Paper 1.

3
PRINCIPLES OF MANAGEMENT

Copy Right Reserved

for Private use only

PRINCIPLES OF MANAGEMENT
OBJECTI E! This "aterial atte"pts to give you an understanding of the #on#ept $anage"ent approa#hes. Planning ! Planning %ature and i"portan#e for"s strategi# and Ta#ti#al Type of plans &teps I Planning' (e#ision $a)ing Type of (e#ision (e#ision $a)ing pro#ess Rationality in de#ision "a)ing. Organi*ation! Organi*ation Pro#ts of organi*ing Organi*ation stru#ture depart"entali*ation &pan of $anage"ent (elegation +uthority' Responsi,ility' +##ounta,ility (e#entrali*ation. (ire#tion ! (ire#tion Prin#iples ele"ents $otivation $aslo-' .e/r*,erg' aroo" "odels Co""uni#ation ! Pro#ess 0or"s %et-or) Barriers $easuring effe#tiveness Co1ordination. 2eadership ! 2eadership theories &tyle $anagerial 3rid Control Controlling and Planning Types of #ontrol Con#urrent and for-ard #ontrol Prin#iples of #ontrol +reas of #ontrol Control te#hni4ues. RE0ERE%CE&! 1. 7. 3. 8. 9. :. ;. Prin#iples of $anage"ent Prin#iples of $anage"ent $anage"ent Pra#ti#e of $anage"ent $anage"ent Theory and Pra#ti#e $anage"ent and Organisation $anage"ent Pro#ess ! ! ! ! ! ! ! 5oont* and O6(onnel Terry and 0ran)lin Ja"es +.0. &toner Peter 0 (ru#)er Ernst (ale 2ouis +. +llen %eu"ann

CONTENTS
&l. %o. 1. 7. 3. 8. 9. :. ;. <. =. 2essons Introdu#tion to $anage"ent Planning Organisation (ire#tion $otivation Co""uni#ation 2eadership Co1ordination Control &yste" and Pro#ess. Pg.%o. 8 18 71 33 39 81 97 9; 9=

2E&&O% 1 I%TRO(>CTIO% TO $+%+3E$E%T

MANAGEMENT $anage"ent is the pro#ess of designing and "aintaining an environ"ent in -hi#h individuals -or)ing together in groups to a##o"plish sele#ted ai"s effi#iently. It #onnotes different "eaning indifferent #onte/ts. The #on#ept "anage"ent "ay ,e used as Colle#tive noun 0ield of study 0un#tion 1 1 1 Board of dire#tors or E/e#utive Co""ittee + ,ran#h of )no-ledge in#luding the prin#iples' te#hni4ues' fun#tions and pro,le" "anage"ent. 0un#tions to ,e perfor"ed to attain the organi*ational o,?e#tives1planning' organi*ing dire#tion' #o1ordination and #ontrol

In a "ore i"portant sense' "anage"ent is a vital fun#tion #on#erned -th all aspe#ts of the -or)ing of an enterprise. .ere the "anage"ent is #onsidered as a ,ody of )no-ledge #onsisting of several #on#epts' prin#iples' te#hni4ues and theories -hi#h #an ,e adopted in any group Endeavour. DEFINITIONS @$anage"ent is an art of )no-ing -hat do you -ant to do and then seeing that is is done in the ,est and #heapest -ay.A 10. B. T+C2OR @To "anage is to fore#ast' to plan' to organi*e' to #o""and to #o1ordinate and #ontrol. 1 .E%RC 0+CO2

@$anage"ent is a distin#t pro#ess #onsisting of planning' organi*ing' a#tuating and #ontrolling perfor"an#e t deter"ine and a##o"plish the o,?e#tives ,y the use of people and resour#es'A 1 3EOR3E R. TERRC @$anage"ent is the #reation and "aintenan#e of internal environ"ent is an enterprise -here individuals -or)ing in groups #an perfor" effi#iently and effe#tively to-ard the attain"ent of group goals. It is an art of getting the -or) done through and -ith people in for"ally organi*ed groups.A
1 5OO%TD +%(O6(O%%E2

FEATURES OF MANAGEMENT The i"portant #hara#teristi#s of "anage"ent as a ,usiness fun#tion are! 1. It is an art of getting things done through and -ith people. 7. +rt and s#ien#e of de#ision "a)ing and leadership. 3. It is a universal pro#ess for a#hieving results. 8. It is an profession -hi#h involves spe#iali*ed training and is governed ,y an ethi#al #ode. 9. It #oordinates hu"an fa#tor and physi#al resour#es for the a##o"plish"ent of group o,?e#tives. 1 ,y ,alan#ing and integration EorF 1 ,y innovation and adaptation 8

IMPORTANCE OF MANAGEMENT STUDY The need and signifi#an#e of "anage"ent fun#tions in the "odern organi*ations are given ,elo-. 1. To in#rease the effi#ien#y 7. to give a definite shape to "anage"ent fun#tion. 3. to i"prove resear#h in "anage"ent. 8. to attain so#ial goals ,y effe#tive utili*ation of resour#es. NATURE OF MANAGEMENT FUNCTIONS 1. 7. 3. 8. >niversality ! It has universal appli#ation in all )indsGnature and si*e of ,usiness a#tivities.

(yna"is" ! This ,ody of )no-ledge is going on #hanging #ontinuously -ith respe#t #hanges that are ta)ing pla#e in the organi*ational environ"ent. Relativity ! It e",ra#es all ,usiness fun#tions at different levels. Regularity of hu"an nature ! It helps to shape the hu"an ,ehaviour in the -or) environ"ent.

APPROACHES TO THE STUDY OF MANAGEMENT + ,rief dis#ussion a,out different approa#hes of "anage"ent is given ,elo-. EMPIRICAL APPROACH The e"piri#al s#hool of "anage"ent ,ases its "ethods on a #lose study of past "anagerial e/perien#es and "anage"ent #ases. +s su#h' it is also )no-n as #ase approa#h or "anage"ent e/perien#e approa#h. +##ording to this approa#h' "anage"ent is #onsidered a study of "anager in pra#ti#e. The intention of studying e/perien#e is to dra- generali*ations and to develop "eans to tea#hing e/perien#es to other pra#titioners and students. +tte"pts are "ade to dupli#ate su##essful e/perien#es -hile avoiding unsu##essful ones. This approa#h offers the "ost #onventional -ay of a#4uiring s)ills in "anage"ent' that is' learning through the e/perien#e of others. This approa#h also helps in #lassroo"' situations for developing diagnosti# and analyti#al s)ills in "anage"ent students. 0ollo-ing li"itations of this approa#h are 4uite o,vious. 1 This e"piri#al approa#h' ,asing its generali*ations on #ases and past e/perien#es has not #ontri,uted anything funda"ental to the develop"ent of "anage"ent as dis#ipline ,e#ause of o,vious #ontradi#tions in various "anage"ent e/perien#es.

HUMAN BEHAVIOR APPROACH

The hu"an ,ehavior approa#h is the out#o"e of the thoughts developed ,y ,ehavioral s#ientists -ho loo) at the organi*ation as #olle#tivity of people. &in#e "anage"ent involves getting things done -ith and through people' the study on "anage"ent "ust revolve round hu"an ,ehavior. This approa#h #an ,e divided into groups interpersonal ,ehavior approa#h and group ,ehavior approa#h. This approa#h suggestion ho- the )no-ledge of hu"an ,ehavior #an ,e used in "a)ing people "ore effe#tive in the organi*ation.

.o-ever' this approa#h is not free fro" li"itations. It is true that "anage #an ,e ,etter pla#ed ,y understanding hu"an ,ehavior ,ut e4uating "anage"ent -ith hu"an ,ehavior is untena,le. There is so"ething "ore than "ere hu"an relations "anage"ent. .u"an ,ehavior approa#h provides only the diagnosis for hu"an pro,le"s ,ut pro,le"s have to ,e solved ,y ta)ing "any "ore fa#tors -hi#h are not e/plained ,y this approa#h.

SOCIAL SYSTEM APPROACH

Closely rese",ling the hu"an ,ehavior approa#h and often #onfused inter"i/ed -ith it is the so#ial syste" approa#h. The real pioneer of so#ial syste" approa#h is ilfred Pareto' a so#iologist. .is ideas -ere later developed ,y Chest Bernard -ho has really developed the #on#ept of so#ial syste"s approa#h "anage"ent. +##ording to this approa#h' the organi*ation is essentially a #ulture syste" #o"posed of people -ho -or) in #ooperation. +s su#h' for a#hieves organi*ation goals' a #o1operative syste" of "anage"ent #an ,e developed only understanding the ,ehavior of people in groups. The so#ial syste" approa#h has real signifi#an#e to the pra#ti#ing "anagers in the sense that all "anagers operate n a so#ial syste" and the organi*ation is li)ely to su##eed if the de"ands of the so#iety in -hi#h it operates as fully re#ogni*ed. The approa#h' ho-ever' spreads the ,oundary and appli#ation of "anage"ent ,eyond the true #on#ept of organi*ations.

SOCIAL TECHNICAL SYSTEMS APPROACH

This approa#h ,elieves that to solve organi*ational pro,le"s' it is not enough to loo) at the #ooperative so#ial syste"s alone ,ut te#hni#al syste"s E"ethods and "a#hinesF and ho- it affe#ts and is affe#ted ,y so#ial syste"s and a te#hni#al syste". The real pattern of ,ehavior in the organi*ation is deter"ined ,y the intera#tion of the t-o. The "a?or #ontri,ution of this approa#h is that -hile analy*ing "anage"ent pro,le" of getting things done ,y people' ade4uate #onsideration should ,e given to te#hnology as -ell as infor"al intera#tions of people. Thus any #hange in te#hnology "ust ,e vie-ed in su,se4uent #hange in so#ial intera#tions at the -or)pla#e. .o-ever' this approa#h is "ore suita,le for "anaging the pro,le"s at the shop floor leave rather thandandling the total "anage"ent pro,le"s.

DECISION THEORY APPROACH

The "a?or e"phasis of this approa#h is that de#ision "a)ing is the ?o, of every "anager. The "anager is a de#ision "a)er and organi*ation is a de#ision1"a)ing unit. Therefore' the ,asi# pro,le" in "anaging is to "a)e rational de#ision. The approa#h #ontri,utes to the sharpening of "anagerial tools spe#ially for "a)ing suita,le de#isions in the organi*ation. The approa#h de"onstrates ho- "anagers #an dis#harge their fun#tions effe#tively. (e#ision1"a)ing is vital in every s#hool of "anage"ent. The vital aspe#t #annot ,e denied ,ut "anage"ent is "ore than "ere de#ision "a)ing.

MANAGEMENT SCIENCE APPROACH

$anage"ent s#ien#e approa#h also )no-n as "athe"ati#al or 4uantitative "easure"ent approa#h' visuali*es "anage"ent as a logi#al entity' the a#tion of -hi#h #an ,e e/pressed in ter"s of "athe"ati#al sy",ol relationships and "easure"ent data. $anage"ent s#ien#e approa#h is a fast developing one in analy*ing and understanding "anage"ent. This has #ontri,uted signifi#antly in developing orderly thin)ing in "anage"ent -hi#h has provided e/a#tness in "anage"ent dis#ipline. arious "athe"ati#al tools li)e sa"pling' linear progra""ing' ga"es theory' ti"e series analysis' e"ulation' -aiting line theory et#' have provided "ore e/a#tness in solving "anagerial pro,le"s. .o-ever' it is very diffi#ult to #all it a separate s#hool of "anage"ent ,e#ause it does not provide the ans-er for the total "anagerial pro,le"s' $oreover' :

"any "anagerial a#tivities are not really #apa,le of ,eing 4uantified ,e#ause of involve"ent of hu"an ,eing -ho are governed ,y "any irrational fa#tors also.

SYSTEMS APPROACH
This approa#h is of #o"paratively re#ent origin' starting late 1=9H' it ha assu"ed #onsidera,le i"portan#e in analy*ing the pheno"ena of "anage"ent. It is an integrating approa#h -hi#h #onsiders "anage"ent in its totality ,ased on e"piri#al data. The ,asi# idea of syste"s approa#h is that any o,?e#t "ust rely on a "ethod of analysis involving si"ultaneous variations of "utually dependent varia,les. The i"pli#ation of syste"s approa#h are given ,elo-. &yste" approa#h of "anage"ent provides and integrated approa#h of "anaging. This #onsiders "anage"ent in its totality. &yste" approa#h of "anage"ent provides an integrated approa#h of "anaging. This #onsiders "anage"ent in its totality. &yste" approa#h possesses the #on#eptual level of "anagerial analysis "u#h higher than any other approa#h. It provides a fra"e-or) through -hi#h organi*ation environ"ent intera#tion #an ,e analy*ed and fa#ilitates de#ision1"a)ing' sin#e the syste" -ithin -hi#h "anagers "a)e de#isions #an ,e provided as a "ore e/pli#it fra"e-or) de#ision1"a)ing is easier to handle. It is often suggested that syste" approa#h is too a,stra#t to ,e of "u#h use to pra#ti#ing "anagers. It "erely indi#ate that various parts of the organi*ation are interrelated. &yste" approa#h of "anage"ent la#)s universality and its pre#epts #annot ,e applied to all organi*ations.

CONTINGENCY OR SITUATIONAL APPROACH

The ,asi# idea of #ontingen#y approa#h is that there #annot ,e a parti#ular "anage"ent a#tion -hi#h -ill ,e suita,le for all situations. Rather' and appropriate a#tion is one -hi#h is designed on the ,asis of e/ternal environ"ent and internal states and needs. Contingen#y approa#h tries to fill this gap ,y suggesting -hat should ,e done in response to an event in the environ"ent. Contingen#y approa#h' on the other hand suggests an a#tive interrelationship ,et-een the varia,les in a situation and the "anagerial a#tions devised. The i"pli#ations of the #ontingen#y approa#h are given ,elo-. It is the sophisti#ated approa#h to understand the in#reasing #o"ple/ity of organi*ations. It e"phasi*es the "ultivariate nature of organi*ations and atte"pts tounderstand ho- organi*ations operate under varying #onditions. The approa#h is dire#ted to-ards suggesting organi*ational designs and "anagerial a#tins "ost appropriate to spe#ifi# situations. Inspite of the various #ontri,utions' #ontingen#y approa#h has not ,een a#)no-ledged as a unified theory of "anage"ent ,e#ause it suffers fro" so"e li"itations. 1. 7. Inade4uate 2iterature Contingen#y approa#h suffers fro" inade4ua#y of literature. Co"ple/ ! analysis of a

(eter"ination of situation in -hi#h "anagerial a#tion is to ,e ta)en involves large nu",er of varia,les -ith "ultifarious di"ensions. 3. Rea#tive not Proa#tive!

Contingen#y approa#h is ,asi#ally rea#tive in nature. It "erely suggests -hat "anagers #an do in given situation. ;

OPERATIONAL APPROACH
This approa#h atte"pts to dra- together the pertinent )no-ledge of "anage"ent ,y relating it to the fun#tions of "anagers' #o""only )no-n as "anage"ent pro#ess. +s su#h this approa#h is also )no-n as "anage"ent pro#ess approa#h. This approa#h vie-s the "anage"ent as a so#ial pro#ess #o"prising a series of a#tions leading to the a##o"plish"ent of #ertain o,?e#tives. The signifi#an#e of operations approa#h is given ,elo-. 1. 7. 3. Operational approa#h offers a ,road' easy to understand #on#eptual fra"e-or) of "anage"ent. The approa#h in#ludes the entire s#ope of "anage"ent and re#ogni*es it as a separate dis#ipline. This approa#h suggests that "anage"ent is a universal pheno"enon irrespe#tive of the type of organi*ations or levels of an organi*ation. Operational approa#h provides useful #on#epts for pra#ti#ing "anagers. It helps the "anagers to put their )no-ledge to use. It offers pra#ti#al suggestions ,y providing #lassifi#ation of "anagerial fun#tions at first level into planning' organi*ing' staffing' dire#ting and #ontrolling. .o-ever the operational approa#h has ,een #riti#i*ed on the follo-ing grounds. The ,asi# tenets of operational "anage"ent that is ' various "anage"ent fun#tions' are not universally a##epted. +nother #riti#is" against operational approa#h is that various ter"s used in this approa#h are not #o""only shared. The analysis of various approa#hes suggests that no approa#h is fully free fro" short#o"ings. .o-ever' a positive sign is e"erging in the for" of #onvergen#e of various approa#hes. The #onvergen#e is provided ,y operational approa#h as #o"pared to any other approa#h.

1. 7. 3.

FUNCTIONS OF MANAGEMENT
The ,asi# ai" of "anaging is to a#hieve #ertain o,?e#tives or goals. The "anager "ust ,e sure of the o,?e#tives he desires to attain or of the end result to ,e ensured. The pre#ise and the #o"plete state"ent in this regard -ould "a)e the o,?e#tives #lear and understood ,y all #on#erned -ho have ot divert their a#tivities to-ards its attain"ent. The desired result' o,?e#tive or goal is attained ,y perfor"ing #ertain funda"ental "anage"ent fun#tions -hi#h #an ,e grouped under ,asi# heads' na"ely 1. 7. 3. 8. 9. :. ;. Planning Organi*ing &taffing $otivating (ire#ting Coordinating Controlling

PLANNING
It "eans @Preparing a s)et#h or an outline of any proposed plan of a#tionsA. It i"plies #onsidering and arranging in advan#e a pro?e#ted #ourse of a#tion. It #an also ,e definedas deter"ining -hat is to ,e done' "a)ing the de#isions to do it' and devising a pro#edure' "ethod and ti"e ta,le to do it. Planning is a general a#tivity. It is a ne#essary part of all operations of an enterprise' and for the <

operations of ea#h of the depart"ents and se#tions. It sti"ulates people to a#tion and also deter"ines their "ode of a#tion. 0or eg. &ales "anager plans his sales #a"paign The pur#hasing $anager plans his pur#hasing and transporting operations The produ#tion $anager plans his produ#tion progra"s. Planning is an e/er#ise in fore#asting and de#ision "a)ing. It involves fore#ast of future #onditions and an esti"ate of ho- the proposed plans -ould ,e affe#ted ,y the". Thus planning involves t-o aspe#ts. 0irst it involves "ental for"ulations of an idea of -hat is desired to ,e a#hieved. >pto this' it re"ains at the thin)ing level and is ,ased on fore#asts and esti"ates. &e#ondly it deter"ines the "ode of a#tion to ,e pursued to a#hieve -hat has ,een thought up. +t this stage' the idea ta)es a definite shape -ith a due regard to the ordinary and i""ediate #ir#u"stan#es fa#ing the enterprise.

ORGANISATION
To organi*e "eans to put into -or)ing order and arrange in a syste". In this sense' an organi*ation is an organi*ed ,ody or persons. Organising "ay ,e defined as arranging a nu",er of #o"ple/ tas)s into "anagea,le units and defining the for"al relationship a"ong the people -ho are assigned the various units of tas)s. This definition is in the #onte/t of attain"ent of the goals and o,?e#tives of an underta)ing. 3enerally' identifia,le units of tas)s are put under the #harge of a depart"ent' se#tion or division. The head of that depart"ent' se#tion or unit ,eing given -ith the authority to perfor" those tas)s. 0or eg. Business a#tivities in an industrial #on#ern "ay ,e grouped under ! 1. Produ#tion 7. &ales 3. 0inan#e and 8. Personnel +fter #lassifi#ation and analysis of fun#tions to ,e perfor"ed ,y ea#h depart"ent' persons possessing re4uisite 4ualifi#ations and e/perien#e "ay ,e appointed as head of ea#h of these depart"ents. &u#h persons should also ,e given proper authority to dis#harge their fun#tions effi#iently. . Thus ,asi#ally organi*ation is #on#erned -ith grouping the a#tivities re4uired to attain the planned o,?e#tives' defining responsi,ilities of the people in the organi*ation' delegating the appropriate authority to the" to dis#harge the respe#tive responsi,ilities and esta,lishing stru#tural relationships to ena,le Co1ordination of the individual efforts to-ards a##o"plish"ent of the enterprise o,?e#tives. The "ain o,?e#tive of organi*ation is to esta,lish -ell defined relationships as ,et-een individuals and groups of individuals and ,et-een the a#tivities perfor"ed ,y the".

STAFFING
It has ,een defined as "anning and )eeping "anned the positions provided ,y the organi*ation stru#ture. Thus staffing involves four things! +ssess"ent of personnel needs of the enterprise and sele#tion and training of e"ployees. (eter"ination of e"ployees re"uneration. Evaluation of e"ployees perfor"an#e. Esta,lish"ent of effe#tive #o""uni#ation s)ills. =

&taffing is a diffi#ult "anagerial fun#tion' ,e#ause it is #on#erned -ith sele#tion of properly 4ualified and "entally -ell1ad?usted persons and their retention in the enterprise as a #ontented and "otivated -or) for#e.

DIRECTING
To dire#t "eans to guide and supervise any a#tion or #ondu#t. It i"plies guidan#e or instru#tions a,out -hat to do and ho- to do it. Be have seen that in organisatin e/e#utives assign responsi,ilities and duties to their su,ordinates and delegate to the" -ith re4uisite authority to perfor" the assigned responsi,ilities of duties. This in fa#t is of very essen#e of "anage"ent the art and pro#ess of getting things done ,y others. %o dou,t' e/e#utives have the authority to for#e their su,ordinates to #o"ply -ith their dire#tives. In #ase any su,ordinates faisl or refuses to #o"ply' ,e "ay ,e thro-n out or punished in so"e other "anner. But this a -rong vie- of the enterprise entire pro#ess of "anage"ent. On any #ase' -ith strong trade unions and a nu",er of la,our la-s to prote#t the -or)er' it -ould not ,e -ise to de"and #o"plian#e fro" one6s su,ordinated. 0or se#uring -hole1hearted #o"plian#e fro" su,ordinated' the fun#tion of dire#tion assu"es #onsidera,le signifi#an#e. (ire#tion fun#tion involves 1. Issuing orders and instru#tions to su,ordinated. 7. 3uiding' training' energi*ing and leading the su,ordinates to perfor" the -or) "ethodi#ally. 3. E/er#ising supervision over the -or) done ,y su,ordinates to ensure tat it is n #onfor"ity -ith ai"s and o,?e#tives of the enterprise. 0ro" all a##ounts' the fun#tion of dire#tions is very i"portant. Thus to "a)e the organi*ation #li#)' it ,e#o"es ne#essary to dire#t one6s su,ordinates in a "anner that they ,e#o"e effe#tive instru"ents in the reali*ation of enterprise goods. The pro#ess of dire#tion #o"prises of the follo-ing ele"ents vi*. i. ii. iii. iv. 2eadership Co""uni#ation $otivation and &upervision

+ detailed dis#ussion a,out these aspe#ts is given in the su,se4uent #hapters.

CO-ORDINATION
&o"e authorities e"phasis #o1ordination as a separate fun#tion of $anage"ent. This approa#h has not ,een adopted here ,e#ause it is felt that #o1ordination is e"phasi*ed in ea#h of the fun#tions of "anage"ent pro#ess. Co1ordination "ust ,e sought fro" the very first step' na"ely' planning' so that plans of all depart"ents are integrated into a "aster plan' issuing the ade4uate #o1ordination. &i"ilarly organi*ing of people into groups and -or) into a#tivities involves ade4uate #o1ordination. It #an also ,e se#ured through proper "otivation of the -or)ers to-ards organi*ed efforts in ter"s of organi*ational o,?e#tives and personal o,?e#tives of the e"ployees through an integration of su#h o,?e#tives. 0inally the #ontrolling aspe#t also indi#ates further #o1ordination is re4uired resulting in i"prove"ents and fresh plans.

1H

CONTROL
Controlling #an ,e defined as @#o"paring results -ith plans and ta)ing #orre#tive a#tin -hen results deviate fro" plans.A In an organi*ational set up' It every $anager6s responsi,ility to #ontrol the perfor"an#e of -or) and -or)ers pla#es under his #harge. Pre-requisites of o!tro"# 1. Control is possi,le only -here is there is a plan a##ording to -hi#h a#tual perfor"an#e is intended to pro#eed. 7. The se#ond re4uire"ent of #ontrol to "easure"ent of the results of a#tual operations. 3. The third re4uire"ent of #ontrol is ta)ing #orre#tive a#tion as soon as deviation fro" the plan is dis#overed. 0unda"entally' #ontrol is any pro#ess that guides a#tivity to-ards so"e pre1deter"ined goal. The essen#e of this #on#ept is in deter"ining in -hether the a#tivity is a#hieving the desire results. This is -hat #ontrol is all a,out. 0or #ontrol to ,e effe#tive and fruitful' it "ust ,e ,ased on a plan. Then on the ,asis of infor"ation re#eived fro" the operational level' there "ust ,e "easure"ent of a#tual perfor"an#e to as#ertain deviations. Thus the a,ove fun#tions are said to ,e the i"portant fun#tions of $anage"ent.

ADMINISTRATION AND MANAGEMENT

The t-o ter"s ad"inistration and "anage"ent are ,eing used inter#hangea,ly for all pra#ti#al purposes. .o-ever these t-o ter"s are different fro" ea#h other. Oliver &heldon su""aries the distin#tion as follo-s. +d"inistration is the fun#tion in the industry #on#erned in the deter"ination of #orporate poli#y' the #o1ordination of finan#e produ#tion and distri,ution' the settle"ent of #o"plaints of the organi*ation and ulti"ate #ontrol of e/e#utiveA. @$anage"ent is the fun#tion in the industry #on#erned in the e/e#ution of poli#y -ithin the li"its setup ,y the ad"inistration and the e"ploy"ent of the organi*ation for the parti#ular o,?e#t set ,efore itA. Billia" sprigeal distinguishes @+d"inistration as the deter"inate fun#tion and @"anage"entA as the e/e#utive fun#tion. $anage"ent is pri"arly #on#erned -ith #arrying out of the ,road poli#ies laid do-n ,y the ad"inistrationA. Thus the ad"inistration is #on#erned -ith the thin)ing fun#tion and "anage"ent -ith doing fun#tion. The essen#e of "anage"ent is highlighted ,y the definition given ,y 5OO%TD and O6 (O%E2 and ,y (O%+2( C2+3.. The later des#ri,e "anage"ent a the art and s#ien#e of de#ision "a)ing and leadership. +rt of getting things done through people and -ith people. .u"an fa#tor in industry has endless #apa#ity for -or) provided planning and resour#es are "ade availa,le to it. The "anager6s goal of attain"ent of enterprise o,?e#tives in the "ore effi#ient "anner #an ,e a##o"plished only -hen the people in the enterprise -or) to the ,est of their a,ility in the spirit of #ooperation and *eal. 11

MANAGEMENT : AN ART OR SCIENCE MANAGEMENT AN ART

+##ording to 3. TERRCI +rt is @Bringing a,out a desired result through the appli#ation of -ill in any a#tivity is #alled as an art'6 The e"phasis is on applying s)ills -ith )no-ledge and a##o"plishing an end through deli,erate effort. Thus the fun#tion of the art is a##o"plishing #on#rete ends efforts' resultsI predi#t situations that -ould not #o"e a,out -ithout the deli,erate effort' to se#ure the".

MANAGEMENT IS A SCIENCE
&#ien#e has ,een defined as @,ody of syste"i*ed )no-ledge a##u"ulated and a##epted -ith respe#t to the under standing of general tools #on#erning parti#ular pheno"enon su,?e#t or o,?e#t of study. It is a,solutely ne#essary that it should have #odified prin#iples and te#hni4ues that e/plains #ertain truth -ith respe#t to ,asi# pheno"enon. In this sense "anage"ent is #ertainly regarded as s#ien#e as it has also develop in to a syste"i*ed )no-ledge regarding a parti#ular pheno"enon' na"ely' "anagerial fun#tion. MANAGEMENT AS PROFESSION Profession is defined as an o##upation ,ased upon the spe#iali*ed intelle#tual study and training' the purpose of -hi#h is to supply s)illed servi#e or advi#e to others for the definite fee or salary.

CHARACTERISTICS OF PROFESSION
1. E/isten#e of )no-ledge ! Profession e"erges fro" the esta,lish"ent of fa#t that there is a ,ody of )no-ledge -hi#h #annot started around ,ut has to ,e studied for ,eing a su##essful professional. 7. +#4uisition of )no-ledge ! +n individual #an enter profession only after a#4uiring )no-ledge and s)ills through for"al training for e/a"ple' only the la- graduates #an enter the profession of legal pra#ti#e. 3. Professional asso#iation ! +n o##upation -hi#h #lai"s to ,e profession should have an asso#iation. .o-ever "anager do not have single unified professional group li)e Indian "edi#al #oun#il for "edi#al pra#titioners fro" this ne- "anage"ent #annot ,e ter"ed as trade profession. 8. Ethi#al #ode ! 0or every profession so"e ethi#al standards are provided and every individual of the profession is e/pe#ted to "aintain #onfor"ity -ith these standards. In "anage"ent also' #ode of #ondu#t has ,een for"ulated to suggest the ,ehavioral pattern for professional "anagers.

17

9. &ervi#e "otive! It is essential ,e#ause the "onetary value of professional servi#e #annot ,e "easured easily in a,sen#e of "ar)et "e#hanis" e/#ept the #o"petition a"ong the professionals the"selves. The su##ess of any profession is "easured not in ter"s of "oney. It earns ,ut ,y the a"ount of so#ial servi#e it provides. &i"ilarly #ontri,utions of "anage"ent #annot ,e "easured in ter"s of "oney alone ,e#ause -ithout integrating effort of "anage"ent' resour#es -orth "illions of rupees "ay ,e useless. On#e organi*ation gro-s ,eyond #ertain si*e' #hanges in the nature of "anage"ent pro#ess de"ands that o-nership and "anage"ent should ,e divor#ed. &o "anage"ent positions should ,e held ,y persons -ho have professional s)ill and ade4uate training.

13

LESSON $ % P2+%%I%3
MEANING
It "eans deter"ining -hat is to ,e done' ho-' -hen and ,y -ho" it is to ,e done. It lays do-n and o,?e#t to pursuit and #hal)s out a spe#ifi# #ourse of a#tion to a#hieve it. It is the first step in the "anage"ent pro#ess #on#erned -ith esta,lish"ent of o,?e#tives and goals to ,e attained in the future in the light of an analysis of present li"itations for attaining su#h goals -ith a vie-s to their re"oval or redu#tion' anti#ipation and designing the #ourse of a#tion and progra""es for attaining su#h pre1 deter"ined goals.

DEFINITION
@Planning is the sele#ting and relating of fa#ts and the "a)ing and using of assu"ptions regarding the future in the visuali*ation to a#hieve desire results.A 3EOR3E TERRC @Planning is de#iding advan#e -hat to do' ho- to do it' -hen to do it' -ho is to do it. It ,ridges the gap for" -here -e are' to -here -e -ant to go. It "a)es it possi,le for things to o##ur -hi#h -ould not other-ise happen.A 1 5OO%TD J O6(O%%E2 @Planning is the thin)ing pro#ess' the organi*ed' foresight' the vision ,ased on fa#ts and e/perien#e that is re4uired for intelligent a#tion.A 1 +20OR( J BE+TTC

FEATURES
+s a pro#ess' planning has #ertain features as given ,elo-. 1 It s the thin)ing pro#ess. 1 @ChoosingA is at the root of planning. 1 It is pervasive prevailing in all a#tivities 1 +##o"plish"ent of enterprise o,?e#tives. 1 Pri"a#y of planning Pri"e 1 It is all e",ra#ing. 1 It leads to in#rease in effi#ien#y. 1 It is an integrated pro#ess #onsisting of o,?e#tives' poli#ies' pro#edures

IMPORTANCE OF PLANNING
The signifi#an#e of planning fun#tion #ould ,e indentified fro" the follo-s 1 To ta#)le in#reasing #o"ple/ity in "odern ,usiness. 1 To fa#e in#reasing #o"petition. 1 To provide for #o"ple/ te#hnologi#al #hanges. 1 To insure against ,usiness failure. 1 To "eet the #hanging e#ono"i# and politi#al situations. 1 To e/er#ise effe#tive #ontrol. 1 To ,ring greater e#ono"y. 18

Merits of &"'!!i!( Planning pro#ess fa#ilities the "anagerial fun#tion on the follo-ing -ays! 1&ele#tion of ,est o,?e#tives #an ,e "ade -ith the help of planning Profits' prestige' 0avoura,le #onsu"er rea#tion' .igh "orale of -or)ers' $an1po-er develop"ent. 1 >nity of a#tion #ould ,e ensured. 1 +id to #o1ordination and #ontrol 1 +id to gro-th and E/pansion. 1 +id to e"ployee #o1operation. 1 +id to e#ono"y. 1 +id to foreseeing the future. 1 In#reases the effe#tiveness of "anager. 2i"itations of planning The effe#tiveness of planning pro#ess "ay ,e affe#ted on the follo-ing reasos 1. >n#ertainty 7. Rigidity 3. >nsuita,ility 8. Costly Planning is ,ased on fore#asted results -hi#h -ill not .old good in un#ertain situations. Prior deter"ination of poli#y' progra""e' et#. $a)es it regid. Business is a dyna"i# a#tivity and hen#e plan $ay not ,e suita,le in all situations. Planning is ti"e #onsu"ing and #ostly affair

)INDS OF PLANNING On the ,asis of the ti"e fa#tor' planning "ay ,e 2ong Ranging planning &hort Range planning 1 1 9 1H years %ot "ore than one year

On the ,asis of ,usiness fun#tion for -hen planning is to ,e dra-n Produ#t planning' pro?e#t and a#tivity planning.

DECISION MA)ING
@It is ht pro#ess sele#tion an alternative fro" t-o or "ore alternatives to deter"ine an opinion or a #ourse of a#tion.A 1 3EOR3E TERRC 0a#tors involved in de#ision "a)ing ! Tangi,le fa#tors! Profits' Kuality of output and all other 4uantitative fa#tors &u#h as $an1hours' $a#hine hours.

19

Intangi,le fa#tors! a.F ,.F #.F d.F %eed ! Beighing the #onse4uen#es of ea#h alternative #ourse of a#tion. &teps in (e#ision1"a)ing pro#ess! (efining and analy*ing the pro,le"' 0inding relevant fa#ts. (eveloping alternative solutions. &ele#ting the ,est solution. Converting the de#ision into effe#tive a#tion. (e#ision1"a)ing Pro#ess 0or"ulation &ele#tion (eli,eration Investigation Con#eption Ption E"ployee "orale. The prestige of ,usiness #on#ern. Consu"er ,ehaviour. &u#h other a,stra#t fa#tors.

CRITERIA
&o"e of the rationales to ,e adopted inde#ision1"a)ing pro#ess are! Redu#tion of #ost' $a/i"i*ation of profit' saving of ti"e' develop"ent of "anagerial s)ill' in#reasing produ#tivity et#.

TYPES OF PLANS
1. &tanding or repeated use plans 1. O,?e#tives 7. Poli#ies 3. Pro#edures. 8. Rules 9. &trategies. &ingle use of plans! 1. Progra""es. 7. Budgets 1:

7.

+ ,rief des#ription a,out these su,1types of plans are given ,elo-! a.F O,?e#tives It "ay ,e defined as the spe#ifi# goals or targets to ,e a##o"plished vi*.' profit "a)ing' #ost redu#tion' in#rease in produ#tivity good-ill' personnel develop"ent. .ealthy e"ployee relations' so#ial responsi,ility. 0i/ing of o,?e#tives in an organi*ational planning fun#tion ensures the follo-ing advantages. It is vital to planning fun#tion. It helps to Integrate planning. It ensure perfor"an#e #ontrol. 2i"itations ! .o-ever' fi/ation of o,?e#tives is su,?e#t to #ertain li"itations vi*.' (iffi#ult to define the o,?e#tives. (iffi#ult to devise suita,le "eans. (iffi#ult to avoid #onfli#t. Re"edies! 1. 7. 3. 8. O,?e#tives should ,e spe#ifi#' O,?e#tive should ,e realisti#' O,?e#tive should ,e ,a#)ed ,y suita,le su,1goals. O,?e#tives should ,e fle/i,le.

,. Poli#ies It "ay ,e defined as a guide to thin)ing and a#tion of those -ho have to "a)e de#isions in the #ourse of a##o"plish"ent of the enterprise o,?e#tives. They are for"ulated in ,road for"s and provide a #o"pressive and fle/i,le #ourse of a#tion to ,e pursued to attain the given o,?e#tives

FEATURES
It is a ,road outlines a,out the things to ,e done and the -ay in -hi#h they an to e done. It is Consistent -ith that of the organi*ational plan. It is to ,e ade4uate in nu",er to a#hieve organisationals goals. It should ,e a sound one. It "ust ensure fle/i,ility.

)INDS OF POLICIES
1. 7. 3. 8. 9. Internal or originated poli#es. E/ternal or i"posed poli#ies. +ddealed poli#ies. &tate or e/pli#it poli#ies. >nstated or i"plied poli#ies. 1;

0a#tors to ,e #onsidered -hile for"ulation poli#ies are ! 1. alues' Beliefs' +",itions' and 0oresight of the o-ners and "e",ers of the top "anage"ent. 7. Prevalent Te#hnology. 3. 0inan#e availa,ility. 8. E"ployee rea#tion. 9. +##o"plish"ent and a#tivities of #o"petitors' :. 3overn"ental regulation and #ontrol. ;. 3eneral ,usiness environ"ent. <. Pri#e levels. =. Pu,li# attitudes and ,ehaviour. $erits ! 1. 7. 3. 8. (e"erits ! 1. 7. 3. 8. It -on6t help to solve all pro,le"s. Instant solutions to pro,le"s "ay not ,e availa,le. It #annot su,stitute hu"an ?udg"ent. It "ay nor en#ourage initiative. 3uide to thin) and a#t. Ensures Consisten#y in all a#tions. Broader appli#a,ility. Confiden#e ,ooster.

#. Pro#edures @The pro#ess of esta,lishing ti"e se4uen#es for -or) to ,e done.A They "ay ,e des#ri,ed as plans pres#ri,ing the e/a#t #hronologi#al se4uen#e of spe#ifi# tas)s re4uired to perfor" designated -or). To deter"ine the spe#ifi# tas)s to ,e perfor"ed. The ti"e -hen those tas)s -ill ,e perfor"ed. The person -ho -ill perfor" the". $erits ! 1. 7. 3. 8. Basis of #ontrol &tandardisation of a#tivities #an ,e done. Ensure #onsisten#y in all operations. +id to #o""uni#ation and #o1ordination.

2i"itations ! 1. Redunda#y "ay ta)es pla#e in #ourse of ti"e. 7. >pdating ,e#o"es "ust.

1<

d. Rule ! It is de#ision "ade ,y the "anage"ent regarding -hat is to ,e done and -hat is not to ,e done in a given situation. It applies to spe#ifi# situations. Rules do not leave any s#ope for de#ision "a)ing nor do they per"it any deviation. e. &trategies ! It is derived for" the gree) -ord strategies' "eaning general' It "eans the art of pro?e#ting and planning the #hoi#e of "eans ,y -hi#h the enterprises for#es ay ,e e"ployed "ost effe#tively in order to a##o"plish it6s intended goal. It is said to ,e for"ulated only to "eet the #hallenge posed ,y #o"petitions poli#ies and a#tivity. The follo-ing fa#tors "ay ,e #onsidered for for"ulating strategies. 1 Corre#t assess"ent of rea#tion of the parties #on#erned. 1 Bhat hu"an and physi#al resour#es are availa,le to dra- up a strategy. 1 Te"pera"ental "a)e1up of the persons to #he#)1"ate -ho" the strategy is ,eing -ould up.

TYPES OF STRATEGIES
1 1 1 1 1 1 &tri)e -hile the iron is hot1a#t pro"pt a -hile the a#tion is li)ely to get results. Ca"el6s head in the tent #reation of #onfiden#e regarding plan to so"e >nity is strength Ti"e is greater heater. Offen#e if the ,est for" of a defen#e. (ivide and rule.

&u##essful i"ple"entation of strategies ! 1. Co""uni#ating strategies to all )ey de#ision1"a)ing "anagers. 7. (eveloping and #o""uni#ating planning pre"ises. 3. Ensuring that a#tion plans #ontri,ute to and refle#t "a?or o,?e#tives and strategies. 8. Revie-ing strategies regularly. 9. (eveloping #ontingen#y strategies and progra". :. $a)ing the organi*ation stru#ture fit planning needs. ;. Continuing to e"phasis planning i"ple"enting strategy. <. Creating a #o"pany #li"ate that for#es planning. f. Progra""e It lays do-n the operation to ,e #arried out to a##o"plish a given -or). It pres#ri,es ho- enterprise resour#es should ,e used. $erits 1. 7. (e"erits 1. 7. 3reater ris) of failure Inade4uate "otivation. +#tion ,ased pra#ti#al guide to "anagerial a#tion. 3reater "otivation.

1=

g. Budget It is a plan relating to a period of ti"e e/pressed in nu"eri#al ter"s. @as a pre1deter"ined state"ent of "anage"ent poli#y' during a given period' -hi#h provide a standard for #o"parison -ith the results a#tual a#hieved. O,?e#tives of Budgeting ! 1. 7. 3. 8. $erits ! Instru"ent of "anage"ent poli#y 1. 7. 3. 8. 9. Ti"e ,ound &pe#ifi# targets. &ynthesis of past' present and future. Right "otivation. Basis of #ontrol. To ensure effe#tive planning. to fa#ilitate Co1ordination fun#tion. To e/er#ise Controlling effe#tive and a#hieving desire goals. To "otivate the -or)for#e for a#hieving desired results.

2i"itations 1. Ca,ined and #onfined. 7. E/#essive relian#e on past e/perien#e. 3. (anger of ina##ura#y in esti"ates. 8. .a"pers initiative rational and prag"ati# initiative is stiffed.

PLANNING PREMISES
$anagerial plans are ,ased on #ertain assu"ptions -hi#h are #alled planning pre"ises. They #onstitute the ground on -hi#h plans -ill stand. $eaningful pre"ises fa#ilitate #onsisten#y and #oordination of plans. The pre"ises "ay ,e of %on1#ontrolla,le pre"ises su#h as e#ono"i# #onditions' politi#al situations' tastes' preferen#es of people et#. &e"i1#ontrolla,le pre"ises su#h as fir"s "ar)et shares' union "anage"ent relations et#. Controlla,le pre"ises su#h as poli#ies of the organi*ation' pro#edures' rules et#. Effe#tive Pre"ising ! To effe#tuate the planning pre"ises follo-ing guidelines "ay ,e adopted. &ele#tion of the pre"ises that ,ear "aterially on progra". (evelop"ent of alternative pre"ises for #ontingen#y planning. erifi#ation of the #onsisten#y of pre"ises Co""uni#ation of the pre"ises. 7H

LESSON $ * ORGANISATION
The ter" organi*ation is derived for" the -ord @organis"A -hi#h "eans stru#ture -ith parts so integrated that their relation to ea#h other is governed ,y their relation to -hole. The ter" organi*ation is used ,oth stru#tural and fun#tional sense. +s a stru#ture it "eans a developed enterprise ,eing operated t a#hieve the given goals. +s a fun#tion it refers to esta,lishing relationship ,et-een a#tivities and authority pertaining to an enterprise. Organi*ation is nothing ,ut a pro#ess of integrating and #o1ordinating the efforts of "en and "aterials for the a##o"plish"ent of a set o,?e#tive.

DEFINITION
@Orgnisation is the pro#ess of identifying and grouping -or) to ,e perfor"ed defining and delegating responsi,ility and authority and esta,lishing relationship for the purpose of ena,ling people to -or) "ost effe#tively together in a##o"plishing o,?e#tives. 1+22E% Organisation thus is an arrange"ent for internal ad"inistration of the enterprise. It des#ri,es the part -hi#h ea#h e"ployee is intended to play in the operation of an enterprise and ensures that #on#erned endeavour of all of the" -ill ,e #ondu#tive to the full i"ple"entation of the plans of the enterprise.

FACTORS INCLUDED IN THE CONCEPT OF ORGANI+ATION

aF ,F #F dF +sse",ly of ,usiness ele"ents su#h as "en' "oney and "aterials. Creation of for"al relationships ,et-een "en e"ployed at different levels through a hierar#hy of authority. (efining the fun#tional role of the personnel and laying do-n the range of their responsi,ility for ,usiness perfor"an#e. Operating the organi*ational a#tivities in #onfor"ity -ith the esta,lish"ent o,?e#tives of the enterprise.

PRINCIPLES OF ORGANI+ATION
1. 7. 3. 8. 9. :. ;. <. =. 1H. 11. 17. Prin#iples of o,?e#tives. Prin#iples of authority. Prin#iples of ulti"ate authority. Prin#iples of for"al authority Prin#iples of the span of #ontrol Prin#iples of de#ision Prin#iples of E/#eption Prin#iples of (efinition Prin#iples of Balan#e Prin#iples of Continuity Prin#iples of Organisation #ost Prin#iples of Effe#tive #o""uni#ation. 71

ELEMENTS OF ORGANI+ATION
1. 7. 3. 8. 9. (ivision of -or) 3rouping of a#tivities. +ssign"ent of (uties. (elegation of +uthority Esta,lish"ent of relationship.

.en#e internal organi*ation' i"plies designing an ad"inistrative set1up #onsisting of individuals -ith defined tas) and responsi,ility to ,e perfor"ed a##ording to an orderly se4uen#e pro#edures for attaining the result.

ORGANISATIONAL CHART
It is i"portant tool for portraying net -or) of an organi*ation stru#ture. It sho-s 1. The "ain portion' nature of relationship ,et-een 7. 2evels of "anage"ent. @It is diagra""ati# for" -hi#h sho-s i"portant aspe#ts of an organi*ation' in#luding the "a?or fun#tion and their respe#tive relationship' the #hannels of supervision and the relative authority of ea#h e"ployees -ho is in#harge of ea#h respe#tive fun#tions.A 10EOR3E TERRC

TYPES OF CHARTS
1. 7. 3. 8. erti#al #hart .ori*ontal #hart Cir#ular #hart Tree #hart

$erits of Organisational Chart ! 1. 7. 3. 8. 9. :. 2i"itations 1. 7. 3. 8. 9. :. ;. 2i)ely to ,e outdated Rigidity It sho-s only relationships &hifting of responsi,ility to so"e,ody else (oes not sho- e/tents of authority or responsi,ility. It "ay go against tea"sprit It ignores the infor"al aspe#ts of orgnisation. Clarity in relationship Easy to understand at a glan#e 0a"iliari*ing ne- e"ployees .elps in for"ulating training progra""e .elps to organi*ational #hange It serves as a ,etter "ethod of visuali*ing the tone and #hara#ter of an organisation.

77

TYPES OF ORGANI+ATION
The pro,le" of organi*ation is to sele#t and #o",ine the efforts of "en of proper #hara#teristi#s so as to produ#e the desired result. +lthough #hara#ter and type of organi*ation -ould depend largely on the si*e and nature of enterprise' the follo-ing ,road patterns of organi*ing the personnel have ,een evolved. 2ine organi*ation 0un#tional Organisation $atri/ Organisation &taff Organisation 2ine and &taff Organisation Pro?e#tised Organisation

+ ,rief outline a,out the three ,asi# organi*ation stru#tures are given ,elo-

LINE ORGANISATION
It is the oldest type of organisation in use in -hi#h authority flo-s fro" the "en at the top to the lo-est "an verti#ally. i.e.' the dire#tionsare issued ,y the person in#harge of the -hole organi*ation and are dire#tly #onveyed to the persons responsi,le forhte e/e#ution of the -or). The advantages of this stru#ture are! &i"ple to understand and develop. Clear1#ut division of authority and responsi,ility is possi,le (is#ipline #an ,e easily "aintained. It "a)es for 4ui#) a#tion .o-ever' this stru#ture has follo-ing short#o"ings! $a)es the organi*ation "ore regid and infle/i,le 2a#) of e/pert advi#e "ay ,e there. 5ey "an are loaded heavily. 2oss of one or t-o #apa,le "en "ay "ar the organisatioin. 2ine Organisation Chart 3eneral $anager $anager Eastern Region $anager Bestern Region

$anager 1

$anager 7

$anager 3

$anager 8

$anager 9

$anager :

LINE AND STAFF ORGNISATION

+ "anager today #annot hope to thin) of all possi,le fa#tors in a given situation. Therefore' he hs a set of e/pert advisers. Those fun#tions -hi#h have dire#t responsi,ility for a##o"plishing the "a?or o,?e#tives of the fir" are #alled line fun#tions. The staff fun#tions are supposed to help and assist the 73

line in dis#harging their responsi,ility. The staff position esta,lished as a "easure of support for the line organi*ation "ay ,e of personal staff' spe#ialished staff and general staff. This for" has #ertain advantages and li"itations. They are It is ,ased planned spe#iali*ation It ,rings e/pert )no-ledge to ,ear upon "anage"ent It provides "ore opportunity for advan#e"ent for a,le -or)ers. 2i"itations! Relationship ,et-een line and staff "e",er "ay #reates #onfusion. 2a#) of authority "ay affe#t the interest of the staff "e",er. Prestige and influen#e of line "e",er ay suffer in front of spe#ialist.

FUNCTIONAL

ORGANISATION

.ere the -hole tas) of "anage"ent and dire#tion of su,ordinates should ,e divided a##ording to the type of the -or) involved. The fun#tional "anage"ent #arries this idea to its logi#al li"it and divides up "anage"ent into a nu",er of fun#tions su#h as produ#tion' sales' finan#e and personae' and resear#h and develop"ent et#. Ea#h of these depart"ents -ould serve its ,est for the organi*ation. Its advantages areI It ensures a greater division of la,our It I"proves the effi#ien#y of the organi*ation. It ,rings spe#iali*ation and innovations. It fa#ilitates "ass produ#tin. .o-ever' it has #ertain li"itations as given ,elo-I &tri#t enfor#e"ent of dis#ipline is 4uestiona,le. Creates #o"ple/ity in stru#turing a#tivities. Responsi,ility #annot ,e fi/ed effe#tively. + "odel of line staff and fun#tional organi*ation stru#ture is given ,elo-. Chair"an P+ to Chair"an

(ire#tor Personal

(ire#tor Produ#tion

(ire#tor Pur#hasing

(ire#tor 0inan#e

3$ 1

3$ 7

$anager $anager $anager Personal Produ#tion 0inan#e

$anager Personal

$anager Produ#tion

$anager 0inan#e

78

FORMAL ORGANISATION
@+ %et-or) of personal and so#ial relation not esta,lished or re4uired ,y the for"al organi*ation ,ut arising spontaneously as people asso#iate -ith one another.A Types of infor"al groups 1. &o#ial overlays 7. 0un#tional overlays 3. (e#ision overlays 8. Po-er overlays 9. Co""uni#ation overlays Benefits 1. 7. 3. 8. 9. :. ;. <. =. 1H. &ense of ,elonging &afety value for e"otional pro,le" +id to the ?o, Breeding ground for innovation and originality I"portant #hannel of #o""uni#ation &o#ial #ontrol Che#) of authority &elf poli#ing 0ills gaps in a "anagers a,ilities 3ives the "anagers feed,a#) a,out e"ployees and their -or) e/perien#e

2i"itations 1. Resistan#e to #hange 7. &u,opti"i*ation 3. Ru"or 8. 3roup thin) philosophy

AUTHORITY AND RESPONSIBILITY

+uthority is the ,asis of organi*ation in as "u#h as organi*ation is des#ri,ed as a syste" of authority relationships. +uthority is the po-er to #o""and others to a#t in a "anner dee"ed ,y the possessor of the authority to further enterprise or depart"ental purpose. It is the po-er to "a)e de#isions -hi#h guide the a#tions of others. The person -ho "a)es the de#isions is the superior and the person -ho a##epts the" and is guided ,y the" is #alled one su,ordinate. +uthority is the right to give orders and the po-er to e/a#t o,edien#e. 1 .E%RI 0+CO2

+uthority "ay ,e of for"al authority' a##eptan#e authority' authority of situation' position authority' and te#hni#al authority. Aut,oritPo.er 1 It is the institutionali*ed right of a It is the a,ility of a person to influen#e superior to #o""and and #o"pel his another person to perfor" an a#t. su,ordinates to perfor" a #ertain a#t. 7 It rests in the #hair It rests in the person 79

3 8 9 :

It is delegated It is -ell defined It is -hat e/ists in the eye It is a de?ure #on#ept Basis for for"al organi*ation

It is earned ,y o-n efforts It is undefined It e/ists in fa#t. It is defa#to #on#ept Basis for infor"al organ

Responsi,ility is an o,ligation of the individual to perfor" assigned duties to the ,est of his a,ility under the dire#tion of his e/e#utive leader. 1 5EIT. (+ I& Responsi,ility refers to duty' a#tivity or so"eti"es even authority. It really "eans that the o,ligation of a su,ordinate to perfor" the duty assigned to hi". The essen#e of responsi,ility is' then o,ligation. In the nor"al fun#tioning of an enterprise "u#h of the responsi,ility in the nature of #ontinuing o,ligation -hi#h "eans that the su,ordinate has an o,ligation to dis#harge his fun#tions as re4uired ,y the superior #ontinually. Responsi,ility involves Co"plian#e' o,edien#e and (ependa,ility. + failure to o,serve these ele"ents "ay #all forth a penalty' punish"ent or dis#iplinary a#tion against the erring su,ordinate. The ter" a##ounta,ility #an also ,e used as a su,stitute for responsi,ility. +##ounta,ility refers to the lia,ility of a su,ordinate for a proper dis#harge of his fun#tions. It in#ludes responsi,ility and arises fro" it. But a##ounta,ility #annot ,e delegated. Thus to ,e a##ounta,le is to ,e ans-era,le for the fulfill"ent or non1fulfill"ent of the authority or responsi,ility assigned.

DELEGATION
To delegate "eans to grant or #onfer. (elegation "eans #onferring authority fro" one "anager to organi*ational unit to another in order to a##o"plish parti#ular assign"ents. (elegation deter"ines the effe#tiveness of the "anager in his -or). The -ay in -hi#h delegation -ill influen#e the relationship ,et-een the su,ordinate and his superior and through it the perfor"an#e of the su,ordinate. In the a,sen#e of delegation' he "ay re#eive orders fro" "any people and "ay' therefore' ,e unsure of his ?o,.

ELEMENTS OF DELEGATION
The pro#ess of delegation involves three ,asi# a#tions -hether e/pressed or i"plied. They are The delegator should assign duties to su,ordinates. .e has to grant authority to su,ordinates to the delegated part of his -or). (elegation should #reate o,ligation on the part of su,ordinate to #o"plete the ?o,. $erits 1. 7. 3. 8. 9. Relieves "anager6s -or)load. 2eads to ,etter de#isions. &peed up de#ision ,uilds up "orale. Train su,ordinates and .elps to #reate for"al organi*ation stru#ture.

7:

BARRIERS TO DELEGATION/
On the "anager6s side! 1. 0ear of loss of po-er 7. 2a#) of #onfiden#e in su,ordinates. 3. 0ear of ,eing e/posed. 8. (iffi#ulty in ,riefing. On the su,ordinates side! 1. 0ear of #riti#is" 7. 2a#) of ade4uate infor"ation 3. 2a#) of self #onfiden#e and initiative and resour#es. 8. %o positive personal gain.

GUIDELINES FOR EFFECTIVE DELEGATION

1. 7. 3. 8. 9. :. ;. Clarity in assigning the tas) Proportionate authority. 2i"its of su,ordinates authority. Positive in#entive for a##epting responsi,ility. Proper training of su,ordinates. Create #li"ate for "utual trust and good-ill %o over laps or slips in delegation.

STEPS IN DELEGATION
The entire pro#ess of delegation of authority #an ,e #o"pleted through the follo-ing steps. (eter"ination of results prote#ted. +ssign"ent of duties. +uthori*ation for a#tion. Creation of o,ligation.

SPAN OF MANAGEMENT
It is one of the organi*ation prin#iple. It refers to the nu",er of su,ordinates for -hose a#tivities an e/e#utive should ,e held responsi,le. The li"it to the nu",er of su,ordinates -ho #an ,e effe#tively "anaged ,y a "anager. The fa#tors deter"ining span of #ontrol of a superior are! 1. 7. 3. 8. 9. %ature of a#tivities involved. +,ility of the superior E)no-ledgeF %ature and a,ility of su,ordinates. Ti"e availa,le. Pla#e availa,le et#.

GRAICUNA0S FORMULA
0ren#h "anage"ent #onsultant . +. 3rai#una offer analy*ing su,ordinate and superior relationship developed a "athe"ati#al for"ula. .is theory identifies three types of the su,ordinates J superior relationships na"ely. 1. 7. 3. (ire#t single relationships. (ire#t group relationships. Cross relationship ,et-een su,ordinates. 7;

These relationships vary E#onsidenan#yF -ith the si*e of the su,ordinates group -hile the supervisions o-n dire#t relationship -ith individuals in#rease n EproptionF to the addition to su,ordinates the groups and #ross relationships in#rease "u#h "ore than proportionately. .e said the total nu",er of relationships gro-s in geo"etri#al ratio' every ti"e a ne- su,ordinates is added.

FORMULA
RL Bhere % L RL 1. 7. %/ M7n11NEn11F %u",er of su,ordinates Total relations. RL: R L 88

Bhen t-o su,ordinates 8 &u,ordinates L 8 / E 7811NE811FF L 8 / M73NE3FO L 8 /P<N3O L 88

&pan of supervision re4uire follo-ing s)ills ! &upervision re4uires attention. &upervision re4uires E"otional sta,ility. &upervision re4uires ti"e. &upervision re4uires a,ility of su,ordinates. &upervision re4uires nature of -or).

USE OF GRAICUNAS FORMULA

It #learly sho-s #o"ple/ity and diffi#ulty of -ider spans. 1. It re"inds "anager of -isdo" of stri)ing to narro-er spans. 2i"itation 1. $athe"ati#al pre#ision is de,ata,le 7. (ire#t group relation "ay ,e far fet#hed. 3. The "ain pro,le" is not nu",er of R2 ,ut their fre4uen#y and the volu"e of stress and strain they generate. 8. It does apply in #ases of #ross relations of a ,ig enterprise. 2i"ited span of #ontrol ensures the follo-ing 7<

1. 7. 3.

Tighter #ontrol and #loser supervision Ease of "anaging fe-er. +vaila,ility of ti"e to thin) and plan

On the other hand li"ited span of #ontrol has so"e short#o"ings also as given ,elo1. 7. 3. +dditional #osts having "ore "anager Co"ple/ities in #o""uni#ation -ill arise Prevention of de"o#rati# parti#ipation

DECENTRALI+ATION
It is the situation -hi#h e/ists as a result of syste"ati# delegation of authority through out the organi*ation. The ter" de#entrali*ation #arries different "eanings to different people. (e#entrali*ation is an e/tension of delegation. (e#entrali*ation i"plies a syste"ati# delegation of authority through out the -hole organi*ation.

1HY DECENTRALI+ATION 2
2arge #o"panies having independent produ#t or servi#e lines "ay adopt a for" of de#entrali*ation. >nder de#entrali*ation the -hole organi*ation is divided in to self1suffi#ient divisions. .aving e/perien#ed "any diffi#ulties in the s"ooth running of su#h #entrali*es organi*ations' de#entrali*ations of authority has ,een suggested and largely resorted to parti#ularly to a#hieve the follo-ing purposes. 1 1 1 1 1 Easing ,urden of #hief e/e#utive. 0a#ilitating diversifi#ation' Providing produ#t of "ar)et e"phasis. (eveloping "anagers and I"proving "otivation.

ADVANTAGES OF DECENTRALI+ATION
1 1 1 1 1 1 (e#entrali*ation leads to spe#iali*ation. En#ourages de#ision "a)ing and assu"ption of authority and responsi,ility. (e#entrali*ation "a)es the su, ordinates to -or) -ith involve"ent 0a#ilitates diversifi#ation in large s#ale. Pro"ote the develop"ent of general "anagers. +ids in adoption of fast #hanging Environ"ent.

DISADVANTAGES OF DECENTRALI+ATION
7=

1 1 1 1 1 1 1

$a)es it "ore diffi#ult to have a unifor" poli#y. (e#entrali*ation leads to pro,le" in #o ordination. $ay ,e li"ited to E/ternal for#es. 2eads to in#rease in #ost. $ay so"e ti"e leads to "is1use of po-er in high levels. 2eads to e/penses in training a "anager. $ay ,e li"ited ,y the availa,ility of 4ualified "anagers.

DELEGATION Vs DECENTRALI+ATION 1. 7. 3. (elegation is the pro#ess -hile de#entrali*ation is the end result. &uperior is responsi,le for delegation -here as in de#entrali*ation su,ordinates are responsi,le. (elegation is vital and de#entrali*ation is optional.

DEPARTMENTATION
0irst tas) in designing an organi*ation stru#ture is the identifi#ation of a#tivities and to group the" properly. The pro#ess of grouping a#tivities is #o""only )no-n as depart"entation.

NEED AND IMPORTANCE OF DEPARTMENTATIN

The ,asi# need for depart"entation arises ,e#ause of spe#iali*ation of -or) and the li"itation on the nu",er of su,ordinates #ontrolled ,y a superior. 1. +dvantages of spe#iali*ation !

Thus if the "anagerial fun#tion is #on#eived as a set of a#tivities fa#ilitating the -or) of organi*ation' these a#tivities #an ,e #arried out "ore effi#iently and effe#tively through the division of -or) leading to a spe#iali*ation of "anagerial fun#tion. 7. 0i/ation of responsi,ility

(epart"entation helps in fi/ing the responsi,ility and #onse4uently a##ounta,ility for the results. 3. (eveloped of "anagers

(epart"entation helps in the develop"ent of "anagers. 8. 0a#ility in +ppraisal

$anagerial perfor"an#e #an ,e "easured -hen the area of a#tivities #an ,e spe#ified and standards in respe#t of these #an fi/ed. (epert"entation provides helps in ,oth these areas.

9. 0eeling of +utono"y ! 3H

(eprt"entation provides "otivation ,y developing feeling of autono"y to the e/tent possi,le. There are several ,ases of depart"entation. The "ore #o""only used ,ases are fun#tion' produt' territory' pro#ess' #usto"er' ti"e et#. &o"e of these ,ases are internal1operation oriented li)e fun#tion' pro#ess' ti"e -hile others li)e produ#t' territory and #usto"er are output1oriented.

FUNCTIONAL DEPARTMENTATION
The grouping of #o""on or ho"ogeneous a#tivities to for" an organi*ation unit is )no-n as fun#tional depart"entation. 0un#tional depart"entation is the "ost -idely used ,asis for organi*ing a#tivities and is present al"ost in every large organi*ation at so"e level. 0un#tional depart"entation is "ost #o""only used ,e#ause it offers #ertain advantages -hi#h in#lude advantages of spe#iali*ation' ensuring perfor"an#e of a#tivities ne#essary for the a#hieve"ent of organi*ational o,?e#tives' eli"ination of un1ne#essary a#tivities' easier #ontrol over fun#tions' easier -ay for pinpointing training need of the "anagers and "aintaining the relative i"portan#e of fun#tions in the organi*ation.

PRODUCT 1ISE DEPARTMENTATION

Produ#t depart"entation involves the grouping together of all a#ti,ities ne#essary to "anufa#ture a produ#t or produ#t line. Produ#t depart"entation is preferred for produ#t e/pansion and diversifi#ation -hen "anufa#turing and "ar)eting #hara#teristi#s of ea#h produ#t are of pri"ary #on#ern. Produ#t depart"entation offers several advantages pla#es attention to produ#t lines' redu#es pro,le"s of #oordination for different produ#ts' provides opportunities for further diversifi#ation and e/pansion of organi*ation and provides produ#t spe#iali*ation ne#essary for "anagers spe#ially -hen ea#h produ#t is different fro" other.

TERRITORC BI&E (EP+RT$E%T+TIO%

Territorial or geographi#al depart"entation is spe#ially useful to large1si*ed organi*ations having a#tivities -hi#h are physi#ally or geographi#ally spread su#h as ,an)ing' insuran#e' transportation et#.' Territorial depart"entatin provides #ertain effi#ien#y in operation. 2o#al fa#tors su#h as #usto"ers' #ulture' styles' preferen#es et#.' al-ays affe#t organi*ational fun#tioning.

PRODUCTION PROCESSES $ 1ISE DEPARTMENTATION

In pro#ess depart"entation' pro#esses involved in produ#tion or various types of e4uip"ents used are ta)en as ,asis for depart"entation. Bhen the produ#tion a#tivities involve the use of several distin#tive pro#esses' these #an ,e used as the ,ase for grouping of a#tivities. &u#h a#tivities "ay ,e te/tiles' oil produ#tion et#.' The pro#ess are set in su#h a -ay that a series of operations is feasi,le "a)ing operations e#ono"i#. It provides advantages of spe#iali*ation re4uired at ea#h level of total pro#esses' "aintenan#e of plant #an ,e done in ,etter -ay' and "anpo-er #an ,e utili*ed effe#tively. CUSTOMER $ 1ISE DEPARTMENTATION Custo"er ,ased depart"entation is ,asi#ally "ar)et oriented in -hi#h depart"ents are #reated around the "ar)ets served or around "ar)eting #hannels. The ,asi# idea of this depart"entation is to provide servi#es to #learly identified groups of #usto"ers. Ea#h group of #usto"ers has different pur#hase ,ehavior' pay"ent s#hedule' de"and pattern et#.' Therefore they #an ,e attra#ted to the organi*ation6s ,usiness ,y satisfying the" ,y providing servi#es' pay"ent s#hedule de"and pattern et#.

CHOICE OF BASES FOR DEPARTMENTATION

31

The sele#tion of ,ases for departe"ntation involves a #onsideration of the relative advantages of ea#h ,ase for the organi*ation. Ideally spea)ing' a suita,le ,asis of depart"entation is one -hi#h fa#ilitates the perfor"an#e of organi*ational fun#tions effi#iently and effe#tively so that its o,?e#tive are a#hieved. 1. &pe#iali*ation!

The ,asis of depart"entation should refle#t the spe#iali*ation in perfor"ing the -or). 7. Coordination!

Coordination involves that all the related a#tivities are perfor"ed in a -ay that their perfor"an#e is syn#hroni*ed so that ea#h a#tivity #ontri,utes to others. 3. E#ono"y

+ ,alan#e should ,e "aintained ,et-een the #ost of #reating a depart"ent and its #ontri,ution. The e/isten#e of a depart"ent is desira,le only -hen it #ontri,utes "ore than its #ost. 8. 0o#us on Result

Those a#tivities -hi#h #ontri,ute to the a#hieve"ent to these results should ,e given proper attention. 9. 2o#al Conditions !

2o#al re4uire"ents of the organi*ation should also the ta)en into a##ount -hile #reating depart"ents. :. .u"an Considerations !

(epart"ents should ,e #reated on the ,asis of availa,ility of personnel' their aspirations and value syste"s' infor"al -or) groups and attitudes of people to-ards various for"s of organi*ation stru#ture.

37

Lesso! $ 3 Dire tio!

(ire#tion is instru#ting the su,ordinates to follo- a #ertain pro#ess to attain a give o,?e#tives. It is getting the -or) done through instru#tions and orders. It is the fun#tion of diversion in the "anage"ent pro#ess to get the -or) fro" the su,ordinates ,y "eans of guiding' "otivation' #o""uni#ation' supervising' leading and if need ,e #o""anding. It is su" of total of "anagerial efforts that is applied for guiding and inspiring the -or)ing tea"s to "a)e ,etter a##o"plish"ents in the organi*ation. It is the heart and soul of "anage"ent.

PROCESS OF DIRECTION
1. 7. 3. 8. (efining the o,?e#tives. Organi*ing the efforts. $easuring the -or). (eveloping the people.

Ever "anager in the organi*ation gives dire#tion to his su,ordinates as superior and re#eives dire#tion s su,ordinate fro" his superior. (ire#tion "ay ,e defined as the fun#tion of "anage"ent -hi#h is related -ith instru#ting' guiding and inspiring hu"an fa#tor in the organi*ation to a#hieve organi*ation o,?e#tive. The dire#tion is not "erely issuing orders and instru#tions ,y a superior to his su,ordinates' ,ut is in#ludes the pro#ess of guiding and inspiring the". The analysis of definition reveals that dire#tion fun#tion #onsist of three ele"ents. 1 1 1 $otivation 2eadership Co""uni#ation

(ire#tion has the follo-ing #hara#teristi#s 1 (ire#tion is an i"portant "anagerial fun#tion. Through dire#tion "anage"ent #an initiates a#tions in the organi*ation. 1 (ire#tion fun#tion is perfor"ed at every level of "anage"ent. 1 (ire#tion is a #ontinuous pro#ess and it #ontinuous through out the life of the organi*ation. 1 (ire#tion initiates at the top level in the organi*ation follo-s and ,otto" through there hierar#hy. It e"phasi*es that a su,ordinates is to ,e dire#ted ,y his o-n superior only.

IMPORTANCE OF DIRECTION
The i"portan#e of dire#tion fun#tion in the organi*ation #an ,e presented as follo-s. 1 (ire#tion initiates a#tion. 1 (ire#tion integrates e"ployees efforts. 1 (ire#tion atte"pts to get "a/i"u" out of individuals. 1 (ire#tion fa#ilitates #harges in the organi*ation. 1 (ire#tion provides sta,ility and ,alan#e in the organi*ation. 33

PRINCIPLES OF DIRECTION
(ire#tion is one of the "ost #o"ple/ fun#tion of the "anage"ent as it ideals -ith people -hose nature itself is 4uite #o"ple/ and unpredi#ta,le. 1. Prin#iples of relating to the purpose of dire#ting a. Prin#iples of "a/i"u" individual #ontri,ution. ,. Prin#iple of har"ony of o,?e#tives. #. Prin#iple of effi#ien#y of dire#tion. 7. a. ,. #. d. e. f. g. Prin#iple relating to dire#tion pro#ess! Prin#iple of unity of #o""and. Prin#iple of appropriateness of dire#tion te#hni4ue. Prin#iple of "anagerial #o""uni#ation. Prin#iple of #o"prehension. Prin#iple of use of infor"al organi*ation. Prin#iple of leadership. Prin#iple of follo- through.

Thus one of the ,asi#s fun#tions of "anage"ent is dire#tion. (ire#tion "eans the use of leadership and "otivation to guide the perfor"an#e of su,ordinates to-ards the a#hieve"ent of the organi*ation6s goals. I"portant re4uire"ents for effe#tive dire#tion are ! .ar"ony of o,?e#tives' >nity of #o""and' dire#t supervision' effi#ient #o""uni#ation and follo-1up.

38

LESSON $ 4 MOTIVATION
$otivation is an art of sti"ulating so"eone or oneself or oneself to get designed #ourse of a#tion' to push the right ,utton to get desire a#tion. $otivation is an a#t of indu#e"ent. $otivation $ & L L Results &atisfa#tion

is a drive t satisfy a -ant is e/perien#ed -hen the out#o"e has ,een a#hieved.

The ,asi# prin#iple of "otivation is ,ased upon the follo-ing poli#y i.e.' #arrot or sti#) poli#y. @Put a #arrot in front of don)ey to "a)e it "ove or Ja, his -ith a sti#) ,eing.A

NATURE OF MOTIVATION
1 1 1 1 1 It is a psy#hologi#al #on#ept It is total not pie#e"eal. (eter"ined ,y hu"an needs. $ay ,e finan#ial or non finan#ial. Constant pro#ess

NEED FOR MOTIVATION

Q Q Q Q Q $a/i"u" utili*ation of fa#tors of produ#tion. Redu#e la,our turnover. Easy availa,ility of right personnel. In#reased the effi#ien#y and output. Create sense of ,elonging.

)INDS OF MOTIVATION
1. 7. 3. 8. Positive "otivation %egative "otivation 0inan#ial "otivation %on1finan#ial "otivation

THEORIES OF MOTIVATION
$anage"ent e/perts have for"ulated different theories on "otivation at different di"ensions. They are ! 1. 7. 3. 8. $aslo-6s theory of "otivation. .er*,erg6s theory $#gegor6s theory roo"s theory. e"phasi*es

%eed hierar#hy theory! +,raha" $aslo-6s ,oo) on "otivation and personality "ultipli#ity of hu"an needs are arranged in an order.

39

Q Q Q Q Q

Physiologi#al needs &afety needs &o#ial needs Estee" needs &elf a#tuali*ation.

The first t-o sets of needs are #alled 2o-er order needs E1'7F The other sets of needs are #alled .igher order needs E3'8F +##ording to hi" -hen one needs fulfils another need -ill e"erge auto"ati#ally. Bhile going for a#hieving the parti#ular need' people li)e to give priority to the pressing needs first and the rest in ne/t. S,ort $ o5i!( of M's"o.0s t,eor- 're# 1 1 1 1 Order #annot ,e regarded as rigid. %o indi#ation regarding satisfa#tion of needs. It "ay not have universal appli#ati,ility. $otivation is pie#e"eal e/er#ise ,y "eans of splitting of hu"an needs.

HER+BERGS0 THEORY
+##ording to .er*,erg' fa#tors that give real satisfa#tion to an individual are "otiators. .e #lassified the fa#tors in to t-o vi*' 0a#tors that prevent dissatisfa#tion 0a#tors that give satisfa#tion 1 .ygiene fa#tors.

1 $otivators Efeeling of a#hieve"ent' signifi#an#e of gro-thF

M'i!te!'! e f' tors

1. 7. 3. 8. 9. :. ;. <. =. 1H. 0air #o poli#y and ad"inistration &upervisor )no-s the -or) &upervisors relationship Peers relationship 0air salary Jo, se#urity &u,ordinates relationship Personal life &tatus 3ood -or)ing #ondition

Moti6'tors
Opportunity to a##o"plish so"ething signifi#ant. Re#ongnition. Chan#e for develop"ent Opportunity to groChan#e for in#reased responsi,ility The ?o, inself

%eeds priority' to a great e/tent' #hara#teri*es the types of ,ehavior. It -ill ,e either dire#ted to-ards a#hieving #ertain desira,le positive goals' or #onversely' to-ards avoiding other undesira,le negative #onse4uen#es. Thus' a 4uestion "ay arise as to -hat varia,les are per#eived to ,e desira,le goals to a#hieve and #onversely undesira,le #onditions to avoid. In this #onne#tion a resear#h study -as #ondu#ted ,y 0rederi#). .er*,ergls of Case1Bestern reserve >niversity and asso#iates. This study #onsisted of an intensive analysis of the e/perien#es and feeling of 7HH Engineers and a##ountants in = different #o"panies in Pitts,rug area' >.&.+. (uring the stru#tured intervie-. They -ere agreed to 3:

desira,le a fe- previous ?o, e/perien#e in -hi#h they felt e/#eptionally good or e/#eptionally ,ad a,out ?o,s. They -ere also agreed to rate the degree to -hi#h their feelings -ere influen#ed for ,etter or -orse ,y ea#h e/perien#e -hi#h they des#ri,ed. In #on#luding the infor"ation fro" the intervie-' .er*,erg #on#luded that there -ere t-o #ategories of needs essentially independent of ea#h other affe#ting ,ehavior indifferent -ays. .is findings are that there are so"e ?o, #onditions -hi#h operate pri"arily to dis1satisfy e"ployees -hen the #onditions are a,sent' their presen#e does not "otivate the" in a strong -ay. +nother set of ?o, #onditions operates pri"arily to ,uild strong "otivation and high ?o, satisfa#tion' ,ut their a,sen#e #arely proves strongly dissatisfying. The first <H ?o, #onditions has refused to as "aintain or hygiene fa#tors and se#ond set ?o, #onditions as "otivational fa#tors.

HYGIENE FACTORS
+##ording to .er*,erg there are 1H "aintenan#e or hygiene fa#tors. They are #o"pany poli#y and +d"inistration te#hni#al supervision' inter1personal relationship -ith supervisors -ith peers' -ith su,ordinates' salary' ?o, se#urity' personal life' -or)ing #onditions and status. These are not intrinsi# part of ?o, ,ut they are related to #onditions under -hi#h a ?o, is perfor"ed. They produ#e no gro-th in a -or)er6s outputI they only prevent prevent losses in -or)ers perfor"an#e due to -or) restri#tions. These "aintenan#e fa#tors are ne#essary to "aintain a reasona,le level to satisfa#tion e"ployeesI ho-ever any #ut ,elo- this level -ill dis1satisfa#tory the". +s su#h these are also #alled dis1satisfiers sin#e any in#rease to these fa#tors -ill not affe#t e"ployee6s level of satisfa#tion. .en#e' these are in no -ay "otivation the".

MOTIVATIONAL FACTORS
These fa#tors are #apa,le of having a positive effort on ?o, satisfa#tion often resulting in an in#reasing one6s total output. .er*,erg in#ludes : fa#tors that "otivate e"ployees. These are a#hieve"ent' re#ognition' advan#e"ent -or) itself' possi,ility of gro-th and responsi,ility. $ost of these fa#tors are related -ith ?o, #ontents. +n in#rease in these fa#tors -ill satisfy the e"ployeesI ho-ever' any de#rease -ill not affe#t their level of satisfa#tion. &in#e' thee in#rease level of satisfa#tion in the e"ployees #an ,e used in "otivating the" for higher output. .er*gerg "aintains that poten#y to various fa#tors is not entirely a fun#tion to fa#tors the"selves. It is also influen#ed ,y the personality #hara#teristi#s to the individuals. 0ro" this point of vie-' individuals "ay ,e #lassified into t-o parts. $otivation see)ers' "aintenan#e see)ers. The "otivation see)ers generally are individuals -ho are pri"arily "otivated ,y the satisfier6s su#h as advan#e"ent' a#hieve"ent and other fa#tors asso#iated -ith -or) itself. On the other1hand' the "aintenan#e see)ers tend to ,e "ore #on#erned -ith fa#tors surrounding the ?o, su#h as supervisionI -or)ing #onditions' pay et#. The short#o"ings of .er*,erg6s theory are! 1. Infa#t ?o, satisfa#tion and dis1satisfa#tion are t-o opposite points on a single #ontinuu" Individuals on the ?o, are affe#ted ,y any #hange either in the ?o, environ"ent or in the ?o, #ontent. 7. .er*,erg "odel is "ethod ,ound and a nu",er of other "ethods used for si"ilar study have sho-n different results not supporting his #ontentions other the theory has li"itation is general a##epta,ility. 3. This theory does not atta#h "u#h i"portan#e to pay' status' or inter1personal relationships -hi#h are help generally as i"portant #ontents of satisfa#tion.

3;

Co"parison of "aslo-s and her*,erg theory MASLO10S NEED THEORY 1. &elf a#tuali*ation $ O T I + T O R $ + I % T E % + % C E HER+BERG THEORY Challenging -or)' a#hieve"ent' gro-th in the ?o,. Responsi,ility' +dvan#e"ent and re#ognition

7.

Estee" or status

3. 9.

&o#ial needs Physiologi#al needs

&tatus' Interpersonal' -or)ing #onditions. 0 + C > 2 T C Jo, se#urity' salary

MC GREGORE0S THEORY
Prof. (ouglas $#. 3regore has introdu#ed a fresh di"ension in the dis#ussion on theories relating to "otivation. .e has #lassified the prevalent theories into t-o groups vi*.' 1. 7. Traditional or R theory and $odern or y theory.

Tr'7itio!'" or 8 t,eor-. It #o"pletely e/#ludes -or)ers fro" the pro#ess of "anagerial de#ision "a)ing the theory stress that -ould here only -hen for#ed to do so through ruthless e/er#ise of "anagerial authority over the" through #onstant re,u)ing s#olding repri"anding. (e#isions -hether right or -rong have to ,e "ade ,y "anagers only' the only rule assigned to -or)ers ,eing to "ainly in#line the de#ision. Assu5&tio!s of 8 t,eor1. 2a#) of in#lination to -or). 7. 0ear #an alone for#e a#tion. 3. In,uilt disli)e for responsi,ility 8. 2iving off others. 9. O,ession -ith se#urity. :. $oney alone #an "a)e the people to -or). ;. 2a,our is only a fa#tor of produ#tion. <. +uthority is synony"ous -ith #ontrol. 3<

Mo7er! t,eor- or Y t,eorIt is the e/a#t opposite of / theory' it gives -or)ers a pride of pla#e in the pro#ess of "anage"ent. It e"phasis fuel and a#tive #ooperation' ,et-een -or)ers and "anage"ent to a##o"plish the enterprise o,?e#tives as per theory if -or)ers are properly "aturated' they -ould -illingly a##ept responsi,ility and sho- the sense of #reativity and i"agination in their -or) perfor"an#e. It #an ,e said to ,e positive and opti"isti# outloo). Assu5&tio!s of Y t,eor1. Bor) is re-ard in itself 7. Inherent sense of responsi,ility 3. Re#ongnition. 8. &ense of se#urity. 9. 0inan#ial re-ard is not the only inspiration. :. (e#ision "a)ing a,ility is not the "onopoly ;. (e"o#rati#ally in#lined

GROUP DYNAMICS
Essentially dyna"i#s is a ,ran#h of physi#s -hi#h "eans any "atter in "otion. It also "eans a "oral for#e that produ#e a#tivity or #hange. 3roup dyna"i#s "eans the a#tion of a group engaged in a #o""on endeavor. The -orld dyna"i#s #o"es fro" the 3ree) -or) "eaning for#e. The phrase 3roup (yna"i#s thus "eans a study of #ohesive and disruptive for#e operating -ithin a group. The i"portan#e of group dyna"i# to a "anager lies in the fa#t that "any people tent to ,ehave differently as individual and "e",er of a group. The "anager "ust thus study the" ,oth as individual and as group' as these are t-o interrelated ele"ents of a "otivational situation. The group dyna"i# -ill ,e stru#tured around the three )ey ele"ent su#h as ,asi# ele"ent of group ,ehaviour' group #ohesiveness and the group stru#ture. The three ,asi# ele"ents -hi#h generally of use in understanding the ,ehavior of a group are a#tivities' intera#tions and senti"ents. 3roup #ohesiveness refers to the degree to -hi#h its "e",ers are attra#ted to the group' are "otivated to re"ain in the group' and "utually influen#e on another. .ighly #ohesive groups are "ore li)ely to #onfor" to group pressures than are "e",ers of lo-1#ohesive groups. 3roup stru#ture if "eant that the nature and #hara#teristi#s of the interrelationships a"ong the "e",ers of a group and the roles they play in it.

THE E8PECTANCY THEORY OF MOTIVATION $ VICTOR H/ VROOM

People -ill ,e "otivated to do things to rea#h a goal if they ,elieve in the -orth of that goal and if they #an see that -hat they do -ill help the" in a#hieve it. roo" "a)es the point that "otivate is a produ#t of the anti#ipated -orth that an individual pla#es on a goal and the #han#es the or she sees of a#hieving that goal. .e states that!

FORCE
0or#e alen#e E/pe#tan#y

VALENCE : E8PECTANCY

L &trength of the person "otivation. L &trength of an individual preferen#e for an out#o"e. L Pro,a,ility that a parti#ular a#tion -ill lead to a desired out#o"es.

3=

Basi# #on#epts of the theory are ! 1. 0irst and se#ond level out#o"es. 7. Instru"entality 3. E/pe#tan#y 8. $otivation. $otivation is the "ultipli#ative fun#tion of the valen#e for ea#h first level out#o"e E iF and the ,elieved e/pe#tan#y EEF that a given effort -ill ,e follo-ed ,y a parti#ular first level out#o"e. $erits of 1. 7. 3. roo"s Theory are! It re#ogni*es the i"portan#e of various individual needs and "otivations. It fits the #on#ept of har"ony of o,?e#tives It is #o"pletely #onsistent -ith the syste" of "anage"ent ,y o,?e#tives.

(e"erits of roo"s Theory are 1. Per#eption of value vary a"ong individuals at different ti"es and in various pla#es. 7. (iffi#ulty to apply the pra#ti#e.

THE PORTER AND LA1LER MODEL

2y"an B Porter and Ed-ard 2a-ler III derived a su,stantially "ore #o"plete "odel of "otivation. The strength of "otivation and energy e/e#ted L value of re-ard N a"ount of energy re4uired N pro,a,ility of re#eiving re-ard. $otivation is an e/tre"ely signifi#ant su,?e#t for "anagers get -or) done through others. I"portant #hara#teristi#s of "otivation are individual differ in their "otivation' individuals are una-are of "otivation so"eti"es' "otivation "ay #hange and vary' "otivation is a #o"ple/ one. $aslo-' .er*,erg' $# 3regore' Roo" and Porter and 2a-ler are so"e the i"portant -riters on "otivation.

8H

LESSON $ ; COMMUNICATION
The -ord #o""uni#ation originates fro" the latin -ord @#o""unisA denoting #o""on. It involves i"parting a #o""on idea or understanding and #overs any type of ,ehavior resulting in an e/#hange of fa#ts' ideas' opinions' or e"otions ,y t-o or "ore persons. $anage"ent tas)s of planning' dire#ting' #oordinating and "otivation #an ,e #arried out ,y the pro#ess of re#eiving issuing re#ording and interpreting. The infor"ation of fa#ts and figures related to the varied aspe#ts of ,usiness a#tivities ne#essarily i"plies trans"ission of infor"ation intended to #onvey the idea of -hat is desired or re4uired to ,e done. This -ould ne#essitate deter"ination of infor"ation to lin) all the leavels and ena,le the #on#erned offi#ers and operative to a#t upon su#h infor"ation. This pro#ess of trans"itting infor"ation as ,et-een different levels of authority and a"ong the offi#ers at the sa"e level is #alled #o""uni#ation. 1 2ouise +llen

CHARACTERISTICS OF COMMUNICATION
1. 7. 3. 8. 9. 3iving infor"ation on "atters regarding things done or to ,e done. Re#eiving infor"ation on "atters of a#tins e/pedited or yet to ,e e/pedted Creating under standing in others a,out their responsi,ility and position and prospe#ts of a situation #on#erning then. $a)ing others listen attentively to the fa#ts' figures' vie-s' opinions under trans"issions. Identifying the #o""on intentions and interest ,y intera#tion of vie-s through #hannels of #o""utations.

IMPORTANCE OF COMMUNICATIONS
Co""uni#ation is des#ri,ed as one of the #ru#ial fouls of "anage"ent. It helps in handling the "a?or "anagerial tas)s of planning dire#tion #oordination "otivating and #ontrolling. It ena,les the top "anage"ent. To for"ulate the #o"prehensive plans and poli#ies on s#ientifi# ,asis. To put the poli#ies and de#isions into a#tion results in a##urate and effi#ient perfor"an#e. .elps the "anage"ent to re"ain infor"ed to the pro,le"s diffi#ulties' grievan#es of personnel. They arise "ainly due to #o""uni#ation gap. It is essential for #oordination -hi#h is the essen#e of "anage"ent. It ,rings a,out "utual understanding ,et-een the offi#ers and personnels at all levels and fosters the sprit of #ooperation. It helps in se#uring largest possi,le parti#ipation or #onsu"ption inde#ision "a)ing' planning and general ad"inistration. This -ill give de"o#rati# #hara#ter to "anagerial pro#ess and strengthen the "oral of the staff.

81

ELEMENTS OF COMMUNICATION
Co""uni#ator or sender or issuer. Co""uni#ate or re#e8iver or addressee $essage orders reports Co""uni#ation #hannel. Response reply rea#tion.

ESSENTIALS OR PRINCIPLES OF GOOD COMMUNICATION

1. Prin#iple of #larity 7. Prin#iple of attention 3. Prin#iple of ade4ua#y 8. 9. :. ;. <. Prin#iple of ade4ua#y Prin#iple of ti"e Prin#iple of integration Prin#iple of infor"ality Prin#iple of feed ,a#) and suggestions et# 1 It "ust give #lear "essage n si"ple -ords and easily understanda,le for". 1 1 It should ,e #onsistent -ith plans' poli#ies progra" and o,?e#tive of the enterprise. 1 It "ust ,e a #o"plete one. 1 It should ,e give at proper ti"e. 1 It should ensure #ooperation at all levels. 1 Co""uni#ation "ust ,e a t-o -ay traffi# "essage poli#es' progra"s' dire#tion' opinions et# are #o""uni#ated do-n-ard3rievan#es' #o"plaints are #o""uni#ated up-ard.

TYPES OF COMMUNICATION
On the ,asis of nature of passing infor"ation 1 1 0or"al #o""uni#ation Infor"al #o""uni#ation

On the ,asis of dire#tion i.e. flo- of "essage ! On the ,asis of "ode of operation 1 1 1 Oral #o""uni#ation Britten #o""uni#ation 3esture #o""uni#ation

Ea#h ,usiness house is #on#erned -ith t-o types of #o""uni#ation' e/ternal and internal. E/ternally' it has to #o""uni#ate -ith the other ,usiness houses' ,an)s' govern"ent offi#ers. The press the #usto"ers and the general pu,li# Internal #o""uni#ation #onsists in trans"itting infor"ation -ith in the organi*ation. .ere -e dis#uss a,out internal #o""uni#ation. Internal #o""uni#ation "ay again the ,e f t-o types. 1. 0or"al or offi#ial 7. Infor"al 0or"al #o""uni#ation flo-s along pres#ri,ed #hannel -hi#h all "e",ers desires of #o""uni#ating -ith one another are o,liged to follo-. 0or"ally a #ler) in any of the se#tions #annot dire#tly #o""uni#ate -ith the "anaging dire#tor. 87

.e "ust tal) to his supervisor -ho -il pass on the passage to depart"ental "anagers' fro" -here it -ill go to the "anaging dire#tor. 0or"al #o""uni#ation "ay "ore verti#ally or hori*ontally. erti#al #o""uni#ation #an flo- do-n-ard or up-ard. .ori*ontal #o""uni#ation flo-s ,et-een e"ployees of e4ual or #o"para,le status. Bhen a nu",er of people irrespe#tive of status sit do-n and #onfer -ith another to arrive at a de#ision a##epta,le to all. It is #alled #onsensus. The for"at for this #o""uni#ation is predeter"ined and #annot ,e altered. In addition to this for"al #hannels of #o""uni#ation' there e/ists in every organi*ation an infor"al #hannel' often #alled a grape vine' that does not arise out of the organi*ational needs ,ut that is never the less' an integral part of his #o""uni#ation syste".

DO1N1ARD COMMUNICATION
+s e/plained earlier #o""uni#ation flo-s fro" a superior to a su,ordinate. The "anaging dire#tor #o""uni#ating -ith the depart"ental heads. + "anager giving a dire#tive an assistant "anager or supervisor' a fore"an instru#ting a -or)er. Orders' individual instru#tions poli#ies' a state"ent ?o, sheets' #ir#ular et# fall under do-n-ard #o""uni#ation. It is e"inently suited to an organi*ation in -hi#h the line of authority runs distin#tly do-n-ards -ith ea#h tan) #learly ,eloanother t -hi#h it is dire#tly related. $ain o,?e#tives of do-n-ard #o""uni#ation 1. 7. To give spe#ifi# dire#tion a,out the ?o, ,eing entrusted to a su,ordinate. The de#ision fallen at "anagerial levels are trans"itted to states in the for" of dire#tives so an a#tion "ay ,e initiated. To e/plain the poli#ies and organi*ational pro#edures.

+ #lear understanding of poli#ies given the lo-er state. + -ider perspe#tive so that they #an grasp and relay their role "ore "eaningfully. 3. To appraise the su,ordinates of their perfor"an#e!

If the perfor"an#e of the su,ordinates is o,?e#tively assessed and the assess"ent #o""uni#ated to hi" in a #onsiderate tone' it -ill definitely pro"ote effi#ien#y. +ppre#iation to good -or) -ill raise his "orale and strengthen his dedi#ation pointing out has short#o"ings -ill ena,le hi" to over #o"e the". 8. To give infor"ation a,out the rational of the ?o,.

i.e. To e/plain to a su,ordinate the signifi#an#e of the ?o, assigned to hi" and -hy he has ,een entrusted -ith it. The i"portan#e of the o,?e#tive of do-n-ard #o""uni#ation has only ,een re#ently re#ogni*ed.

MEDIA FOR DO1N1ARD COMMUNICATION

(o-n-ard #o""uni#ation "ay ,e ,oth oral and -ritten. I"portant dire#tives to initiate a#tion "ay ,e #o""uni#ated through letters poli#ies and pro#edures "ay ,e announ#ed house organs' "anuals' ,ulletins et#' But the do-n-ard follo- of #o""uni#ation is do"inated ,y oral "eans. It is "ore natural to the fore"an to issue oral instru#tions to his -or)ers. 83

LIMITATION OF DO1N1ARD COMMUNICATION

1. >nder Co""uni#ation and over #o""uni#ation (o-n-ard #o""uni#ation is often "ade ,y either under #o""uni#ation or over #o""uni#ation i.e. a superior "ay either tal) to little or too "u#h a,out a ?o, under #o""uni#ation "ay also involved in#o"plete instru#tions' -hi#h -ill inevita,ly lead to unsatisfa#tory perfor"an#e over #o""uni#ation or tal)ing too "u#h' on the other hand "ay lead to the lea)age of #onfidential infor"ation. 7. (elay ! The lines of #o""uni#ation in do-n-ard #o""uni#ation ,eing very long trans"itting infor"ation to the lo-est -or)er in ti"e #onsu"ing pro#ess. By the ti"e infor"ation rea#hes hi" it "ay have lost "u#h of as signifi#an#e' or it "ay have #aused da"aging delay. 3. 2oss of infor"ation ! >nless the #o""uni#ation is fully -ritten' it is not li)ely to ,e trans"itted do-n-ards in its entirely. + part of it is al"ost #ontains to ,e lost. 8. (istortion In long lines of #o""uni#ation' infor"ation is not only distorted. E/aggerating state"ents giving un#ons#ious taints to fa#ts are a part of hu"an nature. 9. Built in resistan#e (o-n-ard #o""uni#ation #auses of too "u#h authority flo-. The su,ordinates do not get any opportunity of parti#ipating in the de#ision "a)ing pro#ess they are e/pe#ted to re#eive poli#y de#isions and dire#tive -ithout 4uestioning their appropriateness' utility or validity -hi#h they resent. "a)ing under

ESSENTIALS OF EFFECTIVENESS DO1N1ARDS COMMUNICATION .

1. 7. 3. 8. $anagers should )eep the"selves -ell infor"ed of the o,?e#tives and a#hieve"ents of their organi*ation. It they are the"selves in possession of ade4uate infor"ation' they -ill ,e also to trans"it infor"ation to their re1su,ordinated in an effe#tive "anner. $anagers "ust -or) a##ording to #o""uni#ation plan. They "ust de#ide ,efore ho"u#h infor"ation is to ,e #o""uni#ated and at -hat ti"e. There should not ,e over #o""uni#ation of authority at the highest level. If an organi*ation is so stru#tured that orders and instru#tions #an originate at various levels' the lines of #o""uni#ation -ill ,e shortened. The infor"ation "ust ,e passed on to #orre#t persons inherently.

UP1ARD COMMUNICATION
If the "anagers have trans"it infor"ation do-n the lines of authority they have also to re#eive infor"ation #ontinuously e"anation fro" levels ,elo- the" the #o""uni#ation #hannel -hi#h pushes the flo- of infor"ation up-ards is )no-n as the up-ard #hannels of #o""uni#ations. $anagers have only re#ently #o"e to the re#ogni*e the i"portan#e of up-ard #o""uni#ation.

88

IMPORTANCE OF UP1ARD COMMUNICATION

1. Providing feed ,a#) This #o""uni#ation provides the "anage"ent -ith ne#essary feed ,a#). The "anage"ent is a,le to as#ertain -hether the dire#tive issued the lo-er statuses have ,een properly understood and follo-ed it also gets the valua,le infor"ation on -hat the e"ployees thin) of the organi*ation and its poli#ies. 7. Out let for the sent1up e"otions!

>p-ard #o""uni#ation is the e"ployee and opportunity to sent their pro,le"s and grievan#es. +lthough the "anage"ent often these things and it )no-s and reali*es the grievan#es of the e"ployees' The later hardly feel #onvin#ed and satisfied. 3. Constru#tive suggestions

Often e"ployees often #onstru#tive suggestion to pro"ote the -elfare of the organi*ation. &o"e of these suggestion -hen i"ple"ented definitely prove ,enefi#ial. They develop sour#e of parti#ipation in the de#ision "a)ing pro#ess. 8. Easier introdu#tion of ne- s#he"es

&in#e the e"ployees feels the"selves to ,e party to the de#ision "a)ing pro#ess' it helps the organi*ation to introdu#e ne- s#he"es -ithout unduly antagoni*ing the e"ployees. 9. 3reater har"ony and #ohesion !

It art as a )ind of lu,ri#ant. It "a)es the at"osphere "ore #ongenial are #reates great har"ony and #ohesion ,et-een the "anage"ent and the e"ployees.

METHODS OF UP1ARD COMMUNICATION

&o"e of the "ore #o""only used "ethods of up-ard #o""uni#ation are dis#ussed ,elo-. 1. Open door poli#y!

The e"ployees are given a feeling that the "anagers doors are al-ays open to the"' -henever the li)e they #an -al) in to his roo"' -ithout any hesitation -hat so -here and tal) to hi" a,out their pro,le"s. 7. Co"plaints and suggestions ,o/es!

In so"e #onvenient pla#es n the offer or the fa#tory #o"plaints and suggestions ,o/es are installed. The e"ployees are en#ouraged to drop their #o"plaints or suggestion if any' in to these ,o/es. These ,o/es are opened at regular intervals and the infor" gathered s#rutini*ed. 3. &o#ial gatherings!

&o#ial gathering are fre4uently arranged in different depart"ents. These gatherings offer a very infor"al at"osphere in -hi#h ate e"ployees shed the inhi,itions and feel free to tal) a,out their pro,le"s. 89

8.

(ire#t #orresponden#e!

&o"e ti"es the "anager "ay dire#tly -rite to an e"ployees and as) hi" to #o""uni#ate -ith hi". 9. Reports!

E"ployees "ay ,e re4uired to su,"it repatriates a,out the progress of their -or) a regular intervals. :. Counseling

In so"e organi*ation -or)ers are en#ouraged to see) the #ounsel of their superiors on their personal pro,le"s. +s they feel en#ouraged to tal) a,out the"selves freely' they provide the "anagers -ith valua,le infor"ation.

LIMITATIONS OF UP1ARD COMMUNICATION

The short#o"ings of the up-ard #o""uni#ation are! 1. E"ployees are usually relu#tant to initiative up-ard #o""uni#ation. The "anagers "ight )eep their doors open' ,ut they #annot for#e the e"ployees to -al) in to their pro,le". 7. E"ployees often feel that if they #o""uni#ate their pro,le"s to their superiors' it "ay adversely refle#t on their o-n effi#ien#y. 3. >p-ard #o""uni#ation is "ore prone to distortion the" do-n-ard #o""uni#ation. In do-n-ard #o""uni#ate distortion is often un#ons#ious. But up-ard #o""uni#ation is deli,erately distorted. 8. &o"eti"es in the pro#ess of up-ard #o""uni#ation' -or)ers ,e#o"e to ,old' ignore their i""ediate superiors and dire#tly approa#hes the top "ost authorities -ith their suggestions or #o"plaints.

ESSENTIALS OF EFFECTIVE UP1ARD COMMUNICATION

1. 7. 3. In order to ena,le the -or)ers to over #o"e the a-e of authority' the "anagers should )eep on en#ouraging the" to #o"e out of their shell and #o""uni#ate freely. (istortion ,y editing #an ,e avoided if the lines of #o""uni#ation are )ept as shortest possi,le. +ll #o""uni#ate should ,e properly analy*ed genuine grievan#es deserve to ,e i""ediately resolved.

HORI+ONTAL COMMUNICATION
Co""uni#ation ,et-een depart"ents or people on the sa"e level in the "anagerial hierar#hy of an organi*ation "ay ,e ter"ed as hori*ontal or lateral #o""uni#ation. It is the "ost fre4uently used #hannels of #o""uni#ation. Bor)ers #o""uni#ating -ith one another' JJJJJJJ e/#hanging infor"ation -ith one another' supervisors holding a #offee ,rea) se#tion s to dis#uss so"e organi*ation are all engage in hori*ontal #o""uni#ation. (iagra""ati#al representation of hori*ontal #o""uni#ation

8:

Produ#tion Pur#hase +##ounts &ales Pu,li# relations

+d"inistration

IMPORTANCE OF HORI+ONTAL COMMUNICATION

.ori*ontal #o""uni#ation is e/tre"ely i"portant for pro"oting understanding and #oordinating a"ong various depart"ents. %ot "u#h i"agination is needed to visuali*e he e",ra#ing situations that the la#) of #o1ordination "ight #reate for the organi*ation. The pur#hasing depart"ent "ight )eep on pur#hasing "aterial -hi#h is neither i""ediately needed nor #an ,e ade4uately stored. The stores "ay report shortage of "aterial -hen produ#tion is fully given up. &#ar#ity of ra- "aterial "ay #ause the produ#tion to slo- do-n ,ut the sales depart"ent "ay #ontinue ,oo)ing orders free flo- of hori*ontal #o""uni#ation a"ong various depart"ents #an easily avert the in#idents of su#h situations. In a s"all organi*ation these fun#tions are #on#entrated the sa"e person or in the fe- person -ho are stationed in #lose pro/i"ity to one another. They do not fa#e any #o""uni#ation pro,le" for the "o"ent pro,le" #rops up' it is thronged out through "utual #onsultation. But in large organi*ation -ith #o"ple/ routines' a deli,erate effort has to ,e "ade to "aintain a free of hori*ontal #o""uni#ation. &o"e "anagers dis#ourage hori*ontal #o""uni#ation feeling that -or)ers "ay get friendly -ith one another and "ay tops and insist on their un4ualified a##eptan#e.

METHODS OF HORI+ONTAL COMMUNICATION

.ori*ontal #o""uni#ation is "ost effe#tively #arried on through oral "eans. 0a#e to fa#e e/#hanges of vie-s or a ,rief #onversation over the telephone in very #onvenient for hori*ontal #o""uni#ation. 0or"al #hannels tend to "ove "anagers status #ons#ious so that they e/press their vie- in e/tre"ely "easured ite"s. This in#ludes the free flo- of #o""uni#ation ta)es pla#e allofreedo" of e/pression there is i""ediate feed ,a#) and all dou,ts and "isunderstanding are sorted out.

GRAPEVINE
&o for -e have ,een dis#ussing the for"al #hannels of #o""uni#ation -hi#h follo- #ertain definite predeter"ined dire#tions apart fro" the"' they operates in every organi*ation an infor"al #hannel of #o""uni#ation #alled the grapevine. It follo-s no set lines' nor any definite rules' ,ut spreads li)e the grapevine' in any dire#tion any -here and spared fast. It is 4uite natural for to group of people -or)ing together to ,e entrusted in one another and tal) a,out appoint"ents pro"otions retren#h"ents or even do"esti# affairs li)e the estranged relation of an e"ployee -ith his -ife or the ro"anti# involve"ents of another. Infor"ation on "ost of these "atters is supposed to ,e se#ret. But so"e people drive great pleasure fro" gathering su#h @se#retA infor"ation ad trans"itting it to others. They are the leaders -ho #ontrol the grapevine. Bhen one of the" #o"e a#ross any pea#e of infor"ation interesting enough to ,e trans"itted to the grape vine in a very "ysterious "anner he -hispers it to another e/horting hi" to )eep the infor"ation se#ret.

8;

5eith davis rightly pointed out that the grapevine is "ore a produ#t of the situation then it is of the person. The grapevine is ,asi#ally a #hannel of hori*ontal #o""uni#ation' for it is only people -or)ing at the sa"e level of hierar#hy -ho #an infor"ally #o""uni#ate -ith one another -ith prefe#t #ase. Thus the -or)ers "ay have one grapevine and the first line supervisors another. But the fa#t is that the grapevine does not follo- any set pattern and it #an ,e effe#tive hori*ontal' verti#ally' and even diagonally.

HO1 THE GRAPEVINES OPERATES

Professor 5eith davis -ho has done so"e resear#h in the nature of grapevine or the infor"al #hannel of #o""uni#ation #lassifies in the four ,asi# types! &ingle strand' 3ossi' Pro,a,ility and Cluster. I The single strand #hain involves the passing of infor"ation through a long line of persons to the H B C -ho tells ( and son on' till the Einfor"ation has rea#hed L ulti"ate re#ipient. + tells B -ho tells "ost of the persons #on#erned. In the gossip #hain' + a#tively see)s and tells every one. This #hain is ?ust li)e the -heel -here + is at the #entre and the infor"ation passes along the spo)es of the -heel to others stationed on the ri". The pro,a,ility #hain is a rando" pro#ess in -hi#h a trans"its the C the la- of pro,a,ility infor"ation to others and the" A in a##ordan#e -ith G Dthese others tell still A ) others in a ultra "anner. This #hain "ay also ,e #alled rando". In the #luster #hain' + feels sele#ted persons -ho "ay in turn relay the infor"ation #o""uni#ation follo-s this #hain. + "odel if different for"s of grapevines are depi#ted in the #hart. F D C < B IMPORTANCE OF THE GRAPEVINE E 1. &afety value! +pprehension e/perien#ed ,y -or)ers on "atters li)e pro"otion and retren#h"ents ,e#o"e an o,sertion -ith the". Tal)ing a,out the" "ay not alleviate their fears' ,ut it #ertainly provides the" e"otional relief. &in#e the grapevine does no,ody #an held a##u"ulate G for"al #hannel' F not follo- any H for any thing GOSSIP he has said.

TYPES OF INFORMAL CHANNELS OF COMMUNICATION

CLUSTER

<

H 8<

LESTRAND

PROB+BI2ITC

Bhile relaying the infor"ation to another fello-' a person is 4uit free to give it any t-ists he li)es. This t-ists helps hi" to e/press his personal e"otions. Thus the grapevine a#t as a )ind of safety value for the dent up e"otions of the su,ordinates. 7. Organi*ational solidarity and #ohesion !

The e/isten#e of grapevine provides that the -or)ers are interest in the asso#iates. The very fa#ts that they tal) a"ong the"selves helps to pro"ote organi*ational solidarity and #ohesion. Properly used grapevine "ay even raise the "orale of the -or)ers. 3. &upple"ent to other #hannels !

+ll infor"ation #annot ,e trans"itted to the e"ployees through he offi#ial #hannels. If there is so"e useful infor"ation and suita,le for ,eing trans"itted through offi#ials #hannels. It #an ,e trans"itted through the grapevine. Thus the grapevine supple"ents others #hannel of #o""uni#ation. 8. T-i#e Trans"ission !

The speed -ith -hi#h infor"ation is trans"itted through the grapevine is ?ust re"ar)a,le. 9. 0eed Ba#)!

The grapevine provide feed ,a#) to the "anage"ent. It ena,le the" to )no- -hat the su,ordinates thin) a,out the organi*ation and its various a#tivates De5erits of (r'&e6i!e# 1. (istortion ! One of the "a?or dra-,a#)s of the grapevine is that it "ay speed ,aseless or distorted ne-s -hi#h "ay so"eti"es prove har"ful even to the e"ployees. 7. In#o"plete infor"ation! The grapevine infor"ation is usually in#o"plete. &o here is lively li)elihood of its ,eing "isunderstood or "isinterpreted. 3. (a"aging s-iftness! The s-iftness -ith -hi#h the grapevine trans"its infor"ation "ay even ,e da"aging.

BARRIERS IN COMMUNICATION
Their "ight ,e a nu",er of su#h ,arriers i"peding the flo- of #o""uni#ation in the organi*ation. This "ay ,e #lassified as EiF EiiF EiiiF E/ternal Organi*ational' Personal fa#tors.

E8TERNAL BARRIERS
Barriers to #o""uni#ation "ay ,e either e/ternal to the parties involved or they "ight ,e internal to the". 1. &e"anti# ,arriers ! 8=

&e"anti# ,arriers are o,stru#tion #aused in the pro#ess of re#eiving or understanding of the "essage during the pro#ess of en#oding and de#oding ideas and -ords. 1 1 1 1 7. Badly e/pressed "essage. 0aulty translations >n1#larified +ssu"ption. &pe#ialist6s language. E"otional or psy#hologi#al ,arriers

E"otional or psy#hologi#al fa#tors are the pri"e ,arriers in inter1personal #o""uni#ation. The "eaning as#ri,ed to a "essage depends upon the e"otional or psy#hologi#al status of ,oth the parties involved. 1 1 1 1 1 1 3. Pre"ature evaluation. Inattention 2oss ,y trans"ission and poor retention. >ndue relian#e on the return -ord. (istrust of #o""uni#ator. 0ailure to #o""uni#ate. Organi*ational ,arriers !

+n organi*ation ,eing a deli,erate #reations for the attain"ent of #ertain spe#ified o,?e#tives' day1to1 day happening -ithin it re4uire ,eing regulated in su#h a "anner that they #ontri,ute to attain these o,?e#tives in the "ost effi#ient "anner. 1 1 1 1 1 8. Organi*ational poli#y Organi*ational rules and regulations. &tatus relationships. Co"ple/ity in organi*ation stru#ture Organi*ational fa#ilities. Personal ,arriers !

Bhile the organi*ational fa#tors dis#ussed a,ove are' no dou,t i"portant influen#es operating on #o""uni#ation' a host of fa#tors internal to the t-o parties1sender and re#eiver1to this pro#ess also e/ert i"portant influen#es on its operation' s #o""uni#ation is ,asi#ally an inter personal pro#esses.

METHODS OF OVERCOMING THE BARRIERS

Considering the i"portan#e of effe#tive #o""uni#ation in the su##essful fun#tioning of ,usiness organi*ations' it is essential on the part of the "anage"ent to over#o"e these ,arriers. 1. 7. It is i"perative that organi*ational poli#y "ust ,e #lear e/pli#it and en#ouraging the #o""uni#ation flo- so that people at all levels reali*e the full signifi#an#e of #o""uni#ation. This poli#y should also spe#ify the su,?e#t "atter to ,e #o""uni#ated. 9H

3. 8. 9. :. ;.

Though the #o""uni#ation through proper #hannel is essential for orderly flo- of infor"ation. Even person in the organi*ation shares the responsi,ility of good #o""uni#ation. Organi*ation should have ade4uate fa#ilities for pro"oting #o""uni#ation. Co""uni#ation ,eing an inter1personal pro#ess' the develop"ent of inter1personal relationship ,ased on "utual respe#ts' trust and #onfiden#e is essential for its pro"otion. There should ,e #ontinuous progra""e of evaluating the flo- of #o""uni#ation in different dire#tions.

Thus #o""uni#ation "ay ,e defined as the pro#ess of passing infor"ation and understanding fro" one person to another. Co""uni#ation provides e"ployees ,oth the s)ill to -or) and the -ill to -or). It "ay ,e for"al and infor"al. Bhether it is for"al or infor"al it "ust ,e done in a proper "anner to serve the purpose. Ideation' en#oding' trans"ission' re#eiving' de#oding and a#ting are so"e of i"portant steps in #o""uni#ation pro#ess. Badly e/pressed "essages' faulty organi*ation' distrust of the #o""uni#ator' restri#ting #o""uni#ation' poor retention' different ,a#)grounds are #alled as ,arriers to effe#tive #o""uni#ation.

91

Lesso! $ = Le'7ers,i&
2eadership is an a,stra#t 4uality in a hu"an ,eing to indu#e his follo-ers to do -hatever he is dire#ted to do -ith the *eal and #onfiden#e. 2eadership is generally defined si"ply as the art of influen#ing people so that they -ill strive -illingly to-ards the a#hieve"ent of group goals. 5OO%TD J O6 (O%%E2

IMPORTANCE OF LEADERSHIP
1. 7. 3. 8. (riving for#e group efforts. +id to authority Better utili*ation of "an po-er. Basis for #o1operation.

INGREDIENTS OF LEADERSHIP
1 1 1 1 +,ility to use po-er effe#tively and in a responsi,le "anner. +,ility to #o"prehend the te"pera"ents of hu"an ,eings. +,ility to inspire. +,ility to a#t in a "anner that -ill develop a #li"ate #ondu#ive to and arousing

"otivations.

LEADERSHIP >UALITIES
I/ 1. 7. 3. II/ 1. 7. 3. 8. 9. :. ;. P,-si '" qu'"ities &ound health to fulfill his o,ligation. itality and enduran#e to fa#e al hardships. Ps- ,o"o(i '" qu'"ities/ Personal "agnetis" Enthusias". Co1operation. E/erting Resour#efulness. +,ility to inspire and integrate. Ta#t and s)illful handling.

III/ I!te""e tu'" tr'its 1. .igh degree of intelligen#e. 7. &ound ?udg"ent. 3. Capa#ity to deal -ith every situation. 8. &#ientifi# approa#h. 9. Open "ind. :. Best tea#her. 97

IV/ >u'"ities of ,'r' ter 1. Integrity 7. &elf dis#ipline 3. 3ood natured 8. Billingness to -or) hard. 9. Billingness to a##ept and share responsi,ilities.

APPROACHES TO STUDY OF LEADERSHIP #

A/ Perso!'" Tr'it A&&ro' , This approa#h says that all of us are possessing #ertain a,ilities and share responsi,ilities. &u#h 4ualities are #onsidered as god given and hen#e leaders are ,orn. B/ Situ'tio!'" ? Co!ti!(e! - '&&ro' , # @Fie"7er0s 5o7e"A # This is vie-ing that leadership 4ualities are deter"ined ,y the situation in -hi#h heGshe operates. It is not individuals #hara#teristi#s. C. Grou& '&&ro' , ! + leader is one -ho #o"es attuned to he feelings and a#tins of people -ho" he is supposed to lead. Thus' the leader is one -ho #o"es #losest to living up to the nor"s and standards of his group. D/ P't, (o'" t,eor-# It suggests that the "ain fun#tions of the leader is to #larify and set goals -ith su,ordinates the the" find the ,est path for a#hieving the goals and re"ove o,sta#les.

2eader ,ehavior "ay ,e grouped into four ! 1. 7. 3. 8. &upportive leadership. Parti#ipative leadership. Instru"ental leadership. +#hieve"ent oriented leadership.

TYPES OF LEADERSHIP
0ro" the point of vie- of authority' leadership #an ,e auto#rati# and de"o#rati# or free rein.

AUTOCRATIC LEADERSHIP
The leader alone deter"ines poli#ies and "a)es plans. .e de"ands stri#t o,edien#e and relies on po-er. $erits! 1. It #an in#reases the effi#ien#y' save ti"e and get good result. 7. It -or)s -ell e"ployees -ho have a lo- toleran#e for a",iguity feel inse#ure freedo". 3. Chain of #o""and' and division of -or) are #lear and full understood ,y all. -ith

93

(e"erits ! 1. 7. 3. One -ay #o""uni#ation "ay #reate #ostly errors. Individual de#ision "a)ing "ay ,e dangerous in the #hanging environ"ent. Resent"ent in for" of "assive resistan#e' lo- "orale and lo- produ#tivity.

DEMOCRATIC LEADERSHIP
The entire group is involved in and a##epts responsi,ility for goal setting and a#hieve"ent. &u,ordinates have #onsidera,le freedo" of a#tion. $erits ! 1. 7. The leader has the ,uilt1in personal "otivation -or)ing for hi". The leader #onsistently re#eives the ,enefit of the ,est infor"ation' ideas' suggestions and talents of his people.

This style per"its and en#ourages people to develop gro- and rise in the organi*ation. (e"erits ! 1. 7. Ti"e #onsu"ing. 2eaders "ay avoid responsi,ility.

0ree rein leadership ! 2eader e/er#ises a,solutely no #ontrol. .e provides only infor"ation' "aterials and fa#ilities to hi "en to ena,le the" to a##o"plish group o,?e#tives. This type does not hold good -hen the leader does not )no- -ell the #o"peten#e and integrity of his people and their a,ility to handle this )ind of freedo" S&e tru5 of Le'7ers,i& St-"es # Le'7er e!tere7 BAuto r'ti C P'rti i&'ti6e BDe5o r'ti C E5&"o-ee e!tere7 BL'isseD f'ireC

+rea of freedo" per"itted to su,ordinates 1 7 3 8 9 : ;

98

This spe#tru" depi#ts that a leader #an adopt nu",er of -ays to relate hi"self -ith a group. The left side of the spe#tru" e"phasi*es that his style is leader #entered. &u#h leaders are "ore #are a,out produ#tion than for the -elfare of his su,ordinates. The right side of the spe#tru" denotes that the leadership style e"ployee #entered. They #are a,out "ore for the -elfare of their su,ordinates than for produ#tion. The #entre of the spe#tru" finds a "ore e4uita,le ,alan#e ,et-een the authority e/er#ised ,y the leader and the a"ount of parti#ipation the grotto e/er#ise. The different s#ales in the spe#tru" des#ri,e the follo-ing ! Point 1 ! 2eader "a)es de#ision and announ#es it. Point 7! $a)ing the su,ordinate to a##ept the de#ision. Point 3! 2eader presents his idea and initiate dis#ussion. Point 8! Presents tentative de#ision su,?e#t to #hange. Point 9! Present the pro,le"' gets opinion and "a)es de#ision. Point :! 2eader allo-s the group to "a)e de#ision -ithin li"its. Point ;! 2eader allo-s the group to "a)e de#ision -ithin li"its defined the situation.

MANAGERIAL GRID
It is a for" of #ontinuu" -hi#h e"phasi*e that leadership style #onsist of fa#tors of ,oth the tas)1oriented and people relations oriented ,ehavior in variying degrees. It e/plains that -hatever "ay ,e the type of leadership styles it ulti"ately relates -ith tas)s to e perfor"ed and people -ith -ho" it is to ,e perfor"ed. &o"e styles e"phasi*e on #on#ern for produ#tion -hi#h "eans that the attitudes of superiors to-ards a variety of things' su#h as' 4uality of poli#y de#isions' pro#edures and pro#esses' #reativeness of resear#h' 4uality of staff servi#e' -or) effi#ien#y and volu"e of output. On the other hand there are #ertain leadership styles -hi#h e"phasi*e on #on#ern for people -hi#h "eans that degree of personal #o""it"ent to-ards goal a#hieve"ent' "aintaining the self1estee" of -or)ers' responsi,ility ,ased on trust' and satisfying inter1personal relations' Based on these t-o fa#tors leadership styles #an ,e identified n to 9 types as given in the diagra". 1.= = < ; : 9 8 99 9.9 =.=

3 7 1 1.1 1 7 2o3 8 9 =.1 : ; < = .igh

Con#ern for Produ#tion

This "anagerial grid #on#ept has ,een developed ,y Bla"e and $our The 9 styles depi#ted ,y the diagra" are ! 1.1 I"poverished style -here e/ertion of "ini"u" effort is re4uire get -or) done and sustain organi*ation "orale.

1.= Country #lu, style -here thoughtful attention to needs of people leads to friendly and #o"forta,le organi*ation at"osphere and -or) te"po. =.1 =.= 9.9 Tas) oriented style -hi#h says that effi#ien#y results fro" arranging -or) in su#h a -ay that hu"an ele"ents have little effe#t. Tea" "odel style -hi#h highlights that -or) a##o"plished is fro" #o""itted people -ith interdependen#e through a #o""on sta)e in organi*ation purpose and -ith trust and respe#t. $iddle Road style rightly pointed out that ade4uate perfor"an#e through ,alan#e of -or) re4uire"ents and "aintaining satisfa#tory "orale.

+"ong the five different styles' the "ost desira,le leader ,ehaviour is =.=. &o efforts have to ,e ta)en ,y developing suita,le training progra"s that atte"pts to #hange "anagers to-ards =.= leadership style. $anagerial gird helps the "anagers to identify and #lassify "anagerial styles and it helps to understand -hy he gets the rea#tion that he does fro" his su,ordinates. .o-ever' the "id point of the grid i.e. 9.9 is highly e"phasi*ed in the pure for" of -or)ing #onditions. To su""ari*e' leadership "ay ,e defined as the a,ility to influen#e and dire#t the tas)1related a#tivities of the "e",ers of group. + leader is a goal1setter' planner' e/e#utive' e/pert' group representative' ad"inistrator of re-ards and punish"ents and a sy",ol of the group. There are three approa#hes to the study of leader ship su#h as. The trans approa#h' Behavioral approa#h and Contingen#y approa#h. In that Behavioral approa#h has e"phasi*ed different leadership styles.

9:

LESSON $ E CO-ORDINATION
It is the integration' syn#hroni*ation or orderly pattern of group efforts in the enterprise to-ards the a##o"plish"ent of o,?e#tives. It "ay ,e defined as ,alan#ing and )eeping the tea"s together ,y ensuring a suita,le allo#ation of -or)ing a#tivities to the various "e",ers and seeing that they are perfor"ed -ith due har"ony a"ong the "e",ers the"selves.

NEED FOR COORDINATION

&yste"ati# se4uen#e of operation 0ulfill"ent of a#tivities as per planned s#hedules +voidan#e of interruptions in the operations Eli"inating in#onsisten#ies in o,?e#tives and poli#ies Re"oval of #onfli#ts a"ong individuals (eveloping the tea" spirit and #ooperation.

ADVANTAGES OF CO-OPERATION
1. 7. 3. In#reases the effi#ien#y' In#reases in the produ#tivity' e#ono"i*ing the a#tivities et#. I"prove the "orale of the e"ployees (evelop and retain good personnel

TYPES OF CO-ORDINATION
1. 7. Internal #o1ordination. It is the esta,lish"ent of relationship -ith a vie- to #oordinate the e"ployees of all the depart"ents. It "ay ,e verti#al or hori*ontal. Eternal Co1ordination. It refers to esta,lish"ent or relationship -ith a vie- to #oordinate the a#tivity of those -ho are not part of the organi*ation.

PRINCIPLES OF COORDINATION
1. 7. 3. 8. Early ,eginning (ire#t #onta#t Re#ipro#ity Continuity

TECHNI>UES OF COORDINATION
@+ "anager in "anaging "ust #oordinate the -or) for -hi#h he is a##ounta,le ,y ,alan#ing' ti"ing and integrating. Balan#ing Ti"ing 1 1 &upport' Ti"e s#hedule 9;

Integrating

>nifi#ation

PROBLEMS OF COORDINATION
1 1 1 1 1 1 1 1 Co"ple/ organi*ational stru#ture I"proper #o""uni#ation .igher la,our turnover 2a#) of "otivation and "orale 0avoritis" Red1tapis" I"proper leadership Bea) pu,li# relations

9<

LESSON $ F CONTROL SYSTEM AND PROCESS

CONTROLLING
Control is any pro#ess that guide a#tivity to-ards so"e predeter"ined goals. Thus #ontrol #an ,e applied is n any field su#h as pri#e #ontrol' distri,ution #ontrol pollution #ontrol et#. Thus #ontrol pro#ess tries to find out deviations ,et-een planned perfor"an#e and a#tual perfor"an#e and to suggest #orre#tive a#tion -herever these are needed. 0or e/a"ple terry has defined #ontrol as follo-s ! @#ontrolling is deter"ining -hat is ,eing a##o"plish' that is evaluating the perfor"an#e and' if ne#essary' applying #orre#ted "easures so that the perfor"an#e ta)es pla#e a##ording to plan. Control is #he#)ing event perfor"an#e against pre1deter"ined standards #ontained in the plans' -ith a vie- to ensuring ade4uate progress and satisfa#tory perfor"an#e. Controlling #onsists in verifying -hether everything o##urs in#onfor"ity -ith the plan adopted' the instru#tions issued and prin#iples esta,lished. Its o,?e#t is to point ,ut -ea)ness and errors in order to re#tify the" and prevent re#urren#e. 1. 7. 3. 8. Control is for-ard loo)ing Control is ,oth e/e#utive pro#ess and fro" the point of vie- of the organi*ation of the syste"' a result Control is a #ontinuous pro#ess. + #ontrol syste" is a #oordinated integrated syste".

IMPORTANCE OF CONTROL
Thus #ontrol is an integrated a#tion of an organi*ation or "anager. It offers help in the follo-ing dire#tions. 1. +d?ust"ent in operations

+ #ontrol syste" a#ts as an ad?ust"ent in organi*ational operations. Every organi*ation has #ertain o,?e#tives to a#hieve -hi#h ,e#o"e the ,asis for #ontrol. 7. Poli#y verifi#ation

arious poli#ies in the organi*ation generate the need for #ontrol. 0or organi*ational fun#tioning' "anagers set #ertain poli#ies and other planning ele"ents -hi#h later ,e#o"e the ,asis and reason for #ontrol. 3. $anagerial responsi,ility

In every organi*ation' "anagerial responsi,ility is #reated through assign"ent of a#tivities to various individuals. This pro#ess starts at the top level and goes to the lo-er levels.

9=

8.

Psy#hologi#al pressure

Control pro#ess puts a psy#hologi#al pressure on the individuals for the ,etter perfor"an#e. The perfor"an#e of the individuals is evaluated in the light of targets set for the". 9. Coordination in a#tion

Control syste" area designed n su#h a -ay that they fo#us not only on the operating responsi,ility of a "anager ,ut also on his ulti"ate responsi,ility. This for#es a "anager to #o1ordinate the a#tivities of his su,ordinate in su#h a -ay that ea#h of the" #ontri,utes positively to-ards the o,?e#tives of the superior. :. Organi*ational effi#ien#y and effe#tiveness

Proper #ontrol ensures organi*ational effi#ient and effe#tiveness various fa#tors of #ontrol' na"ely' "a)ing "anagers responsi,le' "otivating the" for higher perfor"an#e' and a#hieving #oordination in their perfor"an#e' #ontrol' ensures that their organi*ation -or)s effi#iently.

STEPS IN CONTROLLING
The various steps in #ontrol pro#ess -hi#h are ne#essary for its relationship to planning. This steps "ay ,roadly ,e #lassified into four parts. 1. 7. 3. 8. E1F Esta,lish"ent of #ontrol standards $easure"ent of perfor"an#e Co"parison ,et-een perfor"an#e and standards and the #o""uni#ation and Corre#tion of deviations fro" standards Esta,lish"ent of #ontrol standards

Every fun#tion in the organi*ations ,egins -ith plans -hi#h are goals' o,?e#tives or targets to ,e a#hieved. In the light of these standards are esta,lished -hi#h are #riteria against -hi#h a#tual results are "easured. E7F $easure"ent of perfor"an#e

The se#ond "a?or step in #ontrol pro#ess is the "easure"ent of perfor"an#e. The step involves "easuring the perfor"an#e in respe#t of a -or) in ter"s of #ontrol standards. E3F Co"paring +#tual and &tandard Perfor"an#e

The third "a?or step in #ontrol pro#ess is the #o"parison of a#tual and standard perfor"an#e. It involves t-o steps 1 1 finding out the e/tent of deviations and identifying the #auses of su#h deviations.

:H

E8F

Corre#tion of deviations

This is the last step in the #ontrol pro#ess -hi#h re4uires that a#tins should ,e ta)en to "aintain the desired degree of #ontrol in the syste" or operation.

ESSENTIALS OF EFFECTIVE CONTROL SYSTEM

Control is ne#essary in every organi*ation to ensure that everything is going properly. Every "anager' therefore' should have an effe#tive and ade4uate #ontrol syste" to assist hi" in "a)ing sure that events #onfor" to plans. In this tailoring of #ontrol syste"' there are #ertain re4uire"ents -hi#h should ,e )ept in "ind. 1. Refle#ting Organi*ational %eeds I

+ll #ontrol syste"s and te#hni4ues should refle#t the ?o,s they are to perfor". 7. 0or-ard 2oo)ing !

Control should ,e for-ard loo)ing. Though "any of the #ontrols are instan#e' they "ust fo#us attention as to ho- future a#tions #an ,e #onfor"ed -ith plans. 3. Pro"ptness in Reporting (eviations

The su##ess of a ther"ostat lies in the fa#t that it points the deviation pro"ptly and ta)es #orre#tive a#tions i""ediately. 8. Pointing out E/#eptions at Criti#al points !

Control should point e/#eption at #riti#al points and suggest -hether a#tion is to ,e ta)en for deviations or not. 9. O,?e#tives !

The #ontrol should ,e o,?e#tive' definite and deter"ina,le in a #lear and positive -ay. :. 0le/i,le

Control syste" should ,e fle/i,le so that it re"ains -or)a,le in the #ase of #hanged plans' unforeseen #ir#u"stan#es or failures. ;. E#ono"i#al

Control should ,e e#ono"i#al and "ust ,e -orth its #osts. E#ono"y is relative sin#e the ,enefits vary -ith the i"portan#e of the a#tivity' the si*e of the operation the e/pense that "ight ,e in#urred in the a,sen#e of #ontrol and the #ontri,ution the #ontrol syste" #an "a)e.

:1

<. &i"ple Control syste" "ust ,e si"ple and understanda,le so that all "anagers #an use it effe#tively. =. $otivating ! Control syste" should "otivate ,oth #ontroller and #ontrolled 1H. Refle#ting Organi*ational Pattern! The #ontrol should refle#t organi*ational pattern ,y fo#using attention on positions in organi*ation stru#ture through -hi#h deviations are #orre#ted. Fee7 G' H "oo& of 5'!'(e5e!t o!tro"

(esired perfor"an#e

I"ple"entation of #orre#tions

+#tual perfor"an#e

Progra""e #orre#tive a#tion

of

$easure"ent perfor"an#e

of

+nalysis of #auses

Co"parison Perfor"an#e

of

Identifi#ation deviations.

of

TECHNI>UES OF CONTROL
:7

To #ontrol the a#tivities in the organi*ation' "anagers #an use variety f tools and te#hni4ues. They are ,roadly grouped under t-o heads. 1. 7. Traditional te#hni4ues. $odern te#hni4ues.

Traditional te#hni4ues are those -hi#h have long ,een used ,y the "anagers. &o"e of the i"portant te#hni4ues under this heads are ,udgetary #ontrol' finan#ial state"ent and ratio analysis' auditing' ,rea)1even analysis and report -riting et#. @Budgetary #ontrol is a pro#ess of #o"paring the a#tual results -ith the #orresponding ,udgeting data in order to approve a##o"plish"ents or to re"edy differen#es ,y either ad?usting the ,udget esti"ates or #orre#ting the #ause of the differen#e.A 1 3EOR3E R TERRC

The different ,udgets su#h as produ#tion ,udget' sales ,udget' overhead ,udget' la,our ,udget et#. #learly indi#ate the li"its for e/penses and also the results to ,e a#hieved in a given period. It ensures effe#tive #o1ordination of the -or) of the entire organi*ation. It pro"otes #o1operation and tea" spirit a"ong the e"ployees St'!7'r7 Costi!( is one of the te#hni4ues of #ost #ontrol and it is ,eing in#reasingly used ,y "odern ,usiness #on#erns for the purpose of #ost redu#tion and #ost #ontrol. It involves a #o"parison of a#tual -ith the standards and the dis#repan#y is #alled varian#e. Bre'H-e6e! '!'"-sis is useful in planning and #ontrol ,e#ause it e"phasi*e the "arginal #ost and ,enefit #on#ept. It helps to "a)e profit esti"ation at the different levels of a#tivity' as#ertaining turnover for desire profit and esti"ating the i"pa#t of the variations of fi/ed and varia,le #osts. It "agnifies a set of relationships of fi/ed #osts' varia,le #ost' pri#e' level of output and sales "i/ to the profita,ility of the organi*ation. Fi!'! i'" st'te5e!t '!'"-sis su#h as 0ound 0lo- analysis' Cash 0lo- analysis and Ratio analysis help to )no- the finan#ial perfor"an#e and finan#ial position of the ,usiness unit. The li4uidity' profita,ility and solven#y position of the ,usiness unit #an ,e as#ertained and efforts #an ,e ta)en to "aintain these fa#tors in an opti"u" proportion' Au7iti!( is the pro#ess of investigating finan#ial and other operation of a ,usiness esta,lish"ent. It "ay ,e #arried out ,y internal and e/ternal "e",ers. It helps to s#rutini*es the appli#a,ility and relevan#e of poli#y' pro#edure and "ethod -hi#h have a tenden#y to ,e#o"e o,solete. This it helps in #hoosing a suita,le -or)ing pro#edures and "ethods. A7o&tio! of re&orti!( s-ste5 helps to analyse a parti#ular pro,le" and to ta)e ne#essary #orre#tive a#tion over it. Reports "ay ,e prepared regarding ta/ation' legislation and its effe#t on profit' "a)e or ,uy de#isions' repla#e"ent f #apital e4uip"ent' so#ial pri#ing analysis et#. + "anager #an also e/er#ise effe#tive #ontrol over his su,ordinates ,y o,serving the" -hile they are engaging in -or). Personal o,servation helps the "anagers not only in )no-ing the -or)ers attitude to-ards -or) ,ut also n #orre#ting their -or) and "ethod' if ne#essary. :3

MODERN TECHNI>UES
These are of re#ent origin' -hi#h provide infor"ation not readily availa,le -ith traditional "ethods. These te#hni4ues help to give sharper fo#us and pro"ise in#reasingly to i"prove the 4uality of #ontrol. Progra" Evaluation Revie- Te#hni4ue EPERTF and Criti#al Path $ethod ECP$F are t-o "a?or te#hni4ues #o"ing under this head. PERT has ,een' developed ,y an >.&. Offi#e in 1=9< in #onne#tion -ith the Polaris Beapon &yste" and is #redited -ith redu#tion the #o"pletion ti"e of the progra" ,y t-o years. CPM has ,een ?ointly developed ,y (>Point and Re"ington Rand >&+ in order to fa#ilitate the #ontrol of large' #o"ple/ industrial pro?e#ts. These te#hni4ues are used to "ini"i*e total ti"e' "ini"i*e to #ost' "ini"i*e idle resour#es et#. It is helpful in solving pro,le"s of s#heduling the a#tivities of on1ti"e pro?e#ts. These tools re -idely ,eing used in #onstru#tion industry' planning and laun#hing a ne- pro?e#ts' s#heduling ship #onstru#tion et#. It ensures i"proved "anage"ent of resour#es ,y fa#ilitating ,etter de#ision "a)ing. It ai"s to have future oriented #ontrol "e#hanis" for the organi*ation. M'!'(e5e!t I!for5'tio! S-ste5 provides needed infor"ation to ea#h "anager at the right ti"e' in right for" -hi#h aids his understanding and sti"ulate his a#tion. $I& is a refined for" of traditional infor"ation #olle#tion and supply to the organi*ation points. M'!'(e5e!t Au7it is an evaluation of "anage"ent as a -hole. It e/a"ine the total "anagerial pro#ess of planning' staffing' dire#ting and #ontrolling. To evaluate the "anage"ent a#hieve"ent' the organi*ation plans' poli#ies' pro#edures' organi*ation stru#ture' syste" of #ontrol personnel relation should ,e "easure -ith its end results. 1. 7. 3. 8. 9. :. ;. Budgetary #ontrol Cost #ontrol Produ#tion #ontrol Inventory #ontrol Profit J 2oss Control RO2 #ontrol E/ternal audit #ontrol $anage"ent self audit 1 1 1 1 0inan#ial perfor"an#e Cost perfor"an#e PERT CP$ Produ#tion' perfor"an#e' 4uality &tores fun#tion perfor"an#e

1 Overall organi*ational o,?e#tive perfor"an#e. 1 &tatutory perfor"an#e 1

DIRECT CONTROL VERSUS PREVENTIVE CONTROL

DIRECT CONTROL! 1. 7. Cause of negative (eviations fro" standards. >n #ertain' 2a# of )no-ledge' e/perien#e or ?udg"ent Kuestiona,le assu"ptions underlying dire#t #ontrol +ssu"ption that that perfor"an#e #an ,e "easured +ssu"ption that personal responsi,ility e/ists +ssu"ption that ti"e e/penditure if -arranted :8

+ssu"ption that "ista)e #an ,e dis#overed in ti"e +ssu"ption that the person responsi,le -ill ta)e. Corre#tive steps. PREVENTIVE CONTROL +ssu"ption ! Kualified "anagers "a)e a "ini"u" of errors. $anage"ent funda"ental #an e used to "easure perfor"an#e +ppli#ation of "anage"ent funda"entals #an ,e evaluated. +dvantages ! 1. 7. 3. 8. 3reater a##ura#y En#ourage self #ontrol 2ighten the "anagerial ,urden I"pressive

Thus #ontrol is a very i"portant pro#ess through -hi#h "anagers ensure that a#tual a#tivities #onfir" to planned a#tivities. It is "ainly used to "easure progress' to un#over deviations and to indi#ate #orre#tive a#tion.

MANAGEMENT BY OB<ECTIVES
It is a pro#ess -here,y the superior and su,ordinate "anagers of an enterprise ?ointly identify its #o""on goals' define ea#h individual6s "a?or areas of responsi,ility in ter"s of the results e/pe#ted of hi" and use these "easures as guides for operating the unit and assessing the #ontri,ution of ea#h of its "e",ers. 1 3EOR3E &. O(IOR%E

$BO is #o"prehensive "anagerial syste" that integrates "any )ey "anagerial a#tivities in a syste"ati# "anner and that is #ons#iously dire#ted to-ard the effe#tive and effi#ient a#hieve"ent of organi*ational and o,?e#tive.

MBO PROCESS
&tep 1! &tep 7! &tep 3! &tep 8 ! &tep 9! &et do-n infor"ally the goals of the enterprise. O,?e#tive the goal so set out and define "easures of perfor"an#e. The goals and su,1goals at all "anage"ent levels "ust the" ,e set out. +d?ust"ent in the organi*ation stru#ture. The goals to ,e set at all levels "ust ,e ?oint and agreed ones. :9

&tep :! &tep ;! &tep <!

Continuous feed,a#) fro" appraisal of internal 3oals and the enterprise goal as it is set. +ppraisal of results pro#eed #ontinuously against the goals at all levels. Revie- of su,1results thro-s light on organi*ation results.

BENEFITS OF MBO
1. 7. 3. 8. I"prove"ent of "anaging Clarifi#ation of organi*ation. En#ourage"ent of personal #o""it"ent (evelop"ent of effe#tive #ontrols.

1EA)NESS OF MBO
1. 7. 3. 8. 9. :. 0ailure to tea#h the philosophy of $BO 0ailure to give guidelines to goal setters. (iffi#ulty of setting goals E"phasis on short1ter" goals (anger of infle/i,ility Other dangers.

MANAGEMENT BY E8CEPTION @M/B/E/A

It is a syste" of identifi#ation and #o""uni#ation that signals the "anager -hen his attention is needed! #onversely' it re"ains silent -hen his attention is not re4uired. The pri"ary purpose of su#h a syste" is to si"plify the "anage"ent pro#ess itself. It per"its the "anager to find the pro,le"s that need his a#tion and to avoid dealing -ith these the are ,etter handled ,y his su,ordinates.

ELEMENTS OF MBE
The $BE syste"6s stru#ture is #onstituted ,y the follo-ing ele"ents 1. 7. 3. 8. 9. :. $easure"ent Pro?e#tion &ele#tion O,servation Co"parison (e#ision "a)ing 1 ,y assigning values to perfor"an#e 1 to-ards ,usiness o,?e#tive J e/pe#tations. 1 follo- progress to-ards its o,?e#tives 1 to )no- #urrent state of perfor"an#e. 1 a#tual -ith e/pe#ted and identify the e/#eptions. 1 Pres#ri,es the a#tion that "ust ,e fallen in order EiF Bring perfor"an#e ,a#) into #ontrol ::

EiiF +d?ust e/pe#tations to refle#t #hanging #onditions EiiiF E/ploit opportunity It is also deeply rooted in the prin#iples of the de#ision of la,our' delegation or responsi,ility and authority and span of #ontrol. $erits The pra#ti#e of $BE in "anage"ent yields ,enefit in the follo-ing -ay ! 1. 7. 3. 8. 9. :. ;. <. =. 1H. 11. 17. 13. It save personal ti"e Con#entrative e/e#utive effort Redu#es distortions 0a#ilitates ,roader "anage"ent #overage 2essens fre4uen#y of de#ision "a)ing. $a)es fuller use of )no-ledge of trends history and availa,le ,usiness data. 0ully utili*es highly paid people on high1return -or). Identify #rises and #riti#al pro,le"s. Provides 4ualitative and 4uantitative yardsti#)s for ?udging situations and people. Ena,les ine/perien#ed "anagers to handle ne- assign"ents -ith a "ini"u" of related e/perien#e and training. +lerts "anage"ent to opportunity as -ell as diffi#ulties. En#ourages "ore #o"prehensive )no-ledge of all phases of ,usiness operations. &ti"ulates #o""uni#ation ,et-een different seg"ents of an organi*ation.

(e"erits ! Peter (ru)er6s #riti#ally vie-ed $BE as follo-s ! 1. 7. 3. 8. 9. :. ;. <. =. It ,reeds organi*ation "an thin)ing It is often dependent upon un,elieva,le data. It re-ires a #o"prehensive o,serving and reporting syste". It tends to proliferate paper -or) It often assu"es an un relational sta,ility in ,usiness affairs. It gives false sense of se#urity to "anage"ent. &tandard of #o"parison tend to ,e#o"e o,solete. &o"e #riti#al ,usiness fa#tors are diffi#ult to "easure It #an6t ,e a su,stitute for thin)ing.

PRINCIPLES OF MBE
The "a)e the $BE syste" effe#tive the follo-ing prin#iples "ay ,e follo-ed. 1. 7. 3. 8. 9. Pra#ti#e of &elf1#ontrol (is#ard pre1#on#eived notions. Be guided ,y poli#y 2earn to live -ith a##ountants. (elegate for result. :;

:. ;. <. =. 1H. 11. 17. 13.

&harpen your o,servational po-er >se $BE to des#ri,e su,ordinates in different phases. Invite enough parti#ipation E/pe#t so"e people to #all you la*y (ifferentiate ,et-een @BigA and @2ittleA ?o,s (on6t ,e an @Over1the1&houlderA supervisor +void the @organi*ation "anA attitude E/pe#t to -or) harder ,ut to en?oy it "ore.

:<

MODEL >UESTION PAPER

Ti5e # * Hours P'rt $ A A!s.er '!- 4 questio!s 1. 7. 3. 8. 9. :. ;. <. +re $anage"ent and ad"inistration differentS E/plain. E/plain the Chara#teristi#s of "anage"ent as professionS Bhat do you "ean ,y planning pre"ises and ho- it #an ,e "ade effe#tivelyS Bhat do you "ean ,y &pan of $anage"entS (istinguish ,et-een @(elegationA and (e#entrali*ationAS (is#uss the prin#iples of effe#tive dire#tingS Bhat is 3roup (yna"i#sS Bhat is "anagerial 3ridS P'rt $ B A!s.er '- 3 >uestio!s 1. 7. 3. 8. 9. (is#uss the signifi#an#e of leadership as an integral part of "anage"ent. E/plain different leadership styles. Bhat do you "ean ,y $anage"ent ControlS E/plain the Control pro#ess is an organi*ation. (efine Co""uni#ation and des#ri,e the i"portant steps is a #o""uni#ation pro#ess E/plain the prin#ipal ,arriers to #o""uni#ation. (is#uss the "erits and de"erits of different types of organi*ational stru#ture. E/plain the signifi#an#e of different approa#hes of "anage"ent in "anage"ent theory. @3 8 J4 9 ;KA @M'I # JKK M'rHsA @4 8 E 9 3KA

:=

B.B.A (S) DEGREE EXAMINATION, MAY 2007 / 13 PRINCIPLES OF MANAGEMENT Time : Three hours Maximum : 100 Marks Section A (5 x 8 = 40 marks) Answer any !"# $uestions% A&& $uestions carry e$ua& marks% 1% +% 1% 4% 5% 4% 6% 8% 7% 10% 11% 1+% 11% 14% 15% #x'&ain the nature o( mana)ement* ,iscuss in -etai&. the -i((erences

/etween

(orma&

or)ani0ation an- in(orma& or)ani0ation% 2hat -o you mean /y 'ro)ramme- an- non3'ro)ramme-ecisions* 2hat are the characteristics o( or)ani0ation* 2hat are the techni$ues o( -irection* #x'&ain the -i((erent &e5e&s o( mana)ement* 2hat are the 'ro/&ems o( co3or-ination* 2hat are the -i((erent ty'es o( '&annin) #x'&ain the (unctions o( mana)ement* #x'&ain the si)ni(icance o( '&annin)* 2hat are the /arriers to communication* 8ow can one o5ercome them* #x'&ain 8er0/er)9s Moti5ation38y)iene theory* 2rite in short the -i((erent ste's in contro& 'rocess* #x'&ain the 'rinci'&es o( -irection* 2hat are the -i((erent ty'es o( co3or-ination an- ex'&ain any two o( them in -etai&*

B.B.A (S) DEGREE EXAMINATION, MAY 200 PRINCIPLES OF MANAGEMENT Time : Three hours Maximum : 100 Marks

/ 13

;H

Section A (5 x 8 = 40 marks) Answer any !"# $uestions% A&& $uestions carry e$ua& marks% 1% +% 1% 4% 5% 4% 6% 8% ,e(ine Mana)ement3State the im'ortance o( Mana)ement* #x'&ain -i((erent ty'es o( -ecision* 2hat is '&annin)* #x'&ain in the nature o( '&annin)* #x'&ain s'an o( contro&* ,e(ine Authority an- :es'onsi/i&ity* 2hat is meant /y moti5ation* 2hat are the non3monetary (actors o( moti5ation* 2hat are the $ua&ities o( )oo- &ea-ershi'* #x'&ain the nee- (or contro&* S#;T!<= > (4 x 15 = 40 marks) Answer any <?: $uestions% A&& $uestions carry e$ua& marks% 7% #x'&ain the mo-ern a''roaches o( Mana)ement* 10% ,iscuss the 5arious ste's to /e (o&&owe- in '&annin)* 11% 2hat are the /arriers to e((ecti5e communication* 8ow to o5ercome the /arriers to communication* 1+% #x'&ain Mas&ow9s theory o( moti5ation* 11% #x'&ain -i((erent theories o( @ea-ershi'* 14% #x'&ain the 'rinci'&es o( co3or-ination an- techni$ues to /e use- (or e((ecti5e co3or-ination* 15% 2hat is contro&* 2hat are its ste's* 2hat are the techni$ues o( contro&*

;1