Chapter 2 – Notes

Q1. Importance of Planning –

1. Provides Direction
Planning sets clear goals and objectives, helping individuals or organizations align their
actions with a defined purpose. This ensures everyone involved knows the intended
outcomes and how to achieve them.
2. Facilitates Decision-Making
By outlining the steps and resources required, planning helps identify potential choices
and weigh their benefits and risks, leading to better-informed decisions.
3. Improves Resource Utilization
Planning ensures optimal allocation of resources such as time, money, and manpower,
minimizing waste and maximizing efficiency.
4. Reduces Risks
Anticipating potential challenges and devising contingency plans can mitigate risks,
ensuring smoother execution and minimizing disruptions.
5. Enhances Coordination
In group settings, planning fosters collaboration by clarifying roles, responsibilities, and
timelines, ensuring all efforts contribute effectively to the common goal.
6. Boosts Productivity
With a structured plan in place, individuals and teams can focus on their tasks without
unnecessary distractions, resulting in higher productivity.
7. Promotes Accountability
Planning creates measurable benchmarks and timelines, making it easier to track
progress and hold individuals accountable for their contributions.
8. Encourages Adaptability
Effective planning involves anticipating changes and being flexible. It prepares
individuals or organizations to adjust to unforeseen circumstances without losing sight
of the end goal.

Q.2. Types of plans in organization ?

1. Strategic Plans
 ● Definition: High-level, long-term plans that define the overall direction and
objectives of the organization.
● Focus: Broad goals and visions for the future.
● Scope: Organization-wide, covering 3 to 5 years or more.
● Purpose: To set priorities, allocate resources, and ensure alignment with the
organization’s mission and vision.
Key Characteristics:
● Involves top management (e.g., CEOs, board of directors).
● Focuses on external environment analysis (opportunities and threats) and
internal capabilities (strengths and weaknesses).
● Often includes frameworks like SWOT analysis and PESTLE analysis.
Examples:
● Expanding into new international markets over the next five years.
● Becoming a leader in sustainable energy solutions by 2030.

2. Tactical Plans
● Definition: Mid-level plans that translate strategic goals into actionable steps for
specific departments or units.
● Focus: Bridging the gap between strategic plans and operational activities.
● Scope: Typically 1 to 3 years, focused on specific areas or functions.
● Purpose: To guide departmental efforts and resource allocation in line with
strategic goals.
Key Characteristics:
● Developed by middle management (e.g., department heads, managers).
● More detailed than strategic plans but less granular than operational plans.
● Addresses "how" to achieve specific components of the strategic plan.
Examples:
● Launching a regional advertising campaign to support market expansion.
● Developing a training program to upskill employees in digital tools within two
years.

3. Operational Plans
 ● Definition: Detailed, short-term plans that focus on day-to-day tasks and
activities.
● Focus: Specific processes, procedures, and responsibilities.
● Scope: Usually spans a few days, weeks, or months.
● Purpose: To ensure smooth execution of tactical and strategic plans.
Key Characteristics:
● Developed by lower-level managers and supervisors.
● Highly specific and detailed, often including timelines, checklists, and budgets.
● Can be categorized into two types:
o Single-Use Plans: Created for one-time projects or events (e.g., organizing a
product launch).
o Standing Plans: Repeatedly used for recurring activities (e.g., safety
procedures, employee evaluations).
Examples:
● Scheduling employee shifts for a month.
● Creating a workflow for processing customer orders.

Q.3 . Process/ Elements of Planning –

1. Establish Objectives
● Description: Define clear, measurable, and realistic goals that the plan aims to
achieve.
● Why It’s Important: Provides direction and ensures everyone is aligned with the
desired outcomes.
● Example: Increase market share by 15% within the next fiscal year.
2. Analyze the Current Situation
● Description: Assess the internal and external environment to understand
opportunities, threats, and available resources.
● Key Tools:
o SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats.
o PESTLE Analysis: Evaluates political, economic, social, technological, legal,
and environmental factors.
● Example: Analyzing competitors and customer preferences to identify market
 trends.
3. Identify Alternatives
● Description: Develop various strategies or courses of action that could help
achieve the objectives.
● Why It’s Important: Encourages creative problem-solving and ensures the best
possible options are considered.
● Example: Expanding product lines, entering new markets, or increasing digital
marketing efforts.
4. Evaluate Alternatives
● Description: Assess the feasibility, costs, risks, and potential outcomes of each
alternative.
● Key Considerations:
o Alignment with objectives.
o Resource availability.
o Risk vs. reward.
● Example: Comparing the ROI of expanding into a neighboring region versus
launching a new product.
5. Select the Best Alternative
● Description: Choose the most effective and efficient course of action based on
evaluation.
● Why It’s Important: Ensures focus on strategies that are most likely to succeed.
● Example: Deciding to focus on digital marketing to target younger
demographics.
6. Develop a Detailed Plan
● Description: Break down the selected alternative into actionable steps, assign
responsibilities, and establish timelines.
● Components:
o Resource allocation (time, money, manpower).
o Specific tasks and milestones.
o Contingency plans.
● Example: Creating a project timeline with weekly milestones for a product
launch.
7. Implement the Plan
 ● Description: Execute the plan by coordinating teams, communicating
responsibilities, and deploying resources.
● Why It’s Important: Translates planning into action, ensuring progress toward
goals.
● Example: Launching the digital marketing campaign and monitoring ad
performance.
8. Monitor and Evaluate Progress
● Description: Track performance against the objectives and milestones. Identify
deviations and make adjustments as needed.
● Key Tools:
o KPIs (Key Performance Indicators).
o Regular progress reports.
● Example: Measuring website traffic and conversion rates after launching a
marketing campaign.
9. Adjust the Plan as Needed
● Description: Revise the plan to address unexpected challenges or capitalize on
new opportunities.
● Why It’s Important: Maintains flexibility and ensures relevance in dynamic
environments.
● Example: Shifting marketing budgets to focus more on social media ads after
seeing better ROI.
10. Review and Learn
● Description: Conduct a post-implementation review to identify successes,
challenges, and lessons learned.
● Why It’s Important: Improves future planning efforts and strengthens
organizational processes.
● Example: Analyzing why a product exceeded sales expectations and applying
the insights to future launches.

Q.4. Authority and Responsibility (Distinguish also Can be included in 14 Principles of

Henri Fayol Answer)
Continued Below on Next page

Q.5. Centralization and Decentralization

Example – Centralization – A retail chain where all pricing decisions are made by
corporate office
Example – Decentralization – A multinational company allowing regional offices to set
local marketing strategies.

Q.6. Delegation and Decentralization

Delegation:
● Definition: Delegation refers to the process where a manager or leader assigns
specific tasks or responsibilities to subordinates while retaining overall control
and accountability for the outcomes.
● Scope: It is generally limited to specific tasks, roles, or projects, and is often a
short-term or temporary arrangement.
● Control: The person who delegates maintains ultimate authority and
accountability for the work.
● Example: A team leader delegates the task of preparing a report to a team
 member but retains responsibility for the final approval of the report.
Decentralization:
● Definition: Decentralization is the systematic delegation of decision-making
authority throughout the organization, often to lower levels of management or to
regional or local units. It involves the redistribution of power and responsibility.
● Scope: It is broader, typically applied at an organizational or departmental level,
and often involves long-term structural changes.
● Control: Decision-making authority is shared across various levels of the
organization, with less central control.
● Example: A multinational corporation decentralizes authority by allowing
regional offices to make decisions about product marketing, adapting strategies
to local markets without needing approval from headquarters.

Q.7. Managerial Grid

Managerial Grid (Blake and Mouton)
1. Impoverished Management (1,1):
o Low concern for people and production; avoids responsibility.
o Example: A disinterested manager who does the bare minimum.
2. Country Club Management (1,9):
o High concern for people, low concern for production; prioritizes harmony over results.
o Example: A manager who avoids enforcing deadlines to keep employees happy.
3. Authority-Compliance Management (9,1):
o High concern for production, low concern for people; task-oriented, neglects employee well-being.
o Example: A strict manager who values output over employee satisfaction.
4. Middle-of-the-Road Management (5,5):
o Moderate concern for both people and production; balances both but achieves average results.
o Example: A manager who compromises instead of optimizing.
5. Team Management (9,9):
o High concern for both people and production; fosters collaboration for high performance and satisfaction.
o Example: An ideal manager who motivates the team while ensuring tasks are completed effectively.

Q.8. Qualitative tools of Decision Making –

1. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
● Purpose: To assess the internal and external factors that may impact decision-
making.
● Application: Identifying the strengths and weaknesses of an organization or
project, along with opportunities and threats in the external environment.
● Example: A business assessing whether to enter a new market.
2. Delphi Method
● Purpose: To gather expert opinions and reach a consensus on a particular issue
or decision.
● Application: Experts answer questionnaires in multiple rounds, and the feedback
 is summarized and provided to the group after each round, allowing experts to revise
their opinions.
● Example: Developing long-term forecasts or making complex decisions in
uncertain situations.
3. Brainstorming
● Purpose: To generate a wide variety of ideas and solutions in a group setting.
● Application: Participants freely share their thoughts and ideas without
judgment, aiming for creativity and quantity over quality in the initial stages.
● Example: A team brainstorming ways to improve a product's features.
4. Mind Mapping
● Purpose: To visually organize thoughts and ideas around a central concept.
● Application: Creating a diagram to represent different elements, relationships,
and solutions related to a decision or problem.
● Example: Mapping out different customer feedback to develop a strategy for
improvement.
5. Nominal Group Technique (NGT)
● Purpose: To structure group decision-making and prioritize ideas or solutions.
● Application: Participants generate ideas independently, then share and discuss
them in a group to reach a consensus.
● Example: Prioritizing a list of potential features for a new software product.
6. Focus Groups
● Purpose: To gather qualitative data through group discussions on a specific
topic.
● Application: A small group of people discusses a particular issue, product, or
service to uncover deeper insights and opinions.
● Example: Understanding customer perceptions of a new product.
7. Affinity Diagrams
● Purpose: To organize and categorize ideas, opinions, or data into meaningful
groups.
● Application: Post-it notes or cards are used to write down ideas, and then they
are grouped based on common themes.
● Example: Organizing customer complaints into categories to address service
improvement.
8. Decision Matrix Analysis (Qualitative Version)
● Purpose: To evaluate and prioritize multiple options based on qualitative criteria.
● Application: Rather than numerical scores, qualitative assessments are used to
rank options based on key factors or subjective criteria.
● Example: Choosing a vendor based on criteria like reliability, reputation, and
customer service.
9. Scenario Planning
● Purpose: To explore different possible futures and their implications for decision-
making.
● Application: Creating detailed narratives of various future scenarios to better
understand potential risks and opportunities.
● Example: A company analyzing how changes in regulatory policies might affect
its business over the next decade.
10. Tree Diagram
● Purpose: To break down complex decisions into smaller, manageable
components, representing various possible outcomes and their relationships.
● Application: A graphical representation of decisions, showing different paths
and outcomes at each decision point.
● Example: A company considering different product development strategies and
the possible outcomes, such as market success or failure, for each choice.
11. Scenario Analysis
● Purpose: To analyze and evaluate different future scenarios based on various
assumptions about trends, risks, and uncertainties.
● Application: Identifying potential scenarios and their impacts on a decision,
helping to prepare for multiple possible outcomes.
● Example: An organization analyzing the impact of economic recessions,
technological disruptions, or regulatory changes on their strategy.

Q.9. Types of Organisational Structure

1. Functional Structure
● Definition: In a functional structure, the organization is divided into departments
based on specialized functions, such as marketing, finance, human resources,
and production. Each department is led by a functional manager.
● Advantages:
 o Clear specialization in tasks and roles.
o Efficient use of resources and expertise within each department.
o Easier to manage smaller, specialized teams.
● Disadvantages:
o Can lead to silos between departments, reducing communication and
collaboration.
o May result in a lack of flexibility or adaptability.
● Example: A company with separate teams for marketing, finance, operations,
and human resources.
2. Divisional Structure
● Definition: The divisional structure is based on product lines, geographic
regions, or customer segments. Each division operates as its own entity with its
own functional departments like marketing, finance, and operations. Each
division is headed by a divisional manager.
● Advantages:
o Flexibility in managing different products or markets.
o Greater focus on specific markets or products.
o Clear accountability for each division.
● Disadvantages:
o Potential for duplication of resources across divisions (e.g., multiple
marketing departments).
o Can lead to competition or conflict between divisions.
● Example: A multinational company with divisions for North America, Europe,
and Asia, or a company with separate divisions for different product lines.
3. Matrix Structure
● Definition: The matrix structure is a hybrid organizational structure that
combines elements of both functional and divisional structures. Employees have
dual reporting relationships—reporting to both a functional manager and a
project or divisional manager.
● Advantages:
o Promotes collaboration across departments and divisions.
o Flexibility in managing projects and resources.
o Encourages shared decision-making and innovation.
 ● Disadvantages:
o Can create confusion and conflicts in reporting lines.
o Increased complexity in management and decision-making.
● Example: A company working on a project that requires input from the
marketing, engineering, and finance departments, with employees reporting to
both their functional managers and the project manager.

Flat vs. Tall Organizational Structures

1. Flat Organizational Structure
● Definition: A flat structure has fewer hierarchical levels and a broader span of
control. There are few or no middle management layers, and employees often
have more autonomy.
● Advantages:
o Encourages open communication and quicker decision-making.
o Employees are more empowered and take on greater responsibility.
o Lower costs due to fewer management levels.
● Disadvantages:
o Can lead to role ambiguity or unclear lines of authority.
o May become chaotic in larger organizations as too many people report to a
few managers.
● Example: Startups or small organizations with a limited number of employees,
where managers oversee a broad range of tasks.
2. Tall Organizational Structure
● Definition: A tall structure has many hierarchical levels, with a narrow span of
control, meaning each manager oversees only a few employees.
● Advantages:
o Clear lines of authority and reporting.
o Employees may have a clear understanding of their role and career
progression.
● Disadvantages:
o Can lead to slow decision-making due to multiple layers of approval.
o More bureaucracy and higher costs with each additional management layer.
 ● Example: Large corporations with many layers of management, where
employees have more defined roles and career paths.

Q.10) SPAN OF CONTROL –

Span of Control
Span of control refers to the number of subordinates directly managed by a supervisor
or manager. It indicates the breadth of managerial responsibility and has significant
implications on the structure and efficiency of an organization.
● Wide Span of Control: A manager oversees many employees (e.g., 15–30
employees). This structure is common in flat organizations and can lead to more
autonomy and quicker decision-making but can also make management more
challenging.
● Narrow Span of Control: A manager oversees only a few employees (e.g., 3–7).
This structure is common in tall organizations and allows for closer supervision,
more specialization, and clearer lines of authority.
The ideal span of control depends on factors such as:
● Complexity of tasks
● Experience of employees
● The ability of the manager
● The use of technology
● The need for coordination and supervision
Gracunia’s Direct Formula for Span of Control Calculation
The Gracunia's Direct Formula for calculating the Span of Control (also known as Span
of Management) is typically used to find the optimum number of subordinates a
manager should supervise directly.
This formula gives the average number of employees managed per manager. By
applying this formula, an organization can analyze how many subordinates each
manager should ideally oversee to maintain efficiency without overwhelming the
managerial staff.
Span of Control – Formulas

Q.11. MBO & MBE

MBO (Management by Objectives)
Definition: Management by Objectives (MBO) is a management approach where both
managers and employees agree on specific, measurable objectives for performance
within a set time frame. The focus is on achieving goals through clear communication,
collaboration, and mutual understanding. The process typically involves setting
individual goals that align with the organization's broader objectives.
Key Features:
● Goal-setting: Employees and managers collaboratively set clear, measurable,
and achievable goals.
● Performance monitoring: Progress is regularly reviewed to ensure alignment
with objectives.
● Feedback: Regular feedback sessions allow for adjustments and improvements.
● Employee involvement: Employees are actively involved in goal-setting and
decision-making, leading to greater motivation.
Steps in MBO:
1. Setting organizational objectives: Top management sets the primary goals for
the organization.
2. Setting individual objectives: Managers and employees agree on specific
objectives that align with the organization’s goals.
3. Action planning: Employees create a plan for achieving their objectives.
4. Performance evaluation: Regular check-ins to assess progress toward the
 objectives.
5. Feedback and rewards: Positive reinforcement and rewards for meeting
objectives.
Example of MBO:
● Organizational Goal: Increase overall company sales by 10% within the next
year.
● Individual Objective: A sales manager is tasked with increasing their regional
sales by 15% in the same time frame. They set specific actions like expanding
their client base, improving customer relations, and offering promotions.
● Performance Evaluation: At quarterly meetings, the manager’s progress is
reviewed against the set target. If the sales increase is on track, they are rewarded
with an incentive.

MBE (Management by Exception)

Definition: Management by Exception (MBE) is a management style where managers
focus their attention on the areas that deviate significantly from the standard or
expected performance. Instead of overseeing every aspect of operations, managers
allow employees to handle routine tasks and only intervene when performance falls
outside acceptable limits (i.e., exceptions).
Key Features:
● Focus on exceptions: Managers focus on significant variances or problems and
don’t micromanage day-to-day activities.
● Delegation of routine tasks: Employees are empowered to handle their usual
tasks autonomously.
● Problem-solving: Managers intervene only when there is a need to solve critical
issues or make adjustments.
● Efficiency: This method allows for efficient use of management time by
directing attention only where necessary.
Steps in MBE:
1. Establish standards and expectations: Clear benchmarks or performance
standards are set.
2. Monitor performance: Routine tasks are managed by employees, and the
manager checks reports to identify deviations from expectations.
3. Identify exceptions: The manager looks for significant deviations from the
standards or goals.
 4. Intervene when necessary: Managers only step in when there is an exception,
such as a major issue or unexpected outcome.
5. Corrective actions: After identifying exceptions, managers take necessary
actions to correct the course.
Example of MBE:
● Standard Goal: The finance department has a target to maintain monthly
expenses within a specific budget limit.
● Exception: If expenses exceed the limit by more than 10%, the finance manager
is alerted and intervenes to analyze and address the issue.
● Routine: If the expenses are within the expected range, the finance manager
does not need to intervene, allowing the team to manage the routine tasks
without interference.
12. Process of Selection –
Job Analysis and Workforce Planning
● Job Analysis: Understanding the job's responsibilities, requirements, and
necessary qualifications.
● Workforce Planning: Assessing the need for hiring and the roles to be filled.
2. Sourcing Candidates
● Internal Sourcing: Looking within the organization for potential candidates (e.g.,
promotions, transfers).
● External Sourcing: Advertising the job on job boards, company websites, social
media, and recruiting agencies to attract external candidates.
● Networking: Reaching out to professional networks and connections to find
qualified candidates.
3. Application Process
● Job Posting: Creating a detailed job description that outlines the role,
qualifications, and application process.
● Receiving Applications: Collecting applications, resumes, and cover letters from
interested candidates.
● Screening Applications: Reviewing resumes to shortlist candidates who meet
the job requirements.
4. Shortlisting and Screening
● Initial Screening: Evaluating candidates based on their qualifications,
experience, and fit for the role.
 ● Pre-screening Interviews: Conducting phone or video interviews to further
assess candidates.
● Testing: Administering skill tests or psychological assessments to evaluate
abilities and personality traits.
5. Interviews
● Structured Interviews: Conducting in-depth interviews with the shortlisted
candidates. These can be one-on-one, panel interviews, or behavioral interviews.
● Assessing Cultural Fit: Evaluating if candidates align with the organization’s
culture and values.
● Interview Questions: Asking situational and competency-based questions to
understand the candidate's experience and problem-solving skills.
6. Selection and Offer
● Reference and Background Checks: Verifying candidates' qualifications, work
experience, and criminal history (if required).
● Final Selection: Choosing the best candidate based on all assessments,
interviews, and background checks.
● Job Offer: Extending a formal offer to the selected candidate, including
compensation details and benefits.
7. Negotiation and Onboarding
● Negotiation: If necessary, negotiating salary, benefits, and other terms.
● Onboarding: Welcoming the new employee to the organization, providing
necessary training, introducing them to the team, and familiarizing them with the
company's policies and culture.