1. business and industrial
2. business operations
3. business plans

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BUREAUCRACY
Max Weber, a German Scientist is known as Father
Of Bureaucracy.
He studied different types of Business and government
organisations and distinguished 3 basic types of
administration in them.
1. Leader Oriented
2. Traditional Oriented
3. Bureaucratic Oriented
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Leader Oriented Administration
• There is no delegation of management functions
• All Employees serve as loyal subjects of a leader.
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Traditional Oriented
Administration
• Managerial positions are handed down from
generation to generation.
• Who you are is more important than what you can do
becomes the primary criteria for work assignment.
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Bureaucratic Administration
• Delegation of management responsibilities is based on
a person’s demonstrated ability to hold the position.
• No person can claim a particular position either
because of his loyalty to the leader or because position
has been traditionally held by his members of family.
• People earn positions because they are presumed to be
best capable of filling them.
• Weber considers the last type as ideal type of
administration
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Important Features Of
Bureaucratic Administration
1.
There is insistence on following Standard Rules
Weber believed that the authority in an organisation
should be governed by standard rules
OR
Institutional Cult should replace personal cult.
Weber told that this would provide equality in
treatment of subordinates and continuity and
predictability of action.
This would obviate / prevent the need for searching
adhoc solutions to the problems
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2. There is systematic Division Of Work
• Increases production by improving efficiency and
saving time in changing from one job to another.
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3. Principle of Hierarchy is followed
– Each lower officer is under the control and supervision
of higher one
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4. Its necessary for the individual to have knowledge and
training in the Application of Rules because these form
the basis on which legitimacy is granted to this authority.
5.
Administrative acts , Decisions and Rules are recorded
in writing This makes the organisation independent of
people besides making people’s understanding more
accurate.
6.
There is Rational Personnel Administration People are
selected based on their credentials and merits and are
paid according to their position in the hierarchy.
Promotions are made systematically. There is emphasis
on winning people’s loyalty and commitment.
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Contributions and Limitations of
Bureaucracy
Contributions • Bureaucracy can be viewed as logical extensions of
management when it becomes impossible for 1 person to
fulfill all the management functions(Planning,
Organising, Directing ,Controlling)
• The concept has enabled most large scale organisations
which require functionally specialised staff to train and
control the people with heterogeneous backgrounds and
to delegate specific responsibilities and functions to
them.
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Limitations - Important Dysfunctional /
Undesirable / non-functional
Consequences of Bureaucracy are as
follows
1. Overconformity to rules – In a bureaucratic
Organisations, employees observe ‘Stick to the rule’
policy because they fear being penalised for violation
of these rules. They follow only letter of law without
going into its spirit. Eg – a doctor in emergency ward
spends precious time in filling various forms before
helping the accident victim. Violation of rules beget
more rules to take care of violations
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2. Buck Passing – In bureaucratic organisations, the
employee’s initiative is stifled.
In situations, where there are no rules, employees are
afraid of taking decisions independently, lest / else they
may be punished for wrong decisions.
Hence they shift decisions to others or postpone them. As
a result, office work increases.
3. Categorisation of Queries – In a bureaucratic
organisations, probable queries coming from outside are
generally classified in advance into a few broad
categories. Answers for each category are also prepared in
advance. Differences, if any between queries within a
category are ignored. On receiving a query, the
employee’s job is simply to determine its category and
tick the reply applicable to that category.
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4. Displacement Of Goals – is a very common
phenomenon in bureaucratic organisation and was
discovered by German Sociologist Robert Michels.
Goal displacement / Displacement Of Goal takes
place when an organisation substitutes for its
legitimate goal some other goal for which it was not
created, for which resources were not allocated to it
and which it is not known to serve.
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• A stranger enters an office seeking some
information from employee sitting there.
But the employee instead of supplying him the
information asks him to follow the rules and go to
the enquiry counter.
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Displacement of goals can occur in several ways
a. After sometime, leaders may devote much attention
and resources to preserve and maintain the
organisation itself rather than its initial purpose due
to several interest groups in & outside organisation
which begin to use organisational goals as means to
serve their own individual goals.
b. Employees develop Professional Automation –
employees may so intensively internalise the rules
that goals which these rules framed to achieve are
totally forgotten. The means become more important
than ends.
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• Eg – If a librarian is praised for the neat and orderly
look of the library and not for increase in number of
book borrowers.
• If a factory worker is praised for his regular attendance
and not for the quality of his performance.
• If a teacher is praised for pass percentage of his students
and not for the quality of his instruction.
• Its not surprising if they begin to feel after sometime
that orderly look of library , regular factory attendance
and high percentage are all what are demanded of them.
c.
After sometime, secondary goals of an
organisation may completely subordinate its primary
goals, so that latter are no longer served effectively.
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• Story is told of a transport spokesman who
countered complaints that buses often whizzed past
waiting commuters by arguing that picking up
passengers upset timetables.
• Infact appraisals in many organisations are based
on information that is easy to collect rather than
that which is intrinsically important
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• A university may initiate certain social or extra
curricular activities to attract students to classes , but if
social or extra curricular activities consume a lot of
university’s time and resources, they undermine the
achievement of teaching goal.
d. After sometime, sectional interests may develop
among subunits of an organisation and heads of these
units may become so much enamoured with their
section goals that they may forget organisational goals.
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5. No real right of appeal – The clients of a
bureaucratic organisation feel dissatisfied because
they have no real right of appeal. Superiors are often
side with a view point of their subordinates.
6. Neglect of Informal groups – Man is imbued / filled
with sentiments. Being a social creature , he forms
informal groups that play an important role in all
organisations. Bureaucratic organisations often
ignore existence of informal groups which usually
carry out a big chunk of organisational work.
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7. Rigid Structure – Precise description of roles and
over conformity to rules make bureaucratic
structures rigid. Rigid structures though they work
well in stable environments, do not cope well with
today’s changing environment. Organisation needs
flexible structures to frequently interact with their
environment for collecting , processing and
monitoring information and changing the job
description and roles of their employees.
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8. Inability to satisfy the needs of mature individuals –
Maturity – Immaturity theory laid down by Chris
Argyris tells in great detail how bureaucratic
organisations are unable to meet the needs of mature
individuals who work in them.
• Accordingly, a mature individual wants independence,
initiative, self control, opportunity to use his skills and
information to plan his future.
• But hierararchy and control features of bureaucratic
organisation work against these needs.
Neo-Classical Approaches – called so
because they refine and improve
classical concepts.
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• The Human Relations Movement – Managers still
faced difficulties because employees did not always
follow predicted or rational patterns of behavior.
• Hence there was an increased interest in helping
managers deal more effectively with people side of
their organisations .
• Real inspiration for human relations movement came
from Elton Mayo & his colleagues at Western Electric
Company’s plant in Cicerno, Illinois.
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• Plant employed 29,000
workers to manufacture
telephone parts and
equipment.
• These experiments are
described in the following
parts
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1. Illumination Experiments
2. Relay Assembly Test
Room
3. Interviewing Programme
4. Bank Wiring Test Room
Examination of these
experiments with result is
not discussed
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Modern Management Approaches
:
I.
Behavioral Approach : This approach is improved &
more mature version. The findings of the same are
given below : Some points are listed below :
a.) Behaviorists prefer more flexible Organization
Structure & jobs built around Capabilities & Aptitudes
of average employees against Classical Organizations.
Classical Organizations are built around traditional
concepts of Hierarchical authority, unity of command,
line & staff relationships & narrow spans of control.
This system is highly mechanistic & degrades
human spirit.
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b.) Recognizes practical & situational constraints /
limitations on human rationality for making Optimal
Decisions. In view of Complex nature of Business
Problems, this approach attaches great importance to
participative & group decision making instead of
individuals responsible for solving them.
c.) This approach stresses on desirability of humanizing
administration of control process. This encourages
process of self direction & control instead of imposed
control.
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d.) They favor participation in establishment,
measurement & evaluation of standards of performance,
prompt information feedback, feedback to those who fell
below the mark, need for Positive & Reformative
measures instead of Punitive Action.
e.) They have made extensive studies on Leadership. Of
Course, Democratic form of leadership is desirable, but
certain situations may call for Autocratic, Task Oriented
Style of Leadership.
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f.) Realistic Model of Human Motivation is Complex.
Because, different individuals react differently to the
same situation or react the same way to different
situations. No two individuals are exactly the same.
Therefore Manager should evolve strategies to influence
people according to their individual needs etc.
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ii. Quantitative Approach :
•
Also called as Management Science Approach.
•
The interdisciplinary group of scientists who were
engaged for this purpose were OR (Operations
Research) teams because their work consisted of
analyzing operations.
•
Here, we try to construct a Mathematical Model for
simulating a given problem.
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•
By changing the values of variables in the
Mathematical model (such as Increasing Cost of Raw
Materials) & analyzing the different equations of the
model generally with Computer, we try to determine
what the effect of each change would be. Thus the OR
team presents the Management a Rational Base for
Decision making.
•
This helps in decision making, it provides
Quantitative Tools & Techniques aiding in decision
making.
•
This facilitates disciplined thinking while defining
Management Problems & establishing relationships
among variables involved.
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•
This Approach looks for precision & perfection.
•
Widely used in Planning & Control Activities.
•
But is uncommon in areas such as Organizing,
Staffing & Leading the Organization where Problems
are more Human than Technical in Nature.
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iii. Systems Approach :
 This provides the Manager of an Organization an
Integrated Approach to Management Problems by
treating MANAGEMENT AS A SYSTEM.

The Important Features are given below :
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 A System is a set of Interdependent Parts which
together form a Unitary Whole to perform a given
function.
 An Organization is a System consisting of Four
Interdependent Parts, namely, Task, Structure, People &
Technology.
 No part of the System can be accurately analyzed &
understood apart from the whole system (because of the
Multiplicity of Factors affecting a Man.) Each part
bears a relation of Interdependence to every other part.
Systems Approach gives a fair idea.
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 A system has flows of Information, Material &
Energy. They enter the system from environment as
Inputs & leave the System as Outputs. For Eg : Raw
Materials, Human effort, Technology & Information are
Inputs. Outputs are Goods, Services & Satisfaction.
 One important mechanism which enables a System to
adapt & adjust to the changing conditions of its
environment & to exercise Control over its Operation is
“Feedback”. This information is fedback to concerned
people so that work can be assessed & corrected
suitably.
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iv Contingency Approach :
 This Approach tries to integrate the Various Schools
of Management Thought.

In this Approach, there are no Management
Principles & Concepts of the Various Schools which
have a General & Universal Applicability under all
Conditions.
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 There is “No One Best Way Of Doing things Under
All Conditions”.

Methods & Techniques which may have been highly
effective in one situation may not work at all in another
situation.

Thus, it is the Task of the Manager to try to identify,
which technique will, in a particular situation best
contribute to the attainment of Management Goals.
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
Therefore, Managers should develop a Sort Of a
Situational Sensitivity & Practical Sensitivity.

Some Applications of Contingency Approach are as
below :
1)
Designing Organizational Structure.
2)
Deciding degree of Decentralization.
3)
Resolving Conflicts.
4)
Managing Change.
5)
Employees Development & Training Programmes.
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UNIT – 2
PLANNING
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PLANNING

Most Basic Function of Management.

To design an Environment for effective performance
of individuals working together in Groups. A Managers
most essential function is to see that everyone
understands the Groups purposes & objectives.

If group effort is to be effective, People must know
what they are expected to accomplish which is
PLANNING.
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Nature of Planning :
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Important Points on Planning
:

This marks the beginning of the Process of
Management.

Manager must Plan before he can possibly
Organize, Staff, Direct or even Control.

Act.
This is an Intellectual Process, Think before you
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 This basically deals with :
1.)
2.)
3.)
4.)
What is to be done ?
When it to be done ?
How it is to be done ?
Who is to do it ?
 Decision Making is an Integral Part of Planning.
This involves selecting Missions & Objectives &
actions to achieve them. i.e., Choosing from among
Alternative Courses of Action.
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
Planning strongly implies Managerial Innovation.

Here, we consciously determine Courses of action &
base our decisions on Purpose, Knowledge &
considered estimates.

Planning & Control are inseparable Siamese Twins of
Management.
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
Any attempt to Control without Plans is
Meaningless, since there is no way for people to tell
whether they are going where they want to go (the
Result of the Task of Planning).

Thus we can say that, Plans provide Standards of
Control.

Here, Decision Making with take place at many
points. In Fact, it is the Most Critical part of the
Planning Process.
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
Managers must also decide which Assumptions
about the future & about the environment they will
use in their plans.

Planning is not a “One Time Activity”. It is a
Continuous Process.

But, Plans must be Flexible. Flexible means
ability to change direction to Adapt to Changing
Conditions/Situations without Undue Cost.
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 A Plan must provide for Contingencies (In Fact, as
Many Contingencies as Possible.)
 There should be a Built In Flexibility in at least
Five Major Areas, Technology, Market, Finance,
Personnel & Organization.

Flexibility in Technology means, to Change the
Product Mix according to Changing Needs of the
Customer.
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
Flexibility in Market means, Shifting the Market
itself to a New Region.

Flexibility in Finance means, to Mobilize
Additional Financial Resources whenever the need
arises.
 Flexibility in Personnel means, ability to shift
individuals from one Job to Another.

Flexibility in Organization means, Ability of
Organization to Change the Organization Structure.
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
But, all of this is possible only within certain limits.

Planning is an All Pervasive Function. It is
Important for all Levels of Management. One Major
Difference concerns the Time Period Covered. Top
Level Managers are generally involved in Planning
Activities for a Period of Six Months to a Few Years.
Middle Level, for a Week or a Month. First Line
Supervisors, for may be a Day.

Top Level Management spend more time on
Planning, Lower Level Management executes them.
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Why does one Have to Plan ?

Without Planning, the Business Organization
becomes directionless & its decisions would become
Random or Adhoc Choices. Therefore, Planning
becomes Key for Success of a Business Organization.
 Four Vital Reasons describe the Importance of
Planning as given below :
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Reasons for Planning :
1)
Minimizes Risk & Avoids Uncertainty.
2)
Leads to Success.
3)
Focuses Attention on Organization’s Goals.
4)
Facilitates Control.
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1.) Minimizes Risk & Avoids Uncertainty :
In today’s Business Environment, Organizations are
becoming increasingly Complex to manage & Intuition
alone can no longer be relied upon as a means of taking
decisions. For this, Planning has a very Important &
Crucial Role to Play.

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
By applying a More Rational, Data & Facts based
procedure for making decisions, the Planning Process
allows Managers & Business Organizations to
Minimize the Risk & avoid uncertainty.

In a Rapidly Changing Society like ours, in which
Social & Economic Conditions change frequently,
Planning helps a Manager to Cope with & Prepare for
Changing Environment.
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
Planning does not deal with the future decisions
but deals with the future outcomes & consequences of
the Present Decisions.

The Manager has a feeling of Well Being, he has a
feeling of being in Control because he has anticipated
some of the possible changes & has planned for them.
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2.) Leads to Success :

An Organization with proper Planning has a
Higher Degree of Success as compared to similar
Organizations without Plans.
 They have an Opportunity to Outperform their own
Past Results.

Thus, one can say that Managerial Actions are well
planned & not random arising as a mere reaction to
changing environment.
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Summary
•
Planning leads to Success by going beyond mere
Adaptation to Market Fluctuations. It Proacts. It
involves an attempt to shape the environment on the
belief that Business is not just a creation of
Environment but its Creator as well.
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3.) Focuses Attention on
Organization Goals :

Helps to focus on Organization Goals & Activities.

Makes it easier to Apply & Co-ordinate Resources of the
Organization more efficiently.
The Whole Organization is Compelled to focus on
identical Goals & Collaborate in realizing them.

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
It also enables a Manager to Chalk out in advance,
an Orderly Sequence of Steps for Realization of
Organization Goals, thus avoiding Unnecessary over
lapping of Activities.
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4.) Facilitates Control :

Here, Manager sets the Goals & develops Plans to
Accomplish them.

These Goals & Plans then become Standards or even
Reference Points against which Performance can be Measured.

The Basic Function of Control is to ensure that
Activities Conform to Plans, thus we say that Plans
Facilitate Control Measures as well.
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Objectives :
 They are the Results to be achieved & are the end
points towards which all the Business Activities like
Organizing, Staffing, Directing & Controlling are
directed.

Only after defining these objectives, the Manager
can determine the Kind Of Organization, Kind Of
Personnel, & their Qualifications, the Kind Of
Motivation, Supervision etc, which has to be employed
to achieve the Objectives.
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Characteristics of Objectives :
1)







Objectives are Multiple in Number : There are at
least Eight Key Areas in which Objectives of
Performance & Results are to be Set. They are :
Market Standing.
Innovation.
Productivity.
Physical & Financial Resources.
Profitability.
Manager Performance & Development.
Worker Performance & Attitude & Public
Responsibility.

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Take Example of a Cement Manufacturing &
Marketing Company, it may have the following
Objectives :
i.) Specified Capacity Utilization.
ii.) Specified Costs & Return on Investment.
iii.) Specified Quality of Product, say Portland 53
Grade.
iv.) Specified Marketing Services.
v.) Extension & Market Development.
vi.) Serving Remote Areas.
vii.) Maintaining Desired Network of Retail
Outlets.
viii.) Extension of Warehouse Facilities.
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2. Objectives are either Tangible or Intangible :
Objectives which are Quantifiable are called Tangible
Objectives such as Plant Production Capacity, Marketing Target,
Physical & Financial Resources, Employment Strength etc.
The Intangible Objectives are not Quantifiable such as
Manager’s Performance, Worker’s Morale, Public Responsibility
etc.
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3.
Objectives have a Priority :
At any given point in time, the achievement of
one Objective is relatively more important than the
other.
For eg : Goal of maintaining a Minimum
Inventory Level of Raw Materials may be critically
important to a firm having a difficulty in Procuring Raw
Materials. So, we have to prioritize our certain Goals
regardless of time. This becomes critical to the
Organization. Establishment of Priorities is extremely
important in that, the Resources of any Organization
must be allocated by a Rational Means.
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4. Objectives are generally arranged in a Hierarchy
:
We have Organizational Objectives of the total
enterprise at the Top, followed by Divisional or
Departmental Objectives, still followed by Say,
Section & may be Individual Objectives. Objectives at
all levels, serve both as an End and as Means.
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5. Objectives are sometimes conflicting with one another
:
The Process of dividing the Organization into
Depts, for Eg : Production, Marketing, Finance etc requires
that the Objectives be defined for that Dept. Each Dept is
given the responsibility of reaching the defined Objective.
The Process of allocating Objectives among
among Various Depts creates problem of Goal conflict. For
Eg : If the Objective of Finance Dept is to reduce the Interest
Burden by reducing External Borrowings, the Objective of
the Production Dept is to achieve the target by calling for
Additional funds due to the Investment on Raw Materials &
Consumables. The Resolution of the problem is a Careful
Balance of the Goal for each Dept or Unit where we
recognize the fact that Goal of neither Unit can be
6.
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Requirements of Sound Objectives :
While finalizing Objectives, there are certain
requirements that the Manager should keep always keep
in mind. They are :
i.) Objectives must be both clear & acceptable :
The ultimate test of Clarity is the People’s
understanding of the Objectives. Crystal Clear
Communication is helpful in ensuring clarity of
understanding. The Objectives must also be acceptable to
the People i.e ., these Goals should be Compatible with
individual Goals. If activities are outside the Range of a
Person, he will not pursue the Objective. For Eg : If the
attainment of Production Dept is to get extra Production
by two hours of extra work every day by every Worker &
Foreman, it is impossible to achieve it.
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ii.) Objectives must support one another :
Objectives could interfere with one another.
For Eg : The Goal of the Production Dept may be at
Cross Purposes with that of the Marketing Dept.
Therefore, there is a need for Balancing &
Coordination of the activities of the entire Organization,
otherwise, people will pursue different paths making it
difficult for Manager to achieve Company’s Overall
Objectives.
There should be a Close Knit Relationship
between Short & Long Range Objectives. What is to be
done for the First Year should provide as a Base for each
Successive Year. This can be guaranteed only if Short
Range Plans are part of Long Range Plans.
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7. Objectives must be Precise & Measurable :
Objectives must be defined in Clear &
Measurable terms. There are various reasons for the
same :
i) When Goal is Precise & Measurable, it is easier
to decide how to achieve it.
For Eg : Sales Target for Year 2012 – 2013
shall be at least 20% more than the present Financial
Year than an Objective as “ There shall be substantial
increase in Sales for Year 2012 – 2013.” That means,
Quantification of Objectives are Important.
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ii) Precise & Measurable Goals motivate the people
more effectively than generally stated Goals.
iii) Precise & Measurable Goals make it easier for
Lower Level Managers to develop their own Plans for
actually achieving those Goals.
iv) Managers can assess their performance as well
as their Success or Failure, if Goals are Precise &
Measurable.
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8. Objectives should always remain Valid :
Here Manager should be alert all the time &
should Constantly Review, Reassess & adjust them
according to Change in Conditions.
Contd ….
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Advantages of Objectives :
Here are given the Benefits of having Objectives :
1) This Provides Basis for Planning, for evolving
other types of Plans such as Policies, Budgets &
Procedures.
2) They act as Motivators for Individuals & Depts
of an Organization giving a Sense of Purpose.
3) Haphazard Actions are eliminated as so are the
undesirable consequences associated with it.
4) This facilitates Coordinated Behavior of various
groups which otherwise pulls in different directions.
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5) They form a Basis for Managerial Control by
serving as Standards with Reference to which Actual
Performance can be measured.
6) They facilitate Better Management of the
Organization by providing a Basis for Leading, Guiding,
Directing & Controlling activities of people of Various
Depts.
7) This lessens Misunderstanding & Conflict &
Facilitate better Communication among people by
Minimizing Disputes.
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Types of Plans (Hierarchy of Plans) :
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Plan can Encompass any course of Future
Action which clearly depicts that Plans are varied.
Plans are arranged in a Hierarchy within the
Organization. These are classified here as under :
1) Purposes or Missions.
2) Objectives.
3) Strategies.
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Strategies in their turn are classified into 2 Major
Groups of Plans as under :
1) Single Use Plans.
2) Standing Plans.
1) Single Use Plans : This is basically meant for Non
Repetitive Activity to achieve a SPECIFIC task. When
the End is Achieved, the Plan is dissolved.
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i) The purpose of a University is to impart Quality
Education & Encourage Research.
ii) The purpose of the Courts is the interpretation of
Laws & resolving disputes.
2) Objectives :
They are the Ends toward which, the activity is
aimed. These are the results to be achieved. They
represent not only the end point of Planning but the end
toward which the Organizing, Staffing, Directing &
Controlling are aimed. While Organization Objectives
are the Basic Plan of the firm, a Dept may also have its
own Objectives. Finally, this contributes to attainment
of Enterprise Objectives.
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• Be Bold Stand out
• Be Seen
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3) Strategies :
This Word Strategy is most often to reflect
Broad Areas of an Enterprise. There are 3 possible
definitions of Strategy as given below :
1.) Definition 1 :
General Programme of action & deployment
of resources to attain comprehensive objectives.
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2) Definition 2 :
The Programme of Objectives of an
Organization & their changes, resources used to attain
these objectives & policies governing the acquisition,
use & disposition of these resources.
3) Definition 3 :
Determination of Basic Long Term Objectives
of an Enterprise & the adoption of Courses of action &
allocation of Resources necessary to achieve these
goals.
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Thus, a Company has to decide what kind of
Business, it is going to be in.
Is it an IT based Industry or Automotive
Components manufacturing Industry ? Or is it,
establishment of a Cast Iron Foundry. The Enterprise
also has to decide on its Growth Goal & its Desired
Profitability. This may also include Marketing
Strategy.
It may also include Strategy for diversification
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Purpose of Strategy :
This is to determine & communicate thro a
System of Major Objectives & Policies, a Picture of
the kind of enterprise that is envisioned. (That which,
an Organization wishes it to be.)
Strategy does not wish to outline exactly how,
the enterprise is to accomplish it (i.e., It does not
indicate or give MICRO LEVEL Details) but gives
only a GENERAL FRAMEWORK for Guiding,
Thinking & Action.
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Standing Plans
• Policies –
• General guidelines for decision making
• Defines an area within which a decision will be
consistent with and contribute to the objectives
• Sets a boundary for decisions including decisions that
can be made and prohibiting those that cannot.
• Policy is verbal , written or implied , overall guide
setting up boundaries that supply the general limits and
direction in which managerial action is to take place.
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They deal with “How to Do Work”, but do not
Dictate Terms to Subordinates.


This gives a GENERAL FRAMEWORK for work to
take place.
Policies may exist on various “LEVELS OF
ORGANIZATION”. There may be Major Company
Policies through Major Dept Policies & Minor Policies
applicable to small segments of the Organization.
Eg : Personnel Policy, Recruitment Policy,
Marketing Policy, Pricing Policy etc.

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Summary for Policies :

Both, Policies & Objectives guide Thinking &
Action, but, with a Difference.

Objectives are the End Points of Planning while
Policies Channelize (Guide) Decisions to these Ends.
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2)

Procedures :
They are Plans that establish a required method of
Handling Future Activities.
 These are guides to Action, rather than to thinking &
these give the details of the exact manner in which
certain activities must be accomplished.
 These are the Chronological sequence of required
actions.

Same steps are followed each time the activity is
performed.
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For Eg :
Take the Case of a Manufacturing Company.
 Procedure for Handling Orders will first involve Sales
Dept, for the Original Purchase Order from the Customer.
 Then, Finance Dept for Acknowledgement of Receipt
of Advance Payment & for Customer Credit Approval.
 Accounting Dept for recording the Financial
Transaction.
 Production Dept for the order to produce the Ordered
Goods & finally Dispatch Dept for deciding the mode of
Transport & Route.
Summary : Organizations generally lay down Procedures
for all Departmental Activities for Smooth Running of the
Organization.
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Difference Between Policy &
Procedure :

Policies are general guidelines for both Thinking &
Action of people at Higher Level in Organization. But
Procedure are General Guidelines only for persons at
Lower Levels in Organization.

Policies help in fulfilling Objectives. Procedure shows
the way to implement the Policies.

Policies are not generally based on Analysis or Study.
Procedures are always established after thorough study &
analysis of work.
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Advantages of Procedures :

This is a Standard Method of Performing a Task, thus
ensuring High Level of Performance in Organization.

This results in Work Simplification & avoidance of
unnecessary steps & over lapping.

Facilitates Managerial Control over the Performance
by indicating sequence & timing of each Task.

This enables employees to improve their efficiency by
providing them with Knowledge about the entire range of
Works.
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Limitation of having Procedures :
•
They limit Scope of Innovation or Improvement of
Work Performance by Stipulating the Standard way of
Performing the Task.
•
But, this Limitation can be Overcome if
Management Reviews & Appraises the Procedure
periodically with an Intention to improve it.
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Rules :

Rules are detailed & Recorded Instructions that a
Specific Action must or must not be performed in a
given situation, not allowing any discretion.
 These are usually the Simplest type of Plan.
 Rules are different from Policies & Procedures.

Rules are unlike Procedures in that these guide
action without specifying a Time Sequence.
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
Procedures may be looked upon as a Sequence of
Rules.
Rule, may or may not be, part of a Procedure, “
Wear Helmet in this Zone” is a Rule & not a
Procedure.


This Rule allows no Discretion in deviating from a
stated course of Action & in no way may interferes
with the rest of the Procedure for handling Orders.
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Single Use Plans :
1) Programmes :
They are Precise Plans or definite Steps in
Proper Sequence which needs to be taken to carry out
a given Course of Action & are ordinarily supported
by Budgets.
Programmes include all activities necessary for
achieving a given Objective.
The Programmes may be Major or Minor.
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Eg : Major Programme could mean establishing
one more branch in Andhra Pradesh with an investment
of Rs 100 Crore in next Two Years time.
A Major Programme may call for many
supporting Programmes. Essential ingredients for each
Programme are Time Phasing & Budgeting. That
means, specific dates have to be laid down for
completion of each successive stage of a Programme. In
addition, a provision should be made in the Budget for
financing the Programme.
In absence of these ingredients, it may be a
Prospect or a Hope but not a Programme.
Contd ….
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Programme for establishing One More Branch in
Andhra Pradesh must Year Mark Funds & Specific
Time Periods for :
 Deciding a suitable location & Land Procurement.

Planning for Buildings & other Infrastructural
Facilities.

Planning for Procurement of Plant & Machineries
etc…
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2)
Budgets :

A statement of Expected Results expressed in
Numerical Terms is called Budget.
This is defined as a “ Financial or
Quantitative Statement prepared prior to a definite
period of time, of the Policy to be pursued during that
period, for the purpose of Obtaining a given
Objective”.
