UNIT I OVERVIEW OF MANAGEMENT Definition - Management - Role of managers - Evolution of Management thought Organization and the environmental factors

Trends and Challenges of Management in Global Scenario

Management - as how the mind controls the human body and its function similar management (mind) controls the various activities ( human body) in the Organisation - Collection of physical equipments, 4 M s in Organisation ! Men, Machine, Materials, Money, and leads to nothing" #or efficient and profitable functioning it is necessary that all these factors are put to wor$ in a co% ordinated manner" Management Definition Management is the art of getting things done through others" &arold 'oont( )ef as * Management is the process of designing and maintaining an environment in which individuals, wor$ing together in groups efficiently to accomplish selected aims+ Managers carry out their managerial function ,pplies to any $ind of Organisation ,pplies to managers at all Organisational levels ,im is to create a surplus Concerned with productivity, implies effectiveness and efficiency Mgt of 4 M s in the Orgn ! Men, Machine, Materials - money Characteristics of Management Mgt is .niversal Mgt is dynamic Mgt is a group of managers Mgt is /urposeful Mgt is goal oriented Mgt is integrative #unction Mgt is a 0ocial process Mgt is a Multi%faceted discipline Mgt is a continuous process Mgt is a system of authority Mgt is a resource Mgt is intangible
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 Mgt is profession, an art as well as a science ADMINISTRATION VS MANAGEMENT Basis of Administration Distinction Management

/olicy and )etermination of ob2ectives 3mplementation of /olicies ob2ectives - policies Main #unctions 4egislative - determination 56ecutive #unction function /lanning, Organising staffing )irecting, Motivating, Coordinating Controlling

/rovides a s$etch of the /rovides the entire body enterprise 3nfluence 3nfluenced mainly by public 3nfluenced mainly opinion - other outside force administrative function by

4evels of Mainly top level function Mainly middle level function Management involves thin$ing - planning involves doing and acting 4evel of Owners7 8oard of )irectors 56ecutives /osition 'nowledge ,cts as a principal M), 9M - Managers

,cts as an agency

:equires more admin ability :equires more technical than technical ability ability than admin ability
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Management as an Art <he main elements of an art are ! /ersonal 0$ills /ractical $now%how ,pplication of $nowledge :esult orientation Creativity Constant practice aimed at perfection Management is basica ! an art beca"se of the fo o#ing reasons ! , manager applies his $nowledge and s$ills to coordinate the efforts of his people Mgt see$s to achieve concrete practical results Mgt is creative" 3t brings out new situation and converts into output 5ffective Mgt lead to reali(ation of Organi(ational and other goals" Mastery in Mgt requires a sufficiently long period of e6perience in, managing" Management as Science <he essential elements of 0cience 0ystematised body of 'nowledge .nderlying principles and theories developed through continuous observation, inquiry, e6perimentation and research" .niversal truth and applicability" Organised body of $nowledge can be taught and learnt in class room and outside" Mgt is a social science" 3t contains all the essentials of science" 3t is an ine6act science" /5:<, C/M, Cost ,7C, #inance, M8O etc <hus, the theory (0cience) and practice (art) of Mgt go side by side for the efficient functioning of an organisation"

Management as a $rofession <he essential attribute of a profession , well%defined and organised body of $nowledge 4earning and 56perience 5ntry restricted by qualification :ecognised national body 5thical code of conduct )ominance of service motive Mgt is not a f" f edged %rofession no# d"e to the fo o#ing shortcomings 0$ills not fully developed =o uniform method of entry Ob2ective is monetary rather than service 5thical code is not strict ,ssociations are not statutory bodies 8ut in 3ndia it is developing into a profession and it will be achieved in due course" Manageria S&i s Conceptual s$ills &uman 0$ills <echnical 0$ills )esign 0$ills ! )ecision ma$ing

Need for Management 1" <o increase efficiency 1" <o crystalli(e the nature of Mgt 2ob ;" <o improve research in Mgt 4" <o attain social goals

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'e(e s of Management )* To% 'e(e Mgt + Board of Directors, MD, O#ners, Chief E-ec"ti(es <o analyse, evaluate and deal with th environmental forces <o establish overall long term goals and broad policies of the company including the master budget <o appoint departmental and other $ey e6ecutives <o represent the company to the outside world <o coordinate the activities and efforts of different department .* Midd e 'e(e Mgt + Sa es E-ec"ti(es, $rod"ction E-ec"ti(es, $rod"ction e-ec"ti(es etc* <o interpret and e6plain the policies framed by top management <o compile and issue detailed instruction regarding operations <o Cooperate among themselves so as to integrate various parts of the division or a department <o motivate supervisory personnel to wor$ for Orgn goals <o develop and train supervisory and operative personnel" /* S"%er(isor! 0 O%erating 0 'o#er 'e(e Mgt + S"%erintendents, Branch managers, Genera 1oremen <o plan day to day production within the goals lay down by higher authority <o assign 2obs to wor$ers and to ma$e arrangement for their training and development <o supervise and control wor$ers and to maintain personal contact with them"
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Ro es of a manager 2 Mint3berg4 1" Inter%ersona Ro e % 3nteracting with people inside and outside the Orgn 1ig"rehead ! as a symbolic head of an organisation, the manager performs routine duties of a legal nature 'eader ! &iring, <raining, motivating and guiding subordinates 'iason % 3nteracting with other managers outside the orgn to obtain favours and information 1" Informationa Ro e ! 0erving as a focal point for e6change of 3nformation Monitor ! 0ee$s and receive information concerning internal and e6ternal events so as to gain understanding of the Orgn and its environment" Disseminator ! <ransmits information to subordinates, peers and superiors within the Organisation S%o&es%erson ! 0pea$ing on behalf of the Orgn and transmitting information on Orgn plans, policies and actions to outsiders" ;" Decisiona Ro e ! Ma$es important decision Entre%rene"r ! 3nitiating changes or improvements in the activities of the Orgn Dist"rbance hand er% <a$ing charge and corrective action when Orgn faces une6pected crises Reso"rce a ocator ! )istributing Orgn s resources li$e money, time, equipment and labour Negotiator ! :epresenting the Orgn in bargaining and negotiations with outsiders and insiders Im%ortance of Management
Management is the dynamic life !giving element in every business" @ithout it the resources of production remain resources and never become production" 0ound Management provides the following benefits "

,chievement of group goals Optimum utili(ation of resources #ulfillment of social obligations 5conomic growth

 0tability &uman )evelopment Meets the challenge of change C assification of manageria 1"nctions 1"nctions /lanning S"b 1"nctions #orecasting, decision ma$ing, strategy formulation, policy ma$ing, programming, scheduling, budgeting, problem%solving, innovation, investigation and research" 9rouping of #unctions, )epartmentation, delegation, decentralisation, activity analysis, tas$ allocation Manpower planning, 2ob analysis, :ecruitment, 0election, <raining, /lacement, Compensation, /romotion, appraisal, etc" 0upervision, Motivation, communication, 4eadership, etc #i6ation of standard, recording, measurement, reporting corrective action"

Organising

0taffing

)irecting Controlling

E(o "tion of Management 1ather of Management + 5enr! 1a!o 2)67) + )8.94 &enry #ayol contributed 14 principles to Mgt which is widely applied in all the Orgn 1" )ivision of @or$ 1" ,uthority and :esponsibility ;" )iscipline 4" .nity of Command >" .nity of )irection
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?" 0ubordination of individual interest to general interest A" :emuneration of personnel B" Centralisation C" 0calar Chain 1D"Order 11"5quity 11"0tability of <enure of /ersonnel 1;"3nitiative 14"5sprit%de%corps Critica E(a "ation <oo formal =ot pay adequate attention to wor$ers Eagueness &is principle hinted but did not elaborate that mgt can and should be taught"

- )espite these limitations, #ayol made a unique and outstanding contribution to Mgt theory" Scientific Management 1ather of Scientific Management 1*:* Ta! or 2)69; +)8)94 *<he art of $nowing e6actly what you want men to do and see that they do it in the best and cheapest way"+ Mgt a 0cience based upon certain clearly defined principles $rinci% es of Scientific Management 0cience not rule of thumb &armony not discord Co%operation not individualism Ma6imum output in place of restricted output )evelopment of each individual to his greatest efficiency and prosperity

Mental :evolution ! @or$ers and Management, @or$men towards their wor$, their fellowmen and towards their employees" Mental attitude of the two parties" Techni<"es of Scientific Management 1" 1" ;" 4" >" ?" <ime 0tudy Motion 0tudy 0cientific tas$ /lanning 0tandardi(ation and simplification )ifferential piece rate system #unctional foremanship ! ,ccording to <aylor, one supervisor cannot be an e6pert in all aspects of wor$ supervision" 3n system of #unctional #oremanship in which eight supervisors supervise a wor$ers 2ob" i" :oute Cler$ ii" 3nstruction card cler$ iii" <ime and cost cler$ iv" 0hop disciplinarian v" 9ang boss vi" 0peed boss vii" :epair boss viii" 3nspector

Critica E(a "ation Mechanistic ,pproach .nrealistic ,ssumptions =arrow Eiew 3mpracticable 56ploitation of 4abour George E ton Ma!o 2)66= + )8784 5a#throne E-%eriments 1" I "mination E-%eriments ( illumination affected /roductivity) 1" Re a! assemb ! Test room E-%eriments ( @or$ing conditions and /roductivity), piece wor$, rest pauses, shorter wor$ing hours, ;" Mass inter(ie#ing $rogramme ( )irect Fuestions), 9rievances, deep rooted disturbance, satifactory level
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O"tcomes @or$ers wor$ing in a group develop bond of relationships 8ehaviour at wor$place depens on their mental state, emotions and pre2udices 5motional factors play an important role in determining &uman and liberal attitude of supervisor helps in improving performance Managerial s$ills and technical s$ills are not necessary to be a successful leader" 5ENR> 'A?RENCE GANTT 2)6;) -)8)84 Contribution was famous, 9antt Chart, used for scheduling and control of wor$" <as$ and 8onus plan ( Minimum wages is guaranteed to all wor$ers irrespective of output, 56tra wages are paid for e6tra wor$) 1RAN@ B?N@ER GI'BRET5 2)6;6 + )8.74 Motion study, time study #atigue 0tudy @or$ 0implification ! ; positional promotion plan ( present position, the position to be held before promotion to his present position and the ne6t higher position) A$$ROAC5ES TO MANAGEMENT Modern management has developed through several stages or approaches" <hese approaches to the study of management may be classified as underG 1" Classical ,pproach 1" 8ehavioral ,pproach
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;" Management 0cience ,pproach 4" 0ystem ,pproach >" Contingency ,pproach

5=E3:O=M5=< 3=/.<0 Money Manpower Machinery Material Method

#55)8,C'

<:,=0#O:M,<3O=

O.</.<0 9oods - services 5mployment <a6es Others

0ystems approach is an improvement over classical and neoclassical theories as it is closer to reality" <he traditional theorists viewed organi(ation as a closed system while modern theorists treat it as open system" <he system approach highlights the multidimensional and multidisciplinary nature of management" 3t ta$es much wider and overall perspective of organi(ational functioning" SOCIA' RES$ONSIBI'IT> AND ET5ICS SOCIA' RES$ONSIVENESS ! <he ability of a corporation to elate its operations and policies to the social environment in ways that are mutually beneficial to the company and to society" % :eaction or proaction % <he role of government % <he influence of values and performance % Criteria on behaviour

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Def " /eter )ruc$er * 0ocial :esponsibility requires managers to consider whether their action is li$ely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony"+ The Socia A"dit <he 0ocial audit has been defined as * a commitment to systematic assessment of and reporting on some meaningfulH, definable domain of company s activities that have social impact"+ 0ociety has become increasingly aware of the interdependence between the business and its environment" ,s business grow in si(e and power, society e6pects more from them several forces have led to the development of the concept of social :esponsibility" 0ome of the forces are % Consumerism <rade .nion /ublic Opinion 5nlightened 0elf 3nterest /rofessionalisation <rusteeship :esponsibility of business to perform its basic economic function of producing and supplying products and services in the most efficient manner so as to ma6imi(e profits"

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Socia Res%onsibi it! of B"siness

Ethics in Managing % 5thics is defined as the discipline dealing with what is good and bad, with moral duty and obligation" % /ersonal 5thics has been referred to as * the rules by which an individual lives his or her personal life"
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% ,ccounting ethics pertains to the code that guides the /rofessional conduct of accountants" B"siness Ethics is concerned with truth and 2ustice and has a variety of aspects such as e6pectations of society, fair competition, advertising, public relations, 0ocial responsibilities, Consumer autonomy and Corporate behaviour in the home country as well as abroad" Ethica Theories % .tilitarian <heory suggests that plans and actions should be evaluated by their consequences" % <heory based on rights holds that all people have basic rights" % <heory of 2ustice demands that decision ma$ers be guided by fairness and equity, as well as impartiality" Instit"tiona i3ing Ethics <his means applying and integrating ethical concepts into daily action" <his can be accomplished in ; ways% 1" 8y establishing appropriate company policy or a code of 5thics 1" 8y using a formally appointed ethics committee ;" 8y teaching ethics in Management development programs A code is a statement of $o icies, %rinci% es, or r" es that g"ide beha(io"r* The f"nctions of Ethics Committee inc "des1" holding regular meeting to discuss ethical issues 1" dealing with gray areas ;" Communicating the code to all members of the Organi(ation 4" Chec$ing for possible violations of the Code >" 5nforcing the Code ?" :ewarding compliance and punishing violations A" :eviewing and updating the code B" reporting activities of the committee to the board of directors 1actors that raise Ethica Standards )" /ublic disclosure and publicity ." <he increased concern of a well informed public"

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G oba isation 9lobali(ation means covering or affecting the whole world" 3t means integration of the domestic economy of a country with the international economy" :ecent developments in information and communication technology have accelerated the pace of globali(ation" 9lobalisation means the internationali(ation of trade" /articularly product transaction and the integrating of economic and capital mar$ets throughout the world" <he integration ta$es place when trade e6ists freely among the different countries, thus the world economy becomes a single mar$et or single economy" 3n globali(ation there is no restriction of quota, license, tariff and other administrative barrier for trade" <he term globali(ation has four parametersG :eduction of trade barriers, so as to permit free flow of goods across national frontiers" #ree flow of capital among nations" #ree flow of technology among nations" #ree movement of labour among different countries of the world" Benefits of G oba isation 3mproves efficiency 3mproves factor 3ncome 3mproves finance 9ains from Migrations Dra#bac&s of G oba isation 9lobalisation increases the problems of unemployment )omestic 3ndustries finds difficulty in survival"

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 Only group of people who participate in the process of 9lobali(ation will be benefited, this creates income inequality within the country Control on domestic economy becomes more difficult )eveloping country suffers from the problem of brain%drain Internationa B"siness % 3nvolves commercial activities that cross national frontiers % 3t is a process of 5ntrepreneur conducting business activities across national boundaries % 3t consist of 56porting, 3mporting, licensing, opening of 0ales office % <he activities necessary for ascertaining the need and want of target consumer often ta$es place in more than one country" @hen an 5ntrepreneur e6ecutes his or her business model in more than one country 3nternational 8usiness Occurring" Entr! into Internationa B"siness <he method of entering or engaging in 3nternational 8usiness can be divided into three categories )* E-%orting 3ndirect 56porting )irect 56porting 1" Non E<"it! arrangement ! )oing international business through an arrangement that does not involve any investments" % 4icensing % allowing someone else to use something of the company s in return for the payment of royalty % <urn $ey /ro2ects ! , foreign 5ntrepreneur build a factory or other facility, training the wor$ers, train the management and then turn it over to the local owners once the operation is completed, hence the name turn $ey operation % Management Contracts ! Contracting management techniques and s$ills" <he management contracts allow the purchasing country to gain foreign e6pertise without giving ownership of its resources to a foreigner" ;" Direct 1oreign In(estments ! preferred mode of ownership % Minority 3nterest ! &aving less than >DI Ownership /osition % Joint Eentures ! Merger of two companies"

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G oba i3ation in India 0ome ma2or aspects of the policy of globali(ation in 3ndia areG i4'ibera isation of im%ortsA Most imports has been put under open general licence (O94) where automatic permission is granted to import goods"56port oriented units (5O.s) have been allowed to import freely all types of goods require by the unit for manufacturing, production or processing" <he 9overnment in it s trade policy announced on ;1st ,ugust 1DD4 has permitted import of second hand capital goods without any age restrictions" ii) 56port promotion through rationali(ation of tariff structureG <ariff structure refers to the pattern of custom duties levied on the imports of various commodity groups" <he government initiated the process of tariff reduction in 1CC1, to bring our tariff rates in line with the other developing countriesG ma$ing 3ndian goods competitive in the world mar$et" &igh quality and low cost goods can offer competition in the world mar$et and improve 3ndia s e6ports" iii) #oreign direct investmentG iv) #oreign technologyG

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UNIT II PLANNING !ature and "ur"ose of "lanning - #lanning "rocess - T$"es of "lans Ob%ectives - Managing b$ ob%ective &M'O( Strategies - T$"es of strategies - #olicies - Decision Ma)ing - T$"es of decision - Decision Ma)ing #rocess - Rational Decision Ma)ing #rocess - Decision Ma)ing under different conditions

1C

$'ANNING % % % % )eciding in advance what to do, how to do, when to do and who is to do it" 8ridges the gap between where we are to where we want to go" <hin$ing before doing" 3ntellectual demanding process"

Nat"re of $ anning 1" 3t s contribution to purpose and ob2ectives" 1" /rimacy of functions ! /lanning - control are inseparable ;" /ervasiveness of planning ! it is a function of all managers" Earies from level to level 4" 5fficiency of plans ! /ans are efficient if they achieve their purpose at a reasonable cost T!%es 2sco%e4 of % ans I $"r%oses or missionsG % Meaningful e6istence ! special tas$ % 5lements are primary mar$et, profitability, management philosophy and corporate image 5g" 1" )istribution of goods - services % 3<C * 0atisfaction+ % )upont *better things through chemistry+ % &allmar$ *<he social e6pression business+ % 95C 7 .0& *@e are in energy business+ ObBecti(esA % 5nds towards which all activities are directed % <hey are the most basic plan and all other plans are based on the ob2ectives % <hey are multiple in nature" % M8O % Ob2ectives and goals are interchangeable % <hey have hierarchy" % <hey are verifiable % <hey form a networ$" % <hey differ in time span" 0ome are long term and short term"
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II

% Ob2ectives may be general or specific" % Classified into 56ternal institutional ob2ectives (to develop high degree of corporate image ! <,<,) 3nternal Ob2ectives (profit7ma6imum rate of return)

III

StrategiesA

% 9eneral program of action and deployment of resources to attain Comprehensive ob2ectives" % 0@O< analysis 5g 1" rural mar$eting 1" 56tension of )istribution width - 4ength ;" /ester power strategy, social mar$eting, co%branding, co%mar$eting" % Contingent plan to meet the demands of a difficult situation" % Mainly the 2ob of the top management"

IV

$o iciesA % 9eneral statements or understandings which guide or channel thin$ing and ta$e actions in decision ma$ing" % 9uidelines for decision ma$ing % ,ll policies are statements, sometimes it is only practices (implied) % ,llows for some discretion otherwise it becomes rules % 3t is a means of encouraging discretion and initiative, but within limits" % /olicies are developed with the active participation of the entire top level e6ecutives" % /olicy is in writing" <hey ta$e concrete shape when they are put in writing" <his will ensure uniformity in application, continuity and greater conformity"

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Ad(antagesA i" <op management provides guidelines to lower level managers" ii" 9ives managers to act at all levels without the need to consult the superiors every time" iii" 8etter ,dministrative control" /rovides rational basis for evaluating the results" iv" 8y setting up of policies, the management ensures that the decisions made will be in tune with the ob2ectives and interests of the organi(ation" v" <hey save time and effort by pre%deciding problems in repetitive situations" <hey save the management from the botheration of repeating the e6pensive analysis required to ta$e the policy decision every time" 'imitationsA % /olicy is formulated under particular preset conditions which do not remain the same for all problems" % :equires constant review and revision" % =o formula for all problems % 0erve as guides for thin$ing and action and do not provide solutions to problems" % <hey are not substitute for human 2udgment" <hey only point out the limits within which the 2udgment is to be ta$en" % <hey may stifle individual initiative and creativity" T!%es of $o iciesG a) b) c) d) Organi(ational and functional policies" Originated, ,ppealed and 3mposed policies 9eneral and 0pecific policies" @ritten and 3mplied policies"

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$roced"resG % 3t establishes a required method of handling future activities" % <hey are guides to action, rather than to thin$ing" % /rovides details of certain activity, the e6act manner in which it must be achieved" % Chronological order" (stated in steps) % #ound in every level of an organi(ation" Ad(antagesA % Minimi(es the burden of decision ma$ing % 4eads to simplification of wor$ flow % 5limination of unnecessary steps" % )eveloped after careful analysis of various operations which are necessary to bring co%ordination in organi(ation" % .niformity and conformity of action % ,id to communication ! steps to be followed to complete a particular wor$" % Medium of control to evaluate the performance of the subordinate 'imitations % :igidity% discourages improvement % #i6ed way of doing a particular 2ob % =eed to be reviewed and updated constantly

VI % % % % % % % %

R" esA :ules spell out specific required action or non action, allowing no scope for discretion" :ules Es /rocedures Es /olicies :ules ! no time sequence ! *=o smo$ing+ 0equence of rules" )etailed recorded instructions .niform handling of events <o avoid repeated approval from higher levels for routine matters" Offers definite direction to planning process

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VII $rogramsA % Combination of goals, policies, procedures, tas$ assignments, steps to be ta$en resources to be employed to carry out a given course of action" % <ime element is introduced % /lanning for future events and establishing a sequence of required actions" % 0upported by budgets" % /rimary program - supporting programs" VIII % % % % % % B"dgetsA 0tatement of e6pected results e6pressed in quantitative terms" 56pected income and e6penditure under different heads" 9ives clarity, direction and purpose in an organi(ation" Control device" #i6ed or variable (fle6ible) budget" #unctional budgets"

Ste%s in $ anningG 1" 8eing aware of opportunities" % 0@O< analysis 1" 5stablishing ob2ectives" ;" )eveloping premises % /lanning premises are forecasts, applicable basic policies, and e6isting company plans" % <hey are assumptions about the environment in which plan is to be carried out" % #orecasting is important for premising" % /remises should be ma$e practical what volume of salesK @hat priceK 4" )etermining alternative courses of action >" 5valuating alternative course of action % Operation :esearch ! )ecision tree ?" 0electing a course of action % )ecision ma$ing A" #ormulating )erivative plans % 0upporting plans for basic plan B" =umerating plans by budgeting % 3ncome and e6penses

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@inds of % anning 1" 1" ;" 4" >" 0hort term and long term planning #inancial - non financial planning #ormal -informal planning 0pecific or :outine planning Corporate planning and strategic planning

ObBecti(es 0 Im%ortance 0 Ad(antages of $ anning 1" 1" ;" 4" >" ?" A" B" C" #ocuses attention on ob2ectives - results :educes uncertainity and ris$ /rovides sense of direction 5ncourages innovation - creativity &elps in coordination 9uides decision ma$ing /rovides a basis for decentrali(ation /rovides efficiency in operation #acilitates control

1eat"res of a good % an 1" 8ased on clearly defined ob2ectives 1" 0imple, easily understandable ;" #le6ible or adaptable to changing conditions 4" must be balanced in all respects >" must provide standards for the evaluation of performance and actions ?" 3t should be economical A" 3t should be practicable B" /repared with the consultation of concerned persons C" 0hould be clear, specific and logical 1D"0hould be capable of being controlled

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T!%es of $ anning 2Time imit4 1" 4ong term plans (,bove > yrs) 1" Medium term plans (8etween 1 to > Lrs) ;" 0hort term plans ( 4ess than 1 yrs) $ anning can be c assified as + 1" Corporate /lanning 1" )ivisional /lanning ;" 0trategic /lanning S*No Strategic $ anning O%erationa $ anning 1 4ays down ma2or goals and )ecides the use of resources in /olicies of the Organisation day to day operations 1 )one at higher levels of )one at lower level of Management Management ; 4ong term in nature 0hort term in nature 4 8road and general )etailed and specific > 8ased on long term forecast and 8ased on past e6perience appraisal of 5nvironment Obstac es of Effecti(e $ anning 1" 3nadequate inputs 1" 4ac$ of ability ;" 0udden emergencies 4" =eed for creativity >" :esistance to Change :a!s to O(ercome the Obstac es 1" Clear cut Ob2ectives 1" )evelop a sound Management 3nformation 0ystem ;" Create carefully planning premises 4" )evelop a dynamic outloo$ away manages >" $eep plans fle6ible ?" provide required resources A" .nderta$e a cost benefit analysis of all plans

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Management b! ObBecti(es 2MBO4 * M8O is a comprehensive managerial system that integrates many $ey managerial activities in a systematic manner and that is consciously directed towards the effective and efficient achievement of Organisation and individual Ob2ectives"+ % @here superiors and subordinates 2ointly identify the goals of the Organisation $rocess of MBO 1" 1" ;" 4" 0etting preliminary Ob2ectives Clarifying Organisational roles 0etting subordinates Ob2ectives :ecycling Ob2ectives

5o# to set ObBecti(es 1" Fuantitative - Fualitative 1" 0etting Ob2ectives in 9ovt ;" 9uidelines for setting Ob2ectives Benefits of MBO 3mprovement of managing Clarification of Organisation 5ncouragement of /ersonal commitment )evelopment of 5ffective control

:ea&ness of MBO #ailure to teach the philosophy of M8O #ailure to give guidelines to goal setters )ifficulty of setting goals 5mphasis on short run goals )anger of 3nfle6ibility

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$ anning $remises % % % % , plan is based on certain assumptions called premises ,ssumptions or premises are for a future setting or happenings ,ssumptions based upon certain intuition or scientific forecasting <he assumptions about future derived from forecasting and used in /lanning are $nown as planning premises

Def + @oont3 OCDonne */lanning premises are the anticipated environment in which plans are e6pected to operate" <hey include assumptions or forecast of the future and $nown conditions tht will affect the operations of plans" 5g as prevailing policies and e6isting company plans that control the basic nature of supporting plans" % /urpose of premises is to facilitate the planning process by guiding, directing, simplifying and reducing the degree of uncertainty in it" /remises guide planning" $ anning $remises C assification )* E-terna D Interna EETERNA' 5conomic 5nvironment 3ncludes the type of economic system that e6ist in the economy <he nature and structure of the economy, the business cycle,the fiscal, monetary and financial policies of the govt, foreign trade and foreign investment policies of the govt" <he type of economic system, that is socialist, capitalist or mi6ed provides institutional framewor$ with in which business firm have to wor$"

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SOCIA' AND C?'T?RA' ENVIRONMENT % Members of a society wields important influence over business firms" % ,ctivities of business firm may harm the physical environment and impose heavy social costs" % 8usiness should consider the social implication of their decisions" % 0ocial responsiveness Mthe ability of a corporate firm to relate its operations and policies to social environment in way that are mutually beneficial to the company and society at large"" % 0ocial responsibility 7 social responsiveness related to ethics"

$O'ITICA' AND 'EGA' ENVIRONMENT Closely related to government" /olitical philosophy of the govt yields a great influences over business policies" TEC5NO'OGICA' ENVIRONMENT <he nature of technology used for production of goods and services in an important factor responsible for the success of a business firm" <he improvements in technology raises total factor productivity of a firm and reduces unit cost of output" <echnological environment affects the success of firms and the need for technological advancement cannot be ignored" DEMOGRA$5IC ENVIRONMENT 3ncludes the si(e and growth of population, life e6pectancy of the people rural urban distribution of population the technological s$ills and educational levels of labour force" 0ince new wor$ers are recruited from outside the firm, demographic factors are considered as parts of e6ternal environment" <he s$ills and ability of a firms wor$ers determine to a large e6tent how well the orgn can achieve its mission"
1C

NAT?RA' ENVIRONMENT 3n the ultimate source of many inputs such as raw materials, energy which business firms use in their productive activity" ,vailability of natural resources in a region a country is a basic factor in determining business activity in it" 3t includes geographical and ecological factors such as minerals and oil reserves, water and forest resources wealth and climatic conditions, port facilities are all highly significant for various business activities" =ot the availability of natural resources alone but also the technology and ability to being them in use that determines the growth of business and the economy"

INTERNA' ENVIRONMENT 3nternal factors are to a good e6tent controllable factors because the firm can change or modify these factors to improve its efficiency" VA'?E S>STEMS Means the ethical beliefs that guides the organi(ation in achieving its mission and ob2ective" <he value system of a business orgn ma$es an important contribution to its success and its prestige in the world of business" Ealue system of a business firm has an important bearing on its corporate culture and determines its behavior towards its employees, shareholders and society at large" 3nfosys *Our corporate culture is to achieve our ob2ectives in environment of fairness, honesty, transparency and courtesy towards our customers employees, vendors and society at large+

;D

MISSION AND OBFECTIVES <he ob2ectives of all firms are assured to be ma6imisation of long ! run profits" Mission is def as the overall purpose or reason for its e6istence which guide and influences its business decision and economic activities" <he choice of business domain, direction of its development, choice of business strategy and policies are all guided by the overall mission of the company" Re iance Ind"stries Mission *<o become a world class company and to achieve global dominance" Ranba-! aboratories ! to become a research based international pharma company"

ORGANISATION STR?CT?RE Means such things as composition of board of directors, the number of independent directors, the e6tent of professional management and share holding pattern"0ignificant influence over decision ma$ing process in an organi(ation"

G?A'IT> O1 5?MAN RESO?RCES Fuality of employees of a firm in an important factor of internal environment of a firm <he 0uccess of a business organi(ation depends to a great e6tent on the s$ills, capabilities, attitudes and commitment of its employees"

;1

 )ue to importance of &: for the success of a company these days there is a special course for managers how to select and manage efficiently &: of a company" 'ABO?R ?NIONS .nions collectively bargain with top managers regarding wages, wor$ing conditions of different categories of employees" 0mooth wor$ing of a business organi(ation requires that there should be good relations between mgt - labour union"

$5>SICA' RESO?RCES AND TEC5NO'OG> CA$ABI'ITIES /hysical resources such as plant and equipment and technological capabilities of a firm determine its competitive strength which is an important factor determining its efficiency and unit cost of production" :- ) capabilities of a company determine its ability to introduce innovation which enhances productivity of wor$s" .* Tangib e and Intangib e %remises Tangib e ! those which can be quantified" 5g ! Money, .nits of /roduction, etc Intangib e $remises ! refers to the qualitative factors li$e /ublic relations, company reputation, 5mployee morale, etc" ;" Contro ab e and ?ncontro ab e 1actors

Contro ab e ! entirely within the control and realm of management 5g% /olicies, programmes, rules of the enterprises

;1

?ncontro ab e 1actors ! 5nterprises has absolutely no control are uncontrollable premises" 5g ! @ar, natural calamities, new invention, population trends" Effecti(e %remises 1" 1" ;" 4" 0election of premises which bear materially on the programs )evelopment of alternative premises for contingency planning Eerification of the consistency of premises Communication of the premises"

S:OT Ana !sis or 0 TO:S MatriInterna 1actors Interna Strengths 2S4 Eg* Strength in mgt, o%eration, 1inance, Mar&eting, RDD Engineering Interna :ea&nesses2:4 Eg* :ea&nesses in areas sho#n in the bo- of strength*

E-terna 1actors

E-terna O%%ort"nities 2O4 Consider ris& a so* Eg C"rrent and f"t"re Economic condition, %o itica and socia changes, Ne# %rod"ct ser(ices and Techno og!

SO strateg! Ma-i + Ma-i" /otentially the most successful strategy, utili(ing the Organisation strength to ta$e advantage of opportunities

:O Strateg! Mini + Ma-i 5g" )evelopmental strategy to overcome wea$ness in order to ta$e advantage of oppirtunities

E-terna Threats 2T4 Eg 'ac& of energ!, com%etition and areas simi ar to those sho#n

ST Strateg! Ma-i + Mini 5g" .se of strengths to cope with threats to avoid threats

:T strateg! Mini Mini 5g" :etrenchment, 4iquidation , Joint venture"

;;

in O%%ort"nit! bo1orecasting % /rocess of predicting future conditions, that will influence and guide the activities, behaviour and performance of the Organisation" Def ! * #orecasting is the formal process of predicting future events that will significantly affect the functioning of the enterprises" 1eat"res $rocess Im%ortance 'ey to planning Means of coordination 8asis for control 56ecutive development #acing 5nvironmental challenges )eveloping the ground wor$ 5stimating the future trends Comparing actual with estimated results :efining the forecast 3nvolvement of #uture events )epends upon past and present events &appening of future events Ma$e use of forecasting techniques

1orecasting Techni<"es % Fualitative ( use of 0tatistical tools) and Fuantitative ( employ human 2udgments to predict future)

;4

1" Time series Ana !sis ! involves decomposition of historical series into its various components" Ei( ! trend, seasonal variations, cyclical variations and random variations" , trend can be $nown over the period of time and pro2ections can be made about future" 1" 5istorica Ana og! ! past history records ;" Corre ation ! to find the relationship between two variables" 5g" 8etween advertising e6penditure and sales volume, #uture sales estimated on basis of change in adv e6penditure 4" Regression ! <o measure the relationship between two variables" <o find the relative movements of two or more interrelated series" >" De %hi Techni<"e ! the minds of the e6perts in the concerned areas are probed systematically" ;* In%"t o"t%"t ana !sis T!%es of 1orecast % )emand forecast 7 sales forecast % 5conomic #orecast % <echnological #orecast Com%arison of $ anning and 1orecasting S*No 1 $ anning /lanning is more comprehensive, it involves many sub processes and elements in order to arrive at decision :equires several decision ma$ing #or planning top management level is involved 1orecasting #orecasting is the estimate of future events and provides parameters to the planning

1 ; 4

#orecasting does not involve decision ma$ing #orecasting is usually carried by middle or lower level management Commitment of action is the #orecasting does not require basic motive of planning any commitment but helps planning for future actions

;>

Decision Ma&ing % is the process of choosing a course of action from available alternatives % Def * &aynes - Massie * )ecision ma$ing is a process of selection from a set of alternative courses of action which is thought to fulfills the ob2ective of the decision ! problem more satisfactorily than others"+ T!%es of Manageria Decisions 1" Organi(ational and /ersonal )ecisions 1" :outine and 0trategic )ecisions ;" /rogrammed and =on programmed )ecision 4" /olicy and Operating )ecision >" 3ndividual and 9roup decision Decision ma&ing $rocess 1" )efining the problem 1" ,nalysing the problem ;" )eveloping alternative solutions 4" 5valuating the ,lternatives >" 0electing the best alternatives ?" 3mplementing the decision 1actors in(o (ed in Decision Ma&ing 1" Tangib e 1actors % things which can be measured, #i6ed cost, operating cost, profits, machine, etc 1" Intangib e factors ! .nmeasurable elements" 5g" 5mployee morale, quality of labour relations, Consumer behaviour, etc" ! /ersonal values - Orgn Culture, 9roup decision ma$ing, Creative and innovation $rob ems of Decision Ma&ing 1" 3ndecisiveness 1" <ime pressure ;" 4ac$ of 3nformation

;?

4" confusing symptoms with causes >" #ailure to evaluate correctly ?" 4ac$ of follow through @e! to s"ccess in Decision Ma&ing 1" 1" ;" 4" >" ?" A" 8e problem oriented not 2ust solution oriented 0et decision ma$ing goals ,lways chec$ the accuracy of the information )on t be afraid to develop innovative alternatives 8e fle6ible 9ain commitment for decision at an early stage 5valuate and follow up the decision

;A

UNIT III ORGANIZING !ature and "ur"ose of organizing - Organization structure - *ormal and informal grou"s I organization - +ine and Staff authorit$ - De"artmentation - S"an of control Centralization and Decentralization - Delegation of authorit$ - Staffing - Selection and Recruitment - Orientation - Career Develo"ment - Career stages Training - #erformance ,""raisal

;B

ORGANIZING

Definitions ,llen defines Organising as * the process of identifying and grouping of the wor$ to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to wor$ most effectively together in accomplishing their ob2ectives"+ @oont3 and OCDonne defines as * Organisation is the establishment of authority and relationships with provision for coordination between them, both vertically and hori(ontally in the enterprise structure" % Organising is the tas$ of mobili(ing resources % , structure involving a large number of people engaging themselves in multiplicity of tas$s, a systematic and rational relationship with authority and responsibility between individuals and groups" $rocess of organi3ing % the manager differentiates and intergrates the activities of his Organisation % )ifferentiation % the process of departmentali(ation or segmentation of activities on the basis of some similarity % 3ntegration ! /rocess of achieving unity of effort among the various departments 1" 1" ;" 4" >" ?" 5stablishing 5nterprise Ob2ectives #ormulating 0upporting ob2ectives, policies and /lans 3dentifying and classifying the necessary to accomplish 9rouping the activities in the light of human and material resources available )elegating to the head of each group the activity necessary to perform <ying the groups together hori(ontally and vertically through authority relationship and information flows"

$rinci% es of Organising 1" Ob2ectives 1" 0pecialisation ;" 0pan of Control 4" 56ception ! the higher level have limited time, only e6ceptionally comple6 problem should be referred to them and routine matters be dealt by the subordinates at the lower levels >" 0calar /rinciple 7 Chain of command ! line of authority
;C

?" .nity of Command A" )elegation B" :esponsibility C" ,uthority 1D"5fficiency 11"0implicity 11"#le6ibility 1;".nity of )irection 14"/ersonal ability S%an of Management 1actors go(erning S%an of Management % ,ppropriate span of Management must be determined by the specific of the manager particular situation" 1" 1" ;" 4" >" ?" A" ,bility of the manager ,bility of the 5mployees <ype of wor$ @ell defined authority - :esponsibility 9eographic locations 4evel of Management 5conomic Consideration

Orgn #ith Narro# s%an + superior with less number of subordinate to monitor Ad(atages % Close supervision % Close control % #ast Communication, between communication between subordinates superiors Disad(antages % 0uperiors tend to get too involved in subordinate wor$ % Many levels of Management % &igh cost due to many levels % 56cessive distance between lowest level and top level Orgn #ith #ide s%an - superior with more number of subordinate to monitor

4D

Ad(antages % 0uperiors are forced to delegate % Clear policies must be made % 0ubordinates must be carefully selected Disad(antages % <endency of overloaded superiors to become decision bottlenec$s % )anger of superiors loss of control % :equires e6ceptional quality of managers Organisation Chart * ,n Organisation chart is a graphic of the various positions in the enterNprise and the formal relationships among them+" % 3t is a blueprint of the company organi(ation structure" % 9eorge <erry * ,n Organisational Chart is a diagrammatical form, which shows important aspects of an Organisation including the ma2or functions and the respective relationships, the channels of supervision and the relative authority of each employee who is in change of each respective function" Characteristics 1" a diagrammatical presentation 1" represent the formal Organisation structure ;" it shows the main lines of authority in the Organisation 4" indicates inter%play of various functions - relationships >" indicates the channel of communication T!%es of organi3ation Chart 1" Vertica Chart ! lines of command proceeding from top to bottom in vertical lines 1" 5ori3onta Chart ! &ighest position shown in left ;" Concentric or Circ" ar Chart

41

Contents of Organisation Chart 1" 1" ;" 4" >" ?" 8asic Organisation structure - flow of authority ,uthority - :esponsibility of various e6ecutives =ame of components of Organisation /ositions of various office personnel <otal number of person wor$ing in an Organisation @ays of /romotions and salary particulars

/fiffner and 0herwood classifies into ; categories 1" 0$eleton ! a graphical presentation of the framewor$ % arranged in levels connected by various lines representing different types of authority 1" #unctional ! consists of subunits wherin bo6es represent divisions and sections ;" /ersonal Chart ! some process of functional chart is used but the bo6es here contain personnel information 5g% Job title, name of the position holder Organisation Man"a ,n Organisation Manual is a small handboo$ or boo$let contained detailed information about the Ob2ectives, /olicies, /rocedures, rules, etc of the enterprise % 3t often includes Job descriptions which are factual statements of 2ob contents in terms of duties and responsibilities" Contents of organi3ationa Man"a 1" 3ntroductory =ame of the Organisation =ature of the Organisation Ob2ectives of the Organisation 4ocation of the Organisation /urpose of the manual 1" ,dministrative Organisation 0tructure ! ma2or diision, departments, chain of command Job descriptions Organisation Chart /olicies of the Management

41

 :ules - regulations ;" /rocedural Office procedures and practices 0pecimen form to be used 0tandard instructions regarding the performance of different 2obs Methods relating to accounting, budgeting, etc" T!%es of Organisation Man"a 1" /olicy Manual 1" Company Organisation Manual ! describes the duties and responsibilities of various departments % Outlines the formal chain of command and lines of promotion in the company ;" Operation Manual ! describes the established standards, procedures and methods for various 2obs" 4" )epartment /ractice Manual ! detailed information about the Organisation >" :ules - :egulation Manual ! prescribes rules regarding hours of wor$, timing, leave cafeteria, library, recreation, etc" De%artmentation % ,s the process of grouping individual 2obs in department" 3t involves grouping of activities and employees into departments so as to facilitate the accomplishment of Organisation Ob2ectives" Need D Im%ortance of De%artment 1" 0pecialisation 1" 56pansion ;" ,utonomy 4" #i6ation of responsibility >" ,ppraisal ?" Management development A" ,dministrative control Choosing a basis for De%artmentation 1" 0pecialisation 1" Coordination ;" Control 4" 5conomy >" ,ttention
4;

?" &uman Consideration Basis of De%artmentation 1" De%artmentation b! 1"nctiona Basis ! 9rouping of activities in accordance with the function of an enterprise" 5ach ma2or function of the enterprise is grouped into a department" Merits o 3t is a logical and time proven method o 3t follows the principles of speciali(ation o ,uthority and responsibility can be clearly defined and fi6ed o 0ince the top managers are responsible for the end results control shall become effective Demerits <his type of departmentation shall develop a loyalty towards the functions and not towards the enterprise as whole" Co%ordination of different function shall become difficult Only the departmental heads are held responsible for defective wor$ 1" De%artmentation b! Territoria basis ! , company may have separate departments to serve the southern region, northern region etc" 3t has the advantage of the intimate $nowledge of local conditions" Merits 3t motivates each regional head to achieve high performance /rovides each regional head an opportunity to adapt to his local situation and customer need with speed and accuracy" 3t affords valuable top%management training and e6perience to middle level e6ecutivesOenables the organi(ation to ta$e advantage of locational factors, such as availability of raw materials, labour, mar$et, etc" 5nables the Organisation to compare regional performances and invest more resources in profitable regions and withdraw resources from unprofitable ones" Demerits May give rise to duplication of various activities" Many routine and service functions performed by all the regional units can be performed centrally b the head office very economically

44

 Earious regional units may become so engrossed in short run competition among themselves that they may forget the overall interest of the total organi(ation" ;" De%artmentation b! $rocess basis ! is done on the basis of several discrete stages in the process or technologies involved in the manufacture of a product" , cotton te6tile mill have separate departments for ginning, spinning, weaving, dyeing and printing and pac$ing and sales" Merits #acilitates the use of heavy and costly equipment in an efficient manner" 3t follows the priniciple of speciali(ation ! each dept is engaged in doing a special type of wor$" <his increases efficiency" 3t is suitable for Organisation which are engaged in the manufacture of those product which involve a number of processes" Demerits )ifficult to compare the performance of different process based departments 4" De%artmentation b! $rod"ct basis ! suited for a large organi(ation manufacturing a variety of products" #or each ma2or product a semi% autonomous department is created and is put under the charge of a manager who may also be made responsible for producing a profit of a given magnitude" /roduct dept is the logical pattern to follow when each product requires raw materials, manufacturing, technology and mar$eting methods and that are mar$edly different from those used by other products in the Organisation" 5g &44 manufacturing detergents, toiletries, Clearasil cream and soap" Merits :elieves top management of operating tas$ responsibility" 3t can therefore better concentrate on such centrali(ed activities li$e finance, :- ) and control 5nables the top management to compare the performance of different products and invest more resources in profitable products and withdraw resources from unprofitable ones" <hose who wor$ within a department derive greater satisfaction from identification with a recogni(able goal" Demerits
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 :esults in duplication of staff and facilities 5mployment of large number of managerial personnel is required" 5quipment in each product department may not be fully used >" De%artmentation b! C"stomer basis ! ,n enterprise may be divided into a number of departments on the basis of the customers that it services" #or 5g" ,n educational institution may have separate departments for day, evening and correspondence course to impart education to full time students, locally employed students and autstation students respectively" Merits 3t ensures full attention to ma2or customer groups and helps the company to earn goodwill" Demerits 3t may result in under utili(ation of resources and facilities in some department" <here may be duplication of facilities A"thorit! % /ower to ta$e decision % :ight to get orders and obey orders % /ower ! ,bility of individual to influence the action of other person % ,uthority ! right in a position to e6ercise discretion in ma$ing decision affecting others" Bases of $o#er 1" 4egitimate 1" 56pertness ;" :eferrant 4" :eward >" Coercive Def * ,uthority may be defined as legitimate right to give orders and to get orders obeyed" 3t denotes certain rights to ta$e decision and get them e6ecuted by their subordinates" / t!%es of A"thorit! 'ine a"thorit! ! are those that have direct impact on the accomplishment of the ob2ectives of the enterprises

4?

% is the direct authority which a superior e6ercises over his subordinates to carry out orders and instructions" % <he flow of line authority is always downward, that is from a superior to a subordinate % Creates a direct relationship between a superior and his subordinate % 4ine authority is the direct authority which a superior e6ercises over his subordinates to carry out orders and inspections such authority delegated top those positions or elements of the organi(ation which have direct responsibility for accomplishing the primary ob2ectives" % 4ine relationship performs the following roles a" as a chain of command b" as a carrier of accountability (subordinate is answerable to his superior) c" as a channel of communication Staff a"thorit! ! 0taff refers to those elements of the Organisation which help the line to wor$ most effectively in accomplishing the primary ob2ectives of the enterprises" % are those that help the line person wor$ most effectively in accomplishing the ob2ectives" Difference bet#een 'ine and Staff A"thorit! S*No 'ine A"thorit! ) :ight to decide and command . / 7 9 ; H 6 Contributes directly to the accomplishment of Organisational ob2ectives :elatively unlimited and general #low downward from a superior to subordinate Creates superior and subordinate relation 56ercise control Ma$es operating decision 8ears final responsibility for Staff A"thorit! :ight to provide advice, assistance and information ,ssist line in the effective accomplishment of Organisation ob2ectives :elatively restricted to a particular function May flow in any direction depending upon the need of advice 56tension of line and support line 3nvestigates and reports /rovides idea for decision )oes not bear final responsibility
4A

8 )=

results )oing functions /rovides channel communication

<hin$ing function of =o channel of communication is created

1"nctiona a"thorit! % is the right which an individual or department has delegated to it over speciali(ed processes, practices, policies or other matters relating to activities underta$en by personnel in department other than its own" % generally relates to laying down systems and procedures" #or 5g" <he personnel manager may lay down the grievances procedure to be followed in all departments % granted to a staff specialist to issue instruction to line e6ecutives directly in a specific and limited area of operation" De egation of a"thorit! % <o delegate means to entrust authority to a subordinate % ,ssigns some part of his wor$ to his subordinate and also gives the necessary authority to ma$e decision within the area of their assigned duties Def " 'oont( and O )onnel, * <he entire process of delegation involves the determination of results e6pected, the assignment of tas$s, the delegation of authority for accomplishment of these tas$s, and the e6action of responsibility for their accomplishments"+ T!%es of de egation 1" 9eneral or 0pecific 1" #ormal or 3nformal ;" @ritten or oral 4" )ownward and sideward $rocess of De egation 1" )etermination of results e6pected 1" ,ssignment of duties ;" 9ranting of authority 4" creating accountability for performance

4B

Acco"ntabi it! ! is the obligation to carry out responsibility and e6ercise authority in terms of performance standard established by the superior % Once a subordinate is assigned a duty and given the necessary authority to complete it, he becomes answerable for the results" <hus accountability is a derivative of responsibility" $rinci% es of De egation 1" )elegation to conform to desired ob2ectives 1" :esponsibility not delegatable ;" ,uthority to match duties 4" .nity of command >" 4imits to authority to well%defined Merits 1" 8asis of effective functioning 1" :eduction in managerial load ;" 8enefits of speciali(ed service 4" 5fficient running of branches >" ,id to employee development ?" ,id to e6pansion and diversification of business Effecti(e De egation 1" )efine assignments and delegate authority in the light of results e6pected 1" 0elect the person in the light of the 2ob ;" Maintain open lines communication 4" 5stablish proper control >" :eward effective and successful assumption of authority Staffing - #illing and $eeping filled, positions in the Organisation structure" - )ef ! 'oont( and O )onnell * <he managerial functions of staffing involves manning the Organisational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into structure" 1"nctions of Staffing )* $roc"rement ! Job analysis

4C

! ! ! !

Man power planning :ecruitment 0election /lacement

.* De(e o%ment - /erformance appraisal - <raining - Management )evelopment - Career /lanning - )evelopment - /romotion /* Com%ensation ! Job evaluation ! @age and 0alary administration ! 3ncentives ! #ringe 8enefits ! 0ocial security measures 7* 5"man Re ations - is an area of management in integrating people into wor$ situation in a way that motivates them to wor$ together productively, co%operatively and with economic, psychological and social satisfaction" Se<"ence of acti(it! in Staffing $reem% o!ment acti(ities % :equisitioning, :ecruiting - 0electing $ost em% o!ment acti(ities % <raining, appraising, Compensating, /roviding miscellaneous services" $"r%ose and Im%ortance 1" 3ncreasing si(e of Organisation 1" ,dvancement of technology ;" 4ong range needs of manpower 4" &igh wage bill >" <rade unionism ?" &uman relations movement /romoting and

>D

Recr"itment D Se ection - 1st 0tage, continues with selection and stops with the placement of the candidate - Pve it stimulates people to apply for 2obs to increase the hiring ration" i"e" the number of applicants for a 2ob - 9oal of :ecruitment is to create a large pool of persons available and wiling to wor$" - 0electing the person overall - )ef"% 5dwin - #lippo ! * :ecruitment is the process of searching for prospective employees and stimulating them to apply for 2obs in the Orgn" So"rces of Recr"itment 1" Interna so"rces ! 3t includes personnel already on the payroll of an Organisation, presenting wor$ing force" Merits - 4ess e6pense - 8uilds loyalty - 5nsures stability - 0ense of security - 4ower level to loo$ forward to rising to higher levels - Morale of the employees (0hows more 5nthusiasm) Demerits - /romotion based on seniority, inefficient people may also be promoted this will ultimately ruin the prospects of the firm" - <here will not be any any creativity - 4ac$ of <echnical s$ills 1" E-terna So"rces ! #resh flood should be in2ected so as to ma$e it more dyanamic - freshers from college - unemployed with a wide range of s$ills and abilities - retired e6perienced person Merits - required s$ills

>1

- )o ob2ective selections (since people are recruited from a large mar$et, the best selection can be made without any distinctions of caste, colour, gender) - May b economical in the long run (training is not required) Demerits %8rain )rain ! 56perienced persons or raided or hunted by other concerns Methods or Techni<"es of Recr"itment 1" Direct Method ! campus recruitment 1" Indirect Method ! use advertisements for recruitment in newspaper, 2ournal, etc - 8lind advertisement ! without company name the advertisement been made /* Third $art! method a" /rivate 5mployment agency b" /ublic 5mployment agency c" &ead hunters (/rofessional :ecruiting agencies) d" 5mployee :eferrals (:ecommendations) e" <rade .nions f" ,pplicant at the gate g" Eoluntary Organisation h" Computer data ban$ Recr"itment $o ic! 9 E ements 1" 3dentification of :ecruitment needs 1" /referred sources of :ecruitment ;" Criteria of selection and selection techniques 4" Cost of :ecruitment >" :ole, if any assigned to the union in the formulation and implementation of recruitment and selection policies" Se ection - /rocess of discovering the most suitable and promising candidates to fll up the vacancies - <he goal of selection is to sort out or eliminate those 2udged unqualified to meet the 2ob and organi(ational requirements - %ve action, after receiving the application select a particular person

>1

- :ecruitment is a method while selection is a procedure" - 0uccessive hurdles techniques

Ste%s in Se ection 1" 1" ;" 4" >" ?" A" B" , process of re2ecting the unwanted applicant :eceiving application /reliminary screening 7 3nterview ,pplication blan$ /sychological test 3nterview :eference chec$ /hysical 56amination #inal 3nterview

Inter(ie# <he 3nterview is the most frequent method of selection" <he 3nterview is a face to face conversation between an applicant and the employer" <he purpose of 3nterview is to collect information on behaviour, attitudes, opinions, maturity, emotional stability, enthusiasm, confidence, response and other commercial behaviour" 1actors considered in Inter(ie# 3nitiative :esponse 8ehaviour @or$ 56perience Opinion ,ttitude Maturity 5motional 0tability 5nthusiasm Confidence

>;

T!%es of Inter(ie# 1" Str"ct"red Inter(ie# ! is also called as patterned interview" <he interviewers are trained in the process to be used" , list of questions on analysis of the 2ob specification is prepared" <he 3nterviewing process attempts to predict how candidates will perform in the wor$ situations" 1" Gro"% or Disc"ssion Inter(ie# ! <he interviewees are given certain problems and are as$ed to reach a specific decision within a particular time limit" <he applicants enter into group discussion, $nowing that the interview is a test, but do not $now which qualities are being measured or tested" <he ob2ect is to see how individuals perform on a particular tas$ or in a particular situations ;" $ane or Board Inter(ie# ! Candidate is interviewed by a number of interviewers" Fuestions may be as$ed in turn or as$ed in random order as they arise on any topic" 4" Stress Inter(ie# ! <he 3nterview assumes a hostile role toward the applicant" &e deliberately puts him on the defensive by trying to any, embarrass or frustrate him" <he purpose is to find out how a candidate behaves in a stress situation whether he loses his temper, gets confused or frightened" $'ACEMENT <he /lacement of the individual on the new 2ob and orienting him to the Organisation" /lacement may be defined as the determination of the 2ob to which an accepted candidate is to be assigned to that 2ob" , proper placement of a wor$er reduces 5mployee turnover, absenteeism and accident rates and improve morale" ,fter the selection, the employee is generally put on a probationary period ranging from one to two years after his employment to regulari(ed, provided that during this period, his wor$ has been found to be satisfactory" Orientation <raining 56ecutive )evelopment
>4

Orientation 0 Ind"ction 0 Indoctrination 3nduction is a technique by which a new employee is rehabilitated into the changed surroundings and introduced to the practices, policies and purposes of the Organisation The Main ObBects of Orientation 1" 1" ;" 4" >" Clarifying the 2ob )eveloping realistic e6pectation about the Organisation :educing the amount of stress of new employee :educing startup costs 0trengthening the relationships between new employee, his superiors and peers , formal orientation programme generally provides information regarding the following G 1" <he history of the Organisation 1" /roducts and services of the Company ;" Organisation structure of the enterprise 4" 4ocation of departments and .nits >" /ersonnel policies and practices ?" 5mployees facilities and services A" :ules and :egulations B" 9rievance procedures C" 0afety Measures TRAINING D DEVE'O$MENT Training % <raining is an organi(ed process for increasing the $nowledge and s$ills of people for definite purpose" Training D Ed"cation % <raining and 5ducation is concerned with imparting specific s$ills for particular purpose % /urpose of <raining is to bring about improvement in the /erformance of wor$

>>

% 3ncludes the learning of such s$ills as are required to do a specific 2ob in a better way Training D De(e o%ment % )evelopment involves the growth of the individual in all respects % <raining is 2ob centered whereas development is career bound % ,ims at increasing the capacity for further tas$s of greater difficulty % Contents and techniques of employee training may differ from those of Management )evelopment" Training D De(e o%ment $rocess 1" )etermining <raining =eeds a" Organi(ational analysis ! ( analy(ing the present and future needs of the total Organi(ation) b" Operational analysis ! (need of a specific group of 2obs) c" 3ndividual analysis ! (analy(ing the need of the specific 5mployee) 1" )eciding the purpose of <raining ;" Choosing <raining method 4" 5valuating <raining 5ffectiveness Need for Training arises on the acco"nt of fo o#ing reasons ! 1" =ew 5nvironment 1" 4ac$ of <rained /ersonnel ;" ,dvancement in <echnology 4" #aculty Methods >" /revention of accidents ?" Career )evelopment" Need for Training 1" 1" ;" 4" >" ?" <o improve 2ob related s$ills <o update 'nowledge and s$ills <o prepare for higher responsibilities and tas$ <o develop proper 2ob related attitudes <o in2ect motivation and morale <o mould personnel to adapt and ad2ust to Organi(ational change

Ad(antages of Training

>?

1" 1" ;" 4" >" ?" A" B"

3ncreased productivity Job 0atisfaction :eduction in accidents 8etter use of :esources :educed 0upervision 9reater #le6ibility Management by 56ception 0tability and 9rowth

>A

Essentia of a good Training $rogramme , good training programme must satisfy the following conditions 1" Clear /urpose 1" <raining =eeds ;" :elevance 4" 3ndividual )ifferences >" ,ppropriate incentives ?" Management 0upport A" 8alance between theory and practice" Training $roced"re 1" /reparing the 3nstructor % $now the 2ob or sub2ect he is attempting to teach % &ave the aptitude and ability to teach % &ave willingness towards the profession % /leasing /ersonality and capacity for leadership % 'nowledge of teaching /rinciples and methods 1" /reparing the <rainee ;" 9etting ready to teach 4" /resenting the Operation >" <ry out the <rainee s performance ?" #ollow % up Methods and Techni<"es of Training 1" On the Job <raining a" Coaching b" .nderstudy c" Job :otation 1" Eestibule <raining ! ( )ummy Machine set up ) ;" ,pprenticeship <raining 4" Classroom <raining E-ec"ti(e De(e o%ment 0 Management De(e o%ment * )eveloping a manager is a progressive process in the same sense that educating a person it" =either development nor 5ducation should be thought of as something that can ever be completed, for there are no $nown limits to the degree to which one may be developed or educated+

>B

Methods of E-ec"ti(e De(e o%ment )* On the Fob Method a" Coaching and .nderstudy b" /osition rotation c" 0pecial pro2ects and tas$ forces d" Committee assignments e" Multiple Management

.* Off the Fob Method a" b" c" d" e" f" g" 0pecial courses Conferences and 0eminars Case study 0elective :eadings 8rain 0torming 0imulation , role /laying and Management 9ames 0ensitivity <raining

>C

UNIT IV DIRECTING Creativit$ and -nnovation - Motivation and Satisfaction - Motivation Theories +eadershi" St$les - +eadershi" theories - Communication - 'arriers to effective communication - Organization Culture - Elements and t$"es of culture - Managing cultural diversit$

?D

DIRECTING )irecting concerns the total manner in which a manager influences the actions of subordinates" 3t is the final action of a manager in getting others to act after all preparations have been completed" 3t consist of the following elementsG 1" issuing orders and instructions 1" continuing guidance and supervision of subordinates ;" motivating subordinates to wor$ hard for meeting the e6pectation of management" 4" maintaining discipline and rewarding those who perform well >" providing leadership to subordinates C5ARACTERISTICS 1" 5lements of Management 1" Continuing #unction ;" /ervasive #unction 4" Creative #unction >" 4in$ing function ?" Management of &uman #actor SIGNI1ICANCE O1 DIRECTING 1" 3nitiates action 1" 5nsures coordination ;" 3mproves efficiency 4" #acilitates change >" ,ssists stability and growth $RINCI$'ES 1" &armony of ob2ectives 1" Ma6imum individual contribution ;" .nity of command 4" ,ppropriate techniques >" )irect 0upervision ?" 0trategic use of 3nformal Organi(ation A" Managerial Communication B" 5ffective 4eadership C" /rinciple of #ollow up through

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TEC5NIG?ES O1 DIRECTING 1" )elegation 1" 0upervision ;" Orders and instructions 4" Motivation >" 4eadership ?" Communication S?$ERVISION 0upervision implies e6ert overseeing of people at wor$ in order to ensure compliance with established plans and procedures" 5very e6ecutive has to supervise the wor$ of his subordinates" ,t the operating level, supervision is the most significant part of the manager 2ob" <he supervisor is in direct touch with the wor$ers" &e teaches proper wor$ methods, maintains discipline and wor$ standards and solve wor$ers grievances or problems" RES$ONSIBI'ITIES O1 A S?$ERVISOR 1" <o schedule wor$ so as to ensure an even and steady flow" 1" <o assign wor$ to different individuals ;" <o provide proper wor$ing conditions 4" <o issue orders and instructions >" <o prescribe wor$ methods and procedures ?" <o guide, train and inspire wor$ers in the efficient performance of wor$" G?A'ITIES O1 A GOOD S?$ERVISOR 1" 'nowledge of @or$ 1" 'nowledge of the Organi(ation ;" Communication 0$ill 4" &uman :elation of 0$ill >" )ecisiveness 1?NCTIONS 1" /lanning the wor$ 1" Organising the :esources ;" 0taffing the units 4" Maintaining discipline >" 5nforcing safety measures ?" &andling 9rievances A" ,ppraising performance

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1?NDAMENTA'S O1 E11ECTIVE S?$ERVISION 1" /lanning the wor$ 1" <ime management and delegation ;" Organising the resources 4" 0taffing the .nits >" <rianing and development of 5mployees ?" )isciplining the @or$ers A" ,ppraising the performance of 5mployees B" Controlling the results C" 4abour relations and 9rievance procedures 'EADERS5I$ Definition 4eadership is defined as influence, the art or process of influencing people so that they will strive willingly and enthusiastically toward the achievement of group goals" % 4eaders act to help a group attain ob2ectives through the ma6imum application of its capabilities" % 4eaders must instill values ! whether it be concern for quality, honesty and calculated ris$ ta$ing or for employees and customers" S@I''S 1" <he ability to use power effectively and in a responsible manner 1" <he ability to comprehend that human beings have different motivation forces at different times and in different situations ;" <he ability to inspire 4" <he ability to act in a manner that will develop a climate conductive to responding to and arousing motivations" >" #undamental understanding of /eople ?" ability to inspire followers to apply their full capabilities to a pro2ect

?;

'eadershi% St! es 1" A"tocratic 'eader !Commands and e6pects compliance, is dogmatic and positive, and leads by the ability to withhold or give rewards and punishment" 1" Democratic or $artici%ati(e ! consults with subordinates on proposed actions and decision and encourage participation from there ;" 1ree-rein eader 0 aisse3-faire 'eadershi% ! uses his or her power very little, giving a high degree of 3nterdepence in their operations" 4eaders depend largely on subordinates to set their own goals and the means of achieving them, and they see their role as one of aiding the operation of followers by furnishing them with information and acting primarily as a contact with the groups e6ternal 5nvironment" 4" $aterna istic 'eadershi% ! 0erves as the head of the family and treats his followers li$e his family members" &e assumes a paternal or fatherly role to help, guide and protect the followers" 1"nctions 1" 9oal )etermination 1" Motivating #ollowers ;" )irection 4" Coordination >" :epresentation Im%ortance of 'eadershi% 1" 1" ;" 4" ,id to authority Motive power to group efforts 8asis for co operation 3ntegration of #ormal and 3nformal Organi(ation"

Theories 1" Trait Theor! ! , 4eader is a one who has got a enthusiastic loo$, courageous loo$ ! describes the e6ternal qualities of a person 1" Beha(iora Theor! ! , person who intend to be leader, they do not have any qualities li$e <rait <heory /* Contigenc! Theor! + a* 1ied er Mode b* 'i&ert Mode c* Manageria Grid Theor!

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1ied er Mode % 4eaders can be classified as two % a" :elationship Oriented b" <as$ Oriented ; 0ituations been given to find the performance of two types of 4eader% ! 4eader member :elationships % <as$ 0tructure % /osition /ower 5mployees under :elationship oriented 4eader seems to achieve more performance than the other" 'i&erts Mode 0ystem 1 ! 56ploitive ,utocratic 4eader (oriented towards tas$ alone) 0ystem 1 ! 8enevolent ,utocratic 4eader (tas$ oriented but has the quality of opposing if things are good) 0ystem ; ! /articipative 4eader (concerns the employees for a particular $ind of wor$, though he concern decision will be ta$en only by him" 0ystem 4 ! )emocratic 4eader ; 0ituations 1" Confidence 7 <rust in 5mployees 1" 0ubordinates feeling of freedom ;" Managers see$ing involvement with 0ubordinates :atings of the 4eaders by their employees at different situations Manageria Grid Theor! /roposed by 8la$e and Mounton 1 'inds of 4eader 1" 4eaders concerned for /eople 1" 4eader concerned for production 7 <as$ 'eader st! es 1" <as$ Manager 5g )efence , Concerned only on tas$ 1" <eam 8uilders ! leaders high concern for production as well as people ;" 3mpoverished 0tyle ! .nfit for 4eadership qualities, less concern for people as well as production 4" Country club Manager 5g ! <rade union, high concern for people than production"

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COMM?NICATION Communication is derived from the 4atin word Communis which implies common" Communication is the interchange of thoughts and information" E'EMENTS 1" 0ender 1" Message ! <he 0ub2ect matter of Communication ;" 5ncoding ! act of translating he msg into words, pictures, symbols 4" Channel ! Media used >" :eceiver ! ?" )ecoding ! interprets the msg to draw meaning from it" &e converts symbols, signs or pictures into meaning A" #eedbac$ ! So"nd Comm"nication %ro(ides the fo o#ing ad(antage 1" 3mproves Mangerial /erformance 1" #acilitates 4eadership ;" 3ncreases 2ob 0atisfaction 4" :educes time and efforts >" 5nhances coordination ?" &elp public relations C5ANNE'S O1 COMM?NICATION 1" 1orma Comm"nication ! follows the route formally laid down in the organi(ation structure a" Do#n#ard Comm"nication ! flow of communication from superior to subordinate b" ?%#ard Comm"nication % flow of communication from subordinate to superior c" 5ori3onta Comm"nication ! transmission of information among the positions at the same level of he Organi(ation" 1" Informa Comm"nication or Gra%e(ine ! Communication among people through informal contacts or relations"

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Disting"ish bet#een Do#n#ard and ?%#ard Comm"nication Do#n #ard ?%#ard #rom higher to lower levels #rom lower to higher levels #low is downward #low is upward )irective in nature =on%directive /urpose is to get plans implemented /urpose is to provide feedbac$ on results <ravels fast <ravels slowly Orders, instructions, lectures, :eports, suggestions, grievances, manuals, handboo$s, etc are the main protests, surveys are the main e6amples e6amples" Distinction bet#een 1orma and Informa Comm"nication 1orma Comm"nication Informa Comm"nication Official Channel .nofficial Channel )eliberately /lanned and 0ystematic .nplanned and 0pontaneous /art of Organi(ation 0tructure Cuts across formal relationships Oriented towards goals and tas$ of )irected towards goals and need the enterprises satisfaction of individuals 3mpersonal /ersonal and social 0table and rigid #le6ible and instable 0low and 0tructured #ast and .nstructured Gra%e(ine Merits and Demerits Merits .seful for developing group cohesiveness 0erves as an emotional safety value 5ffective source of $nowledge feelings and attitudes of 5mployees 0upplements the channels of official communication <ells mgt when to be firm and when to yield Demerits 8ased on rumors Misleads /eople May breed against particular e6ecutives May lead to more tal$ and less wor$ May distort official channels of communication

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MEDIA OR MET5ODS O1 COMM?NICATION 1" Oral Communication 1" @ritten Communication ;" 9estural Communication ORA' COMM?NICATION Oral Communication involves e6change of messages through spo$en words" 3t may ta$e place" i) by face% to face contacts ii) through mechanical devices li$e telephone" Merits Oral or Eerbal communication offers the following advantagesG 1" 5conomical 1" /ersonal touch ;" 0peed 4" #le6ibility >" Fuic$ response Demerits Oral Communication suffers from the following wea$nesses% 1" 4ac$ of record 1" <ime Consuming ;" 4engthy message 4" /hysical distance >" Misunderstanding :RITTEN COMM?NICATION @ritten Communication is transmitted through written words in the form of letter, circular, memos, bulletins, instruction cards, manuals, handboo$s, reports, returns, Merits 1" 5ffectiveness 1" 4engthy messages ;" 5conomical 4" :epetition >" /ermanent record ?" 8etter response

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Demerits 1" 1" ;" 4" >" ?" <ime Consuming 56pensive 3nfle6ibility 4ittle secrecy 4ac$ of personal touch Misunderstanding

COMM?NICATION NET:OR@S 1" 1" ;" 4" Circle =etwor$ Chain =etwor$ @heel =etwor$ ,ll Channel =etwor$

BARRIERS TO COMM?NICATION a* Organisationa Barriers 1" 1" ;" 4" ,mbiguous policies, rules and procedures 0tatus patterns 4ong chain of Command 3nadequate #acilities

b*Mechanica Barriers 1" Overloading 1" 0emantic barriers ;" =oise c*$ersona Barriers 1" 4ac$ of attention or interest 1" #ailure to Communicate ;" &asty Conclusion 4" )istrust of communicator >" 3mproper state of mind"

?C

MA@ING COMM?NICATION E11ECTIVE 1" 1" ;" 4" >" ?" A" B" 0ound Organi(ation 0tructure Clear messages <wo%way Communication Multiple Channels 9ood 4istening 5ffective Control Modern 3nstrument &uman :elations attitude

ESSENTIA'S O1 GOOD COMM?NICATION S>STEM 1" 1" ;" 4" >" ?" A" B" Clarity of messages Completeness of message Consistency of message proper timing Credibility 5mpathy #ollow%up 5conomy

AD

UNIT V CONTROLLING #rocess of controlling - T$"es of control - 'udgetar$ and non-budgetar$ control techni.ues - Managing #roductivit$ - Cost Control - #urchase Control - Maintenance Control - /ualit$ Control - #lanning o"erations

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Contro ing Definition % as the process of analy(ing actual operations and seeing that actual performance is guided towards e6pected performance" % Comparing operating results with plans and ta$ing corrective actin when results deviate from plans % )ef" 'oont( and O )onnell * <he managerial function of controlling is the measurement and correction of the performance of activities of subordinates in order to ma$e sure that enterprise ob2ectives and the plans devised to attain them are being accomplished" Nat"re D $"r%ose of Contro 1" Control is an essential function of management 1" Control is an ongoing process ;" Control is forward ! wor$ing because pas cannot be controlled 4" Control involves measurement >" <he essence of control is action ?" Control is an integrated system E ements of Contro 1" /lanning 1" 3nformation #eedbac$ ;" )elegation of ,uthority 4" :emedial action Control /rocess 1" #i6ation of 0tandard 1" Measurement of /erformance ;" Comparing performance with standards 4" Correction of )eviations $rob ems in the Contro $rocess Magnitude of Change <ime rate of Change 5rroneous standard ( Mista$es in setting standard) @or$ers :esistance Communication /roblems

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Characteristic of an idea Contro s!stem 0uitable #le6ible 5conomical 0imple Ob2ective /rompt #orward loo$ing 0uggestive 0trategic point control Motivational

Techni<"es of Manageria Contro Traditiona Techni<"es 1" $ersona Obser(ation ( #or 5g" , #actory manager goes around the plant, observes the performance of 5mployees and Machines) .* Good Organisation Str"ct"re /* ?nit! of $ ans 7* Statistica Contro Re%orts >" B"dgetar! contro ! 0tatement e6pressed in financial terms a" Master budget b" #unctional 8udget % 0ales budget, /roduction budget, Material budget, 4abour budget, Cash budget, ,dministrative Overhead budget, c" Capital - :evenue budget d" #i6ed and #le6ible 8udget e" Qero base budgeting ( the budget proposals are considered from the ground up ( (ero base) or from scratch ObBecti(es of B"dgetar! Contro a" /lanning b" Coordination c" Control d" Motivation e" 5fficiency

A;

;* H* 6* 8*

Merits Optimum use of resources #i6ation of :esponsibility 5ffective coordination /lanned approach $rofit D oss contro E-terna a"dit Contro O(era Contro criteria 2 BE$ Ana !sis4 Ret"rn on In(estment Contro

)=*Management A"dit Organisation 0tructure 56ecutive appraisal #unctioning of the management board 0oundness of 5arning 5conomic #unctioning 0ervice to stoc$ holders :-) #iscal /olicy /roduction 5fficiency ))*Res%onsibi it! acco"nting Cost centre /rofit centre 3nvestment centre Techni<"es of Management M8O M85 M8/ ! Management by /articipation implies the mental and emotional involvement of employees, share holders, investors, consumers and other sta$e holders in the decision ma$ing process" 1orms 1" @or$ Committee 1" Joint Management Councils
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;" @or$er )irectors 4" Co%partnership $rod"cti(it! D O%erations Management /roductivity which accounts for profitable operations of an enterprises and provides opportunities to an enterprise for remaining competitive and successful in an area of global competition Output ! input ratio, within a given time period - with due consideration for quality of /erformance $rob ems in Meas"ring $rod"cti(it! of @no# edge #or&ers % Measurement of the productivity of s$ill wor$ers is easier but it becomes more difficult to measure the productivity of $nowledge wor$ers % 9reatest scope for increasing productivity lies in the wor$ performed by $nowledge wor$ers 5g" Managers, 5ngineers, Cost accountant, etc"

O%eration Management % is the design and operation of systems" @or$ing of Operation Management"

In%"t 3nformation <echnology :aw Materials Main /ower Management /hysical #actors ( li$e land, 8uilding, Machines, etc) 1eedbac&

Transformation 0 Con(ersion %rocess

O"t%"t

/lanning, operating Controlling production 0ystem

/roduct 0ervices

56ternal 5nvironment

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De(e o%ing E-ce ent Managers + The &e! to %re(enti(e contro a" 5fforts required on the part of managers themselves @illingness to learn /lanning for 3nnovation - 3nventions <ailoring 3nformation b" 5fforts required on the part of the Organisation ,cceleration of Managerial )evelopment programmes Measuring Managerial programmes and rewarding it =eed for management : - ) =eed for 3ntellectual 4eadership G oba isation 9lobalisation means the internationali(ation of trade" /articularly product transaction and the integrating of economic and capital mar$ets throughout the world" <he integration ta$es place when trade e6ists freely among the different countries, thus the world economy becomes a single mar$et or single economy" 3n globali(ation there is no restriction of quota, license, tariff and other administrative barrier for trade" Benefits of G oba isation 3mproves efficiency 3mproves factor 3ncome 3mproves finance 9ains from Migrations

Dra#bac&s of G oba isation 9lobalisation increases the problems of unemployment 1" )omestic 3ndustries finds difficulty in survival

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Only group of people who participate in the process of 9lobali(ation will be benifitted, this creates income inequality within the country 1" Control on domestic economy becomes more difficult ;" )eveloping country suffers from the problem of brain%drain Internationa B"siness % 3nvolves commercial activities that cross national frontiers % 3t is a process of 5ntrepreneur conducting business activities across national boundaries % 3t consist of 56porting, 3mporting, l3censing, opening of 0ales office % <he activities necessary for ascertaining the need and want of target consumer often ta$es place in more than one country" @hen an 5ntrepreneur e6ecutes his or her business model in more than one country 3nternational 8usiness Occuring" Entr! into Internationa B"siness <he method of entering or engaging in 3nternational 8usiness can be divided into three categories E-%orting o 3ndirect 56porting o )irect 56porting Non E<"it! arrangement ! )oing international business through an arrangement that does not involve any investments" % 4icensing % allowing someone else to use something of the company s in return for the payment of royalty % <urn $ey /ro2ects ! , foreign 5ntrepreneur build a factory or other facility, training the wor$ers, train the management and then turn it over to the local owners once the operation is completed, hence the name turn $ey operation % Management Contracts ! Contracting management techniques and s$ills" <he management contracts allows the purchasing country to gain foreign e6pertise without giving ownership of its resources to a foreigner" Direct 1oreign In(estments ! preferred mode of ownership a" Minority 3nterest ! &aving less than >DI Ownership /osition b" Joint Eentures ! Merger of two companies

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