Unit IV PM

251/ 553/ 552MG103 Principles of Management
UNIT IV
Authority – Delegation-Decenralisation- Difference between authority and

power- Uses of authority- distinction between Centralization and
Decentralization – Responsibility – Line and staff relationship – Staffing –
Sources of recruitment – Selection process – Training – Direction – Nature
and Purpose of Directing – Motivation, Nature and Importance of motivation;
Types of motivation; Theories of motivation- Maslow, Hertzberg X, Y and Z;
Leadership – meaning and importance; Traits of a Leader; Leadership styles
– Likert’s System of Management, Tannenbaum & Schmidt Model and
Managerial Grid.
Authority:
Authority is defined as the right to give orders and the power to get obedience. In the context of
an organization, authority might be termed as 'institutionalized power'. A person in an of organization
authority by virtue of the requirements of the role held by him. Authority resides in a person and arises
out of the demands of position in organizations. Responsibility is the obligation of a subordinate to
perform the duty as required by the superior. There should be parity between authority responsibilities.
This means that the subordinate must have been delegated enough authority undertake all the duties
which have been assigned to him and for which he has accepted responsibility Authority without
responsibility is liable to be abused; responsibility without authority is frustrating. Thus, inequity
between delegated authority and responsibility produces undesirable results.
SOURCES OF AUTHORITY:
Management scholars are divided on whether authority originates at the top and flows down in
traditional fashion or whether it originates at the bottom as a kind of consent of the subordinates. We can
classify the views of various management writers under the three headings, namely, formal authority
theory, acceptance theory and competence theory.
These viewpoints are discussed below:
(i) Formal Authority Theory:

According to this theory, authority' is viewed as originating at the top of an organization
hierarchy and flowing downward through the process of delegation. The ultimate authority in a
company lies with the shareholders who are its owners. The shareholders entrust the
management of the company to the Board of Directors and delegate to it most of their authority.
The Board of Directors delegates authority to the Chief Executive and the Chief Executive in
turn to the departmental heads and so on. Every manager in-the organization has some authority
because of his organizational position. That is why, the authority is known as formal authority.
Subordinates accept the authority of a superior because of his formal position in the organization.
A manager in the organization has only that much of authority which is delegated to him by his
superior.
The shareholders of a company have authority over the company because of the
institution of private property in the society. Various social factors, laws, political and ethical
Prepared by A. Jayakumar.BBM, M.B.A, M.Com 1

considerations, and economic factors put certain limits on their authority and the organization
has to function within these limits. In fact, the basic sources of authority can rest in the social
institutions themselves. In a society, where private property does not exist as in the case of
socialist economies, the origin of authority can be traced to the elements of basic group behavior.
The concept of authority as being a right transmitted from the public through social institutions
to business managers is the central theme of the formal authority theory
(ii) Acceptance Theory:

According to this theory, the authority is the power, which is accepted by others. Formal
authority has no significance unless the subordinates accept it. The degree of effective authority
assessed by a manager is measured by the willingness of the subordinates who accept it. "An
individual will accept an exercise of authority if the advantages accruing to him from accepting
plus the disadvantages accruing to him from not exceed the advantages accruing to him from not
accepting plus the disadvantages accruing to him from accepting; and conversely, he will not
accept an exercise of authority if the latter factors exceed the former." Thus, the acceptability of
an order will depend upon relative consequences, both positive and negative. Many orders may
be fully, acceptable, many fully unacceptable, and others only partially acceptable. Barnard
maintains that a subordinate will accept a order if he understands it well, if he believes it is
consistent with the organization anal objectives and compatible with his own interest.'
The acceptance theory of authority has certain limitations. According to it, a manager has
authority if he gets obedience from the subordinates. But a manager is not able to know whether
his subordinates will obey his order unless the order is carried out or disobeyed by them.
(iii) Competence Theory:

According to this theory, an individual derives authority because of his personal
competence. Urwick identified formal authority as being conferred by organization, technical
authority as being implicit in a special knowledge or skill, personal authority as being conferred
by seniority or popularity. Thus, a person may get his order or advice accepted not because he is
having any formal authority, but because of his personal qualities. These qualities may be
technical competence and social prestige in the organization. For example, a person is expert in a
particular field and other people go to him for guidance and follow his advice as if that were an
order.
Limitations of authority:
The authority of any position in the organisation is not absolute. It is subject to various legal,
social, political and economic factors. In an organisation the scope of authority decreases at
successively lower levels. It is maximum at the top and minimum at the lowest level. The use of
authority by a manager over his subordinates is restricted by the following factors:
i. Biological limitations – a manager cannot ask a subordinate to do something which he

himself cannot do. Human beings do not have the capacity to do certain things. E.g. to climb the
side wall of a building.
ii. Physical limitations – physical laws, climate, geographical factors, etc., restrict
managerial authority to a great extent. For example, a supervisor cannot order workers to make
oil from wood.

iii. Legal constraints – a manager has to exercise his authority within the bounds of various
laws passed by the government. For example, a manager cannot order the workers not to form or
join a trade union.
iv. Social constraints – social sectors impose restrictions on the exercise of authority by a
manager. For instance, the task assigned to employees must conform to the group’s fundamental
social beliefs, creeds, codes and habits.
v. Organisational limitations – a manager’s authority is restricted by the objectives and

policies of the organisation. He cannot go against the policies and rules of the organisation as
laid down in Memorandum of Association, Articles of Association, Partnership Agreement,
Policy Manual, etc.
vi. Economic constraints – market forces and other economic conditions restrict managerial
authority. A sales manager cannot ask his sales persons to sell products at a higher price in
highly competitive market.
vii. Limited span – a manager’s authority is limited because there is a limit on the number of
subordinates which he can effectively supervise. A manager cannot take decision about
unlimited number of subordinates. Similarly, a manager can exercise only that much authority
which is specifically delegated to him.
DELEGATION OF AUTHORITY:
Delegation is the essence of good organization. It is an important process to manage the affairs
of an enterprise satisfactorily. Delegation of authority means conferring authority to another to
accomplish a particular assignment. That means a manager can get things done through others by
sharing authority with them. Delegation stands for calling others to render help in accomplishing a job.
Delegation:
The act of assigning authority and responsibility for completion of specific activities to a
subordinate, that is, how to distribute formal authority throughout the organisational structure is a key
organising decision. Delegation is the assignment to another person of formal authority (legitimate
power) and accountability for carrying out specific activities. The delegation of authority by managers
to employees is necessary for the efficient functioning of any organisation, because no manager can
personally accomplish or completely supervise all of what happens at an organisation.
The Process of Delegation:

The process of delegation involves the following steps.
1. Determination of results expected – first of all, a manager has to define the results he
wants to obtain from his subordinates for the achievement of the organisational objectives.
2. Assignment of duties – the manager the assigns specific duties or tasks to each
subordinate. He must clearly define the function of each subordinate and while assigning
duties and responsibilities, he must ensure that the subordinates understand and accept their
duties. Duties should be assigned according to the qualifications, experience and aptitude of
the subordinate.
3. Granting of authority – assignment of duties is meaningless unless adequate authority is

given to subordinates. They can discharge their responsibilities without adequate authority, but
by granting authority, subordinates are permitted to use resources, to take decisions and to
exercise discretion.
4. Creating accountability for performance – subordinates to whom authority is

delegated must be made answerable for the proper performance of assigned duties and for the
exercise of the delegated authority. The extent of accountability depends upon the extent of
delegation of authority and responsibility. A person cannot be held answerable for the acts not
assigned to him or her by his or her superior. Thus, duty, authority and accountability are three
fundamental components of delegation. All the three phases of delegation are interdependent.
Degrees of Delegation:
1. Low degree of Delegation: Low degree of delegation is that in which a superior states a particular
task to his subordinates and tell them to investigate on that task and report back.
2. Moderate degree of Delegation: It is that in which a superior states the task to his subordinates. He
tells him to investigate on that task and report back with an action plan.
3. High degree of Delegation: It is that degree of delegation in which a task is specified to a

subordinate and he is told to investigate on that task, make an action pan, formulate the plan and then
report back with the results and reasons.
PRINCIPLES OF DELEGATION:
The following principles are guides to successful delegation. Unless carefully recognized in practice,
delegation may be ineffective, organization may fail and the managerial process may be seriously
impeded:
1. Assignment of Duties in terms of Results:
Delegation by results expected implies that goals or objectives have being set and plans
made and are understood and accepted by the subordinates and ' that jobs have been designed to
fit in with them. The subordinates must understand clearly what activities they must undertake
and what results they must show. This will enable them to know by what standards their
performance will be judged and will direct their efforts for the achievement of those results.
2. Functional Definitions:
According to Koontz and O'Donnell, the more a position or a department has clear
definitions of results expected, activities to be undertaken, organization authority delegated, and
authority and informational relationship with other positions understood, the more adequately the
individuals responsible can contribute toward accomplishing enterprise objective." To do
otherwise is to risk confusion as to what is expected of whom. This principle although simple in
concept, is often difficult to apply. To define a job and delegate authority to do it requires, in

most cases, patience, intelligence and clarity of objectives and plans. It is obviously difficult to
define a job if the superior does not know what results are desired.
3. Parity of Authority and Responsibility:

Authority and responsibility should bear logical relation to each other. So much authority
should be granted which is sufficient to fulfill the responsibility. This parity is not mathematical,
but rather coextensive, because both relate to the same assignment. Authority can never be
delegated equal to responsibility as both are different things. Responsibility is the work assigned
to a position and is related to objectives, whereas authority is related to the rights given to
perform the work assigned. There is no common denominator for measuring equality between
these. However, authority should be delegated commensurate with responsibility. For instance, if
a manager tries to hold subordinates accountable for duties for which they do not have the
requisite, authority, it will be unfair. It is also not proper if the subordinates are given -sufficient
authority, but are not held accountable for its proper use.
4. Clarification of Limits of Authority:

Limits of authority must be clarified to the subordinates so that they may not assume
excessive authority than desired. Clear limits of authority will allow subordinates to exercise
initiative, develop themselves through freedom of action and to know their area of operation.
This will also avoid misuse of authority.
5. Absoluteness of Accountability:
Accountability, being an obligation owed, cannot be delegated. No superior can escape
accountability for the activities of his subordinates, as it is the superior who has delegated
authority and assigned duties. The superior cannot pass on his obligation to account for to his
superior to the subordinates along with hit authority. Likewise, the accountability of the
subordinates to their superior for the performance of assigned tasks is absolute.
6. Unity of Command:
This principle states that accountability is unitary. Each person should be accountable
only to one superior for delegated authority, as he cannot serve two masters well. If a person
report, to two superiors for the same duty, confusion and friction will result. He will find himself
frequently receiving conflicting instructions. When this is the case, his only hope is either to get
his two bosses or to run the risk of displeasing either or both. Therefore, as far as possible, dual
subordination should be avoided.
Advantages of Delegation of Authority:

i. It reduces the workload of superiors permitting them to concentrate on key areas.
ii. It provides an opportunity to subordinates to grow and develop.
iii. It helps in exercising effective control over the activities of subordinates.
iv. It provides satisfaction to subordinates in terms of recognition.
v. Accountability imposed on subordinate’s forces them to act in a more meaningful and
responsible manner.
vi. It results in prompt decision-making.

Disadvantages to Delegation of Authority:

i. Some managers believe in fallacy that is if we want it done right, do it yourself.
ii. Managers lacking required confidence and trust in subordinates might not be interested in
delegating the authority.
iii. Low self-confidence and more over confidence amongst the managers may create a
bottleneck in a process of delegation.
iv. Fear amongst managers that they will loose status and position.
v. Poor examples set by superiors who do not delegate may discourage that managers to
delegate further.
Guidelines for Effective Delegation:

The practice of delegation is a challenge for managers and employees alike to pay close attention
to the terms of their working relationships. Delegation will have a better chance of succeeding, for all
parties concerned, if they work to build trust in each other. Here is one more situation where ethics
comes to bear in day-to-day organisational activities.
Pre-requisites – the most basic to effective delegation remains the manager’s willingness.
1. First pre-requisite – is to give employees freedom to accomplish delegated tasks. This

means letting them choose methods and solutions different from the ones the manager would
have chosen. It also means giving them the freedom to make mistakes and to learn from their
mistakes. Mistakes are not an excuse to stop delegating, but rather an opportunity to offer
training and support.
2. Second pre-requisite - is open communication between managers and employees.

Managers who know the capabilities of their employees can more realistically decide which
tasks can be delegated to whom. In turn, employees who are encouraged to use their abilities
and who feel their managers will back them up are more likely to accept responsibility.
3. Third pre-requisite - is the manager’s ability to analyse such factors as the

organisation’s goals, the task’s requirements and the employee’s capabilities.
Tasks of effective delegation – the above discussed prerequisites are all important to carry out the
following tasks of effective delegation.
1. Decide which tasks can be delegated – many items can and should be delegated. Some
of these are minor decisions and recurring chores. However, unusually demanding and
challenging assignments may often be delegated to employees and will do much to develop
them.
2. Decide who should get the assignment – who has the available time? Does the job
require special competence? For whom would it be an appropriate and useful developmental
experience? Managers ask these questions when deciding which of their people should get the
assignment.

3. Provide sufficient resources for carrying out the delegated task – all the delegated
authority in the world will not help the recipient, if he or she cannot have the financial, staff or
time resources necessary to do the job.
4. Delegate the assignment – in delegating the assignment, effective managers provide all
relevant information on the task. As far as possible they specify the results expected, not the
methods to be used. Further, they cultivate a climate of free and open communication between
themselves and the person to whom they have delegated the task.
5. Be prepared to run interference, if necessary – delegated tasks can get bogged down if
resources are insufficient or if the person delegated to do the task runs up against resistance
from others. Sometimes this happens because other kinds of power are at work. We can
readily imagine a case where a transfer of reward power causes some third party to complain or
try to “go around” the person who was delegated the task.
6. Establish a feedback system – usually delegating managers establish a system of

checkpoints and feedback so they will remain advised of progress and can offer advice or
“mid-course adjustments” if necessary. They select the feedback system carefully, bearing in
mind that the tighter their control, the less actual delegation is taking place.
Power:
The ability to exert influence, that is, the ability to change the attitudes or behaviour of
individuals or groups. Power is the ability to exert influence on other people. We define management
as the process of shaping and influencing what people do at organisations. Still, managers are not the
only people who can exert influence at organisations. Employees say and do things to influence
managers and there are many kinds of stakeholders outside the organisation that can influence managers
and employees. So any organisation like any relationship is an open system when it comes to power. At
a Law Firm, associates and their managers exert influence on each other and associates take very
seriously the influence exerted by customers. In fact, the extent to which managers give power to
associates and customers is a distinctive feature of the Law Firm as an organisation.
Sources of Power:
Power does not derive simply from an individual’s level in the organisational hierarchy. John
French and Bertram Raven have identified five sources or bases of power. These aspects of power may
be present in a variety of human relationships. In an organisation each may occur at all levels.
1. Reward power – is derived from the fact that one person, known as the influencer, has the
ability to reward another person, known as the influence, for carrying out orders, which may be
expressed or implied or for meeting performance requirements. One example is the power of a
supervisor to assign work tasks to employees.
2. Coercive power – is the negative side of reward power, based on the influencer’s ability to
punish the influence for not meeting the requirements. Punishment may range from a reprimand
to a loss of a job.

3. Legitimate power (also called formal authority) – exists when a subordinate or influence
acknowledges that the influencer has a “right” or is lawfully entitled to exert influence within
certain bounds. It is also implied the influence has an obligation to accept this power. The right
of a manager to establish a reasonable work schedule is an example of “downward” legitimate
power. A plant guard may have the “upward” authority to require even the company president to
present an identification card before being allowed onto the premises.
4. Expert power – is based on the perception or belief or understanding that the influencer has
specific knowledge or some relevant expertise that the influence does not have. When we do
what our doctors tell us, we are acknowledging their expert power
5. Referent power – is based on the desire of the influence to be like or identify with the
influencer. Referent power which may be held by a person or a group is based on the influence’s
desire to identify with or imitate the influencer. For example, popular conscientious managers
will have referent power if employees are motivated to emulate their work habits. Referent
power also functions at peer level, that is, charismatic colleagues may sway us to their
viewpoints in departmental meetings.
These are potential power sources only. They are the ways in which one person can influence
another person. Possession of some or all of them does not guarantee the ability to influence particular
individuals in specific ways. For example, a manager may have employees’ respect and admiration as an
expert in his or her field, but still may be unable to influence them to be more creative on the job or even
to get to work on time. Thus, the role of the influence in accepting or rejecting the attempted influence
is a key one. A manager has the potential to operate from all five power bases. Some of them are
inherent in the position. A specific degree of legitimate power always accompanies a manager’s job. In
fact, it shapes the hierarchical relationships within which the other forms of power occur. Along with
legitimate power, managers usually have reward and coercive power they can reward employees with
money, privileges, or promotion and punish them by withholding or removing these rewards. Thus,
rewards, coercion, dominating personality, expertise, etc. are main sources of power. Power like
authority, is a means of exercising influence on the behaviour of people, but power is stronger than
influence.
Influence is a psychological force while Power is a personal force that enables a person to
change the behaviour of others. Influence is an all-inclusive concept that covers both power and
authority. It includes all means by which the behaviour is modified e.g. power, authority, etc. Power is
an important means to enforce obedience to the rules, regulations and decisions of the organisation.
Power may be derived on personal or organisational bases. The use of power may affect the behaviour
of people in the desired manner, but it does not necessarily imply that people are in agreement with the
exercise of power.
Power and influence:

The term “Power” is often considered as synonymous to “authority”. Really speaking
there is a difference between the two terms. Power refers to the ability or capacity to influence the
behaviour or attitudes of other individuals. A manager’s power may be considered as his ability to cause
subordinates to do what the manager wishes them to do. A manager’s power may be measured in terms
of his ability to.

1. Give rewards.
2. Punish individuals.
3. Withdraw rewards, etc.
Distinction between power and authority:

The objective of both power and authority is common, that is, to influence the behaviour of
others, but there are the following important differences between authority and power.
i. Power is the ability or capacity to command while authority is the right to command.
ii. Power resides in a person who exercises it whereas authority usually resides in the position
held by a person.
iii. Power is personal while authority is positional and institutional.
iv. Power is acquired by a person through personal qualities or by political means, but
authority is conferred on the position.
v. Power may not always be legitimate. The person concerned may not be entitled to exert
influence and the persons on whom power is exercised may not be under an obligation to accept
it. On the other hand, authority is legitimate as it is exercised because of official sanctions and
the people over whom it is exercised expect it.
vi. Power does not necessarily accompany authority. Power centers may be located at lower
levels in the organisation, but authority increases as one goes up the organisational hierarchy.
One can not get any idea of power centers in an organisation by merely looking at its
organisation chart as the formal structure does not show power centers, but authority relationships are
shown in the formal structure of an organisation and one can get an idea of authority from the
organisation chart.
1. Power flows in all directions. For instance, if a supervisor is able to influence the behaviour
of the production manager it is implied that the supervisor has exercised power over the
production manager, but authority flows downwards as it is delegated to the lower levels in the
organisation.
2. Power politics modify authority relationships in an organisation and some individuals may
have more power and less authority or less Power and more authority.
3. Power is the ability to control resources. Person x has power over y where x controls certain
resources needed by y. For example, the production department has power over the packaging
department because without products no packaging can occur while authority is a right to
allocate resources.

Responsibility:
The term responsibility is used in literature in two different ways. Some writers have defined it
as duty or task assigned to a subordinate by virtue of his position in the organisation. “It refers to the
mental and physical activities which must be performed to carry out a task or duty. That means every
person who performs any kind of mental or physical efforts as an assigned task has responsibility. In
more comprehensive (second) sense, responsibility may be defined as the obligation of an individual to
perform the task assigned to him by his superiors. It is “the obligation of an individual to carry out
assigned activities to the best of one’s ability”. Here we use and define responsibility as the obligation
of a subordinate to his superior. The main characteristics of responsibility are as follows.
i. Responsibility can be assigned to human beings only. Non-living things such as machines
cannot be assigned responsibility.
ii. Responsibility arises from a superior-subordinate relationship and by virtue of his superior
position a manager has the authority to get the required work done from his subordinates.
Therefore, he assigns duties to subordinates who are bound by the service contract to perform the
assigned duties.
iii. Responsibility may be a continuing obligation or confined to the performance of a single

function. For example, a sales person has continuing obligation to the sales manager. On the
other hand, the responsibility of a management consultant to a company comes to an end as soon
as the consultancy assignment is completed.
iv. Responsibility may be defined in terms of functions or targets or goals. For example, the
responsibility of a labour officer is in terms of a function. On the contrary, the responsibility of a
worker who is assigned the job of producing 50 units daily is in terms of targets. As far as
possible responsibility should be expressed in terms of targets. This will enable subordinates to
know by what standards their performance will be evaluated.
In order to enable the subordinate to perform his responsibilities well, the superior must clearly
tell the subordinate as to what is expected of him.
1. Responsibility is a derivative of authority. When a subordinate is delegated authority he

becomes responsible to his superior for the performance of assigned task and for the proper use
of delegated authority. Therefore, authority should be commensurate with responsibility.
2. Responsibility is absolute and cannot be delegated. A subordinate may himself perform the
duty assigned to him or he may get it done from his own subordinate, but he remains responsible
to his own superior in both cases.

Difference between Authority and Responsibility:

Comparison between authority and responsibility is as follows.
1. Authority – right to command or to act. Responsibility – obligation to

perform the assigned duties.
2. Authority – arises from position. Responsibility – arises from a

superior - subordinate relationship.
3. Authority – can be delegated. Responsibility – cannot be delegated.
4. Authority – flows downward. Responsibility – flows upward.
5. Authority – long life and continuing. Responsibility – short life and is over with
performance of the given duty.
6 Authority – return on responsibility. Responsibility – cost of authority.
CENTRALIZATION OF AUTHORITY:
Centralization is the extent to which power and authority are retained at the top
organizational levels. An organization is centralized if decisions made at lower levels are governed by a
restrictive set of policies, procedures, and rules, and if situations not explicitly covered are referred to
higher levels for resolution. It means concentration of decision-making power at the top hierarchy of
management. Centralization is the systematic and consistent reservation of authority at central points
within the organization. “Under centralization, all important decisions are taken by the top executives
and operative decisions and actions at lower levels in the organization are subject to the close
supervision of the top executives. Thus, centralization denotes that most of the decisions are taken not at
a point where work is being done but at a point higher in the organization. As Fayol put it,” Everything
that goes to increase the importance of the subordinate's role is decentralization everything which goes
to reduce it is centralization."
Advantages of Centralization:
Centralization offers advantages;
a. It is easier to coordinate the activities of various units and individuals.
b. Top managers have more experience and may therefore make better decisions.
c. Top managers have a broader perspective on decision situations.
d. Duplication of effort by various organizational units can be avoided.
e. Strong leadership is promoted.
Decentralization of Authority:
Decentralization is the extent to which power and authority are delegated to lower
levels. An organization is decentralized to the extent that decisions made at lower levels are made within
a general set of policies, procedures, and rules, with decisions not covered left to the discretion of lower-
level managers. McFarland has defined it as a situation in which ultimate authority to command and
ultimate responsibility for results is localized as far down in the organization as efficient management of
the organization permit. According to Allen, "Decentralization refers to the systematic effort to delegate
to the lowest levels all authority except that which can only be exercised at central points." Thus,
decentralization means reservation of some authority (power to plan, organize, direct and control) at the
top level and delegation of authority to make decisions at points as near as possible to where actions take
place
Advantages of Decentralization:
Decentralization offers advantages.
a. Top managers can concentrate upon major issues.
b. The jobs of lower-level employees are enriched by the challenge of making decisions.
c. Decisions can be made faster.
d. Individuals at lower levels may be closer to the problem and may be in a better position to
make good decisions.
e. Relatively independent units emerge as divisions, with more easily measured outputs.
Limitations of Decentralization
There are certain disadvantages and limitations of decentralization which are discussed below:
1. Decentralization increases the administrative expenses because it requires the employment of
trained personnel to accept authority. The services of such highly paid personnel may not be
fully utilized particularly in small organizations.
2. Decentralization requires the product lines of the concern to be broad enough to allow creation
of autonomous units, which is not possible in small concerns.
3. Decentralization of authority may create problems in bringing coordination among the various
units.
4. Decentralization may not be possible because of external factors. If a company is subject to
uncertainties, it will not be able to meet these under decentralization.
5. Decentralization may bring about inconsistencies in the company. For instance, uniform
procedures may not be followed for the same type of work in various divisions.
Making decentralisation effective:

To make decentralisation effective it requires the following;
1. Appropriate centralisation – decentralisation can be effective when there is a centralised

authority for overall planning and control. The central authority ensures close coordination
between various operating units. Without such a cementing force, the decentralised organisation
may fall apart into pieces. A workable balance between centralisation and decentralisation must
be maintained at all times.
2. Development of managers – effective decentralisation requires a large number of highly

competent managers who are capable of working independently. In order to develop such
executives, top management must delegate authority and allow the subordinates to learn through
experience in making-decisions.
3. Open communications – a sound communication system must be established to ensure

continuous interaction between superiors and subordinates. Necessary feedback on operating
results should be made available to superiors. The open communication system will enable
managers to provide advice and guidance to subordinates.
4. Coordination – decentralisation tends to create rivalry and conflict among operating

divisions. Departmental managers compete for scarce resources and effective coordination is
essential to prevent such disintegrating tendencies. Interdepartmental coordination helps to
prevent the danger of fragmentation. Committees, liaison officers and other mechanisms of
coordination may be used to ensure coordination.
5. Adequate controls – effective decentralisation needs an appropriate control system that will
distribute the resources, lay down standards of performance and exercise control to ensure that
the various operating units are working in the desired direction.
Centralization vs. Decentralization:

When a firm establishes divisions or departments, when the departmental managers are
given considerable freedom or autonomy in decision-making and when there are reasonably effective
ways of evaluating the performance of each division, the firm is considered to be decentralized. To the
extent that an organization does not delegate a large-part of responsibility and authority in decision
making, the organization is considered to be centralized. Centralization and decentralization are the
opposite ends of the organization continuum. On the one hand, centralization produces uniformity of
policy and action, utilizes, the skills of centralized and specialized staff, and enables closer control over
operating units. And on the other hand, decentralization tends to effect faster decision-making and action
on the spot without consulting higher levels. Decentralization has the effect of motivating the
subordinates since they get a greater share in management decision-making.
Fayol said “Increase in subordinates role is decentralization, and everything which goes to decrease it
is centralization.”
Line and Staff Authority

Classical writers (Taylor, Fayol, Weber) based their explanations of line
authority on simplistic
assumptions. It is said that line authority is the ultimate authority to
command, act, decide, approve or
disapprove all the activities of the organization. Line connotes the
work, functions of organization
components that are accountable for fulfilling the economic objectives
of the organization. Two things
characterize line authority: the right to decide and the right to direct.
According to McFarland the line
manager directs others, delegates, trains subordinates, exerts control,
uses sanctions, has veto powers,
makes operating decisions, and bears final responsibility for results.
One serious limitation with such a
classification scheme is that they do not distinguish between important
and unimportant activities. It is
quite possible to classify finance or personnel as a staff function, but it
is a serious mistake to assume
152

that either is insignificant. Statements that line is associated with the

final objectives or organization,
or line elements are income-producing components of the organization
create an erroneous
impressions that staff functions are of secondary importance and
unimportant.
Efforts to classify such functions, like product research and
development, production processes as staff
and line, proved useless in the past. The customer pays for a product
whose qualities am determined
by design as well as manufacturing. Designating one function as highly
important contributes to the
overall objectives of the organization and relegating the other, as an
unimportant level appears to be a
superficial exercise.
who is Staff?
Staff authority is advisory, which means that the staff is a supporting
unit that recommends action or
alternative actions to the line manager. Catch phrases like: "staff; have
the authority of ideas, lines
have the authority of command; staffs think, lines do; staffs advise,
lines work have gained wide
currency over the years. However, staff authority is not confined to
mere advisory roles of
recommending activities only. According to McFarland a staff manager
helps, serves, investigates,
plans, solves special problems, supports line efforts, and provides
ideas and special expertise. The
above functions are supporting functions; functions that help in some
way the accomplishment of the
primary objectives of the line departments. One distinguishing feature
of staff functions is regarding
the right to command, and direct others. Staff positions are devoid of
the right to command, staff work
is essentially an intellectual process consisting of such activities like
planning, thinking, studying,
informing, recommending, persuading and suggesting, and so on. Even
the above seemingly sensible
explanations fail to answer certain questions associated with
classification of organizational function
in a university, teachers are line. But what about people who are
wedded to research activities? In a
hospital, do nurses have line or staff authority? Experts are not always
in agreement on these issues.
Such borderline functions defy clear-cut classification. Many functions
are obviously line or obviously
staff (Brech).
Peculiarities of Line and Staff Relationship

The principles enunciated by the traditional theorist have been under
attack for years either because
they arc too general or too specific for organizational application, in
this section, we will examine
peculiarities of line-staff relationship.
One Center of Authority (Etzioni): It is one of the basic features of
classical organization structures
to have one and only one center of authority. This is often vested in
the role of the head (line manager)
of the organization. He is the ultimate authority in the internal
structure and is finally responsible for
organizational activity. As such, it is believed that line people are more
committed or loyal to the
organizational goals. Staff experts are more oriented towards their
professional reference and
membership groups. They are thought to make a more narrow,
occupational view of the firm's
problems.
153
Peculiar Subordinate Relationship (Dubin): It is the leader who has
the power to make decisions
that guides the actions of all including staff officers. But at -the same
time there enters into this very
decision-making process the contribution of the staff specialist in their
area of competence." The
president of a company, for example, may issue orders regarding the
production schedule which
becomes binding on the operating departments but before the
schedule is validated by the president
and issued as a directive, the staff specialists in marketing, production,
purchasing, etc., may have
influenced the contents in the schedule. The concept of extending the
personality of the line executive
by advice, counsel appears to be the keystone of the staff idea.
(INffiner and Shertmod)
Staff Obedient to an Impersonal Body of Rules: In all
bureaucratic organizations, authority is
delegated to lower levels. The leader has the maximum authority by
virtue of his position in the
organization. The leader may change, retire or die but the office of the
leader retains the authority that
goes with it. "Staff obedience to the leader and to the organization is in
terms of impersonal body of
rules that establish the governmental framework of the organization."

(Dubin)
False Assumptions (Carzo): The line and staff structure seems to
suffer from some false assumptions:
(a) Staff specialists are able and willing to operate without formal
authority. They would be reasonably
content to function without a measure of formal authority. (b) Their
advice, suggestions and
recommendations- will be readily accepted and applied by the line
officials. (c) A clear delineation of
line responsibilities is possible and is essential to minimize
jurisdictional conflict.
Nature of Staff Service: It is believed that staff structure seems to
suffer from some false
assumptions: (a) Staff specialists are able and willing to operate
without formal authority. They would
be reasonably content to function without a measure of formal
authority (b) Their advice, suggestions
and recommendations will be readily accepted and applied by the line
officials. (a) A clear delineation
of line responsibilities is possible and is essential to minimize jurisdictional conflict.
Staffing:
Staffing – is that part of the process of management which is concerned with obtaining,
utilising and maintaining a satisfied workforce. Its purpose is to establish and maintain sound personal
relations at all levels in the organisation so as to make effective use of the personnel to attain the
objectives of the organisation and to provide personal and social satisfaction which personnel want.
According to Koontz and O’Donnell, “The managerial function of staffing involves manning the
organisational structure through proper and effective selection, appraisal and development of personnel
to fill the roles designed into the structure.
Staffing involves the determination of manpower requirements of the enterprise and providing it with
adequate competent people at all levels. Thus, manpower planning, procurement (i.e., selection and
placement), training and development, appraisal and remuneration of workers are included in staffing.
The staffing function of management pertains to recruitment, selection, training, development, appraisal
and remuneration of personnel. It is the duty of every manager to perform these activities. It is the
tendency in modern enterprises to create separate department known as Personnel Department to
perform the staffing function. But it does not mean that the line managers do not have the responsibility
for staffing. The Personnel Department is created to provide the necessary help to the managers in
performing the staffing or personnel function.
Objectives of Staffing:
The general objective of Staffing is to contribute towards the accomplishment of the goals of an
enterprise. However, the Staffing in any working organization should have the following specific
objectives:
(i) To attain maximum individual development;

(ii) To establish desirable working relationship between employers and employees and between groups
of employees;
(iii) To mould effectively the human resources;
(iv) To ensure satisfaction of the workers so that they are freely ready to work;
(v) To provide fair wages, good working conditions and service benefits to the workers;
(vi) To ensure that every employee makes his maximum contribution to the success of the enterprise.
Functions of Staffing:
Department of Human resource management specially looks after various problems and issues relating
to workforce. Normally, the scope of its activities includes the following functions:
1. Employment. The responsibility for employment consists of appointing the best possible talents
suitable to the requirements of the enterprise. This function includes various activities like job analysis,
manpower demand analysis, recruitment, selection and placement. Before appointing the people,
manpower requirements are estimated both in terms of number and quality. After this, different sources
of manpower supply are tapped. The applications of various applicants are screened and the selected
applicants are required to take certain tests and appear in the final interview. The employment function
is complete when the workers join the organization and are placed on the right jobs.
2. Training and Development. Training and development of personnel is a follow up of selection. It is

a duty of management to train each employee and also to develop him for the higher jobs in the
organization. Proper development of personnel is necessary to increase their skills in doing their jobs
and in satisfying their growth need. For this purpose, the personnel department will devise appropriate
training programmes. Mere are several on the job and off the job methods available for training
purposes. A good training programme should include a mixture of both types of methods. It is important
to point out that personnel department arranges for training not only of new employees but also of old
employees to update their knowledge in the use of latest techniques of production.
3. Compensation. This function is concerned with the determination of adequate and equitable
remuneration of the employees in the organization for their contribution to the organizational goals. The
personnel can be compensated both in terms of monetary as well as non-monetary rewards. Factors
which must be borne in mind while fixing the remuneration of personnel are their basic needs,
requirements of jobs, legal provisions regarding minimum wage levels afford by competitors, etc. For
fixing the wage levels, the personnel department can make use of certain techniques like job evaluation
and performance evaluation.
4. Integration. This function aims to achieve a reasonable reconciliation of the interests of the personnel
with those of the organization. The important problem related to integration is communication. The
personnel manager must provide an efficient system of communication to ensure two-way traffic of
personnel programmes and policies because many a time industrial disputes arise because of poor
communication. The personnel manager should always keep himself in contact with the trade unions to
understand their grievances and remove the same so that harmony is maintained in the organization.
5. Working Conditions. Mere appointment and training of employees is not sufficient, they must be
provided with good working conditions so that they may like their work and work-place and maintain

their efficiency. Working conditions certainly influence the motivation and morale of the employees.
These include the measures to be taken for health and safety of the employees.
6. Welfare Services. The department provides for various welfare services, which relate to the physical
and social well-being of the employees. They may include provision for cafeterias, rest-rooms,
counseling, group insurance, education of children of employees, recreational facilities, etc.
7. Personnel Records. The personnel department maintains the personal records of the employees
working in the enterprise. It keeps full records about their training, achievements, transfer, promotion,
etc. It also preserves many other records relating to the behavior of personnel like absenteeism and labor
turnover and the personnel programme and policies of organization.
8. Industrial Relations. These days, the personnel managers mainly discharge the responsibility of
industrial relations. Personnel managers help in collective bargaining, joint consultation and settlement
of disputes, if they arise. This is because personnel manager is in possession of full information relating
to personnel and he possesses the working knowledge of various labor enactments. It is important to
point out that the responsibility of fulfilling the requirements of various labor laws like Factories Act,
Industrial Disputes Act, etc., rests with the personnel department, the personnel manager can do a great
deal in maintaining industrial peace in the organization as he is responsible for setting various
committees on discipline, labor welfare, safety, grievance, etc. He helps in laying down the grievance
procedure to redress the grievances of the employees. He also gives authentic information to the trade
union leaders and tries to convey them the personnel policies and programmes of the enterprise.
RECRUITMENT:
Recruitment is shortly defined as discovering of potential applicants for actual or
anticipated organizational vacancies. The human resources are the most important assets of an
organization. The success or failure of an organization is largely dependent on the caliber of the people
working therein. Without positive and creative contributions from people, organizations cannot progress
prosper. In order to achieve the goals or the activities of an organization therefore, we need to recruit
people with requisite skiffs, qualifications, and experience. 'While doing so, we have to keep the present
as well as the requirements of the organization in mind. Recruitment is a 'linking - joining together those
with jobs to fill and those seeking jobs. It is a joining process in that, to bring together job seekers and
employer with a view to encourage the former to apply for a job with the latter. The basic purpose of
recruiting is to develop a group of potentially qualified people. To this end the organization must
communicate the position in such a way that job seekers respond. To be cost effective, the recruitment
process should attract qualified applicants and provide enough information for unqualified persons to
self-select themselves out.
Sources of Recruitment:
The sources of recruitment may be broadly into two categories: internal sources and external sources.
Internal sources – consisting of the employees currently working in the organisation. There are two
sources of internal recruitment.
1. Promotions – most of the companies follow the practice of filling higher jobs (positions)
by promoting people working at lower levels. Such a practice helps to improve the motivating and
morale of employees. It encourages employees to put in greater effort, to acquire additional

qualifications. It also improves goodwill and labour relations. On the other hand, promotion implies
shifting an employee to a higher position carrying higher status, responsibilities and pay.
2. Transfers - involve the shifting of an employee from one job to another without any major
change in the status and responsibilities of the employee or pay.
Internal sources of recruitment simplify the selection and placement problems. It is economical
as there is no need for orientation. It also reduces excessive recruiting and placement costs. Selection
among existing personnel tends to be more accurate as their performance is known, but in a growing
enterprise all positions cannot be filled with internal recruitment. Moreover, too much use of internal
sources may lead to inbreeding as the new talent is not allowed to enter the organisation. There is little
choice and internal candidates may lack originality and fresh outlook. Every new enterprise, therefore,
has to recruit people from outside. Running concerns (enterprises) have also to tap external sources for
filling the positions whose specifications cannot be met by present employees.
External Sources: External sources lie outside an organization. Here the organization can have the
services of;
i. Employees working in other organizations;
ii. job aspirants registered with employment exchanges;
iii. students from reputed educational" Institutions; (d) candidates referred by unions,
friends, relatives and existing employees;
iv. candidates forwarded by search firms and contractors;
v. candidates responding to the advertisements, issued by the organization; and
vi. Unstructured applications/walk-ins.
SELECTION:
Selection – once an adequate number of applicants is secured through different sources
of recruitment, the process of selection begins. The employer must develop appropriate criteria and
techniques for evaluating candidates. Selection is the process of carefully screening the candidates who
offer themselves for appointment so as to choose the most suitable persons for the jobs that are to be
filled. It is the process of matching the qualifications of candidates with the requirements of jobs to be
filled. Selection process divides the candidates into two categories.
1. Those that will be offered employment.
2. Those that will not be offered employment
The process could be called ‘rejection’ because more candidates may be turned away than hired. It is
for this reason that selection is often described as a negative process in contrast with the positive nature
of recruitment.
THE PROCESS OF SELECTION:

Selection is usually a series of hurdles or steps. Each one must be successfully cleared before applicant
proceeds to the next. Figure outlines the important steps in the selection process of typical organization.
The time and emphasis placed on each step will, of course, vary from organization to another and,
indeed, from job to job within the same organization. The sequence of steps may also vary from job to
job and organization to organization.
1. Reception: A company is known by the people it employs- In order to attract people with talents,
skills and experience a company has to create a favorable impression on the applicants right from the
stage of reception. Whoever meets the applicant initially should be tactful and able to extend help in a
friendly and courteous way. Employment possibilities must be presented honestly and clearly. If no jobs
are available at that point of time, the applicant may be asked to call back the personnel department after
some time.
2. Screening Interview: A preliminary interview is generally planned by large organizations to cut the
costs of selection by allowing only eligible candidates to go through the further stages in selection. A
junior executive from the Personnel Department may elicit responses from applicants on important items
determining, the suitability of an applicant for a job such as age, education experience, pay expectations,
aptitude, location, choice etc. This courtesy interview, as it often called, helps the department screen out
obvious misfits. If the department finds candidate suitable, a prescribed application form is given to the
applicants to fill and submit.

3. Application Blank: Application blank or form is one of the most common methods used to collect
information on various aspects of the applicants' academic, social, demographic, work-related
background and references. It is a brief history sheet of an employee's background, usually containing
the following things:
Contents of Application Blanks
 Personal data (address, sex, identification marks)
 marital data (single or married, children, dependents)
 Physical data (height, weight, health condition)
 Educational data (levels of formal education, marks, and distinctions)
 Employment data (past experience, promotions, nature of duties, reasons for leaving
previous jobs; salary drawn, etc.)
 Extra-curricular activities data (sports/games, NSS, NCC, prizes won, leisure-time
activities)
 References (names of two or more people who certify the suitability of an applicant of
the advertised position)
4. Selection Testing: A test is a standardized, objective measure of a person's behavior, performance or

attitude. It is standardized because the way the-test is carried out, the environment in the test is
administered and the ways the individual scores are calculated - are uniformly applied. It is objective in
that it tries to measure individual differences in a scientific way, giving very little -room for individual
bias and interpretation.
Over the years, employment tests have not only gained importance but also a certain amount of
inevitability in employment decisions. Since they try to objectively determine how well an applicant
meets job requirements, most companies do not hesitate to invest their time and money in selection
testing in a big way. Some of the commonly used employment tests are.
(a) Intelligence tests: These are mental ability tests. They measure the incumbent's learning ability and
also the ability to understand instructions and make judgments. The basic objective of intelligence tests
is to pick up employees who are alert and quick at learning things so that they can be offered adequate
training to improve their skills for the benefit of the organization. Intelligence tests measure not a single
trait, but rather several abilities such as memory, vocabulary, verbal fluency, numerical ability,
perception, spatial: visualization, etc. Stanford-Binet test, Binet-Simon test, The Wechsler Adult
Intelligence scale is examples of standard intelligence tests. Some of these tests are increasingly used in
competitive examinations while recruiting graduates and postgraduates at entry management positions in
banking, insurance and other financial services Sectors.
(b) Aptitude tests: Aptitude tests measure an individual's potential to learn certain skills, clerical,
mechanical, mathematical, etc. These tests indicate whether or not an individual has the ability to learn a
given job quickly and efficiently. In order to recruit efficient office staff, aptitude tests are necessary.
Clerical tests, for example, may measure the incumbent's ability to take notes, perceive things correctly
and quickly locate things ensure proper movement of files, etc. Aptitude tests, unfortunately, do not
measure on the job motivation. That is why the aptitude test is administered in combination with other
tests like, intelligence and personality tests.
(c) Personality tests: Of all the tests required for selection, personality tests have generated lot of heat
and controversy. The definition of personality, method of measuring per factors and the relationship
between personality factors and actual job criteria has been the subject of much discussion. Researchers
have also questioned whether applicants answer all the items truthfully or whether they try to respond in
a socially desirable manner. Regardless of these objections, many people still consider personality as an
important component of job success.
(d) Achievement tests: These are designed to measure what the applicant can do on the job currently,
i.e., whether the tester actually knows what he or she claims to know. A typing test shows typing
proficiency, a short hand test measures the testis ability to take dictation and transcribe, etc., Such
proficiency tests are also known as work sampling tests. Work sampling is selections test wherein the
job applicant's ability to do a small portion of the job is tested. These tests are of two types; Motor,
involving physical manipulation of things e.g., trade tests for carpenters, plumbers, electricians) or
Verbal, involving problem situations that are primarily language-oriented-or people oriented (e.g.,
situational tests for supervisory jobs).
(e) Simulation tests: Simulation exercise is a test, which duplicates many of the activities and problems
an employee faces while at work. Such exercises are commonly used for hiring managers at various
levels in an organization. To assess the potential of a candidate for managerial positions assessment
centers are commonly used.
(f) Assessment center: An assessment center is an extended work sample. It uses procedures that
incorporate group and individual exercises. These exercises are designed to simulate the type of work,
which the candidate will be expected to do. Initially, a small batch of applicants comes to the assessment
center (a separate room). Their performance in the situational exercises is observed and evaluated by a
team of 6 to 8 trained assessors. The assessor’s judgments on each exercise are compiled and combined
to have a summary rating for, each candidate being assessed.
Initially, a small batch of applicants comes to the assessment centre (a separate room). Their examples
of the real-life but simulated exercises included in a typical assessment centre are as follows:

i. The in-basket. Here the candidate is faced with an accumulation of reports, memos,
letters-and other materials collected in the in-basket of the simulated job he is supposed to take
over .The candidate is asked to take necessary action on each of these materials, say, by writing
letters, notes, agendas for meetings, etc. The results of the, applicant's actions are then reviewed
by the evaluators.
ii. The leaderless group discussion: In this exercise, a leaderless group is given a
discussion question and asked to arrive at a group decision. The evaluators then evaluate each
participant's interpersonal skills, acceptance by the group, leadership and individual influence,
etc.
iii. Business games: Here participants try to solve a problem, usually as members of two or
more simulated companies that are competing in the market place. Decisions might include how
to advertise and product, how to penetrate the market, how much to keep in stock, etc.
Participants thereby exhibit planning and organizational abilities, interpersonal skills and
leadership abilities. Business games have several merits: they reduce time, events that might not
take place for months or years are made to occur in a matter of hours. They are realistic and
competitive in nature. They offer immediate feedback also.
iv. Individual presentations: A participant's communication skills are evaluated by having
the person make an oral presentation of a given topic.
v. Structured interview: Evaluators ask a series of questions aimed at the participant's
level of achievement, motivation, potential for being a self-starter and commitment to the
company.
(g) Graphology Tests: Graphology involves a trained evaluator to examine the lines, loops, hooks,
strokes, curves and flourishes in a person's handwriting to assess the person's personality and emotional
make-up. The recruiting company may, for example, ask applicants to complete application forms and
write about why they want a job. These samples may be finally sent to a graphologist for analysis anti
the results may be put to use while selecting a person. The use of graphology, however, is dependent on
the training and expertise of the person doing the analysis. In actual practice, questions of validity and
just plain skepticism have limited its use.
(h) Polygraph (Lie-detector) tests. The polygraph records physical changes in the body as the test
subject answers a series of questions. It records fluctuations in respiration, blood pressure and
perspiration on a moving roll of graph paper. The polygraph operator form a judgment as to whether the
subject's response was truthful or deceptive by examining the biological movements recorded on the
paper. Polygraphs, despite strong resistance by many applicants, are increasingly being used by
companies, which have problems with inventory and security of funds. Government agencies have
begun to use the polygraph, especially for filling security police, fire and health positions. Critics,
however, question the appropriateness of polygraphs in establishing the truth about an applicant's
behavior. The fact is that polygraph records biological reaction in response to stress and does not record
lying or even the conditions necessarily accompanying lying. Is it possible to prove that the responses
recorded by the polygraph occur only because a lie has been told? What about those situations in which
a person lies without guilt (a pathological liar) or lies believing the response to be true? The fact of the
matter is that polygraphs are neither reliable nor valid. Since they invade the privacy of those tested,
many applicants vehemently oppose the use of polygraph as a selection tool.
(i) Integrity tests: These are designed to measure employee's honesty to predict those who more likely
to steal from an employer or otherwise act in a manner unacceptable to the organization.
5. Selection Interview: Interview is the oral examination of candidates for examination of, employment.
This is the most essential step in the selection Process. In this step the interviewer matches the
information obtained about the candidate through various means to the job requirements and to apply
on-line. Create an e-form which can be filled up on line, and then, you do the calling-up.
Finally, ask HR to maintain a database on all applications. You may not have an opening today. But,
remember tomorrow may be another desperate day for you to look for people with requisite skills,
qualifications and experience.
6. Medical Examination: Certain jobs require certain physical qualities like clear vision, perfect
hearing unusual stamina, tolerance of hard working conditions, clear tone, etc. Medical examination
reveals whether or not a candidate processes these qualities Medical examination can give the following
information:
· Whether the applicant is medically suitable for the specify job or not
· Whether the applicant has health problems or psychological attitudes likely to interfere with work
efficiency or future attendance.
· Whether the applicant suffers from bad health, which should be corrected before he can work
satisfactorily (such as the need for spectacles).
· Whether the applicant's physical measurements are in accordance with job requirements or not.
7. Reference Checks: Once the interview and medical examination of the candidate is over, the
Personnel Department will engage in checking references. Candidates are required to give the names of
two or these references in their application forms. These references may be from the individuals who are
familiar with the candidate's academic achievements or from the applicant's previous employer, who is
well versed with the applicant's job performance and sometimes from co-workers. In case the reference
check is from the previous employer, information in the following areas may be obtained. They are: job
tide, job description, period of employment, pay and allowances, gross emoluments, benefits provided,
rate of absence, willingness of the previous 'employer to employ the candidate again, etc. Further,
information regarding candidate's regularity at work, character, progress, etc., can be obtained. Often a
telephone call is much quicker. The method of mail query provides detailed information about the
candidate's performance, character and behavior. However, a personal visit is superior to the mail and
telephone methods and, is used where it is highly essential to get detailed, first-hand information, which
can also be secured by observation. Reference checks are taken as a matter of routine and treated
casually or omitted entirely in many organizations. But a good reference check, when used sincerely will
fetch useful and reliable information to the organization.
8. Hiring decision: The line manager concerned has to make the final decision now whether to select or
reject a candidate after soliciting the required information through different discussed earlier. The line
manager has to take adequate care in taking the final decision because of economic, behavioral and
social implications of the selection decisions. A careless decision of rejecting a candidate would impair
the morale of the people and they are likely suspected the selection procedure and the very basis of
selection of a particular organization. A true understanding between line managers and personnel
managers should be established so as to facilitate good selection decisions. After taking the final
decision, the organization has to intimate this decision to the successful well as unsuccessful candidates.
The organization sends the appointment order to the successful candidates either immediately or after
sometime depending upon its time schedule.

Training:
Training is a process of learning a sequence of programmed behavior. It is application of
knowledge. It gives people an awareness of the rules and procedures to guide their behavior. It attempts
to improve their performance on the current job or prepare them for an intended job.
Need for training - arises from more than one reason like:
i. An increased use of technology in production;
ii. Labor turnover arising from normal separations due to death or physical incapacity, for
accidents, disease, super-annuation voluntary retirement, promotion within the organization and
change of occupation or job;
iii. Need for additional hands to cope with an increased production of goods and services;
iv. Employment of inexperienced, new or badli labor requires detailed instruction for an
effective performance of a job;
v. Old employees need training to enable them to keep abreast of the changing methods,
techniques and use of sophisticated tools and equipment;
vi. Need for enabling employees to do the work in a more effective way, to reduce learning
time, reduce supervision time, reduce waste and spoilage of raw material and produce quality
goods, and develop their potential.
vii. Need for reducing grievances and minimizing accident rates;
viii. Need for maintaining the validity of an organization as a whole and raising the morale of
its employees.
Importance of Training:
Training is the corner stone of sound management, for it makes employees more effective and
productive. It is actively and intimately connected with all the personnel or managerial activities. It is an
integral part of the whole management programme, with all its many activities functionally interrelated
Training is a practical and vital necessity because, apart from the other advantages mentioned above, it
enables employees to develop and rise within the organization, and increase their “market value”,
earning power and job security. It enables management to resolve sources of friction arising from
parochialism, to bring home to the employees the fact that the management is not divisible. It moulds
the employees’ attitudes and helps them to achieve a better co with the comp any and a greater loyalty to
it. The management is benefited in the sense that higher standards of quality are achieved; a satisfactory
organizational Structure is built up; authority can be delegated and stimulus for progress applied to
employees. Training, moreover, heightens the morale of the employees, for it helps in reducing
dissatisfaction, complaints, grievances and absenteeism, reduces the rate of turnover. Further, trained
employees make a better and economical use of materials and equipment; therefore, wastage and
spoilage are lessened, and the need for constant supervision is reduced.
Steps In Training Programmes:

Training programmes are a costly affair, and a time consuming process. Therefore, they need to be
drafted very carefully. Usually in the organisation of training programmes, the following steps are
considered necessary:
a. Discovering or identifying the training needs.
b. Getting ready for the job.
c. Preparation of the learner.
d. Presentation of operations and knowledge.

e. Performance try-out.
f. Follow-up and Evaluation of the programme.
Training Methods / Techniques:

The forms and types of employee training methods are inter-related. It is difficult, if not impossible; to
say which of the methods or combination of methods is more useful than the other. In fact, methods are
multi- faceted in scope and dimension, and each is suitable for a particular situation. The methods of
training as follows;
 On-the-Job-Training (OJT)
 Job Instruction Training (JIT)
 Vestibule Training
 Training by experienced workmen
 Classroom or Off-the-Job-Training like
 lecture
 conferences
 group discussion
 case studies
 role playing
 programme instruction
 T-group training
DIRECTING:
Meaning:
According to Dale, direction is telling people what to do and seeing that they do it to the best of their
ability. It is through directing that managers get the work done through people. It consists of:
o Issuing orders and instructions by a superior to his subordinates (Communication).
o Guiding, advising and helping subordinates in the proper methods of work (Leadership).
o Motivating them to achieve goals by providing incentives, good working environment,
etc. (Motivation).
o Supervising subordinates to ensure compliance with plans (Supervision).
o Thus, the scope of direction is very wide. It includes all those activities, which a manager
undertakes to, influence the actions of his subordinates and achieve goals. (Koontz and
O’Donnell).
Nature and Purpose:

Direction is a vital managerial function. Planning, organizing and staffing are preparatory functions. It is
through direction that managers get things done. Hence, it is also called management in action. The
importance of directing function in the process of management may be discussed under following heads:
Initiates action: Direction lends meaning to other managerial functions such as planning, organizing
and staffing. It is through direction, managers seek to achieve goals. In most systematic planning, sound

organization and staffing do not ensure accomplishment of Along with these functions, managers must
initiate action by:
 issuing instructions,
 providing guidance,
 supervising work, and
 motivating subordinates to realize goals.
Without direction, other functions of management remain ineffective. Direction makes happen.
Achieves integration: Direction creates harmony and cooperation among the members of a group. In an
organization, different people at different Levels perform the total work. Unless managers supervise the
work in a proper way, things do not move in a desired direction. Direction secures the whole-hearted
cooperation of people at all levels through good communication, people-oriented supervision and
motivation. It tries to integrate the efforts of individuals in a proper way.
Motivates people: Direction motivates employees to achieve superior performance. To this end,
attractive incentives, healthy work climate, guidance and counseling etc., are provided to employees.
Employees are made to realize that their performance alone guarantees organization’s success. Unless
they contribute in a real way, there is no future. This ultimately helps in getting superior performance
from employees. Direction, thus, makes common men do uncommon things.
Facilitates changes: Direction facilitates necessary changes in an organization. It helps an organization

to introduce changes smoothly. For example, employees often resist introduction of computers and,
robots in manufacturing operations, fearing loss of employment. Managers can remove such doubts by
emphasizing the fact that automation and computerization will ultimately help the organization to
achieve growth and, thereby, provide attractive incentives to employees. Through persuasive leadership
and proper communication managers can secure the cooperation of employees. They can introduce
changes in a smooth way.
Attains balance and stability: Direction helps an organization to strike a harmonious balance between
individual needs and organizational demands. People are made to work hard in an attempt to realize
organizational goals and thereby earn their rewards. They are compelled to use resources judiciously and
achieve steady progress. In the Words of Dimock, "The heart of Administration is the direction function
which involves determining the scope, giving orders and instructions and providing dynamic leader
ship". Direction converts plans into action. It is the nucleus around which the practice of management is
built. Without proper direction, people do not work to their full capacity, and goals may remain as
dreams. By putting everything on the right track continuously, direction ensures stability to an
organization.
Principles of directing:
Direction is a complex function as it deals with people whose behaviour is unpredictable.
Effective direction is an art which a manager can learn and perfect through practice. However,
managers can follow the following principles while directing their subordinates.
1. Harmony of objectives – individuals joins organisations to satisfy their physiological and

psychological needs. They are expected to work for the achievement of organisational objectives. They

will perform their tasks better if they feel that it will satisfy their personal goals. Therefore,
management should reconcile the personal goals of employees with the organisational goals.
2. Maximum individual contribution – organisational objectives are achieved at the optimum

level when every individual in the organisation makes maximum contribution towards them. Managers
should, therefore, try to elicit maximum possible contribution from each subordinate.
3. Unity of command – a subordinate should get orders and instructions from one superior
only. If he is made accountable to two bosses simultaneously, there will be confusion, conflict, disorder
and indiscipline in the organisation. Therefore, every subordinate should be asked to report to only one
manager.
4. Appropriate techniques – the managers should use correct direction techniques to ensure
efficiency of direction. The techniques used should be suitable to the superior, the subordinate and the
situation.
5. Direct supervision – direction becomes more effective when there is a direct personal
contact between a superior and his subordinate. Such direct contact improves the morale and
commitment of employees. Therefore, wherever possible direct supervision should be used.
6. Strategic use of informal organisation – management should try to understand and make
use of the informal groups to strengthen formal or official relationships. This will improve the
effectiveness of direction.
7. Managerial communication – a good system of communication between a superior and his

subordinates helps to improve mutual understanding. Upward communication enables a manager to
understand the subordinates and gives an opportunity to the subordinates to express their feelings.
8. Comprehension – communication of orders and instructions is not sufficient. Managers

should ensure that subordinates correctly understand what they are to do and how and when they are to
do. This will avoid unnecessary queries and explanations.
9. Effective leadership – managers should act as leaders so that they can influence the
activities of their subordinates without dissatisfying them. As leaders, they should and counsel
subordinates in their personal problems too. In this way, they can win the confidence and trust of their
subordinates.
10. Principle of follow through – directing is a continuous process. Therefore, after issuing
orders and instructions, a manager should find out whether the subordinates are working properly and
what problems they are facing. He should modify his orders, if necessary, in the light of these findings.
MOTIVATION:
Meaning and Definition:

Motivation refers to goal-directed behaviour. It means what a person will choose to do

when several alternatives are available to him. It also refers to the strength of his behaviour after he has
exercised the choice, and the persistence with he will engage in such behaviour.
Motivation is the process of channeling a person's inner drives so that he wants to
accomplish the goals of the organization. Motivation concern itself with the will to work. It seeks to
know the incentives for work and tries to find out the ways and means whereby their realization can be
helped and encouraged. Managers, by definition, are required to work with and through people, so they
must gain at least some understanding of the forces that will motivate the people they are to manage.
People are complex and they are uniquely different. What motivates one person may not motivate
another. Most successful managers have learned to understand the concept of human motivation and are
able to use that understanding to achieve higher standards of subordinate work performance.
According to Koontz and O’Donnell, “Motivation is a general term applying to the entire class of
drives, desires, needs wishes and similar forces that induce an individual or a group people to work”.
Scott defines, “Motivation means a process of stimulating people to action to accomplish

desired goals”.
In simple words, Motivation is the process of inducing people inner drives and actions towards
certain goals and committing his energies to achieve these goals.
Nature of Motivation:
It is difficult to describe the nature of motivation. However, the following points about it deserve
to be noted;
a. A psychological concept:
Motivation deals with workers on the psychological plane. Even workers with
extraordinary abilities will not be able to perform as desired until they are effectively motivated.
Effective performance on the part of workers can be said to be the result of their abilities backed
by proper motivation. Thus, Performance = Abilities x Opportunity x Motivation. While
motivation has the capacity to secure desired performance from workers, it can be effective only
upon an accurate analysis of worker’s needs for the satisfaction of which they may be induced to
work in the desired manner.
b. Motivation is total, not piecemeal:

A worker cannot be motivated in parts. For successful motivation, he should be
treated as an indivisible unit, taking into account all his urges and aspirations. A motivational
device with promises fulfillment of some needs of workers and not others, will fall short of its
objective of evoking total commitment of workers.
c. Motivation is determined by human needs:

A worker will perform the desired activity only so long as he sees his action as a
means of continued fulfillment of his strongly –felt needs. Once a particular needs is satisfied for
good, he may lose interest in the activity that provides him satisfaction of the said need. In such a

case, he will have to be provided awareness of satisfaction of his other needs so that he continues
to be inclined to pursue the said activity.
d. Motivation may be financial or non-financial:

Motivation may be provided in several ways depending upon the needs, emotions
and sentiments of workers. It may be classified as financial and non-financial. Financial
motivation seeks to satisfy physiological and security needs and it is by way of wages,
allowances, bonus, prizes and other perquisites. On the other hand, non-financial motivation
which seeks to satisfy social, recognition and creative needs may be by way of appreciation for
the work done, higher status and greater responsibility, or increased participation in decision
making.
e. Motivation is a constant process:
Human needs are infinite. No sooner a person has satisfied one need than he seeks
to satisfy another. As very aptly put by McGregor, “Man is a wanting animal- as soon as one of
his needs is satisfied another appears in its place. This process is unending…” Motivation cannot
be a time-bound process. Nor can it be a touch-and- go affair. To keep the workers continuously
engaged in the planned activities, they must be kept in a state of continued animated tension by
means of unfolding before them ever new avenues for the satisfaction of their limitless needs.
The Importance of Motivation:
Motivation is one of the most crucial factors that determine the efficiency and
effectiveness of an organisation. Motivation is an integral part of management process and every
manager must motivate his subordinates to create in them the will to work. The importance of
motivation is briefly discussed below;
 Proper utilization of human resources possible since it inspires employees to make best
possible use of different factors of production.
 Proper motivation improves the efficiency of operation.
 Motivation creates a willingness on the part of workers to do the work in a better way.
 Higher motivation leads to job satisfaction. As a result of this labour absenteeism and
turnover are low.
 Motivation helps to solve the labour problems and maintains good labour relations
 Motivation is the basis of co-operation to get the best results out of the efforts of the men on
the job. Efficiency and output are increased through co-operation.
 High motivation helps to reduce resistance to change.
 By providing proper motivation, all the members will try to be as efficient as possible and to
improve upon their skill and knowledge.
 Financial and non-financial incentives not only retain the existing employees but also attract
the competent employees from outside the enterprise.
 A proper motivation scheme promotes closer relationship between enterprise and workers.
Kinds and types of Motivation:
Motivation can be classified on several bases. They are;

a. On the basis of approach
o Positive motivation ; Negative motivation
b. On the basis of the types of incentives
o Financial motivation; Non-financial motivation
c. On the basis of the nature of reward
o Extrinsic motivation; Intrinsic motivation
(i) Positive motivation:
Positive motivation implies creation of an environment in which people can satisfy their
needs and aspirations. Under it rewards and incentives are offered to inspire employees. All necessary
facilities are provided to workers. They are offered prizes and awards for best performance. Positive
motivation removes the psychological barrier and develops a sense of affiliation.
(ii) Negative motivation:
Negative motivation is based on force, and threats. The fear of punishment or unfavorable
consequences affects the behavioral changes. If the worker fails to complete the work, they may be
threatened with demotion, dismissed, lay off, pay cut etc, involves creating a sense of fear or unhelpful
environment. Which the workers have to suffer in case their performance does not come up to the
desired level. This gives maximum benefits in the short run.
(iii) Financial motivation:
Financial motivation implies use of monetary benefits to inspire employees. Financial

incentives include wages and salaries, bonus, fringe benefits, retirement benefits, etc. money plays an
important role in motivation. Money helps to satisfy physiological and security needs of workers.
Money is also useful in satisfying social needs to some extent because money is often recognise as a
symbol of power, prestige and status. But money is not only motivator. It fails very often to satisfy
higher level needs like ego and selfactulisation. Employees do not always run after money. They also
want status, recognition autonomy and challenge. Once the physiological and security needs are fulfilled
money ceases to be motivator.
(iv) Non-financial motivation:
Non-financial motivation motivators are not associated with monetary rewards. These
include recognition of work done, greater involvement in decision-making, responsibility, challenging
job, etc. Praise, competition, knowledge of results, suggestion system, and opportunity for growth are
other important non-financial motivators. Values and attitudes of an individual also determine his
behaviour. For e.g. a status conscious executive may be motivated by a carpeted floor, private parking
site or personal secretary.

(v) Extrinsic motivation:
This motivation is induced by external factors, which are primarily financial in nature. These
incentives and rewards have been subjected of debate, whether they really motivated the
employees or simply move them to work or perform. These motivations include higher pay,
retirement benefits, rest periods, holidays, profit sharing schemes, health and medical insurance,
vacation etc.
(vi)Intrinsic motivation:
Intrinsic motivation is available at the time of performance of work. These motivations

provide a satisfaction during the performance of the work itself. Some of the intrinsic motivations are
praise, recognition, responsibility, esteem, power, status, participation etc.
Theories of Motivation:
1. Maslow’s Need Hierarchy theory:
According to Abraham Maslow, a U.S psychologist, man is a wanting animal. Abraham

H. Maslow developed his theory on the basis of human needs. He was of the opinion that human
behaviour is directed towards the satisfaction of needs. He has a variety of wants or needs. He proposed
that human needs can be arranged in a particular order from the lowest to the highest. All motivated
behaviour of man is directed towards the satisfaction of his needs. The theory postulated that people are
motivated by multiple needs, which could be arranged in a hierarchy. Maslow offers a general theory of
motivation called the 'need hierarchy theory'. Maslow classified all human needs into five categories as
shown in the figure,
1. Physiological needs:

Physiological needs are the biological needs required to preserve human life. These needs
include needs for food, clothing and shelter. These needs must be met at least partly before higher level
needs emerge.
2. Safety needs:
Once physiological needs are satisfied, the safety or security needs emerge and become
dominant. These needs imply the need for self-preservation and economic independence. These are the
needs of being free from physical danger, threat and deprivation. People want bodily safety, job security,
provision for old age, insurance against risks, etc. these needs are particularly significant where
management policies are uncertain and arbitrary. An organisation can satisfy these needs through
pension plan, guarantee of job, insurance plan, etc.
3. Social needs:
After the needs of the body and security are satisfied then a sense of belonging and
acceptance becomes predominant in motivating behaviour. These needs are for love, friendship,
exchange of feelings and grievances, recognition, conversation, belongingness, companionship etc.
social needs tend to be stronger for some people than for others and stronger in certain situations.
4. Esteem needs:
These are concerned with awareness of self-importance and recognition from others. Esteem
needs consist of such things as self confidence, self- respect, independence, power, prestige,
achievement, praise and status.
5. Self actualization needs:
This implies “the desire to become more and more of what one is, to become everything that
one is capable of becoming”. It involves self fulfillment or achieving what one considers to become
everything what one considers to be his mission in life. It urges an individual to realize his full potential
for continued self-development and for being creative in the broadest sense of the word. E.g. A teacher
thinks that he is capable of giving best teaching to students. A doctor thinks that he is capable of saving
the life of a patient. What a man CAN he MUST be.
McGregor's Theory X and Theory Y:

Different styles of management have a different bearing on the motivation of workers in
the organization. The style adopted by a manager in managing his subordinates is basically dependent
upon his assumption about human behaviour. Theory X is negative, traditional and autocratic style while
Theory Y is positive, participatory and democratic. Thus, these labels describe contrasting set of
assumptions about human nature. Douglas McGregor has classified the basic assumption regarding
human nature into two parts and has designated them as 'theory X’ and 'theory Y'.
Theory X: This is the traditional theory of human behaviour, which makes the following assumptions
about human nature:

1. Management is responsible for organizing the elements of productive enterprises - money, material,
equipment, and people - in the interest of economic ends.
2. With reference to people it is a process of directing their efforts, motivating them, controlling their
actions, modifying their behaviour in order to be in conformity with the needs of the organization.
3. Without this active intervention by management, people would be passive – even resistant to
organizational needs. Hence they must be persuaded, rewarded, punished and properly directed.
4. The average human being has an inherent dislike of work and will avoid it if he can.
5. He lacks ambition, dislikes responsibility and prefers to be led.
6. He is inherently self-centered, indifferent to organizational needs.
7. He is by nature resistant to change.
8. He is gullible, not very bright.
Theory Y: The assumption of theory Y, according to McGregor are as follows:-

1. Work is as natural as play or rest, provided the conditions are favourable; the average human being
does not inherently dislike work.
2. External control and the thrust of punishment are not the only means for bringing about efforts
towards organizational objectives. Man can exercise self-control and self-direction in the service of
objectives to which he is committed.
3. Commitment to objectives is a result of the rewards associated with their achievement. People select
goals for themselves if they see the possibilities of some kind of reward that may be material or even
psychological.
4. The average human being, under proper conditions does not shirk responsibility, but learn not only to
accept responsibility but also to seek it.
5. He has capacity to exercise a relatively high degree of imagination, ingenuity and creativity in the
solution of organizational problems in widely, not narrowly distributed in the population.
6. Under conditions of modern industrial life the intellectual potentialities of people are only partially
utilized. As a matter of fact, men, have unlimited potential.

Theory Z:
The Theory Z, is proposed by William Ouchi in 1980’s, it is an integrated motivational model,
based on the Japanese management practices in America. Ouchi recommended a hybrid of the
two Approaches of American management approach and Japanese management approach. The
proposals are as follows;
 Long-Term Employment.
 Collective Decision Making.
 Individual Responsibility for the Outcome of Decisions.
 Slow Evaluation and Promotion.
 Moderately Specialized Career Path.
 Holistic Concern for Employees.
Leadership:
Meaning and Definition:
Leadership is an integral part of management and plays a vital role in managerial operation. Leadership
is viewed as a characteristic of the individual. Leader is one who makes his subordinates to do willingly
what he wants. Leadership is the process of influencing the behaviour of others towards the
accomplishment of goals in a given situation.
Koontz and O’Donnel have defined, “Leadership is the art of process of influencing people so that they
will strive willingly towards the achievement of group goals”.

George R.Terry has defined, “Leadership is the activity of influencing people to strive willingly for
group objectives”.
IMPORTANCE OF LEADERSHIP:
The importance of leadership in an organization cannot be denied. People working in an

organization need individuals (leaders) who could be instrumental in guiding the efforts of groups of
workers to achieve goals and objectives of both the individuals and the organization. The leader guides
the action of others in accomplishing these tasks. A good leader motivates his subordinates, creates
confidence and increases the morale of the workers. In the words of Peter F Drucker - "Good leadership
is a must for the success of a business but the business leaders are the scarcest resources of any
enterprise".
The following points highlight the importance of leadership:-
i. Leadership is the process of influencing the activities of an individual or a group towards
the achievement of a goal.
ii. An effective leader motivates the subordinates for higher level of performance.
iii. Leadership promotes team - spirit and team - work which is quite essential for the success
of any organization.
iv. Leadership is an aid to authority. A leadership helps in the effective use of formal
authority.
v. Leadership creates confidence in the subordinates by giving them proper guidance and
advice.
Leadership styles or types:

The term leadership styles can be defined as a leader’s behaviour toward group members. It
refers to the behavioural pattern followed by a leader at the time of supervising his subordinates.
The leadership styles can be categorized as follows;
1. Autocratic or Dictatorial leadership style:
This style is also known as ‘leader-centred style’ or ‘authoritarian style’. Under this style,
leader concentrate all authority in himself, instructs subordinates as to what to do, when to do,
how to do it, etc, He also exercise close supervision and control over his subordinates.
Subordinates are expected to do what they are told. The autocratic leader accomplishes the
results through the use of authority, fear of deprivation, punishment and such other negative
rewards. As it is negative in character, authoritarian approach will succeed only in the short run.

Advantages:
 It facilitates quick decision-making

 It provides strong motivation and satisfaction to the leader who decades terms
 Highest productivity
 Less competent subordinates are needed at lower levels
 It can yield positive outcome under conditions of stress.
Disadvantages:
o People dislike this style especially when the motivational style negative.
o It leads to frustration, low morale and conflict which affect organisational
efficiency
o Due to lack of opportunity to exercise initiative and judgment, future
leadership does not develop. Followers remain uninformed, insecure and
afraid of leader’s power.
o There is resistance to change as workers feel harrased and disturbed.
2. Participative or Democratic leadership:
In this type of leadership, the subordinates are consulted and their feedback is taken
into decision making process. Decisions are taken after group discussions. Therefore, the
authority is decentralized. The participative leader attaches high importance to both work and
people. He provides freedom of thinking and expression.

Advantages:
 The subordinates are motivated by participation in decision making process. This will
also increase job satisfaction.
 Absence of leader does not affect output.
 Labour absenteeism and turn-over will be minimum.
 The quality of decision is improved
 The leader multiplies his abilities through the contribution of his followers.
Disadvantages:
 Decisions cannot be taken quickly because under the democratic style of leadership,
the leader consults the subordinates before arriving at decisions.
 Employees may be exploited by adopting this type of leadership disguisely
 People who refer minimum interaction with leaders and fellow subordinates may not
like this type of leadership.
3. Laissez – faire or free rein leadership:
In this type, complete freedom is given to the subordinates so that they plan,
motivate, control and otherwise be responsible for their own actions. Leader does not take part in
decision making process. The authority is completely decentralized.
Advantages:
o Positive effect on job satisfaction and morale of subordinates.

o It creates on environment of freedom, individuality as well as the team sprit
o Full utilization of the potential of subordinates
Disadvantages:
 Lack of discipline
 Lowest productivity
 No control and co-ordination. Hence tense situation will prevail.
 Some members may put their own interests above the group and team interests.
TANNENBAUM & SCHMIDT 1958

Continuum of Leader Behavior
(Autocratic to Democratic
BOSS CENTERED SUBORDINATE CENTERED
LEADERSHIP
CONTINUUM LEADERSHIP
Use of authority by manager <----------------------> Freedom for subordinates
Manager manager
Manager
Manager presents defines
presents Manager permits
Manager makes Manager presents problem, limits;
tentative subordinate to function
decision and "sells" ideas and get asks
decision within limits defined by
accounces it decision invites suggestion group to
subject to superior
questions s, makes make
change
decision decision
TELL SELL CONSULT SHARE
Tannenbaum, R., Schmidt WH (1958), How to choose a leadership pattern. Harvard

Business Review 36/2, 1958: 95-101.
Note: The Autocratic to Democratic continuum model of Tannenbaum and

Schmidt (1958) builds upon the early work of Lewin et al (1938), both autocratic
and democratic styles are apparent, but laissez-faire is absent.
Main Point -> Again this is all about transactions, be it tell, sell, consult, or share.
Share and consult transactions are nicer and more social than tell and sell, but it
is still about transactions.

A Continuum of Leader Behavior

by Tannenbaum-Schmidt
Leader Leader Leader Leader Leader Leader Leader

makes sells presents presents presents defines permits
decision decision ideas and tentative problem, the others to
and invites decision gets limits, function
announc questions subject to suggestio asked
es it change ns, and the
makes group to
decision make a
decision
The above continuum shows the broad range of latitude available to a leader with
the extremes. Not only does he have a range of choices, he can choose different
modes at different times. The factors which are work in deciding an appropriate
behavior are: (1) forces within the leader, (2) forces within the group, and (3)
forces within the situation.
1. Significant forces in the leader are his values, his confidence in the group, his
natural style, and his feelings of security.
2. Group force will include prior experience, competence, confidence in the
leader, tolerance for ambiguity, and motivation.

3. Situational forces might include time pressure, nature of the problem, and the
organization (voluntary vs. non-voluntary).

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251/ 553/ 552MG103 Principles of Management

Authority – Delegation-Decenralisation- Difference between authority and

These viewpoints are discussed below:

(i) Formal Authority Theory:

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 1

(ii) Acceptance Theory:

(iii) Competence Theory:

i. Biological limitations – a manager cannot ask a subordinate to do something which he

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 2

v. Organisational limitations – a manager’s authority is restricted by the objectives and

The Process of Delegation:

3. Granting of authority – assignment of duties is meaningless unless adequate authority is

4. Creating accountability for performance – subordinates to whom authority is

3. High degree of Delegation: It is that degree of delegation in which a task is specified to a

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 4

3. Parity of Authority and Responsibility:

4. Clarification of Limits of Authority:

Advantages of Delegation of Authority:

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 5

Disadvantages to Delegation of Authority:

Guidelines for Effective Delegation:

1. First pre-requisite – is to give employees freedom to accomplish delegated tasks. This

2. Second pre-requisite - is open communication between managers and employees.

3. Third pre-requisite - is the manager’s ability to analyse such factors as the

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 6

6. Establish a feedback system – usually delegating managers establish a system of

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 7

Power and influence:

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 8

3. Withdraw rewards, etc.

Distinction between power and authority:

iii. Power is personal while authority is positional and institutional.

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 9

iii. Responsibility may be a continuing obligation or confined to the performance of a single

1. Responsibility is a derivative of authority. When a subordinate is delegated authority he

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 10

Difference between Authority and Responsibility:

1. Authority – right to command or to act. Responsibility – obligation to

2. Authority – arises from position. Responsibility – arises from a

4. Authority – flows downward. Responsibility – flows upward.

6 Authority – return on responsibility. Responsibility – cost of authority.

Making decentralisation effective:

1. Appropriate centralisation – decentralisation can be effective when there is a centralised

2. Development of managers – effective decentralisation requires a large number of highly

3. Open communications – a sound communication system must be established to ensure

4. Coordination – decentralisation tends to create rivalry and conflict among operating

Centralization vs. Decentralization:

Line and Staff Authority

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 13

that either is insignificant. Statements that line is associated with the

Peculiarities of Line and Staff Relationship

rules that establish the governmental framework of the organization."

(i) To attain maximum individual development;

2. Training and Development. Training and development of personnel is a follow up of selection. It is

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 17

morale of employees. It encourages employees to put in greater effort, to acquire additional

1. Those that will be offered employment.

2. Those that will not be offered employment

THE PROCESS OF SELECTION:

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 20

4. Selection Testing: A test is a standardized, objective measure of a person's behavior, performance or

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 22

Prepared by A. Jayakumar.BBM, M.B.A, M.Com 24