Principlesofmanagement book @ bec doms bagalkot mba

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PRINCIPLESOFMANAGEMENT

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OBJECTIVE: This material attempts to give you an understanding of the conceptManagement approaches.

Planning : Planning – Nature and importance – forms – strategic and Tactical –Type of plans – Steps I Planning, Decision – Making – Type of Decision – DecisionMaking process – Rationality in decision – making.

Organization: Organization – Procts of organizing – Organization structuredepartmentalization – Span of Management – Delegation – Authority, Responsibility,Accountability – Decentralization.

Direction : Direction – Principles – elements – Motivation – Maslow, Hexrzberg,Varoom models – Communication : Process – Forms – Network – Barriers – Measuringeffectiveness – Co-ordination.

Leadership : Leadership theories – Style – Managerial Grid – Control – Controllingand Planning – Types of control – Concurrent and forward control – Principles ofcontrol – Areas of control – Control techniques.

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CONTENTS

Sl. No. Lessons Pg.No.

1. Introduction to Management 4

2. Planning 14

3. Organisation 21

4. Direction 33

5. Motivation 35

6. Communication 41

7. Leadership 52

8. Co-ordination 57

9. Control System and Process. 59

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LESSON – 1INTRODUCTION TO MANAGEMENT

MANAGEMENTManagement is the process of designing and maintaining an environment in whichindividuals working together in groups to accomplish selected aims efficiently.

It connotes different meaning indifferent contexts. The concept managementmay be used as

Collective noun - Board of directors or ExecutiveCommittee

Field of study - A branch of knowledge including theprinciples, techniques, functions andproblem management.

Function - Functions to be performed to attain theorganizational objectives-planning,organizing direction, co-ordination andcontrol

In a more important sense, management is a vital function concerned wth all aspectsof the working of an enterprise. Here the management is considered as a body ofknowledge consisting of several concepts, principles, techniques and theories whichcan be adopted in any group Endeavour.

DEFINITIONS

“Management is an art of knowing what do you want to do and then seeing that is isdone in the best and cheapest way.”

-F. W. TAYLOR

“To manage is to forecast, to plan, to organize, to command to co-ordinate andcontrol.

- HENRY FAYOL

“Management is a distinct process consisting of planning, organizing, actuating andcontrolling performance t determine and accomplish the objectives by the use ofpeople and resources,”

- GEORGE R. TERRY

“Management is the creation and maintenance of internal environment is anenterprise where individuals working in groups can perform efficiently and effectivelytoward the attainment of group goals. It is an art of getting the work done throughand with people in formally organized groups.”

- KOONTZ ANDO’DONNEL

FEATURES OF MANAGEMENT

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The important characteristics of management as a business function are:1. It is an art of getting things done through and with people.2. Art and science of decision making and leadership.3. It is a universal process for achieving results.4. It is an profession which involves specialized training and is governed by anethical code.

5. It coordinates human factor and physical resources for the accomplishment ofgroup objectives.

- by balancing and integration (or)- by innovation and adaptation

IMPORTANCE OF MANAGEMENT STUDYThe need and significance of management functions in the modern organizations aregiven below.1. To increase the efficiency2. to give a definite shape to management function.3. to improve research in management.4. to attain social goals by effective utilization of resources.

NATURE OF MANAGEMENT FUNCTIONS

1. Universality : It has universal application in all kinds/nature and size ofbusiness activities.

2. Dynamism : This body of knowledge is going on changingcontinuously with respect changes that are taking

place in the organizational environment.3. Relativity : It embraces all business functions at different levels.4. Regularity of

human nature :It helps to shape the human behaviour in the workenvironment.

APPROACHES TO THE STUDY OF MANAGEMENTA brief discussion about different approaches of management is given below.

EMPIRICAL APPROACHThe empirical school of management bases its methods on a close study of pastmanagerial experiences and management cases. As such, it is also known as caseapproach or management experience approach.

According to this approach, management is considered a study of managerin practice. The intention of studying experience is to draw generalizations and todevelop means to teaching experiences to other practitioners and students. Attemptsare made to duplicate successful experiences while avoiding unsuccessful ones.

This approach offers the most conventional way of acquiring skills inmanagement, that is, learning through the experience of others. This approach alsohelps in classroom, situations for developing diagnostic and analytical skills inmanagement students. Following limitations of this approach are quite obvious.- This empirical approach, basing its generalizations on cases and pastexperiences has not contributed anything fundamental to the development of

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management as discipline because of obvious contradictions in various managementexperiences.

HUMAN BEHAVIOR APPROACHThe human behavior approach is the outcome of the thoughts developed bybehavioral scientists who look at the organization as collectivity of people. Sincemanagement involves getting things done with and through people, the study onmanagement must revolve round human behavior. This approach can be divided intogroups interpersonal behavior approach and group behavior approach. Thisapproach suggestion how the knowledge of human behavior can be used in makingpeople more effective in the organization.

However, this approach is not free from limitations. It is true that manage can bebetter placed by understanding human behavior but equating management withhuman behavior is untenable. There is something more than mere human relationsmanagement. Human behavior approach provides only the diagnosis for humanproblems but problems have to be solved by taking many more factors which are notexplained by this approach.

SOCIAL SYSTEM APPROACHClosely resembling the human behavior approach and often confused intermixedwith it is the social system approach. The real pioneer of social system approach isVilfred Pareto, a sociologist. His ideas were later developed by Chest Bernard whohas really developed the concept of social systems approach management. Accordingto this approach, the organization is essentially a culture system composed ofpeople who work in cooperation. As such, for achieves organization goals, aco-operative system of management can be developed only understanding thebehavior of people in groups.

The social system approach has real significance to the practicingmanagers in the sense that all managers operate n a social system and theorganization is likely to succeed if the demands of the society in which it operates asfully recognized. The approach, however, spreads the boundary and application ofmanagement beyond the true concept of organizations.

SOCIAL TECHNICAL SYSTEMS APPROACHThis approach believes that to solve organizational problems, it is not enough tolook at the cooperative social systems alone but technical systems (methods andmachines) and how it affects and is affected by social systems and a technical system.The real pattern of behavior in the organization is determined by the interaction ofthe two.

The major contribution of this approach is that while analyzingmanagement problem of getting things done by people, adequate considerationshould be given to technology as well as informal interactions of people. Thus anychange in technology must be viewed in subsequent change in social interactions atthe workplace. However, this approach is more suitable for managing the problemsat the shop floor leave rather thandandling the total management problems.

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DECISION THEORY APPROACHThe major emphasis of this approach is that decision making is the job of everymanager. The manager is a decision maker and organization is a decision-makingunit. Therefore, the basic problem in managing is to make rational decision.

The approach contributes to the sharpening of managerial tools speciallyfor making suitable decisions in the organization. The approach demonstrates howmanagers can discharge their functions effectively. Decision-making is vital in everyschool of management. The vital aspect cannot be denied but management is morethan mere decision making.

MANAGEMENT SCIENCE APPROACHManagement science approach also known as mathematical or

quantitative measurement approach, visualizes management as a logical entity, theaction of which can be expressed in terms of mathematical symbol relationships andmeasurement data.

Management science approach is a fast developing one in analyzing andunderstanding management. This has contributed significantly in developing orderlythinking in management which has provided exactness in management discipline.Various mathematical tools like sampling, linear programming, games theory, timeseries analysis, emulation, waiting line theory etc, have provided more exactness insolving managerial problems. However, it is very difficult to call it a separate schoolof management because it does not provide the answer for the total managerialproblems, Moreover, many managerial activities are not really capable of beingquantified because of involvement of human being who are governed by manyirrational factors also.

SYSTEMS APPROACHThis approach is of comparatively recent origin, starting late 1950, it ha

assumed considerable importance in analyzing the phenomena of management. It isan integrating approach which considers management in its totality based onempirical data. The basic idea of systems approach is that any object must rely on amethod of analysis involving simultaneous variations of mutually dependentvariables. The implication of systems approach are given below.

System approach of management provides and integrated approach ofmanaging. This considers management in its totality.

System approach of management provides an integrated approach ofmanaging. This considers management in its totality.

System approach possesses the conceptual level of managerial analysismuch higher than any other approach. It provides a framework through whichorganization – environment interaction can be analyzed and facilitatesdecision-making, since the system within which managers make decisions can beprovided as a more explicit framework decision-making is easier to handle.

It is often suggested that system approach is too abstract to be of muchuse to practicing managers. It merely indicate that various parts of the organizationare interrelated.

System approach of management lacks universality and its preceptscannot be applied to all organizations.

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CONTINGENCY OR SITUATIONAL APPROACHThe basic idea of contingency approach is that there cannot be a

particular management action which will be suitable for all situations. Rather, andappropriate action is one which is designed on the basis of external environment andinternal states and needs. Contingency approach tries to fill this gap by suggestingwhat should be done in response to an event in the environment.

Contingency approach, on the other hand suggests an activeinterrelationship between the variables in a situation and the managerial actionsdevised. The implications of the contingency approach are given below.

It is the sophisticated approach to understand the increasingcomplexity of organizations. It emphasizes the multivariate nature of organizationsand attempts tounderstand how organizations operate under varying conditions. Theapproach is directed towards suggesting organizational designs and managerialactins most appropriate to specific situations.

Inspite of the various contributions, contingency approach has notbeen acknowledged as a unified theory of management because it suffers from somelimitations.

1. Inadequate LiteratureContingency approach suffers from inadequacy of literature.

2. Complex :

Determination of situation in which managerial action is to be taken involvesanalysis of a large number of variables with multifarious dimensions.

3. Reactive not Proactive:

Contingency approach is basically reactive in nature. It merely suggests whatmanagers can do in given situation.

OPERATIONAL APPROACHThis approach attempts to draw together the pertinent knowledge of

management by relating it to the functions of managers, commonly known asmanagement process. As such this approach is also known as management processapproach. This approach views the management as a social process comprising aseries of actions leading to the accomplishment of certain objectives. Thesignificance of operations approach is given below.

1. Operational approach offers a broad, easy to understand conceptualframework of management. The approach includes the entire scope ofmanagement and recognizes it as a separate discipline.

2. This approach suggests that management is a universal phenomenonirrespective of the type of organizations or levels of an organization.

3. Operational approach provides useful concepts for practicing managers. Ithelps the managers to put their knowledge to use. It offers practicalsuggestions by providing classification of managerial functions at first levelinto planning, organizing, staffing, directing and controlling. However the

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operational approach has been criticized on the following grounds.

1. The basic tenets of operational management that is , various managementfunctions, are not universally accepted.

2. Another criticism against operational approach is that various terms used inthis approach are not commonly shared.

3. The analysis of various approaches suggests that no approach is fully freefrom shortcomings. However, a positive sign is emerging in the form ofconvergence of various approaches. The convergence is provided byoperational approach as compared to any other approach.

FUNCTIONS OF MANAGEMENTThe basic aim of managing is to achieve certain objectives or goals. The manager

must be sure of the objectives he desires to attain or of the end result to be ensured.The precise and the complete statement in this regard would make the objectivesclear and understood by all concerned who have ot divert their activities towards itsattainment. The desired result, objective or goal is attained by performing certainfundamental management functions which can be grouped under basic heads,namely

1. Planning2. Organizing3. Staffing4. Motivating5. Directing6. Coordinating7. Controlling

PLANNINGIt means “Preparing a sketch or an outline of any proposed plan of actions”. It

implies considering and arranging in advance a projected course of action. It canalso be definedas determining what is to be done, making the decisions to do it, anddevising a procedure, method and time table to do it. Planning is a general activity. Itis a necessary part of all operations of an enterprise, and for the operations of eachof the departments and sections. It stimulates people to action and also determinestheir mode of action.

For eg. Sales manager plans his sales campaignThe purchasing Manager plans his purchasing and transporting operationsThe production Manager plans his production programs.

Planning is an exercise in forecasting and decision making. It involves forecast offuture conditions and an estimate of how the proposed plans would be affected bythem.

Thus planning involves two aspects. First it involves mental formulations of an ideaof what is desired to be achieved. Upto this, it remains at the thinking level and isbased on forecasts and estimates. Secondly it determines the mode of action to be

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pursued to achieve what has been thought up. At this stage, the idea takes a definiteshape with a due regard to the ordinary and immediate circumstances facing theenterprise.

ORGANISATIONTo organize means to put into working order and arrange in a system.

In this sense, an organization is an organized body or persons. Organising may bedefined as arranging a number of complex tasks into manageable units and definingthe formal relationship among the people who are assigned the various units oftasks. This definition is in the context of attainment of the goals and objectives of anundertaking.

Generally, identifiable units of tasks are put under the charge of adepartment, section or division. The head of that department, section or unit beinggiven with the authority to perform those tasks. For eg. Business activities in anindustrial concern may be grouped under :1. Production2. Sales3. Finance and4. Personnel

After classification and analysis of functions to be performed by each department,persons possessing requisite qualifications and experience may be appointed ashead of each of these departments. Such persons should also be given properauthority to discharge their functions efficiently.. Thus basically organization is concerned with grouping the activitiesrequired to attain the planned objectives, defining responsibilities of the people inthe organization, delegating the appropriate authority to them to discharge therespective responsibilities and establishing structural relationships to enableCo-ordination of the individual efforts towards accomplishment of the enterpriseobjectives. The main objective of organization is to establish well definedrelationships as between individuals and groups of individuals and between theactivities performed by them.

STAFFINGIt has been defined as manning and keeping manned the positions provided by theorganization structure. Thus staffing involves four things:

Assessment of personnel needs of the enterprise and selection and training ofemployees.

Determination of employees remuneration.Evaluation of employees performance.Establishment of effective communication skills.

Staffing is a difficult managerial function, because it is concerned with selection ofproperly qualified and mentally well-adjusted persons and their retention in theenterprise as a contented and motivated work force.

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DIRECTINGTo direct means to guide and supervise any action or conduct. It implies guidance orinstructions about what to do and how to do it. We have seen that in organisatinexecutives assign responsibilities and duties to their subordinates and delegate tothem with requisite authority to perform the assigned responsibilities of duties. Thisin fact is of very essence of management the art and process of getting things doneby others. No doubt, executives have the authority to force their subordinates tocomply with their directives. In case any subordinates faisl or refuses to comply, bemay be thrown out or punished in some other manner. But this a wrong view of theenterprise entire process of management. On any case, with strong trade unions anda number of labour laws to protect the worker, it would not be wise to demandcompliance from one’s subordinated. For securing whole-hearted compliance fromsubordinated, the function of direction assumes considerable significance.

Direction function involves

1. Issuing orders and instructions to subordinated.2. Guiding, training, energizing and leading the subordinates to perform thework methodically.

3. Exercising supervision over the work done by subordinates to ensure tat it is nconformity with aims and objectives of the enterprise.

From all accounts, the function of directions is very important. Thus to make theorganization click, it becomes necessary to direct one’s subordinates in a mannerthat they become effective instruments in the realization of enterprise goods. Theprocess of direction comprises of the following elements viz.

i. Leadershipii. Communicationiii. Motivation andiv. Supervision

A detailed discussion about these aspects is given in the subsequent chapters.

CO-ORDINATIONSome authorities emphasis co-ordination as a separate function of Management.This approach has not been adopted here because it is felt that co-ordination isemphasized in each of the functions of management process. Co-ordination must besought from the very first step, namely, planning, so that plans of all departmentsare integrated into a master plan, issuing the adequate co-ordination. Similarlyorganizing of people into groups and work into activities involves adequateco-ordination. It can also be secured through proper motivation of the workerstowards organized efforts in terms of organizational objectives and personalobjectives of the employees through an integration of such objectives. Finally thecontrolling aspect also indicates further co-ordination is required resulting inimprovements and fresh plans.

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CONTROLControlling can be defined as “comparing results with plans and taking

corrective actin when results deviate from plans.”In an organizational set up, It every Manager’s responsibility to control the

performance of work and workers places under his charge.

Pre-requisites of control:1. Control is possible only where is there is a plan according to which actualperformance is intended to proceed.

2. The second requirement of control to measurement of the results of actualoperations.

3. The third requirement of control is taking corrective action as soon asdeviation from the plan is discovered.

Fundamentally, control is any process that guides activity towards somepre-determined goal. The essence of this concept is in determining in whetherthe activity is achieving the desire results. This is what control is all about. Forcontrol to be effective and fruitful, it must be based on a plan. Then on the basisof information received from the operational level, there must be measurement ofactual performance to ascertain deviations.

Thus the above functions are said to be the important functions of Management.

ADMINISTRATION AND MANAGEMENTThe two terms administration and management are being used interchangeablyfor all practical purposes. However these two terms are different from each other.Oliver Sheldon summaries the distinction as follows.

Administration is the function in the industry concerned in the determination ofcorporate policy, the co-ordination of finance production and distribution, thesettlement of complaints of the organization and ultimate control of executive”.

“Management is the function in the industry concerned in the execution of policywithin the limits setup by the administration and the employment of theorganization for the particular object set before it”.

William sprigeal distinguishes “Administration as the determinate function and“management” as the executive function.

Management is primarly concerned with carrying out of the broad policies laiddown by the administration”. Thus the administration is concerned with thethinking function and management with doing function.

The essence of management is highlighted by the definition given by KOONTZand O’ DONEL and by DONALD CLAGH. The later describe management a the artand science of decision making and leadership. Art of getting things done

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through people and with people. Human factor in industry has endless capacityfor work provided planning and resources are made available to it. The manager’sgoal of attainment of enterprise objectives in the more efficient manner can beaccomplished only when the people in the enterprise work to the best of theirability in the spirit of cooperation and zeal.

MANAGEMENT : AN ART OR SCIENCE

MANAGEMENT AN ARTAccording to G. TERRY; Art is “Bringing about a desired result through theapplication of will in any activity is called as an art,’ The emphasis is on applyingskills with knowledge and accomplishing an end through deliberate effort. Thusthe function of the art is accomplishing concrete ends efforts, results; predictsituations that would not come about without the deliberate effort, to securethem.

MANAGEMENT IS A SCIENCEScience has been defined as “body of systemized knowledge accumulated andaccepted with respect to the under standing of general tools concerning particularphenomenon subject or object of study.

It is absolutely necessary that it should have codified principles and techniquesthat explains certain truth with respect to basic phenomenon.

In this sense management is certainly regarded as science as it has also developin to a systemized knowledge regarding a particular phenomenon, namely,managerial function.

MANAGEMENT AS PROFESSIONProfession is defined as an occupation based upon the specialized intellectualstudy and training, the purpose of which is to supply skilled service or advice toothers for the definite fee or salary.

CHARACTERISTICS OF PROFESSION1. Existence of knowledge :

Profession emerges from the establishment of fact that there is a body of knowledgewhich cannot started around but has to be studied for being a successfulprofessional.

2. Acquisition of knowledge :

An individual can enter profession only after acquiring knowledge and skills throughformal training for example, only the law graduates can enter the profession of legalpractice.

3. Professional association :

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An occupation which claims to be profession should have an association. Howevermanager do not have single unified professional group like Indian medical councilfor medical practitioners from this new management cannot be termed as tradeprofession.

4. Ethical code :

For every profession some ethical standards are provided and every individual of theprofession is expected to maintain conformity with these standards. In managementalso, code of conduct has been formulated to suggest the behavioral pattern forprofessional managers.

5. Service motive:

It is essential because the monetary value of professional service cannot bemeasured easily in absence of market mechanism except the competition among theprofessionals themselves. The success of any profession is measured not in terms ofmoney. It earns but by the amount of social service it provides. Similarlycontributions of management cannot be measured in terms of money alone becausewithout integrating effort of management, resources worth millions of rupees maybe useless.

Once organization grows beyond certain size, changes in the nature of managementprocess demands that ownership and management should be divorced. Somanagement positions should be held by persons who have professional skill andadequate training.

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LESSON – 2PLANNING

MEANINGIt means determining what is to be done, how, when and by whom it is to be done. Itlays down and object to pursuit and chalks out a specific course of action to achieveit. It is the first step in the management process concerned with establishment ofobjectives and goals to be attained in the future in the light of an analysis of presentlimitations for attaining such goals with a views to their removal or reduction,anticipation and designing the course of action and programmes for attaining suchpre-determined goals.

DEFINITION“Planning is the selecting and relating of facts and the making and using ofassumptions regarding the future in the visualization to achieve desire results.”

GEORGE TERRY

“Planning is deciding advance what to do, how to do it, when to do it, who is to do it.It bridges the gap form where we are, to where we want to go. It makes it possiblefor things to occur which would not otherwise happen.”

- KOONTZ & O’DONNEL

“Planning is the thinking process, the organized, foresight, the vision based on factsand experience that is required for intelligent action.”

- ALFORD & BEATTYFEATURESAs a process, planning has certain features as given below.- It s the thinking process.- “Choosing” is at the root of planning.- It is pervasive – prevailing in all activities- Accomplishment of enterprise objectives.- Primacy of planning – Prime- It is all embracing.- It leads to increase in efficiency.- It is an integrated process consisting of objectives, policies, procedures

IMPORTANCE OF PLANNINGThe significance of planning function could be indentified from the follows- To tackle increasing complexity in modern business.- To face increasing competition.- To provide for complex technological changes.- To insure against business failure.- To meet the changing economic and political situations.

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- To exercise effective control.- To bring greater economy.

Merits of planningPlanning process facilities the managerial function on the following ways:-Selection of best objectives can be made with the help of planning Profits, prestige,Favourable consumer reaction, High morale of workers, Man-power development.

- Unity of action could be ensured.- Aid to co-ordination and control- Aid to growth and Expansion.- Aid to employee co-operation.- Aid to economy.- Aid to foreseeing the future.- Increases the effectiveness of manager.

Limitations of planning

The effectiveness of planning process may be affected on the following reasos

1. Uncertainty Planning is based on forecasted results which will notHold good in uncertain situations.

2. Rigidity Prior determination of policy, programme, etc.Makes it regid.

3. Unsuitability Business is a dynamic activity and hence planMay not be suitable in all situations.

4. Costly Planning is time consuming and costly affair

KINDS OF PLANNINGOn the basis of the time factor, planning may be

Long Ranging planning - 5 – 10 yearsShort Range planning - Not more than one year

On the basis of business function for when planning is to be drawn Product planning,project and activity planning.

DECISION MAKING“It is ht process selection an alternative from two or more alternatives to determinean opinion or a course of action.”

- GEORGE TERRYFactors involved in decision making :

Tangible factors: Profits, Quality of output and all other quantitative factorsSuch as Man-hours, Machine hours.

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Intangible factors:

a.) Employee morale.b.) The prestige of business concern.c.) Consumer behaviour.d.) Such other abstract factors.

Need :Weighing the consequences of each alternative course of action.

Steps in Decision-making process:Defining and analyzing the problem,Finding relevant facts.Developing alternative solutions.Selecting the best solution.Converting the decision into effective action.

Decision-making ProcessFormulation

Selection

Deliberation

Investigation

Conception

Ption

CRITERIASome of the rationales to be adopted indecision-making process are:Reduction of cost, Maximization of profit, saving of time, development of managerialskill, increasing productivity etc.

TYPES OF PLANS1. Standing or repeated use plans

1. Objectives2. Policies3. Procedures.4. Rules5. Strategies.

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2. Single use of plans:1. Programmes.2. Budgets

A brief description about these sub-types of plans are given below:a.) Objectives

It may be defined as the specific goals or targets to be accomplished viz., profitmaking, cost reduction, increase in productivity goodwill, personnel development.Healthy employee relations, social responsibility.

Fixing of objectives in an organizational planning function ensures the followingadvantages.

It is vital to planning function.It helps to Integrate planning.It ensure performance control.

Limitations :

However, fixation of objectives is subject to certain limitations viz.,Difficult to define the objectives.Difficult to devise suitable means.Difficult to avoid conflict.

Remedies:

1. Objectives should be specific,2. Objective should be realistic,3. Objective should be backed by suitable sub-goals.4. Objectives should be flexible.

b. Policies

It may be defined as a guide to thinking and action of those who have to makedecisions in the course of accomplishment of the enterprise objectives. They areformulated in broad forms and provide a compressive and flexible course of actionto be pursued to attain the given objectives

FEATURESIt is a broad outlines about the things to be done and the way in which they an to edone.It is Consistent with that of the organizational plan.It is to be adequate in number to achieve organisationals goals.It should be a sound one.

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It must ensure flexibility.

KINDS OF POLICIES1. Internal or originated polices.2. External or imposed policies.3. Addealed policies.4. State or explicit policies.5. Unstated or implied policies.

Factors to be considered while formulation policies are :1. Values, Beliefs, Ambitions, and Foresight of the owners and members of thetop management.

2. Prevalent Technology.3. Finance availability.4. Employee reaction.5. Accomplishment and activities of competitors,6. Governmental regulation and control.7. General business environment.8. Price levels.9. Public attitudes and behaviour.

Merits :1. Guide to think and act.2. Ensures Consistency in all actions.3. Broader applicability.4. Confidence booster.

Demerits :

1. It won’t help to solve all problems.2. Instant solutions to problems may not be available.3. It cannot substitute human judgment.4. It may nor encourage initiative.

c. Procedures“The process of establishing time sequences for work to be done.”They may be described as plans prescribing the exact chronological sequence ofspecific tasks required to perform designated work.To determine the specific tasks to be performed.The time when those tasks will be performed.The person who will perform them.

Merits :

1. Basis of control2. Standardisation of activities can be done.

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3. Ensure consistency in all operations.4. Aid to communication and co-ordination.

Limitations :

1. Redundacy may takes place in course of time.2. Updating becomes must.

d. Rule :It is decision made by the management regarding what is to be done and what is notto be done in a given situation. It applies to specific situations. Rules do not leaveany scope for decision making nor do they permit any deviation.

e. Strategies :It is derived form the greek word strategies, meaning general,

It means the art of projecting and planning the choice of means by which theenterprises forces ay be employed most effectively in order to accomplish it’sintended goal. It is said to be formulated only to meet the challenge posed bycompetitions policies and activity. The following factors may be considered forformulating strategies.- Correct assessment of reaction of the parties concerned.- What human and physical resources are available to draw up a strategy.- Temperamental make-up of the persons to check-mate whom the strategy isbeing would up.

TYPES OF STRATEGIES- Strike while the iron is hot-act prompt a while the action is likely to getresults.- Camel’s head in the tent – creation of confidence regarding plan to some- Unity is strength- Time is greater heater.- Offence if the best form of a defence.- Divide and rule.

Successful implementation of strategies :1. Communicating strategies to all key decision-making managers.2. Developing and communicating planning premises.3. Ensuring that action plans contribute to and reflect major objectives and

strategies.4. Reviewing strategies regularly.5. Developing contingency strategies and program.6. Making the organization structure fit planning needs.7. Continuing to emphasis planning implementing strategy.8. Creating a company climate that forces planning.

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f. ProgrammeIt lays down the operation to be carried out to accomplish a given work. It prescribeshow enterprise resources should be used.

Merits

1. Action based – practical guide to managerial action.2. Greater motivation.

Demerits

1. Greater risk of failure2. Inadequate motivation.

g. BudgetIt is a plan relating to a period of time expressed in numerical terms. “as apre-determined statement of management policy, during a given period, whichprovide a standard for comparison with the results actual achieved.

Objectives of Budgeting :

1. To ensure effective planning.2. to facilitate Co-ordination function.3. To exercise Controlling effective and achieving desire goals.4. To motivate the workforce for achieving desired results.

Merits :

Instrument of management policy

1. Time bound2. Specific targets.3. Synthesis of past, present and future.4. Right motivation.5. Basis of control.

Limitations1. Cabined and confined.2. Excessive reliance on past experience.3. Danger of inaccuracy in estimates.4. Hampers initiative – rational and pragmatic initiative is stiffed.

PLANNING PREMISES

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Managerial plans are based on certain assumptions which are called planningpremises. They constitute the ground on which plans will stand. Meaningful premisesfacilitate consistency and coordination of plans. The premises may be ofNon-controllable premises such as economic conditions, political situations, tastes,preferences of people etc.Semi-controllable premises such as firms market shares, union managementrelations etc.Controllable premises such as policies of the organization, procedures, rules etc.

Effective Premising :To effectuate the planning premises following guidelines may be adopted.Selection of the premises that bear materially on program.Development of alternative premises for contingency planning.

Verification of the consistency of premises

Communication of the premises.

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LESSON – 3ORGANISATION

The term organization is derived form the word “organism” which means structurewith parts so integrated that their relation to each other is governed by their relationto whole.

The term organization is used both structural and functional sense. As a structure itmeans a developed enterprise being operated t achieve the given goals. As afunction it refers to establishing relationship between activities and authoritypertaining to an enterprise.

Organization is nothing but a process of integrating and co-ordinating the efforts ofmen and materials for the accomplishment of a set objective.

DEFINITION

“Orgnisation is the process of identifying and grouping work to be performeddefining and delegating responsibility and authority and establishing relationship forthe purpose of enabling people to work most effectively together in accomplishingobjectives.

-ALLEN

Organisation thus is an arrangement for internal administration of the enterprise. Itdescribes the part which each employee is intended to play in the operation of anenterprise and ensures that concerned endeavour of all of them will be conductive tothe full implementation of the plans of the enterprise.

FACTORS INCLUDED IN THE CONCEPT OF ORGANIZATION

a) Assembly of business elements such as men, money and materials.b) Creation of formal relationships between men employed at different

levels through a hierarchy of authority.c) Defining the functional role of the personnel and laying down the

range of their responsibility for business performance.d) Operating the organizational activities in conformity with the

establishment objectives of the enterprise.

PRINCIPLES OF ORGANIZATION1. Principles of objectives.2. Principles of authority.3. Principles of ultimate authority.4. Principles of formal authority5. Principles of the span of control6. Principles of decision7. Principles of Exception

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8. Principles of Definition9. Principles of Balance10. Principles of Continuity11. Principles of Organisation cost12. Principles of Effective communication.

ELEMENTS OF ORGANIZATION1. Division of work2. Grouping of activities.3. Assignment of Duties.4. Delegation of Authority5. Establishment of relationship.

Hence internal organization, implies designing an administrative set-up consisting ofindividuals with defined task and responsibility to be performed according to anorderly sequence procedures for attaining the result.

ORGANISATIONAL CHARTIt is important tool for portraying net work of an organization structure. It shows1. The main portion, nature of relationship between2. Levels of management.

“It is diagrammatic form which shows important aspects of an organization,including the major function and their respective relationship, the channels ofsupervision and the relative authority of each employees who is incharge of eachrespective functions.”

-FEORGE TERRY

TYPES OF CHARTS1. Vertical chart2. Horizontal chart3. Circular chart4. Tree chart

Merits of Organisational Chart :

1. Clarity in relationship2. Easy to understand at a glance3. Familiarizing new employees4. Helps in formulating training programme5. Helps to organizational change6. It serves as a better method of visualizing the tone and character of an

organisation.

Limitations

1. Likely to be outdated2. Rigidity

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3. It shows only relationships4. Shifting of responsibility to somebody else5. Does not show extents of authority or responsibility.6. It may go against teamsprit7. It ignores the informal aspects of orgnisation.

TYPES OF ORGANIZATIONThe problem of organization is to select and combine the efforts of men of propercharacteristics so as to produce the desired result. Although character and type oforganization would depend largely on the size and nature of enterprise, thefollowing broad patterns of organizing the personnel have been evolved.

Line organization Staff OrganisationFunctional Organisation Line and Staff OrganisationMatrix Organisation Projectised Organisation

A brief outline about the three basic organization structures are given below

LINE ORGANISATIONIt is the oldest type of organisation in use in which authority flows from the men atthe top to the lowest man vertically. i.e., the directionsare issued by the personincharge of the whole organization and are directly conveyed to the personsresponsible forhte execution of the work. The advantages of this structure are:

Simple to understand and develop.Clear-cut division of authority and responsibility is possibleDiscipline can be easily maintained.It makes for quick action

However, this structure has following shortcomings:

Makes the organization more regid and inflexibleLack of expert advice may be there.Key man are loaded heavily.Loss of one or two capable men may mar the organisatioin.

Line OrganisationChart

General Manager

ManagerEastern Region

ManagerWesternRegion

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Manager 1 Manager 2 Manager 3 Manager 4 Manager5

Manager 6

LINE AND STAFF ORGNISATIONA manager today cannot hope to think of all possible factors in a given situation.Therefore, he hs a set of expert advisers. Those functions which have directresponsibility for accomplishing the major objectives of the firm are called linefunctions. The staff functions are supposed to help and assist the line in dischargingtheir responsibility. The staff position established as a measure of support for theline organization may be of personal staff, specialished staff and general staff. Thisform has certain advantages and limitations. They are

It is based planned specializationIt brings expert knowledge to bear upon managementIt provides more opportunity for advancement for able workers.

Limitations:Relationship between line and staff member may creates confusion.Lack of authority may affect the interest of the staff member.Prestige and influence of line member ay suffer in front of specialist.

FUNCTIONAL ORGANISATIONHere the whole task of management and direction of subordinates should bedivided according to the type of the work involved. The functional managementcarries this idea to its logical limit and divides up management into a number offunctions such as production, sales, finance and personae, and research anddevelopment etc. Each of these departments would serve its best for theorganization. Its advantages are;

It ensures a greater division of labourIt Improves the efficiency of the organization.It brings specialization and innovations.It facilitates mass productin.

However, it has certain limitations as given below;Strict enforcement of discipline is questionable.Creates complexity in structuring activities.Responsibility cannot be fixed effectively.A model of line staff and functional organization structure is given below.

Chairman

PA to Chairman

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Director Personal Director Production DirectorPurchasing

Director Finance

GM 1 GM 2

ManagerPersonal

ManagerProduction

ManagerFinance

ManagerPersonal

ManagerProduction

ManagerFinance

FORMAL ORGANISATION“A Network of personal and social relation not established or required by the formalorganization but arising spontaneously as people associate with one another.”

Types of informal groups1. Social overlays2. Functional overlays3. Decision overlays4. Power overlays5. Communication overlays

Benefits1. Sense of belonging2. Safety value for emotional problem3. Aid to the job4. Breeding ground for innovation and originality5. Important channel of communication6. Social control7. Check of authority8. Self – policing9. Fills gaps in a managers abilities10. Gives the managers feedback about employees and their work experience

Limitations1. Resistance to change2. Suboptimization3. Rumor4. Group think philosophy

AUTHORITY AND RESPONSIBILITYAuthority is the basis of organization in as much as organization is described

as a system of authority relationships. Authority is the power to command others to

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act in a manner deemed by the possessor of the authority to further enterprise ordepartmental purpose. It is the power to make decisions which guide the actions ofothers. The person who makes the decisions is the superior and the person whoaccepts them and is guided by them is called one subordinate.

Authority is the right to give orders and the power to exact obedience.

- HENRI FAYOL

Authority may be of formal authority, acceptance authority, authority of situation,position authority, and technical authority.

Authority Power1 It is the institutionalized right

of a superior to command andcompel his subordinates toperform a certain act.

It is the ability of a person toinfluence another person toperform an act.

2 It rests in the chair It rests in the person

3 It is delegated It is earned by own efforts

4 It is well defined It is undefined

5 It is what exists in the eyeIt is a dejure concept

It exists in fact.It is defacto concept

6 Basis for formal organization Basis for informal organ

Responsibility is an obligation of the individual to perform assigned duties to thebest of his ability under the direction of his executive leader.

- KEITH DAVIS

Responsibility refers to duty, activity or sometimes even authority. It really meansthat the obligation of a subordinate to perform the duty assigned to him. Theessence of responsibility is, then obligation. In the normal functioning of anenterprise much of the responsibility in the nature of continuing obligation whichmeans that the subordinate has an obligation to discharge his functions as requiredby the superior continually. Responsibility involves Compliance, obedience andDependability. A failure to observe these elements may call forth a penalty,punishment or disciplinary action against the erring subordinate.

The term accountability can also be used as a substitute for responsibility.Accountability refers to the liability of a subordinate for a proper discharge of hisfunctions. It includes responsibility and arises from it. But accountability cannot bedelegated. Thus to be accountable is to be answerable for the fulfillment ornon-fulfillment of the authority or responsibility assigned.

DELEGATION

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To delegate means to grant or confer. Delegation means conferring authorityfrom one manager to organizational unit to another in order to accomplish particularassignments. Delegation determines the effectiveness of the manager in his work.The way in which delegation will influence the relationship between the subordinateand his superior and through it the performance of the subordinate. In the absenceof delegation, he may receive orders from many people and may, therefore, beunsure of his job.

ELEMENTS OF DELEGATIONThe process of delegation involves three basic actions whether expressed or implied.They areThe delegator should assign duties to subordinates.He has to grant authority to subordinates to the delegated part of his work.Delegation should create obligation on the part of subordinate to complete the job.

Merits1. Relieves manager’s workload.2. Leads to better decisions.3. Speed up decision – builds up morale.4. Train subordinates and5. Helps to create formal organization structure.

BARRIERS TO DELEGATION.On the manager’s side:1. Fear of loss of power2. Lack of confidence in subordinates.3. Fear of being exposed.4. Difficulty in briefing.

On the subordinates side:1. Fear of criticism2. Lack of adequate information3. Lack of self confidence and initiative and resources.4. No positive personal gain.

GUIDELINES FOR EFFECTIVE DELEGATION1. Clarity in assigning the task2. Proportionate authority.3. Limits of subordinates authority.4. Positive incentive for accepting responsibility.5. Proper training of subordinates.6. Create climate for mutual trust and goodwill7. No over laps or slips in delegation.

STEPS IN DELEGATION

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The entire process of delegation of authority can be completed through the followingsteps.Determination of results protected.Assignment of duties.Authorization for action.Creation of obligation.

SPAN OF MANAGEMENTIt is one of the organization principle. It refers to the number of subordinates forwhose activities an executive should be held responsible. The limit to the number ofsubordinates who can be effectively managed by a manager.The factors determining span of control of a superior are:

1. Nature of activities involved.2. Ability of the superior (knowledge)3. Nature and ability of subordinates.4. Time available.5. Place available etc.

GRAICUNA’S FORMULAFrench management consultant V. A. Graicuna offer analyzing subordinate andsuperior relationship developed a mathematical formula. His theory identifies threetypes of the subordinates & superior relationships namely.

1. Direct single relationships.2. Direct group relationships.3. Cross relationship between subordinates.

These relationships vary (considenancy) with the size of the subordinates groupwhile the supervisions own direct relationship with individuals increase n (proption)to the addition to subordinates the groups and cross relationships increase muchmore than proportionately.

He said the total number of relationships grows in geometrical ratio, every time anew subordinates is added.

FORMULA

R = Nx [2n-1+(n-1)

Where N = Number of subordinates

R = Total relations.

1. When two subordinates R = 6

2. 4 Subordinates R = 44

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= 4 x ( 24-1+(4-1))

= 4 x [23+(3)}

= 4 x{8+3}

= 44

Span of supervision require following skills :Supervision requires attention.Supervision requires Emotional stability.Supervision requires time.Supervision requires ability of subordinates.Supervision requires nature of work.

USE OF GRAICUNAS FORMULAIt clearly shows complexity and difficulty of wider spans.1. It reminds manager of wisdom of striking to narrower spans.

Limitation1. Mathematical precision is debatable2. Direct group relation may be far – fetched.3. The main problem is not number of RL but their frequency and the volume

of stress and strain they generate.4. It does apply in cases of cross relations of a big enterprise.

Limited span of control ensures the following

1. Tighter control and closer supervision2. Ease of managing fewer.3. Availability of time to think and plan

On the other hand limited span of control has some shortcomings also as givenbelow

1. Additional costs having more manager2. Complexities in communication will arise3. Prevention of democratic participation

DECENTRALIZATION

It is the situation which exists as a result of systematic delegation of authoritythrough out the organization.

The term decentralization carries different meanings to different people.

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Decentralization is an extension of delegation.

Decentralization implies a systematic delegation of authority through out the wholeorganization.

WHY DECENTRALIZATION ?

Large companies having independent product or service lines may adopt a form ofdecentralization.

Under decentralization the whole organization is divided in to self-sufficientdivisions.

Having experienced many difficulties in the smooth running of such centralizesorganizations, decentralizations of authority has been suggested and largelyresorted to particularly to achieve the following purposes.

- Easing burden of chief executive.- Facilitating diversification,- Providing product of market emphasis.- Developing managers and- Improving motivation.

ADVANTAGES OF DECENTRALIZATION

- Decentralization leads to specialization.- Encourages decision making and assumption of authority and responsibility.- Decentralization makes the sub – ordinates to work with involvement- Facilitates diversification in large scale.- Promote the development of general managers.- Aids in adoption of fast changing Environment.

DISADVANTAGES OF DECENTRALIZATION

- Makes it more difficult to have a uniform policy.- Decentralization leads to problem in co – ordination.- May be limited to External forces.- Leads to increase in cost.- May some time leads to mis-use of power in high levels.- Leads to expenses in training a manager.- May be limited by the availability of qualified managers.

DELEGATION Vs DECENTRALIZATION

1. Delegation is the process while decentralization is the end result.2. Superior is responsible for delegation where as in decentralization

subordinates are responsible.3. Delegation is vital and decentralization is optional.

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DEPARTMENTATION

First task in designing an organization structure is the identification of activities andto group them properly. The process of grouping activities is commonly known asdepartmentation.

NEED AND IMPORTANCE OF DEPARTMENTATIN

The basic need for departmentation arises because of specialization of work and thelimitation on the number of subordinates controlled by a superior.

1. Advantages of specialization :

Thus if the managerial function is conceived as a set of activities facilitating the workof organization, these activities can be carried out more efficiently and effectivelythrough the division of work leading to a specialization of managerial function.

2. Fixation of responsibility

Departmentation helps in fixing the responsibility and consequently accountabilityfor the results.

3. Developed of managers

Departmentation helps in the development of managers.

4. Facility in Appraisal

Managerial performance can be measured when the area of activities can bespecified and standards in respect of these can fixed. Depertmentation provideshelps in both these areas.

5. Feeling of Autonomy :

Deprtmentation provides motivation by developing feeling of autonomy to the extentpossible. There are several bases of departmentation. The more commonly usedbases are function, produt, territory, process, customer, time etc. Some of thesebases are internal-operation – oriented like function, process, time while others likeproduct, territory and customer are output-oriented.

FUNCTIONAL DEPARTMENTATIONThe grouping of common or homogeneous activities to form an organization

unit is known as functional departmentation. Functional departmentation is the mostwidely used basis for organizing activities and is present almost in every large

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organization at some level.Functional departmentation is most commonly used because it offers certain

advantages which include advantages of specialization, ensuring performance ofactivities necessary for the achievement of organizational objectives, elimination ofun-necessary activities, easier control over functions, easier way for pinpointingtraining need of the managers and maintaining the relative importance of functionsin the organization.

PRODUCT WISE DEPARTMENTATIONProduct departmentation involves the grouping together of all actibities

necessary to manufacture a product or product line. Product departmentation ispreferred for product expansion and diversification when manufacturing andmarketing characteristics of each product are of primary concern. Productdepartmentation offers several advantages places attention to product lines, reducesproblems of coordination for different products, provides opportunities for furtherdiversification and expansion of organization and provides product specializationnecessary for managers specially when each product is different from other.

TERRITORY – WISE DEPARTMENTATIONTerritorial or geographical departmentation is specially useful to large-sized

organizations having activities which are physically or geographically spread such asbanking, insurance, transportation etc., Territorial departmentatin provides certainefficiency in operation. Local factors such as customers, culture, styles, preferencesetc., always affect organizational functioning.

PRODUCTION PROCESSES – WISE DEPARTMENTATIONIn process departmentation, processes involved in production or various

types of equipments used are taken as basis for departmentation. When theproduction activities involve the use of several distinctive processes, these can beused as the base for grouping of activities. Such activities may be textiles, oilproduction etc., The process are set in such a way that a series of operations isfeasible making operations economic. It provides advantages of specializationrequired at each level of total processes, maintenance of plant can be done in betterway, and manpower can be utilized effectively.

CUSTOMER – WISE DEPARTMENTATION

Customer based departmentation is basically market – oriented in whichdepartments are created around the markets served or around marketing channels.The basic idea of this departmentation is to provide services to clearly identifiedgroups of customers. Each group of customers has different purchase behavior,payment schedule, demand pattern etc., Therefore they can be attracted to theorganization’s business by satisfying them by providing services, payment scheduledemand pattern etc.

CHOICE OF BASES FOR DEPARTMENTATION

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The selection of bases for departemntation involves a consideration of the relativeadvantages of each base for the organization. Ideally speaking, a suitable basis ofdepartmentation is one which facilitates the performance of organizational functionsefficiently and effectively so that its objective are achieved.

1. Specialization:

The basis of departmentation should reflect the specialization in performing thework.

2. Coordination:

Coordination involves that all the related activities are performed in a way that theirperformance is synchronized so that each activity contributes to others.

3. Economy

A balance should be maintained between the cost of creating a department and itscontribution. The existence of a department is desirable only when it contributesmore than its cost.

4. Focus on Result

Those activities which contribute to the achievement to these results should be givenproper attention.

5. Local Conditions :

Local requirements of the organization should also the taken into account whilecreating departments.

6. Human Considerations :

Departments should be created on the basis of availability of personnel, theiraspirations and value systems, informal work groups and attitudes of people towardsvarious forms of organization structure.

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Lesson – 4Direction

Direction is instructing the subordinates to follow a certain process to attain a giveobjectives. It is getting the work done through instructions and orders. It is thefunction of diversion in the management process to get the work from thesubordinates by means of guiding, motivation, communication, supervising, leadingand if need be commanding.

It is sum of total of managerial efforts that is applied for guiding and inspiring theworking teams to make better accomplishments in the organization.

It is the heart and soul of management.

PROCESS OF DIRECTION1. Defining the objectives.2. Organizing the efforts.3. Measuring the work.4. Developing the people.

Ever manager in the organization gives direction to his subordinates as superior andreceives direction s subordinate from his superior.

Direction may be defined as the function of management which is related withinstructing, guiding and inspiring human factor in the organization to achieveorganization objective. The direction is not merely issuing orders and instructions bya superior to his subordinates, but is includes the process of guiding and inspiringthem. The analysis of definition reveals that direction function consist of threeelements.

- Motivation- Leadership- Communication

Direction has the following characteristics- Direction is an important managerial function. Through direction managementcan initiates actions in the organization.

- Direction function is performed at every level of management.- Direction is a continuous process and it continuous through out the life of theorganization.- Direction initiates at the top level in the organization follows and bottomthrough there hierarchy. It emphasizes that a subordinates is to be directed by hisown superior only.

IMPORTANCE OF DIRECTIONThe importance of direction function in the organization can be presented as follows.

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- Direction initiates action.- Direction integrates employees efforts.- Direction attempts to get maximum out of individuals.- Direction facilitates charges in the organization.- Direction provides stability and balance in the organization.

PRINCIPLES OF DIRECTION

Direction is one of the most complex function of the management as it ideals withpeople whose nature itself is quite complex and unpredictable.

1. Principles of relating to the purpose of directing

a. Principles of maximum individual contribution.b. Principle of harmony of objectives.c. Principle of efficiency of direction.

2. Principle relating to direction process:

a. Principle of unity of command.b. Principle of appropriateness of direction technique.c. Principle of managerial communication.d. Principle of comprehension.e. Principle of use of informal organization.f. Principle of leadership.g. Principle of follow through.

Thus one of the basics functions of management is direction. Direction means theuse of leadership and motivation to guide the performance of subordinates towardsthe achievement of the organization’s goals. Important requirements for effectivedirection are : Harmony of objectives, Unity of command, direct supervision, efficientcommunication and follow-up.

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LESSON – 5MOTIVATION

Motivation is an art of stimulating someone or oneself or oneself to get designedcourse of action, to push the right button to get desire action. Motivation is an act ofinducement.

Motivation Results Satisfaction

M = is a drive t satisfy a wantS = is experienced when the outcome has been achieved.

The basic principle of motivation is based upon the following policy i.e., carrot orstick policy.“Put a carrot in front of donkey to make it move or Jab his with a stick being.”

NATURE OF MOTIVATION- It is a psychological concept- It is total not piecemeal.- Determined by human needs.- May be financial or non financial.- Constant process

NEED FOR MOTIVATION* Maximum utilization of factors of production.* Reduce labour turnover.* Easy availability of right personnel.* Increased the efficiency and output.* Create sense of belonging.

KINDS OF MOTIVATION1. Positive motivation2. Negative motivation3. Financial motivation4. Non-financial motivation

THEORIES OF MOTIVATIONManagement experts have formulated different theories on motivation at differentdimensions. They are :

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1. Maslow’s theory of motivation.2. Herzberg’s theory3. Mcgegor’s theory4. Vrooms theory.

Need hierarchy theory: Abraham Maslow’s book on motivation and personalityemphasizes multiplicity of human needs are arranged in an order.

* Physiological needs* Safety needs* Social needs* Esteem needs* Self actualization.

The first two sets of needs are called Lower order needs (1,2)The other sets of needs are called Higher order needs (3,4)

According to him when one needs fulfils another need will emerge automatically.While going for achieving the particular need, people like to give priority to thepressing needs first and the rest in next.

Short – coming of Maslow’s theory are:

- Order cannot be regarded as rigid.- No indication regarding satisfaction of needs.- It may not have universal applicatibility.- Motivation is piecemeal exercise by means of splitting of human needs.

HERZBERGS’ THEORYAccording to Herzberg, factors that give real satisfaction to an individual aremotiators. He classified the factors in to two viz,

Factors that prevent dissatisfaction - Hygiene factors.

Factors that give satisfaction - Motivators (feeling of achievement,significance of growth)

Maintenance factors Motivators1. Fair co policy and administration Opportunity to

accomplish somethingsignificant.

2. Supervisor knows the work Recongnition.3. Supervisors relationship Chance for

development4. Peers relationship Opportunity to grow5. Fair salary Chance for increased

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responsibility6. Job security The job inself7. Subordinates relationship8. Personal life9. Status10. Good working condition

Needs priority, to a great extent, characterizes the types of behavior. It will be eitherdirected towards achieving certain desirable positive goals, or conversely, towardsavoiding other undesirable negative consequences. Thus, a question may arise as towhat variables are perceived to be desirable goals to achieve and converselyundesirable conditions to avoid. In this connection a research study was conductedby Frederick. Herzbergls of Case-Western reserve University and associates. Thisstudy consisted of an intensive analysis of the experiences and feeling of 200Engineers and accountants in 9 different companies in Pittsbrug area, U.S.A. Duringthe structured interview. They were agreed to desirable a few previous jobexperience in which they felt exceptionally good or exceptionally bad about jobs.They were also agreed to rate the degree to which their feelings were influenced forbetter or worse by each experience which they described.

In concluding the information from the interview, Herzberg concluded that therewere two categories of needs essentially independent of each other affectingbehavior indifferent ways. His findings are that there are some job conditions whichoperate primarily to dis-satisfy employees when the conditions are absent, theirpresence does not motivate them in a strong way. Another set of job conditionsoperates primarily to build strong motivation and high job satisfaction, but theirabsence carely proves strongly dissatisfying. The first 80 job conditions has refusedto as maintain or hygiene factors and second set job conditions as motivationalfactors.

HYGIENE FACTORSAccording to Herzberg there are 10 maintenance or hygiene factors. They

are company policy and Administration technical supervision, inter-personalrelationship with supervisors with peers, with subordinates, salary, job security,personal life, working conditions and status. These are not intrinsic part of job butthey are related to conditions under which a job is performed. They produce nogrowth in a worker’s output; they only prevent prevent losses in workersperformance due to work restrictions. These maintenance factors are necessary tomaintain a reasonable level to satisfaction employees; however any cut below thislevel will dis-satisfactory them. As such these are also called dis-satisfiers since anyincrease to these factors will not affect employee’s level of satisfaction. Hence, theseare in no way motivation them.

MOTIVATIONAL FACTORSThese factors are capable of having a positive effort on job satisfaction

often resulting in an increasing one’s total output. Herzberg includes 6 factors thatmotivate employees. These are achievement, recognition, advancement work itself,possibility of growth and responsibility. Most of these factors are related with job

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contents. An increase in these factors will satisfy the employees; however, anydecrease will not affect their level of satisfaction. Since, thee increase level ofsatisfaction in the employees can be used in motivating them for higher output.Herzgerg maintains that potency to various factors is not entirely a function tofactors themselves. It is also influenced by the personality characteristics to theindividuals. From this point of view, individuals may be classified into two parts.Motivation seekers, maintenance seekers. The motivation seekers generally areindividuals who are primarily motivated by the satisfier’s such as advancement,achievement and other factors associated with work itself. On the other-hand, themaintenance seekers tend to be more concerned with factors surrounding the jobsuch as supervision; working conditions, pay etc.

The shortcomings of Herzberg’s theory are:1. Infact job satisfaction and dis-satisfaction are two opposite points on a

single continuum Individuals on the job are affected by any change either inthe job environment or in the job content.

2. Herzberg model is method bound and a number of other methods used forsimilar study have shown different results not supporting his contentionsother the theory has limitation is general acceptability.

3. This theory does not attach much importance to pay, status, orinter-personal relationships which are help generally as important contentsof satisfaction.

Comparison of maslows and herzberg theory

MASLOW’S NEED THEORY HERZBERG THEORY

1. Self actualizationMOTIVATOR

Challenging work, achievement,growth in the job.

2. Esteem or status Responsibility, Advancement and

recognition

3. Social needsMAINTE

FAC

Status, Interpersonal, workingconditions.

5. Physiological needs Job security, salary

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NANCE

ULTY

MC GREGORE’S THEORYProf. Douglas Mc. Gregore has introduced a fresh dimension in the discussion ontheories relating to motivation. He has classified the prevalent theories into twogroups viz.,

1. Traditional or X theory and2. Modern or y theory.

Traditional or X theory.It completely excludes workers from the process of managerial decision making

the theory stress that would here only when forced to do so through ruthlessexercise of managerial authority over them through constant rebuking scoldingreprimanding. Decisions whether right or wrong have to be made by managers only,the only rule assigned to workers being to mainly incline the decision.

Assumptions of X theory1. Lack of inclination to work.2. Fear can alone force action.3. Inbuilt dislike for responsibility4. Living – off others.5. Obession with security.6. Money alone can make the people to work.7. Labour is only a factor of production.8. Authority is synonymous with control.

Modern theory or Y theoryIt is the exact opposite of x theory, it gives workers a pride of place in the processof management. It emphasis fuel and active cooperation, between workers andmanagement to accomplish the enterprise objectives as per theory if workers areproperly maturated, they would willingly accept responsibility and show the sense ofcreativity and imagination in their work performance. It can be said to be positiveand optimistic outlook.

Assumptions of Y theory1. Work is reward in itself2. Inherent sense of responsibility3. Recongnition.4. Sense of security.5. Financial reward is not the only inspiration.6. Decision – making ability is not the monopoly7. Democratically inclined

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GROUP DYNAMICSEssentially dynamics is a branch of physics which means any matter in

motion. It also means a moral force that produce activity or change. Group dynamicsmeans the action of a group engaged in a common endeavor. The world dynamicscomes from the Greek work meaning force. The phrase Group Dynamics thus meansa study of cohesive and disruptive force operating within a group.

The importance of group dynamic to a manager lies in the fact that manypeople tent to behave differently as individual and member of a group. The managermust thus study them both as individual and as group, as these are two interrelatedelements of a motivational situation. The group dynamic will be structured aroundthe three key element such as basic element of group behaviour, group cohesivenessand the group structure.

The three basic elements which generally of use in understanding thebehavior of a group are activities, interactions and sentiments. Group cohesivenessrefers to the degree to which its members are attracted to the group, are motivatedto remain in the group, and mutually influence on another. Highly cohesive groupsare more likely to conform to group pressures than are members of low-cohesivegroups. Group structure if meant that the nature and characteristics of theinterrelationships among the members of a group and the roles they play in it.

THE EXPECTANCY THEORY OF MOTIVATION – VICTOR H. VROOMPeople will be motivated to do things to reach a goal if they believe in the

worth of that goal and if they can see that what they do will help them in achieve it.Vroom makes the point that motivate is a product of the anticipated worth

that an individual places on a goal and the chances the or she sees of achieving thatgoal. He states that:

FORCE = VALENCE * EXPECTANCY

Force = Strength of the person motivation.Valence = Strength of an individual preference for an outcome.Expectancy = Probability that a particular action will lead to a desired

outcomes.

Basic concepts of the theory are :1. First and second level outcomes.2. Instrumentality3. Expectancy4. Motivation.

Motivation is the multiplicative function of the valence for each first level outcome (Vi)and the believed expectancy (E) that a given effort will be followed by a particularfirst level outcome.

Merits of Vrooms Theory are:

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1. It recognizes the importance of various individual needs and motivations.2. It fits the concept of harmony of objectives3. It is completely consistent with the system of management by objectives.

Demerits of Vrooms Theory are1. Perception of value vary among individuals at different times and in various

places.2. Difficulty to apply the practice.

THE PORTER AND LAWLER MODELLyman W Porter and Edward Lawler III derived a substantially more complete modelof motivation.

The strength of motivation and energy exected = value of reward + amount ofenergy required + probability of receiving reward.

Motivation is an extremely significant subject for managers get work done throughothers. Important characteristics of motivation are individual differ in theirmotivation, individuals are unaware of motivation sometimes, motivation maychange and vary, motivation is a complex one. Maslow, Herzberg, Mc Gregore, VRoom and Porter and Lawler are some the important writers on motivation.

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LESSON – 6COMMUNICATION

The word communication originates from the latin word “communis” denotingcommon. It involves imparting a common idea or understanding and covers any typeof behavior resulting in an exchange of facts, ideas, opinions, or emotions by two ormore persons.

Management tasks of planning, directing, coordinating and motivation can be carriedout by the process of receiving issuing recording and interpreting.

The information of facts and figures related to the varied aspects of businessactivities necessarily implies transmission of information intended to convey the ideaof what is desired or required to be done. This would necessitate determination ofinformation to link all the leavels and enable the concerned officers and operative toact upon such information. This process of transmitting information as betweendifferent levels of authority and among the officers at the same level is calledcommunication.

- Louise Allen

CHARACTERISTICS OF COMMUNICATION1. Giving information on matters regarding things done or to be done.2. Receiving information on matters of actins expedited or yet to be expedted3. Creating under standing in others about their responsibility and position

and prospects of a situation concerning then.4. Making others listen attentively to the facts, figures, views, opinions under

transmissions.5. Identifying the common intentions and interest by interaction of views

through channels of commutations.

IMPORTANCE OF COMMUNICATIONSCommunication is described as one of the crucial fouls of management. It helpsin handling the major managerial tasks of planning direction coordinationmotivating and controlling. It enables the top management.

To formulate the comprehensive plans and policies on scientific basis.

To put the policies and decisions into action results in accurate and efficientperformance.

Helps the management to remain informed to the problems difficulties,grievances of personnel. They arise mainly due to communication gap.

It is essential for coordination which is the essence of management. It bringsabout mutual understanding between the officers and personnels at all levels andfosters the sprit of cooperation.

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It helps in securing largest possible participation or consumption indecisionmaking, planning and general administration. This will give democratic characterto managerial process and strengthen the moral of the staff.

ELEMENTS OF COMMUNICATIONCommunicator or sender or issuer.Communicate or rece4iver or addresseeMessage – orders reportsCommunication channel.Response – reply reaction.

ESSENTIALS OR PRINCIPLES OF GOOD COMMUNICATION1. Principle of clarity - It must give clear message n simple words

and easily understandable form.

2. Principle of attention -3. Principle of adequacy - It should be consistent with plans,

policies program and objective of theenterprise.

4. Principle of adequacy - It must be a complete one.5. Principle of time - It should be give at proper time.6. Principle of integration - It should ensure cooperation at all levels.7. Principle of informality8. Principle of feed back- Communication must be a two way traffic

message polices, programs, direction,opinions etc are communicated

downwardGrievances, complaints and suggestions etc arecommunicated upward.

TYPES OF COMMUNICATIONOn the basis of nature of passing information

- Formal communication- Informal communication

On the basis of direction i.e. flow of message :On the basis of mode of operation

- Oral communication- Written communication- Gesture communication

Each business house is concerned with two types of communication, external andinternal.

Externally, it has to communicate with the other business houses, banks,government officers. The press the customers and the general public Internal

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communication consists in transmitting information with in the organization.Here we discuss about internal communication.

Internal communication may again the be f two types.1. Formal or official2. Informal

Formal communication flows along prescribed channel which all members desires ofcommunicating with one another are obliged to follow. Formally a clerk in any of thesections cannot directly communicate with the managing director.

He must talk to his supervisor who wil pass on the passage to departmentalmanagers, from where it will go to the managing director. Formal communicationmay more vertically or horizontally.

Vertical communication can flow downward or upward. Horizontal communicationflows between employees of equal or comparable status. When a number of peopleirrespective of status sit down and confer with another to arrive at a decisionacceptable to all. It is called consensus. The format for this communication ispredetermined and cannot be altered.

In addition to this formal channels of communication, there exists in everyorganization an informal channel, often called a grape vine, that does not arise outof the organizational needs but that is never the less, an integral part of hiscommunication system.

DOWNWARD COMMUNICATIONAs explained earlier communication flows from a superior to a subordinate.

The managing director communicating with the departmental heads. A managergiving a directive an assistant manager or supervisor, a foreman instructing a worker.Orders, individual instructions policies, a statement job sheets, circular etc fall underdownward communication. It is eminently suited to an organization in which the lineof authority runs distinctly downwards with each tank clearly below another t whichit is directly related.

Main objectives of downward communication

1. To give specific direction about the job being entrusted to a subordinate.The decision fallen at managerial levels are transmitted to states in theform of directives so an action may be initiated.

2. To explain the policies and organizational procedures.

A clear understanding of policies given the lower state. A wider perspective sothat they can grasp and relay their role more meaningfully.

3. To appraise the subordinates of their performance:

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If the performance of the subordinates is objectively assessed and the assessmentcommunicated to him in a considerate tone, it will definitely promote efficiency.Appreciation to good work will raise his morale and strengthen his dedicationpointing out has shortcomings will enable him to over come them.

4. To give information about the rational of the job.

i.e. To explain to a subordinate the significance of the job assigned to him and whyhe has been entrusted with it. The importance of the objective of downwardcommunication has only been recently recognized.

MEDIA FOR DOWNWARD COMMUNICATIONDownward communication may be both oral and written. Important directives toinitiate action may be communicated through letters policies and procedures may beannounced house organs, manuals, bulletins etc, But the downward follow ofcommunication is dominated by oral means.It is more natural to the foreman to issue oral instructions to his workers.

LIMITATION OF DOWNWARD COMMUNICATION1. Under – Communication and over communication

Downward communication is often made by either under – communication or overcommunication i.e. a superior may either talk to little or too much about a job undercommunication may also involved incomplete instructions, which will inevitably leadto unsatisfactory performance over communication or talking too much, on the otherhand may lead to the leakage of confidential information.

2. Delay :

The lines of communication in downward communication being very longtransmitting information to the lowest worker in time – consuming process. By thetime information reaches him it may have lost much of as significance, or it mayhave caused damaging delay.

3. Loss of information :

Unless the communication is fully written, it is not likely to be transmitteddownwards in its entirely. A part of it is almost contains to be lost.

4. Distortion

In long lines of communication, information is not only distorted. Exaggeratingmaking under statements giving unconscious taints to facts are a part of humannature.

5. Built – in resistance

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Downward communication causes of too much authority flow. The subordinates donot get any opportunity of participating in the decision making process they areexpected to receive policy decisions and directive without questioning theirappropriateness, utility or validity which they resent.

ESSENTIALS OF EFFECTIVENESS DOWNWARDS COMMUNICATION.1. Managers should keep themselves well informed of the objectives and

achievements of their organization. It they are themselves in possession ofadequate information, they will be also to transmit information to theirre-subordinated in an effective manner.

2. Managers must work according to communication plan. They must decidebefore how much information is to be communicated and at what time.

3. There should not be over communication of authority at the highest level. Ifan organization is so structured that orders and instructions can originateat various levels, the lines of communication will be shortened.

4. The information must be passed on to correct persons inherently.

UPWARD COMMUNICATIONIf the managers have transmit information down the lines of authority they have alsoto receive information continuously emanation from levels below them thecommunication channel which pushes the flow of information upwards is known asthe upward channels of communications. Managers have only recently come to therecognize the importance of upward communication.

IMPORTANCE OF UPWARD COMMUNICATION1. Providing feed back

This communication provides the management with necessary feed back. Themanagement is able to ascertain whether the directive issued the lower statuses havebeen properly understood and followed it also gets the valuable information on whatthe employees think of the organization and its policies.

2. Out let for the sent-up emotions:

Upward communication is the employee and opportunity to sent their problems andgrievances. Although the management often these things and it knows and realizesthe grievances of the employees, The later hardly feel convinced and satisfied.

3. Constructive suggestions

Often employees often constructive suggestion to promote the welfare of theorganization. Some of these suggestion when implemented definitely provebeneficial. They develop source of participation in the decision making process.

4. Easier introduction of new schemes

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Since the employees feels themselves to be party to the decision making process, ithelps the organization to introduce new schemes without unduly antagonizing theemployees.

5. Greater harmony and cohesion :

It art as a kind of lubricant. It makes the atmosphere more congenial are createsgreat harmony and cohesion between the management and the employees.

METHODS OF UPWARD COMMUNICATIONSome of the more commonly used methods of upward communication are discussedbelow.

1. Open door policy:

The employees are given a feeling that the managers doors are always open to them,whenever the like they can walk in to his room, without any hesitation what so whereand talk to him about their problems.

2. Complaints and suggestions boxes:

In some convenient places n the offer or the factory complaints and suggestionsboxes are installed. The employees are encouraged to drop their complaints orsuggestion if any, in to these boxes. These boxes are opened at regular intervalsand the inform gathered scrutinized.

3. Social gatherings:

Social gathering are frequently arranged in different departments. These gatheringsoffer a very informal atmosphere in which ate employees shed the inhibitions andfeel free to talk about their problems.

4. Direct correspondence:

Some times the manager may directly write to an employees and ask him tocommunicate with him.

5. Reports:

Employees may be required to submit repatriates about the progress of their work aregular intervals.

6. Counseling

In some organization workers are encouraged to seek the counsel of their superiorson their personal problems. As they feel encouraged to talk about themselves freely,they provide the managers with valuable information.

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LIMITATIONS OF UPWARD COMMUNICATIONThe shortcomings of the upward communication are:1. Employees are usually reluctant to initiative upward communication. The

managers might keep their doors open, but they cannot force theemployees to walk in to their problem.

2. Employees often feel that if they communicate their problems to theirsuperiors, it may adversely reflect on their own efficiency.

3. Upward communication is more prone to distortion them downwardcommunication. In downward communicate distortion is often unconscious.But upward communication is deliberately distorted.

4. Sometimes in the process of upward communication, workers become tobold, ignore their immediate superiors and directly approaches the topmost authorities with their suggestions or complaints.

ESSENTIALS OF EFFECTIVE UPWARD COMMUNICATION1. In order to enable the workers to over come the awe of authority, the

managers should keep on encouraging them to come out of their shell andcommunicate freely.

2. Distortion by editing can be avoided if the lines of communication are keptas shortest possible.

3. All communicate should be properly analyzed genuine grievances deserveto be immediately resolved.

HORIZONTAL COMMUNICATIONCommunication between departments or people on the same level in the managerialhierarchy of an organization may be termed as horizontal or lateral communication.It is the most frequently used channels of communication. Workers communicatingwith one another, &&&&&&& exchanging information with one another, supervisorsholding a coffee break section s to discuss some organization are all engage inhorizontal communication.

Diagrammatical representation of horizontal communication

Production

Purchase

Accounts Sales Public relations

Administration

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IMPORTANCE OF HORIZONTAL COMMUNICATIONHorizontal communication is extremely important for promoting

understanding and coordinating among various departments. Not much imaginationis needed to visualize he embracing situations that the lack of co-ordination mightcreate for the organization. The purchasing department might keep on purchasingmaterial which is neither immediately needed nor can be adequately stored. Thestores may report shortage of material when production is fully given up. Scarcity ofraw material may cause the production to slow down but the sales department maycontinue booking orders free flow of horizontal communication among variousdepartments can easily avert the incidents of such situations.

In a small organization these functions are concentrated the same personor in the few person who are stationed in close proximity to one another. They donot face any communication problem for the moment problem crops up, it isthronged out through mutual consultation. But in large organization with complexroutines, a deliberate effort has to be made to maintain a free of horizontalcommunication.

Some managers discourage horizontal communication feeling thatworkers may get friendly with one another and may tops and insist on theirunqualified acceptance.

METHODS OF HORIZONTAL COMMUNICATIONHorizontal communication is most effectively carried on through oral means.

Face to face exchanges of views or a brief conversation over the telephone in veryconvenient for horizontal communication. Formal channels tend to move managersstatus conscious so that they express their view in extremely measured items. Thisincludes the free flow of communication takes place allow freedom of expressionthere is immediate feed back and all doubts and misunderstanding are sorted out.

GRAPEVINESo for we have been discussing the formal channels of communication

which follow certain definite predetermined directions apart from them, theyoperates in every organization an informal channel of communication called thegrapevine. It follows no set lines, nor any definite rules, but spreads like thegrapevine, in any direction any where and spared fast.

It is quite natural for to group of people working together to be entrustedin one another and talk about appointments promotions retrenchments or evendomestic affairs like the estranged relation of an employee with his wife or theromantic involvements of another. Information on most of these matters is supposedto be secret. But some people drive great pleasure from gathering such “secret”information ad transmitting it to others. They are the leaders who control thegrapevine. When one of them come across any peace of information interestingenough to be transmitted to the grape vine in a very mysterious manner he whispersit to another exhorting him to keep the information secret.

Keith davis rightly pointed out that the grapevine is more a product of the situationthen it is of the person. The grapevine is basically a channel of horizontalcommunication, for it is only people working at the same level of hierarchy who caninformally communicate with one another with prefect case. Thus the workers may

BSPATIL 53

have one grapevine and the first line supervisors another. But the fact is that thegrapevine does not follow any set pattern and it can be effective horizontal, vertically,and even diagonally.

HOW THE GRAPEVINES OPERATESProfessor Keith davis who has done some research in the nature of grapevine or

the informal channel of communication classifies in the four basic types:

Single strand, Gossi, Probability and Cluster.

The single strand chain involves the passing of information through a long line ofpersons to the ultimate recipient. A tells B who tells C who tells D and son on, till theinformation has reached most of the persons concerned. In the gossip chain, Aactively seeks and tells every one. This chain is just like the wheel where A is at thecentre and the information passes along the spokes of the wheel to others stationedon the rim. The probability chain is a random process in which a transmits theinformation to others in accordance with the law of probability and them theseothers tell still others in a ultra manner. This chain may also be called random. In thecluster chain, A feels selected persons who may in turn relay the informationcommunication follows this chain.A model if different forms of grapevines are depicted in the chart.

IMPORTANCE OF THE GRAPEVINE1. Safety value:

Apprehension experienced by workers on matters like promotion and retrenchmentsbecome an obsertion with them. Talking about them may not alleviate their fears,but it certainly provides them emotional relief. Since the grapevine does not followany formal channel, nobody can held accumulate for any thing he has said.

TYPES OF INFORMAL CHANNELS OF COMMUNICATION

A

B

C

DE

F

G

HI

A

E

D

CB

L

K

J

GF HGOSSIP

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While relaying the information to another fellow, a person is quit free to give itany twists he likes. This twists helps him to express his personal emotions. Thusthe grapevine act as a kind of safety value for the dent up emotions of thesubordinates.

2. Organizational solidarity and cohesion :

The existence of grapevine provides that the workers are interest in theassociates. The very facts that they talk among themselves helps to promoteorganizational solidarity and cohesion. Properly used grapevine may even raisethe morale of theworkers.

3. Supplement to other channels :

All information cannot be transmitted to the employees through he official channels.If there is some useful information and suitable for being transmitted throughofficials channels. It can be transmitted through the grapevine. Thus the grapevinesupplements others channel of communication.

4. Twice Transmission :

The speed with which information is transmitted through the grapevine is justremarkable.

5. Feed Back:

The grapevine provide feed back to the management. It enable them to know whatthe subordinates think about the organization and its various activates

Demerits of grapevine:1. Distortion : One of the major drawbacks of the grapevine is that it may

speed baseless or distorted news which may sometimes prove harmful evento the employees.

2. Incomplete information: The grapevine information is usually incomplete.So here is lively likelihood of its being misunderstood or misinterpreted.

3. Damaging swiftness: The swiftness with which the grapevine transmitsinformation may even be damaging.

BARRIERS IN COMMUNICATIONTheir might be a number of such barriers impeding the flow of communication in theorganization. This may be classified as

(i) External(ii) Organizational,(iii) Personal factors.

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EXTERNAL BARRIERSBarriers to communication may be either external to the parties involved or theymight be internal to them.

1. Semantic barriers :

Semantic barriers are obstruction caused in the process of receiving orunderstanding of the message during the process of encoding and decoding ideasand words.

- Badly expressed message.- Faulty translations- Un-clarified Assumption.- Specialist’s language.

2. Emotional or psychological barriers

Emotional or psychological factors are the prime barriers in inter-personalcommunication. The meaning ascribed to a message depends upon the emotional orpsychological status of both the parties involved.

- Premature evaluation.- Inattention- Loss by transmission and poor retention.- Undue reliance on the return word.- Distrust of communicator.- Failure to communicate.

3. Organizational barriers :

An organization being a deliberate creations for the attainment of certain specifiedobjectives, day-to-day happening within it require being regulated in such a mannerthat they contribute to attain these objectives in the most efficient manner.

- Organizational policy- Organizational rules and regulations.- Status relationships.- Complexity in organization structure- Organizational facilities.

4. Personal barriers :

While the organizational factors discussed above are, no doubt important influencesoperating on communication, a host of factors internal to the two parties-sender andreceiver-to this process also exert important influences on its operation, scommunication is basically an inter – personal processes.

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METHODS OF OVERCOMING THE BARRIERSConsidering the importance of effective communication in the successful

functioning of business organizations, it is essential on the part of the managementto overcome these barriers.

1. It is imperative that organizational policy must be clear explicit andencouraging the communication flow so that people at all levels realize thefull significance of communication.

2. This policy should also specify the subject matter to be communicated.3. Though the communication through proper channel is essential for orderly

flow of information.4. Even person in the organization shares the responsibility of good

communication.5. Organization should have adequate facilities for promoting communication.6. Communication being an inter-personal process, the development of

inter-personal relationship based on mutual respects, trust and confidenceis essential for its promotion.

7. There should be continuous programme of evaluating the flow ofcommunication in different directions.

Thus communication may be defined as the process of passing information andunderstanding from one person to another. Communication provides employeesboth the skill to work and the will to work. It may be formal and informal. Whether itis formal or informal it must be done in a proper manner to serve the purpose.Ideation, encoding, transmission, receiving, decoding and acting are some ofimportant steps in communication process. Badly expressed messages, faultyorganization, distrust of the communicator, restricting communication, poorretention, different backgrounds are called as barriers to effective communication.

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Lesson – 7Leadership

Leadership is an abstract quality in a human being to induce his followers to dowhatever he is directed to do with the zeal and confidence.

Leadership is generally defined simply as the art of influencing people so that theywill strive willingly towards the achievement of group goals.

KOONTZ & O’ DONNEL

IMPORTANCE OF LEADERSHIP1. Driving force group efforts.2. Aid to authority3. Better utilization of man power.4. Basis for co-operation.

INGREDIENTS OF LEADERSHIP- Ability to use power effectively and in a responsible manner.- Ability to comprehend the temperaments of human beings.- Ability to inspire.- Ability to act in a manner that will develop a climate conducive to and arousing

motivations.

LEADERSHIP QUALITIESI. Physical qualities

1. Sound health to fulfill his obligation.2. Vitality and endurance to face al hardships.3.

II. Psychological qualities.

1. Personal magnetism2. Enthusiasm.3. Co-operation.4. Exerting5. Resourcefulness.6. Ability to inspire and integrate.7. Tact and skillful handling.

III. Intellectual traits1. High degree of intelligence.2. Sound judgment.3. Capacity to deal with every situation.4. Scientific approach.5. Open mind.

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6. Best teacher.

IV. Qualities of character1. Integrity2. Self discipline3. Good natured4. Willingness to work hard.5. Willingness to accept and share responsibilities.

APPROACHES TO STUDY OF LEADERSHIP :A. Personal Trait ApproachThis approach says that all of us are possessing certain abilities and shareresponsibilities. Such qualities are considered as god given and hence leaders areborn.

B. Situational / Contingency approach : (Fielder’s model) :

This is viewing that leadership qualities are determined by the situation in whichhe/she operates. It is not individuals characteristics.

C. Group approach :

A leader is one who comes attuned to he feelings and actins of people whom he issupposed to lead. Thus, the leader is one who comes closest to living up to thenorms and standards of his group.

D. Path goal theory:

It suggests that the main functions of the leader is to clarify and set goals withsubordinates the them find the best path for achieving the goals and removeobstacles.

Leader behavior may be grouped into four :

1. Supportive leadership.2. Participative leadership.3. Instrumental leadership.4. Achievement oriented leadership.

TYPES OF LEADERSHIPFrom the point of view of authority, leadership can be autocratic and democratic orfree rein.

AUTOCRATIC LEADERSHIPThe leader alone determines policies and makes plans. He demands strict obedienceand relies on power.

BSPATIL 59

Merits:

1. It can increases the efficiency, save time and get good result.2. It works well employees who have a low tolerance for ambiguity feel insecure

with freedom.3. Chain of command, and division of work are clear and full understood by all.

Demerits :

1. One – way communication may create costly errors.2. Individual decision making may be dangerous in the changing

environment.3. Resentment in form of massive resistance, low morale and low

productivity.

DEMOCRATIC LEADERSHIPThe entire group is involved in and accepts responsibility for goal setting andachievement. Subordinates have considerable freedom of action.

Merits :

1. The leader has the built-in personal motivation working for him.2. The leader consistently receives the benefit of the best information, ideas,

suggestions and talents of his people.

This style permits and encourages people to develop grow and rise in theorganization.

Demerits :

1. Time consuming.2. Leaders may avoid responsibility.

Free rein leadership :

Leader exercises absolutely no control. He provides only information, materials andfacilities to hi men to enable them to accomplish group objectives. This type doesnot hold good when the leader does not know well the competence and integrity ofhis people and their ability to handle this kind of freedom

Spectrum of Leadership Styles :

Leader centered[Autocratic]

Participative[Democratic]

Employee centered[Laissez faire]

BSPATIL 60

1 2 3 4 5 6 7

This spectrum depicts that a leader can adopt number of ways to relate himself witha group. The left side of the spectrum emphasizes that his style is leader centered.Such leaders are more care about production than for the welfare of his subordinates.

The right side of the spectrum denotes that the leadership style employee centered.They care about more for the welfare of their subordinates than for production.

The centre of the spectrum finds a more equitable balance between the authorityexercised by the leader and the amount of participation the grotto exercise.

The different scales in the spectrum describe the following :

Point 1 : Leader makes decision and announces it.Point 2: Making the subordinate to accept the decision.Point 3: Leader presents his idea and initiate discussion.Point 4: Presents tentative decision subject to change.Point 5: Present the problem, gets opinion and makes decision.Point 6: Leader allows the group to make decision within limits.Point 7: Leader allows the group to make decision within limits defined the

situation.

MANAGERIAL GRIDIt is a form of continuum which emphasize that leadership style consist of

factors of both the task-oriented and people relations oriented behavior in variyingdegrees. It explains that whatever may be the type of leadership styles it ultimatelyrelates with tasks to e performed and people with whom it is to be performed. Somestyles emphasize on concern for production which means that the attitudes ofsuperiors towards a variety of things, such as, quality of policy decisions, proceduresand processes, creativeness of research, quality of staff service, work efficiency andvolume of output. On the other hand there are certain leadership styles whichemphasize on concern for people which means that degree of personal commitmenttowards goal achievement, maintaining the self-esteem of workers, responsibilitybased on trust, and satisfying inter-personal relations, Based on these two factorsleadership styles can be identified n to 5 types as given in the diagram.

Area of freedom permittedto subordinates

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1.9 9.9

9

8

7

6

5

4

3

2

1

1.1 9.1

1 2 3 4 5 6 7 8 9

Low Concern for Production High

This managerial grid concept has been developed by Blame and Mour The 5styles depicted by the diagram are :

1.1 Impoverished style where exertion of minimum effort is requireget work done and sustain organization morale.

1.9 Country club style where thoughtful attention to needs of people leads tofriendly and comfortable organization atmosphere and work tempo.

9.1 Task oriented style which says that efficiency results from arranging workin such a way that human elements have little effect.

9.9 Team model style which highlights that work accomplished is fromcommitted people with interdependence through a common stake inorganization purpose and with trust and respect.

5.5 Middle Road style rightly pointed out that adequate performancethrough balance of work requirements and maintaining satisfactorymorale.

Among the five different styles, the most desirable leader behaviour is 9.9. So effortshave to be taken by developing suitable training programs that attempts to changemanagers towards 9.9 leadership style. Managerial gird helps the managers to

5.5

BSPATIL 62

identify and classify managerial styles and it helps to understand why he gets thereaction that he does from his subordinates. However, the mid point of the grid i.e.5.5 is highly emphasized in the pure form of working conditions.

To summarize, leadership may be defined as the ability to influence and direct thetask-related activities of the members of group. A leader is a goal-setter, planner,executive, expert, group representative, administrator of rewards and punishmentsand a symbol of the group. There are three approaches to the study of leader shipsuch as. The trans approach, Behavioral approach and Contingency approach. In thatBehavioral approach has emphasized different leadership styles.

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LESSON – 8

CO-ORDINATION

It is the integration, synchronization or orderly pattern of group efforts in theenterprise towards the accomplishment of objectives. It may be defined as balancingand keeping the teams together by ensuring a suitable allocation of workingactivities to the various members and seeing that they are performed with dueharmony among the members themselves.

NEED FOR COORDINATION

Systematic sequence of operationFulfillment of activities as per planned schedulesAvoidance of interruptions in the operationsEliminating inconsistencies in objectives and policiesRemoval of conflicts among individualsDeveloping the team spirit and cooperation.

ADVANTAGES OF CO-OPERATION

1. Increases the efficiency, Increases in the productivity, economizing theactivities etc.

2. Improve the morale of the employees3. Develop and retain good personnel

TYPES OF CO-ORDINATION

1. Internal co-ordination. It is the establishment of relationship with a view tocoordinate the employees of all the departments. It may be vertical orhorizontal.

2. Eternal Co-ordination. It refers to establishment or relationship with a viewto coordinate the activity of those who are not part of the organization.

PRINCIPLES OF COORDINATION

1. Early beginning2. Direct contact3. Reciprocity4. Continuity

TECHNIQUES OF COORDINATION

“A manager in managing must coordinate the work for which he is accountable bybalancing, timing and integrating.

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Balancing - Support,Timing - Time scheduleIntegrating - Unification

PROBLEMS OF COORDINATION

- Complex organizational structure- Improper communication- Higher labour turnover- Lack of motivation and morale- Favoritism- Red-tapism- Improper leadership- Weak public relations

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LESSON – 9CONTROL SYSTEM AND PROCESS

CONTROLLINGControl is any process that guide activity towards some predetermined goals.

Thus control can be applied is n any field such as price control, distribution controlpollution control etc. Thus control process tries to find out deviations betweenplanned performance and actual performance and to suggest corrective actionwherever these are needed. For example terry has defined control as follows :

“controlling is determining what is being accomplish, that is evaluating theperformance and, if necessary, applying corrected measures so that the performancetakes place according to plan.

Control is checking event performance against pre-determined standards containedin the plans, with a view to ensuring adequate progress and satisfactory performance.

Controlling consists in verifying whether everything occurs inconformity with theplan adopted, the instructions issued and principles established. Its object is to pointbut weakness and errors in order to rectify them and prevent recurrence.

1. Control is forward looking2. Control is both executive process and from the point of view of the

organization of the system, a result3. Control is a continuous process.4. A control system is a coordinated – integrated system.

IMPORTANCE OF CONTROLThus control is an integrated action of an organization or manager. It offers

help in the following directions.

1. Adjustment in operations

A control system acts as an adjustment in organizational operations. Everyorganization has certain objectives to achieve which become the basis for control.

2. Policy verification

Various policies in the organization generate the need for control. For organizationalfunctioning, managers set certain policies and other planning elements which laterbecome the basis and reason for control.

3. Managerial responsibility

In every organization, managerial responsibility is created through assignment ofactivities to various individuals. This process starts at the top level and goes to thelower levels.

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4. Psychological pressure

Control process puts a psychological pressure on the individuals for the betterperformance. The performance of the individuals is evaluated in the light of targetsset for them.

5. Coordination in action

Control system area designed n such a way that they focus not only on the operatingresponsibility of a manager but also on his ultimate responsibility. This forces amanager to co-ordinate the activities of his subordinate in such a way that each ofthem contributes positively towards the objectives of the superior.

6. Organizational efficiency and effectiveness

Proper control ensures organizational efficient and effectiveness various factors ofcontrol, namely, making managers responsible, motivating them for higherperformance, and achieving coordination in their performance, control, ensures thattheir organization works efficiently.

STEPS IN CONTROLLINGThe various steps in control process which are necessary for its relationship toplanning. This steps may broadly be classified into four parts.

1. Establishment of control standards2. Measurement of performance3. Comparison between performance and standards and the communication

and4. Correction of deviations from standards

(1) Establishment of control standards

Every function in the organizations begins with plans which are goals, objectives ortargets to be achieved. In the light of these standards are established which arecriteria against which actual results are measured.

(2) Measurement of performance

The second major step in control process is the measurement of performance. Thestep involves measuring the performance in respect of a work in terms of controlstandards.

(3) Comparing Actual and Standard Performance

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The third major step in control process is the comparison of actual and standardperformance. It involves two steps

- finding out the extent of deviations and- identifying the causes of such deviations.

(4) Correction of deviations

This is the last step in the control process which requires that actins should be takento maintain the desired degree of control in the system or operation.

ESSENTIALS OF EFFECTIVE CONTROL SYSTEMControl is necessary in every organization to ensure that everything is going properly.Every manager, therefore, should have an effective and adequate control system toassist him in making sure that events conform to plans.

In this tailoring of control system, there are certain requirements which should bekept in mind.

1. Reflecting Organizational Needs ;

All control systems and techniques should reflect the jobs they are to perform.

2. Forward Looking :

Control should be forward looking. Though many of the controls are instance, theymust focus attention as to how future actions can be conformed with plans.

3. Promptness in Reporting Deviations

The success of a thermostat lies in the fact that it points the deviation promptly andtakes corrective actions immediately.

4. Pointing out Exceptions at Critical points :

Control should point exception at critical points and suggest whether action is to betaken for deviations or not.

5. Objectives :

The control should be objective, definite and determinable in a clear and positiveway.

6. Flexible

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Control system should be flexible so that it remains workable in the case of changedplans, unforeseen circumstances or failures.

7. Economical

Control should be economical and must be worth its costs. Economy is relative sincethe benefits vary with the importance of the activity, the size of the operation theexpense that might be incurred in the absence of control and the contribution thecontrol system can make.

8. SimpleControl system must be simple and understandable so that all managers can use iteffectively.

9. Motivating :Control system should motivate both controller and controlled

10. Reflecting Organizational Pattern:The control should reflect organizational pattern by focusing attention on positionsin organization structure through which deviations are corrected.

Feed back loop of management control

Desiredperformance

Implementationof corrections

Actualperformance

Programme ofcorrective

Measurementof performance

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action

Analysis ofcauses

Comparison ofPerformance

Identification of

deviations.

TECHNIQUES OF CONTROL

To control the activities in the organization, managers can use variety f tools andtechniques. They are broadly grouped under two heads.

1. Traditional techniques.2. Modern techniques.

Traditional techniques are those which have long been used by the managers. Someof the important techniques under this heads are budgetary control, financialstatement and ratio analysis, auditing, break-even analysis and report writing etc.

“Budgetary control is a process of comparing the actual results with thecorresponding budgeting data in order to approve accomplishments or to remedydifferences by either adjusting the budget estimates or correcting the cause of thedifference.”

- GEORGE R TERRY

The different budgets such as production budget, sales budget, overhead budget,labour budget etc. clearly indicate the limits for expenses and also the results to beachieved in a given period. It ensures effective co-ordination of the work of theentire organization. It promotes co-operation and team spirit among the employees

Standard Costing is one of the techniques of cost control and it is being increasinglyused by modern business concerns for the purpose of cost reduction and costcontrol. It involves a comparison of actual with the standards and the discrepancy iscalled variance.

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Break-even analysis is useful in planning and control because it emphasize themarginal cost and benefit concept. It helps to make profit estimation at the differentlevels of activity, ascertaining turnover for desire profit and estimating the impact ofthe variations of fixed and variable costs. It magnifies a set of relationships of fixedcosts, variable cost, price, level of output and sales mix to the profitability of theorganization.

Financial statement analysis such as Found Flow analysis, Cash Flow analysis andRatio analysis help to know the financial performance and financial position of thebusiness unit. The liquidity, profitability and solvency position of the business unitcan be ascertained and efforts can be taken to maintain these factors in an optimumproportion,

Auditing is the process of investigating financial and other operation of a businessestablishment. It may be carried out by internal and external members. It helps toscrutinizes the applicability and relevance of policy, procedure and method whichhave a tendency to become obsolete. This it helps in choosing a suitable workingprocedures and methods.

Adoption of reporting system helps to analyse a particular problem and to takenecessary corrective action over it. Reports may be prepared regarding taxation,legislation and its effect on profit, make or buy decisions, replacement f capitalequipment, social pricing analysis etc.

A manager can also exercise effective control over his subordinates by observingthem while they are engaging in work. Personal observation helps the managers notonly in knowing the workers attitude towards work but also n correcting their workand method, if necessary.

MODERN TECHNIQUESThese are of recent origin, which provide information not readily available withtraditional methods. These techniques help to give sharper focus and promiseincreasingly to improve the quality of control. Program Evaluation Review Technique(PERT) and Critical Path Method (CPM) are two major techniques coming under thishead.

PERT has been, developed by an U.S. Office in 1958 in connection with the PolarisWeapon System and is credited with reduction the completion time of the programby two years. CPM has been jointly developed by DUPoint and Remington Rand USAin order to facilitate the control of large, complex industrial projects. Thesetechniques are used to minimize total time, minimize to cost, minimize idleresources etc. It is helpful in solving problems of scheduling the activities of on-timeprojects. These tools re widely being used in construction industry, planning andlaunching a new projects, scheduling ship construction etc. It ensures improvedmanagement of resources by facilitating better decision making. It aims to havefuture oriented control mechanism for the organization.

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Management Information System provides needed information to each manager atthe right time, in right form which aids his understanding and stimulate his action.MIS is a refined form of traditional information collection and supply to theorganization points.

Management Audit is an evaluation of management as a whole. It examine the totalmanagerial process of planning, staffing, directing and controlling. To evaluate themanagement achievement, the organization plans, policies, procedures, organizationstructure, system of control personnel relation should be measure with its endresults.

1. Budgetary control - Financial performance2. Cost control - Cost performance3. Production control - PERT CPM

Production, performance, quality4. Inventory control - Stores function performance5. Profit & Loss

Control ROL control - Overall organizational objectiveperformance.

6. External audit control - Statutory performance7. Management self audit -

DIRECT CONTROL VERSUS PREVENTIVE CONTROL

DIRECT CONTROL:

1. Cause of negative Deviations from standards.Un certain, Lac of knowledge, experience or judgment

2. Questionable assumptions underlying direct control

Assumption that that performance can be measuredAssumption that personal responsibility existsAssumption that time expenditure if warrantedAssumption that mistake can be discovered in timeAssumption that the person responsible will take.

Corrective steps.

PREVENTIVE CONTROL

Assumption :

Qualified managers make a minimum of errors.Management fundamental can e used to measure performanceApplication of management fundamentals can be evaluated.

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Advantages :

1. Greater accuracy2. Encourage self control3. Lighten the managerial burden4. Impressive

Thus control is a very important process through which managers ensure that actualactivities confirm to planned activities. It is mainly used to measure progress, touncover deviations and to indicate corrective action.

MANAGEMENT BY OBJECTIVES

It is a process whereby the superior and subordinate managers of an enterprisejointly identify its common goals, define each individual’s major areas ofresponsibility in terms of the results expected of him and use these measures asguides for operating the unit and assessing the contribution of each of its members.

- GEORGE S. ODIORNE

MBO is comprehensive managerial system that integrates many key managerialactivities in a systematic manner and that is consciously directed toward the effectiveand efficient achievement of organizational and objective.

MBO PROCESS

Step – 1: Set down informally the goals of the enterprise.

Step – 2: Objective the goal so set out and define measures of performance.

Step – 3: The goals and sub-goals at all management levels must them be set out.

Step – 4 : Adjustment in the organization structure.

Step – 5: The goals to be set at all levels must be joint and agreed ones.

Step – 6: Continuous feedback from appraisal of internalGoals and the enterprise goal as it is set.

Step – 7: Appraisal of results proceed continuously against the goals at all levels.

Step – 8: Review of sub-results throws light on organization results.

BENEFITS OF MBO

1. Improvement of managing

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2. Clarification of organization.3. Encouragement of personal commitment4. Development of effective controls.

WEAKNESS OF MBO

1. Failure to teach the philosophy of MBO2. Failure to give guidelines to goal setters.3. Difficulty of setting goals4. Emphasis on short-term goals5. Danger of inflexibility6. Other dangers.

MANAGEMENT BY EXCEPTION (M.B.E.)

It is a system of identification and communication that signals the manager whenhis attention is needed: conversely, it remains silent when his attention is notrequired.

The primary purpose of such a system is to simplify the management process itself.

It permits the manager to find the problems that need his action and to avoiddealing with these the are better handled by his subordinates.

ELEMENTS OF MBE

The MBE system’s structure is constituted by the following elements

1. Measurement - by assigning values to performance2. Projection - towards business objective & expectations.3. Selection - follow progress towards its objectives4. Observation - to know current state of performance.5. Comparison - actual with expected and identify the

exceptions.6. Decision making - Prescribes the action that must be fallen in

order(i) Bring performance back into control(ii) Adjust expectations to reflect changing

conditions(iii) Exploit opportunity

It is also deeply rooted in the principles of the decision of labour, delegation orresponsibility and authority and span of control.

Merits

The practice of MBE in management yields benefit in the following way :

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1. It save personal time2. Concentrative executive effort3. Reduces distortions4. Facilitates broader management coverage5. Lessens frequency of decision making.6. Makes fuller use of knowledge of trends history and available business data.7. Fully utilizes highly paid people on high-return work.8. Identify crises and critical problems.9. Provides qualitative and quantitative yardsticks for judging situations and

people.10. Enables inexperienced managers to handle new assignments with a

minimum of related experience and training.11. Alerts management to opportunity as well as difficulties.12. Encourages more comprehensive knowledge of all phases of business

operations.13. Stimulates communication between different segments of an organization.

Demerits :

Peter Druker’s critically viewed MBE as follows :

1. It breeds organization man thinking2. It is often dependent upon unbelievable data.3. It rewires a comprehensive observing and reporting system.4. It tends to proliferate paper work5. It often assumes an un relational stability in business affairs.6. It gives false sense of security to management.7. Standard of comparison tend to become obsolete.8. Some critical business factors are difficult to measure9. It can’t be a substitute for thinking.

PRINCIPLES OF MBE

The make the MBE system effective the following principles may be followed.

1. Practice of Self-control2. Discard pre-conceived notions.3. Be guided by policy4. Learn to live with accountants.5. Delegate for result.6. Sharpen your observational power7. Use MBE to describe subordinates in different phases.8. Invite enough participation9. Expect some people to call you lazy10. Differentiate between “Big” and “Little” jobs11. Don’t be an “Over-the-Shoulder” supervisor12. Avoid the “organization – man” attitude

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13. Expect to work harder but to enjoy it more.

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MODEL QUESTION PAPER

Time : 3 Hours (Max : 100 Marks)

Part – A (5 X 8 = 40)Answer any 5 questions

1. Are Management and administration different? Explain.2. Explain the Characteristics of management as profession?3. What do you mean by planning premises and how it can be made effectively?4. What do you mean by Span of Management?5. Distinguish between “Delegation” and Decentralization”?6. Discuss the principles of effective directing?7. What is Group Dynamics?8. What is managerial Grid?

Part – B (4 X 15 = 60)

Answer ay 4 Questions

1. Discuss the significance of leadership as an integral part of management.Explain different leadership styles.

2. What do you mean by Management Control? Explain the Control process isan organization.

3. Define Communication and describe the important steps is acommunication process Explain the principal barriers to communication.

4. Discuss the merits and demerits of different types of organizationalstructure.

5. Explain the significance of different approaches of management inmanagement theory.

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PRINCIPLES OF MANAGEMENT

Time : Three hours Maximum : 100 Marks

Section A – (5 x 8 = 40 marks)

Answer any FIVE questions.All questions carry equal marks.

1. Explain the nature of management?2. Discuss in detail, the differences between formal organization

and informal organization.3. What do you mean by programmed and non-programmed

decisions?

4. What are the characteristics of organization?5. What are the techniques of direction?6. Explain the different levels of management?

7. What are the problems of co-ordination?8. What are the different types of planning

9. Explain the functions of management?10. Explain the significance of planning?11. What are the barriers to communication? How can one

overcome them?12. Explain Herzberg’s Motivation-Hygiene theory?13. Write in short the different steps in control process?

14. Explain the principles of direction?15. What are the different types of co-ordination and explain any

two of them in detail?

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PRINCIPLES OF MANAGEMENT

Time : Three hours Maximum : 100 Marks

Section A – (5 x 8 = 40 marks)Answer any FIVE questions.

All questions carry equal marks.

1. Define Management-State the importance of Management?

2. Explain different types of decision?3. What is planning? Explain in the nature of planning?4. Explain span of control?

5. Define Authority and Responsibility?6. What is meant by motivation? What are the non-monetary

factors of motivation?7. What are the qualities of good leadership?8. Explain the need for control?

SECTION B – (4 x 15 = 60 marks)Answer any FOUR questions.

All questions carry equal marks.

9. Explain the modern approaches of Management?10. Discuss the various steps to be followed in planning?

11. What are the barriers to effective communication? How toovercome the barriers to communication?

12. Explain Maslow’s theory of motivation?

13. Explain different theories of Leadership?14. Explain the principles of co-ordination and techniques to be

used for effective co-ordination?

15. What is control? What are its steps? What are the techniques ofcontrol?