Table of Contents

Page

Module Title: Finalizing Evaluated Business Plan

How to use this Module
2
Summary of Learning Outcomes 3
Pre-test 4
Lesson 1 – Finalizing Evaluated Business Plan
Words to Study 5
What is a Feasibility Study? 5
Types of Feasibility Study 6
Importance of Feasibility Study 7
Why a Feasibility Study is Important for any Business?
8
Understanding Feasibility Study 8
The Importance of Feasibility Study 8
Tools for Conducting a Feasibility Study 9
Feasibility analysis 9
Criteria for Business Plan Paper Evaluation 10
Let us remember 12
Activity 1 13
Activity 2 14
How much have you learned? 15

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 HOW TO USE THIS MODULE

This module entitled “Recalling the Duties and Functions of

Enterprise Owner” contains instructional materials and activities for
you to complete.
The unit of competency “Recall the Duties and Functions of
Enterprise Owner” contains the knowledge, skills and attitudes
required for the course Entrepreneurship.
You are required to go through a series of learning activities in
order to complete each of the learning outcomes of the module. Follow
each activity on your own and answer self-check at the end of the
learning activity.
If you have questions don’t hesitate to ask your teacher for
assistance.

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COURSE : ENTREPRENEURSHIP 10

UNIT OF COMPETENCY : Recall the Duties and

Functions of Enterprise Owner

MODULE TITLE : Recalling the Duties and

Functions of Enterprise Owner

MODULE DESCRIPTION : This module covers the

knowledge, skills and attitudes
required in Recalling the
Duties and Functions of
Enterprise Owner

SUGGESTED DURATION : 10 hours

SUMMARY OF LEARNING OUTCOMES

Upon completion of the module, the students should be able to:

LO1. Recalling the Duties and Functions of Enterprise Owner

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What do you already know?
I. Direction: Direction: Read and understand the items being
described below. Choose and encircle the letter of the correct
answer.
1. The most basic management function of an entrepreneur which
tells you where you are going and how to get there?
a. Controlling c. planning
b. Organizing d. staffing
2. Plans are categorized in different ways. Which plan is used
repeatedly as it covers policies, procedures, and rules in
management function?
a. Organizational plans c. standing plan
b. Staffing plans d. single-purpose plan
3. This plan is essentially non-repetitious. Since it is usually used
within a short period of time. It comprises programs, projects, and
budgets.
a. Improvement plan c. single purpose plan
b. Organizational plan d. standing plan
4. A management function that clusters the activities into
departments or job positions, and designating the personnel to
head and compose each department is called _____________?
a. Directing c. planning
b. Organizing d. staffing
5. A diagram that shows the relationships of the position and their
corresponding authority, responsibility, and accountability is
____________?
a. Functional type organization c. line organization
b. Line and staff organization d. organizational
chart

Remarks:

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Parent Name and Signature: _______________________________________

Lesson 2

DUTIES AND FUNCTIONS OF AN ENTERPRISE OWNER

WHAT IS THIS LESSON ABOUT?

This lesson recalls the duties and functions of an enterprise
owner.

WHAT WILL YOU LEARN?

Recall the duties and functions of an enterprise owner.

LET US STUDY

Words to study
Planning - the process of making plans for something.
Organizing – it refers on assembling the essential resources to
execute the developed plans.
Directing – involves the guiding, leading and supervision of the
employees for the achievement of organizational goals.
Staffing – is the proper and effective selection, appraisal and
development of personnel to do the jobs and fulfill the roles in the
structure.
Controlling – means making sure that activities done in the
enterprise are in conformity with what has been planned

PLANNING
Planning is the fundamental management function, which
involves deciding beforehand, what is to be done, when is it to be
done, how it is to be done and who is going to do it. It is an intellectual
process which lays down an organization’s objectives and
develops various courses of action, by which the organization can
achieve those objectives. It chalks out exactly, how to attain a specific
goal.
Planning is nothing but thinking before the action takes
place. It helps us to take a peep into the future and decide in
advance the way to deal with the situations, which we are going to

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 encounter in future. It involves logical thinking and rational decision
making.

Characteristics of Planning

1. Managerial function: Planning is a first and foremost managerial

function provides the base for other functions of the management, i.e.
organizing, staffing, directing and controlling, as they are performed
within the periphery of the plans made.
2. Goal oriented: It focuses on defining the goals of the organization,
identifying alternative courses of action and deciding the appropriate
action plan, which is to be undertaken for reaching the goals.
3. Pervasive: It is pervasive in the sense that it is present in all the
segments and is required at all the levels of the organization. Although
the scope of planning varies at different levels and departments.
4. Continuous Process: Plans are made for a specific term, say for a
month, quarter, year and so on. Once that period is over, new plans are
drawn, considering the organization’s present and future requirements
and conditions. Therefore, it is an ongoing process, as the plans are
framed, executed and followed by another plan.

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5. Intellectual Process: It is a mental exercise at it involves the
application of mind, to think, forecast, imagine intelligently and
innovate etc.
6. Futuristic: In the process of planning we take a sneak peek of the
future. It encompasses looking into the future, to analyze and predict it
so that the organization can face future challenges effectively.
7. Decision making: Decisions are made regarding the choice of
alternative courses of action that can be undertaken to reach the goal.
The alternative chosen should be best among all, with the least number
of the negative and highest number of positive outcomes.

Planning is concerned with setting objectives, targets, and

formulating plan to accomplish them. The activity helps
managers analyze the present condition to identify the ways of
attaining the desired position in future. It is both, the need of the
organization and the responsibility of managers.

Importance of Planning

 It helps managers to improve future performance, by

establishing objectives and selecting a course of action, for the
benefit of the organization.
 It minimizes risk and uncertainty, by looking ahead into the
future.
 It facilitates the coordination of activities. Thus, reduces
overlapping among activities and eliminates unproductive work.
 It states in advance, what should be done in future, so it
provides direction for action.
 It uncovers and identifies future opportunities and threats.
 It sets out standards for controlling. It compares actual
performance with the standard performance and efforts are made
to correct the same.
Planning is present in all types of organizations, households,
sectors, economies, etc. We need to plan because the future is highly
uncertain and no one can predict the future with 100% accuracy, as the
conditions can change anytime. Hence, planning is the basic
requirement of any organization for the survival, growth and success.

By planning process, an organization not only gets the insights of

the future, but it also helps the organization to shape its future.
Effective planning involves simplicity of the plan, i.e. the plan should

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be clearly stated and easy to understand because if the plan is too
much complicated it will create chaos among the members of the
organization. Further, the plan should fulfil all the requirements of
the organization.

Steps involved in Planning

The 4 Types of Plans

Operational Planning
“Operational plans are about how things need to happen,”
motivational leadership speaker Mack Story said at LinkedIn.
“Guidelines of how to accomplish the mission are set.”

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 This type of planning typically describes the day-to-day
running of the company. Operational plans are often described as
single use plans or ongoing plans. Single use plans are created for
events and activities with a single occurrence (such as a single
marketing campaign). Ongoing plans include policies for
approaching problems, rules for specific regulations and
procedures for a step-by-step process for accomplishing particular
objectives.

Strategic Planning
“Strategic plans are all about why things need to happen,”
Story said. “It’s big picture, long-term thinking. It starts at the
highest level with defining a mission and casting a vision.”
Strategic planning includes a high-level overview of the
entire business. It’s the foundational basis of the organization and
will dictate long-term decisions. The scope of strategic planning
can be anywhere from the next two years to the next 10 years.
Important components of a strategic plan are vision, mission and
values.

Tactical Planning
“Tactical plans are about what is going to happen,” Story
said. “Basically, at the tactical level, there are many focused,
specific, and short-term plans, where the actual work is being
done, that support the high-level strategic plans.”
Tactical planning supports strategic planning. It includes
tactics that the organization plans to use to achieve what’s
outlined in the strategic plan. Often, the scope is less than one
year and breaks down the strategic plan into actionable chunks.
Tactical planning is different from operational planning in that
tactical plans ask specific questions about what needs to happen
to accomplish a strategic goal; operational plans ask how the
organization will generally do something to accomplish the
company’s mission.

Contingency Planning
Contingency plans are made when something unexpected
happens or when something needs to be changed. Business
experts sometimes refer to these plans as a special type of
planning.
Contingency planning can be helpful in circumstances that
call for a change. Although managers should anticipate changes

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 when engaged in any of the primary types of planning,
contingency planning is essential in moments when changes can’t
be foreseen. As the business world becomes more complicated,
contingency planning becomes more important to engage in and
understand.

ORGANIZING

The Nature of Organizing

Once a plan has been created, a manager can begin to organize.
Organizing involves assigning tasks, grouping tasks into departments,
delegating authority, and allocating resources across the organization.
During the organizing process, managers coordinate employees,
resources, policies, and procedures to facilitate the goals identified in
the plan. Organizing is highly complex and often involves a systematic
review of human resources, finances, and priorities.
Before a plan can be implemented, managers must organize the
assets of the business to execute the plan efficiently and effectively.
Understanding specialization and the division of work is key to this
effort, since many of the “assets” are employees. Recall what Henri
Fayol wrote about the division of work:
“The specialization of the workforce according to the skills of a
person, creating specific personal and professional development within
the labor force and therefore increasing productivity, leads to
specialization which increases the efficiency of labor. By separating a
small part of work, the workers speed and accuracy in its performance
increases. This principle is applicable to both technical as well as
managerial work.”
Where workers are specialists, managers can group those
employees into departments so their work is appropriately directed and
coordinated. In short, work should be divided, and the right people
should be given the right jobs to reduce redundancy and inefficiency.
According to Chester Barnard, “Organizing is a function by which the
concern is able to define the role positions, the jobs related and the co-
ordination between authority and responsibility. Hence, a manager
always has to organize in order to get results.
A manager performs organizing function with the help of following
steps:
1. Identification of activities - All the activities which have to be
performed in a concern have to be identified first. For example,
preparation of accounts, making sales, record keeping, quality

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 control, inventory control, etc. All these activities have to be
grouped and classified into units.
2. Departmentally organizing the activities - In this step, the
manager tries to combine and group similar and related activities
into units or departments. This organization of dividing the whole
concern into independent units and departments is called
departmentation.
3. Classifying the authority - Once the departments are made,
the manager likes to classify the powers and its extent to the
managers. This activity of giving a rank in order to the managerial
positions is called hierarchy. The top management is into
formulation of policies, the middle level management into
departmental supervision and lower level management into
supervision of foremen. The clarification of authority helps in
bringing efficiency in the running of a concern. This helps in
achieving efficiency in the running of a concern. This helps in
avoiding wastage of time, money, effort, in avoidance of
duplication or overlapping of efforts and this helps in bringing
smoothness in a concern’s working.
4. Co-ordination between authority and responsibility
- Relationships are established among various groups to enable
smooth interaction toward the achievement of the organizational
goal. Each individual is made aware of his authority and he/she
knows whom they have to take orders from and to whom they are
accountable and to whom they have to report. A clear
organizational structure is drawn and all the employees are made
aware of it.

Importance of Organizing Function

1. Specialization - Organizational structure is a network of

relationships in which the work is divided into units and
departments. This division of work is helping in bringing
specialization in various activities of concern.
2. Well defined jobs - Organizational structure helps in putting
right men on right job which can be done by selecting people for
various departments according to their qualifications, skill and
experience. This is helping in defining the jobs properly which
clarifies the role of every person.
3. Clarifies authority - Organizational structure helps in clarifying
the role positions to every manager (status quo). This can be done
by clarifying the powers to every manager and the way he has to

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 exercise those powers should be clarified so that misuse of
powers do not take place. Well defined jobs and responsibilities
attached helps in bringing efficiency into managers working. This
helps in increasing productivity.
4. Co-ordination - Organization is a means of creating co-
ordination among different departments of the enterprise. It
creates clear cut relationships among positions and ensure mutual
co-operation among individuals. Harmony of work is brought by
higher level managers exercising their authority over
interconnected activities of lower level manager.
Authority responsibility relationships can be fruitful only
when there is a formal relationship between the two. For smooth
running of an organization, the co-ordination between authority-
responsibility is very important. There should be co-ordination
between different relationships. Clarity should be made for having
an ultimate responsibility attached to every authority. There is a
saying, “Authority without responsibility leads to ineffective
behavior and responsibility without authority makes person
ineffective.” Therefore, co-ordination of authority- responsibility is
very important.
5. Effective administration - The organization structure is helpful
in defining the jobs positions. The roles to be performed by
different managers are clarified. Specialization is achieved
through division of work. This all leads to efficient and effective
administration.
6. Growth and diversification - A company’s growth is totally
dependent on how efficiently and smoothly a concern works.
Efficiency can be brought about by clarifying the role positions to
the managers, co-ordination between authority and responsibility
and concentrating on specialization. In addition to this, a company
can diversify if its potential grow. This is possible only when the
organization structure is well- defined. This is possible through a
set of formal structure.
7. Sense of security - Organizational structure clarifies the job
positions. The roles assigned to every manager is clear. Co-
ordination is possible. Therefore, clarity of powers helps
automatically in increasing mental satisfaction and thereby a
sense of security in a concern. This is very important for job-
satisfaction.
8. Scope for new changes - Where the roles and activities to be
performed are clear and every person gets independence in his
working, this provides enough space to a manager to develop his

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 talents and flourish his knowledge. A manager gets ready for
taking independent decisions which can be a road or path to
adoption of new techniques of production. This scope for bringing
new changes into the running of an enterprise is possible only
through a set of organizational structure.

Types of Organization Structure

1. Formal Organization Structure: The organization structure of

jobs and positions, with specified activities and relationships, is
known as formal organization structure. It is created by
management, to attain the objectives of the company.

 Line Organization: Line organization is the oldest and

simplest pattern of organization, wherein the supervisor
has outright supervision over the subordinate. The flow of
authority is from the top-level executive to the person at
the lowest level of the organization’s echelon.

Line Organization Sample

 Functional Organization: As the name suggests,

functional organization structure is one in which the
thorough task of managing and directing the employees, is
grouped as per the functions or type of work involved.

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Functional Organization Sample

 Line and Staff Organization: This type of organization

structure is an improvement over the traditional line
organization. In line and staff organization primary and
supportive activities are related to the line of supervision
by appointing supervisor and specialist, who are linked to
line authority.

Line and Staff Organization Sample

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 2. Informal Organization Structure: The relationship between the
employees, that relies on personal attitudes, prejudices and
interests rather than procedures. It is system of personal and
social connection, whose creation is not needed by formal
organization. The organization structure is a basic idea, which
depends on the activity authority relationship in the company. It is
designed in such a way to realize business objectives.

STAFFING

The managerial function of staffing involves manning the

organization structure through proper and effective selection, appraisal
and development of the personnel to fill the roles assigned to the
employers/workforce.
According to Theo Haimann, “Staffing pertains to recruitment,
selection, development and compensation of subordinates.”
Staffing can be defined as one of the most important functions of
management. It involves the process of filling the vacant position of the
right personnel at the right job, at right time. Hence, everything will
occur in the right manner.
It is a truth that human resource is one of the greatest for every
organization because in any organization all other resources like-
money, material, machine etc. can be utilized effectively and efficiently
by the positive efforts of human resource.
Therefore it is very important that each and every person should
get right position in the organization so as to get the right job,
according to their ability, talent, aptitude, and specializations so that it
will help the organization to achieve the pre-set goals in the proper way
by the 100% contribution of manpower. Thus, it can be said that it is
staffing is an essential function of every business organization.

Functions of Staffing
1. The first and foremost function of staffing is to obtain qualified
personnel for different jobs position in the organization.
2. In staffing, the right person is recruited for the right jobs, therefore it
leads to maximum productivity and higher performance.
3. It helps in promoting the optimum utilization of human resource
through various aspects.
4. Job satisfaction and morale of the workers increases through the
recruitment of the right person.
5. Staffing helps to ensure better utilization of human resources.

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6. It ensures the continuity and growth of the organization, through
development managers.

Importance of Staffing

Efficient Performance of Other Functions

For the efficient performance of other functions of management,
staffing is its key. Since, if an organization does not have the
competent personnel, then it cannot perform the functions of
management like planning, organizing and control functions properly.

Effective Use of Technology and Other Resources

What is staffing and technology’s connection? Well, it is the
human factor that is instrumental in the effective utilization of the latest
technology, capital, material, etc. the management can ensure the right
kinds of personnel by performing the staffing function.

Optimum Utilization of Human Resources

The wage bill of big concerns is quite high. Also, a huge amount is
spent on recruitment, selection, training, and development of
employees. To get the optimum output, the staffing function should be
performed in an efficient manner.

Development of Human Capital

Another function of staffing is concerned with human capital
requirements. Since the management is required to determine in
advance the manpower requirements. Therefore, it has also to train and
develop the existing personnel for career advancement. This will meet
the requirements of the company in the future.

The Motivation of Human Resources

In an organization, the behavior of individuals is influenced by
various factors which are involved such as education level, needs, socio-
cultural factors, etc. Therefore, the human aspects of the organization
have become very important and so that the workers can also be
motivated by financial and non-financial incentives in order to perform
their functions properly in achieving the objectives.

Building Higher Morale

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 The right type of climate should be created for the workers to
contribute to the achievement of the organizational objectives.
Therefore, by performing the staffing function effectively and efficiently,
the management is able to describe the significance and importance
which it attaches to the personnel working in the enterprise.

Nature of Staffing Function

 Staffing is an important managerial function- Staffing
function is the most important managerial act along with
planning, organizing, directing and controlling. The operations of
these four functions depend upon the manpower which is
available through staffing function.
 Staffing is a pervasive activity- As staffing function is carried
out by all mangers and in all types of concerns where business
activities are carried out.
 Staffing is a continuous activity- This is because staffing
function continues throughout the life of an organization due to
the transfers and promotions that take place.
 The basis of staffing function is efficient management of
personnel- Human resources can be efficiently managed by a
system or proper procedure, that is, recruitment, selection,
placement, training and development, providing remuneration,
etc.
 Staffing helps in placing right men at the right job. It can be
done effectively through proper recruitment procedures and then
finally selecting the most suitable candidate as per the job
requirements.
 Staffing is performed by all managers depending upon the
nature of business, size of the company, qualifications and skills
of managers, etc. In small companies, the top management
generally performs this function. In medium and small-scale
enterprise, it is performed especially by the personnel department
of that concern.

Staffing Process - Steps involved in Staffing

1. Manpower requirements- The very first step in staffing is to
plan the manpower inventory required by a concern in order to
match them with the job requirements and demands. Therefore, it
involves forecasting and determining the future manpower needs
of the concern.

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 2. Recruitment- Once the requirements are notified, the concern
invites and solicits applications according to the invitations made
to the desirable candidates.
3. Selection- This is the screening step of staffing in which the
solicited applications are screened out and suitable candidates
are appointed as per the requirements.
4. Orientation and Placement- Once screening takes place, the
appointed candidates are made familiar to the work units and
work environment through the orientation programs. placement
takes place by putting right man on the right job.
5. Training and Development- Training is a part of incentives
given to the workers in order to develop and grow them within the
concern. Training is generally given according to the nature of
activities and scope of expansion in it. Along with it, the workers
are developed by providing them extra benefits of in-depth
knowledge of their functional areas. Development also includes
giving them key and important jobs as a test or examination in
order to analyze their performances.
6. Remuneration- It is a kind of compensation provided monetarily
to the employees for their work performances. This is given
according to the nature of job- skilled or unskilled, physical or
mental, etc. Remuneration forms an important monetary
incentive for the employees.
7. Performance Evaluation- In order to keep a track or record of
the behavior, attitudes as well as opinions of the workers towards
their jobs. For this regular assessment is done to evaluate and
supervise different work units in a concern. It is basically
concerning to know the development cycle and growth patterns of
the employees in a concern.
8. Promotion and transfer- Promotion is said to be a non-
monetary incentive in which the worker is shifted from a higher
job demanding bigger responsibilities as well as shifting the
workers and transferring them to different work units and
branches of the same organization.

Some of the important steps involved in staffing process are as

follows:
Staffing is referred as both line as well as a staff activity. It is
referred as line activity because like other functions such as planning,
organizing, directing, controlling, staffing is also performed by every
manager.

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 It is a staff activity because it is an important area of
management also like marketing management, financial management,
we have human resource management department also in large
organizations.
The steps involved in the staffing process are:

1. Estimating manpower requirement:

Staffing process begins with the estimation of manpower
requirement which means finding out number and type of employees
needed by the organization in near future. Manpower requirement is not
only to find out number of people needed but also the type of people.
Type means what should be the qualification educational
background of the people whom we need to appoint. While assessing
the type of manpower required company should also make policy
regarding number of people to be appointed from backward classes,
women force, minority, etc.
For estimating manpower Requirement Company will take
following three steps:
(i) Work load Analysis.
(ii) Workforce Analysis
(iii) Comparing both to find out requirement.
Workload Analysis:
This requires finding number and type of employees required to
perform various jobs designed in organizational structure.
Workforce Analysis:
It means analyzing existing workforce or employees already
occupying the job positions and how many of them are overburdened or
under burdened.
Comparison:
After doing work load analysis and workforce analysis, the
manager compares both as excess of work load over workforce
indicated under staffing and you need to appoint more people whereas
excess of workforce over work load indicated over staffing and you need
to remove or transfer some employees elsewhere.
As both overstaffing as well as understaffing are undesirable. The
manager tries to find out the manpower requirement by equating
workload analysis to workforce analysis.
2. Recruitment:
It refers to the process of inducing the people to apply for the job
in the organization. After assessing the number and type of employee
required, the manager tries that more and more people should apply for

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the job so that the organization can get more choice and select better
candidates.
If we can fulfill the requirement from inside the organization
through transfers and promotion, then it is very economical and fast but
generally organization has to fulfill its requirement from outside the
organization. To recruit people from outside the organizations’, contact
various placement consultants, employment exchanges, contractors
etc. but the most common way to recruit fresh talent is through
advertisement. Company advertises in newspapers etc. and many job
seekers after reading the advertisement applies for the job.
3. Selection:
It refers to choosing the most suitable candidate to fill the vacant
job position. The selection is done through a process, which involves
test, interviews, etc.
In selection number of selected candidates is less than the
number of rejected candidates that is why selection is called negative
process also. The main objectives of selection are:
(i) To select the best among the available.
(ii) To make selected candidate realize that how
seriously things are done in the organization.
4. Placement and Orientation:
Placement refers to occupying of post by the candidate for which
he is selected. After selection the employee is given appointment letter
and is asked to occupy the vacant job position.
Orientation refers to introduction of new employees to the
existing employees’ large organizations organize orientation programs
to familiarize the new employees with the existing whereas in small
organizations superior takes the new employees on round and
introduces him to the existing employees.
5. Training and Development:
To improve the competence of employees and to motivate them it
is necessary to provide training and development opportunities for
employees so that they can reach to top and keep improving their skill.
Organizations may have in house training centers or arrange with some
institutions to provide training for their employees. Training and
development not only motivate employees but these improve efficiency
of work also.
By offering the opportunities for carrier advancement to their
employee’s organizations can improve their effectiveness and
efficiency.

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 In most of the large, scale organizations there is a separate
human resource department which performs staffing function but in
small organizations the line managers only perform all the functions. So
small organizations in which there is no human resource department
include following steps also in the staffing process.
i. Performance Appraisal:
After taking training and performing the job for sometimes
there is need that employees’ performance must be evaluated.
Performance appraisal refers to evaluating the performance of
employees against some standards. The standards are made
known to employees in advance. Superiors prepare a feedback
report on the basis of performance appraisal.
ii. Promotion and Career Planning:
Promotion refers to being placed at a higher job position
with more pay, job satisfaction and responsibility. Generally, on
the basis of feedback report of employees’, performance they are
given promotion and opportunities for higher job positions.
iii. Compensation:
It refers to price of the job. It includes pays, reward and
other incentives given to employees. It includes direct as well as
indirect payments. Direct payments such as wages, salary, etc.
Indirect payments such as medical facility, insurance, etc. The
managers must fix the right compensation on the basis of
qualification, type of job, etc.

DIRECTING/LEADING

According to many management theorists, four basic

management functions exist. These are planning, organizing, directing,

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and controlling. Directing is an essential function in any enterprise. In
fact, directing helps managers ensure quality performance and achieve
the organization’s goals.
There are four primary elements of directing – supervising,
motivating, leadership, and communication. Today, we will explore
leadership and its characteristics.

Elements of Directing – Leadership

Leadership is a process which manager use to guide, direct, and
influence the work of their subordinates in the desired direction. It is
also the ability of the manager to induce the employees to work
confidently and with vigor.
In simple words, leadership skills allow a manager to influence
others for the realization of a goal. Further, leaders must have an eye
set on the future and motivate people to achieve the visions. Keith
Davis defines leadership as follows:
‘Leadership is the ability to persuade others to seek defined
objectives enthusiastically. It is the human factor which binds a
group together and motivates it towards goals. ‘

Characteristics of Leadership

 Leadership is an interpersonal process where

a manager influences and guides workers for achieving the
organization’s goals.
 A good leader needs to be intelligent, mature, and have a strong
personality.
 Leadership is a group process and needs at least two (or more)
people interacting with each other.
 A leader can shape and mold the behavior of a group in
the direction he wants.
 There are no best leadership styles. A good leader understands
that he needs to tackle the situations as they arise.

Directing is the heart of management function. All other functions of

management such as planning, organizing, and staffing have no
importance without directing. Leadership, motivation, supervision,
communication are various aspects of directing. Let us study the
Directing refers to a process or technique of instructing, guiding,
inspiring, counselling, overseeing and leading people towards the
accomplishment of organizational goals. It is a continuous managerial

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process that goes on throughout the life of the organization. Main
characteristics of Directing are as follows:

1. Initiates Action
Each and every action in an organization is initiated only through
directing. The managers direct the subordinates about what to do, how to
do when to do and also see to it that their instructions are properly
followed.
2. Ingrates Efforts
Directing integrates the efforts of all the employees and
departments through persuasive leadership and effective
communication towards the accomplishment of organizational goals.
3. Motivates Employees
A manager identifies the potential and abilities of its subordinates
and helps them to give their best. He also motivates them by offering
them financial and non-financial incentives to improve their performance.
4. Provides Stability
Stability is significant in the growth of any organization. Effective
directing develops co-operation and commitment among the employees
and creates a balance among various departments and groups.
5. Coping up with the Changes
Employees tend to resist any kind of change in the organization.
But, adapting the environmental changes is necessary for the growth of
the organization. A manager through motivation,
proper communication and leadership can make the employees
understand the nature and contents of change and also the positive
aftermaths of the change. This will help in a smooth adaptation of the
changes without any friction between the management and employees.
6. Effective Utilization of Resources
It involves defining the duties and responsibilities of every
subordinate clearly thereby avoiding wastages, duplication of efforts, etc.
and utilizing the resources of men, machine, materials, and money in the
maximum possible way. It helps in reducing costs and increasing profits.

Principles of Directing

1. Maximum Individual Contribution

One of the main principles of directing is the contribution of
individuals. Management should adopt such directing policies that
motivate the employees to contribute their maximum potential for the
attainment of organizational goals.

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2. Harmony of Objectives
Sometimes there is a conflict between the organizational
objectives and individual objectives. For example, the organization
wants profits to increase and to retain its major share, whereas, the
employees may perceive that they should get a major share as a bonus
as they have worked really hard for it.
Here, directing has an important role to play in establishing
harmony and coordination between the objectives of both the parties.
3. Unity of Command
This principle states that a subordinate should receive instructions
from only one superior at a time. If he receives instructions from more
than one superior at the same time, it will create confusion,
conflict, and disorder in the organization and also, he will not be able to
prioritize his work.
4. Appropriate Direction Technique
Among the principles of directing, this one states that appropriate
direction techniques should be used to supervise, lead, communicate
and motivate the employees based on their needs, capabilities,
attitudes and other situational variables.
5. Managerial Communication
According to this principle, it should be seen that the instructions
are clearly conveyed to the employees and it should be ensured that
they have understood the same meaning as was intended to be
communicated.
6. Use of Informal Organization
Within every formal organization, there exists an informal group
or organization. The manager should identify those groups and use
them to communicate information. There should be a free flow of
information among the seniors and the subordinates as an effective
exchange of information are really important for the growth of an
organization.
7. Leadership
Managers should possess a good leadership quality to influence
the subordinates and make them work according to their wish. It is one
of the important principles of directing.
8. Follow Through
As per this principle, managers are required to monitor the extent
to which the policies, procedures, and instructions are followed by the
subordinates. If there is any problem in implementation, then the
suitable modifications can be made.

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CONTROLLING
Controlling is one of the important functions of a manager. In
order to seek planned results from the subordinates, a manager needs
to exercise effective control over the activities of the subordinates. In
other words, the meaning of controlling function can be defined as
ensuring that activities in an organization are performed as per the
plans.
Controlling also ensures that an organization’s resources are
being used effectively & efficiently for the achievement of
predetermined goals.
 Controlling is a goal-oriented function.
 It is a primary function of every manager.
 Controlling the function of a manager is a pervasive function

Controlling Function of Management

Controlling means validating if the activities occurring are in
confirmation with the actual plans prepared and accepted, instructions
issued and principles established. The controlling function also helps in
the effective and efficient application of enterprise resources in order to
accomplish the planned goals. Controlling gauges, the deviation of
actual performance from the planned performance, establish the causes
of such aberrations and helps in adopting corrective actions.
Controlling as a managerial process is associated with ensuring
that all the functioning of the business is as per the plans formulated
and gives meaning and effect to all other processes of management.
Controlling as a function is pervasive and is continuous. The function
starts the moment a plan is finalized and formulated and is done across
the entire business entity in different ways from the lower levels to the
top most one. Being plan based controlling is a function that is
inherently goal oriented and clearly involves the understanding of what
you want.
According to Brech, “Controlling is a systematic exercise which is
called as a process of checking actual performance against the
standards or plans with a view to ensure adequate progress and also
recording such experience as is gained as a contribution to possible
future needs.”
According to Donnell, “Just as a navigator continually takes
reading to ensure whether he is relative to a planned action, so should a

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business manager continually take reading to assure himself that his
enterprise is on right course.”
The two primary applications of controlling include facilitation of
coordination and further helps in planning.

Importance of Controlling

1. Strengthening the Goal Oriented Nature

By virtue of planning a business becomes a goal-oriented
entity. This goal-oriented attitude of the business is maintained and
strengthened by the process of controlling. As already elaborated
controlling is an extension of the planning process that ensures
conformity with the planned agenda. Doing so the process gives out
a clear picture that the plans are superior to individual actions and
must be followed. This allows the employees to clearly understand
what is given more priority and keeps them goal oriented.
2. Achieving Goals
Being goal oriented provides an entity let it be a business or
not, the advantage of making it easier to achieve goals. When the
employees understand the goals and are kept goal oriented their
efforts will be directed towards achieving it. If the effort is in a
different direction altogether, the process of controlling weeds it out.
Thus, the process ensures channelizing effort into achieving
predetermined goals.
3. Optimum use of Resources
The process of controlling as is evident from the observations
above is a strict scrutinizing process that looks into what was done
and compares it to how it was done. During such a process the
amount or the nature of use of various resources also comes under
strict scrutiny. Was that person meant to do that or was that
machine supposed to be used instead of this one is probable
questions that this process answers. The benefit of answering such
questions is that the people using such resources will be more
careful in its usage and this leads to an optimum use of resources.
4. Facilitates a system of Motivation
A control system is all about scrutinizing what was done with
what should have been done. This plays a key role in being a good
motivator. By virtue of this process, the employees clearly
understand what will be appreciated or even rewarded and what will

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 be discouraged and sometimes punished. Thus, the employees are
motivated to get rewards and avoid punishments which helps the
business fare better and get better results.
5. Maintaining Discipline
Similar to being a system of motivation, a good control
mechanism also allows for the maintenance of discipline within an
business. When there is a clear understanding of what is shunned
and what is appreciated the employees will be disciplined in doing
what is to be done and will not do those that are shunned, creating a
stable and disciplined workforce.

Controlling is thus a very important and integral part of everyday

management. It is process that helps in ensuring business success and
stability and cannot be separated from the other functions. This is
because the effectiveness of planning and all other functions are
gauged and understood through the process of controlling.

Steps Involved in Controlling Function of Management

Controlling like most other processes are composed of a number
of steps followed in a sequential order. There are 4 steps that are
involved in the process of controlling and they are:
1. Establishment of standards
Standards are benchmarks that we can compare a
particular output to. It serves the purpose of being a threshold
which has to be achieved or surpassed. The creation and the prior
establishment of standards is the first step involved in the process
of controlling. The standards are established in accordance to the
plan that is developed for the entire organization. So, if the plan is
to construct a 5-star hotel in 5 years than a standard that needs
to be achieved in the first year could be the creation of the
building plan and the accumulation of finance from multiple
sources for the commencement of the construction. Thus, this
acts as a sub goal that needs to achieved or surpassed. Standards
may be classified into following:
i. Standards that be measured and subsequently
expressed are called measurable standards. They
could be in form of time, cost, output, expenditure,
profit, appreciation, growth, market share, user base
etc.
ii. There standards cannot be measured monetarily. For
instance- deviation of workers attitudes, the

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 performance of a manager, etc. These are called as
intangible standards.
iii. Controlling is facilitated through the formation of such
standards because controlling is practiced only on the
basis of such standards.
2. Ascertainment of output
The second main step in controlling is the measurement of
performance. Gauging deviations from the planned measures is
easier for measurable standards of performance as they can be
quantified in units, cost, money terms, etc. However, non-
measurable or intangible standards of performance are difficult to
gauge.
Qualitative assessment becomes a challenge, especially
while the performance of manager needs to be measured.
Following factors are usually considered while measuring
manager’s performance: workers attitude, morale to work, the
development in the attitudes regarding the physical environment,
and communication with the superiors.
3. Identification of deviations
After the actual output is determined it is compared and
contrasted to the standards that we have established. This step is
central to the entire process of controlling as the deviations from
the plan is identified during this step. Deviations can be referred
to all those factors present in the actual output that prove distinct
and different from the established standard. Depending upon the
nature of distinction, deviations are classified either as Positive or
Negative Deviations.
In the above example, if the management was able to get
the plans ready, get the finances ready and also get the due
permission from the authorities and materials were organized for
the commencement of construction, it will be a positive deviation.
Positive deviations thus as will be understood from the illustration
is when the conditions of the standard are surpassed and the
output goes ahead to materialize more factors relevant to the
central plan, in this case getting permits and materials. Negative
deviations on the other hand refers to a situation when the
standard wasn’t even met. In our case it would be the
management not being able to procure the finances.
After identifying the deviation, the manager should think
about various causes which actually lead to this deviation. The
causes may include incorrect planning, coordination lapses,

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 defective implementation, ineffective communication and
inefficient supervision etc.
4. Taking remedial actions
Mere identification of deviation will not be of any
consequence to a business when it is either incapable or unwilling
to take effective remedial actions. Remedial actions would include
a sum total of all efforts taken to solve the deviations identified.
The main object of remedial actions would be Negative deviations.
However positive deviations do come under the ambit of this step.
This happens when the management is overdoing itself.
For instance, if the management were to procure furniture
for the Hotel too while it was supposed to only plan and organize
funds then such an act even though positive would not be in the
best interest as the furniture will undergo wear and tear by the
time the hotel is constructed and let open to the public. However,
such instances are rare and it is negative deviations that this step
is concerned more with. Remedial actions for negative deviation
would be changing the approach of the fund mobilizing team,
consulting a better and more punctual architect etc.
5. Review/Follow Up
Last but not least is the step of review or follow up. It
involves ensuring that the remedial actions so taken are bearing
fruit and are effective. This step would probably involve ensuring
that the architect newly hired is giving regular updates, the newly
reorganized funding campaign is working in the earnest etc.

Let us Remember

Management is an activity concerned with guiding human and

physical resources such that organizational goals can be achieved.
Management involves creating an internal environment: - It is the
management which puts into use the various factors of production.
Therefore, it is the responsibility of management to create such
conditions which are conducive to maximum efforts so that people are
able to perform their task efficiently and effectively. It includes ensuring
availability of raw materials, determination of wages and salaries,
formulation of rules & regulations etc.

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Activity 3

Direction: Based on your evaluated business plan/feasibility study, give

a situation that best exemplified the following plans:

No Type of Plan Example

.
1. Tactical Plan

2. Operational Plan

3. Strategic Plan

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Remarks:

Parent Name and Signature:

__________________________________________
Activity no. 4

Direction: Design your own organizational structure based on your

business plan/feasibility study. Clearly identify the authority by putting
an arrow or line for the hierarchy.

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Remarks:

Parent Name and Signature:

__________________________________________
Activity no. 5

Direction: Based on the organizational structure that you formulate on

activity no. 4, identify the job description and job qualification of each
job in the organizational chart. Use separate sheet if necessary.

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Remarks:

Parent Name and Signature:

_________________________________________
How much have you learned?
I. Direction: Direction: Read and understand the items being
described below. Choose and encircle the letter of the correct
answer.

1. The most basic management function of an entrepreneur which

tells you where you are going and how to get there?
c. Controlling c. planning
d. Organizing d. staffing
2. Plans are categorized in different ways. Which plan is used
repeatedly as it covers policies, procedures, and rules in
management function?
c. Organizational plans c. standing plan
d. Staffing plans d. single-purpose plan
3. This plan is essentially non-repetitious. Since it is usually used
within a short period of time. It comprises programs, projects, and
budgets.
c. Improvement plan c. single purpose plan
d. Organizational plan d. standing plan
4. A management function that clusters the activities into
departments or job positions, and designating the personnel to
head and compose each department is called _____________?
c. Directing c. planning
d. Organizing d. staffing
5. A diagram that shows the relationships of the position and their
corresponding authority, responsibility, and accountability is
____________?
c. Functional type organization c. line organization

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 d. Line and staff organization d. organizational
chart
6. Directing is a challenging task the principal concern of directing
as a management function is to______?
a. Asses the skills, strengths, weaknesses, and potentials of
personnel
b. Discover the problem in quantity or quality of skills of
personnel
c. Influence subordinate to contribute to the attainment of the
firm objectives
d. Make sure that what is done in the enterprise conforms with
what had been planned
7. Which among the choices bellow is necessary to determine how
often you should measure performance in the controlling process?
a. Compare performance with standard and analyze deviations
b. Establish standards
c. Measure actual performance
d. Set performance measurements
8. A type of organization chart where officers have staffs to assists
them but who do not have any authority over line personnel is
____________?
a. Line and staff organization c. functional staff
organization
b. Line organization d. organizational chart
9. Assessing the skills, strengths, weaknesses, and potentials of your
personnel will tell you whether _______________?
a. Your company has just the right quantity and quality of men
b. You have an excess in quantity but short in quality
c. Both quantity and quality of skills of your personnel are
insufficient
d. A, B and C
10. If you find out that there is a problem in quantity and quality
of skills among your present personnel, what solution should you
adopt to solve the problem?
a. Consider recruiting from inside or outside the organization
b. Undertake training and skills development
c. Advise the person to look for another job
d. A and B

II. Why directing is an essential duty and function of an enterprise

owner? Answer in 5 sentences only.

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Remarks:

Parent Name and Signature:

_________________________________________

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