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.
The Management Process
Planning: Planning is the primary function of management. It involves determination of a course of action to achieve desired results/objectives. Planning is the starting point of management process and all other functions of management are related to and dependent on planning function. Planning is the key to success, stability and prosperity in business. It acts as a tool for solving the problems of a business unit. Planning plays a pivotal role in business management It helps to visualize the future problems and keeps management ready with possible solutions.
Planning is the fundamental management function, which involvesdeciding beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do it. It is anintellectual process which lays down organisation’s objectives and develops various courses of action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.
Planning is nothing but thinking before the action takes place. It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.
Characteristics of Planning
- First and foremost managerial function: Planning provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
- Goal oriented: It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
- Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
- Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
- Intellectual Process: It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.
- Futuristic: In the process of planning we take a sneak peek of future. It encompasses looking into future, to analyse and predict it, so that the organisation can face the future challenges effectively.
- Decision making: Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with least number of negative and highest number of positive outcomes.
Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the present condition to identify the ways of attaining the desired position in future. It is both, the need of the organisation and the responsibility of managers.
Importance of Planning
- It helps managers to improve future performance, by establishing objectives and selecting a course of action, for the benefit of the organisation.
- It minimises risk and uncertainty, by looking ahead into future.
- It facilitates coordination of activities. Thus, reduces overlapping among activities and eliminates unproductive work.
- It states in advance, what should be done in future, so it provides direction for action.
- It uncovers and identifies future opportunities and threats.
- It sets out standards for controlling. It compares actual performance with the standard performance and efforts are made to correct the same.
- Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because future is highly uncertain and no one can predict future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.
Steps involved in Planning
By planning process, an organisation not only gets the insights of future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand, because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation.