Management Note For All Banking Exam

 

Chapter: Introduction of Management

What is Management

 

•      Simply speaking management is what managers do.    

•      Management involves coordinating and overseeing the work activities of other so that their activities are completed efficiently and effectively.

•      Efficiency: - Getting the most output from the least inputs. Because manager deals with scarce inputs like people, money equipment.

•      Effectiveness: - doing things right or completing activities so that organizational goals are attained.

 

•      Effectiveness

Effectiveness is the level of results from the actions of employees and managers. Employees and managers who demonstrate effectiveness in the workplace help produce high-quality results. Take, for instance, an employee who works the sales floor. If he’s effective, he’ll make sales consistently. If he’s ineffective, he’ll struggle to persuade customers to make a purchase. Companies measure effectiveness often by conducting performance reviews. The effectiveness of a workforce has an enormous impact on the quality of a company’s product or service, which often dictates a company’s reputation and customer satisfaction.

•      Efficiency

Efficiency in the workplace is the time it takes to do something. Efficient employees and managers complete tasks in the least amount of time possible with the least amount of resources possible by utilizing certain time-saving strategies. Inefficient employees and managers take the long road. For example, suppose a manager is attempting to communicate more efficiently. He can accomplish his goal by using email rather than sending letters to each employee. Efficiency and effectiveness are mutually exclusive. A manager or employee who's efficient isn’t always effective and vice versa. Efficiency increases productivity and saves both time and money.

 

 

 

 

 

Function of Management

Planning

Organizing

Leading

Controlling

 

 

•      Planning:-As managers engage in planning, they define goals, establish strategies for achieving goals, and develop plans to integrate and coordinate activities.

•      Managers are also responsible for arranging and structuring work to accomplish the organizational goals. It is called as organizing. When managers organize they determine what task is to be done, who is to do them, how the tasks are to be grouped, who repots whom and where decision is to be made.

 

•      Every organization has people, and a manager’s job is to work with and through people to accomplish goals. This is leading. When managers motivate subordinates, help to resolve work group conflicts, influence individuals or team as they work, select the most effective communication channel, or deal in any way with employee behavior issues.

•      The final management function is controlling. After goals and plans are set (planning) m task and structural arrangement are put in order (organizing) and people are hired, trained, motivated (leading), there has to be some evaluation of whether things are going as planned.

•      To ensure that goals are being met and that work is being done as it should be managers must monitor and evaluate performance. Actual performance must be compares with set goals. If the goals aren’t being achieved its management job to get work back on track. This process of monitoring, comparing and correcting is the controlling function.

Process of Management

•      Those functions which are performed by managers are called management process.

•      Inputs: Men, money, Materials, Methods, Machines

•      Process: - Planning, Leading, Staffing, Organizing, controlling.

•      Output:- Goals or end result

Characteristics of Management

 

1. Achieving the objectives

•      An organization comes into existence to attain certain objectives.

•       Management deals with the achievement of these objectives.

•      A manager’s success is measured by the extent to which these objectives are achieved.

•      Management always aims at achieving the organizational objectives.

•      For example, if the objective of a company is to sell 1000 computers then manager will plan the course of action, motivate all the employees and organize all the resources keeping in mind the main target of selling 1000 computers.

2. Working with Others: - Organizational goals are achieved with the joint effort of people. Management can provide effectiveness to human efforts only when team or group activities are managed properly.

3. Science and arts: - Both science and arts .As management presents everything in easy and attractive way, it’s an art while management can apply the principles of management in practice for the achievement of organizational goal, it is a science.

4. Growing Professionalism: Management is growing as a profession. In today’s business age, its principals and practice have become compulsory. So management is gradually changing into the form of profession.

5. Coping with Environment: - The effectiveness of management as lies in its ability to cope with the changing environment. There are several internal and external forces influencing environment.

6. Universality In application: - Management encompasses everything, not only in organization. Even to manage church, temple one has to apply management principles. Management is universal and can be found in all types of organization.

7. Attaining Efficiency and Effectiveness: - Efficiency is getting things right while effectiveness means doing the right thing. Efficiency and effectiveness is two pillar of managerial success. These are the bases of competitive advantage of organization.

8:- Responding to social needs: - The social responsibility of an organization is now developed concept that requires management to take inputs from society and give output to society.

Principles of Management

•      The practices of management are based on specific disciplines which are known as principles of management.

•      Hennery Fayol has recommended fourteen principals.

1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of command
5. Unity of direction
6. Remuneration of personnel
7. Centralization and decentralization
8. Subordination of Individual Interest
9. Scalar chain
10. Order
11. Equity
12. Stability of Tenure
13. Initiative
14. Esprit De Crops

ü  Division of work: Every work must be done by perfect employee and how an employee can becomes perfect. Only by division of work. So, Henry Fayol introduced this principle for fast production in factory and with this principle of management, skill and efficiency of labourers increase. They become specialize in their work, after this company can increase the standard of their product.

ü  Authority and responsibility: This principle is the guideline for all the employees and authorities that authorities and responsibility are two part of one coin and if any higher authority delegates the power to his subordinate then it means that higher authority also delegates the responsibility for doing work on that status. This is wonderful principle which should be in the knowledge of every employee of any company because higher authority can ask about completing of any work and make you accountable also.

ü  Discipline: Discipline means obey the order of higher administrator. This principle explains the cultural and ethical value of Old India where if a person learnt from his master, he used to obey every duty of his master. Same principle will apply in business management. Discipline in work and in employee is key of success.

ü  Unity of command:-
This principle states that orders should be given from one higher authority . If there are two higher authority who give order to one subordinate , then subordinate will misguide and he will not do any work. For the continuity of work , it is very necessary for manager that he observes that is there only one authority on labourer or employee who is giving command or order . If two authority are in same rank , then GM should promote or transfer to one of them .

ü  Unity of direction:  One main different between direction and command that direction is just guidance without any order or there is not the provision of penalty or punishment , if other will not direct according to direction but in command , if employee will not follow it , it may possible that employer will give punishment for not obey the order . If direction is just guide then why the need of this principle . Answer is very simple . Direction is more powerful tool in the hand of manager because with this manager can make democratic environment but if direction is given by one authority because if two or more leader will give direction anti way, then it will surely reduce the efficiency of employee.

ü  Subordinate of individual interest: - This principle is telling about two interests. One an employee appoints in the company, there are large nos. of interest like he is interested to get promotion, he is interested to get high salary but this principle is also paramount to the general interest of company. If company sees that providing high salary to employee is not suitable under current situation, company can reduce salary of employees for some time; even any employee can be removed from service under retrenchment.

ü  Principle of handsome salary:    This principle is also helpful for development of employee and supports employees that employer should give handsome salary to employee because of increasing inflation of necessary food prices , without handsome salary , employee will not satisfied and turnover ratio of employee will increase and if company wants to develop employee and increase production , then company should provides not only high salary but also provides large number perquisites to employees .

ü  Centralization and descentralization:

·         The amount power with control of management dependent on the company size.

·         Centralization emphasis on the contraction of decision making of authority to the top level management.

·         Sharing the authority too top level to bottom level.

·         Maintaining the centralization and decentralization dependent on the size of organization, and all the knowledge and capability of subordinate.

ü  Equity:

·         Employed must be treated kindly and justice must be interacted to insure fair at work place.

·         Manager should fair and fair and impartial when dealing with employer

·         He should give equal attention toward all employees

ü  Stability of tenure:

·         The period of service should not be too short and employee should not move from passion of frequently.

·         An employee cannot render useful services if he is remove before he became familiar to the work assign him.


Managerial Hierarchy / Level of Management

•      The term managerial Hierarchy refers to the arrangement of managerial positions in an organization.

•      The concept of division of managerial hierarchy into different levels was bought into practice to divide the authority and responsibility into various levels.

•      The common managerial hierarchies are

1. Top Level Management ( Board of Director, Executive Officer)
2. Middle Level Management ( Department Heads)
3. Lower Level Management ( Supervisor, Foreman and Account In charge)

Top Level Management

•      This is the highest level and also called as brain of management.

•      The function of top level of management

1. To prepare strategic plans and policies of the organization.
2. To define overall objective of the organization
3. To set up organizational structure to complete the work in efficient and systematic manner.

Middle Level Management:-

They are the largest group of managers in most organizations.

It is known as backbone of organizations.

This level consists like human resource manager, production manager, marketing manager, finance manager.

The function is

•      To play the role of mediator between top level and first line management.

•      To implement plan and policies lay down by top level management.

•      To prepare departmental plans and strategies on the basis of guidance and information from top level.

 

Lower Level Management

•      They are also known as first line or operating level of management.

•      It is directly involved in the actual operation of production, marketing, finance, accounting, etc.

•      This levels consists of superiors, foreman, sales officers, accounts officers, etc

•      The basic function are:-

•      To make day to day plans and to implement plans formulated by middle level management.

•      To assign responsibilities and duties to the employees.

•      To manage resources.

•      To maintain close and harmonious relation among all the employees.

•      To submit progress report to the middle level management.

Managerial Skills

•      A skill is an ability or proficiency in performing a particular task.

•      When manager have the necessary management skills, they will probably perform well and be relatively successful in their profession.

•      There are three skills among managers.

1. Technical skill: - It refers to the ability and knowledge in using the equipment's, techniques and procedures involved in performing a specific task.
2. Technical skill are espically important at the first line management level, since they spend much of their time in training subordinates and answering questions on work related problem.

Human Skill

•      Human skill refers to the ability to work by understanding and motivating other people individually or in a group.

•      Managers with good human skill are able to get the best output from subordinate.

•      They should know how to motivate, communicate, lead, inspire and trust subordinate.

•      This skill is equally important in all level of management.

Conceptual Skill

•      This refers to the mental ability to analyze and diagnose complex situation.

•      Conceptual skill helps the managers to conceptualize the environment to analyze the forces working in a situation and to take a broad farsighted view of the organization.

 

Managerial Roles

The term management role refers to specific categories of managerial behavior or function performed by managers. For playing managerial role, a managers need to fulfill some officials system and procedures.

1.     Interpersonal Roles

2.     Informational Roles

3.     Decisional Roles

·         Interpersonal Roles: - It relates to manger contact and dealing with other people. Manager tries to maintain an interpersonal relationship with employee and outsiders on behalf of organization. Interpersonal roles deal with coordination and interaction with organizational members. Managers develop the contacts and build relationship with people inside and outside the organization interpersonal roles involves the activities. The interpersonal role includes

1. Figurehead:- This include greeting the visitors, distribution gifts, attending ceremonial function, etc
2. Leaders: - This includes directing motivating, leading and controlling.
3. Liaison: - managers play this role when they work as connecting link between their organization and outside institution or people. This role of managers helps to maintain social and business relation with outsiders.

Informational Role

•      Information is the lifeblood of an organization and communication of day to day information is necessary in every organization...

•      Those roles are closely related with task necessary to obtain the transmit information

•      It consists of receiving, collecting and circulating the information.

1. Monitor: - This role involves receiving information about internal performance of the organization and also of external events.
2. Disseminator: - This role involves transmitting relevant information to the members of the organizations.
3. Spokespersons: - As a spokespersons, a manager formally relays information to people outside the organizations. The managers explain the view point of the enterprise on significant matters or queries of the people.

 

Decisional Role:-

•      Decisional role involves making choices to solve organizational problems. Collecting information and maintaining relationship with other serve as a basis for decision makers.

•      Through these roles the manager makes thing happen.

•      Mainly decision is taken to solve the problem.

•      Manager needs to take decision and need o negotiate with conflict parties and uncertainties.

•      The decisional roles are:-

1. Entrepreneur: - This role involves initiating change or acting as a change agent and taking risk for better performance. A manager develops new idea and strategic models for implementation.
2. Disturbance handler: - This role involves taking corrective action when the organization faces unexpected disturbances like strike, feud between subordinates, etc.
3. Resource allocator: - Resource includes money, equipment, and time. The manager has to allocate the scarce resources in many department and units where they are most needed.
4. Negotiator: - A managers must bargain with other units and individuals to obtain advantage for his unit. The negotiations may concern work, performance, objectives, resources or anything else influencing the units.

Becoming a Manager

•      Role of Education

•      Role of Experience

•      Beside experience, natural ability, drive and self motivation also plays an important role in acquiring management skill.

•      Emerging Challenges for Management

Management is the process of getting things done through and people. Management is the essence of organized effort of people. Whatever the activities are to be performed they are performed by people min those activities. People who involve in management activities to decide how best use business resources to produce goods or provide services. A single individual cannot perform all the management activities.

•      Globalization:  globalization means free trade in product and services offering wide choices of goods to consumer around the world. Management is no longer controlled by national broders. The growth of regional free trade agreement and world trade organization present the new challenges and opportunities for manager. The manager need to understand the process of globalization and competition it creats for them.

•      Development of Environmentalism:  Quality and Productivity: management needs to cope with continuous improvement in product quality. The importance of quality and standards for acceptable quality has increased the dramatically in recent years. There is an interrelationship between quality and productivity.  Quality is the excellence of the product includes attractiveness lack of defects reliability and long term dependability. Productivity has all so become major issue or organization during recen years. Increase in productivity requires developing and applying techniques and strategies.

•      Ethics and Social Responsibility: another managerial challenge that is important is concerned with ethics and social responsibility. There is increase concern about the roles and state of ethics in business because of the belief the business ethics in decision making. In recent attention has been focused on the issue of social responsibility of business. Society is generally is expecting amore form of the business organization.

•      Workforce Diversity: work force diversity is the organizational reality today. Workforce diversity means that organizations are becoming more heterogeneous in the term of the gender, ethics and backgrounds. The workforce is increasingly batter educated. Manager should relize that employee come to work with their cultural value and life style preference. They shold recognize the different among employee and respond to them in way that is insure employee commitment. It can improve decision making by providing perspective on the problems.

•      Innovation and Change: organization must pay attention to innovation and change. Otherwise they will go out the business. Product life span has been shortening every day.  They have to beat their competitor in the market place with constant flow of innovative product and services. An organization’s employee is the vital forces for innovation and change.

•      Empowerment of employee

•      Technological development: technological environment consist of innovation techniques and organized knowledge of the way of doing things. Technology includes the any equipment tools or operating method that are designed to make work more efficient. The manager must grasp a proper understanding of these aspects of technological context.  The technology management has now emerged as important and crucial management activities in modern business firms to match the competitive market. Manager has to cope with all these change taking place in technology and their management.

•      Change management: organizations today are excited by change. The forces for change may come from the environment. Many managers find themselves unable to cope with an environment. Manager must be able to adapt to these change for successful operation. In this globalization age, the concept of management also needs to be modified to complete international level modern methods must replaced traditional techniques.

•      Relationship of management: relationship of management is defined as those processor that organization and individual use in order to maintain the connection they have with each other. It has now been realized that a fostering goods relationship is a vital component to both and professional and success. The emerging management practice involves recognizing goals. Relationship management however entails. Much more then how one deals who co-workers and customer.

•      In context of Nepal political Instability, power labor unions affiliated with political parties, rising public expectations and lack of skilled manpower due to brain drain are the major challenges for management.

 Chapter two:  Introduction of Evolution of Management Science

•      Management is an old as the human civilization. The concept of management has been in practice since ancient times.

•      The study of management has progressed through several stages as scholar and practitioner working in different areas focused on what they believed to be important aspect of goods management practice.

•      The study of management as a science began only after the Industrial revolution.

•      After the Industrial revolution, management of enterprises assumed an increasingly important role but Frederic Winslow (FW) Taylor started the Systematic Management.

•      Therefore, the evolution of management thought can be studied into 6 categories

1. Classical  theory          b. Human Relation and behavioral Science

c. Decision theory       d. Management Science theory         e. System theory

F. Contingency  

·       classical theory

Started in the beginning in the 19 the century this theory suppose that as a human being work for economics benefit. It includes three different approaches.

                        1) Scientific management theory

                        2) Administrative management theory

                        3) Bureaucracy management theory

Scientific management theory

Ø  developed in 19^th century

Ø  F.W Taylor Gilogerth lillion Giherth hennery Fayal  were the main person.

Ø  It contributes for the development of scientific management among them. F.W Taylor role was important so he is known as fathers of management.

Ø  Scientific management is the foundation of stone of modern management theory.

Ø  Scientific management provides valuable insight into production efficiency.

Ø  Scientific management emphasis on improved working condition.

Ø  Scientific management developed he many management tools.

Ø  This theory gives the importance tools for work specialization standardization section of employee requirement training and wages.

Ø  Principle of scientific management is: division of work , training for worker, close the corporation between management and worker. Minimums outputs were generate.

Administrative management theory:

§   The purpose was to develop basic guidelines for designing creating and maintaining  large organization.

§  The classical organizational theorists emphasized on the overall approach to the administrative problems of organization. They search for effective means of studying and managing organizations effectively.

§  Developed by French industrialist  and mining engineering by professor Hennery Foal

§  This theory emphasis to management activities and principle.

§  According to foal management is the dieselizing field of study involving money managerial function like for costing  planning  organization co-coordinating and controlling

§  Principle of administrative theory are all the principle of management as:

 

Bureaucracy  theory

§  Developed in 19^th century by max Weber father of Berecracy .

§  In Berecracy  clears rules and regulation and line of authority are given to be Berecracy  for the effective conduct of management. Hierarchy of authority is cleared fixed in rules and regulation.

§  A Berecracy organization structure has following feature.

1)      There should be hierarchy of authority involving soupier  subordinate relationship chain of command

2)      There should be system of rules, regulations and producers selection and promotion of employee are based on technology competence.

3)      A business organization should apply the method division of labor and specialist should be assigned to each place.

4)       

5)       

Behavioral Science Approach

 

•      It gives emphasis to human behavior and Psychological aspect.

•      It is multidimensional and Interdisciplinary in nature.

•      It is and more modern version of Human relation approach.

•      Abraham Maslow, Douglas Mc Gregory, Frederic Herzberg, etc contributed for this theory.

•      The behavioral scientist who have had lasting impact on management thinking and practice where Abraham Maslow , Douglas McGregor and Frederic Herzberg.

•      These ideas have significantly influenced management theory and practice

•      Many new concepts of motivation ,communication, leadership, informal organization, conflict management, and teamwork emerged from the work of behavioral scientist.

•      Maslow, a Psychologist, studied and analysis human need. His work on human motivation is considered as of vital significance to understand human behavior in organization.

•      The implication of this theory is that the manager must recognize the need pattern of each work

•      According to him, as the lower level needed are satisfied, they are no longer motivating factors and the higher level  need become dominant.

•       

This various theory of behavioral science approach is

                                            Douglas Granger :- theory of X and Y

                                            Abraham Maslow: theory of hierarchy

•      . He proposed two distinct views of human beings.

•      One negative labeled theory X and another labeled theory Y.

•      According to Human theory Y is a set of Optimistic assumption about Human nature and theory X is a set of pessimistic assumption.

•      Theory X and Y, Human Need Theory and Frederick Herzberg Two Factor Theory

 

Assumption of theory of X

They must be corrected control or threatened with punishment to achieve desire goals.

Must employed had little capacity they do not solve the organizational problem.

Employed want to directed guided they do not like to take responsibility and they want to security safety and also they have little ambition.

 

 

 

 

 

 

                                                                                                                              

 

Assumption of Theory Y

•      It is not  that employees do not like to work by nature they like to work and work is a part of their life. They enjoy work.

•      Employee will become committed to organizational objectives is they are rewarded for doing so.

•      Employees are sharp minded but their internal ability remains hidden.

•      Employee get responsibilities in proper situation and also accept them

•      People are capable of self-direction and self-control if they are committed to objectives .

•      People will become committed to organizational objective if they are rewarded for doing so.

•      The average person can learn to both accept and seek responsibity.

•      Many people in the general population have imagination , ingenuity and creativity .

Maslow hierarchy theory

In 1943 Abraham Maslow, a human psychologist propounded a theory of human needs. This theory a human needs. This theory had widely influenced modern understanding of motivation. Maslow believe that motivation is mater of satisfying human needs. His conception and explanation of human needs were new and sophisticated. Therefore his theory of Hierarchy of needs is well read and must known as theory of motivation.

“According to Maslow, human being everywhere share concern for certain fundamental needs”

 

 

•      .

Physiological needs

•      Physiological need:- This are the basic need essential to survive which includes food, cloth shelter, water, cloth, sex, etc.

•      In organization adequate wages and good working environment satisfy these needs.

Security Needs/ Safety Needs:-

•      Security Needs includes protection against danger or threat on or off the job.

•      Safety working situation, security of job, good remuneration and necessary facilities are include in safety needs.

Social Needs:-

It includes affections, sense of belonging, acceptance and friendship. It includes friendly behavior of colleagues, involvement in social organization and in committee, etc.

Ego or Esteem Need:-

•      This Need includes self respect, high and respected post, freedom, recognition and separate identity from boss/ authority etc.

Self Actualization Need:-

Expectation of creative or challenging work, participation in decision making, autonomy in work, Few friends( Few close intimate friends rather than many surface relationships),etc.

Frederick Herzberg:- Two Factor Theory

•      Frederick Herzberg developed the two for work motivation.

•      From the research taken from 200 engineers and accountants he found two sets of needs namely motivating factor and Hygienic factor

•      Hygience Factor:- The presence of these factor donot motivate employee but their absence cause dissatisfaction.

•      It includes company policy and supervision, relationship with supervisor, working condition, salary,  relationship with peers, personal life, job security , status, etc.

•      These factor are necessary to maintain a minimum level of need satisfaction.

Motivating Theory:-

•      The presence of motivating factor causes high levels of motivation and job satisfaction, whereas their absence do not cause high dissatisfaction.

•      These factors includes achievement, recognition, advancement, work itself, personal growth, responsibility, etc.

Conclusion:- The manager needs to identify the behavior of subordinates to inspire them to get the things done. He need to know a workers psychology and treat him accordingly.

 

Management Science Theory

•      It is also called as Mathematical, quantitative and operational research approach.

•      This theory emphasizes on application of mathematics and statistics for taking decision and solving management problems.

•      It is primarily concerned with decision making.

•      Linear programming, game theory, sampling theory, probability theory, simulation, etc.

•      Nowadays days in operation research this technique are used to solve complex management problem.

 

System Theory:

•      System theory was developed in the 60s Kenneth, Boulding, Johnson, Rosenzweig, etc have contributed to the development of this theory.

•      This theory takes management as a system.

•      Management is a system which works under certain rules and procedures.

•      Input:- Human, Financial, Physical Information

•      Processing:- Planning, Organizing, Leading , Controlling

•      Output:-Goods/ Service, Profit or loss ,Goal Integration.

•      According to Ludwing Von Bertalanffy, there are two types of system. Closed or open.

•      Close system do not Interact with the environment

•      Open System constantly interact with the environment.

Contingency Theory

•      This theory is also called situational approach.

•      This theory does not accept any single model of management.

•      This approach is based on the premise that there is probably no best way to solve management problem in all organization.

•      According to this approach, the best way to lead, plan, organize and conduct managerial activities varies with the situation.

•      The manager must understand the uniqueness and complexity of each situation.

•      According to this theory, the form of management is affected by the elements such as size, nature, situation, challenges, etc.

•      The best way depends on the specific events

•      The business environment is dynamic . in this dynamic environment contingency approach is more suitable and need to adopt situational theory.

•      This theory is developed by manager and practitioners  who have faced many challenges while applying the management principle and techniques.

•      This situational approach to management is best management practice in this dynamic business world.

•      The contingency theory emerged from the experience of many other manager and practitioners. The major contingency variables are :

1)      Size of organization          4) individual difference

2)      Task technology                5) the type of work being done

3)      Environment uncertainty

 

Emerging concept of management
Workforce Diversity:-  It is the differences in genders, ages and ethnicities of workforce. Different in opinions of individuals also come on diversity

•      Learning Organization:- It is one in which employee at all levels, individually and collectively are continually increase their capacity to produce quality result.

•      Outsourcing:- Management of employees from outside through contracting with third party for significant period of time.

•      Knowledge Management :- It is the discipline of enabling individuals, teams and entire organisations to collectively and systematically create, share and apply knowledge, to better achieve their objectives"

 

 

 

 

Chapter 4:-Concept of Business Environment

•      Business organizations establish, operates and grow in society which is surrounded by environmental components.

•      Business environment grow or operates and dies in the environment .

•      Business environment consists of all components of the surroundings of a business organization, which affects or influence its operation and determine its effectiveness,

•      Environment is dynamic and changes according to time.

•      Business environment define as forces that affect on the business environment.

•      It is also complex and difficult to forecast.

•      Business organization cannot exist and operate without environment.

•      Every organization obtains inputs from environment, transform them into output in environment.

•      There are two types of environment

•      It  exchange resource and information with the external environment that are relevant to its operation for instance it import the imports, input like capital technology manpower and materials from the external environment. These input are then processed within the business system and transormed into useful outputs in the form of goods and services.

•      A business environment consist input-output function.

•      The combination of internal and external factor that influence a company’s operating situation.

•      The business environment can include factors such as client supplier its competition and owners improvements in technology laws of government activities, and market ,social and economics rends.

•      There are two types of environment Internal and exernal.

1. Internal Environment:- all the condition and forces within the the organization affecting the business operation it is controlled by the management. It is measure strength and weakness of an organization. Component of internal environment are as.

Employees: employees are the vital and important assets of an organizations. Though they are inside of the organization they are an important sources of external information. business hires employee, it is the major internal factor. Employees differ in skill, knowledge morality, and attitude so on. When manager and employees has difference in goals and belief then conflict may aries. The task management is to divide the work assign the work to suitable employee and handle the conflict.

Shareholder:  management deal with many shareholders. Shareholders have the right of ownership, power of management and voting right. Shareholder being owner of business have a direct interest in the performance of the organization. The director elected by them represent their interest in the  broad. It plays the major role in formation of objective, policies, strategies, of the organization as well as their implementatioans.

Organization culture: organization culture is the framework of values vision , norms and custom shared by the member of an organization.  The arrangement of various facilities, pattern of relationship among the various department, responsibility, authority and communication is the organization structure. Its also include specialization and span of control.

Structure:  structure is the overall  framework for organization roles, rules, hierarchy  relation and  authority . structures also includes the individual group unitsand their interrelationship. An organizations structure keep on changing. The periodic  adjustments made in the work of function of individual,  group or units changes the internal working of the organization.

Unions: lsbour union represent the problem of and feeling their members to management in this process, labour and management interact with the each other. To negotiate wages, working condition, hour of works, so on collective bargaining mechanism are used. Employewees are also given opportunity to participate in some aspect of the management.

  External Environment:- It referes to the forces and intuition outside the organization on affect organization performance and also it is not controlled of the management identify opportunity and threats. It is ocated the outside the business it affect the organization performance, . They are also known as uncontrolled factor, they consist the economics factor , political factors social culture, technological factor legal,

Components of external environment: 1) task environment 2) general environment.

Task environment: such environment has directly and immediately impact on the organization. Forces in task environment result from action of supplier, distributer, customer and competitor,. These group affect the manager ability to obtain resources and dispose the output. The task environment differ from the general environment in that it can be influenced or controlled to some extent by an organization. Components of task environment are as follows.

·         Customers:  a customer may be individual in a family a business house or an intuition. These customer are not onely linked with the business form for the purchases of the goods and services they are also an  important sources of ideas opinion information and reaction. Therefore the manager maintain the close relationship with them for he information and chang e the number of type of customer or change their taste and needs the result of threats and opportunities.

·         Supplier :- supplier are those who supplies the goods and service to the business organizations are called supplier. Supplier are the directly impact on the business operation. A business form buying the raw materials from the supplier who are an important part of an task environment. As the quality and price of raw materials  receive from the supplier and they are also determine the price of product and quality of product. The business firm try to obtain  lower price batter quality works and faster delivery. The strengthens their competitive position change in the nature number of type of any supplier result in forces that produces opportunities and threat in the business firm.

·         Competitor:  a business form face competition in the market. Competition is , therefore inevitable manager work out strategies to deal with competitor and the competing the product. Information market behavior and competitors are strategies gathered and analyze to identify future opportunities and threat for the firm. If installed properly the marketing information system help manager to catch the market single time. Rivalry between competitor is the potentially the most threatening force that manager must deal with.

·         Government: the role of government is the regulate business system and protect the interest of the customer and general public. It is the roles also protect the industries ensuring to free-market principles. The policies and regulation  of the  government have therefore a major impact  on the functioning of the business system.

·         Pressure group:-  in the society there living the different culture, religion, and  cast they are impact on the business activities. If the business firms are unable to provide them quality product they are taking legally action for it. if any employee doing works in any organization lack of skill and knowkedge if he would dominated they should be going to the voilents.

·         Financial Institutions: business firm are rely on the service of on the intuition ike commercial bank, development bank, finance company or insurance company to meet their short and long financial and other services requirement he term and condition of loan advance and quality and promptness of their services an impact on the performance of a business. Therefore maintaining the effective working relationship with these financial intuitions is enssentail for business.

·         Media: A business units being an important social entity often draw the attention of the media. The media keeps an eye on the vital decision or action of the business firm having general public interest. Managers therefore need to maintain good communication with media and external audience and deal with effective and promptly.

·         General Environment:- These are broad external conditions that may affect business activities of the organization. It is also called as macro environment.

·         Components of General Environment

·         Political Environment:-  they are bring the new rules and regulation in the business concern all so they take vat and on the product o that they are in the business concern.  I9in context of Nepal , Nepal has huge quantity of natural resources due to the political instability, natural  resource are not utilized until. The political system that exists in country influence the business organization. If the political risk is high there are less number in the business  in the business organization. There are several political factors likes,Constitution, Political Philosophy, Political party, rules regulation n.

·         Economic Environment:-  the economics environment of a business is largely determined by the economics system. The number of economics factors, such ass economic planning, national income, industrial investment saving inflation and international economy activities reflect the business environment. These factors are dramatically affect the company ability to function effectively and influence their strategies and choices. It indicates the condition of the economy in wich business organization operates. It ha continuous and great impact on business. It includes national income, production, inflation saving, investment, price, government activities.    

·         Socio-social cultural forces consist of the attitude beliefs and value of individual and group in the society. As the value of custom and tastes changed in the society, the manager must also change his organization pattern .as society change our life is also change by7 new things

.it affect the product choices. The social environment impose on management. The larger problem of the  poverty, lack of knowledge, uneducated, family system cast and religious structure. culture and tradition, like he complicate managerial  function of especially in respect to supervision, discipline management marketing, control system etc. these social factor are the mixed with management. 

Technological Environment: technology consist of skill, operating methods, invention and innovation , which works more efficient. It also largely influence organization by creating change in job, skill, life style product, production method and process. Technological change result of result in modification in product and services.   Technological change such as advance in radio, television and printing process, have influenced the style of adverting goods and services. Faster processing of information in material handling storages and transportation has enabled the manager to make product to consumer at the in right rights place and relatively good condition. The manager must be, therefore grasp of proper understanding of his aspect of technological change.

Organization – Environment Relationship
(How environment affect Organization)

•      Since organization is open system, there is a close relationship between organization and environment.

•      Every organization obtains inputs from environment; transform them into output in environment.

•      The impact of these environmental factor is very powerful on the function of the business system.

•      It should be noted that the circumstances Often change dramatically over time.

•      A business system is involved in input-process-output function. It exchange the resources and information with the external environment  that are relevant to its operations.

•      It imports the input like capital, technology manpower and raw materials from the external environment, these input are processed within the business system and transform into useful output in the form off the goods and services. These output are sent back or exported the external environment for the consumption.

How Environment affects organization:-

1. Environment change and Complexity:-

Environment can be described along two dimensions

1. Degree of change       b. Degree of Homogeneity

The degree of change study which environment is comparatively peaceful and which comparatively dynamic.

The degree of homogeneity studies which environment is comparatively simple and which is comparatively complex.

James D. Thompason: - When the degree of change in environment is stable and degree of homogeneity is simple, the organization faces least uncertainty in their operations.

•      Environment Turbulence: - Organization may face the possibility of environment turbulence without any warning. Generally, natural calamities like earthquake, volcano, landslide, flood turbulence in a business organization.

•      Competitive Forces:- Porters 5 force model

1. Threat of new entrants
2. Competitive rivalry:- Compton between similar organization
3. Threat of substitute product
4. Power of buyers
5. Power of suppliers

Emerging Business Environment in Nepal

•      Nepal is a member of WTO; Nepal cannot restrict the entry of foreign goods and services.

•      Emergence of Open Market: Nepal have adopt liberal and open market, economic freedom has been given,

•      Increasing role of Private sectors

•      For a long time, business firm are in Nepal operated under condition of states regulation and protection.  Economics factors were predominantly significant for business.

•      The economy operate in scarcity.

•      Development of Information Technology:- National Information Technology Center (NITC) was established in 2002 with the

•      Vision of developing and promoting Information Technology in Nepal.

•      Growth of Service Sector:-The service sector involves restaurant, transportation, education, computer software, etc.

•       

Components of emerging business environment

·         Emerging Multinational Companies: Nepal has adopt  the policy of open  market and economic liberalization. It has forwarded special policies to attract foreign investment so the foreign investor. Have  a entered Nepal through multinational companies now hotel, bank, hydro power projects, nursing home finances companies etc are being run in joint venture with the member of WTO. Globalization has begun to influence Nepal business environment.

·         Emerging of open market of economy: government has adopt liberal and open market economy policy. Under open market economy , economic obstacle in licensing, registration, etc. with the nominal formalities, private enterprise and entrepreneur have freedom to choose the line of business and  cope on the basis of their interest.

 

·         Development  of private sector: economic reform program has shown symptoms in economics sector mainly in the private sector. Private sector has gone ahead in sector of hydro power, airlines, communication , road, water supply, banking and financing companies, hotel, small and cottage industries etc.

·         Development of information economy: the repid development of information technology, (IT)  has also affected the Nepalese business. The use of it resources consist of computers programs , email, internet, network system E-commerce fax etc. increasing the working efficiency of the business organization. Many organization like bank finance companies educational institution hotel, telecommunication airlines manufacturing and trading organization use It resources.

·         Emerging of consumption: the evaluation free market economy has changed the concept of sellers market to consumer market. The open market policy has  created the competitive environment among the manufacture and supplier and thus has provided selection facilities to the consumer. Consumer purchases goods and services on the basis of their needs and requirements. Therefore business organization have adopted different strategies to draw the attention of consumer toward their product and services.

·         Development of service sector:  in Nepal the repid growth of service sector can be noticed in recent year . some of business are diverted from manufacturing business to services sector. New private enterprise are emerging in the field of services sector. These services sector are consist of hotel restaurant , transportation telecommunication, media, cyber internet,  computer software and education health etc. these sector have attracted huge investment in recent year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit 2: planning and decision making

 

What is planning?              

•      All managers need to be effective planners.

•      Whether the organizations they work for sells product or services, operate in private sector or public sector, profit or non profit organization. Each type of organization need planning.

•      Richard Steers:- “Planning is the process by which managers define goals and take necessary step to ensure that these goals are achieved”.

•      Planning is deciding in advance what is to be done, how is it be done and who is to do it.

•      Generally, a manager defines goals and takes necessary steps to ensure that these goals can be achieved in an efficient manner.

 

 

Organizational   Goal setting and planning:

Organizational   Goals:

•      A goal is a statement of a desired future of an organization wishes to achieve.

•      It describes what the organization is trying to accomplish.

•      Goals may be strategic (making broad statements of where the organization wishes to be at some future point) or tactical (defining specific short-term results for units within the organization).

•      Goals are what organizations want to achieve in the future.

•      Achievement of a goal is the destination of an organization.

•      Goals should be SMART

 

Purposes   of  Organizational  Goals:

Griffin has identified four important purposes, which the organizational goals serve. They are as follows:

§  Goals provide guidance and unified direction for people in the organization. Goals can help everyone understand where the organization is going and why getting there is important.

§  Goal-setting practices strongly affect other aspects of planning. Effective goal setting promotes good planning and good planning facilities future goal setting.

§  Goal can serve as a source of motivating to employees of the organization. Goals that are specific moderately difficult can motivate people to work harder, especially if attaining the goal is likely to result in rewards.

§  Goals provide an effective mechanism for evaluation and control. This means that performance can be assessed in the future in terms of how successfully today’s goals are accomplished. 

Functions of Organizational   Goals:

§  Organizational goal have meaning and relevance not only to the entire organization, but also to the individuals working in them. The functions of the goal on organization and individual levels separately.

FUNCTIONS FOR ORGANIZATION:

§  Goals often focus attention or give direction to manage to managers attempting to acquire and make use of organizational resources. Goals provide guidelines for members of organization.

§  Goals are often a reason for organizing. They restrict the deviations in behavior of members and groups. Goals dictate power, authority, work schedules, communications patterns, etc. to departments and units.

§  Goals can serve as a standard by which efficiency and effectives of the organization or units can be judged.

§  Goals are of central importance in motivating staff and adapting in a dynamic and uncertain environment.

§    Goals can assist the organization in acquiring the right type of human resources.

The planning function

Methods of planning

 

•      Top Down Method:- In this method , top level managers are directly involved in all the aspect of planning. They formulate objectives, programs, policies of organization

•      Bottom Top Method:- In this method at first line management develop plan and forwarded to middle level for modification. After modification or changes it is forwarded to top level management.

•      Composite Plan method:- In this high level management sends necessary guidance, method or ways to middle or lower management. The middle or lower levels formulate plans according to the received guidance and send it to higher level.

 

Types of planning

§  on the basis of hierarchy:

1.   corporate plan: corporate plan is a long-term plan prepared by top-level management. It also give the reason for the existence of organization. This plan clearly defines the objectives of the organization and strategy to achieve defined goal.

2.   Tactical plan: This plan is prepared by middle level of management. It is a medium term plan. The departmental managers formulate this plan on priority basis. They focus on allocating resources on the basis of programs. It is mainly prepared to perform the departmental activities like production, finance, marketing, personnel etc.

3.   Operational plan: This plan is prepared by lower level management. It is a specific action plan of each and every activity of the unit. It involves a schedule of each unit of work to implement a tactical plan.

§  On the basis of use

1.   Single use plan: This plan is prepared for a specific purpose. This plan is useless after the completion of defined goals. Project and budgeting plan are the examples of such plans.

2.   Standing plan: This plan is prepared for programmed decision making in different situations. This is a broad plan for repetitive activities. Such plans once developed will be implemented in the organization to achieve organizational objectives in different situations

§  On the basis of flexibility

1.   specific plan: specific plan is prepared for a specific work or for a specific department or unit. The members of the organizations are clear about the task to be performed and resources to be used. All clearly stated plans are specific plans.

2.   Flexible plan: flexible plan is changeable  on the basis of time and situation. It is not specific in terms of procedures and allocation of resources. The responsible member can modify such plan on the basis of requirement.

Steps in the planning process:

1.   Setting goal: goal determination is the first step in the planning process. Goals indicate the end point of what to be done, where the primary emphasis to be placed, and what is to be accomplished by the network policies, strategies, procedures, rules and budget. Goals are then quantified to make them measurable to enable the management to assess the performance.

2.   Determination of premises: premises are the assumptions about the environment in which plans are made and implemented. Thus, assumptions about the likely impact of important environmental factors such as market demand, population growth, cost of raw materials, technology to be used, government policy, etc on the future plans are made.

3.   Determination of alternatives: planning is not necessary if there are no alternatives. Every possible alternative or course of action has to be carefully studied and analyzed. The possible alternative actions existing in the situations would be enormous. Therefore, critical thinking of the planners is required to visualize the most crucial and apparent possibilities. Only the most likely possibilities should be retained for further consideration.

4.   Evaluation of alternatives: when all possible alternative have been identified and their strong and weak points examined, the next step in planning is to evaluate them for feasibility and consequences in the light of premises and goals. Some alternatives may be highly profitable but may require huge investment. Other alternative may create practical difficulties of availability of machines, materials, or technology. Still other alternatives may suits organization’sgoal but may be less profitable.

5.   Select and announce the final plan: The final step in planning should flow naturally from the preceding steps. If alternatives have been clearly spelt out and carefully examined, the most desirable choice is usually apparent. This is the point at which the plan is adopted-the real point of decision-making.the final step of planning is, thus, two-fold:  selecting one of the alternatives, and announcing the final plan.

Concept of strategic planning:

§  It is the comprehensive master plan starting how the organization will achieve the mission and objective.

§  It is dynamic and long range planning which focuses on the organization as whole.

§  Strategic planning is a process that involves the review of market conditions; customer need, competitive strength, and weakness; socio-political, legal, and economic condition, technological developments, and the availability of resources that leads to the specific opportunities or threats facing the organizations.

§  Generally, strategic planning process consist of collecting information from the environment, developing mission, setting objectives, determining strategic and preparing portfolio plan.

 

 

 

SWOT Analysis:

•      It is primary stage of strategic planning and concentrates on collecting information from the environment.

•      Top management needs to collect information from the environment before formulating a strategic plan for the organization.

•      SWOT stands for Strength , Weakness , Opportunity and Threat.

•      Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.

 

Some examples:

 

Strengths	Weaknesses
•      Political support •      Funding available •      Market experience •      Strong leadership	•      Project is very complex •      Likely to be costly •      May have environmental impact •      Staff resources are already stretched
Opportunities	Threats
•      Project may improve local economy •      Will improve safety •      Project will boost company's public image	•      Environmental constraints •      Time delays •      Opposition to change

Tools to Aid Strategic Planning:[quantitative tools]

There are some quantitative tools, which aid managers in performing their planning functions. Many managers may not have sufficient knowledge of advanced mathematics and statistical theories to apply these tools personally. A consideration of these tools is, however, important for at least two reasons:

§  Managers should know that such tools exist and they can be applied to certain problems that are referred to management consultants.

§  The growing use of these quantitative techniques indicates the need for increased training in quantitative methods on the part of managers.

1.   Forecasting: Forecasts are predictions, projections, or estimates of future situations. The basis of any planning is a future estimate. All the planners would like to know in advance how they would fare in future. In what direction, the situation would move? Forecasting is, thus, used to predict exactly how some variable will change in the future. There are many factors or activities like sales, products, markets, supplies, manpower, exports, and import, which can be predicted and projected.

2.  

start

 Flow charts: flow charts are also very useful planning and controlling tools. They are also the tools for sequencing of activities. Sequencing is simply arranging events in an order of their desired occurrence. Flow charts symbolically depict a line sequence. These charts have arrows that indicate of the action, and symbols that represent step or particular points in the action. Standard flow-charting symbols include: (i) boxes for events or activities, (ii)diamonds for key decisions, and ovals for start and stop points.

Turn on computer

Open document

Select icon

Insert disk

No power

Start power

no

stop

 

 

 

 

                                                                           

                                             

                                             Example of flow chart

3.Gantt chart: Also Called: milestones chart, project bar chart, activity chart. A Gantt chart is a bar chart that shows the tasks of a project, when each must take place and how long each will take. As the project progresses, bars are shaded to show which tasks have been completed. People assigned to each task also can be represented.

4.Break-even analysis: The break-even analysis is also called profitgraph. The term profitgraph is preferred to break-even analysis as the latter mistakenly suggests that the firm’s goal is to break-even rather than to make a profit. Break-even analysis is also known as cost-volume-profit analysis. Break-even analysis is another helpful planning and control tool for managers. It gives information about price and profit decisions. The objective of break-even analysis is to determine the quantity at which the product or service will generate enough revenue to start earning profit.

5.simulation: The other tool used in planning is simulation. An organizational simulation is a model of a real world situation that can be manipulated to discover how it functions. Simulation can be used to find out how it works. Simulation method is more explanatory than fixed. The simulation method is useful in complicated situation. Skilled manpower and consultancy are needed for the development of improved model of simulation. If the problem is difficult, use of computer is needed.

Concept of Managerial decision making:

§  Decision making is a crucial component of management process.

§  It is also known as hearth of management.

§  In general term decision making is the process of selecting a best course of action out of many available alternatives.

§  It is the process of identifying and defining problem, developing alternative solution, evaluating them in terms of possible consequences and choosing the best solutions among them and implementing the decision efficiency.

 

Decision making process:

1)  Identification of problems: while taking decisions, at first the problem should be identified and definition of the problem, such as, ‘what is the problem, what and how it affected the organizational goal? The managers should be well informed about such thing. Problem should not be explained in itself, but it should be explained relating with the organizational goal.

2)  Development of alternatives: in the second phase of the decision making process, alternatives should be found out. There may be more alternatives than only one for solving the problems. So, after the identification of problem, no important decision should be taken without developing several alternatives. The manager should develop alternatives by himself/herself, or collectively, or taking of experts. If there is limitation of time, it becomes difficult to develop alternatives for non programmed decision.

3)  Selection of best alternatives: this is the vital stage in the decision making process. Choosing consists of selecting the alternative with higher possible payoff. Among the alternative developed, it is likely that one will be considered better than others.

a)  It is less expensive

b)  It takes less time

c)  It will be more effective

d)  It will be preferred by employees

e)  It will result in greater productivity

In any case, the alternatives chosen should be a realistic one. The decision maker must critically evaluate each one of the alternatives. The lost gain factor must be considered. The strengths and weaknesses of each of them will be evident when they are compared.

4)   Evaluating and controlling: This is the final step in the decision-making process. After decisions have been implemented, their progress must be monitored and their success evaluated. Was the solution effective? What adjustment could/should be made? Did the decision making process work well? The manager should be sure that the decision has served the purpose for which it wsa made. Proper and timely evaluation of decisions have allows managers to take corrective actions if needed.

 Types of decision making:

1.   Programmed decisions: The decisions to be taken on regular nature of problems or on repeating problems are called programmed decisions.

Generally such decisions are taken by the first-line manager on the basis of framework of polices, rules & regulations, standard operating procedure of the organization.

 

2.   Non-programmed decisions: It is a unique or creative nature decisions they are no regular in nature.

Decision taken on unstructured, new & difficult problem is non-programmed decisions.

E.g. changing marketing strategies

 

3.   Routine decisions: The decision based on day to day operation of the organization is called routine decisions.

E.g. making   availability of raw-material, repair & maintenance.

 

4.   Basic decisions: It is also known as strategic decisions.Such decisions are necessary for long-run survival & growth of business activities.

E.g. decision on investment of extra capital, replacement of plant and machinery etc.

 

5.   Organizational decisions: It is also known as formal and official decisions. In such decisions maker has to consider each official authority before he come to any decisions.

 

Example: appointment, transfer of employee, promotions.

 

6.   Personal decisions: The decisions taken by executive chief relating to his own affair.

Conditions of   decision making:

§  Decision making under certainty: If a manager has all the information he or she needs, and can predict precisely the consequences of his or her actions, he or she is operating under a condition of certainty. Under conditions of certainty, the decision maker knows the outcomes of each alternative. The decision maker has access to accurate and reliable information. All alternative are known, hence, under such conditions, a perfectly accurate decision can be made.

§  Decision making under risk: decision cannot be made under the conditions of certainty all the time. Some element of risk is involved in decision-making. Risk exists when the probability of an action being successful is less than 100 percent. If a decision is wrong, the organization losses money, time, and other important assets. Decision –making is risky when it is difficult to predict the outcomes of the alternatives with certainty

§  Decision making under uncertainty: Uncertainty means that managers do not have enough information about the environment to understand or predict the future. Due to the dynamic and complex environmental elements, such uncertain condition appears. Decision makers, thus, need to use their intuition, judgment, and experience in making decision under the condition of uncertainty. Therefore errors are inevitable in decision making.

 

Group decision making:

In an organization decisions have to be made on different issues. If such decisions are taken collectively, this is called group decision making. Many ideas of many people amalgamate in group decision. Nowadays, practice of group decision making has become popular in most of the organizations.

Group decision becomes better than single person decision for the any organization. In group decision, different information, experiences and knowledge come together. Many alternatives can be developed. The best alternative becomes more trustworthy as well as acceptable, and the best decision is possible. Group decision enhances employees’ will power.

Advantages

·         Generates more information, ideas and solutions

·         Builds team felling

·         Increases commitment to the solution

·         Shares responsibility

·         Problems and solutions are properly identified

     Disadvantages

·         risky.

·         Groupthink – a pressure to Requires good group management and communication skills.

·         Takes more time

·         May create conflict between supporters of different views.

·         Decision may become avoid disagreement or raise objection – may occur.

 

Techniques to aid decision making:

Group decision-making involves interactions among group members. Such interactions can have both negative & positive effects on the group’s performance. To minimize the negative effects and to facilitate group decision-making, managers can employ any of the following techniques:

1.   Brainstorming: Brain storming is a method of idea-generation. Its purpose is to solve problems that are new to the organization. In brainstorming, the group meets to generate alternatives. The members present ideas and clarify them with brief explanation. Each idea is recorded on a flip chart. Group members are encouraged to offer any idea that occurs to them, even those that seem too risky and impossible to implement. In this process, criticisms or evaluation of ideas is not allowed.

After a list of ideas has been generated, those most obviously impracticable are eliminated from list. The number of ideas that remain in the list are then kept for serious discussion. This process ultimately leads to a broad agreement on the vital ideas to be considered for implementation.

 

 

 

2.   Nominal group technique: The nominal group technique was developed to gain the benefits of group participation. The purpose of this technique is to improve participation of group members in decision making and minimize competition among them. This technique reduces the domination of a few individuals and the pressure of time constraints. NGT is often used to generate goals and to choose among alternative goals and policies.

NGT involves a two-stage process. In the first stage, individuals work separately. Then, in the second stage, they work as an interacting group to evaluate and choose the alternatives.

3.   Other techniques: There are some other group decision-making techniques. The important ones are Delphi groups, and round Rubin groups. These are used as a variant of the NGT. In all the group decision-making techniques, the effort is made to maximize participation and encourage individuals that their ideas are valued. This increases felling trust, openness, and willingness to cooperate.