This action might not be possible to undo. Are you sure you want to continue?
“Management is a distinct process, consisting of activities of planning, organizing, actuating and controlling performed to determine and accomplish stated objectives with the use of human being and other resources.” In simple words, management is defined as an art of getting things done through others and with people, efficiently and effectively to attain the desired goals.
Nature of Management
The nature of management is defines in following points:1.
5. 6. 7.
Continuous Process: Management is a never ending process. It will remain the part of organization till the organization itself exists. Management is an unending process as past decisions always carry their impact for the future course of action. Universal in Nature: Management is universal in nature i.e. it exists everywhere in universe wherever there is a human activity. The basic principles of management can be applied any where whether they are business or non-business organization. Multidisciplinary: Management is basically multidisciplinary. Though management has developed as a separate discipline it draws knowledge and concepts of various other streams like sociology, psychology, economics, statistics etc. Management links ideas and concepts of all these disciplines and uses them for good-self of the organization. Management is a group activity. Management is a vital part of group activity. As no individual can satisfy all his needs himself, he unites with his co-workers and work together as an organized group to achieve what he cannot achieve individually. Management is goal oriented: Management is a goal oriented activity. It works to achieve some predetermined objectives or goals which may be economic or social. Dynamic: Management is dynamic in nature i.e. techniques to mange business changes itself over a period of time. System of authority: Authority is power to get the work done by others and compel them to work systematically. Management cannot perform in absence of authority. Authority and responsibility depends upon position of manager in organization.
Functions of Management
The functions of management, viz. planning, organizing, staffing, directing and controlling have already been referred to in this chapter, under “Process of Management”. More details of these functions are as follows:
Planning. Planning means looking ahead and deciding the future course of action. It involves suggesting ways and means to achieve the objectives. There may be different ways of achieving the objectives and planning attempts to choose the best out of them. Planning includes forecasting, which is the process of assessing the future. R.C Davis, an early exponent of the management process, has defined planning as “the exercise of creative thinking in the solution of business problems. It involves the determination of the work is to be done, how and where it is to be done, and who shall be responsible.”
Organizing. After planning, the next step is to determine and identify the activities needed to realize the plan. These activities are divided into different departments. Then the activities of different departments are undertaken by different groups of individuals. The relationship of different departments is also defined for effective performance by each department. Each of the above activities comes under the domain of organisation. Organisation is both a structure and an administrative process. It is a structure, for it lays down the functions and duties to be performed by a group of people for attaining the objective of the enterprise. It is an administrative process, as it describes every position in the organisation so that each incumbent knows exactly what duties he is to perform and where the boundaries of his activities are. It establishes relationships among different departments and also among different persons in the same department.
Staffing. After the organisation has been set up on paper and when the business is ready to commence operations, staffing must be undertaken. Staffing or manning, as it is called sometimes, involves the regular provision of human resources needed for different positions in an enterprise. It consists of defining manpower needs, interviewing, recruiting, placing, transferring, etc. in a new organization, the top positions are filled first so that these persons can do their own staffing. In a going concern, the staffing function is continuous. The area of staffing as emerged as the area of ‘Personnel Management’.
Directing. Direction is a complex function that includes all those activities which are designed to encourage subordinates to work effectively and efficiently in both the short and long run. In other words, “it consist of the process and techniques utilized in issuing instruction and making certain that operations are carried out as originally planned”.
Controlling. The technique or the process through which the managers know whether things produced or actions taken by the subordinates are in conformity with the standards laid down in advance or not, is called control. When a manager exercises control, he observes some acts by means of a report or a chart. He compares that act with a standard and if there is a notable deviation, he instructs the incumbent to minimize future similar deviations. Control, therefore, refers to a system which enables management to know if the actual performance is in conformity with the plan (Standards). Thus, under the control function, measuring standards or yardsticks are established and communicated to the managers who, in turn, evaluate the performance of the employees. Control sorts out the shortcomings in the outcome of any action, and suggests the need for remedial measures.
The above functions of management have been described in sequence of its process. There is another important function which requires attention. It is coordination. The managers of all the levels attach equal importance to this function.
and who shall be responsible.” “Planning is the exercise of creative thinking in the solution of business problems. organizing. as given above.” “Planning is selecting information and making assumptions regarding the future to formulate activities necessary to achieve organizational objectives. . The act of thinking and determining a course of action. As such planning is the basic function on which the structure of the functions stands. the management considers various alternative course of action which may help it in achieving the desired objectives and choose the one which is likely to be most suitable for getting the desired results. viz. spelt out in detail. how and where it is to be done. It precedes all other functions. The basic function.. reveal its features which may be stated as: 1.PLANNING Meaning of Planning The management of an enterprise determines its objectives and seeks to achieve them by various types of business activities. directing. Planning is the first function of management. Let us examine some of the definitions of planning. Features of Planning The meaning of planning and its definitions. other functions are meaningless. Without objective and course of action. is called planning. and controlling planning determines the objectives and the course of action to be followed. how to do it. when to do it and who is to do it. Before commencing these activities. It makes possible for things to occur which would not otherwise happen. “Planning is deciding in advance what to do. staffing. It involves the determination of what is to be done.
Forecasting is a technique of anticipating facts relating to future. to keep an equilibrium in changing pattern of demand and supply. 3. Planned actions are always better than the non-planned ones. 8. An activity of cognitive domain. Planning is a function which all the managers perform. It is an established fact that all managers from general manager down to foreman plan. In other words. Function of all Managers. Planning tends to choose the best course of action from the different alternatives. Choice making activity. Plans need continuous review. There may be different alternatives for finding a solution to a problem. A continuing activity. Planning relates to cognitive domain. the managers think and arrive at the consensus of laying down ways and means to achieve the goal. Types of Plans Plans can be classified on the basis of the following categories: Types of Plans On the basis of levels On the basis of On the basis of Usage . Planning increases efficiency.2. Based on forecasting. Objective-oriented activity. it is a pervasive activity. Efficiency increasing activity. With a view to take cognizance of the nature of economics. 4. 6. Under planning. involving co-ordination of different function of management and thus to keep the business in perfect running conditions planning is a dynamic concept. Planning follows forecasting. Planning establishes a system which helps in doing the job smoothly and quickly. 5. Koontz and O’ Donnel have stated that “the purpose of every plan and all derivatives plans is to facilitate the accomplishment of enterprise purpose and objectives”. It is a domain of contemplation and thinking. Though the nature and extent of planning may vary from manager to manager. It is an intelligent guess of future. Planning is made on the basis of scientific prediction about the future. Planning gets inspiration from objective. 7.
These plans are operational plans which help to accomplish the long-term plans. 2. marketing. A marketing plan may be that goods will be sold only on cash basis. Long-term Plans . These areas may pertain to production. Long-terms planning are also known as strategic planning as it involves the effect of long-term changes. i. . Such plans are made for a long duration.e. decide upon suitable constraints and devises a practical plan by which the objectives may be achieved.” 2.. 5 to 10 years or even more. Argenti defines corporate planning as” “a systematic and disciplined study designed to help identify the objectives of any organisation or corporate body. finance. The duration of these plans is normally one year.These plans are made to cover a particular functional area of the business. at least once in every three years. personnel. Functional plans . for example. These plans involve decision.Corporat e Plans Function al plans Shortterm Plans Longterm Plans Standin g Plans Single use Plans On the Basis of Levels 1. determine and appropriate target. A long-term production plan may be to switch over to automation from manual production within 5 years. Corporate Plans . Corporate plans are based on various factors affecting the organisation and in the basis of availability of resources. On the basis of Duration/Time 1. a personnel plan. policies and strategies. may be that every manager will be attending a training programme. etc.These types of plans are generally made by the top level managers.making by the top management in solving business problems. Short-term Plans . These include the setting of objectives.These plans include formulation of overall plans for the whole enterprise. They cover the whole organisation. Such plans are made mainly at the lower levels of management.
They are specific plans and non-repetitive in nature. etc. projects. goals. 2. Establishing objective . rules. schedules.Short-term plans include formulation of programs. Single Use Plans .These plans are also known as one time plans. budgets. It is so because different organisations are of different sizes and are producing or dealing in different types of goods and services. will be used. Short-term plan may be to buy a component locally as the production of that part is still in process. Standing plans include the formulation of objectives. sections and individuals. They also indicate the area where and how more emphasis should be laid.The first step in planning is to determine ‘objectives’ for the entire enterprise and then for its different departments. On the basis of Usage 1. methods. the following steps of planning may be preferred by much management: 1. rules. Objectives indicate the end-points of what is to be achieved. Tactical means tactics involving operations of local importance or of brief duration. projects. Standing Plans .These plans are also know as repeat use plans. Nevertheless. Short-terms planning are also called tactical planning. policies. They make it clear how and where the strategies. Steps in Planning/Process of Planning It is difficult to generalize the planning steps. They are made to handle a particular or new situation. The managers of different enterprises may also believe in different philosophies and they may have different value systems. These plans are devised to be used in a particular situation. programs and schedules. Single use plans include budgets. . procedures. strategies and rules. Such types of plans are designed in a manner to be used in repetitive situations throughout the enterprise. etc. Standing plans are used over and over again every year. policies. methods. They provide guidelines to management in solving the recurring problems. A long-term plan may be to produce all the components of a product within the factory.
Panning premises can also be differentiated on the basis of controllability. and still others are non-controllable. while the internal planning premises are the firm’s own climate. population. In this case. These premises are planning assumptions or the expected environment of plans in operation. The objective of the production department will be to ensure optimum production. a hierarchy of objectives is developed. etc. on the basis of their being: external and internal. Some premises are controllable. determine the objectives of the individual. The main objective of the enterprise may be to increase profits. this is a tangible premises. others are semicontrollable. planning premises.Main objective of the enterprise gives direction to the sub-objectives of different departments. such as the enterprises’ reputation within the industry. External planning premises are related to the general business climate and the climate of the particular industry. 2. They provide important facts and information relating to the future and thus. The sales department will try to increase sales and personnel department will employ suitably qualified persons and make suitable arrangements for their training. . rules. While planning a manager should not overlook the intangible premises also. government influence.The next step in planning is to establish planning premises. When we say. Policies. Some of the examples of external premises are about the general business climate. Planning premises can either be tangible or intangible. or a possible loss of prestige. Premises expressed in terms of quantity are tangible premises. Business cycle and population trends are the examples of non-controllable premises. process are expected to rise to the extent of 15% within the coming two years. Readers should be in a position to guess for themselves which premises can be more accurately estimated. in turn. programs. The firm’s share of market is semi-controllable. Establishing planning Premises . Eventually. Still another distinction can be made among premises. because competitors will try to capture the market. Intangible premises cannot be quantified. facilitate the work of planning. Departmental objectives give rise to subobjectives of the sections which. the objective of the purchases department will be to buy raw materials of desired quality at lower rates. are the examples of controllable premises.
4. Activities are fixed and starting and finishing times of all the activities are timings of different activities. showing revenue and capital expenditures separately. Sequencing and timing facilitate actual work to be undertaken. viz. the time to be taken for performing the different activities. it is necessary to sequence the various activities. This is called ‘Contingency Planning’. the next step is to take decisions in respect of scheduling. control on actual performance can be exercised. Necessary steps may be taken if differences between budgeted levels and actual levels are material. There is a budget for the entire enterprise. Unscientific decisions on these elements are likely to result in the failure of planning. These different courses are examined and the one which is the most suitable is included in our plan. Different alternatives are analyzed and compared on the basis of different factors.. viz. it requires some derivative plans for its support. Selecting from the Alternative Courses. For selecting the most suitable course of action. Derivative plans are the supportive plans which are formulated for executing the basic plan. 5. Further. the second best should be picked up and so on. financing. the master budget which shows the expected profit calculated by deducting the expenses from the income. Therefore. another step of planning is to think of the different alternative courses of doing the task. advertising. As there may be several courses of action. cost. Scheduling of different activities. The derivative plans would be to acquire vehicles. When the plans have been set. If the best course is difficult to be applied. Priorities. it is necessary to quantify and present them in the form of a budget. Formulation of Derivative Plans. .3. accessibility. the manager should make a list of alternative plans in order of merit. Before we estimate the time element. i. The basic plan may be to increase the sale by sending goods to different areas of city. each department may have its own budget. smooth procedures. etc. 6. gain. Once the basic plan is established. When the basic and derivative plans have been formulated. Budgeting. There may be situations when it would be difficult to use the best course of action. the techniques of decision-making are applied in order to have the best choice from amongst the different alternatives. employing and training of different types of personnel. With the help of these budgets. risk. which tie into the overall budget. etc.e.
government policies. Each part of the plan should be shown to and discussed with concerned person. Premises are made about market conditions. Future is uncertain. If it is finalized in consultation with him. . as he will psychologically feel committed to it. There have been instances where the persons involved in this manner. it is worthwhile to take into confidence different persons who have to execute the plan. The assumptions or premises are for a future setting or happenings. have suggested valuable changes to make the plans more meaningful. there must be provision of follow-up in our system. and try to do his best in complying with the obligation. We must be prepared with the alternative plans if the existing course of action is not working well. Planning provides the future course of action.7. business cycles. tax policy. Sometimes we may have to introduce modifications in our plans to suit the changing circumstances. The process of planning is shown in figure: PROCESS OF PLANNING SCHEDULING OBJECTIVES OR GOALS (What we want to accomplish and (What would be the sequence of activities and how much time would when) PLANNING PREMISES (What our planning assumptions would be) SELECTING FROM THE ALTERANTIVE COURSES (What are the different courses and which one to select) DERIVATIVE PLANS (What would be the supporting plan) be taken by each activity BUDGETING (What would be the overall expenditure and income and the expenses of different departments) TAKING STAFF TO CONFIDENCE (How would the staff be taken into confidence) FOLLOW-UP (What would be the procedure to followup) Planning Premises: A plan is based in certain assumptions called premises. 8. he will try to implement it wholeheartedly. Before the actual process of planning is launched. premises represent the plan environment in fact. Therefore. Follow-up. etc. One cannot be always sure of getting the expected results. Acceptance by the staff. price trends.
Some forecasts or expectations are the results of planning process. may become premises for other plans. evaluation and usefulness.(Quantifiable) (Non-Quantifiable) economic units of goodwill conditions outputs etc. broadly. Plans or the resulting forecasts.their choice.depend upon the abilities of the planner. These may.planning premises. In spite of this fact. They are not called premises then. -product Market • Controllable Semi-controllable Uncontrollable Limitations or Barriers of Planning Planning is a necessary management function. It may also be noted that all the assumptions are not premises. there are some limitations of planning. Plan Premises Internal Eg: sale Forecast Capital Investment External Tangible Intangible eg: socio. however. Planning premises relevant to are industry may not be relevant to the other. be divided into two groups as shown in figure:- Limitations of Barriers of Planning .
planning is bound to be affected. Political climate. The manager should assess the expected demand of the workers and keep in mind the alternatives which he may have to put to use if the circumstances so require. the change in their attitude cannot be foreseen. sometimes. significantly affect the plans of various organisations. Labour Unions. 2. etc. Some external limitations have been described below: 1. the whole planning structure may have to be changed. there is instability in the attitude of the unions which put a limitation on managerial planning. Even if their demands are fulfilled partially. Political climate. Tax incentives. puts obstacles in the way of successful planning. Managers have little or no control over such limitations. fair trade policies. . When the government decides to make a policy of procuring a certain percentage of sugar from sugar mills to be sold through fair price shops. it affects the plans of the sugar mills. Many a time. the plans of many enterprises get upset. When the government regulates the business practices of introduces certain new trade policies. If they take a rigid stand.External Limitation Political Climate Labour Unions Technological Changes Policies of the Competitors Natural Calamities Internal Limitations Human Psychology Prompt Action Difficult Time Constraints Rigidity of Policies and Procedures Capital Investment Subordinates’ initiative Expenses involved External Limitations External limitations are the results of the external environment. If the government bans the large-scale industries or restricts their activities in order to promote small-scale industries. Often. Managers should keep a watch on the political trends and try to give a flexible touch to their plans. the plans of big enterprises would get a setback.
howsoever big the order may be. Heavy rains. then. Many Indian businessmen would not sell anything on credit to the new customer. Such calamities cannot be avoided but. They might have produced qualitative goods in accordance with the plans. Human psychology is one of the important internal limitations of planning. Technological changes. Sometimes the effective policies of the competitors make the plan ineffective.3. Therefore. Such attitudes of the businessmen create bottlenecks in the way of effective planning. etc. Sometimes plans do not come up to the expectations because of certain natural calamities. Such changes bring about improvements in technology and quality of products and may reduce the cost of production. Natural Calamities. The plan of an enterprise using only technology and producing old-styled products will face a setback. Internal limitations Internal limitations are mainly due to lack of expertise and experience on the part of the management. Human Psychology. fire. The rivals might have convinced the customers and succeeded in selling their products successfully. storms. Some important internal limitations have been discussed below: 1. As such. The members of an organisation may develop certain beliefs which they can hardly change. 4. There is a tendency among many businessmen to stick to the old rigid practices even when their business has considerable expanded. managers should keep their knowledge updated and they should be conscious of the new technologies that are being developed in the field of their business activities. . The planners might have kept in view the principle of demand and supply. the planners should keep themselves aware of the activities of their competitors to ensure the achievement of their objective. Technological changes may also upset the plan. lack of resources and other human factors. plans may be chalked out in order to minimize the risks. But their rivals might have surpassed them in the marketing area. A manager should be dynamic and should change his outlook with the changing times. The costlier and outdated products lose their market. disrupt normal working and cause deviations. Policies of the competitions. 5.
Sometimes.e. it would be difficult to take such an action and if it is taken. It is not a proper attitude. Policies and procedures. the manager should provide for such contingencies in his plan. . Subordinates’ Initiative Shifted. Prompt action difficult. The executives should always encourage new ideas and innovations even if they are not provided for in the plan. planning is not that important that a lot of time should be spent on it. future planning is largely governed by the nature of equipment and it may restrict a change in the quality of the product or a change-over from one product to another. baryons doubt. the plan should be flexible. Whenever possible. Some businessmen prefer to utilize their time in some other constructive work. Whenever such an action is necessary the manager should act within the policies of the enterprise. Such initiatives are always in the interest of the organisation. Rigidity of policies and procedures. If the plan is to be followed. Time constraints. 3.2. this may amount to violation of the plan. i. Sometimes sudden emergencies necessitate prompt action. It is rather an investment. they have the potentialities to show better performance. their rigidity hinders smooth working. Workers and junior managers have to follow guidelines provided in the plan. they do not readily come forward with suggestions. There should be some built-in device which may enable the management to adjust itself to changed circumstances. Capital investment is also an internal limitation. Entire planning procedure requires a lot of time. Capital investment. regularize the working of an enterprise. 6. But sometimes. To them. 4. Once the capital is invested in some equipment. the fruits of which are reaped in future. This prompt action may not have been envisaged in the plan. 5. but in the face of the already laiddown principles and procedures. It has been proved that the time spent in planning is not a “futile exercise”. There should be some scope for deviations in the plan.
Planning is concerned with predetermined course of action. Expenses Involved. The plans also include unexpected risks such as fire or some other calamities in the organisation. Surveys are conducted. By stating in advance how work has to be done. The intensity of the foregoing limitations can be reduced by the foresight of the managers. 2. Importance of Planning 1. The resources are kept aside in the plan to meet such uncertainties. . Lot of information has to be collected to give a final shape to the plan. Top-level managers should extend their maximum support for the success of the plans. Besides. how to do etc. If there were no planning. The plans are made to overcome such uncertainties.7. Planning involves considerable expense. Planning helps the manager to face the uncertainty because planners try to force the future by making some assumptions regarding future keeping in mind their past experiences and scanning of business environments. Planning Reduces the risk of uncertainties. Sometimes. Planning makes clear what employees have to do. planning provides direction for action. Employees know in advance in which direction they have to work. Organisations have to face many uncertainties and unexpected situations every day. an input of flexibility should also be applied to planning. They should involve the subordinates of all levels in the formulation and finalization of the plans. Planning provides Direction. investigations are undertaken and the date collected in order to prepare plans. expertise of technicians and other qualified persons is also needed who charge very heavily for their services. employees would be working in different direction and organisation would not be able to achieve its desired goal. people are interviewed. But management experts plead that the amount spent on planning should be regarded as investment because planning helps in maximising profits. This leads to unity of direction also. A planning climate should be infused in the organisation and every member should have a positive outlook towards it. It provides the directions to the efforts of employees.
if the managers. As in planning goals are set in advance and predictions are made for future. The departmental plans are derived from main organisation plan. better methods and procedures to perform a particular job planning process forces managers to think differently and assume the future conditions. 6. it makes the managers innovative and creative. which are made in planning to achieve these objectives only. if the planned output for a week is 100 units and actual output produced by employee is 80 units then the controlling manager must take measures to bring the 80 unit production upto 100 units but if the planned output i. Planning reduces over lapping and wasteful activities. the base for comparison in controlling is given by planning function only. Planning facilitates decision making. Planning function begins with the setting up of the objectives. Controlling means comparison between planned and actual output and if there is variation between both then find out the reasons for such deviations and taking measures to match the actual output with the planned. non-managers and all the employees are following course of action according to plan then there will be integration in the activities. So. procedures methods and rules etc. The organisational plans are made keeping in mind the requirements of all the departments.. . Planning establishes standard for controlling. As a result there will be co-ordination in different departments. there is a great scope of finding better ideas. So. Planning requires high thinking and it is an intellectual process. When employees follow the plan they are leading towards the achievement 5. Planning promotes innovative ideas. But in case there is no planned output then controlling manager will have no base to compare whether the actual output is adequate or not. 7. policies. Planning helps the managers to take various decisions.3. For example. 4. 100 units is not given by the planners then finding out whether 80 units production is sufficient or not will be difficult to know.e. Focuses attention on objectives of the company. Plans ensure clarity of thoughts and action and work can be carried out smoothly. These predictions and goals help the manager to take fast decisions. So. On the other hand.
The predetermination of action avoids confusion and clashes and wastage of resources. Delegation is a tool to get the work done effectively and efficiently through others whereas decentralization is required when an organisation grows and expands and only top level cannot manage it. Organising The word ‘organizing’ is derived from the word ‘organism’ which means an entity. no time is wasted in selection. its people being its parts. ‘Organizing’ can be interpreted as a structure and as a process. An independent entity consists of many parts. Their interrelation is governed by their relation to the whole. Specially. well integrated and interrelated. playing their respective role to achieve the common objectives. placed at various positions. 8. Organizing means fuller and optimum utilisation of resources and coordination of human efforts for the attainment of specified objectives. Delegation is an essential part of every organisation. It is a matter of choice and preference of top level management and not compulsory. An organisation is also an entity. In this way.of objectives. Improves efficiency and leads to economical operations. Through planning. Planning results in systematic and smooth functioning of the company because planning is concerned with the predetermined course of action. Delegation is necessary in every organisation but Decentralization is not necessary. No organisation can work without using the concept of delegation as there is no individual who can do all the work himself only. when people in an organisation are placed at various positions according to their competence. So. All the systematic working leads to economic and efficient operations. The employees also know in advance what procedures they have to follow. efforts of all the employees are directed towards the achievement of organisational goals and objectives. in the present era due to liberalization and globalisation fast decision is needed and quick decisions can be taken through decentralization only as it provides greater flexibility and freedom of action but still many organisations are working with little or no decentralization. each knowing about his/ her authority and responsibility-all this constituted the concept of organizing. .
At higher levels. there is often a divergence between individual needs and organizational goals. Fatigue. Often executives come to regard these domains as their own empires which receive their attention to the neglect of the organizational interest. The most important of these principles can be listed under the following heads: 1. in reality. Objectives are helpful in determining the activities and the structure itself. 2. Consideration of objectives Organisation offers the structure that enables us to accomplish goals. however. it also depersonalizes their activities so that individuals find little meaning in the work. These principles are intended for universal application to all enterprises and cooperative efforts in different fields. While specializations cause great function interdependency among operatives. monotony and boredom are inevitable the outcome of division of about. grouping jobs into manageable units and their co-ordination can pose serious problems. Division of labour or Specialization The classicists viewed specialization as the basis of efficiency. one should take due cognizance of time. Once objectives are clearly defined. Moreover. functional interdependency among work activities causes strains and tensions. Existence of these levels is always the characteristic of organized and . 3. It tends to segment the organisation into enclaves of authority and influence. The principle of specializations has been challenged by the behavioralists and others. However. tailor applied by breaking down jobs into single repetitive tasks performed on specialized tools. the organizer can conveniently proceed to group activities. Specialization leaves to a different type of problems at the executive level. delegate authority to individuals to whom activities have been assigned and coordinate their efforts for better results.Principles of Organisation Structures Traditional organisation theorists developed certain principles of organization as guide to thinking in organizing. A group of individuals can secure better results by having division of work. and develop and design the structures so as to facilitate accomplishment of objectives. The assumption underlying this principle is that the work firms and means adopted by the organisation are acceptable to the individuals and groups. Since objective have a direct bearing upon the organisation structure. The scalar principle The vertical dimension of organization structure consists of levels of authority arranged in a hierarchy from the chide executive at the top to the first-line supervisor at the bottom. F.W.
Thus. 5. Departmentation breaks the work into manageable units. develops or employs a new technology. In a complex business organisation. financial aspects of the business can well be placed in one section. The principle of Unity of Command A business organisation must have a single head in whom all authority and responsibility is concentrated. 4. The scalar principle holds that organisation consists of two or more levels of authority. Unity of effort.coordinated group efforts. Choice of basis is a recurring question and changes as the organisation grows. 6. Departmentation is desirable because individuals vary considerably in the range of activities which their abilities will permit then to perform effectively. Departmentation requires analyzing everything that has to be done and determining the grouping in which it can be placed without violating the principle of homogeneity. The principle of Departmentation Logical grouping of related jobs and functions is quite natural in developing the organisation structure. Span of control (also referred to as the span of supervisions or span of management) refers to the number of subordinates reporting directly to the executive the principle holds that larger the number of subordinates reporting directly to the . but this has to be blended with the efforts of the organized people below. product and place. the number of levels may be substantially large. To subject the person to the authority of more than one immediate superior tends to divide his loyalty and confuse his action. The principle of span of Control The idea of span of control is related to the horizontal dimension of an organisation structure. consistency of direction. high morale and effectiveness of coordination depend upon one executive as the locus of ultimate’s responsibility. Someone sees it is desirable to call signals and gives the word at which every one exerts his effort in unison with the others. Gluck viewed four possible bases of Departmentation-purpose. Another advantage is that is focuses executive skills on logical and interrelated problems and provides a basis for top management to coordinate and control the efforts of the departments. The single leader is the ultimate source of authority by which conflicts are minimized. Clearly a leader has emerged producing a two-level group consisting of the leader at the top and the pushers as follows. process. the levels represent gradations of distributed authority. Each successively lowers down the management hierarchy represents a decreasing amount of authority. In organisations. Consider the members of a group formed spontaneously to help push a car out of mud. The bias idea of this scale is that of grading or distributing a characteristic over a series of demarcated units.
7. It implies devising a method of control so that only exceptional results are flagged for management attention.executive. This principle is based on the assumption that management at higher echelons of organisation structure has limited time and capacity. If sub-division is carried too far. The growth of business. but gives way to the demand for genuine change without fundamentally altering the basic functions of the various segments of the structure. And they should devote a larger part of their time and abilities to important matters of planning and policy making. and second is the capacity of the executives to supervise. two other variables are involved in this principle. A flexible organisation is able to withstand pressures. . Since these variables differ considerably from individual to individual. Both the environment and the individuals comprising the organisation are constantly in flux. The principle of flexibility Organisation is created to accomplish certain goals. Horizontal and vertical dimensions should be kept in blanked relationship to one another. whether sudden or gradual produces pressures which upsets the organizational balance. the more difficult it tends to be for him to supervise and coordinate them effectively. 9. It is to be admitted that there is a limit to the number of subordinates a manager can effectively supervise. The principle of balance This principle implies that each area and function of an enterprise should operate with equal effectiveness in making its allotted contribution to the total purpose. This principle implies that only problems involving unusual matters should be referred upward and decided by higher level executives. coordination and integrating the work sequences becomes very complex. it is hardly justified to lay down any fixed number of subordinates to be supervised by the manager. The first is the capacity of the higher executive to do his work efficiently. The exception principle The next very useful fundamental of organisation structure is the exception principle. To cope with these changes and get reach its objectives and organisation must be designed with sufficient amount of flexibility. The idea of balance applies to organisation structures as well as to functions and processes. the problem of timing. In addition to the numbers. 8. Problems of balance arise from the tendency to sub-divide the work into small units. and that reunite problems should be passed on to lower levels and resolved there it. but what should be that limit is yet an open question. and by avoiding over-reliance upon and single type of structure. And therefore. changes n organization structure should be made after giving full consideration to balance.
As noted earlier organisation structure is a means. If a subordinate does not make decision on problem falling within the limits of his authority and consumes disproportionate time than his senior. the notion of simplicity is identifiable with the convenience with which people. not an end in itself. By forcing a distinction between programmed decisions and the non-programmed decisions. He terms geographical dispersal or delegation as mere “administrative reforms” intended to relieve pressure on top management. 10. aiming for as clear-cut structure as will permit doing the necessary work efficiently”. Line structure is part of every organisation. simplicity is an objective of organizational planning. However. Principle of simplicity The idea of simplicity in organizational structure may at first appear facetious in view of the large size and complex nature of many of our business organisations. Principle of Decentralisation This principle is of great significance in the organisation.perhaps many having face-to-face personal contracts are able to combine into performing groups. delegation applies at all levels in the organisation structure. Thus. There is said to exits decentralization in an organisation if decision making authority is pushed down to its lower levels and near the source of information and action as possible. Nevertheless. Combination of line and Staff Functions Organisation structures are usually of line.Exception principle is also the principle underlying delegation of authority. 12. decentralization provides a new ordering principle in which both centre and parts discharge real top management functions. It is also frequently used to indicate either geographical dispersal or delegation. Simplicity is an appealing objective because it implies economy of efforts. staff and functional types. 11. especially to large enterprises. Rather. These views are in the idea of profit centers as organizational unit consonance with. The staff and functional types are modifications of the line . for ducker’s views on decentralization are quite penetrating and interesting. the exception principle helps the manager to concentrate on un-programmed decisions involving new and unstructured elements. He calls this as the principle of federal decentralization’ which is based on organisation of activities into separate product business with separate markets and production and profits goals for each. This principle in brief states: “it is desirable to consider simplicity of structure in developing and organisation.
production department. Under such situation. After the jobs have been identified. like increase in demand. Delegation of authority. While developing clusters within a department. 4. is called his/her span of control or span of command or the hierarchy of positions. Once the organisation structure has been developed and the authority and responsibility of each individual has been identified. Staff functions are auxiliary to the line functions and are advisory in nature. accounts department. Factors Leading to the Formation of a Structure The following factors lead to the formation of an organisation structure: 1. This gives an idea of the number of jobs required for the organisation. . Therefore. finance department. One single departmental head cannot supervise all the jobs in his/her department. Jobs of various departments are to be properly supervised. The above list of principles of organisation structure is not intended to be complex. The reason is that these are basic authority relations. These principles should be used as mere fundamentals or guides to actions while designing the organisation structure. nor are these principles meant for application as immutable laws. exit. the smooth functioning of the organisation should take place. an assessment is made of the various activities required to accomplish the organisation objectivities. Formation of Departments. being supervised by a senior. combination of which will result in confusion. Under this step. he/she divides those jobs into workable clusters and puts each cluster under the charge of a subordinate manager or a supervisor. Then an estimate is made of transferring the various activities into different jobs. thus formed. the area place in different departments on the basis of their homogeneous nature. it is argued that line and staff functions should not be combined in one individual or department where separation of the functions is possible. 2. Line structure consists of vertical relationships with power to command and execute. Activities under a Job. the workload of different individuals increases. Span of control. The process of placing different jobs in different departments is called Departmentation.structure. On the basis of distinction like this. The number of persons. The various departments. some of the work of the over burdened seniors may be 3. Staff functional structures seldom exeunt apart from a combination with line structure. may be purchased department. Sometimes due to the situational reasons. marketing department. The activities included in each job are called the job-profits or job-design. it is seen how many persons can be supervised by a single senior.
But the term “span of management” should preferably be used since span is one of management and not merely or control which is just important function of management. This is basically the problem of deciding the number of subordinates to report directly to each manager. . Time. he will finally reach a point of little or no time in discharging his duties effectively. no manager is expert in all the things and to that extent he must create limited subordinate positions. and coordinates the entire work. Versus Narrow Spam Spam of management directly affects the number of levels in the organisation. Similarly. or span of authority. sets a real limit to the number of minutes in an hour. More details of such authority are given in the next chapter. Such personality and energy limitations also affect the executive’s span of management. The term “span of management” is often referred to as span of control. when the manager is asked to control a large number of subordinates keeping in view his time span. But more the levels are created. The problem of span of management is not a new one. If this is so. an executive can supervise well only a limited number of subordinates. more will be the administrative cost due to additional staff required and more will be the difficulties to be encountered in communication and controlling. why create departments and levels? Answer to this question is provided by the principle of span of management. direct subordinates. Because of biological and other limitations. individuals differ in their ability to get along with people and also in the physical and mental energy they possess. for instance. The principle of span of management does not by itself resolve the conflict between the advantages to tall organisation and that of a flat one. span of supervisions. man has experienced and realized that no individual can deductively supervise and infinite number of subordinates. Ever since the dawn or organized co-operation. Spam of Management An organisation is characterised by the presence of a number of levels and departments. furthermore. Wider spam of management leads to flat organisation whereas narrow spans of management result in tall organisation structure.transferred to their respective subordinates without disturbing the structure. the necessary authority is also passed on to the subordinates along with the additional work. In doing this. It takes time to assign tasks. Psychologists also point out span of attention as a factor affecting span of management. span of responsibility. The principle states that there is a limit to the number of subordinates that each manager can effectively supervise. answer questions. Further. If the number of subordinates under the direct supervisions of a manager is continuously increased. supervisions will lose much of its quality. The passing on of such authority along with the additional work is called delegation of authority.
The above considerations of narrow and wide spans of management point to the imperative need for a balance. Another serious problem in having too many levels in the organisation is posed by the practice that communication must flow through proper channels only. leads to larger expenses in the form of executive remuneration. due to such placement he gets very few opportunities to develop self-reliance and initiative and enjoys hardly any feeling of belongingness. Moreover. Since the number of levels through which orders. plans and policies must pass increases. supervision will become less effective because the manager will not have sufficient time and energy to attend to each of his subordinates. Too many levels hardly allow for delegation of any real authority and greatly limit the supervision to a very few activities at lower levels. The result is that the subordinate is deprived of the benefit of managing a larger number of related activities. and actual span of management should be determined keeping in view the entire pertinent factor in a particular situation and at a given time. If subordinates are allowed to communicate directly. in turn. However. But a host of the factors go a long way in determining what spans are feasible in a given situation. Narrow spans also adversely affect employee morale. and personal abilities and influences are some of the factors having a bearing on the number of subordinates that can be effectively supervised by a manager. . the effective solution to thus practical problem lies in encouraging lower level managers to develop cross relationships. Large number of contacts required may also distract him to the extent of neglecting important questions of policy. Supervision of too many people on the other hand. misinterpreted or distorted. Factor Determining the Spam of Management Theoretical and practical variations in span of management are so wide that one needs help in deciding the number of subordinates to be supervised effectively at each position in the organisation structure. Advantages and disadvantages of these two situations should be carefully examined in terms of tangible as well as intangible factors. there is also the real damager of subordinates away from the top leadership losing even their desire to understand them properly. can also lead to trouble. This. The more the levels in the organisation through which the communication must passes. the greater will be the danger of its being misunderstood. Time and attention required. Expenses are further increased on account of additional clerical and office staff needed as a result of there being large number of managers. A subordinated who finds himself submerged at the bottom of the organisation pyramid feels sensitive about the fact that he hears nothing from the top leadership. Narrow spans also reduce opportunities for management development.Narrow spans lead to many levels in the organisation and thus required a larger number of managers. All these factors market the employees less enthusiastic in their jobs and greatly reduce their morale. The process of control also gets complicated when there are narrow spans and too many levels in the organisation structure. the immediate superior will find himself in the most precarious position of the matter being disposed of without his knowledge or having come to know of the information after being communicated to others.
An organisation poorly conceived consumer disproportionate time of the manager in counseling and guiding the subordinates. Delegation of Authority In an enterprise which is effectively organized and structured.. Evidently the time left can be spent on supervising the work of subordinates. Subordinate Training A well trained subordinate is able to do his job quite successfully. Moreover. Besides. Consequently the frequency and severity of superior-subordinate relation stands greatly reduced. the sales manger must devote part of his time in contacting customers. while relying upon ability and training of the subordinates as a factor influencing span of management. he will have less time to spare for supervising the work of his subordinates and hence operate with a narrow span. i. every manager must also be busy for part of his time with administrative job of planning and policy-making not directly related to guiding the subordinates. On the other hand. The more is the time required to be devoted to processes other than supervision. At lower levels. on the other hand. it is difficult to discover what to teach and how to teach.1. 2. Degree of Decentralization If a manger is to make many of the decisions himself. Thus. 4. If a subordinate is not clear what he is expected to do or is called upon to do something beyond the scope of his authority. Where subordinates are delegated with authority sufficient to carry out the assigned duties and their authorities are clearly defined. Thus. At higher levels. management is able to influence and minimize the frequency and severity of superior-subordinate relationships and thus increase its span. the narrower should be the span of management for such an administrative position. An important symptom of inefficient organisation influencing span of management is to be found in ambiguous or inadequate delegation of authority. it should be remembered that training is a continuous process. he will make more demand on the senior manager and hence operate to reduce his span. 3. it is much easier to identify the areas of training and develop suitable techniques for imparting it.e. well-trained subordinates would considerably reduce the time and attention of the senior and thus help to increase his span. But training becomes more and more difficult as one goes up the echelons of management hierarchy. an executive operating under decentralized set-up is relieved of much of the burden of making programmed decisions and can afforded to supervise relatively a larger number of subordinates. . a manager dealing with trained subordinates can afford to supervise a large number of them and operate with a wider span. Time Required to be Spent on Supervision Every manager spends part of his time in doing the job personally.
thus widening his span of supervision. operates to reduce his span of control. schedules and personnel problems from staff experts and thus. This factor refers to the importance. 9. He can know the deviations either by personal observation or through use of objective standards. The top level manager needs to work linger with each of his subordinates than the first line supervisor whim largely handles the routine problems. increase inter-relationships and consumer more time of the executive to dispose them of and thus. Similarity of functions Supervised Similarity or variety of function to be supervised by the manager also influences his span of supervisions. gain much of their guidance on methods. supervision of components and personnel becomes more difficult and time-consuming. complexity and time to be spent by the executive in reviewing the objectives. it will be more prudent to reduce the number of subordinates reporting to him. activities and functions with a degree of variability and probably more complex in nature. As the importance. 6. therefore. 7.5. Use of objective standards Supervising the subordinates requires that management must know how far plans are being followed and to what extent their performance tends to deviate from plans. require fewer contracts with line managers. He becomes well versed with jobs and can handle a larger number of subordinates. warrant a fewer number of persons to be handled by the supervisor. complexity and time required of the manager in performing his planning function increases. On the contrary. 8. In the latter case manager is saved of may time-consuming relationships and can concentrate on points of strategic importance. availability of staff assistance and requirement to plan periodically and not on continuing basis will alter the position. Availability of Staff Assistance Staff activities are not uncommon in business enterprises. However. it is only when the staff fails to turn the show smoothly that . Here the executive manages similar functions (which are perhaps repetitive also). Territorial contiguity of functions Supervised Where functions are geographically separated. subordinates as a result. programming the actions and deciding number of policy matters. When an organizations equipped with staff services. The manager must spend considerable time in visiting the separate units and make use of more time consuming formal means of communication. Planning required of the supervisor. Geographic contiguity of functions supervises by the manager.
the word ‘responsibility’ has the synonym ‘accountability’ but the word ‘accountability’ has been used in the sense of a condition in which a person is bound to report or render an account to another. assigned task. “accountability refers to the fact that each performer who is given authority and responsibility must recognize that the executive above him will judge the quality of his performance. On the other hand. Difference between Authority. It should be remembered here that responsibility and accountability go hand in hand because the latter arises out of the former. he should be given sufficient authority to carry out his duties. i. the person. responsibility and authority must be in balance. if a man is made responsible for the performance of a particular task. no individual should be given more authority that is necessary to discharge his responsibilities and. Responsibility and Accountability Basis 1. who accepts responsibility without being provided with adequate authority to carry out his duties. the former may be misused by the person concerned. may be placed in a very embarrassing situation. It is immaterial whether he reports success of failure in the work attempted by him. For example. authority should be equal to responsibility. Provision of staff assistance thus helps the executive to supervise a large number subordinates. In the words of McFarland.” Accountability According to Oxford English Dictionary. Accountability will be discharged if the subordinate gives a full report to his senior about his performance in relation to the work assigned to him. Different writers on management have supported this meaning. Accountability will be discharged in hand because the latter arises out of the former. The ideal situation will be that where authority and responsibility are equal.e. because inequality between the two may produce undesirable results.the manager normally gets involved. Hodge and Johnson have rightly remarked-“if organisational efficiency and morale are to be optimal. Where authority exceeds responsibility. no individual should be asked to assume an obligation without receiving a commensurate amount of authority to discharge that obligation. on the other hand. accountability means the obligation of an individual to report formally to his superior about the work he has done to discharge his responsibility. performance. .Concept Authority Responsibility Accountability It is a right to take It is an obligation to It is answerability decision and given perform the on account of command.” In simple words. Authority and Responsibility An important principle of management is that authority should match responsibility.
. superior. n It always downward superior subordinate. because he continues to be responsible for the authority he has given to the delegate. It cannot be withdrawn. flows from to 4. Even after the authority has been passed on to a delegate. 2. 5.Origin It arises from contract or from formal position.2. It flows upward from It flows upward subordinated to from subordinate to superior.Flow It can be withdrawn by a notice. Under delegation of authority. Not a permanent Phenomenon. he keeps a watch on the performance of the delegate. It cannot be so withdrawn. Parting with Part of the Authority. In fact. 3. Delegator’s Accountability Continues. 4. The delegate acts within the limits laid down by his senior.Withdraw al Delegation of Authority It arises from the It arises from the responsibility. It cannot be fully delegated. 3. Authority can be taken back from him if he does not use it properly. delegation of authority. The delegator continued to be accountable to his seniors for the authority he has delegated to the subordinates. the delegator still retains it. The following features emerge from the meaning of delegation of authority given above: 1. It cannot be delegated at all. Delegator Retains the Authority. It is so.Delegatio It can be delegated. Delegator may not part with his authority forever. the delegator gives pat of his own authority to a delegate selected by him.
4. Assignment of Duties. be remembered that delegator is also accountable to his seniors for the compliance of the task given to his subordinate. After determining the outcomes and identifying a suitable subordinate. Granting of Authority Accountability . Delegation of authority is specific when guidelines for accomplishing the objectives have been explicitly prescribed. The delegator. Specific or general delegation. Thus. when only broad instructions have been given to do the work. In order to make that delegation effective. he becomes answerable to his superior for the satisfactory performance of those duties. it is necessary that the expected outcomes and procedures of doing the work are thoroughly discussed with the delegate. It is general. the subordinate is under and obligation to report back t his superior (the person who delegated authority) that the task has been accomplished satisfactorily. ELEMENTS OF PROCESS OF DELEGATION Following are the four elements in the process of delegation of authority: 1. he should be given complete freedom to take all such actions which are necessary to perform the duties assigned to him. In other words. Accountability. It should however. Granting of Authority. then he should examine who is the suitable subordinate for doing that work. Determination of the Outcomes. duties are assigned to him. Process of Determination of the Outcomes Assignment of Duties 3. should determine the expected outcome he is interested in. should be granted matching authority to carry them out. before deciding whom to delegate the authority. The person. under the first step the desired outcome should be matched with the required competence of subordinate. to whom duties assigned. By accepting the assigned tasks. Once the duties are assigned to the subordinate. 2.5.
Centralization Centralisation refers to concentration of power or authority in few hands i. . whereas in the decentralized set-up. It is believed. however. In fact. decision-making authority is concentrated at the top-level of the management. and in possession of adequate information necessary to arrive at the decision. In a centralized set-up. Normally. By decentralisation we mean dispersal of decision-making authority at various levels in the organisation. This means greater freedom is given in decision-making to lower level managers and supervisors in the organisation. top level.e. that higher level executives commit fewer mistakes since they are well-trained and experienced. it is very rare that authority for crucial decisions is delegated. employee morale or motivation tend to be centralized at the upper levels of management. The most significant feature of decentralisation of authority is that most of the decisions made at the lower level do not need approval of the seniors.. Importance and significance of the decision: Once of the important factors determining the degree of decentralisation of authority is costliness of the decision. An organisation is centralized when the decision-making authority is in the hands of top level management only. Some such factors of overwhelming preponderance may be explained as following: 1. decisions which are costly in terms of money value involved or in terms of factors like goodwill and image of the establishment. Factors Determining the Degree of Decentralisation Although the extent of authority delegation largely depends on the attitude and temperament of individual managers. it is observed from the mode of managerial behavior that the determining factor to centralisation of authority with regard to specific area or areas is the weight of responsibility since authority delegation does not implicate responsibility delegation. yet many other factors also affect it. the practice is not based on the assumption that people at the higher level in the managerial hierarchy do not make mistakes. Decentralisation of Authority The term ‘decentralisation of authority’ is closely related to delegation of authority. Of course. many important decisions are made at the lower level also. In other words.
the internal advantage of uniform policy cannot be undermined altogether. Moreover. is a controversial matter. opt for decentralisation. the more the decisions to be made inviting number of departments and levels. service. But. Of course. credit. . Size of the enterprise: another pertinent factor determining of decentralisation is largely the size of the organisation.. There is no denying the fact that larger the firm. people with rational managerial temperament believe and want to rely upon participative approach of doing the work and are anxious to take maximum opportunity of individual initiative in the organisation. nothing in particular or the categorically can be prescribed. But it is to be appreciated in all circumstance that the size of each individual unit should be so determined that departments or units are easily manageable with authority considerably decentralized. Management attitude and philosophy: decentralisation is largely a question of character of top executives and their attitude. It may be noted that outlook and attitude of top management is. And there is no denying the fact that such a standing belief deters them from delegating authority to others-even to executives of regional offices. exactness of the size. 4. Diseconomies of larger size may be greatly reduced by organising the enterprises into a number of decentralized units resulting in economy and efficiency. Control techniques: another related factor determining the degree of decentralisation is the magnitude of desire to obtain uniform policy with regard to such vital factors as price of a product. dampening future growth of managerial personnel from within the organisation. undoubtedly. the harder it is to coordinate them. till now. a significant determinant of the extent and mode of authority dispersal. It is certain that an executive with traditional rigid outlook hardly contemplates delegating substantial authority.2. etc. a number of executives and specialists need to be consulted in big establishments. in the same event. It is further to be appreciated that centralisation is likely to arrest individual initiative. 3. In essence. which can best be practiced by centralized authority. delivery. Of course. On the other hand. decisions are often being delayed though delayed decisions cost much. costs involved to centralize decisions must also be taken into account.
national unions. Environment Influences: so far the determinants of the extent of decentralisation that have been analyzed belong to the interior of the firm. Purpose . In fact. Decentralisation Decentralisation of authority means to disperse the decisionmaking authority at various levels in the organisation. the key to safe decentralisation is adequate training of subordinates and make them able to shoulder higher responsibility effectively. availability of capable executive substantially determines the nature and extent of dispersal of authority. Say for example. Basis Delegation Delegation of authority means to pass on decision-making authority and freedom to a subordinate to do some specific task. these forces on many occasions deter the management of an enterprise to delegate authority down the echelon since many aspects of the functioning are virtually controlled by such echelon since many aspects of the functioning are virtually controlled by such external forces. The purpose of delegation of authority is to share the burden of a senior or to pass on some authority to a subordinate to 6. if pricing of any product is subject to regulation. Likewise. when raw material is subject to government allocation.. There should not be any controversy over the fact that forces like government controls. Availability of capable executive: nevertheless. It is not uncommon that top executives willing to delegate authority and themselves handicapped in that respect for want of capable and qualified subordinates. hardly any authority could be given to sales manager to exercise and assert. But certain external forces are also significant in demining to mode of decentralizing authority. the extent of authority that can be given to purchasing and factory managers is really a point of argument. to a considerable length determine and mould the extent and nature of decentralisation of an organisation. etc. Obviously. government purchases. Concept 2.5. fiscal policy of the government. The purpose of decentralization of authority is to disperse the authority to different managers working at the same level so that they can do the work 1. And perhaps it would be interesting to note that decentralisation provides possible opportunities to impart the training required.
of The authority delegated can be The authority. two groups are involved-top level the senior and the subordinate. Delegation has narrow scope. 8. as It has wider scope. 7. the toplevel management keeps a general watch on the activities of the subordinates to whom the authority has been given. independently reference to seniors for guidance. 6. once decentralized. Delegation is just an act or a process through which a senior shares his authority with a subordinate. Scope. Status. authority. 5. Delegation of authority can take Decentralisation cannot take place place without decentralisation of without delegation of authority. management and the lower level managers of a particular level. viz. taken back if delegate is not is generally not withdrawn. . Dependence. Decentralisation is a philosophy under which top management disperses the authority at lower management levels so that they assume higher management responsibilities. of In delegation of authority only In decentralisation of authority two persons are involved. as it is it is between a superior and his/ extension of delegation to the low her subordinates. Nature Control. without any their immediate instruction and 3. 4. Under decentralisation. doing the work properly. Withdrawal Authority. of In delegation of authority. the delegator keeps a watch on the activities of his delegate and sees that the latter does the work as per instruction. level of management.make his work wholesome. Number Persons Involved.
compensation. .Koontz and O’Donnell NEED AND IMPORTANCE OF STAFFING How can the enterprise objectives be achieved if competent persons are not appointed in the organisation? What would be the fate of an organisation that is indifferent to the training requirements of its personnel? How will the managers and operators feel if they are not duly compensated for their sacrifices for the organisation? Will the morals of the people not come down. Providing Suitable Personnel. 1. The staffing team develops employment tests and tools and holds different types of interviews.STAFFING DEFINITION OF STAFFING After planning & organising the next function of management is to perform staffing function. Staffing consist of manpower planning. promotion & maintenance of managerial personnel “The managerial function of staffing involves manning the organisational structure through proper & effective selection. as a weak staffing department may allow the infiltration of incompetent persons in the organisation. appraisal & development of personnel to fill the roles designed into the structure”: . Through staffing function managers fill the jobs created by organising function. The need and importance of staffing as a function of management can be assessed by the following benefits that this function provides. Thus shows that a goods and strong staffing team is a necessary requirement of enterprise. selection. It arranges to reject the unsuitable candidates and helps in selecting the suitable ones for various posts in the organisation. recruitment. if nobody in the organisation looks after their welfare? The answers to these questions reveal the need and importance of staffing. training. Staffing involves manning the organisation structure through proper recruitment and selection processes.
7. It is necessary for an organisation to keep in touch with the technological developments and innovations. Any enterprise indifferent to such developments will lag behind and never be able to catch up with competitors. The staffing applies the various appraisal and job evaluation techniques and measures the competence of individuals and the worth of different jobs. Many organisations fail because of rapid turnovers problems. Job satisfaction. Staffing function is instrumental in improving the effectiveness of other managerial functions. It is. . Compensation. Job enrichment means given more autonomy to the jobholders to do the job as they deem fit. Staffing department ensures that through the processor of training and retraining all personnel in the organisation keep themselves abreast of the latest techniques of doing the management and operational work. 5. Job satisfaction may be provided by involving people in formulating the objectives and decisionmaking. The staffing department should look after the job satisfaction of the people of its organisation. Job enlargement means adding more activities to the existing jobs. Staffing function tries to optimise the utilisation of human resources. they do the other manger function effectively. It avoids both the over and under manning. People feel attached to organisation where such facilities are given. Sharpening other functions. 6. Thus. 4. Maintaining Human Resources. 3. Utilisation of human Resources. by the techniques of job enlargement and job enrichment. The persons selected for an organisation should be willing to work for a pretty long period. It fills up all the posts and the people selected through this function keep the organisation going. Keeping pace with New Developments. an attempt is made to recognize the competence of individuals so that they may be compensated appropriately. If the people selected through staffing are competent. People working in an organization will feel satisfied if they are duly compensated for the efforts they put in their organisation. by placing suitable parsons at suitable jobs. transport. necessary that the morale of people remains high throughout their stay in the organisation. health and other requirements are properly taken care of. therefore. It properly finds out the requirement of human resources in the organisation and utilizes it to the fullest.2. They feel satisfied if their housing.
HRM consists of four basic functions: (i) Staffing.. Staffing mainly includes an estimate of completed. though it tends to be of continuous nature. so that they give their best to the organisation. career development and organisational development. “HRM is convened with the most effective use of people to achieve organisational and individual goals. along with staffing are undertaken in HRM. It is the way of optimizing human competence at the workplace so that the goals of an organisation are accomplished effectively. According to Ivancevich and Glueck. salary-administration. an attempt is made to improve the competence at the current job of the employee. The remaining functions Viz. (iii) motivation and (iv) maintenance. training and development includes employee training. employee development. The second has of HRM. This clearly shows that staffing is a part of HRM. the staffing function will be considered to have been completed. HRM is the art of procuring. The later thinking is that staffing function continuers till the suitable candidates have been selected and placed in the organisation.” According to Decenzo and Robbins. developing and maintaining suitable persons to achieve the goals of an organisation in an effective way. Employee development aims at improving the competence of an employee for the future position that the employee is likely to get within the organisation. retention of employees. (ii) training and development. viz. Under employee training. Meaning of staffing has already been discussed in this chapter. STAFFING AS PART OF RESOURCE MANAGEMENT HUMAN Human resource Management (HRM) is a broad concept. It is a way of managing people at work. whereas staffing is a part of it.STAFFING VS HUMAN RESOURCE MANAGEMENT (HRM) The term staffing is being gradually subsumed in the broader concept of HRM. training and development. etc. Career .
the HRM approach is being taught and practiced in many parts of the world. organisation provides opportunities so that employees may develop themselves for their career goals. HCM is considered superior to HRM. To enable the employees to continue in the same organisation with contentment. The history of personnel management begins around the end of the 19th century. HRM must also realize that any problem.” Besides protecting employees’ welfare. the influence of trade unions and the labour movement. They will further feel motivated if HRM looks after their welfare. The third component of HRM is ‘Motivation’. Evolution of HRM Personnel management has been transformed into HRM. The maintenance function is the last component of HRM. The purpose of organisation development is to change the attitudes and values of employees according to new organisational strategic directions. But the modern view of HRM gained prominence in 1981 when it was introduced in the MBA COURSE AT Harvard Business School. a sound system of communication also keeps the employees in good stead. when welfare officers came into being. an employee faces in his or her personal life will ultimately be brought into the workplace. The importance of personnel management increased during the World wars-first and the second. Such programs provide many benefits to the organisation while simultaneously helping the affected employee. Employee’s assistance programs. such as programs that help individuals deal with successful life situations. including India. It attaches more . Micco writes-“HRM must work to ensure that the working environment is safe and healthy. caring for employees’ well-being has a major effect on their commitment. The purpose of this function is to assign such activities to the employees that will inspire them to continue working in the same organisation. Employees feel motivated if they are placed at job limited with their attitude and aptitude. HRM write-ups started appearing in American and British journals during 1970s.development takes place by employee’s own initiative. are needed. Today. Their creation was a reaction to the harshness of industrial conditions. HRM. For this. mow is being substituted with a new concept-Human Capital Management.
like system and culture. reasonable benefits. Recruitment. Let us discuss these steps briefly: Staffing Process Manpower Planning Recruitment Selection Placement and Induction Training and Development 1. This means to assess precisely how many persons are required for the various positions in the organisation.. “Recruitment”. “is the process of searching for prospective . The second step in the process of staffing is recruitment. the function of recruitment starts. development. The staffing function starts with the manpower planning. performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved. selection. STAFFING PROCESS Staffing means manning of an organisation. Staffing process involves determination of manpower requirements. It deals with motivational factors. according to Fippo. Manpower planning is also known as Human Resource Planning. training. at the proper times. how many persons does the organisation already haves and how many more will have to be appointed.importance to individuals as assets of the organisation. Beach has defined it as “ a process of determining and assuring that the organisation will have an adequate number of qualified persons. recruitment. while HRM deals with ‘hygiene factors.” 2.. Manpower Planning. It means to search the prospective candidates to be considered for employment. placement. values and behaviors. job transfer and appraisal of personnel to fill the various positions in an organisation. etc. After the manpower requirements have been assessed. Like fair pay. clean and safe working conditions. The staffing also ensures that the right kind of people is to be placed at the right job.
Placement is the actual posting of an employee to a particular job.” 4. The Term ‘Training’ connotes a systematic procedure of imparting technical knowledge and skill for specific jobs. from within the organisation pr from outside. etc. 5. • When the new employees are hired. training and development lie outside the purview of ‘staffing. assesses their suitability. Placement and induction. the selected candidates are placed at jobs for which they are most suitable. and Ensure him that he will get full support for the constructive purposes. rules. chooses the proper source or sources and invites applications from the prospective candidate for different jobs in the enterprises. policies. Selection. Familiarize him with the important spots of the organisation. It here means. • When employees are put on new jobs. the next step is to select from among them the most suitable ones. . 3. to introduce the newly selected employee to his hob. Koonlz and Weinrich write. other jobs. nature of products. Apprise him of the expectations from him. After the selection process is complete.employees and stimulating them to apply for jobs in the organisation. In the narrow sense. The purpose of induction or orientation of the newly appointed employee should be to: (i) (ii) (iii) (iv) Give him a bird’s eye view of the organisation. These are. Placement taken place along with induction.” This implies that recruitment examines the different sources of manpower supply.“selection is the process of choosing from among candidates. Selection is the process through which unsuitable candidate are rejected and the suitable ones are chosen. and • When some innovations have emerged and it is though worthwhile to use new techniques for doing a job. Training and Development. Training is given manly on three occasions. After the job-application of the prospective candidate has been received. of the organisation. the most suitable person for the current position or for future positions. The implied that specific position or rank is assigned at that stage. but some authors prefer to include it in the steps of staffing. Induction means to orientate the newly appointed employee to his job in particular and to the whole organisation in general. It enables employees to take up the desired jobs effectively.
On the other hand. for example. and blacksmithing. Sources of Recruitment It has already been stead that “Recruitment is the process of searching prospective candidate for the organisation”. These candidates are searched through the internal and external sources.The nature of some jobs is such that it does not require reorientation. Engineering graduated in varied fields.. someone from the existing employees is promoted or selected or transferred or even demoted. need refresher courses in view of new developments taking place frequently. viz. The term ‘training’ is usually used for improving the skills of rank and file. . Development. on the other hand. These have been explained below: Sources of Recruitment Internal External Promotion Transfer Demotion Recommendations of the Present and Ex-employees Advertisements Employment Exchanges Direct Applicants at the gate or by Mail Badli Workers or Temporary Workers Educational and Training Institutes Labour Contractors and Jobbers Consultancy Firms Union and Provincial Public Service Commission Job websites Internal Sources These are the sources through which recruitment takes place from within the organisation. is an educational process aimed at growth and maturity of managerial personnel. Development enables the managers to acquire and strengthen their administrative competencies. there are jobs which require constant training. When a post falls vacant or a new post is created.
When a person feels mal-adjusted at his post. Merits of internal Sources Recruitment from within the organisation has the following advantages: 1. etc. Sometimes there are mutual transfers. 1. Upgrading of Several Employees. The organisation knows the abilities and loyalties of its employees.Thus. It does not require anybody’s reference about their ability. Claude S. transfers and demotions are internal sources recruitment. In this way. Policies. a foreman will get a chance to become the works manager and a qualified worker may be promoted as the foreman. If. only an unskilled worker will be taken from outside for the opening left at the bottom. . Familiarity with the Policies. of the company. Management does not have to exert in familiarizing then with the rules. Employees’ Morale. 2. When a certain person promoted several other persons below his rank are automatically promoted. for example. 4. In such a case. Many companies feel that filling the jobs from its internal sources is the best practice because the internal candidates are well familiar with the policies of the enterprise. promotions. Such transfers take place for the mutual convenience of the employees. “filling of vacancies and promoting employees from within are also positive morale builders”. Transfers may take place on the following three occasions. that suitable person from within the organisation is transferred or posted at the place. No need of References. he is transferred to a post for which he may prove more useful for the organisation and another suitable person is posted in his place. Promotion from with enhances employees’ morale. George has rightly remarked. integrity and moral character. A promotion is the transfer of an employee to a higher post carrying a better status and higher wages. A demotion is the transfer of an employee to a junior post. 3. a works manager is promoted as production manager. The policy of internal promotions makes then enthusiastic and optimistic. When a post falls vacant. 3. It takes place when the employee is either inefficient or some charge of misconduct or corruption are established against him. one vacancy filled from within results in upgrading several employees. 2.
necessary for the new jobs. Therefore. They use their influence to get promotions. recruitment from within the organisation suffers from the following defects: 1. Sometimes their union persons are promoted simply because they are working in the organisation. Economical. Limitations of internal sources In spite of the above merits.e. Unsuitable Persons may be promoted. 6. Sometimes unsuitable persons are promoted simply because they are working in the organisation. Not a Complete Solution. i. They use their influence to get promotions. Not Suitable for New Enterprises. Departmental Transfers. For this post. A new organisation cannot use internal sources of recruitment.5. etc. If a requisition is sent to the employment exchange for supplying proper names of intending candidates. There may be some departments having surplus staff and some others having shortage of staff. 2. Recruitment from within the organisation is economical in the sense that employers do not have to spend on the external sources of recruitment like incurring expenses on advertisements. it will take a prettily long time. Outside deserving Candidate Deprived. Transfer has the benefit of adjustment. Internal recruitment does not solve the problem there is a chain of promotions of his juniors. 5. The time consuming process can be avoided if the recruitment is made from within the organisation. 4. So it has limited scope. Again time will be required in administering various tests and interviews of the candidates. the surplus staff may be transferred to the department which is under staffed. 3. thus resulting in a vacant post at the bottom. the management will have to knock the doors of external sources. . The major drawback of this source is that the enterprise may be deprived of intelligent candidate from outside. contractors. Sometimes their unions interfere and pressurize the employers to make promotions from within the orgainsation without giving any importance to merit of the candidates. Internal candidate do not have to face the outside competition. Spirit of Competition Hampered. with new ideas and initiative to take up challenging jobs. they do not put in the desired efforts for updating their knowledge. internal recruitment is economical from the viewpoint of the time also.
These enroll those persons who are in need of jobs. registered with the employment exchange. These source provide the prospective candidate from outside the organisation. 2. along with their bio-data. The employers get their requirements published in the newspapers. The unemployed or those who are not satisfied with their existing jobs may get their names. They feel that it is time consuming source. The prospective candidates go through such advertisements and apply for the posts which suit their requirements. . They find and opportunity to please their relatives and friends who are looking for a job. This is a convenient method and the employers do not have to spend huge amounts on advertisements. Employment Exchanges. In this way. Advertising is an important external source of recruitment. recruitment through 3. they become birds of the same flock and may revolt against the management. Some people do not favor this source. Such persons not only prove harmful for the enterprise but they also bring down the reputation of the employees on whose recommendation they are recruited. Some applicants give wrong particulars of their qualification and experience and thus. This practice is usually followed in private near relatives of the employees would be given preference in appointments if they possess the necessary qualifications. The Employment News’. Their named are recommended by the exchange whenever there is a requisition from an employer. the employers may get many applications to make selection of suitable candidate of their choice. is solely meant for this purpose. sorting out suitable candidate from a large number of applicants is a big problem. Through this medium. When many persons infiltrate through the like-minded employees of an organisation. Sometimes the existing and ex-employees are requested to recommend suitable candidate for various posts in the organisation. Advertisements. they waste the time of management as well as their own. Moreover. a weekly. The employees feel elevated when they are contracted for recommending the names for recruitment. manager to get interview calls. The trouble arises where the employees recommend less qualified or inefficient persons. Some important external sources are: 1. Recommendations of the Present and Ex-employees.External Sources Recruitment may be made from external sources also. Employers may approach these exchanges for the purpose of recruitment.
after reading such notices. Those. Badly Workers or Temporary Workers. otherwise such applications may be preserved and as and when a post falls vacant or a new post is created. It is difficult to get meritorious people through this source because such people find it quite inconvenient to get themselves registered with the employment exchange. this source suffers from a few drawbacks also. efficient workers are seldom procured through this source. However. Some concerns keep a list of such workers. . Such workers are given temporary jobs when the regular employees go on leave or when they are deputed somewhere else. Long queues at the exchange are very troublesome. Those on rolls of employment exchange have to visit it visit it after specified periods regularly for deleted from the list of prospective candidates. Moreover.employment exchange is economical. This source is employee-sponsored. The employers may invite them for tests and interview. 4. Employers are required to send a latter only to the employment exchange and on the basis of this letter the names of the job sealers are sent to them. the candidates just take a chance and send applications without waiting for an advertisement. When the names are invited from the employment exchanges. Sometimes. do not demand high wages. This source can be advantageously used whenever there is more work in the factory or when some employees are on leave. the use of such applications may be made. generally. The employer cannot always depend upon this source. the job seekers contact the personnel officer on their own and enquire if they could get a change in the enterprise. contact the personnel officer and may be appointed if they are found suitable for the job. Such ad hoc appointments are not a permanent charge on the organisation. employees are recruited without any exertion on the part of management. the workers recruited through this source. 5. Whenever need arises. if there is a vacancy. Direct Applicants at the gate or by Mail. Sometimes the employers put up a notice board at the factory’s gate showing the details of persons required by them. It is easy for them to supply the candidate according to the employers’ requirements. Employment exchanges. This type of external source is most economical. have the names of many persons with varied qualifications. Under this source. In some cases. there are less chances of favoritism or nepotism. such persons can be called. The employers keep a watch on the skills of such temporary employees. At the same time. Closely related to the above source is another source know as badly workers or temporary workers. The candidates.
These days some specialised consultancy firm are coming up which provide technical and qualified personnel to the needy employers. they have close contracts with workforce and supply the required number of workers on commission basis. Consultancy Firms. 10. Educational and Training Institutes.who are suitable. Union and Provincial Public Service Commissions. websites. their performance is also not upto the mark. Such contracts are either made by personal visits or through correspondence. Job . so not have a regular source of income. 6. under this source. 9. the former 8. They generally charge commission from both employer and the employees. Enterprises get suitable persons though consultancy firm but recruitment through this source is quite costly. The young candidates do not have to wait for a long time for employment. The disadvantage of this source is the uncertainty of the availability of workers. Jobs can be procured through internet. who are not on rolls of the institutes. the work of the enterprise is not disrupted. Sometimes they are exploited by contractors. These are job providers and job seekers both approach the websites. The commissions administer competitive tests and select suitable persons. There are some firms which help in recruiting persons for the enterprises situated in foreign countries. The workers. With their help and cooperation. The major defect of this source is that the qualified unemployed persons. the management gets qualified persons for the vacant posts. may be absorbed on regular basis whenever it is possible to do so. Labour contractors and jobbers provide a large number of workers at a short notice. Job websites have become a common source for the job seekers and job providers. 7. The company requiring employees sends the specification to the concerned institutions and interested candidates may apply. Do not get such a chance. if they possess the necessary qualifications. Badli workers prove useful in the hour of need. Moreover. Some employers contract colleges and technical institutes for recruiting qualified and trained personnel. They are also not a fixed charge on the organisation and prove very economical for it. Through this source. Some posts in public sector are filled at the recommendation of these commissions. These commissions help in recruiting and selecting people in an objective ways. Labour Contractors and jobbers. Some key posts are filled on the basis of interview only. They are those persons who on the one hand’ have links with the establishments and the other.
help both the parties. the likelihood is the better employees can be selected through external sources. Consultancy firms earn a good deal of money in doing the recruitment services. Com shine.com.com. Sometimes the internal sources are not adequate to meet the increasing needs of the enterprise due to the expansion and diversification of the business. Wide Choice. monster. Procuring Highly Qualified people. . Some wellknown job websites are naulri. existing employees do not like it. Resentment in Existing Staff.com. Timesjobs. clickjobs. They think that they should be given preference as they are part and parcel of the enterprise. etc. The websites.submitting their requirements and the latter submitting their bio-dates. Sometimes. 5. Competitive Spirit. The required people may not be available internally. Com. Newspapers publish advertisements for employers. External sources can manage many applicants for recruitment. 4. some organisations require highly qualified people for reaching greater heights. Similarly. But they can succeed in getting the desired personnel through external sources. This much choice may not be able under internal sources. Thus. external sources provided the required manpower needs. may more people are employed in different external sources.com. These sources are means of livelihood for many people. 3. In such a case. Like employment exchange. jobstreet. Meeting the increased Needs. 2. external sources keep their competitive spirit alive.com. Merits of External Sources External sources of recruitment extend the following advantages: 1. The existing employed of an organisation will keep their job knowledge updated if the know that the people can be recruited from outside also. So. Limitations of External sources The following limitations may arise if the candidates are recruited form external sources: 1. Source of Livelihood. When employees are hired from outside. jobsahead.
direct applications at the gate or by mail. philosophy of management. described in the foregoing pages. suitable candidate are not found. Like the size of the organisation. finally left with the candidates who are to be employed on the other hand. specially TV and newspaper advertisements. Again employment exchanges and newspapers. External sources. receiving the applications. Besides spending on these sources. availability of time. even after spending huge sums on these sources. are very expensive. some organisations follow a long chain of steps. training and technical institutes and newspaper advertisements are suitable. 3. SELECTION PROCESS As discussed earlier in this chapter. and labour contractors are suitable recruitment source. the enterprises may conveniently depend upon internal promotions. newspaper advertisements. ‘selection’ is the process of eliminating the unsuitable candidates and choosing the suitable ones. For manual and operative jobs. For technical and first level managerial jobs. Expensive Process. a lot more is spent on the induction programs of the new employees. nature of job. Hiring people from outside consumes a lot of time. For managerial posts. Notification of the vacant posts. some organisations select their employees just in one go through ‘Wall-in-interviews’.” There is no hard and fast rule regarding the steps involved in the process of selection. etc. and Department of Personnel and Administrative Reforms are useful for recruiting people for foreign enterprises. Suitability of Different Recruitment Sources From the study of different recruitment sources. consultancy firms. “Selection is a managerial decision-making process as to predict which job applicants will be successful if hired. etc. employment exchanges. etc. holding interviews. need a pretty good time. we can from an idea of suitability of different sources for different sources for different posts. . The number of selection steps depends upon many factors. number of applicants. Sometimes. In the words of David and Robbins. level of job. Work may suffer due to this long process. Lengthy Process. badli workers. Union and Provincial Public Service Commissions.2. consultancy firms. eliminating unsuitable candidates at every step.
Achievement Tests: some establishments want that their employees must have certain level of achievement in some particular disciplines. 3. on the basis of information collected from the application blank. physical characteristics. necessary personal information. for example. Some employers would require the candidates to undergo the remaining selection formalities if they find that candidates have a good personality and that they can communicate well.Large organisations. Different intelligence tests are developed for different age-groups. Different types of tests are administered according to the nature of jobs. educational qualifications. decide that their supervisors must have proficiency in English language of graduation level and of numerical ability upto senior Secondary level. Intelligence Tests: these tests provide a measure of intelligence quotient (IQ) of the candidate showing his mental ability. Preliminary Interview. They may. This interview is a brief interview in which candidates’ external personality and speech skills are adjudged. Some important types of tests are: (a) 2. should be simple and should not contain unnecessary questions. reasoning. numerical calculated through the following formula: (b) A person’s mental age is a measurement of his ability to think when compared with the average person’s ability at that age. Some organisations would consider those candidates only who possess a particular level of IQ. they would administer achievement tests to ensure that only their achievement tests to ensure that only such candidates would be considered for interview who qualify their achievement tests in respect of English and Mathematics. Application Blank. etc. usually consider the following steps in the process of selection: 1. Candidates may have to undertake employment tests to establish their claim for the job. . exp0erience. An application blank is a columnar Performa which constrains information like address. In such a case. references. Employment Tests.
extroversion-introversion. The nature of job suggests as to which tests should be administered for selecting the suitable candidates. the latter measures the potential for learning the job in question. emotional balance. Validated tests are those which have been tried out earlier and found suitable (d) (e) (f) (g) (h) 4. of the candidates.(c) Aptitude Tests: these tests measure the candidates’ competence to learn a particular job. driving. dominance-submission. etc. (a) Structured or Patterned Interview: in such an interview. The employer wants to ensure that only such candidates are selected who have the ability and capacity to learn the jobs well for which they are being considered. Test should be administered by trained persons only. can be conducted in the following ways. Performance Tests: these tests are designed to measure the level of proficiency and skill of the candidates in performing the Job. Tests administered should be validated ones. prove maladjusted and do not contribute much for the organisation. The former measures the existing knowledge in the job. It is not necessary for the staffing officer to give all the types of tests for selecting personnel for their organisation. Trade Tests: these tests measure the existing skills of the candidates. the interviewer puts oral questions to the prospective employees in order to judge whether they are suitable for the job or not. They measure the level of candidate’s knowledge in job he/ she has applied for Trade tests should not be confused with aptitude tests. Personality Tests: these tests measure the temperament. Employment interview. candidates’ skill in typing. There are no hard and fast rules of interviewing candidates interviews. value system maturity level. Attitude Tests: the administration of these tests reveals the extent of candidates’ inclination in the jobs for which the selection procedure has been launched. in general. Dexterity Tests: these tastes enable the staffing officer to know the ability of the candidates to use the different parts of body in a coordinated manner. etc. different sets of questions. For example. The candidates who manager to get selected without the proper attitude in the job. having the same pattern and with same different . In an interview.
Job offer. 6. It also contains other instructions about the agreement to take place between the candidates and the enterprise. Different candidates are asked different series of questions. Physical examination is arranged for candidates who have been placed in the selection list. A candidate suffering from serious diseases. In this interview. it is necessary to enquire three to five persons about the conduct of the prospective employee.level. like heart trouble or tuberculosis. 7. a number of candidates face the interview committee together. questions to be asked are not planned in advance. is judged by the interviewers. presence of mind. their ability to communicate. A person should be physically fit for the job for which he she is being considered. It is also seen that the candidate has a good state of health and that he possesses the general physical characteristics required for the job. contains the date by which the candidates should join. References are generally required to enquire about the conduct of these persons who have been found suitable in the interviews and tests. The candidates are asked awkward question and it is seen how they react to such questions and it is seen how they react to such questions.public or private. . are framed in advance. If they do not lose their balance of mind. schools or colleges last attended or from any the reliable source. Physical Examination. The candidates are asked to opine on an issue or they are asked to discuss a topic. the organisation employed a doctor who undertakes the work of medical examination. (c) (d) 5. This interview is held to note how thick skinned the candidate is. Stress Interview. Reference. having the same pattern and same difficulty level brings about objectivity in the interview. In many cases. generally. is rejected. such an offer.directive Interview: in this interview. Before forming a balance opinion. When the candidates respond and give reasons and counter-reasons. Reference can be collected from the previous employers. expression. The candidates who have been found medically fit are given the job offer. Group Interview. etc. they prove their worth as suitable candidates. Each series. Questions pertaining to the job are asked and candidates are expected to respond freely to show their ability for the job. (b) Unstructured or Non. The task of physical examination may be handed over to some reliable medical agency.
Process . Meaning Recruitment Selection It is a process of searching suitable It is a process of choosing the eligible candidate and stimulating them to candidates having necessary apply for the vacant job. like the job-emoluments. Recruitment is inviting and procuring applications from one or more sources. Basis 1. The selection procedure described above has been illustrated in Figure 7. The selection process eliminated eleven candidates at different steps and ultimately two candidates were left who were selected and inducted into the organisation. Employment Contract. Of applicants Candidates found eligible Candidates passing preliminary interview Candidates passing all tests Candidates approved by interviewers Candidates found of good moral character Candidates selected found medically fit and finally The above figure shows that thirteen candidates were enrolled. The selected candidates have to enter into an agreement with the employers. It is a simple process as candidates It is a complex process as candidate to not have to pass any test. 2.4 below: Process of Selection Not. Recruitment is a positive process as it seeks to persuade more and more people to apply for jobs.8. qualification and offers them jobs. The function of selection starts where the function of recruitment ends. work rules. Distinction between selection and Recruitment Recruitment and selection are interrelated functions of the staffing department. has to pass many tests. earning of incre0ments. Selection is processing and screening of applications. leave rules. Selection is a negative process in the sense that it eliminated the unsuitable candidate at every stage of the selection process and only required number remains after the final step is over. etc. Its ultimate aim is selection. Recruitment is not an absolute step.
3. the function of recruitment ends. Another important purpose of training is to make the organisations more stable and flexible. few eligible candidates. primarily. Nature It is a positive process as it seeks to It is a negative process as so many persuade more and more people to candidates are eliminated to select apply for the job. and it is usually needed for the current requirements of the job. skills. Stage 5. Training is imparted in technical and mechanical process. “Stability” writes FLIPPO “is the ability of an organisation to sustain its effectiveness. despite the loss of key personnel. quantity of production in the workers’ congenial working conditions. The need of their training is beneficial to the organisation and the employees in the following ways: Benefits to the Organisation Training is beneficial to the organisation also in the following ways: 1. . resulting in improvement of quality. performance and knowledge of the employees to make them enable for the job. step. Motive Training and Development We have already discussed that training is the process of improving the attitudes. meant for the rank and file or workers and clerical personnel. This brings about an improvement in the work styles. 2. Need of training is also felt due to the fact that training is to replace the conventional methods of performance with modern technological developments that are taking place in areas of operation. There is no greater organisational asset than if trained and motivated personnel. its ultimate aim is selection. Recruitment is not an absolute The function of selection starts where. Its motive is to induce more and Its motive is to eliminate all more candidates to apply for the unsuitable candidates to select the job. the ability to adjust to short-run variations in the volume of work. 4. This can be developed only through creation of a reservoir of trained replacements. Need/Benefits of Training It has already been mentioned that training is. Organisational stability and Flexibility. Flexibility. requires personnel with multiple skills to enable their transfer to jobs where the demand is the highest. Adopting Modern Technology. eligible ones.
Trained personnel produce more and better products. . initiatives. 4. maturity. as also for the satisfaction of individual managers. Subjectmatter 5. provides quick guidance to the customers. The trained persons save a goods amount of time on many fronts. Level of It is meant employees personnel. and do not taken much time in the maintenance of goods and machines. Initiative Training is imparted in technical and Development mechanical processes. Better Quality and Productivity. future needs of the organisation. for non-managerial It improves the competence of managers. Thus results in increased sales and more profits. like enabling It involves a broader education for the workers to handle machines and long-term purposes.3. Time of Training is usually needed for the Development seeks to meet the Utilisation current requirements of the jobs. Purpose Training Development Training implies a systematic Development is an educational procedure of imparting knowledge process aimed at growth and and skill for specific jobs. tools properly. It is organised for non-managerial It takes place on the basis if selfpositions at the initiative of managers. It is short-term process. They take less time in production. 6. Only good enterprises show the concern for the development of their employees. focuses on 2. conceptual ideas. Duration 3. 4. Timeliness. 5. Enhances Goodwill. The organisations that organizes training prgrammes for their employees are considered as good in the business world. Distinction between Training and Development Basis 1.
Directing convert plans into performance. Other functions prepare a base or setting of action i.. inspiring and motivating the employees in the organisation so that their efforts result in achievement of organisation goal. 4. Directing is a performance oriented function. guide. how action has to be carried on the directing initiate of start action. Direction are given by managers to their subordinates. Directing flow from top to bottom. 3. 5. However. 6. Directing takes place wherever superior subordinate relation exists. Features/ characteristics of directing function 1. the time spent in directing is comparatively more at operational level of management. 2. By giving directions or instructions the managers get the work started in the organisation. The main motive of directing is bringing efficiency in performance. motivate and communicate with his subordinate to get things done. Directing takes place at every level. Human element. It improves interpersonal and intergroup relationship. motivating them to perform more efficiently and leasing then towards the achievement of organisation goal. It motivates employees to work with their best ability. Directing is a pervasive function as it is performed by managers at all levels and in all locations.DIRECTING Meaning and introduction Directing function of management is concerned with instructing. Directing functions direct the performance of individuals towards achievement of organisational goal. supervise and motivate his subordinates. Every manager has to supervise. Directing function involves study and molding of human behaviour.e. He has to continuously guide. But actual work begins only when these only instruction but it also includes supervising the employees when they are performing the job. A manager cannot just reset after issuing orders and instruction. Performance oriented. Performance is the essence of directing. Importance of directing function . Ever manager can direct his immediate subordinate and take direction from immediate boss. Directing initiates action. guiding. After the staffing function the right person is placed at the right position in the organisation. Directing is a continuous process. Directing starts from top level and flows to lower level. He must continuously take steps to me sure that orders and instructions are carried out properly. Continuing faction.
The directing function tries to create balance in the organisation. If the directing function is executed successfully then it results in unity of direction and achievement of organisational goals. the salesman may insist on reduction of price to get more orders whereas the high officials are against the reduction of price to get more orders whereas the high officials are against the reduction as it will being down or reduce the total revenue. When the employees are working at different levels then their efforts are integrated and they co-ordinate only with the help of directing function as while issuing instructions the continuity of the work can be maintained. In the orgnisation number of employees is working at different levels and in different job positions. 5. For example. The employees can earn more by producing more which will achieve the organisational goal also. 3. Directing is a complex process. To initiate action. Directing function does not mean giving orders only but through directions and instruction the superiors true to motivate the employees to perform to their best ability. Directing function develops the feeling of belongingness and encourages employees to perform to their best ability. when the company is planning to computerize its working generally the employees hesitate to accept it as they are not aware of the technology. 4. To integrate employees’ efforts. Generally the employees hesitates in accepting the changes but through directing function the changes can be implemented more easily as while giving directions the superiors guide the subordinates that the changes are better for them also. The directing function tries to balance both the attitudes by instructing and guiding the salesperson to find out other means and ways of increasing sale.1. The employees may differ in their levels of authority and the type of job assigned. These are: . To guide mangers to perform directing efficiently certain principles are developed. In the directing function the superiors direct the actions of employees towards the predetermined goals of the orgnisation. for example. For example. But when in the directing function the employees are guided that through change they will also be updated as they will have change of learning new technology which will increase their value in the market. Means of motivation. Here also directing function creates balance by instructing the employees that their interests and organisation’s interests are in same direction. Motivation is a very important element of directing. 2. employees want more earnings. Sometimes there can be difference of attitude between the employee and the employer. Generally when the employees are working at different levels they develop different attitudes and the balance between their attitudes is made by directing function. organisation wants more production. But all are interrelated to each other as they are the part of one organisation. To facilitate change. So through proper guidance the employees readily and happily accept changes. Balance in the organisation. The employees in the orgnisation start working only when they get instructions and directions from their superiors.
Harmony of objective. Performance of orgnisation becomes effective only when everyone makes a distinct and maximum possible contribution to the organisational objective. . motivate then to use these talents in to the interest of the organisation. Communication is a two way process i. Some or standard technique for all may not be suitable as some employees get motivate with monetary incentives whereas other get motivated with non-monetary incentives. Unity of command. A manager must follow through the performance of his subordinates as mere giving instructions is not directing but it is essential to ensure that work is done in the desired manner. Directing should create conditions where individuals can achieve their objectives by fulfilling productivity are complementary to each other. A manager must possess the qualities of a good leader. Maximum individual contribution.. communication does not mean only giving of instruction by superior to subordinate but it also means clear feedback from subordinate to superior. 8. instructing and motivating subordinate should be appropriate i. The effectiveness of direction increases by securing the cooperation of informal leaders. Directing function must help all the individuals to perform to their best ability. According to his principle the objectives of individual and organisation must be in harmony with each other. A manager must direct his subordinates in such a way that they feel that organisational objectives are in there own interest. He must guide and counsel his subordinates not only on work problems but also on their personal problems. the orders must come from one boss only. if employee is receiving orders form more bosses he gets chance to give excuses by saying that he was busy in executing the orders of other boss. According to this principle the technique selection for guiding. 4. Effective leadership. Managers must motivate the employees to contribute maximum. Manager must allow the subordinates to express their view clearly and without any hesitation. 7.e. The manager must try to find out the hidden talents of the employees. This will help to win the cooperation of the employee. If there are more bosses it can create problem of who-clash among the superiors as every superior will want his order must be executed by the employee. According to this principle and employee should receive orders from one boss only because if he is receiving orders from more than one boss then he will get confused and will not be able to understand that whose orders must be executed first and on the other hand. So according to the need of employee’s direction technique should be selected. According to this principle communication is an important element of directing. Managerial communication. 3.e. Appropriate technique. 6. 5. In every organisation an informal organisation structure exists within formal organisation structure so managers must make use of informal structure also for getting correct and real feedback. Managers must review from time to time that orders are 2. Follow through. Manager must explain the plans and policies to subordinate and ensure that they understand them properly by taking their feedback. according to the attitude and need of the employees.1. Strategic use of informal organisation. To avoid confusion and to give no chance of excuse to employee.
implemented accordingly. guiding. Leadership. supervision means seeing the activities of employees from over &above.. Communication Supervisio n + Motivatio n + Leadershi p Communication + = Directing The supervision means instructing. Elements of directing There are four main elements or components of directing which are: 1. supervision where super means over and above and vision means seeing. Motivation. and 4. Through follows up managers can inform the about their deficiency and it also helps in revising directions. 2. Supervision. monitoring and observing the employees while they are performing jobs in the organisation.e. The words supervisions is the combination of two words i. So. Managem ent Supervi sor Subordinat es Role of supervisor Supervisor plays two important roles: . 3.
So they are the best persons to give feedbacks of subordinates. The supervisor makes sure that all the instructions are communicated to each and every employee. 7. 2. Discipline. 6. Ensures issuing of Instructions. grievances and suggestions of subordinates to management. The strict supervision and guidance of supervisor encourages the employees and workers to be more disciplined in their activities. The top level and middle level. Control means match between actual and planned output. . When the workers are constantly monitored or observed then they always use the resources in the best possible manner which leads to minimum wastage. Improves Communication. grievances and problems of subordinates to superiors. 5. Optimum Utilisation of Resources. Whenever subordinates are in doubt and need help the supervisor guides them to come out from their problem situations. the supervision function ensures strict control over the activities of subordinates. policies. Feedback. The supervisor gives the feedback regarding complaints. Role of guide. Improves Motivation. Supervisor plays the role of linking pin as he communicates the plans. 4. While playing the role of the linking pin or mediator the supervisor tries to remove the communication gap between the superiors and subordinates as he passes on the complaints and problems of subordinates to superiors and instructions of superiors to subordinates. 2. Under the guidance of supervisor the workers follows a fixed or strict time table and execute the plans in right directions. The supervisors are directly dealing with the subordinates. The relationship with the supervisor is a very good incentive to improve the motivation level of the employees. Whenever the workers are under constant supervision or monitoring then step check is kept and if they are deviating from constant monitoring. Role of mediator or linking pin. 3. Facilitates control. But if there is no supervision or check on workers they may result in wastage of resources. Supervisors issue instructions and orders to all the subordinates and make sure that these instructions and orders are clear to all the members. decisions and strategies of management to subordinates and complaints. They give the report regarding the working of every worker which becomes the base for the performance appraisal for the employees.1. plan out all the instructions but the instruction are issued only by supervisory level management. Supervisor plays the role of linking pin. While guiding the employees the supervisors encourage the subordinates to perform to their best capacity. Importance of Supervisions/ Function of Supervisor 1.
2. Supervisor play a key role in maintaining group unity among workers working under him he maintains harmony among workers by solving their disputes. respect and recognition etc. When a motive emerges in an individual. Some motivators are positive and some are negative few examples of positive motivators are promotion. bonus. Motive arises out of needs of an individual. It causes restlessness as he wants to fulfill his motive. demotion. influence human behaviour to behave in a particular manner. Motive. Motivation is an internal feeling which means it cannot be forced on employees. Motivation is a complex and difficult task. increment. Motivated person need no supervision or direction. respect. For example of a person has a motive to get promotion so he will work efficiently to get promotion. It is a process of inducing people to perform to the best ability to accomplish the goal. Motivators. Maintain group unity. respect etc. If manager measures them accurately then also every person uses different approaches to satisfy his need. bonus. if employee does not improve his performance with positive motivators then manager uses negative motivators such as warning. . Motivation is a complex process. Individual search for food to fulfill the motive of hunger. 3. desire. desire to have a new house. promotion. Motivation Motivation can be defined as stimulating. The internal feelings such as need. Motivation is a psychological term which means it cannot be forced on employees. In order to motivate people a manager must understand various types of human need. inspiring and inducing the employees to perform to their best capacity. stopping increments etc. It comes automatically from inside the employees as it is the willingness to do the work. issue o memo. Motivation produces goal directed behaviour. Motivators are the incentives or techniques used to motivate the people in an organisation. recognition. Few interrelated Terms 1. 2. 4. 3. He will always work in desired manner. Common motivators used by the managers are increment. For example. Motivation. Motivators can be positive as well as negative. For example motive to earn induces an individual to search for job or work. Motivation is a psychological phenomenon. To motivate employees managers use various motivators. Motivation induces people to behave in such a manner so that they can achieve their goal. sometimes fear of negative motivators also induces person to behave in a desired manner. Human needs are mental feelings which can be measured accurately. Features/ characteristics/ nature of motivation 1.8. recognition etc. aspirations etc. A motive is an inner states or desire which energizes and individual to move or to behave to move or to behave towards achievement of goal.
Search Behaviour. if an employee develops a need to earn more. After behaving in a particular manner for a long time then he evaluates that whether the need is satisfied or not. 3. After searching for alternatives the human being starts behaving according to chosen option. 6. Satisfied need. Reduction of tension. 2. Process of Motivation The Process of Motivation Unsatisfie d Need Tension Drives Reductio n of Tension Satisfacti on of Need Search Behavio ur 1. Unsatisfied need. Motivation process begins when there is an unsatisfied need in a human being. This tension creates an urge of drive in the human being an he starts looking for various alternatives to satisfy the drive. After sometime he will et incentives or increments or promotion which will satisfy his need. this need will make him restless and he will start thinking how to satisfy his need. Satisfaction of one need gives rise to another so managers have to continuously perform the function of motivation. Human needs are unlimited and go on changing continuously. After fulfilling one need another need develops and the same process continues till needs keep emerging in human beings.Some get satisfied with monetary incentives. 5. After fulfilling the need the human being gets satisfied and his tension gets reduced. Tension. To satisfy his need he may think of working hard in organisation and get promotion so he will start working hard. Drive. some with positive and some with negative motivators. The presence of unsatisfied need gives him tension. 5. Human beings are ever-changing. So it is not possible to make generalization in motivation. Motivation is a dynamic and continuous process. For example. . 4. But motivation process does not end by satisfaction of one need. some with non-monetary.
Maslow’s Need Hierarchy Theory. To understand the needs of human being we must learn Maslow’s Need Hierarchy theory. The motivated employees show less resistance in accepting the changes according to changes in the business environment because they know if the changes are not implements in the organisation. Need Hierarchy Theory Motivation is psychological phenomenon and the needs of employees play very important role in motivation. Motivated employees are always supportive and cooperative in accepting changes in the organisation. With motivation the turnovers are less because the satisfied employees never leave the job. Motivation helps change negative attitude to positive attached. Reduction in Employees’ Turnover. The motivation improves the efficiency level of employees which means the employees start performing the job to the best of their ability with minimum wastage of time and resources because motivated employees always go for best utilisation of resources. There is more co-operation and co-ordination in the organisation and all the employees work with the team spirit.Importance of Motivation 1. When the employees get their need satisfied or get the recognition and respect in the organisation then they always offer a supportive hand to superiors. The motivation creates confidence in the employees to get their need satisfied in the organisation itself. 5. The motivation bridges the gap between the ability to work and willingness always improves efficiency. All the employees contribute their efforts in one direction of accomplishment of goal. Motivation creates supportive work Environment. Without motivation the employees try to perform minimum activities in the organisation. 4. All the resources of the organisation are of no use unless and until the employees use these resources. Motivation helps the managers to introduce changer. In motivation the relations between superior and subordinates are always improved. Help in achieving the Organisational Goal. Motivation improves performance level of employees. Need or the desire is a very important element in motivation because the employees get motivated only for their need and if the needs are . The motivated employees always try to achieve the organisational goal and contribute their best efforts for the realisation of organisational goal as they know with the achievement of organisational goal only they can achieve their personal goal. 3. not only the organisation will lose by this but the employees also will find it difficult to get their needs fulfilled. 6. But the motivation fills in the desire to perform to their maximum level. 2. They always select the alternative to remain in the organisation and increase their earning rather than leaving the organisation and increasing their earnings. The motivated employees make best use of the resources.
These needs include basic requirements for survival and maintenance of human life. clothing MASLOW’S NEED HIERARCHY THEORY Physiological Need ORGANISATIONAL EXAMPLES Minimum/ Basic Salary Savings for Physical & Economic Security Safety & security need Job confirmation. affection. It means the need for love. 4. Social needs assibilation/ belonging need. friendship etc. These needs are related to the respect and recognition. once the people satisfy their physiological and safety needs then the social need becomes more active and to fulfill the social needs the managers prefer team-work. affection. Under safety and security there are two categories. When the above three needs are satisfied then propel start demanding respect for themselves in a group. provident fund. accident. Esteem needs. etc? Economic security: Which means having sufficient funds to meet the future physiological needs and to come out of physical security threat? The people why have more of safety and security need active get motivated by monetary incentives. Esteem needs can be satisfied through no-monetary incentives. The employees develop these needs for their survival that is why they are at the top in the sequence. Once the present day physiological needs are fulfilled then the people start thinking about their future as they want to secure their future by making sure that in future also they continue to satisfy their physiological needs. These needs can be satisfied when the monetary incentives are offered by the employers. (a) (b) Physical security: Which means safety from illness. 2. This need is more common in higher level employees. Shelter and clothing. companionship. Love.fulfilled completely then it is not possible to motivate the employees. The common physiological needs are food. EXAMPLES OF INDIVIDUAL Food. Physiological Need. friendship Social Need Cordial relations in informal organisation . 3. Safety and security needs. arrange formal and informal get-togethers so that employees can develop social relationships. Maslow has given a sequence or hierarchy of need in the following way: 1. pension etc. shelter. fire.
people may have social needs active without satisfaction of physiological and safety needs. when a soldier faces bravely the bullet of enemy he seems to realize the self-actualization need.. This need refers to realizing or reaching to the aim of your life.Maintaining a status in Society Esteem Need Promotion. But sometimes there can be exceptions when sequence is not followed. The two common types of incentives are: INCENTIVES Financial incentives Non-financial incentive . For example. Self-Actualization Needs. Conclusion Generally the employees or all the human beings follow this sequence of needs. special status or titles to employees Achieving of Self as[aeration Self actualization Need Achievement of goal 5. there can be only self-actualization need present ignoring all other needs. Behaviour of people depends upon their need. starting from physiological need.e. Assumptions of Maslow’s Need Hierarchy Theory: 1. Generally the needs follow the hierarchy i. 2. Financial/ non-financial incentives Incentive can be defined as monetary or no-monetary reward offered to the employees for contributing more efficiently. Incentive acts as a very good stimulator or motivator because it encourages the employees to improve their efficiency level and reach the target. Sometimes. For example. Once the employee becomes what he wants to become it means satisfaction of his actualization need. Incentive can be extra payment or something more than the regular salary or wage. Human behaviour can be changed or motivated by fulfilling their needs.
The co-partnership is offered by issue of shares on exceeding a fixed target. In some organisations pay hikes and allowances are directly linked with the performance of the employee. Bonus is a onetime extra reward offered to the employee for sharing high performance. new year etc. Many companies offer share in management or participation in management along with share in profit to its employees as an incentive to get efficient working form the employees. To get increment and allowance employees perform to their best ability.Pay/allowance Profit sharing climate Co-partnership Bonus Commission recognition Suggestion system Productivity linked participation With wage incentives Retirement benefits Perks. social and security need active in them.) 2. The organisation offer share in the profits to the employees as a common incentive for encouraging the employees for working efficiently. The common monetary incentives are: 1. Sharing the profit does not give ownership right to the employees. Generally when the employees reach their target or exceed the target then they are paid extra amount called bonus. Pay and allowances. Bonus. Under profits sharing schemes generally the companies fix a percentage of profits. and if the profits exceed that percentage then the surplus profits is distributed among the employees. fringe benefits status organisation career advancement job enrichment employee’s job security employee’s employee empowerment Monetary of financial incentives The reward or incentive which can be calculated in terms of money is known as monetary incentive. . Christmas bonus. 3. Profits sharing. Regular increments in salary every year and grant of allowance act as good motivators. some companies have the scheme of offering bonus during the festival time (diwali. It encourages the employees to work efficiently to increase the profits of the company so that they can get share in the profits. Bonus is also given in the form of free trips to foreign countries. Co-partnership/ stock option. paid vacations or gold etc. 4. These incentives are offered to employees who have more physiological.
The incentives which cannot be calculated in terms of money are known as nonmonetary incentives. Commission. provident fund. Non. It refers to relations between superior/ subordinates. the employees who have more of esteem and self actualization need active in them get satisfied with the non-monetary incentives only. for example under differential piece wage system efficient workers are paid higher wages as compared to inefficient workers? To get higher wages workers perform efficiently. These are the characteristics which describe and organisation. 8. Which offer higher wage for more productivity. responsibility. Perks/ fringe Benefits/ perquisites. Status.5. to motivate people. The common means or ways of non-monetary incentives are: 1. Status refers to rank. 6. Suggestion system. These incentives are suitable for employees who have security and safety need. Some organisations offer retirement benefits such as pension. gratuity etc. Commission is the common incentive offered to employees working under sales department.actualization need active in them. authority. 9. Career advancement. More orders mean more commission. Generally people working at high job position or at high rank get satisfied with non-monetary incentives. free education for children. If refers to special benefits such as medical facility. . Generally the sales personal get the basic salary and also with this efforts put in by them. These extra benefits are related with the performance of the employees. There is certain wage rate plan. Retirement benefits. these benefits are over and above salary. Organisational climate. housing facility etc. For example. Under suggestion system the employees are given reward if the organisation gains with the suggestion offered by the employee.Financial Incentives Money is not the only motivator. The amount of reward or payment given to the employee under suggestion system depends on the gain or benefit which organisation gets with that suggestion it is a very good incentive to keep the initiative level of employees high. A positive approach adapted by manager creates better organisational climate whereas negative approach may spoil the climate. recognition and prestige related to job. Employees are always motivated in the healthy organisational climate. Whenever there are promotional opportunities employees improve their skill and efficiency with the hope that they will be promoted to high level. 3. 7. Promotion 2. Managers must provide promotional opportunities to employees. These characteristics have direct influence over the behavior of a member. Productivity linked with wage incentives. if an employee suggests a cost saving technique of then extra payment is given to employee for giving that suggestion.Monetary/Non. By offering higher status or rank in the organisation managers can motivate employees having esteem and self.
Employees follow the decision more sincerely when these are taken in consultation with them for example if target production is fixed by consulting employee then he will try to achieve the target more sincerely. Interesting. Whenever if there is any negative attitude or mistake is done by subordinate then it should be discussed in private by calling the employee in cabin. displaying the achievement of employee. Once the employees get job secured they lose interest in job. influencing your own behavior is not leadership. The following elements must be present in the leadership: (a) It is the process of influence. 7. 6. Employee’s participation. This empowerment develops confidence in employees. Leadership Leadership is a process of influencing the behavior of people at work towards the achievement of specified goal. distributing mementos. They use positive skill to prove that they are performing to the best when freedom is given to them. 4. Job security means life time bonding between employees and organisation. Job enrichment/ assignment of challenging job. gifts etc.is a very big stimulator or motivator which induces people to perform to their best level. . (c) There must be minimum two or more persons present. Examples of employee’s recognition are congratulating employee for good performance. Recognition means giving special regard or respect which satisfies the ego of the subordinates. (b) The influence is always for achievement of common goal. Job security. enriched and challenging job itself is a very good motivator or stimulator. 8. Employees get bored by performing routine job. employees get satisfied and they are motivated. Of example government employees do not perform efficiently as they have no fare of losing job. By offering challenging jobs. Job security must be given with some terms and conditions. It means involving employee in decision making especially when decisions are related to workers. interesting jobs. autonomy to perform job. 5. It means giving more freedom to subordinates. Whenever the good efforts or the positive attitudes are show by the subordinates then it must be recognised by the superior in public or in presence of other employees. giving certificate of achievement. Autonomy/ employee empowerment. They enjoy doing jobs which offer them variety and opportunity to show their skill. Job security means giving permanent or confirmation letter. Employee’s recognition. Job security ensures safety and security need but it may have negative impact. Ego-satisfaction is a very good motivator.
The manager influences the behavior towards the achievement of organisational goal. 3. 5. A leader may exist in formal as well as informal organization. planning organizing. The managers have formal authority to influence the behavior. 4. Leadership shows interpersonal relationship between leader and followers. A manager exists only in formal organisation 5. The significance of leadership can be understood by learning following points: 1. 3.e. Leadership indicates the ability of an individual to influence others. 2. 2. directing. 4. A manager is always a leader because he has to influence the behavior of subordinates working under him.(d) The influence should be to get the willing co-operation of the employees and not the forceful co-operation. staffing.e. Leaders influence the behavior towards the satisfaction of every member of the group and realisation of group goal. Difference between Manager/Leader or Manager ship/Leadership Manager 1. Leader A leader may not a manager because the people who are leading informal groups are not managers always. That is why they can use assertiveness and sanctions to influence the behavior of employees. A leader performs only one function i.. Leadership tries to bring change in behavior. The leaders have informal authority only that is the authority of trust and faith shown by the group members. Importance of leadership Leadership is an important element of directing. Leadership is a continuous process. Manager perform all the functions i. The leaders have direct contacts with the subordinates and they always motivate the employees for higher perfume and achievement of goal. Leadership is to achieve common goal. Helps in inspiring and guiding the employees.. That is why leadership is considered as an important factor for . Features of Leadership 1. directing.
. Improves job satisfaction. Qualities of a good leader A person must possess the following qualities to be a good and effective leader. The leader must have complete 2. The guidance at such situation brings job satisfaction to the employee. Leaders recognize their abilities which provide psychological support and confidence in the employee. Physical qualities. The group’s cohesion or the team sprit depends upon mutual trust. 3. The leaders try to recognize the hidden talent and qualities of the employees and encourage them to highlight these hidden talents to boost up their confidence level. The leadership helps in creating team spirit by encouraging the employees to share common vision (goal and work collectively leaders always guide the subordinates to give importance to the group goal rather than individual goals. leaders guide them in the right direction of achievement of organisational goal. 1. intelligence and Scholarship. 2. Generally employees fail to realize or recognize their abilities and capabilities. Knowledge. Improves productivity. The biggest challenge or problem of every organisation is best utilisation of physical. weight. Healthy and smart leader can him also work hard and he can induce his subordinates also to work hard. 6. health and looks of person attract and individual. The leaders develop the spirit of teamwork and convince the subordinates that they can achieve their goal only when the team goal or group goal is achieved. The behavior of manager must be supportive and managers are considered good leaders only when they are able to motivate the employees and provide them psychological support. It is possible with the effective and efficient utilization of resources and efficiency depends upon the motivation. Leadership also helps the employees to take right decision at the time of stressful situation. But it depends upon working conditions and behavior of managers towards their employees. Physical features like height. Creates confidence. The satisfaction does not depend only on monetary compensation. 5. confidence and motivation among the employees which results in maximum utilization of resources. co-operation and liking of subordinates for each other. Good physical features attract people. friendliness. confidence and co-operation among the employees and leaders develop co-operation. Secures co-operation of the members of Organisation. financial and human resources. Leaders try to secure the willing cooperation of the employees as they develop feeling of initiative and enthusiasm in the employees. Improves team-spirit or group cohesion. The leader must have superior judgment and abilities to take right decision in right situation. Leaders also act as guides as whenever the employees are in trouble. A leader must be able to examine every problem in the right perspective or direction. 4.the success of the organisation. Leadership ensures that mangers follow such a pattern which is acceptable to all the subordinates and motivates the employees to consider themselves as a part of organisation.
he should take decision. Although it is not possible for an individual to possess all the qualities but at least through training manager can make an effort to acquire as many as possible. The leaser must be able to convince the employees that their willingness to do work will bring best result in their performance. He must understand people and try to maintain good relations with them. The leader must share or pass on the credit of success to his subordinates. 9.knowledge about the work performed by his group members. . He must take risk for the advantage of organisation. A good leader must set an example for others as inspire the people. A leader must take firm decisions. 5. He must have a mature mind. Communication skill. He must provide supportive environment to subordinates so that they do not hesitate to discuss their problems. The leader must have the sense of responsibility for achievement of goal or target of his group member. figures and logic. Motivation skill. He must have courage and initiative to take bold decisions. A leader must take initiative to grab the opportunities. Once he is convinced about the facts and figures. So they must have good communication skill so that information reaches each and every member. 8. Self confidence and sense of responsibility. On the other hand. He must be decisive while managing various activities and people. Decisiveness. The leader should not force the subordinates but develop voluntary contribution from the subordinate side. A leader must possess high level of integrity and honesty. Generally all the instructions and information from the superiors are passed to subordinates by the leaders only. Then only he can be a successful leader. He must be able to answer all the questions of subordinates regarding “why”. 4. A leader can develop confidence in his subordinates only when he is having faith and confidence in his own abilities. 6. He must know clearly and readily accept the accountability for any mistake done by the subordinates as subordinates work under his guidance and direction. 3. leaders pass all the problems and grievances of the subordinates to the top level and to inform the problems rightly the leader must have communication skill. To establish cordial relationship among the subordinates and the superiors. A leader is the source of information for all the members of his group. He must remain connected with the work and must lead all his subordinates in performing to their best ability. He should take decision on the basis of facts. He should not get confused. He must follow ethics and values then only he can expect his subordinates to be ethical and honest. Initiative. A confident leader only can create confidence in his subordinates. He must be confident that he will be able to tackle every situation successfully. A leader must be friendly with his subordinates. the leaders must have communication skill. 7. Integrity and honesty. Social skill.
Communication can be defined as transmission or exchange of ideas, views, message, information or instructions between two or more persons by different means.
The common means and ways for transmission of ideas are:
(a) Spoken words: (b) Written word; (c) Diagrams, pictures or graphs; and (d) Gestures. The communication is a two way process as it begins with sender and ends when the feedback comes from receiver to sender. Minimum two parties are involved in the process of communication i.e., the sender and the receiver.
Communication process/ elements of communication process
The communication process begins when sender thinks of an idea or message to be conveyed to other person. Then the sender encodes the message i.e., plans out the words or the language in which the message must be sent to the other party. After encoding the message the sender transmits or transfers the message by using different ways and means. After transmission the message reached to receiver. The receiver decodes the message to understand the message and give his response or feedback to the sender. When the feedback reaches back to sender then only the communication process ends which means the communication is a circular process which starts with sender and ends with sender.
Sender Message Encoding Nois e Receiver Decoding Media
Sender. Sender is the person who conveys the message. The communication process begins immediately when the idea comes in the mind of sender. Message. The contents of ideas or message or suggestion which sender wants to share with receiver is called message. Encoding. Receiver cannot read the mind of sender. So receiver converts the into a language or other communication symbols such as pictures, gestures etc. This is known a encoding. Media. It is the way or means through which encoded message has to be transmitted to receiver. The common ways of transmission are phone, letter, internet, message etc. Decoding. Decoding refers to converting the encoded message into language and understanding the message. Receiver. Receiver is the person who receives the communication and understands the message. Feedback after understanding the message receiver sends his response on that idea or message to sender. When response reaches the sender then only communication process ends. Noise. Noise is any element which results in disturbance, distraction or interruption in the flow of information. The noise can be a loud sound made by any vehicle, disturbance in the telephone line, disconnection of line. Losing of letter or documents on the way, poor connectivity in the e-mail or internet. Due to noise the message is not conveyed to receiver and receiver is not able to decode the message in the same manner as expected by the sender.
Importance of Communication
The communication is an important element of directing because of following points:
Act as basis of coordination and cooperation. Generally the organisational objectives are set up at planning stage and these objectives have to be communicated to management at all levels. That is why through communication only the objective and goals of the objectives and goals of the organisation are made clear to every employee. While setting up the personal targets and objective o employees the managers must get the accurate information which reaches manager through communication only. Through communication the top level management is able to interact with lower level management and all the employees. This interaction helps in getting the commitment and co-operation and coordination of people. Act as basis for Decision Making. For taking any major decision or solving any problem in the organisation there is a need to get the most accurate information and information moves in organisation through communication only. Whenever the managers are taking decisions they keep in mind the ‘prose’ and ‘cons’ or positive or negative aspects. The accurate information regarding the positive and negative aspect comes only through communication.
Increase managerial efficiency. Every individual in the organisation is assigned a job or task. He is made responsible for some activities. He is granted authority to carry on those responsibilities. This classification of task, responsibility and authority is possible only when the information reaches accurately to the employees. The employees must know clearly who has to export to whom, what part of total job they are expected to perform and what is their decision making powers. The clarity about these questions comes only with smooth flow of communication. Establish effective leadership. If there is two way information flows between the superiors and subordinates then there will be definitely positive reaction of employees. Generally rules are framed by the top level authority but these are applied on all the employees in the organisation. So it is always advisable to interact clearly with all the levels of employees before framing the rigid rules and regulation. The rules are more effective before framing the rigid rules and regulations. The rules are more effective when they are formed with the interaction of employees. Helps in process of motivation and morale development. Motivation is a psychological process of developing willingness to work. In the motivation process the superiors try to analyse the needs of subordinates and the needs can be recognized only when there is smooth flow of information and exchange of views between the superiors and subordinates. With the communication it becomes more convenient for the superiors to offer financial and non financial incentives. The job satisfaction and the moral of the employee depend on the communication between superior and subordinates. Helps in smooth working of an Enterprise. All interactions in organisation depend upon communication. Smooth working of an enterprise is possible only when there is no communication gap. Right from establishing of enterprise till its survival communication is essential. Through communication managers give directions to subordinates for smooth functioning of organisation. Promotes cooperation and peace. Through two way communication process manager try to develop mutual understanding between management and workers. Through smooth flow of communication subordinates and superior can discuss their problems, grievances and aspirations. Cooperation brings peace in the organisation.
Form of Organisational Communication.
There are two forms of organisational communication: 1. Formal communication; and 2. Informal communication.
In this communication the manager passes instructions to his subordinates and the success of downward communication depends upon communication skill of the managers. Formal communication generally takes place in the written form such as issue of notice. Formal Communication Formal communication refers to official communication taking place in the organisation. Whenever there is exchange of views or message or information related to official matter such as assignment of task. The common ways of having downward communication are: . memo. fixing of responsibilities. According to direction of flow formal communication can be divided into four types: (a) Downward communication. verbal or oral channels are avoided in formal communication as there is no record or proof of such communication. letter. The flow of information from the top level or from the superiors to lower level of subordinates is know as downward communication. document etc. granting authority or setting up of targets. objectives etc then it is known as formal communication.FORMS OF ORGANISATIONAL COMMUNICATION Organisational Communication Formal Communicati on Downwar d Horizont al Diagona l Informal Communicati on Gossip Upward Suggestion System Formal Grievance Task Force meetings Clusters directives Single strand Probabilit y 1.
In the recent years upward communication is gaining more importance because the subordinates prefer to involve themselves in the decision making and they have started demanding a better working condition. the marketing manager may discuss from time to time the quality and packing of product with the production manager. When the subordinates inform or pass any information to superiors then it is known as upward communication.(b) Upward Communication. That will be considered as the horizontal communication. This communication flows from subordinates to superiors. The diagonal communication prevents delay in flow of information and helps in taking fast decisions as subordinates of one department can directly communicate with the managers of other department. (c) Horizontal Communication. Upward communication generally consists of work performance. grievances or problems of the employees. Diagonal communication is a flow of information between the persons working in different departments and holding different levels of authority. Generally different departmental heads discuss the policy of their department with each other. Purchas e Manage r Productio n Manager (d) Diagonal Communications. the salesman may request the production manager to modify the product design according to the requirement of the customer. opinion. Sales -Man Production Manager Advantages of Formal Communication: . The upward communication may take place in the following manner. Horizontal communication is the communication between the two or more persons working at the same level of authority. For example. Discussion between two managers of same rank is also a Horizontal communication. For example.
• The formal communication is very systematic and ensures orderly flow of information. • The information may not be transmitted accurately to avoid the unfavorable effect of communication. It is a common pattern of centralized organisation. So. every member is attached to one person. • Through formal communication it is easy to exercise control over the work performance of different employees. The common networks of formal communication are: • Wheel pattern. A B C D E • Circle Pattern. The person may receive or give information to two more . Under the chain pattern each person gets the information from one person that is their immediate boss and passes the information to one person who is their immediate subordinate. E B A D C • Chain Pattern. • The source of information can easily be located. Under wheel pattern all the information flow one person only who is generally leader of the group. The other members have no communication link with each other. Disadvantages: • The information is delayed as generally scalar chain is followed while passing of information. • In formal communication it is easy to fix the responsibilities of different employees as there is proof for the information. It is the most centralized way of communication. • In formal communication the information is conveyed or passed in impersonal manner. In the circle pattern each person communicates with two more persons in a group.
persons in the organisation. B E C D • Inverted V. All the members in the organisation are linked to each other and information can flow anywhere in the organisation. That is why it is more decentralized. A B E C D • All source (Channel) Pattern. 2 1 A B 2. in this network a subordinate is allowed to communicate with his immediate superior and also with the superior of his superior. It is most A decentralized organisation. However in latter case only limited communication can take place. Generally the social interactions. Under all channel pattern there is no fixed pattern of communication. Informal communication Informal communication between different members of organisation who are not officially attached to each other is known as informal communication. Friendly talks and non-official matters are discussed in the informal communication. . In this type of organisation every member participates equally in floe of information.
There is no fixed direction or path for the flow of information under informal communication. confusing and zigzag manner. That is why the network of informal communication is known as Grape Vine. 4 1 2 7 3 8 2. Under this pattern or method the information is shared between two persons who trust each other. The information moves in a very vague. under cluster method one person tells the information to select other persons. But the common networks of informal communication are: 1. There is no fixed source of information under informal communication and information can move in any direction. So. There are several types of informal systems. 1 0 3 5 4 8 9 1 2 7 6 . Gossip. Cluster. then one of the persons from that group passes the information to members of other group and one person from other group may pass it to another and so on. Under gossip pattern one person tells many which means information is with one member of organisation and 6 5 9 he shares the information with many other people in his social group.
X 4. In single strand pattern each individual communicates to the other in sequence. Advantages of informal Communication . X The research studies have shown only 75% information of informal communication is accurate and 25% are remorse spread through various members in the organization.3. Probability. Single strand. In probability network the individual communicates randomly with other individuals.
Disadvantages of informal communication: 1. It establishes personal relationship among individuals irrespective of the levels. The managers can fill up communication gap if there is any through informal communication. The confidential information may get leaked under informal communication. 2.(Benefits from employees’ point of view): 1. 2. It is flexible. dynamic and varies from individual to individual It is based on informal 2. The managers can get true and accurate response of subordinates on various policy matters. Informal communication provides emotional relief to employees and results in reducing union and management problems. 3. 3. Difference between Formal and informal communication Basis of Difference 1. Through normal communication the matters can be discussed which cannot be discussed through official channels. It provides information to all the members cutting across the official channels. It follows formal or established Informal Communication It refers to communication between individual and groups which are not officially recognized. superiors and relations are highly impersonal. Informal communication helps in spreading rumors and false facts. 4. So urgent matters can be communicated informally. Benefits from management point of view: 1. It is more rigid in nature and cannot be modified. 4. The information travels in a very unsystematic manner an duets distorted while passing through various channels. Responsibilities cannot be fixed as the source of information cannot be known. Informal communication traces very fast. Relations 3. The employees can develop friendly relationship and get social satisfaction. 2. Nature 4. Channel . 3. It establishes relation between the subordinates. Meaning Formal Communication It refers to communication taking place within the official chain of command.
The speed of formal commedication is generally slow because all information has to pass through an established chain of command. circulars. through written words. It serves the need of organisation. The records of formal communication are main-tainted for future reference. reports etc. It is easy to fix the responsibility in formal com. 2. It takes less time and travels It is usually taken seriously . The speed of informal communication is very fast as it cuts across all the official channels. Difference between Oral communication and written communication Point of Difference 1. It mostly tends to be oral. It serves the need of individuals working in organization. relationship and no fixed line of command is followed. mike etc. It is not possible to fix the responsibility because source of information is not known. Oral communication. Speed It refers to exchange of It refers to exchange of message verbally. message in written words. These methods are: 1. Fixation of responsibili ty 9. No records of communication maintained. Expressi on 6. It may take place through letters. memos. Written communication. 5. Written communication refers to transmission of message.line of command. It refers to exchange of message with the help of spoken words. idea etc.medication because source of information is known. Meaning Oral written 2. information are 8. It may take place through face to face conversation or through mechanical device such as telephone. Record Methods of communication There are two main methods of communication under formal as well as informal communication. Speed It is mostly expressed in written form. It travels slowly and takes long term. Need 7.
. Personal touch fast. It may not be taken seriously by parties involved. Sometimes due to lack of vocabulary manger may use wrong words. It may not be very precise. It is more suitable for formal communication. It transmits message with It tends to be more personal touch. misrepresentation of communication may cause misunderstanding. Economy 6. Semantic Barriers 2. if the production manager announces in the meeting that there will be increase in budget of production department then employs may understand that their salary will increase but managers may understand it that expensive machinery will be purchased. impersonal. Psychological Barriers 3. It can be verified from the written records. Suitable 7. It is more economical for distant places. Therefore it is important for a manager to identify these barriers and take measures to overcome these.3. Organisational Barriers 4. Main causes for semantic problem can be (i) Badly expressed message. For example. The barriers can be grouped in following categories: 1. It can be verified from the written records. Personal Barriers Semantic Barriers Sometimes the same words and sentences can be understood differently by different people in the organisation which means difference in the understanding levels of employees. It can be expressed in precise terms. Due to this the manager may fail to convey the same meaning to his subordinates. Verifiability 5. Precision 8. This filtration. It is not economical for distant places. Seriously 4. It cannot be verified afterwards since there is no evidence to verify. Barriers to effective communication Some times the message sent by sender does not reach the receiver in the same manner as expected by the sender. It is more suitable for informal communication.
(ii) Symbols with different meanings. Due to wrong translation there may be transfer of wrong message. when worker is giving suggestion regarding method of production. Sometimes the worker may misinterpret the assumptions. Body language and gesture decoding. Along with verbal communication another important mode of communication is body language and gestures shown by person who is talking. Sometimes people evaluate the meaning of message before the sender completes the message. For example. translations. It means when receiver does not pay complete attention to the message as a result communication becomes ineffective. Prize. While explaining to subordinates many specialized experts use technical words which may not be understood by the workers. He may means that take care of quality of goods whereas workers may understand that he is instructing to keep the goods safely. Sometimes a word may have different meaning. For example boss may instruct the subordinate to “take care of goods”. Specially when is oral information sometimes manager may not be able to retain all information for a longer time. As a frightened person may not communicate properly similarly an angry person may not receive the communication effectively. Sometimes managers do not give attention due to extreme emotions for example. He may resist change. (iii)Faulty (iv) (v) Technical (vi) Psychological barriers Emotional or psychological factors also act as barriers to effective communication. Principle. Receiver may understand the other meaning for example: price. principal. this results in filtering or loss of information. Unqualified assumptions. He may have some personal prejudice against the sender. Example-if manager is telling a joke but there are signs of anger on his face then worker will get confused. the manger is preoccupied with an important file. This lack of attention may disappoint the employees. Hold the handle of door carefully. He jumps to conclusions without logical deduction from the situation. If translator is not efficient he may make mistake in translation. (ii) (iii)Loss . Lack of attention. or handle with care. Some of the psychological barriers to effective communication are: (i) Premature Evaluation. then workers may get confused and misunderstand the meaning. The reason can be preoccupied mind of receiver. depression or jubilation. Sometimes the workers do not understand the language which is used by manager so workers get it translated. The state of mind has great influence over the information and its reflection. They may ignore or misinterpret some of the information when they are not interested. When communication passes through various levels. If the verbal communication is not matching with the body language. right. It means deriving conclusions before completion of message. In such case the receiver may not have an ion mind. write etc. jargon. by transmission and poor Retention.
authority relationship. rules. Rules and regulations. exist. In large organisation free and effective flow of communication is possible only when some facilities like social get together. Some of the organisational barriers are: (i) Organisational policy. Some of the personal barriers are: (i) Latch of confidence of superior in his subordinates. For example in centralized organisation most of the information remains at top level only. Sometimes superiors conceal and hide information if they have fear of losing their authority over the subordinates. delay of action and delay in movement of information. complaint box. Organisational Barriers Factors related to organisational structure. while giving the feedback the subordinates filter all their negative points and highlight only their positive side. opinion or suggestions. regulations may also create barriers as following rules may lead to red tapes. task force etc. Status difference. Rigid rules. secondly they do not give much importance to the information exchanged between them. For example. Distrust bet wean communicator and receiver also acts as a barrier to effective communication. Organisational facilities. Sometimes the people working at higher level do not believe in the information supplied by the lower level employees as they feel how would he know about my job and who is he to give me suggestions Compels organisation. (ii) (iii)Fear . When the information passes through various levels then there can be screening or filtering of information at different levels. In absence of such facilities there can be delay and barrier to effective communication. If there is no incentive for communication then subordinates may not take initiatives to give suggestions. They may not understand each other’s message in the origin sense. (ii) (iii) (iv) (v) Personal barriers Certain personal factors of sender and receiver may influence the free flow of information. For example if there is no rewards given for giving some good suggestion the employees will take no initiative to give goods suggestions. Lack of incentives.(iv) Distrust. If superiors have no confidence and trust in their subordinates then they pay no attention to their advice. People at lower level may not be able to communicate freely in centralized organisation. of authority. regulations may act as barriers to effective communication. If organisational policy does not support free flow of information it may result in barriers.
they will accept it with full cooperation. 8. Sender must select the words according to the education level of receiver. Communication must meet the need of present organisation as weak as for future organisation. We can never know whether receiver has understood the message or not unless we get the feedback. Good listener. The parties to communication must have open mind they should not try to withhold information for their personal interest. Patient and attentive listening solve many problems.Improving communication effectiveness All organizational face barriers to effective communication. Effective communication is the responsibility of all persons in the organisation as all have to work towards a common goal. Communication is complete only when the message is understood by the receiver. 7. The symbols used in message must be known to the listener. tone and symbol used in message must be selected very carefully. The message should be encoded in direct and simple language so that the receiver is able to understand it without much difficulty. This follow up helps to remove hurdles. The message can be conveyed properly only if it is clearly formulated in the mind of the communicator. By using following measures they can overcome such barriers: 1. Use of proper language. The language used should not offend the sentiments of listener. Whenever we communicate we must keep in mind the needs of the receiver of the message or it should be our effort to see that whatever message or information we send across must be o value to receiver. The should not react before receiving and listening the full message. 2. tone and contents of message. If plans are developed with consultation and involvement of subordinates. Communication for the present as well as for future. . Consult others before communication. Open mind. misunderstanding of instructions given by manager to subordinates. Communication according to the need of the receiver. Feedback also provides opportunity for suggestions and criticism. There should be proper follow up of the information given by manger to subordinate. 6. Feedback helps to know the effect or success of communication given by sender. This will make receiver more receptive. Before communicating the message it is advisable to consult others. For an effective communication the words. on the other hand receiver must also listen with due attention. 3. The sender must listen to receiver’s words alternatively. There must be consistency in the past. 5. Clarify the idea before communication. 4. Proper feedback. present and future communication. 9. Follow up communication. In the first place we must be clear about what we want to communicate.
Completeness of message. The receiver should not be left guessing.10. A complete message carries all necessary facts and figures. A message is effective only when it is given completely. . It may lead to misunderstanding.
if the planned output is 1. If there is any difference or deviation then finding the reasons for such difference and taking corrective measures or action to stop those reasons so that future thee is match between actual and planned performance. “Controlling is determining what is being accomplished. applies corrective measures so that performance takes place according to plans. Scope:. evaluating the performance and.CONTROLLING MEANING Controlling function can be defined as comparison of actual performance with the planned performance. that is. “Controlling consists of verifying whether everything occurs in conformity with the plans adopted. then controlling function will look for . For example. “Controlling function leads to goal achievement. It has for its object to point out weaknesses and errors in order to rectify them and prevent recurrence”.Controlling is very wide in scope as it does not end only by comparing the actual performance with planned performance but it tries t o find the reasons and solutions for such problems also. 4. an organisation without effective control is not likely to reach its goal”.000 units and actual output is 800 units. Definitions by different authors: 1. “Controlling is measurement and correction of the performance of the subordinates to make sure that enterprise objective and plans devised to attain them are being accomplished”. 3. Controlling is not last function of management but it is the function which being back the management cycle to planning. 2. the instructions issued and the principles established. if necessary.
Helps in achieving organisational goals. It is to find out whether the mismatch is due to fault in the actions or activities. timely action is taken to bring back the activities on the path of planning. This free communication and care motivate the employees to give better performance. There are two aspects of controlling function. If the reason is fault in machinery or inefficiency of workers then the corrective measures are taken by instructing the maintenance department to keep regular check of machinery and if it is due to inefficiency of workers then they are sent of training so that their efficiency can be improved. 3. In both the aspects the managers try to finds out the reasons for mismatch and take corrective measures. A good control system also guides employees to come out from their problems. When all the activities are going according to plan then automatically these will direct towards achievement of organisational goal. IMPORTANCE OF CONTROLLING 1. Judging accuracy of standards. Making efficient use of resources. Each activity is performed according to predetermined standards. 2. Improving employee motivation. These are: strategic control and operational control. As a result there is most and effective use of resources. Strategic control refers to check hoe effective the strategies and the plans are because sometimes there can be deviation in actual performance and planned performance due to plans and strategies.reasons of this deviation. An accurate control system revises standards from time to time to match them with environmental changes. The operational aspect refers to focus on managerial and other activities of the organisation. An effective control system communicates the goals and standards of appraisal for employees to subordinates well in advance. . Like traffic signal control guides the organisation and keeps it on the right track. Through strategic controlling we can easily judge whether the standard or target set are accurate or not. When the plans are made in the organisations these are directed towards achievement of organisational goals and the controlling function ensures that all the activities in the organizational take place according to plan and if there is any deviation. 4.
(b) Performance appraisal report by supervisors. Ensures order and discipline. Effective controlling system keeps the subordinates under check and makes sure they perform their function efficiently. An effective controlling system helps in minimizing the errors by continuous monitoring and check. Control can be exercised on employees’ performance through following measures: (a) Self-appraisal report. All the departments are controlled according to predetermined standards which are well coordinated with one another. Under controlling function it is made sure that employees are aware of their duties and responsibilities very clearly. 7. Controlling makes sure that proper direction is taken and that various factors are maintained properly. Small errors or small mistakes may not seriously affect the organisation. Strikes control monitor.5. to the employees. Controlling helps in minimizing the errors. In this report employees specify their achievements. These standards help the employees to work efficiently. 6. Control helps to maintain equilibrium between means and ends. They must know clearly the standards against which their performance will be judged. Controlling helps in improving the performance of the employees. Control provides unity of direction. 8. Sharp control can have a check over dishonesty and fraud of employees. The superiors continuously monitor and observe the employees when they are performing the job and comparison between the standard and actual performance is done. The employees are asked to prepare a report of their performance and to explain whether their performance is in accordance with plan or not. To have good report the employees perform efficiently and effectively. Controlling insists on continuous check on the employees and control helps in creating an atmosphere of order and discipline. Facilitate coordination in action. The managers . But if these ramrods are repeated gains and again it will become a serious matter and can bring disaster for the organisation. Control creates an atmosphere of order and discipline in the organisation. On the basis of this observation the managers prepare performance appraisal report. employees work on computer monitor which bring more order and discipline in work environment. increments bonus etc. These reports become the base for giving promotions.
3. in such cases judgment depends upon the discretion of manager. change in competitor’s policy etc. job satisfaction. to observe them minutely. Relationship between planning and controlling The planning and controlling functions of management are very closely related. To install an expensive control system organisations have to spend large amount. 2. Employees may resist and go against the use of cameras. when it is to be done and by whom it must be done. employee’s morale etc. Control system loses its effectiveness when standard of performance cannot be defined in quantitative terms and it is very difficult to set quantitative standard for human behavior. . Planning bridges the gap between where are standing today and where we want to reach. Employees feel control reduces or curtails their freedom. Controlling means keeping a check that everything is in accordance with plan and if there is any deviation. Planning is the basic function of every enterprise as in planning we decide what is to be done. Resistance from employees. taking preventive measures to stop that deviation. efficiency level. Costly affair.try to detect the error on time and take remedial steps to minimize the effect of error. An enterprise cannot control the external factors such as government policy. The benefits must be more than the cost involved then only controlling will be effective otherwise it will lead to inefficiency. It involves lot of time and effort as sufficient attention has to be paid to observe the performance of the employees. Limitations of controlling 1. change in fashion. Difficulty in setting quantitative standards. 1. Employees often resist control and as a result effectiveness of control reduces. No control on external factors. Control is an expensive process. Management must compare the benefits of controlling system with the cost involved in installing them. The relation between both the functions is explained below. technological changes. The meaning of controlling makes it clear that controlling function is undertaken for right and timely implementation of plans. Meaning. 4.
Controlling process Controlling process Analysing the deviations . if the standard target is 1. Continuous monitoring and check in controlling function make it possible that everyone follows the plan.K. Generally people believe that controlling is a backward looking function because in controlling we look back to the performance which is already achieved by the employees and compare it with plan. Planning and controlling are interdependent and interlinked. Planning and controlling functions always co-exist or have to exit together as one depends on the other. In planning plans are made for future that is why it is considered as forward looking function. The base for comparison or the yardstick to check is given by planning to controlling function. Planning and controlling are forward looking functions. So base of comparison come from planning only. For example. But controlling does not get ended here only. Planning is a futuristic function as it involves looking in advance and making policies for the maximum utilisation of resources in future. On the other hand.000 units then controlling managers make sure that there is improvement in the performance and the employees achieve the set target. The controlling function compares actual performance with the planned performance and it there is no planned performance then controlling manager will not be able to know whether the actual performance is O. Therefore controlling is also a forward looking function like planning. or not. On the other hand. It involves finding the reasons for deviation and suggesting preventive measures to bring back the actual performance in relation to planned performance.2. The controlling function makes sure that in future actual performance and output match with the planned performance or output. 3. The controlling function makes sure that everyone follows the plan strictly. the planning function is also dependent on controlling function as plans are not organisation. if the workers have produced 800 units the manager can know whether it is adequate or not only when there is a standard production set up b planners. The controlling function makes sure that in future actual performance. So both the functions are interlinked and interdependent as for successful execution of both the functions planning and controlling must support each other.
The standards. For example. After setting up of standards the performance of the employees is measured by evaluating the actual work done by the employees. The standards must be achievable. The standards must be revised from time to timely actions can be taken. • Standard sale. The standards must be revised from time to time keeping in mind the changes of business environments. standard sale p.a. 00. 00. For example. is 12. Certain quality parameters are fixed to measure the quality standard when numbers of rejection or sales return increases.000. Taking Corrective Action Setting up of (target) standards:. If long term standards are set up they must be divided into short term. . 20 lac per annum. It indicates low standard of quality. For example. high or very high standards which cannot be achieved are of no use.4 lac • Reduction in cost by 5%. Sometimes employees achieve the quantitative standards by ignoring qualitative standards. When the performance can be measured numerically then it is very convenient to measure the performance.8.Standards mean target or the yardstick against which the actual performance is measured.Rs. 2. While measuring the performance the quantitative as well as qualitative aspect of performance is kept in mind. That is why while measuring the performance quality standards are also measured. Measuring of performance. With short term targets or standards the errors can be detected early and timely actions can be taken. then per month 1. Standards must be set up keeping in mind the resources of the organisation and as far as possible standards must be set up in numerical or measurable terms. The standards must specify the time limit within which they have to be achieved and as far as possible the standards must be set up for short term. setting up of quality standards or standards for managerial work etc.000 target can be taken for comparison. • Standard profit.Establishi ng Standards Measuring of performanc Comparing performance with Standards Fig. Sometimes it is not possible to express the standards in numerical terms.1 1.
All deviations need not be brought to the notice of top management.Generally the performance of managers is measured by looking at the overall efficiency level of the organisation. These two categories must be controlled by following ways: (i) Critical point control. 20. Compare performance against standard. For example. Manager should not waste his time and energy in finding solutions for minor deviations rather he should concentrate on removing deviations of high degree. If the deviation is minor then it should be ignored. if there is increase in production cost by Rs. They must divide the deviations in two categories deviations which need to be attended urgently in one category and minor or insignificant decisions in other category. and then it must be attended urgently. The deviations which are beyond the specific range should only be handled by managers and minute or minor deviations can be ignored. (ii) Management by exception. per unit and there is increase in postal cost by Rs. Analysing deviations. But if there is mismatch or deviation then the manager tries to find out the extent of deviation. the performance must be measured periodically in short period of time. The performance of financial department is measured by checking the solvency and liquidity ratios etc. Key areas are those which have impact on whole organisation. If there is match in both then the controlling function ends there only. . then more focus should be to find out reasons for increase in cost of production as it will affect the profits and future revenue of organisation whereas postal cost is incurred rarely and managers have no control over postal cost. But if the deviation is more than timely action must be taken. The performance of research and development department is measured by change in technology and updating of production department. A range of deviations should be established and only cases beyond this range should be brought to the knowledge of top level management. 5. 3. 4. It means a manager who tries to control every thing may end up controlling nothing. After measuring the performance the manager compares the actual performance with the planned performance and standard. It means keeping focus on some key areas (KRAs) and if there is any deviation in these key areas.
getting the machine repaired if delay in performance is due to fault in the machinery. These are solved by subordinates. It is very essential to find out the exact and accurate cause of deviation. Taking corrective measures may involve. They the next step is to know the reasons for such deviations and trying to remove deviations in future. If delay is due to carelessness and laziness of the employees. making the supervisors more responsive. Taking corrective measures to improve the performance so that in future it matches with the plan. Generally the managers take measures to improve the performance such as sending the employees for training if the deviation is due to inefficient performance.2. then managers must try to find out the reason for such increase after identifying the reasons for deviations which need immediate attention. it can be ignored but if it increase more than Rs. shortage of resources. fault in machinery.. if production cost increases by Rs. Redesign or re-frame the plans or strategies if these are overstated or not matching with the present day business environment. the manager will come to know about the deviations between the plan and actual performance. can be handled at supervisory level or can be ignored also for some time. 5. according to plan. Advantages/ Merits of Management by Exception (MBE) • It saves time and efforts of managers. These deviations and reasons must be brought to the knowledge of top level management for critical evaluation whereas the increase less than Rs. On comparing the actual performance with the planned performance.2. Taking corrective measures. sometimes the managers . The manager takes measures to bring back everything on the track i. • It focuses attention of managers on significant matters. • No wastage of time and energy of managers to solve routine problems.e. inefficient staff.For example. over or understating of standards. The causes for deviations can be many: for example. (a) (b) (c) Let the situation remain same if the deviations are minor. • It differentiates between critical and simple problems.
Feedback in controlling.have to see the standards and targets again if standards are not realistic and achievable. Positive deviation. This revision of standards is called downward revisions because standards are reduced to make them realistic and achievable. 6.. For example. The manager must take the corrective measure only by finding the root cause of the deviation and try to remove that cause. After suggesting the corrective measure a feedback report is prepared. in that case upward revision of the plan is done and plans are set at high rote so that they match with the actual performance. Plan = 100 units Actual production = 80 units Deviation = -20 units Techniques of managerial control The main techniques of managerial control can be classified into following two categories: 1. plan 100 units. When actual performance is less than the plan performance then it is called negative deviation. Sometimes the performance is higher than the set standards. Traditional Techniques 2. The controlling function does not end by taking corrective action as it is a continuous process.g. Actual Production= 120 units Deviation = +20 units Negative deviation. along with reasons the corrective measures are also specified in the feedback report and feedback acts as a base to establish the standard for next year and controlling process again starts from 1st step. “Deviation” in Controlling Deviation refers to difference between actual performance and standard performance. Modern techniques . When actual performance is better than the plan performance it is called positive deviation e. Feedback refers to list of reasons for deviations of plans or for ineffiency in overall working of organisation.
. Break even analysis. Statistical reports. 2. This is the most traditional and most popular method of control. Statistical reports. Although in present environment these have become outdated but still many companies are using these: 1. Break even analysis 4. With the help of these observations they can easily analyse the performance of employees. 3. Budgetary control Personal observations. it refers to sale 3. ratios etc. When sales reached breakeven point. Under this manager observe the subordinates while they are performing jobs. By converting performance report into statistical chart or table you can easily point out the progress or deviation of performance. are very useful in analysis the performance of employees. They generally note down their observations. average. 1.Techniques of Controlling Traditional Techniques Personal observations Statistical reports Break even analysis Budgetary control Modern techniques Return on investment Ratio analysis Responsibility accounting Management audit PERT/ CPM techniques Traditional techniques These are the techniques which were commonly used by various companies. Various concepts of stats such as graphical presentation. 2. By comparing the performance chart of current year with previous year the managers can know the progress of their performance. boreal even point is a point of no profit no loss. Personal observation. Brake even analysis is a useful technique to study relationship between costs and profit. correlation. percentage.
amount at which company is neither earning profit nor incurring loss. With the help of break even analysis technique manager can estimate profits at levels of cost and revenue. The formula for calculating brake even point is:
Following figure shows brake even chart of a firm. Graphically breakeven point is a point where total revenue and total cost intersect. In the following figure firm will attain breakeven point when sale is 50000 units.
All the points to the left of brae even point indicate loss and right to breakeven point indicates profit.
50 Fig. 8.2
Units of output (In Thousands)
Breakeven chart helps the firms to keep a close check on their variable cost and determine the level of output at which firm can earn its target profit. It also helps to measure the points at which all the costs are fully covered and beyond that point can each more profits. Budgetary control. Budget is a statement of expected results and expected cost expressed in numerical terms. Budge is a statement which helps us to know the future results and to achieve these results how much we will have to spend. There are different types of budgets which can be prepared by an organisation: for example, sales budget, production budget, financial budget, cash budget etc.
In budgetary control technique the estimated results are compared with the actual results. The variation between these two indicates inefficiency. Budgetary control provides following benefits to the company: 1. Budgeting focuses on standards or objectives. 2. Budget helps subordinates to compare their performance with budgetary standards and can do self appraisal. 3. Through budgeting mangers can allocate resources to departments according to their budgetary allocation. 4. Budgets help to improve coordination between various departments. As budget of one department Depends on other. For example, budget of sales department Depends upon budget of production department Budget of production department Depends upon budget of purchase department. 5. It helps to use the principle of management by exception by giving more attention to department where actual operations and target deviate from budgetary standards.
The success of budgetary techniques depends upon the estimation of standards. As far as possible we should prepare flexible budgets due to dynamic environment. Modern Techniques of Control Now a day the common control techniques preferred by companies are:
Return on investment (ROI). Return on investment is a useful technique of controlling over-all performance of company. It is also known as return on capital employed. The essence of this approach is that profits is not taken as an absolute figure but it is considered in relation to capital invested with this method we can compare the earning of one company with other even when they have invested different capital because it determines the ration of earning and not the absolute earning. The rate of return can be calculated by using following formula.
Net income can be taken before or after tax. Total, investment includes working capital, fixed capital and free reserve. To avoid confusion gross assets can also be taken in place of total investment. The technique of ROI offers following advantages to an organisation. (i) (ii) (iii) (iv) It indicates how effectively resources are being used. We can compare the performance of business with previous year’s performance by comparing ROI of both the years. It facilitates balanced use of capital employed. It focuses attention on profits and relates them to capital invested.
Ratio Analysis. It refers to evaluation and analysis of financial statements by calculating some important ratios. The common ratios which help to draw important conclusions from the financial statements are:
men to pay the amount due to various stakeholders. Common ratios which are calculated under the category of liquidity ratio are: (a) (b) (ii) Solvency Ratio. These ratios measure the relationship between profits or earnings and capital employed or sales. These also help to know the short term solvency of firms.(i) Liquidity ratio. The common ratios used by companies to measure profitability ratio are. This ratio is calculated to find out the long term solvency of firms. It helps to find the ability of firm to pay back its debts. These ratios are calculated to find out the profits ability position of a businessman. The common rations calculated under solvency ratios are: (a) Debt Equity ratio (b) Proprietary Ratio (iii) Profitability ratios. (a) (b) (c) . This ratio helps to measure the ability of business.
They are accountable if actual cost exceeds the budget or estimated cost. Generally sales or marketing departments are set up as revenue centre. Higher turnover indicate efficient utilisation whereas lower turnover means inefficient utilisation of resources. The common types of responsibility centers created in the organisation are: (i) Cost or expenses centre. The ROI of different departments is calculated (ii) (iii) (iv) . Responsibility Accounting. Profit=revenue. This centre is responsible for the profit of the organisation. The common turnover rations are: (a) (b) 3. So the centre head of profit centre is accountable for revenue as well as the cost. This centre is responsible not only for profit but also for the assets he uses. Revenue centre. In this centre managers are responsible for the cost incurred in the centre and not for the revenue generation. Under this technique of controlling organisation is divided into various responsibility centers and head of each centre is responsible for the achievement of their centre. Turnover ratios are calculated to determine the efficient utilisation of resources. Generally production centers act as cost centre to keep a check on production or operational cost of the firm. He has to ensure that revenue is not less than estimated revenue and cost is not more than the estimated cost. This centre is responsible for generating the revenue. Investment centre. This centre makes use of return on investment. Manager of this centre is accountable of actual revenue is not same or is less than the estimated revenue. Profit centre.cost.(iv) Turnover Ration. These responsibility centres are generally various sections or departments of an organisation and head of the department is considered as Responsibility head as he is responsible for the overall growth and achievement of his department or centre.
Financial audit has been used by firm from long time but the management audit is a new concept. The object of network analysis is to help in planning. It would evaluate the progress made by the enterprise through the introduction of new techniques or ideas. Net work techniques (PERT and CPM). staffing. This centre ensures that there is no wastage of assets and all assets are used properly for increasing the profits of the company. This control technique helps to measure the efficiency levels of managers. Management audit is not compulsory by law like financial audit. There is shortage of qualified management auditors. It helps to locate present and future deficiency in the performance of management function. organizing. directing and controlling etc. It would determine whether or not organisation is working efficiently. The main advantages of Management audit are: (i) (ii) (iii) (iv) (v) (vi) It reviews overall plan and policies of managers. Although there is no chartered accountancy degree which is authorized to does management audit. Management audit. Limitations of management Audit (i) (ii) (iii) (iv) 5. organizing and controlling the operations to enable the management in accomplishing the project economically and efficiently. There is no standard technique of management audit. . the main purpose of management audit is seeing that these functions are performed efficiently and effectively. But still many companies are doing management audit is a comprehensive and constructive review of the performance of management team of any organisation. 4. Managers perform various functions such as planning.separately. The scope and contents of management vary from firm to firm. It would highlight possible opportunities for the organisation. It ensures updating of existing managerial policies and strategies in the light of environmental changes.
The steps involved in using PERT/CPM is given below: (i) (ii) (iii) (iv) The project is divided into a number of clearly identified activities. In CPM only one time estimate is prepared. programmed evaluation and review technique and CPM i.building. Under critical path method (CPM) the project is analyzed into different operations or activities and their relationships are determined and shown on the network diagrams. If required the plan can be modified so that there is timely execution and completion of project. There are various types of network techniques but PERT i. It represents the sequence of those activities where no delay can be permitted..e. Critical Path Method are most popular techniques..e. For example:. aircraft manufacturing and other construction projects.If a project consists of six steps say A to F and after completing step A we can start B and C and after completing D we can start E and after completing D and E we can start F.These techniques deal with time scheduling and resources allocation for these activities and aim at effective execution of projects with-in given time schedule and cost. In CPM cost required to complete the project is also calculated. These clearly indentified activities are arranged in logical sequence. So network diagram will be: . The longest path is identified as critical path. A net work diagram is prepared to show the sequence of activities. PERT provides managers with the information they need in planning and controlling schedules and cost in development projects. PERT provides the framework for treating wide range of project management’s problems. (v) (vi) (vii) PERT and CPM are commonly used in ship. Generally these time estimates are prepared: these are optimistic (shortest time) pessimistic (longest time) and most likely time. Time estimates are prepared for each activity.
Network diagram Management Information System (MIS). Right decision can be taken at right time only when managers receive accurate and timely information. MIS is a communication tool for managers. only relevant information is provided to them. (v) It reduces information overload i. .. 8.E Time (Weeks) 4 2 6 8 3 4 Start Stop Fig.e.3:6.Activity A B C D E F Predecessor A A B C D. Advantages of MIS are: (i) (ii) (iii) It provides cost effective management information. (iv) It improves quality of information with which a manager works. MIS provides the required information to managers on time and systematically. It helps in planning. By getting information on time managers can take timely actions if actual performance is different from standards. It provides accurate information to all the managers working at different levels. controlling and decision-making. It is a control technique which provides information and support for effective managerial decision-making.
the proper section of site is extremely important. Therefore for such plants. Important decision which decides the fate of the business. Therefore shifting this frequently may entail large cost and therefore not advisable. A small size small scale industry would rather have its location near a big city/market and can move easily with any market champs. the plant location was not given the due importance and decided or individual preferences of the entrepreneur & social customs & environment. . Government also became instrumental in the selection of plant location because they used this as instrument of developing the backward areas. (ii)Locating a business requires large investment & almost permanent infrastructure. However big size industry which have large investment & almost permanent facilities seated cannot shift easily.Facility Location & Plant layout Plant location: . In the past. The site selection becomes more important with the size & nature of the plant. Therefore for the balance development of the country the government encouraged industry (both private & public sector) to set up plants in the remote/backward areas which were other wise not suitable for setting up the plants. Importance of plant location (i) Goods location reduces the cost of production & distribution & thus increases the plant’s profitability & competitiveness.Probably no location of suitable site is so perfect as to guarantee success but bad location can be so bad as to bankrupt a company.
taxes.g. The business uncertainty & dynamic environment may convert a good location of today into an inferior one of tomorrow & vice versa. rise in labour cost (g) Takeover by the government (h) Relocation of associated ministries & plants. I need for selection of suitable site may arise in following cases (a) (b) (c) While staring a new factory During expansion of the existing plant Relocation of the existing plant. cost of construction etc. (v) Location may also have some benefits from the government in terms of tax holiday or cheap land available etc. storage capacity for raw material.(iii) (iv) Plant location determines the nature of investment costs to be incurred and decides the level of operating cost. Location fixes some of the physical factors of overall plant design e. Dynamic Nature of plant location There is nothing like permanent good location. . (a) Shift in structure of market or movement of market (b) Changes in cost of transportation (c) Changes in cost & availability of raw materials (d) Change in cost pricing policy of the enterprise (e) undesirable labour situation (f) Non available of labour. It may happen due to one or more of the following reasons. cost of labour. healing & ventilation refinement.
Transport facilities.Political strategic considerations. 10. The factors to be considered are: 1. Climate. 7. 6. 2. Availability of labors. 5. Availability of utilities (Water. and many different factors must be considered. 11. Local community considerations. 4. 8. other factors such as room for expansion and safe living conditions for plant operation as well as the surrounding community are also important. Electricity). 3. The location of the plant can also have a crucial effect on the profitability of a project.Taxations and legal restrictions RAW MATERIALS AVAILABILITY: The source of raw materials is one of the most important factors influencing the selection of a plant site. Environmental impact and effluent disposal. Raw material availability. Primarily the plant must be located where the minimum cost of production and distribution can be obtained but. Considerable care must be exercised in selecting the plant site. on the advantages and disadvantages of the available real estate. This is particularly true for the sulfuric acid plant because large volumes of . 9.PLANT LOCATION AND SITE SELECTON The geographical location of the final plant can have strong influence on the success of the industrial venture. The various principal factors that must be considered while selecting a suitable plant site are briefly discussed in this section. The choice of the final site should first be based on a complete survey of the advantages and disadvantages of various geographical areas and ultimately. Availability of suitable land. Location (with respect to the marketing area).
Attention should be given to the purchased price of the raw materials. washing. the major consumers are fertilizer industries and hence the plant should be erected in close proximity to those units. and the effective transportation facilities for the plant personnel are necessary. AVAILABILITY OF LABOURS: Labors will be needed for construction of the plant and its operation. Fuel and Electricity which are briefly described as follows: Water: -The water is required for large industrial as well as general purposes. A full site evaluation should be made to determine the need for piling or other special foundations. well drained and have loadbearing characteristics. because the buyer usually finds advantageous to purchase from near-by sources. The land should be ideally flat. purity of raw materials and storage requirements. If possible the plant site should have access to all three types of transportation. Proximity to the major markets is an important consideration in the selection of the plant site. as well as local building costs and living conditions. Skilled tradesmen will be needed for plant maintenance. AVAILABILITY OF SUITABLE LAND: The characteristics of the land at the proposed plant site should be examined carefully. but there should be an adequate pool of unskilled labors available locally. Future changes may make it desirable or necessary to expand the plant facilities. These services will normally be supplied from a central facility and includes Water. a site should be selected so that it is close to at least two major forms of transport: road. TRANSPORT: The transport of materials and products to and from plant will be an overriding consideration in site selection. starting with water for cooling. freight and transportation expenses. If practicable. and labors suitable for training to operate the plant. Skilled construction workers will usually be brought in from outside the site. since either or both may have a pronounced effect on the construction costs. Road transport is being increasingly used. LOCATION: The location of markets or intermediate distribution centers affects the cost of product distribution and time required for shipping. steam generation and as a raw material in the production of . and is suitable for local distribution from a central warehouse. The cost of the land is important. waterway or a seaport. Rail transport will be cheaper for the long-distance transport. rail. AVAILABILITY OF UTILITIES: The word “utilities” is generally used for the ancillary services needed in the operation of any production process. Local trade union customs and restrictive practices will have to be considered when assessing the availability and suitability of the labors for recruitment and training. The topography of the tract of land structure must be considered. In case of sulfuric acid plant. availability and reliability of supply.sulfur are consumed in the process which will result in the reduction of the transportation and storage charges. There is usually need for convenient rail and air transportation facilities between the plant and the main company head quarters. distance from the source of supply.
POLITICAL AND STRATEGIC CONSIDERATIONS: Capital grants. and cost for supply and purification treatment must also be considered when choosing a water supply. in boiler feed.sulfuric acid. the permissible tolerance levels for various effluents should be considered and attention should be given to potential requirements for additional waste treatment facilities. Stronger structures will be needed at locations subject to high wind loads or earthquakes. Electricity: . building codes. from which all the minerals have been removed is used where pure water is needed for the process use. local regulations on zoning. fuel and steam are required for running the various equipments like generators. The availability of such grants can be the overriding consideration in site selection. plant lightings and general use and thus be considered as one major factor is choice of plant site. motors. mineral content. Power. rivers. Extremes of low temperatures will require the provision of additional insulation and special heating for equipment and piping. seas. TAXATION AND LEGAL RESTRICTIONS: State and local tax rates on property income. In choosing a plant site. such as areas of high unemployment. If the water supply shows seasonal fluctuations. The plant therefore must be located where a dependable water supply is available namely lakes. bacteriological content. The temperature. turbines. Similarly. slit and sand content. unemployment insurance and similar items vary from one location to another. Similarly. Dematerialized water. excessive humidity and hot temperatures pose serious problems and must be considered for selecting a site for the plant. LOCAL COMMUNITY CONSIDERATIONS: The proposed plant must fit in with and be acceptable to the local community. nuisance aspects and others facilities can have a major influence on the final choice of the plant site. As all industrial processes produce waste products. ENVIRONMENTAL IMPACT AND EFFLUENT DISPOSAL: Facilities must be provided for the effective disposal of the effluent without any public nuisance. The disposal of toxic and harmful effluents will be covered by local regulations. and the appropriate authorities must be consulted during the initial site survey to determine the standards that must be met. wells. it’s desirable to construct a reservoir or to drill several standby wells. and other inducements are often given by governments to direct new investment to preferred locations. .Power and steam requirements are high in most industrial plants and fuel is ordinarily required to supply these utilities. CLIMATE: Adverse climatic conditions at site will increase costs. Natural and forced draft cooling towers are generally used to provide the cooling water required on site. Full consideration must be given to the safe location of the plant so that it does not impose a significant additional risk to the community. tax concessions. full consideration must be given to the difficulties and coat of their disposal.
limestone. & it is sub divided into pure (cotton. sugarcane etc. Sugarcane). minerals. coal.. existing everywhere like clay.e. • Localized materials i.Choice of site (slates) Three slates a) Selection of region b) Selection of community c) Selection of actual site Steps in Plant Location by Bethel Factors Affecting Plant Location Selection of region Selection of community Selection of plant site Selection of region: • Availability of raw materials: it is categorized into two: • Ubiquities i.e. water etc. . raw silk) & gross materials (iron-ore.
time required to transport finished goods. Export of Alphansos from Ratnagiri.g.P. rail. • Enables to render quick service & after-sales services. special discounts allowed are suitable to factory. • Enables to study the consumers. Market: a place where particular products are sold. prompt availability. frequency.: Textile mills in Maharashtra. Transport: getting raw materials to place of manufacture. transporting finished goods to place of consumption & carrying employees to the factory & sales representative to the consumers are functions of transport.: TAPS Uses Road. dependability. prompt availability. time required to transport finished goods.• Spriegel & Lansburgh quoted “Nearness to the source of raw materials is of special importance when the material is bulky in relation to its value & when the volume & weight are greatly reduced during its processing.” Spriegel & Lansburgh quoted “Nearness to the source of raw materials is of special importance when the material is bulky in relation to its value & when the volume & weight are greatly reduced during its processing. marble manufacturing in Jabalpur. Nearness to fuel & power: it is a decisive factor in plant location.” For e. For e. Water & Own Rail Route. shift in the market & speed are factors considered for choosing particular mode. It is necessary to ensure that the phases. road & air. voltage. Nearness to market influences: • Reduced cost of transporting finished goods & promotional expenses. fish-canning & salt pans near coast. rates.g. sandal wood products in Mysore. regularity. sugar factories in U. James Lundy quoted “ideal plant from the point of view of transportation is one which is centrally located & directly connected by water. . Cost.
SELECTION OF COMMUNITY: Labour: Kimball & Kimball wrote “ the need of adequate supply of labour is obvious.industries. but a number of consideration such as cost of living & the character of labour available as to both skill & temperament should be taken into account.” According to labour. A stable labour force. reliability of labour supply.g. reasonable wage rates.• Execute replacement orders without delay.Rural areas. “for e. . The need of management is to face less strikes or lockouts & to achieve lower labour cost per unit of production. factory may be located as follo0ws: • Semi. adequate number of employees. Supplementary & complementary factories: d.: Agro. proper attitude towards work are feature that influence supply of labour. Jones described advantages of concentration of industries: • Helps to increase the variety of materials that supplier’s offers. • Fragile nature of goods. the right type of labour.skilled/ unskilled. Constructional industries etc cannot be minimized. A cool climate develops the best of worker. as in case of quarries.urban areas. • Perishable nature of goods. • Skilled. Meteorological conditions & topography: Kimball & Kimball quite “the effect of climate upon the efficiency in the case of working force required to work outdoors.
E. Political stability: the political situation in potential locations should be considered while selecting a locality for establishing a factory. State assistance: karnataka state provides assistance like feasibility study subsidy. stamp duty exemption. Local taxes & Insurance: factories must be located in a place where taxes. • Attracts a variety of repair plants like foundries. • Division of labour is possible. problems leasing to water. insurance costs are comparatively low. investment subsidy. E. Kanjivaram. sales tax exemption to some extent. transport. mineral content of water. subsidy on electricity .: fire cracker industry. The factors in this connection are stability in its supply. Existence of banks will exert influence over location of plants. Kanpur. communication.g. working capital loan.: Singur. Water supply: water should be available in adequate quantity & proper quality. repair services. liquor industries in Gujarat.g. processing fee.• Improves the labour market for employer & employee. shops & hotels give momentum to growth of industries in such an area. E.g. concession on term loans.: Banaras. Momentum of early start: some of the facilities like banking. tool makers & machine shops. Banking & credit institutions: factory expansion needs funds to meet the requirements. • Serves to perfect the local markets. luck now. Historical factors: The existences of historical towns are responsible for location of such industries. • Helps banks to discount commercial papers readily.
tariff, technical guidance; raw materials; marketing facilities; allotment of land & sheds to entrepreneurs.
SELECTION OF EXACT PLANT SITE:
Following factors must be considered while selecting plant site: 1) Price of land 2) Type of soil 3) Waste disposal 4) Expansion potential 5) Availability of commercial services 6) Communication 7) Availability of amenities 8) Health of the locality 9) Statutory consideration 10) 11) 12) 13) 14) 15) Flood & drought conditions Right & title of the land Good scenery Attitude of local people Technology know-how Existence of religious & social institutions
After selecting the suitable site, the next step is to plant and organize the facilities and equipment to be used in the factory. A particular type of building is required to be selected and the method of arranging material, machinery & equipment has to be decided. Factory building provides the housing for men, material & machines. The arrangement of machinery & equipment inside the factory building for manufacturing process is known as factory layout or plant layout. Plant layout can be defined as “A technique of locating marines, processes & plant services which the factory in order to secure the greatest possible output of high quality at the lowest possible cost of production”.
OBJECTIVES OF A GOOD PLANT LAYOUT
A good plant layout is one which enables the right equipment coupled with right method, in right place to permit processing of a product unit in the most effective manner. According to F.G. Moore “a good layout is one which allows material rapidly and directly for processing.
The objectives of a good plant layout are:1.
Integrate the production centers: - A good layout integrates the production centers namely men, material & machines, into logical balanced & effective production units. a) It permits the arrangement of equipment to provide greater utilization b) It minimizes the production delays & reduces congestion by allowing smooth & Continuous flow of raw material & work in process. c) Increases output by shortening the manufacturing cost
Reduces material handling: - equipments are so arranged as to minimize material handling & transportation
Effective utilization of space: - utilizes space both vertical & horizontal in the best possible manner Works convenience & job satisfaction: - provides pleasant, clear & noise free government for workers. Temperature, ventilation, light, humidity & dirt are well controlled. Safety is taken as important factor to be provided. Flexibility: - good layout provides flexibility for possible changes in the plant’s production programme (both in design & required output). Removal of bottlenecks: - good layout provides for smooth flow of operation, flow of materials & eliminates bottlenecks through balancing of plant capacities. Quick disposal of work: - provides for quick disposal of work & maximum works of time in production. Avoids industrial accidents- provides adequate space for movement of raw material etc and therefore reduces the chances of industrial accidents. Maintains decency & orderliness in the plant area.
Principles of plant layout
Overall integration: - a goods layout should ensure integration of men, material, machinery & supporting activities in the best possible way Maximum movement: - The number of movements of men & material should be least Smooth & continuous flow: - it should be ensured. Bottlenecks, backtracking & congestion points should be removed Utilisation of cube space: - Space is at a premium & its best use should be made. In addition to the floor, ceiling should also be used for storing things. Satisfaction & safety: - layout should ensure safety, good ventilation, freedom from dust, noise, fumes etc. it improves the morale of workers. Flexibility: - it means that layout should be adopted & re-arranged at least cost for other possible usage & causes least inconvenience.
7.g. Management policy Plant layout job affected by management’s policy on (i) (ii) (iii) (iv) 2. 1. accessibility & the size of the store & also identifies the space & location of temporary storage for work in process. Factors affecting plant layout 1. The layout determines the arrangement of facilities & sources in the plant. Helps in production. 5. 6. It specifies the location. renting. planning & control system e.g. Good plant layout improves the quality of supervision 8. Helps effective utilization of machines. It ensures the flow of materials & personnel in the plant & therefore is concerned with time effort & cost spent on transportation. It outlines the relationship between production centers & service department. 3. Improves the quality of output 9. 4. It determines the type of handling system & their cost of installation. 2.IMPORTANCE OF PLANT LAYOUT A good plant layout may not be a guarantee to success but a bad plant layout is sure to destroy the performance of organisation. (i) Size & nations of product Plants for expansion Amount of inventory in stock Synthetic/ analytical . Manufacturing process Layout will on the type of manufacturing process e. machine loading etc. Supervisors’ span of control may be effectively increased.
fork buck etc. 5. 9. 6. Layout would also expend on the floor area available. Type of Layout would be in a simple strayed building than in mulch strayed building. Arrangement of material havening equipment. Volume of production Plant layout & material handling equipment would be different in large scale organization than in a small scale manufacturing modesty. One head price mat is asked in case of shorter of stoic. Plant layout and material havening equipment/ services are closely related it is necessary to provide attuned such as hand buck.(ii) Government 3. (ii) 4. nature of product Nature of product affords the layout in many ways e. Availability of total floor area.g. (i) Small & night products can be moved easily to the machines where for heavy & bulky products may have to be moved. Similarly noisy and vibrating man hives would repines a special core in the plant layout. 7. Type of equipment in use Use of single purpose and malts purpose machines would substantially affect the plant layout. Service facilities . 8. One or a few standardized product can biller is produced through product layout in large numbers while prows layout may be belier for producing a large Variety of non-standardized products.
.Layout must take core of service facilities like canter. Possibly of futures expansion Adequate thought must be given to layout to take care of possible expansion of fatuities in the near future. drinking wafer. lockers. wash rooms etc. 10. just aid .
. In Drill section Stock room other words. Process Layout (Functional Layout) This is also known as functional layout. This type of layout is generally employed for plants/ industry engaged in job order production and non repetitive kind of manufacturing activities. all machines will be at one place. all milling machines at another & so on the machines as to be arranged according to their functions.Types of plant layout A. 1 Store room 2 Inspection Deficient 3 Producing Section 4 Milling Section Advantages (i) Wide flexibility exists as regards allotment of work to equipments & workers. It is characterized by 5 6 keeping similar Lathe Shaper section section machines or similar operations at one 7 8 location (place).
(iii)Comparatively (iv) Better product quality because the supervisors & workers aliens to one type of machines & this become specialists. Automatic material handling is more efficient. Work in progress inventory is large. less number of machines are required and this lesser capital investment. Disadvantages 1. 2. This type of layout is preferred for continuous production. 4.g. 3. Process layout needs more spaces. Completion of same product takes more time. More material in process remaining in queue for further operations. D E F x Store room (rent materi al) G Y A B H I V L K J M N O P STOCK ROOM . B. Material handing is more & more associated costs. 6. 5. Production control becomes difficult. (v) Variety (vi) Workers don’t get affected by the works done by others.(ii) Better utilization of available equipments. It implies that version operations on a product are performed in a sequence and the machines are placed along the product flow lines e.makes work more interesting. Product layout This is also known on line (type) layout. of jobs coming . 7. machines are arranged in the sequence in which a given product will be operated upon.
2. . Disadvantages 1. Product completion takes lesser line. 5. It one inspector looks after the inspection of too many machines. After the total assembly gets worked on machines M. Combination Layout These days pure product or process layout are rare. 4. One shut down in the machine may totally interrupt the line. 3. Better coordination & simple PPC. Less flexible because it is product specific.Z Raw material from the store is fed to three lines X. Therefore. it (inspection) may be slow. 5. 3. to goes to the stock room. Advantages 1. 2. 6. It may be difficult to increase production beyond the capacity of the line. O & P. E. Y & Z material in X line gets processed on machines D. Role of output depends upon the slowest machine. Less in-process inventing. It may lead to idle time of other machines. Products of X & Y lines are assembled at W and get processed on machines H & I still another part comes from Z line and assembles with the main product at V. (The inspection phase has not been shown in the layout). A combination of the two combines the advantages of both types of layouts. Less space requirements for the same volume of production. 4. Material handling is easy and saves on line and cost. some study by machines of each type may be required. Smooth & coordination work flow. F & G and meets material of Y line after it has been processed on the main assembly line machines A B. N. C.
a fixed position layout is resolved to. High cost of equipment landline. b) Arrangement of productive facilities within this experiment.g. D. Low utilization of labour & equipment. 2. 2. Advantages 1. Starting a new plant. 3. Disadvantages 1. Least movement of materials. Different types of products (projects) can be undertaken with the same layout. material & equipment move to the product site.For example. Here the product remains stationery and men. Fixed Position Layout When the product being manufactured in too big e. When starting a new plant of is mercenary to determine a) Management of production & service repatriates & their proximity of each other in the plant. OR Main Product by Process Layout & by product by line. Changes in the product design Changes in the product design may entail a change in the séance of operators or a new set of operations to mat these change the layout may have to be changed . Affords maximum flexibility for incorporating all sorts of cheques. Ship. production steps may be Process layout & assembly by line. 2. aircraft or big Pressure Vessel. Problems of layout Problems of layout may arise in any one of the following 1.
Changes in volume of production May require either modification or introduction of an of an entirely new layout 5. layout may have to be changed & may necessitate i) Rearrange or redesign material handling equipment Provide sufficient space for movement of men/material Provide easy accessibility for maintenance & repaints Provision for safeties devices Separating & guarding hazardous seditions. 4.if they occur. Poor working conditions If working is not happy with working condition viz.3. Necessity of introducing a new product (diversification ) A new product introducing of an additional item to balance production live. layout may be changed 6. poor high.May also require a change in the layout. poor ventilation nose etc. Change in location of the industry . Frequent accidents:. ii) iii) iv) v) 7.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.