personnel department etc. The plans formulated by the departmental managers are called middle-level plans.
  
• Lower level Plans: These plans are prepared by the foreman or the supervisors. They take the existence of the actual workplace and the problems connected with it. They are formulated for a short period of time and called short term plans.
  

On the basis of time:

• Long Term Plan: Long-term plan is the long-term process that business owners use to reach their business mission and vision. It determines the path for business owners to reach their goals. It also reinforces and makes corrections to the goals as the plan progresses.
  
• Intermediate Plan: Intermediate planning covers 6 months to 2 years. It outlines how the strategic plan will be pursued. In business, intermediate plans are most often used for campaigns.
  
• Short-term Plan: Short-term plan involves pans for a few weeks or at most a year. It allocates resources for the day-to-day business development and management within the strategic plan. Short-term plans outline objectives necessary to meet intermediate plans and the strategic planning process.

On the basis of use:

• Single Plan: These plans are connected with some special problems. These plans end the moment of the problems to be solved. They are not used, once after their use. They are further re-created whenever required.
  
• Standing Plan: These plans are formulated once and they are repeatedly used. These plans continuously guide the managers. That is why it is said that a standing plan is a standing guide to solving the problems. These plans include mission, policies, objective, rules and strategy.

Hence these are the basic types of plans in any organization.

Planning process

Planning is a complex process which requires high level of studies and analysis. To create a plan there must be determination of objectives and outlining of the course of action to achieve the goals. There is no set formula for planning. A planning process which is suitable for one kind of organization may not be suitable for another type of organization. However, we can take the following steps as the guideline to draw a plan:

1. Analysis of the environment: Planning begins with the awareness of the opportunities in the external environment and within the organization. For this SWOT analysis is most suitable. Strength and weaknesses are the internal factors whereas opportunities and threats are the environmental factors which are to be analyzed.

   

   
   

2. Setting the objectives: The second step of planning is to set objectives and goals for the organization as a whole and for each department. Long term, as well as short-term plans, are to be created. Objectives are specified to each and every manager and department head. Objectives give direction to the major plans. So managers should have an opportunity to contribute their ideas for setting their own objectives and of the organization.
   
3. Develop premises: Planning premises are the assumptions about the future on the basis of which the plans will be ultimately formulated. Planning premises are the key to the success of planning as they supply pertinent facts and information regarding the future such as general economic conditions, production cost, and prices, probable competitive behavior, governmental control etc. Forecasting is an essential part of premises.
   
4. Determine and evaluate alternatives: The fourth step is to search and identify the alternative course of action. It suggests that a particular objective can be achieved through numerous ways. But the most relevant alternatives must be listed down so that selection is made easier. Once various alternatives are identified, they must be well analyzed with their strong and weak points.
   
   

   

   
   

5. Selection of Best Alternative: This is the point where the certain plan is adopted. When the alternatives are determined most suitable alternative must be chosen out from the list which can give maximum output with minimum risk.
   
6. Formulation of a derivative plan: Derivative plans are the backing plans which are very essential. Once the basic plan has been formulated, it must be translated into day to day operation of the organization. Middle and low-level managers must draw up the appropriate plans, programs and budget for their sub-units.
   
7. Budget formulation: After decisions are made and plans are set the next step is giving them sufficient funds to carry them out. Optimum budgeting must be done for every course of action.
   
8. Implementation of a plan: Once the plans are set up, now the plans must be well informed and shared with the employees and managers expecting full commitment and trust. Finally, the plans must be carried out.
   
9. Follow up action: Obviously once a plan is carried out it generates certain output. The progress must be well monitored and managers need to check the progress of their plans so they can take necessary steps to improve the plans if needed.Quest. 

Question 5. Explain importance & steps of decision making.

Ans:-1. Better Utilisation of Resources

Decision making helps to utilise the available resources for achieving the objectives of the organisation. The available resources are the 6 Ms, i.e. Men, Money, Materials, Machines, Methods and Markets. The manager has to make correct decisions for all the 6 Ms. This will result in better utilisation of these resources.

2. Facing Problems and Challanges

Decision making helps the organisation to face and tackle new problems and challenges. Quick and correct decisions help to solve problems and to accept new challenges.

3. Business Growth

Quick and correct decision making results in better utilisation of the resources. It helps the organisation to face new problems and challenges. It also helps to achieve its objectives. All this results in quick business growth. However, wrong, slow or no decisions can result in losses and industrial sickness.

4. Achieving Objectives

Rational decisions help the organisation to achieve all its objectives quickly. This is because rational decisions are made after analysing and evaluating all the alternatives.

5. Increases Efficiency

Rational decisions help to increase efficiency. Efficiency is the relation between returns and cost. If the returns are high and the cost is low, then there is efficiency and vice versa. Rational decisions result in higher returns at low cost.

6. Facilitate Innovation

Rational decisions facilitate innovation. This is because it helps to develop new ideas, new products, new process, etc. This results in innovation. Innovation gives a competitive advantage to the organisation.

7. Motivates Employees

Rational decision results in motivation for the employees. This is because the employees are motivated to implement rational decisions. When the rational decisions are implemented the organisation makes high profits. Therefore, it can give financial and non-financial benefits to the employees.

Steps of Decision Making Process

Following are the important steps of the decision making process. Each step may be supported by different tools and techniques.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when it comes to identifying the purpose of the decision.

• What exactly is the problem?
• Why the problem should be solved?
• Who are the affected parties of the problem?
• Does the problem have a deadline or a specific time-line?

Step 2: Information gathering

A problem of an organization will have many stakeholders. In addition, there can be dozens of factors involved and affected by the problem.

In the process of solving the problem, you will have to gather as much as information related to the factors and stakeholders involved in the problem. For the process of information gathering, tools such as 'Check Sheets' can be effectively used.

Step 3: Principles for judging the alternatives

In this step, the baseline criteria for judging the alternatives should be set up. When it comes to defining the criteria, organizational goals as well as the corporate culture should be taken into consideration.

As an example, profit is one of the main concerns in every decision making process. Companies usually do not make decisions that reduce profits, unless it is an exceptional case. Likewise, baseline principles should be identified related to the problem in hand.

Step 4: Brainstorm and analyse the different choices

For this step, brainstorming to list down all the ideas is the best option. Before the idea generation step, it is vital to understand the causes of the problem and prioritization of causes.

For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect diagram helps you to identify all possible causes of the problem and Pareto chart helps you to prioritize and identify the causes with highest effect.

Then, you can move on generating all possible solutions (alternatives) for the problem in hand.

Step 5: Evaluation of alternatives

Use your judgement principles and decision-making criteria to evaluate each alternative. In this step, experience and effectiveness of the judgement principles come into play. You need to compare each alternative for their positives and negatives.

Step 6: Select the best alternative

Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best alternative is an informed decision since you have already followed a methodology to derive and select the best alternative.

Step 7: Execute the decision

Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with the help of subordinates.

Step 8: Evaluate the results

Evaluate the outcome of your decision. See whether there is anything you should learn and then correct in future decision making. This is one of the best practices that will improve your decision-making skills.

Conclusion

When it comes to making decisions, one should always weigh the positive and negative business consequences and should favour the positive outcomes.

This avoids the possible losses to the organization and keeps the company running with a sustained growth. Sometimes, avoiding decision making seems easier; especially, when you get into a lot of confrontation after making the tough decision.

But, making the decisions and accepting its consequences is the only way to stay in control of your corporate life and time.

Question 6. Explain types of decision & decision making under different conditions.

Ans:-Types of Decisions

Programmed and Non-Programmed Decisions: Herbert Simon has grouped organizational decisions into two categories based on the procedure followed. They are:

Programmed decisions: Programmed decisions are routine and repetitive and are made within the framework of organizational policies and rules. These policies and rules are established well in advance to solve recurring problems in the organization. Programmed decisions have short-run impact. They are, generally, taken at the lower level of management.

Non-Programmed Decisions: Non-programmed decisions are decisions taken to meet non - repetitive problems. Non-programmed decisions are relevant for solving unique / unusual problems in which various alternatives cannot be decided in advance. A common feature of non-programmed decisions is that they are novel and non-recurring and therefore, ready made solutions are not available. Since these decisions are of high importance and have long-term consequences, they are made by top level management.

Strategic and Tactical Decisions: Organizational decisions may also be classified asstrategic or tactical.

Strategic Decisions: Basic decisions or strategic decisions are decisions which are of crucial importance. Strategic decisions a major choice of actions concerning allocation of resources and contribution to the achievement of organizational objectives. Decisions like plant location, product diversification, entering into new markets, selection of channels of distribution, capital expenditure etc are examples of basic or strategic decisions.

Tactical Decisions: Routine decisions or tactical decisions are decisions which are routine and repetitive. They are derived out of strategic decisions. The various features of a tactical decision are as follows:

• Tactical decision relates to day-to-day operation of the organization and has to be taken very frequently.
• Tactical decision is mostly a programmed one. Therefore, the decision can bemade with in the context of these variables.
• The outcome of tactical decision is of short-term nature and affects a narrow part of the organization.
• The authority for making tactical decisions can be delegated to lower level managers because : first, the impact of tactical decision is narrow and of short-term nature and Second, by delegating authority for such decisions to lower-level managers, higher level managers are free to devote more time on strategic decisions.

Decision Making Conditions

everyday a manager has to make hundreds of decisions in the organization. Managers do not function in a theoretical world but they function within the reality that many thongs are not known. There are three conditions that managers may face as they make decisions. They are (1) Certainty, (2) Risk, and (3) Uncertainty.

(1) Certainty

A state of certainty exists only when the managers knows the available alternatives as well as the conditions and consequences of those actions. There is little ambiguity and relatively low possibility of making a bad decision. It assumes that manager has all the necessary information about the situation. Hence, decisions under certainty means a perfectly accurate decision will be made time after time. Of course, decision making under certainty is rare.

(2) Risk

A state of risk exists when the manager is aware of all the alternatives, but is unaware of their consequences. The decision under risk usually involves clear and precise goals and good information, but future outcomes of the alternatives are just not known to a degree of certainty. A risk situation requires the use of probability estimates. The ability to estimate may be due to experience, incomplete but reliable information, or intelligence. Statistical analysis can be applied to the calculation or probabilities for success or failure.

(3) Uncertainty

In today's complex environment most significant decisions are made under a state of uncertainty where there is no awareness of all the alternatives and also the outcomes,even for the known alternatives. To make effective decisions, managers must require as much relevant information as possible. Such decisions require creativity and the willingness to take a chance in the face of such uncertainties. In such situations, managers do not even have enough information to calculate probabilities and degrees of risk. So, statistical analysis is of no use. Hence, managers need to make certain assumptions about the situation in order to provide a reasonable framework for decision making. Intuition, judgment, and experience always play major roles in the decision making process under conditions of uncertainty.

Hence, In conclusion, we can say that greater the amount of reliable information, the more likely the manager will make a good decision. Hence, manager should make sure that the right information is available at the right time.

Question 7. What is group decision making ?

Group Decision Making

Ans:-Definition: The Group Decision Making is the collective activity wherein several persons interact simultaneously to find out the solution to a given statement of a problem. In other words, group decision making is a participatory process wherein multiple individuals work together to analyze the problem and find out the optimum solution out of the available set of alternatives.

In group decision-making, the number of participants often ranges from two to seven. It is not necessary that all the group members agree with each other and hence most of the times, the decision is taken on the basis of a majority if no other mode of a majority is prescribed. The majority means the number of votes in favor or against the proposed alternative.

There are several techniques that can be used to increase the efficiency of group decision making. These are as follows:

1. Nominal group Technique
2. Delphi Technique
3. Brainstorming
4. Dialectic Decisions Method

The concept of group decision making is based on the proverb that two heads are better than one. This means when the decisions are taken jointly, the expertise or experience of each member could be capitalized to reach to an optimum solution. Thus, the synergy gets created when the decisions are made in a group as more ideas and opinions pop up during the discussion session.

But however, the group decision making can be time-consuming and often leads to the conflict between the group members. Also, no single member is held accountable in case of a failure of such decision, since it is the whole group that agrees with that decision.