Principles of Management

PRINCIPLES OF MANAGEMENT

FORDIPLOMA IN HOTEL

MANAGEMENT & CATERING TECHNLOLGY

COMPILED

BY SANGESH SYLLABUS

UNIT – I

INTRODUCTION DEFINITION OF THE TERM MGT NATURE OF MGT MGT VS ADMINISTRATION LEVELS OF MGT AREAS OF MGT PRODUCTION MGT INVENTORY MGT FIFO,LIFO FINANCIAL MGT MARKETING MGT PERSONAL MGT PERSONNEL MGT SKILL OF MANAGER HUMAN SKILL TECHNICAL SKILL CONCEPTUAL SKILLS ROLE OF MANAGER – Distinguish

between managers & Executive.

UNIT – II

EVOLUTION OF MANAGEMENT THOUGHT

PIONEERS OF MGT – FREDERICK, WINSLOW, TAYLOR, HENRY FAYOL.

PROCESS OF MGT – PLANNING, ORGANIZING, STAFFING, DIRECTING AND CONTROLLING.

UNIT – III

PLANNING (MEANING) IMP OF PLANNING STEPS IN PLANNING MBO – PROCESS & BENEFITS. ORGANIZING (DEFINITION) PROCESS PRINCIPLES OF ORGANIZATION SCALAR PRINCIPLE DEPARTMENTATION UNITY OF COMMAND SPAN OF CONTROL

UNIT – IV

MOTIVATION THEORIES LEADERSHIP STYLES OF LEADER AND

LEADERSHIP QUALITES. FORMAL & INFORMAL LEADERS. THEORIES CONTROLLING PROCESS OF CONTROL MGT OF EXCEPTION

UNIT – V

COMMUNICATION

PROCESS AND TYPES

BARRIER’S

DECISION MAKING

PHASE – PAST, PRESENT, FUTURE DEVELOPMENT

TEST AND REVIEW

UNIT – I

WHY WE STUDY MANAGEMENT?

To enhance the understanding of events/ activities, challenges and skills that will give

Meaning to our future work experience and careers as managers or other professional careers we

may choose.

Make us become effective manager who will be able to help the organization achieve a high level of

performance through the utilization of its human and material resources.

Equip ourselves with effective management theories and practices that can be applied to all types of

organization and any occupational settings we may choose to be in the future.

Make us to become effective managers who will be able to detect and locate problems to be solve,

thus making good decision about appropriate solution and utilizing organizational resources

effectively to implement these solutions.

Enable us to assess the future, make plans for it, thus acting as good planners.

To be responsible and accountable for employees to be in the same track towards accomplishment of

organizational goals.

DEFINITION OF MANAGEMENTS, ORGANIZATION AND MANAGERS.

a) MANAGEMENT:

Earlier definition by Mary Parker Follet – Management scholar as:

“The art of getting things done through people”

Stoner

“The process of planning, organizing, leading and controlling the efforts of an organization

member and of using all other organizational resources to achieve stated organizational goal”.

Holt

“The process of planning, organizing, leading and controlling resources in an organization.

Management is merging quality and variety with cost that is providing unlimited variety of goods, better quality and at lowest price level to the customers.

Management is defined as a process of identifying problems and threats and taking care of these problems and threats in such manner that ultimately these turn out into opportunities which could benefit the organization in accomplishment of its objectives.

Meaning of management at glance:(i) As an activity: getting things done through others being with them.(ii) As a process: a series of interrelated functions performed in all organizational.(iii) As a discipline: a subject of study drawing upon knowledge of others disciplines. A

young and growing discipline. (iv) As a group: a body of persons who perform the task of managing organization. An

elite group in the society.

Nature or Characteristics of management:

1. Goal oriented.2. Universal.3. Integrated process4. Social process5. Activity based 6. Group activity7. Art as well as science8. Multi disciplinary9. Intangible 10.Optimum co-ordination between human and material resources.11.The combination of multiple functions12.Management is a distinct entity.13.Management is a profession14.Management based on authorities 15. It is needed at all level16. It is a social responsibilities17.Purposeful18. It is an executive function19. It is a coordinating force20.Dynamic in nature21.Management principles are relative not absolute ---- it means that management

results are according to the situation.22.Management is creative and innovative formulate creativity; creativity is the

process of developing new ideas.

After a careful study of definitions we embark upon such features, which illustrate the nature of management. Such features are as follows:

1. It is a process: process means a systematic method of doing some work. Management is recognized as a continuous process. It is that process in which work is done with others or it is got done from them. In order to achieve the pre-determined objective a manager performs the work of planning, organizing, staffing, leading and controlling. A manager did these works in a continuous order. So, it is a process.

2. Group efforts: management always efforts to group efforts and does not apply to an individuals. A group rather than an individual can easily and effectively attain management of an enterprise.

3. It is a social process: management is called a social activity because it is connected with the people working in a human group and which requires organizing their efforts. Any activity, which is connected with the people living in society, is called a social activity. In this context management is also described as a social activity.

4. Attainment of pre-determined objectives: group efforts in management are always directed towards the achievement of some pre-determined objectives; with out objectives management would be difficult if not impossible.

5. Management has a distinct entity: in view of the widening scope of business it is not possible for an owner to perform all functions himself. We can say that specially qualified experts are needed for managing the company.

6. Management is a universal activity: it is clear that management is not only connected with business but also with non-business activities also, which is also important. Management is everywhere.

7. Management as a profession: when we have recognized the distinct entity of management, there should not be any doubt or hesitation to call it a profession. The quality of a profession is that he must posses some special qualifications or ability for which he is paid remuneration. The knowledge of management is also a qualification and managers also get their remuneration for it. Hence, management is considered a profession.

8. Management is an intangible force: management is a force, which is not visible. It can only be feeling or realized on the basis of the success of an organization.

9. It is a combination of multiple functions: the basic function of management is to achieve the objectives of the organization successfully. That is why a manager has to perform various function like planning, organizing, staffing, leading and controlling etc. hence management does not mean one particular job but it happens to be a combination of various jobs.

Conclusion:Management fulfills several essentials of a profession but like other professions

management does not restrict entry into managerial jobs, to people with a special academic degree.

Objectives of management at a glance

□ Securing maximum results with minimum efforts.□ Maximum prosperity for employer and employee.□ Human better mere□ Elimination of all types of waste□ Economic growth□ Social justice

Importance of management at glance:

1. Achievement of group goals2. Optimum utilization of resources3. Minimization of cost4. Survival and growth of business5. Generation of employment6. National development

MANAGEMENT AND ADMINISTRATION

On the basis of different opinions of the experts over the world management and administration, there are three prevalent concepts: -

(i) American concepts: Administration is a higher-level activity or system and management is lower.

(ii) English concepts: management is the higher-level system and it has more power than administration.

(iii) Modern concepts: According to it, management and administration are synonymous. In the modern scientific age of management this is the most prevalent and accepted concept of management and it makes no difference between management and administration.

DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION

Sr. No.

Basis of difference Administration Management

1. Meaning It means the determination of objectives, plans and policies of an enterprise.

Management is to translate threats into opportunities.

2. Purpose Administration aims at determining the objectives.

Management aims at achieving pre-determined objectives.

3. Nature Administration is a decision making function.

Management is an execution or doing function.

4. Decisions Administration decides what is to be done and when it is to be done.

Management decides who will do the function and how he will do it, where he will do it.

5. Scope The term administration is applicable at the top level of management.

The term management is more applicable at middle level and lower level of management.

6. Usage The term administration is generally used from business organizations like govt., offices, colleges, universities etc.

Management is generally used with reference to business enterprises.

7. Features affecting decisions

Administration decisions are influenced by govt. policies, social and political circumstances and economic additions.

Management decisions are mainly influenced by the target of enterprise.

8. Relationship Administration is related mainly with the owner and top-level managers.

Management is related with the workers and employers of organization.

9. Function It is a determinative or thinking function.

It is an executive or doing function.

10. Concerned It is concerned with determination of major object and policies.

It concerned with the implementation of policies.

11. Level It is mainly top-level function. It is largely a middle and lower level function.

12. Influence Its services are influenced mainly by public opinion and other outside forces.

Managerial decisions are influenced mainly by objectives and policies of organization.

13. Concerned It is not directly concerned with direction of human efforts.

It is a activity concerned with directions of human efforts in the executions of plans.

14. Involvement Planning and controlling are the main functions involved in it.

Directing and organizing are main functions involved in it.

15. Skills Conceptual and human skills used eagerly in govt. and public sector.

Technical and human skills used mainly in business organization.

16. Minister, Commander, Commissioner, Registrar, Vice -

Managing director, general manager, sales manager, branch

Chancellor, Governor etc. manager etc.

LEVELS OF MANAGEMENT (MANAGERIAL HIERARCHY)

The management levels may be classified as follows:

(i) Top management(ii) Middle management (iii) Supervisory or operating

management

Top or executive management:

Top management refers to the managing at the highest level in the management hierarchy. It is the ultimate source of authority. It is held responsible for the general success or failure of the organization.

Top management consists of the board of directors and the chief executive or managing director they establish overall long-term goals and plans of the organization. It is their responsibility to ensure success of the organization. It is basically an organ of overall review and control. Chief executive is concerned with the overall management of the company’s operations. He maintains coordination among different departments of the company. He also keeps the organization in harmony with its external environment.

Features:□ To analyze and interpret changes in external environment of the company.□ To establish long term corporate plans.□ To formulate and approve the master budget and departmental budgets.□ To design broad organization structure.□ To appoint departmental heads and key executives.□ To coordinate and integrate the activities of different departments and

divisions of the company.□ To provide overall direction and leadership to the company.□ To exercise the overall review and control of the financial and operating

results of the company.□ To represent the company to the outside world.□ To decide the distribution of profits.

Intermediate management:Intermediate or upper middle management comprises departmental or divisional

heads.E.g. works manager, marketing manager, finance manager etc.

It is also known as departmental or functional management. Every divisional head is the overall uncharged of one particular division or department. He is accountable for the performance of his division or department to the chief executive. He performs the usual managerial functions of planning, organizing, staffing, directing and controlling in relation to one department. He coordinates and controls the activities of all personal working in different branches of his department.

Middle management:Middle management consists of all sectional heads.

E.g. plant manager, area sales manager, branch manager, office manager etc.These executives serve as a link between intermediate or top management and the

operating management.

Function:(i) To interpret and explain the plans and policies formulated by top management.(ii) To control the operating performance.(iii) To cooperate among themselves so as to integrate the various activities of

department.

(iv) To train, motivate and develop supervisory personal.(v) To lay down rules and regulations to be followed by supervisory personnel.

Supervisory or operating or first-line management:This is the lowest level of management in an organization. It consists of supervisors,

foremen, sales officers, and purchase officers etc. supervisors and operating managers maintain close contacts with rank and file workers and supervise day-to-day operations. They are concerned with the mechanics of jobs.

Function:1. To plan day-to-day production with is the goals laid down by higher authorities.2. To assign jobs to workers and to make arrangements for their training and

development.3. To issue orders and instructions.4. To supervise and control workers operations and to maintain personal connection with

them.5. To arrange material and tools is maintain machinery.6. To advice and assist workers by explaining work procedures, solving problems etc.7. To maintain discipline and good human relations among workers.8. To report feedback information and workers problems to the higher authorities.

PRODUCTION MANAGEMENT  

Planning, implementation, and control of industrial production processes to ensure smooth and efficient operation. Production management techniques are used in both manufacturing and service industries.

Production management responsibilities include the traditional “five M's”: men and women, machines, methods, materials, and money.

Managers are expected to maintain an efficient production process with a workforce that can readily adapt to new equipment and schedules. They may use industrial engineering methods, such as time-and-motion studies, to design efficient work methods. They are responsible for managing both physical (raw) materials and information materials (paperwork or electronic documentation). Of their duties involving money, inventory control is the most important. This involves tracking all component parts, work in process, finished goods, packaging materials, and general supplies.

The production cycle requires that sales, financial, engineering, and planning departments exchange information—such as sales forecasts, inventory levels, and budgets—until detailed production orders are dispatched by a production-control division. Managers must also monitor operations to ensure that planned output levels, cost levels, and quality.

INVENTORY MANAGEMENT  

Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business. It is also used for a list of the contents of a household and for a list for testamentary purposes of the possessions of someone who has died. In accounting inventory is considered an asset.

Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods.

The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.

Other definitions of inventory management from across the web:

Involves a retailer seeking to acquire and maintain a proper merchandise assortment while ordering, shipping, handling, and related costs are kept in check.

Systems and processes that identify inventory requirements, set targets, provide replenishment techniques and report actual and projected inventory status.

Handles all functions related to the tracking and management of material. This would include the monitoring of material moved into and out of stockroom locations and the reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle counting support etc.

Management of the inventories, with the primary objective of determining. controlling stock levels within the physical distribution function to balance the need for product availability against the need for minimizing stock holding and handling costs.

In business management, inventory consists of a list of goods and materials held available in stock.

An inventory can also be a self examination, a moral inventory.

FIFO and LIFO accounting Methods: are means of managing inventory and financial matters involving the money a company ties up within inventory of produced goods, raw materials, parts, components, or feed stocks.

FIFO stands for first-in, first-out: meaning that the oldest inventory items are recorded as sold first.

LIFO stands for last-in, first-out: meaning that the most recently purchased items are recorded as sold first. Since the 1970s, U.S. companies have tended to use LIFO, which reduces their income taxes in times of inflation.

When a merchant buys goods from inventory, the value of the inventory account is reduced by the cost of goods sold (CoG sold). This is simple where the CoG has not varied across those held in stock; but where it has, then an agreed method must be derived to evaluate it. For commodity items that one cannot track individually, accountants must choose a method that fits the nature of the sale.

Two popular methods which normally exist are: FIFO and LIFO accounting (first in - first out, last in - first out). FIFO regards the first unit that arrived in inventory as the first one sold.

LIFO considers the last unit arriving in inventory as the first one sold. Which method an accountant selects can have a significant effect on net income and book value and, in turn, on taxation. Using LIFO accounting for inventory, a company generally reports lower net income and lower book value, due to the effects of inflation. This generally results in lower taxation.

FINANCIAL MANAGEMENT

The management of the finances of a business / organisation in order to achieve financial objectives

Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to:

• Create wealth for the business

• Generate cash, and

• Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested

There are three key elements to the process of financial management:

(1) Financial Planning

Management need to ensure that enough funding is available at the right time to meet the needs of the business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit.

In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions.

(2) Financial Control

Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. Financial control addresses questions such as:

• Are assets being used efficiently?

• Are the businesses assets secure?

• Do management act in the best interest of shareholders and in accordance with business rules?

(3) Financial Decision-making

The key aspects of financial decision-making relate to investment, financing and dividends:

• Investments must be financed in some way – however there are always financing

alternatives that can be considered. For example it is possible to raise finance from selling

new shares, borrowing from banks or taking credit from suppliers

• A key financing decision is whether profits earned by the business should be retained rather

than distributed to shareholders via dividends. If dividends are too high, the business may be

starved of funding to reinvest in growing revenues and profits further.

Strong financial management in the business arena requires managers to be able to:

1. Interpret financial reports including income statements, Profits and Loss or P&L, cash flow

statements and balance sheet statements

2. Improve the allocation of working capital within business operations

3. Review and fine tune financial budgeting, and revenue and cost forecasting

4. Look at the funding options for business expansion, including both long and short term

financing

5. Review the financial health of the company or business unit using ratio analyses, such as

the gearing ratio,profit per employee and weighted cost of capital.

6. Understand the various techniques using in project and asset valuations

7. Apply critical financial decision making techniques to assess whether to proceed with an

investment

8. Understand valuations frameworks for businesses, portfolios and intangible assets.

MARKETING MANAGEMENT

Marketing is an integrated communications-based process through which individuals and communities are informed or persuaded that existing and newly-identified needs and wants may be satisfied by the products and services of others.

Marketing is used to create the customer, to keep the customer and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that Marketing is one of the premier components of Business Management - the other being Operations (or Production). Other services and management activities such as Human Resources, Accounting, Law and Legal aspects can be "bought in" or "contracted out".

Marketing Definition:

Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The term developed from the original meaning which referred literally to going to a market to buy or sell goods or services.

The Chartered Institute of Marketing defines marketing as "The management process responsible for identifying, anticipating and satisfying customer requirements profitably."

Marketing practice tended to be seen as a creative industry in the past, which included advertising, distribution and selling.

Traditionally, marketing analysis was structured into three areas: Customer analysis, Company analysis, and Competitor analysis (so-called "3Cs" analysis). More recently, it has become fashionable in some marketing circles to divide these further into certain five "Cs":

□ Customer analysis□ Company analysis

□ Collaborator analysis

□ Competitor analysis

□ Analysis of the industry Context.

Department analysis is to develop a schematic diagram for market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segmentations.

Marketing managers work to develop detailed profiles of each segment, focusing on any number of variables that may differ among the segments: demographic, psychographic, geographic, behavioral, needs-benefit, and other factors may all be examined. Marketers also attempt to track these segments' perceptions of the various products in the market using tools such as perceptual mapping.

HUMAN RESOURCE MANAGEMENT / PERSONNEL MANAGEMENT

Human resources: Human resources are a term used to refer to how people are managed

by organizations. The field has moved from a traditionally administrative function to a

strategic one that recognizes the link between talented and engaged people and

organizational success.

The field draws upon concepts developed in Industrial/Organizational Psychology and

System Theory. Human resources have at least two related interpretations depending on

context.

The original usage derives from political economy and economics, where it was traditionally

called labor, one of four factors of production although this perspective is changing as a

function of new and ongoing research into more strategic approaches at national levels.

This first usage is used more in terms of 'human resources development', and can go beyond

just organizations to the level of nations.

The more traditional usage within corporations and businesses refers to the individuals within

a firm or agency, and to the portion of the organization that deals with hiring, firing, training,

and other personnel issues, typically referred to as 'human resources management'.

Key functions of Human Resource Management:

1. Recruitment and Selection

2. Redundancy

3. Industrial and Employee Relations

4. Record keeping of all personal data

5. Total Rewards: Employee benefits and compensation

6. Confidential advice to internal 'customers' in relation to problems at work

7. Career development

8. Competency Mapping (Competency mapping is a process an individual uses to

identify and describe competencies that are the most critical to success in a work

situation or work role.)

9. Time motion study is related to HR Function

10.Performance Appraisal.

Role of Human Resource Department

Human Resources are exactly it says: resources for humans – within the workplace! Its main

objective is to meet the organizational needs of the company it represents and the needs of

the people hired by that company. In short, it is the hub of the organization serving as a

liaison between all concerned.

1. Organizational Development: To ensure its success, a company must establish a

hierarchal reporting system. The funnel of responsibility is critical to the efficiency of a

smoothly operating business entity in which there is a clearly defined understanding of

who is responsible for what.

They provide consultation to a company's management team to identify what the company's

core business and culture is about, and proceeds to plan and map the company's

organizational infrastructure to support those needs.

2. Employee Recruitment and Selection Process: There are many steps to recruiting

and selecting qualified employees. First, a department head must inform the HR

manager of an opening in their department.

Then the HR manager must obtain the job description to formulate a Job Description Sheet

for publication either internally, publicly, or both. Then HR must field the (many) responses to

that job announcement to weed out the qualified from the unqualified applicants.

Once that is completed, the interview process must be coordinated. They prepare the job

description, contact the newspaper, run the ad, field the calls, compile a list of potential

candidates, submit that list to the department's hiring manager for approval and selection,

contact the chosen candidates to set up preliminary interviews, and interview the candidates!

Although most interviews are with the hiring manager or their associates, not all applicants

get to meet with the department's hiring manager right away. It is not uncommon for a

company to filter out those who fail to impress the HR manager first. For those select few

who make it through, the HR manager schedules interviews between the department's hiring

manager and potential candidates, and follows up with the hiring process to establish the

new hire with the company.

3. Employee Training & Development: As a company and the requirements of a position

evolve, a company needs to take certain measures to ensure a highly skilled workforce is in

place.

The Human Resources Department oversees the skills development of company's

workforce, acting as an in-house training center to coordinate training programs either on-

site, off-site, or in the field. This might include on-going company training, outside training

seminars, or even college, in which case an employee will receive tuition reimbursement

upon earning a passing grade.

4. Employee Compensation Benefits: This covers salaries, bonuses, vacation pay, sick

leave pay, Workers' Compensation, and insurance policies such as medical, dental, life, and

401k.

The Human Resources Department is responsible for developing and administering a

benefits compensation system that serves as an incentive to ensure the recruitment and

retainment of top talent that will stay on with the company.

When an employee is hired, the company's Benefits Coordinator is required to meet with

employees one-on-one or in small group settings to explain their benefits package. This often

requires an employee to make an informed decision and to provide their signature for

processing purposes

5. Employee Relations: With the increased rise in unethical practices and misbehaviors

taking place in today's workplace such as age, gender, race, and religion discrimination and

sexual harassment, there needs to be mandatory compliance with governing rules and

regulations to ensure fair treatment of employees. In short, employees need to know they

have a place to turn when a supervisor abuses his or her authority in anyway.

Whether corporate or union, the HR Department will get involved to act as arbitrator and

liaison between legal entities, regulatory agencies such as Human Rights, supervisors (who

might be falsely accused), and employees to properly address and resolve the issue at hand.

6. Policy Formulation:

Regardless of the organization's size, company policies and procedures must be established

to ensure order in the workplace. These policies and procedures are put in place to provide

each employee with an understanding of what is expected of them.

Similarly, these policies and procedural guidelines will assist hiring managers in evaluating

their employee's performance. These policies can be established company-wide or used to

define each department's function. It is Human Resource's responsibility to collaborate with

department managers on the formulation of these policies and regulations to ensure a

cohesive organization. A common practice is the development and implementation of an

Employee Procedure Manual or Employee Handbook that is either distributed to each

employee at the time of hire or a master copy allocated one to a department.

7.The Human Resources Information Systems:

keeps track of the vast amount of data, a human resources department must have a good

HRIS in place to automate many functions such as planning and tracking costs, monitoring

and evaluating productivity levels, and the storing and processing of employee records such

as payroll, benefits, and personnel files.

It is very important that you, the job seeker, understand how the HR function works –

specifically in the area of candidate recruitment.

If you are considering a career in human resources, you can choose to become a Generalist

or a Specialist. Whether a job seeker or a HR professional, research a company well before

applying for a position.

SKILLS OF A MANAGER

In order to have a proper achievement of good and in order to have plan to be properly worked on a manager must have certain skills such as: -

(1) Conceptual skills: A manager must have conceptual knowledge of management. Each principle and concept should be clear in the mind of a manager and he should be effectively able to apply him.(2) Technical skills: it is concerned with the application of skill or knowledge acquired. Management does not simply mean the knowledge of principles of management rather it is its application which makes its effective.(3) Human skills: A manager should have Psychological knowledge. He should able to deal with different persons in different circumstances.

Decision making skills: in crucial times a manager should be able to have the ability of making decisions. These decisions must be effective and practical in use as well.

MANAGERIAL SKILLS:

1. Planning skills: the manager must pass the skills of thinking the skills of analyzing the environment; it includes what is happening in the society organization and political system. He must be able to assess or guess the changes in environment, traits offered by the changes in environment. He must be able to match two sets of environment on the basis of external and internal analysis.

2. Organizing skills: organizing skill is needed to specify who will achieve what and how manager must be in a position of identification of specific activities and specific jobs. A manager must be clear about grouping of various jobs, span of management, type of relationship to be established between various people and various jobs.

3. Leading skill: leadership is the ability of individual to influence the people. Recognition of human factor is also included in leading skill of human factor various leadership track like communication and motivation are also included in the leadership skills.

4. Technical skills: technical skills refer to the ability and knowledge in using the equipment, techniques and procedures involved in performing specific tasks. These skills require specialized knowledge and proficiency in mechanics of a particular job. A manager must know which skills should be employed in his particular enterprise and be familiar enough with their potentiality to ask discerning question of his technical advisors.

5. Human skills: human skills consist of the ability to work effectively with other people. These are required to win co-operation of others and to build effective work teams. Human skills are reflected in the way a manager perceives his superiors, subordinates and peers. An awareness of the importance of human skills should be part of manager’s orientation.

6. Conceptual skills: conceptual skills comprise the ability to see whole organization and interrelationships between its parts. These skills refer to the ability to visualize the entire picture or to consider a situation in its totality. Such skills help the manager to analyse the forces working in a situation and to take a broad and foresighted view of the organization.

7. Diagnostic skills: it includes the ability to determine by analyzing and examination, the nature and circumstances of a particular condition. It is not only the ability to specify why something happened but also the ability to develop certain possible outcomes. It is the ability to it through unimportant aspects and quickly gets though the heart of problem.

8. Controlling skill: there are certain standards, which are fixed in a way such that accomplishment of those standards leads to the accomplishment of goals. A manager must keep check on the activities of subordinates and must rectify them if there are any problems.

9. Decision making skills: there are two types of decisions to be taken by the manager.(i) Routine and program decision(ii) Non-routine and non-program decisions.

FIRST-LINE MIDDLE TOPMANAGEMENT MANAGEMENT MANAGEMENT

RESPONSIBILITIES OF MANAGER

Conceptual

Human

Technical

Conceptual

Human

Technical

Conceptual

Human

Technical

1. Responsibility towards suppliers: people who supply raw material, mechanical components, financial institutions and advertising agencies. It is the duty or says responsibility of the manager that the suppliers are being paid at the time.

2. Responsibility towards distributors: it is the responsibility of the manager to check regular supply of the product. Product must be checked for the quality, packaging (as in the case of children packaging plays a very important role). There must be free testing of goods that is distribution of samples. There should be fair return on investment that is fair commission must be paid. To motivate them the organisation must reward them, credit facilities must be made available to the middle class people etc.

You can survive in the vest way if the industry will survive:a. You can take the advantage by showing collectiveness.b. Compiling with the norms lay down by the association.c. Providing correct information to organisation.d. Sharing latest knowledge.e. Supporting the individual members of the association.f. Indulging in fair and ethical competition.g. Not using any political or other strategies.

3. Responsibility towards union: employees union is recognized as the enemy of the organisation.

4. Responsibility towards govt.: Birth growth and death of any organisation will generate according to statuary provisions and these will be governed by the government of the organisation and this can be done by

(i) Sending the correct information.(ii) Taxes and duties must be paid regularly.(iii) Organisation must try to operate as a model citizen.(iv) Organisation must not try to damage the culture of that area and

must try to maintain the rich culture of that area.

5. Responsibility towards customer

6. Responsibility towards society

7. Responsibility towards competitors

8. Responsibility towards workers

9. Responsibility towards shareholders or owners

ROLES OF A MANAGER

There are different types of managerial roles some of them are given below:

1. Figurehead: In this role manager performs symbolic duties required by the status of his office. Making speeches, bestowing honors, welcoming official visitors, distributing gifts to retiring employees are examples of such ceremonial and social duties.

2. Leader: This role defines the managers relationship with his own subordinates. The manager sets an example, legitimizes the power of subordinates and brings their needs in accord with those of his organisation.

3. Liaison: It describes the manager’s relationship with the outsiders. A manager maintains mutually beneficial relations with other organisations, governments, industry groups etc.

4. Monitor: It implies seeking and receiving information about his organisation and external events. An example is picking up a rumor about his organisation.

5. Disseminators: It involves transmitting the information’s and judgments to the members of the organisations. The information relates to internal operations and external environment. A manager calling a staff meeting after a business trip is an example of such a role.

6. Spokesman: In this role, a manager speaks for his organisation. He hobbies and depends his enterprise. A manager addressing the trade union is an example.

7. Entrepreneur: It involves initiating changes or acting as a change agent. For example a manager decides to launch a feasibility study for setting up a new plant.

8. Disturbance handler: This refers to taking charge when the organisation faces a problem or crises. For example a strike, feud between subordinates, boss of an important customer. A manager handles conflicts, complaints and competitive actions.

9. Resource allocate: In this role a manager approves budgets and schedules sets priorities and distribute resources.

10.Negotiator: As a negotiator a manager bargains with suppliers, dealers, trade union’s agents etc.

UNIT II

EVOLUTION OF MANAGEMENT THEORIES

Begin from ancient civilization. Organized management practice in 2000 B.C during King Hummurabi. Great Pyramid in Egypt, 100,000 workers involve. Egyptian use mathematical to organize labor, supervise to build within specified design and time.

China – Sun Tzu War, touching on strategy, planning and leadership use by military strategy.

THE FORMATION OF MANAGEMENT PRACTICES

Management thought started with industrial revolution around 1800. This point saw the invention and use of machinery setting up factories and creation of entrepreneurial capital that finance the industries. People think ways to improve efficiency and effectiveness.

Pre classical view point.

The factories became widespread and large number of employees needs to be coordinated. Therefore the challenge had motivated a number of individuals to think of ways and means to run the factories more effectively.

Management theories can classified into 5 view points that are :

- Pre classical view point- Classical view point- Behavioral view point- Quantitative view point- System view point

a) Charles Barbage ( 1792-1871)- Known as father of modern computing- English mathematician, pioneered in computing and management.- The idea of work specialization – work is divided into various jobs.- Recognized specialized physical work as well as mental work

(Specialists- Invented a profit sharing plan _ a bonus for useful suggestions and

portion of wages that was dependent on factory profits.- Ideas used in Scanlon plan.

CLASSICAL VIWEPOINT

A perspective on management that emphasizes finding ways to manage work efficiently. Three different approaches:

a) Scientific managementb) Bureaucratic managementc) Administrative management

1. SCIENTIFIC MANAGEMENT

Approach that emphasizes findings ways to manage work efficiently. Three different approaches are:

A) Frederick Winslow Taylor) 1856-1915)- The father of scientific management.

- Observed ‘ soldering ‘ by employees- working at less than full capacity

meaning feared that, Increasing their productivity would cause them or

others to lose jobs.

- Faulty wage system encourages workers to operate at slow pace.

- Generate rules handed down were inefficient.

Thus, developed science management:

1) Scientifically study each tasks and develop the best method for performing the tasks.

2) Carefully select employees, train them by using scientifically developed method.

3) Cooperate fully with employees to ensure them using proper method.4) Divide work and responsibility. Management will plan work method using

scientific principles and employees are responsible for executing the work accordingly.

Frederick made use of time and motion study to substantiate his theories and increase productivity. He divides work into different task. He redesigned the work, improve production by his principle- management should develop a science for each tasks to be performed.

B) Henry L Gantt (1861-1919)- Gantt chart – graphic aid to planning, scheduling and control.

- Management tool that helps managers to schedule their work.

Fayol proposed that management was a common activity to all human beings who involve in organization. His principles consist of the elements as follows:

1. Division of work. Output can be increased by specialization, making employees more

efficient.

2. Authority. The right or power to give orders to subordinates is authority. Wherever

authority exists, responsibility arises.

3. Discipline. Employees must obey the organizational rules. Good discipline must

result from an agreement between firm and employees with fairness and clear

understanding of both sides. Penalties can be applied to violations of rule.

4. Unity of Command. Each subordinate should receive orders from one superior.

5. Unity of Direction. Organizational activities that have the same objective should be

guided by one manager, using one plan.

6. Subordination of individual Interests to the General Interest. The interests of one

employee (or group of employees) should not precede over the interests of the

organization as a whole.

7. Remuneration. Employees must be paid a fair wage. Rewards should be used as a tool

of encouragement.

8. Centralization. The degree to which subordinates are involved in decision-making.

Whether the decision is centralized or decentralized is a question of proportion.

9. Scalar Chain. The line of authority from top to the lowest ranks of management.

Communication should go along this chain. To avoid delays, cross communications can

be allowed if agreed by all involved parties.

10. Order. Materials and people should be in right place at right time.

11.Equity. Managers should be kind and fair to their subordinates

12.Stability of Tenure of Personnel. High employee turnover causes inefficiency.

Managers should ensure replacements at hand when vacancies arise.

13. Initiative. The power of thinking out, proposing and executing. Management should

encourage employees to originate and carry out plans. This urging tends to boost levels

of effort.

14.Esprit de Corps. Fostering team spirit is the way to construct harmony and unity among

employees.

Table: Compare Henri Fayol to Frederick Taylor

Henri Fayol Frederick W. Taylor

1841-1925 1856-1915

General administrative theorist Scientific management theorist

1916 1911

General Principle of Management The Principle of Scientific

Management

Underlined all elements necessary

to organize and manage corporation

as a whole.

Emphasized on technology and

procedures employed by individual

workers improve efficiency.

Top down Bottom up

Conclusion

In contrast to The Principles of Scientific Management, introduced in 1911 by Frederick

Winslow Taylor, one of the prominent classical theorists in the concurrent period, which

emphasized on the technology employed by individual workers in order to improve

production efficiency; Fayol underlined all of the elements necessary to organize and

manage a major corporation as a whole.

His main contribution is in the point that he was the first general administrative theorist who

developed the complete theory of management by suggesting what managers should do and

what constitutes good management practices. More than eight decades have passed since

these principles were proposed. As we are moving into the age of rapid industrial and

technological development, you might think these principles are only common sense at

present. It important to understand that it really needs intuition to propose such a significant

idea in the environment where there were no clear boundaries of worker and management

responsibilities, no existence of effective work standard, and no clear concept about how

organizations work and how they should be structured or managed.

Nevertheless, there are some limitations and arguments on certain elements of his proposed

principles. For example, Division of work / specialization, which means dividing jobs into

specialized and repetitive tasks in order to make them as simple as possible. The argument

is that job can become too specialized. When this happens, employees express their

frustrations and boredom by taking the days off, socializing around instead of concentrating

in their own jobs, and ignoring quality of works. At last, efficiency declines.

Another controversy is on Unity of Command principle. While Fayol and many Classical

theorists believed that a subordinate should have only one superior to whom he or she is

directly responsible, contemporary theorists view this principle is logical only when

organizations are comparatively simple.

Yet in some circumstances, Unity of Command causes inflexibility as we can see from matrix

structure, which creates a dual chain of command and totally breaks Fayol’s rule.

My last example of controversy is related to Authority. Fayol assumed authority was a

power derived from managerial position. This power was the sole source of influence over

subordinates. Therefore, managers were all powerful in every aspect.

This might be true fifty years ago while staff were less important. Nowadays, preceding

conditions no longer exist. Authority from legitimate right is not equal to power, which can be

referred to an individual’s capacity to influence decisions. As a result, an exclusive focus on

authority produces a narrow, unrealistic view of influence in organization.

Given the fact that all changes that have taken place in environment for more than eighty

years, some elements of Fayol’s principles definitely become limited. Though, for most part,

they still provide valuable insights into managing effective and efficient organizations.

FUNCTIONS OF MANAGEMENT

1. Planning: It is a process of thinking before doing. It involves determinations of goals and the

activities required to be performed to achieve the goals. It consists: What is to be done?

(i) How it is to be done?(ii) Where it is to be done?(iii) When it is to be done?(iv) By whom it is to be done?

So planning is a process of shorting out the path for attaining the determined objective of the business. Over all planning is deciding that in present, what is to do in future.

2. Organising:Organizing refers to the way in which work of a group of people is arranged and

distributed among the group members to achieve the objectives of an organisation. As a function of management organizing refers to the following:

(a) Bringing together human and non-human resources that is the work to be done and its distribution in human resources.

(b) To define and establish authority responsibility relationship for the achievement of goals.

(c) Determination of objectives.(d) Division of activities into jobs(e) Fitting individuals into jobs, and (f) Developing relationships.

In conclusion we can say that organizing refers to distribution of work to the superiors and sub-ordinates and fixing there authorities and responsibilities.

3. Staffing:

Staffing is the process of determining the manpower requirement that could meet the company’s objectives. Staffing is a managerial function of attracting, acquiring, developing and maintaining the human resources required to achieve the organisation objective efficiently.

Staffing also involves upgrading of quality/skills of the staff to get higher performance from then. Personnel department of an organisation looks after the function of staffing. Staffing usually includes the following activities:

□ Human resource planning.□ Announcing vacant positions, that is recruitment.□ Receiving applications.□ Administering test.□ Interviewing.□ Medical test.□ Final selection and appointment letter.□ Orientation and placement.

4. Directing or Leading:Directing as a function of management is concerned with instructing, guiding and

inspiring people in the organisation to contribute to the best of their capabilities for the achievement of organizational objectives. As a conclusion directing includes the following:

(a) Communication: it is the process of passing information and understanding from one person to another. This process is necessary for making the subordinates understand what the management expects of them. A manager has always to tell the subordinates what to do, how to do it and when to do it. He has to create an understanding in their minds in regard to these matters.

(b) Leadership: a good manager must also be an effective leader. Leadership is concerned with influencing the behavior of followers. In order to get the cooperation of employees, the manager must have leadership skills. The style of leadership will vary from situation to situation.

(c) Motivation: effective motivation is necessary for getting voluntary cooperation of the subordinates. Different types of rewards motivate different people. Every manager should study the behavior of individuals working under him to provide him or her proper inducements. To some financial incentives are important, while others are motivated by non-pecuniary incentives like job security, job enlargement, freedom to do work and recognition.(d) Issuing orders and instruction by the superior.(e) Leading the subordinates to influence their activities towards

achievement of goals.(f) To ensure that the subordinates are working as per plans and

policies.

5. Controlling:Controlling is a process of verifying whether actual performance is in accordance to the planned performance and to take corrective action wherever required.

It involves comparison of actual performance with the planned performance as to quality, quantity, time taken etc. and than analyze the deviations and to take corrective measures to correct the deviations. It involves the following steps:

1. Establishment of standards.2. Measurement of actual performance.3. Comparison of actual performance with the planed performance.4. Find out deviations.5. Taking corrective action.

UNIT – III

PLANNING

Planning in organizations and public policy is both the organizational process of creating

and maintaining a plan; and the psychological process of thinking about the activities

required to create a desired goal on some scale. As such, it is a fundamental property of

intelligent behavior. This thought process is essential to the creation and refinement of a

plan, or integration of it with other plans, that is, it combines forecasting of developments with

the preparation of scenarios of how to react to them.

The term is also used to describe the formal procedures used in such an endeavor, such as

the creation of documents diagrams, or meetings to discuss the important issues to be

addressed, the objectives to be met, and the strategy to be followed. Beyond this, planning

has a different meaning depending on the political or economic context in which it is used.

Two attitudes to planning need to be held in tension: on the one hand we need to be

prepared for what may lie ahead, which may mean contingencies and flexible processes. On

the other hand, our future is shaped by consequences of our own planning and actions.

Planning is a process for accomplishing purpose. It is blue print of business growth and a

road map of development. It helps in deciding objectives both in quantitative and qualitative

terms. It is setting of goals on the basis of objectives and keeping in view the resources.

What should a plan be?

A plan should be a realistic view of the expectations. Depending upon the activities, a plan can be long range, intermediate range or short range. It is the framework within which it must operate. For management seeking external support, the plan is the most important document and key to growth. Preparation of a comprehensive plan will not guarantee success, but lack of a sound plan will almost certainly ensure failure.

Purpose of Plan: A plan is an important aspect of business. It serves the following three critical functions:

Helps management to clarify, focus, and research their businesses or project's

development and prospects.

Provides a considered and logical framework within which a business can develop and

pursue business strategies over the next three to five years.

Offers a benchmark against which actual performance can be measured and

reviewed.

Essentials of planning: Planning is not done off hand. It is prepared after careful and

extensive research. For comprehensive business plan, management has to

1. Clearly define the target / goal in writing.

1. It should be set by a person having authority.

2. The goal should be realistic.

3. It should be specific.

4. Acceptability

5. Easily measurable

2. Identify all the main issues which need to be addressed.

3. Review past performance.

4. Decide budgetary requirement.

5. Focus on matters of strategic importance.

6. What are requirements and how will they be met?

7. What will be the likely length of the plan and its structure?

8. Identify shortcomings in the concept and gaps.

9. Strategies for implementation.

10. Review periodically.

STRATEGIC PLANNING

Definition:

Long range planning focus on the organizing as a whole. It need managers to

considers the organization as a total unit and ask themselves what must be done in

along term to attain organizational goals.

Strategic Management

The process of ensuring that an organization possesses and benefits from the use of

an appropriate organizational strategy.

Strategic Management Process:

Importance of the planning Process

A plan can play a vital role in helping to avoid mistakes or recognize hidden opportunities.

Preparing a satisfactory plan of the organization is essential. The planning process enables

management to understand more clearly what they want to achieve, and how and when they

can do it.

A well-prepared business plan demonstrates that the managers know the business and that

they have thought through its development in terms of products, management, finances, and

most importantly, markets and competition.

Environmental analysis- General- Operating- Internal

Establishing organizational direction- mission- objective

Strategy formulation

Strategy implementation

Strategic control

Planning helps in forecasting the future, makes the future visible to some extent. It bridges

between where we are and where we want to go. Planning is looking ahead.

1. Makes the objectives clear and specific: planning clearly specifies the objectives

and the policies or activities to be performed to achieve these objectives in other

words what is to be done and how it is to be done are clarified in planning.

2. Off setting the uncertainty and change: planning is necessary to look ahead

towards future and to take decisions regard facing the expected changes/requirement

of the future. E.g. before coming of summer session producers started production for

the products to be used in summer.

3. Plans facilitate decision-making: to achieve the objective predetermined under

planning, business has to take various decisions by considering the available

resources. If job may be completed by using various alternatives (e.g. manually or by

machines) and the best alternative is decided by the management, which is more

helpful in achieving the objective.

4. Provides basis of control: under controlling actual performance is compared with

the planed performance (target/objective). So planning is the base of controlling

process.

5. Leads to economy and efficiency: planning clarifies the work and its method of

doing. Resultantly it reduces confusion and wastage of resources in the form of

thinking at the time of doing. So efficiency of the worker will risen which will further

result economy in production.

6. Facilitates integration: under planning proper directions as per plane are provided

to the subordinates. Resultantly they all make effort towards the achievement of

preplanned objective. Such co-ordination of sub-ordinates and their departments will

certainly help the organisation in achieving its objective.

7. Encourages innovation and creativity: planning is the process of thinking in

advance and so plans are made to achieve a target at future date by using latest

methods and technology to perform the industrial/business activities and so plans lead

to innovation.

8. Facilitates control: planning facilitates the managers in performing their function of

control. Planning and control are inseparable in the sense that unplanned action

cannot be controlled because control involves keeping activities on the predetermined

course by rectifying deviations from plans.

9. Improves motivation: the effective planning system ensures participation of all

managers, which improves their motivation. It improves the motivation of workers also

because they know clearly what is expected of them. Moreover, planning also serves

as a good training device for future managers.

10. Improves competitive strength: effective planning gives a competitive edge to the

enterprise over other enterprises that do not have planning or have ineffective

planning. This is because planning may involve expansion of capacity, changes in

work methods, changes in quality, anticipation of tastes and fashion of people and

technological changes, etc.

11. Encourages innovation and creativity: planning helps innovative and creative

thinking among the managers because many new ideas come to the mind of a

manager when he is planning. It creates a forward-looking attitude among the

managers.

12. Achieves better coordination: planning secures unity of direction towards the

organisational objectives. All the activities are directed towards the common goals.

There is an integrated effort throughout the enterprise. It will also help in avoiding

duplication of efforts. Thus, there will be better coordination in the organisation.

MANAGEMENT BY OBJECTIVE

Definition- A management that uses organizational objectives as the primary means of managing organizations.

- Popularize through the writing of Peter Drucker.- MBO- strategy has 3 basic parts:

1 Individual within an organization are assigned a specialized set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers.

2 Performances reviews are conducted periodically to determined how close individual are to attaining their objectives.

3 Rewards are given to individuals on the basis of how close they come to reaching the goals.

MBO PROCESS:

1 Review organizational objective

Manager gains a clear understanding of the organization’s overall objectives.

2 Set worker objective

Manager and worker meet to agree on worker objectives to be reached by the end of the normal operating period

3 Monitor progress

At intervals during the normal operating period, the manager and worker check to see if the objective are being reached

4 Evaluate performance

At the end of the normal operating period the worker’s performance is judged by the extend to which the worker reached the objectives.

5 Give rewards Rewards given to the worker are based on the extent to which the objectives were reached.

SUCCESSFUL MBO PROGRAM

1. Top management must be committed to the MBO process and set appropriate objectives for the organizations.

2. Managers and subordinates together must develop and agree on each individual’s goals.

3. Employee’s performance should be evaluated. The evaluation helps to determine whether the objectives are fair.

4. Management must follow through an employee performance evaluation by rewarding employees accordingly.

ADVANTAGES AND DISADVANTAGES OF MBO

ADVANTAGES DISADVANTAGES

MBO programs continually

emphasize what should be done in

an organization to achieve goals.

Time consuming leaving both

managers and employees less time

to do actual work.

MBO process secure employee

commitment to attaining

organizational goals.

Increase the volume of paper works

(Elaborate goals, communication of

goals etc)

2. ORGANIZING: (also spelled organising) is the act of rearranging elements following one

or more rules.

The first step in implementation of a plan is organizing. Organizing means to break up the

plan of action into smaller activities so that it can be accomplished by a group of people. The

organizing function thus not only determines the persons needed to do a job, but also defines

the job of each position in the organizational hierarchy.

Organizations are groups of people frequently trying to organize some specific subject, such

as political issues. So, even while organizing can be viewed as a simple definition, it can get

as complex as organizing the world's information.

An organization is a group of two or more people that exists and operates to achieve clearly stated, commonly held objectives. (Straub and Attner, Introduction to Business, Kent publishing, 2004.p. 9109.)

Organization is a group of people working together in a structured and coordinated fashion to achieve a set of goals. (Ricky W. Griffin, Management 7th Edition, Houghton Mifflin Book Company, Boston, USA)

Organization is a systematic arrangement of people to accomplish some specific purpose. (Stephen P. Robbins and Mary Coulter, Management, 5th Edition, Prentice Hall of India Ltd)

IMPORTANT OF ORGANIZING

o Important to management system.o To create and maintain relationship between all resources, by specifying which

resources to be used, when, where and how.o Minimize costly weaknesseso Accomplish better objectives by using coordinated efforts of people.

Organizational Structure:

Formal system that separates and integrates tasks:- Allocating people and resources to tasks.- Clarifying responsibilities through job descriptions, organizations charts and

lines authority.- Letting employees know what to expect by them establishing rules, regulations

operation procedures and performance standards.The chain of command and hierarchy of responsibility, authority and accountability are established through organizational structure.

Organizational structure can be divided into four elements:

1. Specialization2. Standardization3. Coordination4. Authority

a) Specialization:

- Identifying specialized task, assigning to individuals/ work that are trained.- Middle managers will be responsible for directing work, functional and first line

usually supervises such as marketing, accounting or quality control.

b) Standardization:

- Developing the procedures an organization uses to ensure employees perform their tasks in uniform and consistent manner.

How?Description, instructions, rules and regulations to standardize subordinates jobs success

- Application forms will standardize the selection of employees.- On the job training programs will promote standardized skills and reinforce

values to organization’s success.

c) Coordination:

- Formal and informal procedures that integrates both managerial and employee’s activities.

d) Authority:

Right to make decision and take actions. Various organizations distribute authority differently.Centralized organization- top manages make decision, communicate to lower managers.Decentralized organization – Greater decision making responsibility is given to lower level managers.

Scalar principle:Definition: Classical-management rule that subordinates at every level should follow the chain of command, and communicate with their seniors only through the immediate or intermediate senior. According to its proponent, the French management pioneer Henri Fayol (1841-1925), a clear understanding of this principle is necessary for the proper management of any organization.

The more clear the line of authority from the ultimate authority for management in an enterprise (CEO)  to every subordinate position, the more effective will be decision making and organization communication at various levels in the organization.

Departmentation (Grouping)

One reason organizations exist is to do things that would be hard for one person to do by themselves. For example, it's hard to conceive of one person building an office building. Instead, we have organizations of thousands of people with diverse skills that work together to build buildings. However, coordinating, controlling and just keeping track of a lot of individuals introduces its own problems.

The basis on which individuals are grouped into departments and departments into total organizations.

Approach options include;

1. Functional - by common skills and work tasks2. Divisional - common product, program or geographical location3. Matrix - combination of Functional and Divisional4. Team - to accomplish specific tasks5. Network - departments are independent providing functions for a central core breaker

Common Bases for Departmentation

What organizations actually do is a group person in a way that relates to the task they perform. This still leaves a lot of possibilities. Here are six common bases for departmentation:

Knowledge and Skill. People are grouped by what they know. For example, hospitals have departments like Neurology, Allergy, Cardiology, Internal Medicine, Gastro-Enterology, etc.

Work Process. Workers are grouped based on the process or activity used by the worker. For example, a manufacturing company may create separate casting, welding and machining groups. Often, it is the underlying technology that determines the departmentation. For example, a print shop may have separate letterpress and offset departments -- two different processes for getting the same outputs.

Business Function. Grouping by the basic function in the organization: purchase supplies, raise capital, generate research, etc. This leads to the familiar departments of manufacturing, marketing, engineering, finance, and so on.

Time. When work is done. For example, shifts in a factory or hospital or hotel.

Output. Grouping based on the products or services that the employee works on. For example, a manufacturer may have different divisions for each of its product lines.

Client. Grouping based on the type of clients their work is ultimately sold to. For example, computer companies often have different sales departments for home, small business, educational, government and large business customers.

Place. Groups are based on the geographical areas that they serve. For example, during WW2, the US War Dept. was organized into 7 "theatres" corresponding to regions of the world where the US was fighting. Similarly, Post Offices are often divided by regions and zip codes.

  Means (Function) Ends (Market)

Specific Types

knowledge & skill work process business function

time

Output Client

Place

Kinds of Companies

small organizations of various kinds large-scale manufacturing —

assembly line production

professional bureaucracies: universities, hospitals

Often found in really big orgs and multinationals

divisionalized forms & conglomerates

Orgs with high product line heterogeneity

Orgs in fast moving industries

Orgs with extra resources available, like Microsoft

Strengths

Works well with smaller organizations

Groups skill sets so they can consult with each other and socialize each other: put all the accountants together, all the factory workers together, etc.

Avoids duplication of efforts: just one HR dept., one operations division, etc.

Allows economies of scale: single purchasing dept. can order large quantities of paper for all parts of the organization

Allows different parts of org to evolve in different ways at different speeds to adapt to the complex environment

Some sense of ownership of product: in effect creates many small companies responsible for one small product.

Sense of belonging to team and of common fate.

Weaknesses

Does not create sense of ownership/responsibility for final product:

Encourages finger-pointing: "not my department"

People in different functional areas don’t understand the whole, nor other parts

Can create significant duplication of effort and knowledge throughout org.

Innovations don't spread: brilliant new time management system in one division is unknown in other divisions

No economies of scale

Matrix & Project-based Organizations

An attempt to organize company according to both function and market dimensions simultaneously, so that each person belongs to both a functional department and a product/market department. Some people therefore report to two bosses.

The big advantage of matrix organizations is that they are great for sharing of information and enabling people to coordinate their efforts with larger organizational goals and strategies.

The problem, of course, is that having two bosses can be confusing, and is a situation that is easily exploited by subordinates, who can pit their bosses against each other. The subordinates can also be unwitting victims of power struggles among the bosses.

The matrix form works best when one dimension is a permanent affiliation (typically functional), and the other is a temporary dimension, such as a client project. So a person is, say, a marketing research analyst, and is presently assigned to the Carnation project, which will take 6 weeks, and will then be assigned to the R.J. Reynolds project, and so on.

Criteria For Choosing

An organization can divide itself into departments any way it wants using any criteria it wants -- there is no law about it. It doesn't have to be rational. However, there is a theory (developed by James Thompson) about what is the best way to do it. According to the theory, there are 4 basic rational criteria for choosing the bases for departmentation:

1. Work-flow interdependence.

This refers to the flow of product from person to person as it is being constructed. There are four kinds of increasingly tight interdependence:

pooled: sharing of resources and consequences only. In other words, the positions have really nothing to do with each other, they are only interdependent in the general sense of being part of the same company, so they are funded by the same budget.

sequential: work is fed from one position to the next, like an assembly line reciprocal: work passed back and forth between a pair of positions/tasks team: work flows around and through a network of positions, like the ball in a

basketball game.

Now here is the key idea: where work-flow interdependence is critical, rational organizations try to group tasks/positions together which are more tightly interdependent. That is, operations which are team-interdependent should be grouped first (i.e., at the lowest levels in the organization), operations that are reciprocal-interdependent should be grouped second, and so on. This is illustrated in the figure below, which gives the organization chart of a hypothetical manufacturing organization.

Counting from the bottom up, the first and second groupings are by work process, the third is by business function, and the fourth is by output (product). Now think about it in terms of interdependencies. The tightest interdependencies are between the turning, milling and drilling operations. These are team or reciprocal interdependencies. So they are the first to be grouped together (under "General Foreman: Fabricating").

The next tightest interdependencies are the sequential interdependencies between fabrication and assembly, since first you make the materials, then you assemble them. So these are grouped together under "Manager: Manufacturing".

There are also sequential interdependencies between the business functions of design (engineering), manufacturing, and marketing. So at the next level up, we merge all of these under "Vice-President: Snowblowers".

Above this level, most of the workflow interdependencies are only of the pooled variety: the snowblower department really has little to do with the frostbite remedy department, except that they all dip into the same general pool of organizational resources (capital, management talent, physical assets, etc.).

2. Process interaction.

This refers to consultations among people about how to do things. For example, lawyers in a corporation consult each other to take advantage of specialized skills and to develop a common approach to things.

3. Economies of scale.

Groups formed in order to achieve economies of scale. For example, if each department in a factory has a maintenance person, it may be inefficient because the small departments don't have quite enough work for a fulltime maintenance person, while the big departments have too much.

This approach also encourages specialization, as within a central maintenance department there can be specialists for different kinds of problems.

4. Social considerations

Groups are formed in order to minister to people's social needs. This often leads to functional

groupings because people are comfortable with their "own kind" (as in technical people

prefer technical people, sales types like sales types, etc.).

Often there are individual concerns, like two people who don't get along, the force certain

departments to be placed under other departments, or not placed under certain departments.

UNITY OF COMMAND

The chain of command, sometimes called the scalar chain, is the formal line of authority,

communication, and responsibility within an organization.

The chain of command is usually depicted on an organizational chart, which identifies the

superior and subordinate relationships in the organizational structure.

According to classical organization theory the organizational chart allows one to visualize the

lines of authority and communication within an organizational structure and ensures clear

assignment of duties and responsibilities.

By utilizing the chain of command, and its visible authority relationships, the principle of unity

of command is maintained. Unity of command means that each subordinate reports to one

and only one superior.

SPAN OF CONTROL

In a business of more than one person, unless the business has equal partners, then there

are managers and subordinates. Subordinates are workers controlled by the manager.

A hierarchy describes the structure of the management of the business, from the top of the

company – the managing director, through to the shop floor worker, who reports to their

foreman, in a manufacturing business.

The hierarchy of a business is usually best understood by drawing an organisation chart

showing which levels of management and employees report to whom.

An example of a hierarchy is shown in the diagram below

A span of control is the number of people who report to one manager in a hierarchy. The

more people under the control of one manager - the wider the span of control. Less means a

narrower span of control.

The advantages of a narrow span of control are:

A narrow span of control allows a manager to communicate quickly with the employees under them and control them more easily

Feedback of ideas from the workers will be more effective It requires a higher level of management skill to control a greater number of

employees, so there is less management skill required

The advantages of wide span of control are:

There are less layers of management to pass a message through, so the message reaches more employees faster

It costs less money to run a wider span of control because a business does not need to employ as many managers

The width of the span of control depends on:

The type of product being made – products which are easy to make or deliver will need less supervision and so can have a wider span of control

Skills of managers and workers – a more skilful workforce can operate with a wider span of control because they will need less supervision. A more skilful manager can control a greater number of staff

A tall organisation has a larger number of managers with a narrow span of control whilst a

flat organisation has few managers with a wide span of control.

A tall organisation can suffer from having too many managers (a huge expense) and

decisions can take a long time to reach the bottom of the hierarchy

BUT, a tall organisation can provide good opportunities for promotion and the manager does

not have to spend so much time managing the staff

Chain of command is the line on which orders and decisions are passed down from top to

bottom of the hierarchy. In a hierarchy the chain of command means that a production

manager may be higher up the hierarchy, but will not be able to tell a marketing person what

to do.

The advantages of hierarchies are:

Helps create a clear communication line between the top and bottom of the business –

this improves co-ordination and motivation since employees know what is expected of

them and when.

Hierarchies create departments and departments form teams. There are motivational

advantages of working in teams.

The disadvantages of hierarchies are:

The formation of departments can mean that:

- Departments work for themselves and not the greater good of the business.

- Departments do not see the whole picture in making decisions.

Hierarchies can be inflexible and difficult to adjust, especially when businesses need

to adapt to changing markets – remember employees do not tend to react well to

change.

UNIT – IV

Motivation

INTRODUCTION

MOTIVATION IS THE MOST IMPORTANT CONCEPT IN UNDERSTANDING THE BEHAVIOUR OF THE INDIVIDUAL.

EVERY ORGANISATION HAS PEOPLE WITH OUTSTANDING ABLITIES WHO PERFORM BETTER THAN THE OTHERS.

WE TRY TO ANSWER THE QUESTION BY UNDERSTANDING THE MEANING OF MOTIVATION.

MEANING:

THE TERM MOTIVATION WAS GENERATED FROM THE LATIN WORD ‘MOVERE’ WHICH MEANS “TO MOVE”.

DEFINITION:

MOTIVATION REFERS TO THE WAY IN WHICH URGES (A strong restless desire), DRIVES, DESIRES, ASPIRATIONS (A cherished desire) NEEDS DIRECT, CONTROL OR EXPLAIN THE BEHAVIOUR OF HUMAN BEINGS. BY DALTON.

MOTIVATION IS THE WILLINGNESS TO EXERT HIGH LEVELS OF EFFORT TOWARDS ORGANISATIONAL GOALS, CONDITIONED BY THE EFFORTS ABLITY TO SATISFY SOME INDIVIDUAL NEED. BY STEPHEN P.ROBBINS.

THE DEFINITION OF MOTIVATION INCLUDES THE FOLLOWING:

THE FACTORS TO INFLUENCE HUMAN BEHAVIOUR ARE PSYCHOLOGICAL, SOCIOLOGICAL, ECONOMIC AND MANAGERIAL.

THE EFFICIENCY OF SUCH BEHAVIOUR – THIS MAY BE TESTED BY THE RESULTANT ACTION. WHETHER THIS BEHAVIOUR HAS DIRECTED, CONTROLLED OR IMPLEMENTED THE DESIRED ACTION.

MOTIVATION PROCESS:

UNSATISIFED TENSION DRIVES SEARCH BEHAVIOUR SATISIFACTION OF

NEED REDUCTION OF TENSION.

THEORIES OF MOTIVATION

CONTENT THEORIES

MASLOW’S HIERARCHY OF NEEDS.

THEORY ‘X’ & ‘Y’.

CLAYTON ALDERFER’S “E R G” THEORY.

PROCESS THEORIES:

VROOM’S EXPECTANCY MODEL.

PORTER-LAWER’S MODEL.

ADAM’S EQUITY THEORY.

CLAYTON ALDERFER’S “E R G” THEORY

ALDERFER IDENTIFIED AND RE WORKED THREE GROUPS ARE CORE NEEDS:

• EXISTENCE NEEDS E

• RELATEDNESS NEEDS R

• GROWTH NEEDS G

E PHYSIOLOGICAL &SAFETY NEEDS.

R INTERPERSONAL & SOCIAL NEEDS.

G HIGHER LEVEL NEEDS IS NOT SATISFIED, THE DESIRE TO SATISFY A

LOWER-LEVEL NEEDS INCREASES.

VROOM’S EXPECTANCY MODEL

VICTUR VROOM (1964) PRESENTED THIS THEORY AS AN ALTERNATIVE TO CONTENT THEORIES.

THIS MODEL HAS BEEN EXPANDED AND REDEFINED BY PORTER AND LAWLER (1968).

VROOM’S MODEL IS BUILT AROUND CONCEPTS OF VALENCE AND EXPECTANCY AND IS COMMONLY CALLED AS “VIES “THEORY.

MOTVATION FORCE IS A PRODUCT OF VALENCE AND EXPECTANCY.

MOTIVATION FORCE= VALENCE x EXPECTANCY.

[STRENGTH OF DRIVE TOWARDS ACTION] [STRENGTH OF ONE’S DESIRE FOR SOMETHING] [PROBABLITY OF GETTING IT WITH A CERTAIN ACTION]

PORTER-LAWLER MODEL

THERE ARE VARIOUS ELEMENTS IN THIS MODEL ARE:

EFFORT-THE AMOUNT OF EFFORT THAT EMPLOYEE WILL PUT.

PERFORMANCE – ABLITY.REWARDS - LEVEL OF PERFORMANCE.SATISFACTION – REWARD & PERFORMANCE.

IMPORTANCE OF PORTER-LAWLER MODEL:

MATCHES THE ABLITIES OF THE INDIVIDUAL TO THE REQUIREMENT OF THE JOB.

EXPLAIN THE ROLES OF THE EMPLOYEES.

EXPLAIN THE EXPECTED LEVEL OF PERFORMANCE TO THE EMPLOYEE.

MAKES SURE THAT THE REWARDS ARE THE VALUED BY THE EMPLOYEE.

LEADERSHIP

Leadership in the management scope refers to the art of inducing subordinates to

accomplish their assignments with zeal, devotion and confidence. Manager, as a

leader, influences his subordinates to work together willingly on related tasks to attain,

and makes them to put their best efforts. Managerial leadership is one of the most

effective tool of handling people to work effectively towards accomplishing the

prescribed objectives.

DEFINITION AND MEANINGS

• Leadership is the art or process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goal.

• Leadership is the ability to influence and to motivate others to achieve organizational goals.

• Leadership is the relationship in which one person (the leader) influences others to work together willingly on related tasks to attain goals desired by the leader and/or group.

• Leadership is direction setting, aligning people, motivating and inspiring.

• Leadership is quality of behaviour of individuals whereby they guide people of their activities in organized effort.

IMPORTANCE OF LEADERSHIP

Now-a-days leadership has become an important task of management due to:

• Rapid advancement in technology, • Specialization in the field of commerce and industry,• Enhancement of size of industry,• increase of social demands, etc.

Successful implementation of various programmes, plans and projects depend upon

the way in which these are guided. It depends on the successful person of good

leadership.

FUNCTIONS OF LEADERSHIP

The leader, as a manager, creates the love for work devotion to duty, but also induces subordinates to work with greater sincerity, zeal and interest with maximum efficiency and with better understanding. The leader as a manager performs the following four distinct functions:

DIRECTING

The first function of leadership is to initiate the subordinate to work and give the desired result.

RESPONDING

Psychologically handle the subordinates for favourably responds to the call/direction of manager.

REPRESENTING

Represent his own personality in a clear and understandable way, and at the same time he should represent the subordinates to his own side as they appear and as they really are.

CONVINCING

Create confidence among his subordinates with regard to his thinking, approach, and character.

POWER AND LEADERSHIP

Leaders apply power within organization to influence individuals or groups of employees, peers and managers. However, they do not always have to exercise their power in order to influence others. There are different forms of power which are explained as under:

LEGITIMATE POWER

Legitimate power derived from a specific position in the organization structure and the formal authority vested in it.

REWARD POWER: This form of power derived from the ability to provide valued rewards to others.

COERCIVE POWER: Power derived from the ability to penalize others.

INFORMATIONAL POWER: Power derived from the ability to control access to important information.

EXPERT POWER

Power derived from the manager’s personal skills, technical knowledge, and

experience.

REFERENT POWER

Power derived from the ability to inspire respect, admiration, and loyalty.

CURRENT TRENDS IN LEADERSHIP

Managers in Japanese firms use participative leadership styles and invite considerable employee involvement in organizational decision to build commitment. They also promote harmony among organization members by emphasizing personal relationships rather than maintaining a strictly task orientation. A growing trend in Japan is the careful design of work groups to substitute for leadership, especially in technical units such as research-and-development department.

THEORIES OF LEADERSHIP

There are three major theories which are explained as under:

TRAIT THEORIES

According to this approach, certain personal characteristics of individual

(traits) are necessary for a successful leader:

These studies attempted to identify certain traits that distinguish (a) leaders from

followers; and (b) successful leaders from unsuccessful leaders. It is also pointed out

that leaders should have the following traits:• Decisiveness• Clear vision• Deep but correct foresight• Perfect judgment• Perfecting his subordinates• Participative management• Better public contacts• Progressive minded.• Strong desire for power• Prefer independent activity• Dislike detailed

BEHAVIORAL THEORIES

According to this approach, leadership depends upon behaviour and styles of leaders

because it is strongly affected by situations from which leaders emerged and in which

they operate. One leadership style cannot be effective in all organizational settings.

Successful leadership depends on the relationship between organization situation and

leader’s style. Basically there are two type of styles of leadership:

Autocratic leader: A leader who tends to centralize authority and to make unilateral

decisions.

Democratic leader: A manager who tends to delegate authority and to encourage

participation in decision making.

According to continuum of autocratic-democratic leader behavior manager, as a

leader, can select from seven behaviors along the continuum from autocratic to

democratic behavior. At one extreme, the leader makes all decisions and tells

employees how to implement the decisions. At the other extreme, the leader allows

employees to make decisions and also allows employees to choose how to meet their

goals. A continuum of autocratic-democratic leader behavior is given below:

LEADERSHIP STYLES:

1. Task oriented function/ production centered. Concern on getting the job done to her / his satisfaction rather than develop or employee growth.

- Plan and defines work to be done - Assigns task responsibilities- Sets clear work standards- Urges task completion and monitor results- Supervise employee.- Concerned to get the job done rather than the development of the employees.

2. Employee oriented/ people centered.- Managers try motivate rather than control the employees. - Encourage to participate in decision making. - Develop trust and respect. - Show high amount of consideration towards employee’s ideas and feelings.- Characteristic of Manager:

- Warmth and has special rapport with subordinates.- Respect the feeling of others- Sensitive to other’s needs and mutual trust.

Formal and informal leaders

It has been observed above that a manager should also be a good leader. But in actual

practice, every manager is not able to provide the kind of leadership desired by his

subordinates. This gives rise to informal leaders who do not hold any managerial post in

the organisation.

A formal leader, on the other hand, is one who possesses organisational authority to

direct and control the activities of his subordinates. He can issue orders and instructions

to his subordinates by virtue of his formal authority in the organisation. An informal leader

is elected by the management, as in case of a formal leader.

Sometimes, informal leaders become more acceptable to the workers as compared to the

formal leaders. In such a situation, the formal leaders become the position-holders only.

They are not able to achieve the voluntary cooperation of the workers in all matters. It is

also true that a work-group may have different leaders for different purposes. The

members of a work-group may be influenced by one leader while doing their jobs. But as

regards their personal problems, they may go to another leader as far as their reaction is

concerned.

Management often tries to suppress informal leaders. But it should be remembered that

the trouble they cause reflects the desires of the group. If they are suppressed, the

workers may become more antagonistic to management, morale may fall even lower and

new informal leaders may step to the fore.

Therefore, it is better to work with informal leaders. There are many ways in which a

manager can build up good relations with the informal leaders working with him. Among

other things, he can pall necessary information to them first, seek their advice on

technical and human relations problems, and assign them to train other.

CONTROLLING

Definition:

- The process to assure that actual activities conform to planed activities (J.F stoner).

- The process of monitoring performance and taking action to ensure desired results.

The Important of Controlling:

- Assist the management process- PLOC by determine what is necessary, when and why it is required.

- Deals with the change, or uncertainty. Plans and goals set by organization deals with future which is always uncertain and is constantly changing. E.g market shift, product demand.

- Deals with complexity- As organization grow in size and diversity, they become complex. Control is needed to coordinate activities and accomplish integration.

- Deals with human limitation (mistake) e.g wrong forecasts thus it help tosspot mistake.

- Ensure delegation and decentralization are operate smoothly. Enable managers to check on performance.

The control process:

Establish standards and methods for measuring the performance standard. E.g customer waiting time.

Measure the performance e.g R & D gas in the air. Its depend on the situation. What, when and how frequently to measure.

Determine whether performance matches standards. If the performances match the standard no corrective action is needed. Take corrective action if the performance does not match the standard then corrective actions may be include

Management by Exception

Management by Exception is a "policy by which management devotes its time to

investigating only those situations in which actual results differ significantly from planned

results.

The idea is that management should spend its valuable time concentrating on the more

important items (such as shaping the company's future strategic course). Attention is given

only to material deviations requiring investigation."

It is not entirely synonymous with the concept of exception management in that it describes a

policy where absolute focus is on exception management, in contrast to moderate application

of exception management.

This type of management can be powerful when it is necessary to process lots of data in

order to make managerial decisions. The problem with this policy is that it can result in

myopic behavior.

This behavior implies that lower management shifts its goal from running a successful

business in a real world environment, to feeding centralized auditors and managers with

financial data which will be interpreted as within. In this situation, a company manager might

sell off assets like equipment (vital to long run productivity) in order to manipulate accounting

ratios used in determining exception. Thus, lower management can in some cases dodge

being marked as an exception, to the long term detriment of the plant they are managing.

Management by exception and/or reporting by exception is a process by which top

management is spared from routine, planned, expected and irrelevant information or

situation. However, it initiates feedback and reporting in the event of any extra ordinary

situation or circumstance that would be out of the scope of the junior management as they

still lack the expertise in important strategic matters.

UNIT – V

COMMUNICATION

It is the process of exchange of the messages and receiving the response of that message. The person who sends the messages is known as sender and the person who receives the message is known as receiver and the response to the message is known as feed back. Since the feedback requires another message to be communicated by the sender to the receiver. So communication process becomes a circular process.

“Allen Lousis” communication is the sum of all the things which one person does when he wants to create understanding in the mind of another. It is a continuous process of telling, listening and understanding.

“George Terry” communication is an exchange of facts, ideas, opinions and emotions by two or more persons.

In simple words, exchange of ideas/messages, response there off in total is known as communication. Any method of communication like words—oral or written, pictures, graphs, diagrams, etc. may be adopted to communicate. Effective communication is that communication in which the receiver is understood actually what the sender wants to convey, and in the same form. ‘Noise’ is something, which has disturbed the effective sending and receiving of communication.

Characteristics/features of communication

1. Co-operative process: it is a process of co-operation because two or more persons are required for the exchange of message i.e. sender(s) and receiver(s).

2. Two way process: it involves both sending the message and receiving the response to that message. Communication is not completed unless the receiver of the message has understood the message and has given his response.

3. Pervasive function: communication is necessary at all levels of management i.e. top, middle and lower level and also in all the depths of the organisation.

4. Continuous process (circular process): it is a continuous process because transmission of messages is going on a continuous process.

5. Flows in all directions: communication may flow upward and downward, between superior and subordinate, horizontally (gang plank) between persons of similar ranks or diagonally between persons at different levels.

Advantages/Importance of communication

1. Facilitates planning: while making plans several ideas, problems, suggestions etc. are communicated for an effective planning system and so communication facilitates better planning.

2. Helps in decision making: by providing the required information, needed for making various decisions communication helps a lot because the quality of decision depends on the quality of information available with the decision maker.

3. Facilitates co-ordination: flow of communication is in all directions results a better co-ordination in all level of management as well as all depth of organisation.

4. Classifies authorities and responsibilities of various positions: by way of communication authority and responsibility of various posts/positions are conveyed (classified) to the position holder.

5. Improves better relations among superiors and subordinates: by effective communication misunderstanding between superiors and subordinates can be removed. Moreover clear and accurate information can be communicated at proper time resulting better relations between the two.

6. Helps in motivating: communication helps in the process of motivation by sharing of information, consultation and discussion of various problems for prompt redressed/solution, quick solution of problems creates satisfaction resulting motivation towards work.

7. Information regarding organisational rules: subordinates should be informed by communicating them, rules and principles of the organisation and any misunderstanding regarding there of must also be clarified. This will necessarily improve the acceptance of organisational rules.

8. Facilitates directing function: communication makes a link between managers and workforce of the organisation resulting a continuous flow of directions, instructions, orders, suggestions, problems etc. so it facilitates directing function.

9. Better public relations: by way of communication customers, suppliers, shareholders, govt. and society may be provided required information. Resulting better co-operation and good relations among all these groups.

10. Improves efficiency: an effective communication helps in understanding ideas, instructions or guidelines in a close and clear way and removes all confusions. Resulting better understanding, better efficiency.

Process/Steps of communication

1. Sender: The person who initiates the communication process in known as sender. The sender has some need, information, thought, idea or inform which he wants too communicate to some other person to achieve some purpose. By initiating the message, the sender attempts to achieve understanding and a change in the behavior of the receiver.

2. Encoding or communication symbol: the next element in the process is that of encoding the information to be transmitted. The sender of information organizes his ideas into a series of symbols (words, signs, etc.), which, he feels, will communicate to the intended receiver or receivers. This is known as encoding of message, i.e., converting to communicable codes which will be understood by the receiver of the message.

3. Message: the next element in the process of communication is message. The message is the physical form into which the sender encodes the information. The message may be in any form that could be experienced and understood by one or more of the senses of the receiver. Speech may be heard, written words may be read and gestures may be seen or felt. Thus, a message may taken any of the two form i.e. verbal or non verbal. Verbal message is in the form of word language, while non-verbal would be in the form of gestures like wink, smile, grunt, frown, warming of hand, shaking of head, etc.

4. Receiver: the next element in the process of communication is the receiver, the person who receives the message is called receiver. The communication process is incomplete without the existence of receiver of the message. It is the receiver who receives and tries to understand the message. If the message does not reach the receiver, communication cannot be said to have taken place. The socio-demographic and physiographic characteristics of the receivers influence in selection of an appropriate channel of communication.

5. Decoding: decoding is the process by which the receiver’s draws meaning from the symbols encoded by the sender. It is affected by the receiver’s past experience, education, perception, expectations and mutuality of meaning with the sender. The greater the overlap or commonality of the receiver’s field of experience and sender, the greater success of the probability of expected communication. A model of communication by Wilbur Schramm. It illustrates that an individual with significantly different educational or cultural background ahs to put in greater effort to ensure successful communication.

6. Feedback: after receiving the message, the receiver will take necessary action and send feedback information to the communicator. Feedback is a reversal of the communication process in which a reaction to the sender’s message is expressed. The receiver becomes the sender and feedback goes through the same steps as the original communication. The feedback is optional and may exist in any degree (from minimal to complete) in any given situation. Generally, greater the feedback, the more effective the communication process is likely to be. For example, early feedback will enable the manager (sender) to know if his instructions have been properly understood and carried out.

Two-way communication takes place when the receiver provides feedback to the sender. For instance, giving an instruction to a subordinate and receiving it acceptance is an example of two-way communication. On the other hand, in case of one-way communication, feedback is totally absent. Here the sender communicates without expecting or getting feedback from the receiver.

A policy statement from the chief executive is an example of one-way communication. One-way communication takes less time than two-way communication. In certain situations one-way communication is more effective to get work from the subordinates.

Two-way communication is superior to one-way communication in the following respects:

(a) Two-way communication is more accurate than one-way communication. The feedback allows the sender to refine his communication, so that it becomes more precise and accurate.

(ii) Receiver’s self-confidence is higher in case of two-way communication, as they are permitted to ask questions and seek clarification from the senders.

However, in case of two-way communication, the sender may feel embarrassed when the receiver draws his attention to sender’s mistakes and ambiguities.

7. Noise: surrounding the entire spectrum is the noise that affects the accuracy and fidelity of the message communicated. Noise is any factor that disturbs, confuses or otherwise interferes with communication. It can arise at any stage in the communication process. The sender may not be able to encode the message properly or he may not be properly audible. The message may get distorted by other sounds in the environment. The receiver may not hear the message, or comprehend it in a manner not entirely intended by the sender of the message. The channel also may cerate interference by ‘filtering’, i.e. allowing some information to pass through and disallowing others. In any case, there is so much of noise or interference in the entire process that there is every possibility of the communication being distorted.

Types of communication OR forms of organisational communication

1. On the basis of relationship: (a) formal communication, (b) informal communication.

2. On the basis of flow or types of formal communication: (a) downward communication, (b) upward communication, (c) horizontal communication, (d) diagonal communication.

Formal communication: it refers to the communication which rakes place on the basis of organisational relationship formally established by the management. It is used to transmit official messages within or outside the organisation. It strictly follows the chain of command. It may be verbal but mostly it is expressed in written form to have a proof.

Informal communication: it refers to the communication which takes place on the basis of informal or social relations among the people in an organisation. It is developed at its own due to mutual confidence and relations. Generally it is used to transmit personal message and do not follow the principle of chain of command. It is mostly expressed in verbal/oral form. It may take place among the persons having different positions at different level and chain is not a restriction. Network of informal communication is also known as grapevine.

Barriers to effective communication*

1. So many levels of management: when the message has go through multiple levels of management. These levels may become obstacle in flow of communication. It happened when chain of command is strictly followed.

2. Selective reception: when a part of information is blocked by any person in the channel of communication it is termed as selective reception. In other words only the selected part is further exchanged and remaining is blocked. It happens when information provider is of the view that the information disagrees with in interest.

3. Language barrier: sometimes sender and receiver of message do not understand the same language and in that case messages not communicated. Moreover if the pronunciation of words by sender is not clear it may become an obstacle.

4. Status barrier: the difference is status of sender and receiver may also become obstacle to effective communication. E.g. subordinates bay pass on interpreted (distorted) information to their superiors to please them and do not reveal their mistakes.

5. Poor listening skills: sometimes people are poor listeners and they believe that the information is not enough important to pay attention to it resulting poor communication.

6. Credibility of source: effective flow of communication also depends on trust and confidence of the receiver on the source of information/message and also on sending channel (sender).

7. Physical distance of receiver and sender: physical distance between these two may also become a barrier generally in those circumstances where sender is interested in knowing the reaction of the receiver quickly. But verbal communication is not possible there.

8. Emotional and psychological barriers: these barriers arise from emotions, attitudes and social values of the participants. People may refuse to accept the messages affecting them emotionally.

9. Symbolic barriers: sometimes the some word of language/symbol may carry different meaning to different parties as per their traditions, customs or religion and in that case communication will not be an effective communication.

10. Lack of organisational facilities: in some organisations there are no suggestion boxes regarding complaints and also the subordinate can’t disturb the chain of command. Such lack of organisational facilities is also barrier in effective communication.

11. Specialization barrier: when a department or a person treats him more specialized, it will result no attention towards other departments/persons.

12. Complex organisational structure: when organisational structure is of complex nature, the information may get filtered, modified or lost at different levels before reaching to the last level.

13. Semantic problems: effective communication does not only include of transmission of information/idea but also includes that the receiver has understood the information in the same way as was desired by the sender. E.g. announcement in increase in budget is meant for increase by installing new plan and new technology machines and

plant. But workers may think that due to increase budget their salary and wages will raise.

Overcoming communication barriers

1. Clarity of information: subordinates should be kept informed on policy that affects them on a regular basis. Clear-cut instructions should be issued and follow-up measures should be taken to ensure that the instructions are thoroughly understood and are being implemented.

2. Prompt information: the management should make a practice of passing along the information promptly to everyone concerned so that action, when required, is not delayed.

3. Creation of proper atmosphere: in particular cases, as for instance, when a boss is talking to his subordinate, the atmosphere should be peaceful, so that there is effective communication of instructions and suggestions.

4. Effective listening: the sender must listen to the receiver’s words attentively, so that the receiver may also listen to the sender at the same time.

5. Feedback: communication should be two-way traffic. There should be some system by which the workers should be able to convey their suggestions and grievances to the top management. Two-way communication is also necessary for feedback for the purpose of control.

6. Effective channels: management should try to cut the roots of the rumors. If the communication channel is well maintained, there will be no room for rumors, lies, guesses and misconceptions. Worker should get open doors for any clarification or consideration at all times. This will also increase the morale of the employees.

Principles of effective communication

1. Principle of clarity: the beginning of all communication is some message. The message must be as clear as possible. No ambiguity should creep into it. The message can be conveyed properly only if it has been clearly formulated in the mind of the communicator.

2. Principle of objective: the communicator must know clearly the purpose of communication before actually transmitting the message. The objective may be to obtain information, give information, initiate action, and change another person’s attitude and so on. If the purpose of communication is clear it will help in the choice of mode of communication.

3. Principle of understanding the receiver: understanding is the main aim of any communication. The communication must crate proper understanding in the mind of the receiver. Thus according to Killian, “communication with an awareness of the total physical and human setting in which the information will be received. Picture the place of work; determine the receptivity and understanding levels of the receivers; be aware of social climate and customs; question the information’s timeliness. Ask what, when and in what manner you would like to be communicated with if you were in the similar environment and position.

4. Principle of consistency: the message to be communicated should be consistent with plans, policies, programmes and goals of the enterprise. The message should not be conflicting with previous communications. It should not crate confusion and chaos in the organisation.

5. Principle of completeness: the message to be communicated must be adequate and complete; otherwise it will be misunderstood by the receiver. Inadequate communication delayed action, poor public relations affects the efficiency of the parties to communication.

6. Principle of feedback: this principle calls for communication a two-way process and providing opportunity for suggestion and criticism. Since the receiver is to accept and carry out the instructions, his reactions must be known to the sender of message. The latter must consider the suggestion and criticism of the receiver of information. But feedback principle is often given a back seat by most managers, which defeats the very purpose of communication.

7. Principle of time: information should be communicated at the right time. The communicator must consider the timing of communication so that the desired response is created in the minds of the receivers.

DECISION MAKING

DEFINITION

- Process where a course is selected as the way to deal with a specific problem.

- Selection of one alternative from two or more alternative.

THE NATURE OF MANAGERIAL DECISION MAKING

Decision making is one of the vital tasks of a manager e.g in planning, organizing, controlling.Decision making is a process which affects all the manager’s operating functions. The key to successful decision making depends on the proper formulation of the specific problem at hand.

Types of decision making:

1. Programmed decisions2. Non- program decision

PROGRAMMED DECISIONS

It is a repetitive decision that can be handling by a routine approach. It is usually made in accordance with some established habit, rule or procedure (STONER). Grievances procedures for employees are an example of programmed decisions.

NON- PROGRAMMED DECISION

This is a type of decision that deals with a unique, unusual or exceptional problem. The nature of the problem that occurs is unstructured and something different. Eng is the selection and training of personnel.

e.g Nature of problems an decision making in organization

Highest level Un structured Non- programmed

Organizational hierarchy

structured lowest level

organizational levels nature of problem programmed

nature of decision making

Programmed decisions Non programmed decision

A repetitive decision that can be handle by routine approach. Well structured situations using predetermine decision rules, related rules and policies. E.g grievances procedures for employees.

Unstructured, unique, unusual or exceptional problem, requires a higher level management participation. E.g J.E. Virus out break.

DECISION MAKING CONDITIONS

There are three different conditions under which decision are made. Each of those conditions is based on degree to which the future outcome of a decision alternative is predictable. These conditions are:

1. Certainty2. Risk3. Uncertainty

CERTAINTY:

The decision maker knows the out-come of the problems. Individual are fully informed in terms of:

- The nature of the problems- Possible alternatives- Result of alternatives

RISK

Future conditions are unknown in advanced. Some information are available but not enough to answer all questions and normally most of the management decisions are made under this condition. Occurs in the situation in which an individual can define as :- Nature problems- Possible alternatives

UNCERTAINTY

Individual cannot even assign subjective probabilities to possible state of nature because the individual do have the information or intuitive judgment to use as basis for assigning the probabilities to each state of nature.

The essential elements in a decision making process includes the following:

1. The decision maker,

2. The decision problem,

3. The environment in which the decision is to be made,

4. The objectives of the decision maker,

5. The alternative courses of action,

6. The outcomes expected from various alternatives, and

7. The final choice of the alternative.

Process/Steps in rational decision making

The understanding of the steps will enhance and improve the analytical and decision making process.

Steps 1 - Investigate the situation.- Define the problem- Diagnose the causes- Identify decision objectives

Step 2- Generate alternative solutions.- Consider as many alternatives as possible

Step 3- Evaluate and choose among alternative solutions- Once the possible solutions are developed, the decision maker has to examine

the probable desirable and undesirable consequences of each alternative.

Step 4- Implement and monitor the chosen solution- Design the implementation for the chosen situation. Decision makers

responsible for reviewing the plan periodically and comparing the actual performance with the planned solutions.

State Of Nature Types And Decisions

Routine Adaptive InnovativeDecisions decision decision

Certainty UncertaintyObjective probabilities Subjective probabilities

RISK CONTINUUM

Routine:

Choices made in response to relatively well known problems. Solution obtained from standard rules, operating procedures and computer programs.

Adaptive:

Combination of moderately. Unusual and partially known problems and alternative solutions that are modifications of other known and well define solutions.

Innovative:

Involve combining the discovery, identification and diagnosis of unusual and ambiguous problems with the unique. Novel and creative alternative solutions.

- Represents a series of mini decisions made over a period of months or several years.

- Represents an individual decision, involve many people, many and various time.

- Do not unfold in a logical, orderly sequence.- Made in the midst of a lot other managerial tasks.

Differences:

ROUTINE ADAPTIVE INNOVATIVE

Made under conditions of certainty, low level risk

Moderate levels of uncertainty and risk.

High levels of risks and certainty.

CONDITION THAT AFFECT DECISION MAKING

States of nature:

Condition, situations and events that managers cannot control, but influence their decisions. e.g new technologies, entrance of new competitors into market, new laws and political instability.

Certainty:

Managers are fully informed of the problem, alternative solutions that will lead to desired result, probability that certain states of the nature will occur.

Objectives probability:

The likelihood that the state of nature will occur, based on hard facts and figures.

Rational decision and non- rational decision model:

RationalMake optimal decision, possessing and understanding all information relevant to their decisions at the time they are made.

Non-rational modelInformation gathering and processing limitations make it difficult for managers to make optimal decisions.

Rational decision:Permits maximum achievement of an objective within limitations of environment in which decisions are made. It merges the rationality of the decision maker and the decision into sequence of basic steps:

1. Problem awareness and diagnosis.It include noticing, interpreting and incorporation

Noticing Interpreting IncorporationManagers Managers ManagersMonitor environmental forces and decide which are problems

Assess the forces they have notice determine what is causing it

Relate their interpretation to the current or desired state of their department/ organization to the future problems.

2. Set objectivesWhat to be achieve and by what date.

3. Search for alternative solutionsSeeking additional information, thinking creative, consulting experts, undertaking.

4 Compare and evaluate alternative solutions.Emphasizes expected results, including relative cost of each alternatives.

5. Choose among alternative solution.Final choice

6. Implement the solution selected.