Principles & Practices of Mgmt (Ppm)

8/8/2019 Principles & Practices of Mgmt (Ppm)

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PRINCIPLES & PRACTICES OF MANAGEMENT (PPM)Assignement Question Paper

(ANSWERS)

Q1. (a) Functions of Managers: Evolution of Management Thoughts

The operation / task of a Manager is related to the Industrial Revolution began in the eighteenth century and transformed the job of manager

from owner-manager to professional, salaried manager. Prior to industrialization, the United States was predominantly an agricultural society.

The production of manufactured goods was still in the handicraft stage and consisted of household manufacturing, small shops, and local mills.The inventions, machines, and processes of the Industrial Revolution transformed business and management (such as, the use of fossil fuels assources of energy, the railroad, the improvement of steel and aluminum metallurgical processes, the development of electricity, and the

discovery of the internal-combustion engine.) With the industrial innovations in factory-produced goods, transportation, and distribution, bigbusiness came into being. New ideas and techniques were required for managing these large-scale corporate enterprises.

Management is creative problem solving. This creative problem solving is accomplished through four functions of management: planning,organizing, leading and controlling. The intended result is the use of an organization's resources in a way that accomplishes its mission and

objectives.

In Management, this standard definition is modified to align more closely with our teaching objectives and to communicate more clearly thecontent of the organizing function. Organizing is divided into organizing and staffing so that the importance of staffing in small businessesreceives emphasis along side organizing. In the management literature, directing and leading are used interchangeably.

Planningis the ongoing process of developing the business' mission and objectives and determining how they will be accomplished. Planningincludes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal. Planning

is concerned with the future impact of today's decisions. It is the fundamental function of management from which the other four stem. The needfor planning is often apparent after the fact. However, planning is easy to postpone in the short-run. Postponement of planning especially

plagues labor oriented, hands on managers.

Organizingis establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks

and the flow of information within the organization. It is in this function that managers distribute authority to job holders.

Staffingis filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating

are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family membersincluding the owner/operators.

Directingis influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of

directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping themaccomplish their own career objectives.

Controllingis a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual

performance, comparing the two, and taking corrective or preventive action as necessary.

CO-ORDINATION- AS A TASK MANAGER:

Coordination- It is the act of coordinating, making different people or things work together for a goal or

effect.
http://extension.osu.edu/~mgtexcel/Planning.htmlhttp://extension.osu.edu/~mgtexcel/Planning.htmlhttp://extension.osu.edu/~mgtexcel/Organize.htmlhttp://extension.osu.edu/~mgtexcel/Staffing.htmlhttp://extension.osu.edu/~mgtexcel/Direct.htmlhttp://extension.osu.edu/~mgtexcel/Control.htmlhttp://extension.osu.edu/~mgtexcel/Planning.htmlhttp://extension.osu.edu/~mgtexcel/Organize.htmlhttp://extension.osu.edu/~mgtexcel/Staffing.htmlhttp://extension.osu.edu/~mgtexcel/Direct.htmlhttp://extension.osu.edu/~mgtexcel/Control.html


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There are three basic coordinating mechanisms: mutual adjustment, direct supervision, and standardization

(of which there are three types: of work processes, of work outputs, and of worker skills).

Mutual Adjustment

This mechanism is based on the simple process of informal communication. It is used in very small companies, such as a 5-person software shop, or for very, verycomplicated tasks, such as putting the first person on the moon. Mutual adjustment is the same mechanism used by furniture movers to maneuver through a house,

or paddlers to take a canoe downriver, or jazz musicians playing a live engagement. It's especially useful when nobody really knows ahead of time how to do what

they're doing.

Direct Supervision

Achieves coordination by having one person take responsibility for the work of others, issuing instructions and monitoring their actions. An example is theoffensive unit of a football team. Here, there is marked division of labor and specialization, and the efforts of the players are coordinating by a quarterback calling

specific plays.

If the organization is large enough, one person cannot handle all the members, so multiple leaders or managers must be used, then the efforts of these people (the

managers) are coordinated by a manager of managers, and so on.

Standardization

A third mechanism of coordination is standardization. Here, the coordination is achieved "on the drawing board", so to speak, or "at compile-time" if you like, not

during the action or "run-time". The coordination is pre-programmed in one of three ways:

Work Processes. An example is the set of assembly instructions that come with a child's toy. Here, the manufacturer standardizes the work process of the parent.

Often, the machinery in a factory effectively standardizes work by automatically providing only, say, blue paint when blue paint is needed, and only red paintwhen red paint is needed.

Outputs. Standardized outputs means that there are specifications that the product or work output must meet, but aside from that the worker is free to do as they

wish. Stereo equipment manufacturers have a lot of freedom in designing their products, but the interface portions of the product (the connections to other stereo

devices like CD's, speakers, tape-recorders, etc.) must be the same as everyone else's, or else it would be hard to put together a complete system.

Worker Skills. Professional schools, like medical schools, law school, business school, produce workers that do stuff exactly the same way. How do you treat a

staphyloccocus infection? You use one of the following antibiotics. It's a series of recipes that are memorized. Employers (e.g., hospitals) can rely on these

employees (physicians) to do things the standard way, which allows other employees (e.g., nurses) to coordinate smoothly with them. When a surgeon and ananesthesiologist meet for the first time in the operating room, they have no problem working together because by virtue of their training they know exactly what to

expect from each other.


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(b). Henry Fayol-

People Whose Ideas Influence Organisational Work Henri Fayol Henri Fayol (1841-1925) a

French engineer. His key work was Administration Industrielle et Generale, 1916 He belongs to the

Classical School of management theory and was writing and exploring administration and work about

same time as F W Taylor in USA. While both have a task focus, their approaches are quite different. Fayol was particularly

interested in authority and its implementation while Taylor concentrated on work organisation (e.g. efficiency). In many ways

their views illustrating some of the differences between the USA and Europe. The views and attitudes towards organisations and

management are not always led by American theorists. He advocated a consistent set of principles that all organisations need to

run properly. His five functions still form the basis of much of modern management thought and action. plan (and look ahead),

organise, command, co-ordinate, control (feedback and inspect) He also identified 14 principles that he saw as common to all

organisations. Specialisation/ division of labour. Authority with responsibility Discipline Unity of command Unity of direction.

Subordination of Individual Interests Remuneration Centralisation Chain / line of authority Order Equity Lifetime jobs (for good

workers) Initiative Esprit de corps.

FAYOLS ACTIVITIES IN INDUSTRIAL UNDERTAKING:

1. Technical (Production)

2. Commercial (Buying, Selling & Exchanging)3. Financial (search for optimum use of capital

4. Security (Protection of property & persons)

5. Accounting (Including statistics)6. Managerial (Planning, Organizing, Commanding, Co-ordination & Controlling)

Commercial Financial Security

Technical Accounting

Managerial

(Planning, Organizing, Command, Co-ordination & Controlling)

Managers`Managers`

ActivitiesActivities


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Q2. (a).Modern Management: The followings are the thoughts which has been discovered-

1. A Management Theory JUNGLE- The variety of approaches to management analysis, the amount of

research and the number of differing views have resulted in much confusion as to what mgmt is &what theory & science to be applied & Managerial events to be analysed.

2. The Systems Approach- It has broad applicability. Organizations are open systems- with boundaries

and also interacts with other external environment.This approach has recognized the relation

between planning, organizing & controlling in an organization.

3. Situational Approach- Under this factor Managerial activities depends on the circumstances /

environment around. This implies that any activity in an organization shows different patterns underdifferent situations. Managers have realised that there is no one, best way to do things, nut it can get

very complex and difficult to determine all the factors affecting the goal on the basis of situation

This refers to the certain involvement of thoughts which results in developing & rediscovering previously

known applications.

McKinsey`s 7-S Framework: It was discovered & developed by the consulting firm of Mckinsey &Company. The Seven S are as below :

1. Strategy : Systematic action & allocation of resources to achieve companies goal.2. Structure : Organising authority / responsibility relationships.

3. Systems : The process & procedure requires for smooth functioning of strategy towards achievement

of goals.

4. Style : This refers to the way Management behaves & spends its time towards the achievement ofgoal.

5. Staff : The people working within the organization.

6. Shared Values : The Values shared by the members of the company.7. Skills : Refers to the capabilities by which the targeted goal is achieved.

(b) Planning : It involves selecting missions & objectives and the actions to achieve them. It also requiresdecision making, that is, choosing from among alternatives future course of actions. It provides a rational

approach to achieving objectives.

Planning bridges the gap from where we are & where we have to go. The FOUR MAJORaspects of

Planning are :

1. Its Contribution to purpose & planning for accomplishment of goal.

2. Primacy- Planning logically precedes all other Managerial Functions. Planning & Controlling are

inseparable.

3. Pervasiveness- It is a necessity for all Managers. But it differs with each Manager`s Authority.4. Efficiency- It is measured by the amount it can contribute to the purpose and objectives as off set by

the costs required to formulate & operate it and by unsought consequences. Plans are efficient if they


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achieve their purpose at a reasonable cost, when cost is measured not only in terms of money or time

or production but also in the degree of individual and group satisfaction.

TYPES OF PLANS:

1. Missions OR Purpose- This identifies the basic function or task of an enterprise / agency / any partof it.

2. Objectives OR Goals- These are the ends towards which activity is aimed. They represent the endpoint towards which planning, organizing, staffing, leading & controlling are aimed.

3. Strategies- This is defined as the determination of the basic long-term objectives of an enterprise andthe adoption of courses of action and allocation of resources.

4. Policies- These define an area within which decision is to be made & ensure that the decision will be

consistent with, and contribute to, an objective. These help decide issues before they becomeproblems, make it unnecessary to analyze the same situation every time it comes up. It permittes

Managers to delegate authority and still maintain control over what their subordinates do. Since they

are guides to decision making they must be followed for some discretion otherwise, they would berules.

5. Procedure- These are plans that establish a required method of handling future activities. They are

chronological sequences of required action. They detail the exact manner in which certain activitiesmust be accomplished.

6. Rules- These spells out specific required actions or non-actions, allowing no discretion. A procedure

which guides action without specifying a time sequence. A procedure might be looked upon as a

sequence of rules. A rule may or may not be part of the procedure. The essence of a rule is that itreflects a managerial decision that some certain action must, or must not, be taken. These should be

distinguished from policies. The purpose of policies is to guide decision making by marking off

areas in which managers can use their discretion. Rules are also serves as guides, but they allow nodiscretion in their application.

7. Programs- These are a complex of goals, policies, procedures, rules, task assignment, steps to be

taken, resources to be employed and other elements necessary to carry out a given course of action

and are ordinarily supported by Budgets. A primary program may call for many supportingprograms.

8. Budgets- It is a statement of expected results expressed in numerical terms. It is also reffered to as a

numberized program. The Major advantage of Budgeting is that it makes people plan, because it is inthe form of numbers & it forces precision in planning. It is expressed in financial terms: labour

hours, units of products, or machine hours or in any other numerical measurable term. It may deals

with operations, can reflect capital outlays or may be shown as cash flows. Budgets varyconsiderably in accuracy, detail and purpose. Some budgets vary according to the organizations level

of output and are called Variable OR Flexible Budgets. On the other hand Government agencies

have or develop program budgets in which the agency identifies goals, develops detailed programsto meet the goals & estimates the cost of each program. Zero Base Budget is a combination of the

variable budget and the program budget.

Q 3 (a). Objectives : These are defined as the important ends towards which organizational & individual

activities are directed. Objectives should be verifiable, that is, at the end of the period it should be possible

to determine whether or not the objective has been achieved.

Management By Objectives-


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Definition- It is a comprehensive managerial system that integrates many key managerial activities in a

systematic manner and that is consciously directed towards the effective and efficient achievement oforganizational and individual objectives.

In 1954 Mr. Peter Drucker emphasized that objectives must be set in all areas where performance affects thehealth of the organization. Considering this as the main, sub-ordinates assume the responsibility of setting-

up a short- term objectives for themselves and then they review the same with their superiors.

Process of Setting Objectives-

Managers at different levels in the organization hierarchy are connected with different types of objectives.

Objectives & planning programme form a network. If goals are not interconnected and if they do notsupport one another, people end up pursuing paths that may seem good for their own department but may be

detrimental to the company as a whole.

1. The Board of Directors and top level managers are involved in determining the purpose, the mission

and over all objectives of the firm, as well as the more specific overall objectives in the key result

areas.2. Middle Level Management are involved in the setting of key result area objectives, division

objectives and department objectives.

3. Lower Level Managers set objective of department and units as well as of their subordinates.

Process of Management By Objectives

1. Setting Preliminary Objectives at the top- This is the first step in top managers to determine whathe or she perceives to be the purpose or mission and the more important goals of the enterprise for a

given period ahead. The Goals set by the superior are preliminary, based on an analysis and

judgement as to what can and should be accomplished by the organization within a certain period.

This requires taking into account the company`s strengths & weaknesses in light of availableopportunities and threats.

2. Clarifying Organizational Roles- The relationship between expected results and the responsibilityfor attaining them often needs to be clarified. Analysis of an organization`s structure often reveals

that the responsibility is vague and that re-organization is needed.

3. Setting Subordinates Objectives- After making sure that subordinate managers have been informed

or pertinent general objectives, strategies and planning premises, the superior can then proceed to

work with subordinates in setting their objectives. The Superior asks what goals the subordinatesbelieve they can accomplish, in what time period, and with what resources.

Superiors must be patient counselors, helping their sub-ordinates develop consistent

and supportive objectives and being careful not to set goals that are impossible to achieve. Superiorsmust listen to, and work with their subordinates, but in the end they must take responsibility for

approving subordinates goals. The Superior judgment and final approval must be based on what is

reasonably attainable, fully supportive of upper level objectives, is consistent with goals of other

managers in other functions and is consistent with the longer-run objectives and interests of thedepartment and the company.


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4. Re-cycling Objectives- Setting objectives is not only a joint process but also an interactive one.

Objectives can hardly be set by starting at the top and dividing them up among sub-ordinates. Nor

Should they be started from the bottom. A degree of recycling is required. Top managers may havesome idea of what their sub-ordinate`s objectives should be but they will almost certainly change

these pre-conceived goals as the contributions of the sub-ordinate comes into focus.

Guidelines for Setting Objective

1. The Objective should be verifiable, that is at the end of the period one should be able to tell whetheror not the objective have been achieved.

2. The Objectives should be challenging, yet reasonable.

3. The Objective should cover the main features of the job.4. The list of objectives should not be too long; if so some of the objective can be combined.

5. Objectives should be assigned priorities.

6. The Set of objectives should include- improvement objectives & personal development objectives.7. The objectives should be co-ordinated with those of other managers an organizational units and

should be consistent with the objectives of superiors and the company as a whole.

8. Objectives should be communicated to all who need to be informed. Should be expressed clearly &in writing.

9. Short-term objectives should be consistent with long term aims of the organization.

10. The assumptions & the planning premises underlying the objectives should be clearly identified.

11. They should provide the feedback so that necessary corrective steps can be taken.12. The resources & authority should be sufficiently given to Managers to be able to achieve the targets.

13. The Individuals who are expected to accomplish objectives should be given a chance to suggest their

objectives.14. Sub-ordinates should have control over aspects for which they are assigned responsibility.

Q 3 (b). Decision Making- It is defined as the selection of a course of action from among alternatives: it is

the core of planning.

It has to be rational. People deciding rationally are attempting to reach some goals that can not be attained

without action. They must have clear understanding of alternative sources by which a goal can be reachedunder existing circumstances and limitations.

STEPS IN DECISION MAKING

1. The Steps for Alternatives- The first step of decision making is to develop alternatives; this can be

done with the assistance of the concept of the limiting factors.A limiting factor- is something that stands in the way of accomplishment desired objectives.

Recognizing to those that will overcome the limiting factors. Preferably it is done by recognizing

and overcoming those factors that stands critically in the way of a goal, the best alternative courseofaction can be selected.

2. Evaluation of Alternatives- After alternative next step is of Evaluating them. This usually done by

the following steps mentioned below :


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a). Quantitative & Qualitative Factors- Quantitative factors are those which can be measured in

numerical terms such as time or various fixed and operating cost.

Qualitative or Intangible factors- that are difficult to measure in numeric terms as the quality oflabour relation or the international political climate.

The importance of quantitative factors cannot be questioned but the success of the venture would be

endangered if the intangible or qualitative factors are ignored.

b). Marginal Analysis- The techniques of marginal analysis compares additional revenues arisingfrom additional costs. Profits are maximized when additional revenues costs are equal. It is used for

comparing factors other than costs and revenues.For example- to find the best output of amachineinputs could be varied against output until the additional input equals the additional output.

c). Cost Analysis- It reflest on the effective cost analysis. It helps seek the best ratio of befits and thecost. For Example- finding the least costly way of reaching an objective or getting the greatest value

for given expenditure. It is a technique for choosing the best plan when the objectives are less

specific than sales, costs or profits. Non- quantifiable objectives can sometimes be given some offairly specific measures of effectiveness.

3. Selecting an Alternate- The three basic approaches which required for Managers to use his skills atare-

a). Experience: An event or a series of events participated in or lived through.

Reliance on past experience Experience as a general concept comprises knowledge of or skill in orobservation of some thing or some event gained through involvement in orexposureto that thing or

event. Experience is a subject of philosophy, and we all learn everything solely by experience (including

the experience of reading). Without the experience we have difficulty expressing the thought or act, andthis is self-evident in invention where the new takes time to create and distribute, but the old is well

known and taught. This has an implication that the more unique things you experience and the more

meaningful things you experience (such as experiencing a philosophy book instead of watching Star

Trek.

The techniques in this chapter help you to make the best decisions possible with the information you have available.With these tools you will be able to map out the likely consequences of decisions, work out the importance ofindividual factors, and choose the best course of action to take.
http://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/wiki/Observationhttp://en.wikipedia.org/wiki/Exposurehttp://en.wikipedia.org/wiki/Exposurehttp://en.wikipedia.org/wiki/Knowledgehttp://en.wikipedia.org/wiki/Observationhttp://en.wikipedia.org/wiki/Exposure


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Decision Trees are excellent tools for helping you to choose between several courses of action. They provide a highlyeffective structure within which you can lay out options and investigate the possible outcomes of choosing thoseoptions. They also help you to form a balanced picture of the risks and rewards associated with each possible courseof action.

How to use tool

You start a Decision Tree with a decision that you need to make. Draw a small square to represent thistowards the left of a large piece of paper. From this box draw out lines towards the right for each possible solution,and write that solution along the line. Keep the lines apart as far as possible so that you can expand your thoughts.Atthe end of each line, consider the results. If the result of taking that decision is uncertain, draw a small circle. If theresult is another decision that you need to make, draw another square. Squares represent decisions, and circlesrepresent uncertain outcomes. Write the decision or factor above the square or circle. If you have completed thesolution at the end of the line, just leave it blank.

Starting from the new decision squares on your diagram, draw out lines representing the options that you could select.From the circles draw lines representing possible outcomes. Again make a brief note on the line saying what it means.Keep on doing this until you have drawn out as many of the possible outcomes and decisions as you can see leadingon from the original decisions.

An example of the sort of thing you will end up with is shown in Figure 1:

ResultBy applying this technique we can see that the best option is to develop a new product. It is worth much more to us to


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take our time and get the product right, than to rush the product to market. It is better just to improve our existingproducts than to botch a new product, even though it costs usless.

Key points

Decision trees provide an effective method of Decision Making because they:

Clearly lay out the problem so that all options can be challenged

Allow us to analyze fully the possible consequences of a decision Provide a framework to quantify the values of outcomes and the probabilities of achieving them

Help us to make the best decisions on the basis of existing information and best guesses.

As with all Decision Making methods, decision tree analysis should be used in conjunction with common sense -decision trees are just one important part of your Decision Making tool kit.

Just as people are different, so are their styles of decision making. Each person is a result ofall of the decisions made in their life to date. Recognizing this, here are some tips to enhance

your decision making batting average.

Do not make decisions that are not yours to make. When making a decision you are simply choosing from among alternatives. You are

not making a choice between right and wrong.

Avoid snap decisions. Move fast on the reversible ones and slowly on the non-

reversible. Choosing the right alternative at the wrong time is not any better than the wrong

alternative at the right time, so make the decision while you still have time.

Do your decision making on paper. Make notes and keep your ideas visible so youcan consider all the relevant information in making this decision.

Be sure to choose based on what is right, not who is right.

Write down the pros and cons of a line of action. It clarifies your thinking and makes for a better

decision. Make decisions as you go along. Do not let them accumulate. A backlog of many little decisions

could be harder to deal with than one big and complex decision.

Consider those affected by your decision. Whenever feasible, get them involved to increase theircommitment.

Recognize that you cannot know with 100% certainty that your decision is correct because the

actions to implement it are to take place in the future. So make it and don't worry about it.

Use the OAR, O. A. R. approach in decision making. Look at O, Objectives you are seeking to

attain, A, the Alternatives you sense are available to you and R, the risk of the alternative you are

considering.

It has been said that a decision should always be made at the lowest possible level and as close to the

scene of action as possible. However, a decision should always be made at a level insuring that all

activities and objectives affected are fully considered. The first rule tells us how far down a decisionshould be made. The second how far down it can be made.

Remember that not making a decision is a decision not to take action.

Every manager must make decisions, and making the right decisions is essential.


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The process of decision making is of the utmost importance for effective management. As a manager, your

decision making must be informed by expert knowledge and experience. To that end, the articles below on

decision making can help.

Programmed & Non- Programmed Decisions-

Programmed Decisions- These are applied to structured or routine problems. It relies primarily onpreviously established criteria. It is decision making by precedent. Most programmed decisions are made atlower levels of the organization; this is because problems at lower levels are often routine and well

structured, requiring less decision discretion. This we can explain thru this example- In an organization, the

head of the dept. expects his team to be on time but sometimes when this routine is not followed and seeshis colleagues are making a habit of coming late in office, then he gets into some serious decision of say

marking late or half day absent. This decision is strictly in favour of organization.

Morover its A class of decisions, asset mix decisions made by pension fund managers, which exhibit

characteristics of both programmed and strategic choices is examined in this paper. The decisions are

classified using the scheme developed by Mintzberg et al., (1976) to highlight the circumstances under

which strategic decisions may be programmed. The types of strategic decisions which lend themselves to

programming are considered. The advantages and disadvantages of programming strategic decisions are

also discussed.

Non Programmed Decisions- These are used for unstructured, novel and ill defined situations of a non-recurring nature. Strategic decisions are non-programmed decisions, since they require subjective

judgments. This can be explain with a situation like- fire catches up due to short circuit in the dept, the

immediate head will make sure his entire team should come out safe & sound without too much ofpanicking & fear in such a situation he has to keep himself calm & cool without loosing his thinking.

Q 4 A). Organising: The term organizing means a formalized intentional structure of roles or poistions.This is used in reference to a formalized structure of roles or is sometimes used to denote an enterprise.

It is very essential in an organisation for employees to work together if they know what part they are to playin anay group effort and how their roles are interrelated. Organizing can be viewed as the activities tocollect and configure resources in order to implement plans in a highly effective and efficient fashion.Organizing is a broad set of activities, and often considered one of the major functions of management.Therefore, there are a wide variety of topics in organizing. The following are some of the major types oforganizing required in a business organization.

It's common for Board members to be organized into Committees. Some Board models, including the

Policy Governance Model (a registered trademark of John Carver), minimize or avoid committeesaltogether. Some Committees are increasingly popular, including the Audit Committee and CompensationCommittee in for-profits and the Board Development (or Board Governance) Committee in nonprofits. Oneway to organize, focus and activate Committees is by associating a work plan with each. A work planusually includes specific goals, objectives and deadlines for achievement. Often those goals are alignedwith goals in an overall strategic plan. In Board meetings, each Committee reports status on implementingits work plan.


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ORGANISATION CHARTS AS MENTIONED BELOW

(Organisation with Clear Spans)

(Organisation with Narrow Spans)

(Organisation with Wide Spans)

Major Principles of Organizing

There is a considerable agreement among management scholars and practitioners about a number ofprinciples underlying the science of organizing. These Principles are truths of general applicability and are

more

Principle of functional definition


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The more a position or a department has a clear definition of the results expected, activities to be

undertaken, and organization authority delegated and has an understanding of authority and informational

relationships with other positions, the more adequately the responsible individual can contribute towardaccomplishing enterprise objectives.

Process of organizing

The various principles of authority delegation and of department formation are fundamental truths about theprocess of organizing. They deal with phases of the two primary aspects of organizing- authority andactivity groupings. There are other principles that deal with the process of organizing. It is through their

application that managers gain a sense of proportion or a measure of the total organizing process.

Principle of balance

In every structure there is need for balance. The application of principles or techniques must be balanced to

ensure the overall effectiveness of the structure in meeting enterprise objectives.

The principles of balance is common to all areas of science and to to all functions of the manager. The

inefficiencies of broad spans of management must be balanced against the inefficiencies of long lines ofcommunication. Losses from multiple commands must be balanced against the gains from expertness and

uniformity in delegating functional authority to- staff and service departments. The savings of functionalspecialization in departmentalizing must be balanced against the advantages the advantages of establishing

profit responsible semi-independent product or territorial departments. It is apparent, once again, that the

application of management theory depends on the specific situation.

Principles of flexibility

The more that provisions are made for building flexibili0ty into an organization structure, the more

adequately an organization structure can fulfill its purpose.

Devices and techniques for anticipating and reacting to change must be built every structure. Every

enterprise moves toward its goal in a changing environment, both external and internal. The enterprise thatdevelops inflexibilities, whether these are resistance to change, too complicated procedures, or too-firm

departmental lines, is risking the inability to meet the challenges of economic, technical, biological,

political, and social change.

Principle of leadership facilitation

The more an organization structure and its delegation of authority enable managers to design and maintain

an environment for performance, the more they will help the leadership abilities of those managers.

Managerial effectiveness depends to a great extent upon the quality of leadership of those in managerial

positions, it is important for the organization structure to do its part in creating a situation in which amanager can most effectively lead. In this sense, organizing is a technique of promoting leadership. If the

authority allocation and the structural arrangements create a situation in which heads of department tend to

be looked upon as leaders and in which their task of leadership is aided, organization structure hasaccomplished an essential task.


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Q4 (b). MATRIX ORGANIZATION-

The matrix organization is an attempt to combine the advantages of the pure functional structure and the

product organizational structure. This form is identically suited for companies, such as construction & hotel

industry, that are project-driven & related to Hospitality Satisfaction of clients. Hospitality Industry mainly due

to the need of marketing, for example planning, executing an advertisement campaign for a any Special Food

festival happening at the hotel. Second example like TATA SKY- Creating awareness thru print, visual media &

penetrating market thru professional technical team for installation of DISH to improve on Consumer base.

In a matrix organization, each project manager reports directly to the vice president and the general manager.

Since each project represents a potential profit centre, the power and authority used by the project manager

come directly from the general manager.

Information sharing is mandatory in such an organization, and several people may be required for the same

piece of work. However, in general, the project manager has the total responsibility and accountability for the

success of the project. The functional departments, on the other hand, have functional responsibility to maintain

technical excellence on the project. Each functional unit is headed by a department manager whose prime

responsibility is to ensure that a unified technical base is maintained and that all available information can be

exchanged for each project.

Typical Matrix organization as shown below in the Diagram

The basis for the matrix organization is an endeavor to create synergism through shared responsibility between

project and functional management. Other advantages of a pure matrix organizational form, to project

management, include:

Because key people can be shared, the project cost is minimized

Conflicts are minimal, and those requiring hierarchical referrals are more easily resolved

There is a better balance between time, cost and performance

Authority and responsibility are shared


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Stress is distributed among the team

Suggested advantages of a strong matrix

o Better solutions to client' needs

o Better reconciliation of technology requirements

o Better for complex projects

o Requiring a diverse mix of expertiseo Better integration across functional departments

o More effective departmental communication

o More efficient use of corporate resources

Disadvantages of a Matrix

1. A final issue in individual conflict can arise when functional managers experience insecurity and an

erosion of autonomy.2. Functional managers often view a matrix organization as a loss of status, authority, and control over their

traditional domain. This view can result in resistance and hostility to the matrix.

3. Another major disadvantage is cost. Matrix management can be costly for both organizations and theindividuals in these organizations. For the organization, the existence of dual authority creates additional

management overhead and additional staff, mainly administrative. The matrix also leads to costs associated

with organizational "heaviness" including excessive meetings or "groupitis," which can lead to delayeddecision making and increased information-processing costs.

4. An imbalance of authority & power, as well as horizontal and vertical influence of the project and

functional Managers, can also lead to problems in matrix organisation.

5. It requires many time consuming meetings.

6. One final disadvantage recently noted is the inability of the matrix structure to respond quicklyenough to the rapidly changing demands of the multinational environment

Q6- SHORT NOTES

B). Leadership Behaviour & Styles- The behavioural theorists contend that a leaders style is oriented

towards either an employee centered or job centered emphasis. In the employee centered orientation, the

leader emphasis developing friendly, open relationships with employees and is very sensitive to theirpersonal and social needs. A job centered orientation is the approach in which the leaders emphasis on

getting his / her job done thru planning, organizing, delegating, making decisions, evaluating performance &

controlling. There are other theories which has been discussed as below

1. Style based on the use of Authority- This emphasis on the ways in which leader applies the qualities for

the achievement of the goal of an organization.

a). Autocratic Leader- Under this quality the leader commands & expects the compliance, which is positive

and leads with the ability to withhold or give reward and punishment.


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b). Democratic or Participative Leader- Under this quality the leader consults with subordinates for the

decision making & actions to be taken which is return encourages the participation from them. This quality

is reflected in those leaders who do the consultation & discussion before taking a particular concurrencedecision. This category completely indicates about the Leader who do take support of subordinates in their

opinion for accomplishing any task. Morever also reflects the openness any support required from his end.

c). The Free Rein Leader- Under this category the leader uses very less or very little power, in return giving

his / her sub-ordinates the maximum independence in their operations to set their own goals. Such Leadersdepend largely on subordinates to achieve their goals. They act as one of aiding the operations of followers

by providing them with complete information and acting primarily as a contact with the groups externalenvironment.

2. Likert`s Four Systems of Management- Rensis Likert thru his style of studying reflects that Supervisorswith best of records in performance focus primarily on his / her subordinates human aspects by helping

them & understanding their problems in endeavoring to build effective work groups/team with high

performance goals.

He described leadership styles in 4 systems wherein each style is defined by 7 operating characteristics,

which are mentioned herein below;

a). Character of Motivational Forces

b). Character of Communication Process

c). Character of Interaction- Influence Process.d). Character of decision- making process.

e). Character of Goal Setting or Ordering.

f). Character of Control Processg). Performance Characteristics

System1- Management is described as Exploitive Authoritative, its managers are highly autocratic, have

little trust on subordinates, motivate people through ear & punishment and only occasional rewards, engageon downword communication & limit to decision making powers upwards. His observation such as that

performance under this system / leader is mediocre.

System2- Benevolent Authoritative- This system reflects patronizing support & trust in subordinates,

motivate with rewards & some fear, permit some upward communication, solicit some ideas and opinions

from subordinates and allow some delegation on decision making with close policy control. Productivity isfair to good.

System3- Consultative- This system reflect that Managers have substantial but not complete trust & faithin subordinates, tries to make use of subordinates ideas & opinions, use rewards to motivate with occasional

punishment, engagement in both upwards & downwards communication, general decisions at top level

whereas major decision makings at lower level. Productivity is good.

System4- Participative Group- This shows that Manager has complete faith, trust & confidence in their

subordinates. They always get & exchange ideas, implement the same towards in constructive manner for

the achievement of goals, rewards regularly as per the involvement of the group. Shows active participationdownword & upwards communication & takes active participation in decision making. Productive is

excellent under this system of leadership


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3). The Grid Dimensions- It has concern for people & concern for production

Concern for People- It includes the element related to personal commitment towards goals achievement,

maintenance of the self esteem, placement of responsibility on the basis of trust rather than obedience,

provision of good working conditions, maintenance & satisfying interpersonal relations.

Concern for Production- It includes the elements related attitude of supervisor towards a wide variety ofthings such as quality of policy decisions, procedures & processes, creativeness of research, quality of staff

services, work efficiency & volume of outputs.

4). Leadership as a Continuum- This concept has been developed by Mr. Robert Tannenbaum & Mr.

Warren Schmidt. This emphasis on leadership quality involving style from one that is highly boss orientedto the other which is highly subordinate centered. The style varies from the degree of freedom a leader

grants to subordinates. This theory clearly states which style of leadership is appropriate depends on the

leader. Under the theory the following elements can influence a leader-

-Force operating in the Manager`s Personality- his / her value, confidence in subordinates & inclination

towards leadership styles.-Forces in subordinates that will affect the Manager`s behaviour- subordinates willingness to work,

experience, state of mind, & knowledge about the task.

-Forces in the Situation- organization values and traditions, the feasibility of safely delegating authority &

the pressure time.

C). Barriers to Good Communication-

Communication- It is the art of developing and attaining understanding between people. It is the process of

exchanging information & feelings between two or more people and it is essential to effective management.

It is the transfers of information from a sender to a receiver with the information being understood by thereceiver. In any organization there are barriers, which cause breakdown of information exchange. TheManager must be aware of these and seek to dissolve their influence in the daily firm activities.No matterhow good the communication system in an organisation is, unfortunately barriers can and do often occur. This may be

caused by a number of factors which can usually be summarised as being due to physical barriers, system design

faults or additional barriers. There are lot of factors which affect the communication or comes as hindrances /

hurdles to effective communication-

1. Lack of Openness- Communication is between two persons and is subject to the influence

that effects human behavior. It reflects the openness in the firm for honest & pivotal factor.Under this basic honesty is vital in any communication & disclosure of feelings, frankness in

presenting his ideas / opinions in front of the Leader & other colleagues.

2. Filtering- Employees tend to refrain from communication information that is potentiallythreatening to them. As a result the information gets distorted as it ascends from bottom to

the top of an organization. Similarly any communication issued from top gets into different

understanding as moves downward.

3. Degree of Motivating- When communication takes place, please have various motives topersuade, to tell, to entertain and to reinforce ideas. The enthusiasm displayed and interest

shown definitely conditions the communication.


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4. Either or Thinking- Under this factor a person always remain with options, in which he is not

in a position to come to a specific decision & can not view a situation correctly. This

hampers the time & approach of a communication.5. Assumptions- This factor defines the acting or taking decisions based on some unjustified

thinking / assumptions. The reader should not assume that the receiver understands what

she/he has been told. Mutual understanding must not be taken for granted.

6. Snap Reactions- This implies on the reader that if he/she feels that he/she will less benefited /

gained, the communication is almost be uncertain / ineffective. This condition exists in

communication between two people in conflict.7. Fear- It is another consideration when emotionally loaded words like failure, strike, liar and

defeat are used. Fear can affect the translation of information.

8. Language- Under this factor, meaning of words gets influenced by association. The meaningof information / symbols gets influenced by the amount of education the participants possess.

There is also body language, which includes facial expressions, gestures made & tone of

voice.9. Time Constraint- This factor refers to the pressure on any employee / manager is made &

placed. In this they wants to hurry the conceptualization & encoding process & results in

making mistakes / errors under which the information gets distorted.

10. Perception- It is the factor under which we individually interpret the messages from otherpeople / sources. Our past experiences affect our perception & cause us to view people,

events & other messages differently.

11. Poor Listening Skills- This represents the art of listening. Moreover it also implies on thestate of mind of the person, whether he is completely involved in listening whats goin

around. We people spends our 45 to 60 % work in listening out of which retention rate of

oral communication is 50% only.

More wider factors affects the communication-

Physical barriers are often due to the nature of the environment.Thus, for example, the natural barrier which exists, if staff are located in different buildings or on differentsites.Likewise, poor or outdated equipment, particularly the failure of management to introduce new technology,may also cause problems.Staff shortages are another factor which frequently causes communication difficulties for an organisation.Whilst distractions like background noise, poor lighting or an environment which is too hot or cold can allaffect people's morale and concentration, which in turn interfere with effective communication.

System design faults refer to problems with the structures or systems in place in an organisation.Examples might include an organisational structure which is unclear and therefore makes itconfusing to know who to communicate with.

Other examples could be inefficient or inappropriate information systems, a lack of supervision or training,and a lack of clarity in roles and responsibilities which can lead to staff being uncertain about what isexpected of them.

Attitudinal barriers come about as a result of problems with staff in an organisation.


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These may be brought about, for example, by such factors as poor management, lack of consultation withemployees, personality conflicts which can result in people delaying or refusing to communicate, thepersonal attitudes of individual employees which may be due to lack of motivation or dissatisfaction atwork, brought about by insufficient training to enable them to carry out particular tasks, or just resistance tochange due to entrenched attitudes and ideas.

OTHER COMMON BARRIERS TO EFFECTIVE COMMUNICATION INCLUDE:

Psychological factors such as people's state of mind. We all tendto feel happier and more receptive to information when the sunshines.Equally, if someone has personal problems like worries about theirhealth or marriage, then this will probably affect them.

Different languages and cultures represent a national barrierwhich is particularly important for organisations involved inoverseas business.

Individual linguistic ability is also important. The use of difficultor inappropriate words in communication can prevent people fromunderstanding the message.Poorly explained or misunderstood messages can also result inconfusion. We can all think of situations where we have listened tosomething explained which we just could not grasp.

Physiological barriers may result from individuals' personaldiscomfort, caused, for example, by ill health, poor eye sight orhearing difficulties.

Presentation of information is also important to aidunderstanding.

D). Requirements of Effective Controls-

Controlling Process- It is determine what is being accomplished that is, evaluating the performance and,

if necessary, applying corrective measures so that the performance takes place according to the plan. Somethefts, loss, errors are abound to take place in this resulting in requirement of Controlling Process.


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Implementation of a decision method and the use of feedback so that the goals and specific strategic plans of

the firm are optimally obtained. To do this, managers study accounting and other reports and compare them

to the plans set earlier. These comparisons may show where operations are not proceeding as planned andwho is responsible for what. The feedback that management receives may suggest the need to replan, to set

new strategies, or to reshape the organizational structure. Requirements factors for the same are mentioned

as below-

1. Tailoring Controls to plan & positions- Under this factor all controls techniques & systemsshould reflect the plans they are designed to follow. It should be tailored to positions. It

should also highlight the structure of an organization. It should be implemented that place of

an organization where the responsibility lies and action lies more, to enable the Manager tocorrect deviation from plans.

2. Controls to Individual Managers- These are meant to help Individual Managers to achieve

the goals as set for them by the organization in order to carry out their function moreefficiently. It should clearly highlight the information in a precise manner so that they will

understand and act accordingly.

3. Controls point-up expectations at critical points- Controls allows Managers to benefit from

the exception principle and detect those areas that require their attention. But it is not enough

just to look for exceptions; one must look for them at critical points. Consequently, theexception principle should be accompanied in practice by the principle of critical point

control.4. Seeking Objective of Controls- Effective control requires objective, accurate & suitable

standards. A Managers personality must not influence judgement of performance and make it

less accurate.5. Ensuring Flexibility of Controls- It should remain workable in the face of changed plans,

unforeseen circumstances, or outright failures.

6. Fitting the Control system to the Organizational Culture- To be most effective, any system

or technique must fit the organizational culture.7. Achieving Economy of Controls- Controls must be worth their cost. Control techniques and

approaches are efficient when they bring to light actual or potential deviation from plans withthe minimum of costs.8. Controls to Lead Corrective Actions- It is justified only if deviation from plans are corrected

through appropriate planning, organizing, staffing & leading. An adequate system will

disclose where failures are occurring and who is responsible for them and it will ensure thatsome corrective action is taken

E). Programme Planning & Budgeting-

Budgeting- It is the formulation of plans for given period in numerical terms. Budgets are statements ofanticipated results, either in financial terms as in revenue and expense and capital budgets, or in non-

financial as in budgets of direct-labour hours, materials, or units of production.

The purpose of budgeting is for Manager to identify and clearly see what capital will be spent by whom,

where & what expense, revenue, units of physical inputs or outputs, the plan involve. The Manager can then

delegate more authority to affect the plan within the budget allotted for a particular task.

Programme Budgeting is basically a systematic method for allocating the resources of an enterprise in ways

that will most effectively help the enterprise to meet its goal. It overcomes the weakness of all kinds on


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budgets of being too closely tied to the time frames of accounting periods of months, quarters or years. By

concentrating on goals & programmes in light of available resources, it stresses the desirability of assessing

costs against benefits when selecting the best course towards accomplishing a programme goal.

It is mostly used in Govt. operations but also used and applicable in/to all types of enterprises. There are

some factors because of which this is not that useful in govt. operations, they are mentioned as below-

1. Many Govt. Executive- especially in middle & lower level, does not understand thephilosophy & theory of the technique.

2. It lacks clear defined goals for executives.3. Lack of attention to planning premises.

4. Many Govt. budgetary divisions are reluctant to make any changes from their practice and

procedures of annual budgets to longer range programme budgets.

5. Accounting data are often inconsistent with programme budgeting. There is lack of

information in many areas to make meaningful cost effective analysis.

6. There is the political problems of re-organizing govt. depts. to improve concentration ofprogramme responsibility.

F). Formal & Informal Organization-

Formal Organization- It means the intentional structure of roles in a formally organized enterprise. A

Formal Organization a relatively stable set of a description of the organization structure (typically in an

Organization Chart) and the rules (policies, procedures and regulations) that make up an organization.

It implies that people in an organization should work together in order to fulfill the required roles. Secondly

the roles should be designed in such a way that required task / work is done along with people enjoy & worksmoothly, effectively & efficiently. This can be explained by Contracts within the Organization, Incentives

and Authority etc. It can more defined as below mentioned points-

Large secondary groups that are deliberately and rationally designed to achieve specific objectives.

Carefully designed structure.

Status clearly separated from the individual.

Designed for efficiency: BUREAUCRATIC

Vary in size.

Fulfill a variety of personal and social needs.

Impact all our lives.

So dominant that we create formal organizations to supervise and coordinate other organizations.

Informal Organization- It is a concept in Management Practice that denotes the network, unrelated to the

firms formal authority structure, of social interactions among its employees. Its the togetherness of peoples

personal & social relationship that arise as they associate with each other in work environment. TheInformal Organization can make Formal Organization much more effective & efficient by providing support

to Management, Stability to environment & smooth use of communication channels.


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This can be explained by norms, political processes, & routine jobs which are carried out on time to time.

Principles & Practices of Mgmt (Ppm)

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