SPRING 2014

MBA Semester 1
MB0038 Management Process and Organization Bea!ior
"1# $e%ine te terms &strateg'(# )*+,ain te %o,,o-ing.
a/ 0or+orate strateg'
1/ B2siness strateg'
c/ 32nctiona, strateg'
Strateg'
The Strategy term is borrowed from the military which distinguished between the grand plan
and actual action by calling the former strategy and the latter tactics.
Strategy in organizations can be divided into three:
Corporate strategy
Business strategy
Functional strategy

0or+orate strateg'
There are several businesses and a corporate headquarters which controls Corporate
strategy. ach of these businesses may be run by an independent company much li!e Tata
"otors runs the vehicle business and Tata Consultancy Service runs the #T business The
corporate headquarters will have grand plans on how each business should operate. For
e$ample% it might say that that Tata "otors should design% develop% and manufacture an
indigenous small car &ano or that TCS should e$pand business to China. This grand plan
created by the corporate headquarters is called 'Corporate Strategy(. #t lays down the grand
plan to be followed by each business under a corporate headquarters.
B2siness strateg'
very business% small or big% will have a business strategy. This is the grand plan for doing
business. For e$ample% a corporate can ma!e a grand plan of e$panding his business to
another district or having branches. )e can ta!e a decision to be the provider of low cost
furniture or highly differentiated furniture% household furniture only% modular furniture only% a
supplier of all furniture needs% etc. This is what business strategy is. #f you were a T*T*
company% each business of T*T* +say Tata "otors% Tata #ron and Steel Company% Tata
)otels% etc, would have their own business strategy in consonance with the corporate
strategy.
32nctiona, strateg'
-nce you have a business strategy% each independent department will need its own
strategy. For e$ample% the ). of Tata "otors will need a strategy quite different from the ).
of Tata Consultancy Service +TCS,. So% the operations% mar!eting% finance% ).% etc of each
business will ma!e their own grand plan or strategy and this is called functional strategy. #n
the case of .a/u% he might plan to hire more carpenters and pay daily wages or wages per
piece. This is the ). strategy +of course it is only one element of ). strategy but illustrates
what functional strategy means,. #n other words% the grand plan made by each functional
area is called functional strategy. 0sually organizations have operations strategy% finance
strategy% mar!eting strategy% and ). strategy. #f you are large and well diversified% you may
have an information strategy% supply chain strategy% etc. also and this depends to some
e$tend on the nature of your business.
"2# $e%ine te term &management(# )*+,ain te Bea!io2ra, science teor' and
S'stems teor'#
$e%inition o% management. *ccording to )arold 1oontz% 2"anagement is an art of getting
things done through and with people in formally organised groups. #t is an art of creating an
environment in which people can perform as individuals and can cooperate towards the
attainment of group goals3.
*ccording to F.W. Taylor% 2"anagement is an art of !nowing what to do% when to do% and
see that it is done in the best and cheapest way3.
By modifying the definition of )arold 1oontz and define management as 'the process of
designing and maintaining an environment in which the individuals wor!ing in groups
efficiently employ resources and accomplish the selected goals of self and the organization(.
This definition brings to fore the following !ey issues of management:
#t is about people and other resources
There are goals but goals of the individual and the organization has to be managed
#t involves creating an environment where people and resources interact to produce
the goals.
Bea!io2ra, science teor'. The thought was originated by 4ilfredo 5areto in 6789% and
he researched on organization and management relationship. :ater% )ugo "unsterberg
applied psychology to increase industrial production in 686; and around the same time%
<alter =ill Scott applied psychology to advertising% mar!eting% and personnel in 686> and
6866. But it was lton "ayo and F.? .oethlisberger who made an impact on the behavioral
science theory through their )awthorne e$periments in <estern lectric Company in 68@@.
These e$periments proved that good wor!ing relationship with the supervisor and colleagues
and the idea of challenge in the /ob accounted for higher productivity. Challenge is created
through setting high goals which cannot be normally achieved but which can be achieved
with a little additional effort. These e$periments brought to fore the importance of behavioral
science in management. $tending the idea sometime in 68A9 and 68AB% "a$ <eber
propounded the theory of bureaucracy.
S'stems teor'
Though the systems theory can be traced to biology% where we have cardiovascular system%
nervous system% etc which are fairly independent yet interdependent% it was Chester Barnard
who e$tended this into management area through his writing 'Functions of the $ecutive( in
68@7. #n systems theory% we perceive that organizations have a number of fairly independent
systems such as purchase system% operations system% mar!eting system% financial system%
etc. The wor!ings of these are independent% but it has to be integrated by the manager. This
theory% perhaps% brings the idea of integration as a !ey component of management.
"3# Gi!e te de%inition and im+ortance o% +,anning in an organization and e*+,ain te
ste+s in +,anning#
$e%inition o% +,anning. 5lanning can be defined as a basic management function which
enables one to select the purpose of the business% and how the resources should be
mustered to achieve that purpose to include using the available resources optimally to do
that. 5lanning implies goal setting for the organization !eeping in mind the constraints%
opportunities% and threats as much as what the person or business which is planning wants
0om+,ete Ans-er a%ter +a'ment# 4isit ---#sm2e,+#com