PARA 13.2|IC 90, HRM One Liner|Chapter-2 | Functions of Management
Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 90, HRM Chapter 2: Functions of Management for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.
IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 90, Human Resource Management paper comes in all GIPSA exams which makes it very important.
♦Chapter 2: Functions of Management
2.(a)Purpose to be achieved
In the famous book, ‘Alice in Wonderland’ Alice reaches a spot where the road forks into two paths.
- “Which path should I take?” asks Alice.
- “Where do you want to go?” asks a voice.
3.(b)Level at which the planning is being done
The nature of the goals will depend on the level at which the planning is being done.
A Chairman‟s plan will be in terms of the total organisation,
- the products to be made,
- the areas in which to operate,
- the new products to be developed,
- the amount of profits to be earned and so on.
- Departmental Level
- The factory manager may have as his objectives the amount of production or the mix of products and may plan for a year or for the next six months.
- The Accounts Manager may be planning for the finances to be generated for the new projects to be undertaken for the next five years or merely on reducing the idle time for funds in the banks during the shorter term.
6.Planning is the most basic of all managerial functions, which will give direction to the activities for the future, through the determination of mission, objectives, goals, strategies, policies, procedures, rules, programmes, schedules and budgets.
- Mission and Goals
- The mission of an organisation is the broadest possible statement of why that organisation has been created. It would be stated in very general terms and without a time frame.
- It would be spelt out by the promoters or the Board of Directors. The mission would remain unchanged for quite some time and would provide the rationale for all its activities.
- The Mission statement for the Government of India would be found in the Preamble of the Constitution of India.
- Strategies and tactics
- Corporate strategy
- Business strategy
- HR strategy
- Strategic planning gives only broad indications and not specific details, while tactical decisions will specify operational details.
- A policy clarifies principles and values of management. Policies are not decisions but provide guidance for decision makers.
11.A policy guideline will normally apply in a variety of situations and across the organisation. Policies exist relating to:
- use of contract labour versus internal staff,
- facilities for health care,
- encouraging individual initiatives,
- tolerance of indiscipline and so on
12.Procedures lay down detailed steps for doing things.
13.A procedure lays down step-by-step details of actions while a policy lays down a general guideline.
14.Difference between rules and policies: Policies provide guidance for making decisions. Rules provide guidance for actions. Policies may change less frequently than rules. Policies will have applications in a much wider set of situations, while a rule may apply in a lesser number of situations.
15.A programme is a decision involving a number of activities to be performed over a specified period of time in order to achieve a stated objective.
16.Schedules lay down the sequence in which a series of operations will be carried out. The schedule will also lay down the time frame for such activities.
- The production department will have a schedule specifying how much, of what product, will be made, when.
- The sales department will have a schedule of billing, time-wise or customer-wise or area-wise.
- Computer operations follow schedules over specified time cycles so that the inputs reach the various related departments in time for them to use these inputs.
17.A budget is a plan stated in numerical terms. It may state the expectations with regard to incomes from various sources and the expectations of expenses on various heads. These figures, usually in financial terms, are worked out from the physical targets planned out by the various operating departments.
18.SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Good planning should, it is suggested, take note of these four factors.
- S and W relate to characteristics of the organisation which is making the plan. S and W are internal factors and will include management styles, policies, morale, decision processes, research capability, trade unions, etc.
- O and T are related to happenings in the environment. They are external factors and will include political, regulatory, technical, technological, competitive, financial, economic, demographic, social, etc. factors.
- SWOT Analysis
- Strengths are resources which are available to be exploited, things which can be done well.
- Weaknesses are the opposites of strengths, lack of resources or lack of competences. These are determined in absolute terms as well as in relation to the competition.
- Scanning of the external environment will clarify the changes that may provide opportunities (to be taken advantage of) as well as threats, constraints or risks (which have to be guarded against).
- SWOT Strategies
- Strengthen the strengths,
- Overcome or neutralise the weaknesses,
- Take advantage of the opportunities and
- Overcome or neutralise the effects of the threats
21.After the SWOT analysis, organisations may find it possible to do something to change the weakness. A change in policy may be called for. There could be repositioning of its product.
- The second important function of management is organising, which is the activity of creating the organisational structure necessary to carry out the planned activities.
A structure will comprise of:
- People with responsibilities for specified tasks,
- the relationship between these people,
- the hierarchy (who will report to whom and who will give instructions)
- An organisational structure consists of roles and the groups in which they are placed. A role is a position which a person will occupy. That person is called the incumbent in that role. Every role will have tasks and responsibilities attached to it. Every role will be related to another role, as
- Superior or
- Peer (same level)
24.A section will consist of persons who are having tasks which relate to the same function, not necessarily the same objective.
25.Departmentalisation: In a big organisation, several activities are to be undertaken to ensure that the overall objectives of the business are achieved. Many of these activities are similar and repetitive. For effectiveness of performance and control, it is necessary to group similar activities together. Such grouping of similar activities to facilitate administration results in the organisation structure.
26.Principles for departmentalisation: While deciding on departmentalisation, the principles laid down by Fayol relating to unity of command, etc., have to be kept in mind.
This is the pattern in many insurance companies. There will be separate departments for
- Processing and underwriting new business,
- Policy servicing,
- Personnel and so on
- Departmentalisation on the basis of different products
- An engineering company may have a separate division for selling boilers and another for water purification plants.
- A hospital will have separate departments for attending to out-patients (functional) and another for children (product).
- A multi-product organisation like Godrej will have separate divisions for personal care products, food related businesses, home products, etc.,
- Departmentalisation on the basis of region: Departments can be formed also on the basis of region. In that case, the regional office would be responsible for all activities for all products within that region. local laws, markets or practices‟.
29.Departmentalisation on the basis of specific customers: For a bank; corporate clients, non-resident Indians and government institutions are different kinds of customers.
30.Line and staff
- In organisations, some functions are called „Line‟ functions and some functions are called „Staff‟ functions.
- A „line‟ function is one that produces results directly in its core business areas, while a „staff‟ function is one that that provides support services.
- Selling is a line function. The cashier‟s job is a line function. Recruiting people is a line function.
- Giving legal advice is a staff function. Planning is a staff function. Execution of the plan will be done by the line.
31.Span of control: In an organisational structure, there is always a superior to whom sub-ordinates will report. The expression „Span of Control‟ is used to refer to the number of persons who report to any one superior. The term span of control is also known as „Span of management,‟ „Span of supervision‟ or the „Span of authority.
- Relevant factors to decide optimum number of sub-ordinates: The optimum number of sub-ordinates, a manager can control and supervise varies, according to experts, from a small number of four to a relatively large number of twenty. Some of the factors relevant to determine the optimum number are:
- Nature of work
- Capabilities of sub-ordinates
- experience and abilities of the manager
- Well-defined authority and responsibility
- Degree of decentralisation
- Sophisticated information and control system
- Proximity of locations
33.Levels of hierarchy: Span of control is closely linked to another concept in organisation structure, namely, that of the number of levels in the hierarchy. The smaller the span of control, the larger would be the hierarchy.
(a)Authority vested with role
- An organisation structure clarifies roles. Every role has responsibilities as well as tasks attached to it. Every role will also have some authority vested in it.
- Authority is the right to give orders to the sub-ordinate and ensure necessary compliance.
- Authority is also to use resources like spending money. Authority is essential for discharging responsibilities.
35.(b)Flow of authority from top to the bottom: Authority flows from the top to the bottom through the structure of an organisation.
- (c)Centralisation and decentralisation: There is no rule about the extent to which an organisation should decentralise. Both centralisation and decentralisation have advantages and disadvantages. These have impacts on speed of decision making and ability to respond to new situations.
- Delegation is the process by which a manager passes on to his sub-ordinate, the authority to make decisions and the responsibility to achieve certain results. Instruction to perform a certain task is not delegation.
38.Delegation – A tool to develop people: Studies show that when people are given authority to make decisions and responsibility to achieve results they are likely to show enthusiasm and commitment in their work.
39.Barriers to Effective Delegation: Despite the distinct advantages of delegation, managers are often unwilling to delegate and many sub ordinates are reluctant to accept the delegated responsibility.
40.Inverted pyramid type of structure: Modern organisation structures tend to be different from the traditional structures. As stated earlier, the trends are towards reducing the number of levels in the hierarchy. Decentralisation is happening to much larger extents because of the need for faster decisions making.
41.Staffing: The function of organising will determine the jobs to be done by people. The function of finding the people to do those jobs is called staffing.
42.Classes of workers: In another development, organisations are tending towards conducting the work with the help of three classes of workers:
- a group of core workers,
- a set of contractors and
- a complement of flexible work force
43.Core workers: Qualified professionals, technicians and managers, who are in regular employment, make up the core workers.
44.Contractors: The routine work of the organisation is contracted out to specialist agencies which are able to carry out the work more economically.
45.Flexible work force: The flexible work force of part time and temporary workers can be engaged as per needs and this complement can be increased or decreased depending upon the changing needs.
46.Leading: Leading is the process of influencing people. Leadership requires power. That power can come from a number of factors, all of which will, in different ways, make the persons being led amenable to being influenced by the leader. That they will make their contribution to the goals of the organisation. The analysis of the function of leading would focus on motivation, leadership and communication.
47.Directing is the process of communicating to the people appropriately (in time and content) what to do, how to do it, and why it has to be done. If direction is inappropriate, the work will not be done properly; the results may not be as expected. Direction includes instruction and coaching.
48.Managerial levels and skills: A manager‟s job is to use the resources at his disposal in such a way that the expected result is obtained. This is so at all levels. But the nature of actions to do the job will not be the same for all managers. The skills required will also vary accordingly. For this purpose managers are usually divided into three levels viz.,
- Middle level
- Top managers.
49.Frontline managers: Managers who directly guide and supervise those who actually perform the work, are the frontline managers.
50.Middle level managers: are positioned above the supervisors but below the most senior executives like general managers. Plant managers, departmental heads, staff officers come under this category
51.Top level managers: are involved in policy making for the company as a whole. Executive directors, board members and presidents are examples of top level managers.
- Decision Making: All managers, at all levels, irrespective of the jobs for which they are responsible, are required to make decisions. A decision is necessary to plan the job and at every stage of its implementation.
53.(a)Programmed and non-programmed decisions: A programmed decision is one in which the parameters for decision are laid down in the rules or policies. Non-programmed decisions are often, but not necessarily, taken by groups. Non-programmed decisions are often considered as precedents and have the effect of rules or guidelines to be followed in future similar cases by lower levels.
54.(b)Futurity in decisions: A decision is made at present so that certain outcomes may occur in future. It sets into motion today a set of activities which are expected to lead to certain events in future.
55.(c)Sloughing off the past: Planning is a decision. It does not guarantee a specified future. It does not determine with finality the things to happen in future.
56.(d)Planning is based on possibilities and probabilities: Planning involves looking into the future. It is however not prophecy. It is not forecasting in the sense of saying beforehand what will happen. Neither rophecy nor forecasting is possible. Planning is necessary because it is not possible to prophesy and forecast.
57.(e)Planning makes adaptation easier: Planning recognises the futurity in present decisions. It does not reduce the uncertainty of the future but it increases one‟s readiness to meet it.
58.Controlling: When a plan is made, it is assumed that the plan will achieve the expected results in the future. One cannot be sure that it will happen so. Therefore, while implementing the plan it is necessary to observe carefully that the activities are on course. Controlling is the process of ensuring that:
- the activities are being carried out as planned and that
- the activities are leading to the expected objectives
59.The control function may detect variations in actual happenings compared to the plans, suggesting that something is not right with
- execution of the plan
- the plan itself and / or
- the objectives
60.Controlling techniques: Appraisals, business reviews, budget reviews and audit are all different aspects of the controlling function. Some of these are done as the activities are happening. Others are delayed and are retrospective. The controlling function is most effective when it happens closest to the time of actions. Otherwise, they may provide lessons for the future, but some wastage may have happened.
61.Some techniques developed for controlling include:
- Management by objectives (MBO),
- Programme Evaluation and Review Technique (PERT) and
- Critical Path Method (CPM)
62.Co-ordination is the function that ensures that all activities are happening in proper sequence in time and in space.
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