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Department Of Finance Jagannath University, Dhaka.
Md. Mazharul Islam (Jony) ID no:091541, 3rd Batch. Department of Finance. Jagannath University. Email:firstname.lastname@example.org Mobile: 01198150195
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About the Author Md. Mazharul Islam Jony, studying BBA, major in Finance at Jagannath University, Dhaka. He is completed his HSC from Cantonment College, Jessore and SSC from Chowgacha Shahadat Pilot High School, Chowgacha, Jessore with the highest performance result in 2006 and 2008 consecutively. His favorite hobby is to search new teaching technique and learning method.
Md. Mazharul Islam (Jony) ID no:091541, 3rd Batch. Department of Finance. Jagannath University. Email:email@example.com Mobile: 01198150195
Principles of Management
Name of chapters included in this book
Serial number 1 2 3 4 5 6 7 8
Name of the chapter Management: An overview Evaluation of Management Thought Fundamentals of Planning Fundamentals of Organizing Human Resource Management and Staffing Motivating Employees for Job Performance Leadership The Control Function
Page no. 1-8 9-16 17-20 21-24 25-27 28-32 33-35 36-37
Department of Finance
Management: An Overview
In this chapter we will discuss: Definitions of Management The Role of Management Functions of Managers Levels of Management
Management Skills and Organizational Hierarchy Approaches to Management
One of the most important activities in business is the management of the 4M‟s – men, machines, material and money. The term „management‟ can be interpreted differently in different contexts. Hence, it is difficult to define. In one context, it may comprise the activities of executives and administrative personnel in an organization, while in another, it may refer to a system of getting things done. In a broad perspective, management can be considered as the proper utilization of people and other resources in an organization to accomplish desired objectives. With increasing global competition, changes in the world of technology, changing business practices and increasing social responsibility of organizations, the role of managers has become all the more significant. In this chapter, we will first examine the definitions of management given by some eminent management thinkers to understand the essence of management. Secondly, we will discuss the five basic functions of management i.e., planning, organizing, staffing, leading and controlling. The chapter also focuses on the managerial skills required at various levels of the organizational hierarchy and briefly explains the various approaches to management.
DEFINITIONS OF MANAGEMENT
The term „management‟ can be interpreted in a variety of ways. To gain a better insight into the nature of management, let us look at some of the definitions of management: Harold Koontz and Heinz Weihrich define management as “the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.” Louis E. Boone and David L. Kurtz define management as “the use of people and other resources to accomplish objectives.” Dalton E. McFarland defines management as “a process, by which managers create, direct, maintain, and operate purposive organizations through systematic, coordinated, cooperative human effort.” Mary Parker Follet termed management as “the act of getting things done through people.” Definitions by Follet and Louis E. Boone and Kurtz call attention to the fact that managers achieve organizational goals by getting others to do the necessary tasks. The other two definitions suggest that management is much more than “just getting the work done” and (as shown in Figure 1.1) suggest the following aspects of management:
1. Managers carry out the functions of planning, organizing, staffing, leading and controlling: Henry Fayol was the first management thinker to outline the five basic functions carried out by managers. Every manager performs these basic functions. These functions are discussed in detail in the later part of this chapter. 2. Management is essential to any kind of organization: Wherever there are groups of people working together to achieve some common objectives, it becomes essential to guide, organize and control them. The term „management‟ applies to any organization irrespective of the size or nature of operations. The prime concern of a CEO of a multinational company, the General Manager of a hotel, the first-level supervisor, the manager of a cricket team and the student president in a college is to manage their people and resources effectively.
Department of Finance
Md. Mazharul Islam Jony
human. 5. 4. but maintaining the same level of outputs. The aim of all managers is to improve productivity. while effectiveness means “doing the right things. In the words of Peter Drucker. However. efficiency and effectiveness: Productivity is defined as “the output-input ratio within a time period with due consideration for quality.1: Key Aspects of the Management Process 3.” It can be expressed as: Productivity = Outputs / Inputs (within a time period. The goal of all managers is to generate surplus: The aim of all business managers is to create a surplus. Department of Finance Jagannath University Md. Drucker states that effectiveness is the foundation of success whereas efficiency is a minimum condition for survival after success has been achieved. By reducing inputs. Even in non-profit organizations. Mazharul Islam Jony 2|Page . Productivity can be improved by ensuring efficiency and effectiveness in the operations of the firm. Effectiveness refers to achievement of stated organizational objectives while efficiency denotes the judicious use of resources to achieve organizational objectives. In order to perform their duties satisfactorily. making the ratio more favorable. “Management – Tasks. Management is essential at all hierarchical levels: Management is necessary at all levels. the type of skills and the degree to which various skills are required at different levels of the hierarchy may vary. Responsibilities. By increasing outputs and reducing inputs. the aim of managers is to accomplish their goals with the minimum amount of resources or to make as much surplus as possible with available resources. thereby. quality considered) Productivity can be improved in the following ways: By producing more output with the same inputs.” In his book. Practices”.Figure 1. efficiency means “doing things right”. managers need technical. the manager has to create an environment which encourages people to accomplish as much as possible with the least amount of resources and personal dissatisfaction. conceptual and design skills. To accomplish this objective.
they have been used as the basic framework for this book. budgeting. resolve conflicts among subordinates. memos Initiate improvement projects. meetings Seek and receive information. these ten roles were grouped into three categories – interpersonal roles. counseling. Mazharul Islam Jony 3|Page . use mail. make phone calls Transmit information to outsiders through speeches. Direct and motivate subordinates. purchases. They have been briefly explained in the next section of the chapter. unpatterned activities of short duration. training. a manager performs the role of a spokesperson when he or she represents the organization in public. phone calls. And finally. As shown in Table 1. Maintain information links both inside and outside organization. in the late 1960s. scheduling. organizing. As a disseminator. scan periodicals and reports. a manager is required to interact with people both within and outside the organization. and communicating with subordinates. maintain personal contacts Forward information to other organization members. disseminator and spokesperson. leading and controlling. In the liaison role. a manager performs all the ceremonial or symbolic duties. budgets. setting priorities Represent department during negotiation of union contracts.1: Mintzberg's 10 Managerial Roles INTERPERSONAL Figurehead Leader Liaison INFORMATIONAL Monitor Disseminator Spokesperson DECISIONAL Entrepreneur Performs ceremonial and symbolic duties such as greeting visitors. Using a method called structured observation. The three interpersonal roles of a manager are figurehead. leader and liaison. In the role of a recipient. send memos and reports. In the leadership role. signing legal documents. reports. adapt to environmental crises Decide who gets resources. Since these functions are very essential for effective management. In order to understand the role of management. opportunities and problems that the organization may face. informational roles and decisional roles. Table 1.THE ROLE OF MANAGEMENT As mentioned earlier. He did a careful study of five chief executives at work and found that they were involved in a number of varied. a manager receives information pertaining to changes. the need to perform interpersonal roles. it would be the duty of a college dean to award diplomas at the convocation ceremony. sales. Henry Mintzberg devised a new approach – the managerial roles approach – by observing what managers actually do. both within and outside the organization and hence. represent departmental interests Disturbance Handler Resource Allocator Negotiator Department of Finance Jagannath University Md. In his role as a figurehead. identify new ideas. Example. delegate idea responsibility to others Take corrective action during disputes or crises. A manager acts as a channel of information within the organization. A manager is required to interact with many people. managers perform five functions – planning. Mintzberg isolated ten roles which he believed were common to all managers. a manager is required to motivate the employees to perform at their best to achieve the company‟s objectives. staffing. The three informational roles of a manager are that of a recipient. a manager provides information to subordinates that would influence their performance at work.1.
Leading involves (1) communicating with others. (3) how jobs can be grouped into various units. Mazharul Islam Jony 4|Page . Organizing Organizing is the process of assigning tasks and allocating resources to individuals to enable them to accomplish organizational goals. Figure 1. the pitfalls associated with a poor plan can be eliminated by excellent organization. if any. promotion and career planning. staffing is better known as “human resource management” and involves manning or filling the various positions in the organizational hierarchy. and (3) developing remedial measures to correct deviations. Organizing is a continuous process of determining (1) which tasks are to be performed. If plans are not organized properly even the best of plans can fail. This function also deals with compensation. training and placing them in the organization come under the purview of staffing. The basic control process involves (1) comparing performance with standards. (2) how tasks can best be combined into specific jobs. At the same time.” It is the management function that involves influencing and inspiring team members to perform well and accomplish corporate objectives. leading and controlling. (2) determining where negative deviations occur.2: Management Functions Planning Planning can be defined as the process. The organizational structure of a firm is a key element in determining its success or failure. In simple words. performance appraisal. staffing. Department of Finance Jagannath University Md. Activities like determining manpower requirements.2 depicts the management process and shows the various functions that managers are involved in. organizing. Figure 1.FUNCTIONS OF MANAGERS The functions of a manager provide a useful framework for organizing management knowledge under the various heads of planning. and (4) the authority and reporting relationships within the corporate hierarchy. recruiting and selecting candidates. managers need to determine the future trends in business and incorporate change and innovation into the organization from time to time. and directing people towards the achievement of organizational goals. It is evident from the figure that managers are involved in more than one activity at the same time. and (3) motivating people to put forth the effort required to achieve organizational goals. There are various types of plans and they may range from planning to define the overall purposes and objectives of an organization to planning for a specific action. Planning helps a firm decide its future course of action. Managerial functions are effective tools for managers to achieve the organization‟s planned objectives. it is the act of making things happen through others. Controlling can be defined as the continuous measurement and analysis of actual operations against the established industry standards developed during the planning process and corrections of deviations. by which. (2) leadership styles and approaches. Staffing Today. motivating. managers decide the mission and objectives of the firm and take necessary steps to achieve the desired objectives. Controlling The final step in the management process is to monitor the progress of an organization towards its goals. On the other hand. They include the general administrative duties that need to be carried out in virtually all organizations. Leading Leading is defined as “the management function of influencing. assessing the number of people presently available in the organization.
depending upon the size. The various activities performed at each of these levels of management are illustrated in Table 1.2. and (3) supervisory or first-level management. as the size of an organization increases. Mazharul Islam Jony 5|Page . fewer in the middle. Many describe this kind of an organizational structure as a pyramid. technology.4: Managerial Levels and Areas Department of Finance Jagannath University Md.3: Levels of Management Figure 1. and very few at the top. the owner is the only member of the management team. It is a normal practice to categorize management into three basic levels: (1) top-level management. culture. Figure 1. But. as the managerial positions gradually decline as one progresses towards the higher levels of management (see Figure 1.4). etc. The number of managerial positions at each level varies from organization to organization. (2) middle-level management. The duties and responsibilities at these three levels of management vary from organization to organization. a more sophisticated organizational structure is required. prevailing in the organization. Figure 1.LEVELS OF MANAGEMENT In many small business enterprises. In most of the organizations.3 illustrates the levels of management. there are more positions at the first-level.
computer specialists. a study has suggested that companies having an outsider as a board chairperson perform better. First-level managers spend much of their time in training subordinates and clarifying doubts in work-related problems. In a manufacturing plant. Kalz identified three kinds of skills for administrators. Members of the board are selected by shareholders. boards with more outsiders operate more independently and are more proactive. In recent times. Due to the advent of information technology. Technical skills are essential for first-level managers. In order to do so. Technical Skills Technical skills refer to the ability of a person to carry out a specific activity. elected or designated by the organization‟s governing body. human and conceptual skills. “Senior Vice President” and “Executive Director. “department head” and “divisional head. These managers are responsible for implementing the plans and strategies developed by top management for the accomplishment of organizational goals. Mazharul Islam Jony 6|Page . They are responsible for output variables like number of units produced. Though it is a usual practice to elect the CEO as the chairperson of the board. labor costs. For example. These are technical. During the early 1970s. and in a large office – the clerical supervisor. and they include job classifications such as the “Chief Executive Officer” (CEO). and quality control. online technical assistance has become available to first. when needed.” But. They are few in number. They are usually called supervisors. They are directly responsible for the performance of managers at lower levels.” The number of middle-level managers in complex organizations is far higher than other managers. Engineers. one needs to have knowledge of methods. “Vice President”. processes and procedures. the first-level manager may be called a foreman.” Top-level managers are responsible for taking major decisions for the organization as a whole. accountants and employees in manufacturing departments all have the necessary technical skills for their specialized fields. “chief”. on the other hand. as he/she helps the board to monitor the performance of the top management objectively. “President”. and the growing use of computers to track many activities formerly monitored by first-level managers. They work to some extent with the middle-level managers in implementing the plans. inventory levels. they essentially act as “rubber stamps. they often confront conflicting demands. Since firstlevel managers act as a link between the management and the rest of the workforce. Thus. A fourth skill – the ability to design solutions – was later added to the above mentioned skills. in a research department – the technical supervisor. managers need certain skills to perform the functions associated with their jobs.Top-Level Managers Top-level managers are usually appointed. They may be addressed by different names. This has resulted in making middle-level managers redundant and has thus reduced the number of middle-level managers in many organizations First-Level Managers First-level managers are directly responsible for the performance of employees involved in operations. they play a vital role in the success of the organization. the number of board members vary from 15 to 25. In many organizations. Hence. Depending on the size of the company. “director”. the power of these managers has gradually decreased because of union influence. middle-level managers serve as a source of innovation and creativity.level managers. Middle-Level Managers Middle-level managers deal with the actual operation of various departments in an organization. First-level managers implement the operational plans developed by middle managers and take corrective actions. Department of Finance Jagannath University Md. They look to the top management for direction and guidance and are answerable to them. Their typical titles include “manager”. the increasing educational level of workers. When a board comprises a majority of individuals who have close ties with the management. and their supervisors must be able to teach them how to perform the tasks assigned to them using these tools. Robert K. top-level managers report to the Board of Directors. employees at the operational level work with tools. The top-level managers are responsible for the overall activities of the business and are accountable for its impact on the society at large. MANAGEMENT SKILLS AND ORGANIZATIONAL HIERARCHY A manager‟s job is varied and complex. In public limited companies. and maintaining overall control over organizational performance.
Mazharul Islam Jony 7|Page . It stresses on the behavior of people in groups.6. and communicate with people to accomplish certain objectives. The cooperative social systems approach: It advocates a system of cooperation using both interpersonal and group behavioral aspects. wherein organizations have either succeeded or failed by following this approach. We can briefly summarize them as follows: Figure 1. Top managers should not only recognize a problem but also suggest ways to overcome them. The empirical or case approach: In this approach. Managers at upper organizational levels should be able to design a rational and feasible solution to the problem by considering the various internal and external factors. motivate. customers and the general public.” to understand how the various parts of the organization relate to one another and associate the organization with the external environment. peers and people outside the work unit such as suppliers. Conceptual Skills Conceptual skills refer to the ability of a person to think and conceptualize abstract situations. Human skills are of paramount importance in the creation of an environment. in which people feel comfortable and are free to voice their opinions.Human Skills Human skills or interpersonal skills refer to the ability of a person to work well with other people in a group. 3. The interpersonal behavior approach: This approach is based on individual psychology and focuses on interpersonal relationships. they become mere “problem watchers. The relative significance of these skills varies at different levels in the organizational hierarchy as shown in Figure 1. 2. 4. Design Skills Design skills refer to the ability of a person to find solutions to problems in ways that would benefit the organization.6: Relative Need for the Main Categories of Skills APPROACHES TO MANAGEMENT 1. one tries to understand management principles with the help of cases. It is the ability to lead. The group behavior approach: This approach is based on sociology and social psychology. It is the ability to understand and coordinate the full range of corporate objectives and activities. These skills are most important at the top management level. These skills are important for all levels in the organization. These skills aid employees during interaction with their supervisors. as top-level managers have the greatest need to see the “big picture. Department of Finance Jagannath University Md. It also identifies the situations.” and will prove ineffective. If they only see the problem.
3rd Batch. 12. 8. The decision theory approach: The focus in this approach is on the decision-making process and people involved in it. The operational approach: This approach attempts to develop the science and theory of management by drawing upon concepts. techniques and knowledge from other fields and managerial approaches. structure. staff. 7. Different circumstances may necessitate the use of different methods. The study identified ten managerial roles. etc. Mazharul Islam Jony 8|Page . The systems approach: It considers organizations to be open systems as they interact with the external environment. It recognizes the importance of the inter-relationship between planning. 9. which can be expressed in terms of mathematical symbols and relationships. informational and decisional roles. This approach focuses on areas involving close relationships between technical systems and the people involved such as production. Mazharul Islam (Jony) ID no:091541. The sociotechnical systems approach: It realizes the impact of technical systems on personal attitudes and group behavior. principles.com Mobile: 01198150195 Department of Finance Jagannath University Md. The managerial roles approach: This approach had been developed by studying the work methods of five chief executives. systems.5. 11. Prepared By Md. which were grouped into three catsegories – interpersonal. Jagannath University. shared values and skills. Department of Finance. 10. 6. the main assumption is that there is no hard and fast rule for all situations. Managerial practice depends upon circumstances. office operations. Email:jony007ex@gmail. The McKinsey‟s 7-S framework: The seven S‟s used in this approach are strategy. style. organizing and controlling. The mathematical or “management science” approach: This approach treats management as a logical process. The contingency or situational approach: In this approach.
We then focus on four well-established schools of management thought (see Table 2. (iii) the quantitative approach and (iv) the modern approaches to management. Table 2.Evolution of Management Thought Classical Approach Behavioral Approach Quantitative Approach Modern Approaches to Management INTRODUCTION According to one school of thought. In this chapter. Hence. Mazharul Islam Jony 9|Page . Frank and Lillian Gilbreth and Henry Gantt Max Weber Henri Fayol Mary Parker Follet Elton Mayo Abraham Maslow Douglas McGregor Chris Argyris William Ouchi Scientific management Bureaucratic management Administrative management Behavioral approach Group influences Hawthorne studies Maslow‟s needs theory Theory X and Theory Y Model I versus Model II values Quantitative approach Management science Operations management Management information system Modern approaches The Systems Theory Contingency Theory Emerging pproaches: Theory Z and Quality management Department of Finance Jagannath University Md. both theory and history are indispensable tools for managing contemporary organizations. Finally. contemporary management thought has its foundations in the history of management and the many significant contributions of theorists and practitioners. Taylor. Some are also of the opinion that management theory is too abstract to be of any practical use.1): (i) the classical approach. an awareness and understanding of important historical developments and theories propounded by early thinkers is important for today‟s managers. Like most modern disciplines.1: Major Classification of Management Approaches and their Contributors Major Classification Approaches Classical approach of Management Major Contributors Frederick W. (ii) the behavioral approach. history has no relevance to the problems faced by managers today. A theory is a conceptual framework for organizing knowledge that provides a blueprint for various courses of action. we first take a look at the early approaches to management. However. some emerging approaches in management thought are discussed.
The major contributors to the three schools of management thought – scientific management. At Midvale. workers indulge in soldiering for three main reasons: 1. Henry Fayol and Max Weber respectively. by facts or truths gained through systematic observation. wrote The Principles of Scientific Management in 1911. Scientifically select employees and then train them to do the job as described in Step 1. administrative theory and bureaucratic management. Faulty wage systems employed by the organization encouraged them to work at a slow pace. Mazharul Islam Jony 10 | P a g e . other workers would lose their jobs. Table 2. Establishing harmonious relations between management and workers so that the job is desired way.4: Four Steps in Scientific Management Step Step 1 Step 2 Step 3 Step 4 Description Develop a science for each element of the job to replace old rule of thumb methods. Frederick Winslow Taylor Frederick Winslow Taylor took up Henry Towne‟s challenge to develop principles of scientific management. Classical theorists formulated principles for setting up and managing organizations. Some of the earliest advocates of scientific management were Frederick W. iii. and Henry Gantt (1861-1919). Taylor. administrative theory and bureaucratic management – are Frederick W. Taylor first began to experiment with new managerial concepts in 1878 while employed at the Midvale Steel Co. In the early 19 th century. considered “father of scientific management”. Lillian Gilbreth (1878-1972). Scientific Management Scientific management became increasingly popular in the early 1900s. Outdated methods of working handed down from generation to generation led to a great deal of wasted efforts.CLASSICAL APPROACH Classical management thought can be divided into three separate schools: scientific management. These views are labeled “classical” because they form the foundation for the field of management thought. Taylor. Frank Gilbreth (1868-1924). Supervise employees to make sure they follow the prescribed methods for performing their jobs. his rise from laborer to chief engineer within 6 years gave him the opportunity to tackle a grave issue faced by the organization – the soldiering problem. In essence. experiment. 2. Taylor (1856-1915). ii. An engineer and inventor. According to Taylor. scientific management as propounded by Taylor emphasizes: i. or reasoning. scientific management was defined as “that kind of management which conducts a business or affairs by standards established. Training and preparing workers to perform that particular job.” In other words. Workers feared that if they increased their productivity. it is a classical management approach that emphasizes the scientific study of work methods to improve the efficiency of the workers. 3. Continue to plan the work but use workers to actually get the work done. Need for developing a scientific way of performing each job. performed in the Department of Finance Jagannath University Md. „Soldiering‟ refers to the practice of employees deliberately working at a pace slower than their capabilities.
Mazharul Islam Jony 11 | P a g e . Frank Gilbreth (1868-1924) is considered the “father of motion study.Frank and Lillian Gilbreth After Taylor. Figure 2. Frank and Lillian Gilbreth made numerous contributions to the concept of scientific management. She had great interest in the human implications of scientific management and focused her attention on designing methods for improving the efficiency of workers. The Gilbreths devised a classification scheme to label seventeen basic hand motions – such as “search. he was able to reduce the motions involved in bricklaying from 18 ½ to 4. A motion picture camera and a clock marked off in hundredths of seconds was used to study motions made by workers as they performed their tasks. She continued her innovative work even after Frank‟s death in 1924. He is best known for his experiments in reducing the number of motions in bricklaying. Frank Gilbreth also developed the micromotion study. allowed them to analyze the exact elements of a worker‟s hand movements.” Lillian Gilbreth (1878-1972) was associated with the research pertaining to motion studies. In recognition of her contributions to scientific management. Frank and Lillian Gilbreth were mainly involved in exploring new ways for eliminating unnecessary motions and reducing work fatigue.” “select. Motion study involves finding out the best sequence and minimum number of motions needed to complete a task.1 Gantt scheduling chart Department of Finance Jagannath University Md. she received twenty-two honorary degrees. which they called therbligs (Gilbreth spelled backward with the„t‟ and „h‟ transposed).” and “hold” – which they used to study tasks in a number of industries. workers increased the number of bricks laid per day from 1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves. Lillian was the first woman to gain eminence as a major contributor to the development of management as a science. By carefully analyzing the bricklayer‟s job.” “position. Lillian‟s doctoral thesis (published in the early 1900s as The Psychology of Management) was one of the earliest works which applied the findings of psychology to the management of organizations. Using his approach. These 17 motions. and became a professor of management at Purdue University.
work scheduled and work completed are shown. 3rd Batch. Jagannath University.” Fayol was unknown to American managers and scholars until his most important work. General and Industrial Management.Henry Laurence Gantt Henry L. If all the workers under a foreman reached the daily standard. he received a bonus. time. which were based on the “rational worker” model. Many of the managerial concepts that we take for granted today were first articulated by Fayol. a prominent European management theorist. who would be paid a bonus for every worker who reached the daily standard. Gantt later became an independent consultant and made several contributions to the field of management. Along the horizontal axis of the chart. Email:jony007ex@gmail. The Gantt chart was the first simple visual device to maintain production control.1) is still used today by many organizations. Mazharul Islam Jony 12 | P a g e . In spite of the numerous contributions it made. The Gantt Chart (see Figure 2. The chart indicates the progress of production in terms of time rather than quantity. French industrialist Henri Fayol (1841-1925). He is probably best remembered for his work on the task-and-bonus system and the Gantt chart. Administrative Theory While the proponents of scientific management developed principles that could help workers perform their tasks more efficiently. They are: The principles of scientific management revolve round problems at the operational level and do not focus on the management of an organization from a manager‟s point of view. there are a few limitations of scientific management. The most prominent of the administrative theorists was Henri Fayol. satisfactory results were inevitable. another classical theory – the administrative management theory – focused on principles that could be used by managers to coordinate the internal activities of organizations. he would receive an extra bonus. These principles focus on the solutions of problems from an engineering point of view. Gantt (1861-1919) was a close associate of Taylor at Midvale and Bethlehem Steel. Gantt‟s charting procedures were precursors of today‟s program evaluation and review techniques. Gantt felt that this system would motivate foremen to train workers to perform their tasks efficiently. in less than the standard time. Limitations of scientific management Scientific management has provided many valuable insights in the development of management thought. Mazharul Islam (Jony) ID no:091541.e. if the worker completed the work fast.com Mobile: 01198150195 Department of Finance Jagannath University Md. Scientific management theorists also ignored the human desire for job satisfaction. The Gantt chart in Figure 2. i.2) Prepared By Md. developed a general theory of management.1 compares a firm‟s scheduled output and expected completion dates to what was actually produced during the year. Since workers are more likely to go on strike over factors like working conditions and job content (the job itself) rather than salary. He also introduced an incentive plan for foremen. the business operations of an organization could be divided into six activities (see Figure 2. was translated into English in 1949. became increasingly ineffective. Fayol believed that “with scientific forecasting and proper methods of management. It is a simple chart that compares actual and planned performances. Taylor and his followers overlooked the social needs of workers and overemphasized their economic and physical needs. According to Fayol. Under Gantt‟s incentive plan. The vertical axis identifies the individuals and machines assigned to these work schedules. The proponents of scientific management were of the opinion that people were “rational” and were motivated primarily by the desire for material gain. Department of Finance. principles of scientific management.
Department of Finance Jagannath University Md. The concept of division of work can be applied to both managerial and technical functions. Scalar chain: This refers to the chain of authority that extends from the top to the bottom of an organization. Authority and responsibility go hand-inhand. Authority and responsibility: Authority is defined as “the right to give orders and the power to exact obedience. adherence to rules. 11. Formal authority is derived from one‟s official position and personal authority is derived from factors like intelligence and experience. productivity of employees and the ability of the firm to pay. an organization should adopt a centralized or decentralized approach to make optimum use of its personnel. A manager should treat all employees in the same manner without prejudice. Initiative: Employees should be encouraged to give suggestions and develop new and better work practices. Discipline: Discipline is vital for running an organization smoothly. Division of work: Work specialization results in improving efficiency of operations. Equity: All employees should be treated fairly. social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization). 7.” Authority can be formal or personal. When a manager exercises authority. It involves obedience to authority. 12. Material order indicates that everything is kept in the right place to facilitate the smooth coordination of work activities. respect for superiors and dedication to one‟s job. 14.Figure 2. 2. 13. Subordination of the individual interest to the general interest: Individual interests should not take precedence over the goals of the organization. Unity of direction: Activities should be organized in such a way that they all come under one plan and are supervised by only one person. 3. 8. Mazharul Islam Jony 13 | P a g e .” Management must inculcate a team spirit in its employees.2: Business Operations of an Organization Fayol outlined fourteen principles of management: 1. 6. Similarly. 4. Order: This refers to both material and social order in organizations. Espirit de corps: This means “a sense of union. he should be held responsible for getting the work done in the desired manner. Remuneration: The compensation paid to employees should be fair and based on factors like business conditions. 5. 9. 10. Stability of tenure of personnel: A high labor turnover should be prevented and managers should motivate their employees to do a better job. Centralization: Depending on the situation. cost of living. Unity of command: Each employee should receive orders or instructions from one superior only. The scalar chain defines the communication path in an organization.
The study was started in 1924 by Western Electric‟s industrial engineers to examine the impact of illumination levels on worker productivity. Managers make rational decisions and judgments based purely on facts. The Human Relations approach made a significant contribution at a time when it was generally being assumed that workers have to be coerced to work. The positive motivation aspect has been generalized by the Human Relations theorists. The term “bureaucracy” (derived from the German buro. this approach has very little to say about positive motivation. T. people would perform effectively. less perfect organizations. and impersonal organization. and recognized the significance of behavioral processes in the workplace.Bureaucratic Management Bureaucratic management. He observed that nepotism (hiring of relatives regardless of their competence) was prevalent in most organizations. This theory is against the view that people respond automatically to monetary stimulus. Subordinates do not take any decision on their own and always look up to their superiors for approval of their ideas and opinions.5. The activities of employees at each level are monitored by employees at higher levels. The National Research Council sponsored this research in cooperation with the Western Electric Company.6 gives an overview of the key contributions to management theory by the behavioral management school of thought. The behavioral approach to management emphasized individual attitudes and behaviors and group processes. Jobs are divided into tasks and subtasks. Human relations theory was one of the greatest advances in management. Weber (1864-1920). The characteristics of Weber‟s ideal bureaucratic structure are outlined in Table 2.” led the team which conducted a study at Western Electric‟s Hawthorne Plant between 1927 and 1933 to evaluate the attitudes and psychological reactions of workers in on-thejob situations. it is a formal organization structure with a set of rules and regulations. Eventually the study was extended through the early 1930s. The limitations of the Human Relations theory are: The Human Relations theorists are of the opinion that by removing fear.” In other words. enthusiasm. the behavioral theorists viewed it from the individual‟s point of view. one of the schools of classical management. Exhibit 2. was one of the major contributors to this school of thought. Elton Mayo: Focusing on Human Relations Elton Mayo (1880-1949). According to Weber. formalized. The rules and regulations that are to be followed by employees are well defined to instill discipline in them and to ensure that they work in a co-coordinated manner to achieve the goals of the organization. Department of Finance Jagannath University Md. Whitehead and William Dickson. The researchers and scholars associated with the Hawthorne experiments were Elton Mayo. a contemporary of Fayol. hatred and passion so as to remain unattached and unbiased towards their subordinates.5: Major Characteristics of Weber’s Ideal Bureaucracy Characteristic Work specialization division of labor and Description The duties and responsibilities of all the employees are clearly defined. it did not succeed in establishing new concepts. Mazharul Islam Jony 14 | P a g e .N. meaning office) referred to organizations that operated on a rational basis. Abstract rules and regulations Impersonality of managers Hierarchy structure of organization BEHAVIORAL APPROACH The behavioral school of management emphasized what the classical theorists ignored – the human element.3 Limitations of Human Relations Approach Human relations theory recognizes the significance of human resources. While classical theorists viewed the organization from a production point of view. Weber felt that nepotism was grossly unjust and hindered the progress of individuals. He therefore identified the characteristics of an ideal bureaucracy to show how large organizations should be run. Table 2. Fritz Roethlisberger. This view attacked the assumption that workers can be motivated to work only through fear. yet. They try to be immune to feelings like affection. Yet. Table 2. These characteristics would exist to a greater degree in “ideal” organizations and to a lesser degree in other. Each employee is given a particular task to perform repeatedly so that he acquires expertise in that task. “a bureaucracy is a highly structured. the “Father of the Human Relations Approach. This theory believes that each individual is unique and the attitude and behavior of an employee determines the way he or she works. emphasizes the need for organizations to function on a rational basis.
Management science techniques are widely used in the following areas: Capital budgeting and cash flow management Production scheduling Development of product strategies Planning for human resource development programs Maintenance of optimal inventory levels Department of Finance Jagannath University Md. which he labeled “Theory X” and “Theory Y. Third. They generally have higher-level needs which have not been satisfied by the job. Human Relations is one of the foundations on which the building of management is to be built. Theory Y is more positive and presumes that workers can be creative and innovative. human needs occur in the following hierarchical manner: (i) physiological needs. Management sets production standards. most of the principles advocated cannot be applied in the organizational context. Abraham H. Although this theory has given great insights. these two theories reflect the two extreme sets of belief that different managers have about their workers. Theory X presents an essentially negative view of people. this approach assumes that a worker‟s attitudes. It stresses on “giving the workers a sense of responsibility” but hardly tells what their responsibilities are. Then the individual strives to fulfill needs at the next level. It emphasizes more on interpersonal relations and on “the informal group. Mazharul Islam Jony 15 | P a g e . they no longer act as motivators of behavior. Human Relations theory also tends to be very vague. McGregor‟s Theory X and Theory Y influenced many practicing managers. Management Science The management science approach stresses the use of mathematical models and statistical methods for decision-making. Another name commonly used for management science is operations research. Workplace culture sets its own production standards.” According to McGregor. Therefore. First. a Brandeis University psychologist. Human Relations does not understand the economic implications of organizational problems. (iii) belongingness or social needs. Human Relations theory does not provide enough focus on work. This theory focuses more on the informal group and is very vague about the positive motivation aspects. His theory rested on three assumptions.7: Elton Mayo and the Hawthorne Studies Pre-judgments Findings Job performance depends on the individual The group is the key factor in job performance. Maslow (1908-1970). all of us have needs which are never completely fulfilled. through our actions we try to fulfill our unsatisfied needs. (ii) safety or security needs. According to Maslow. behavior and effectiveness is predominantly determined by his relation with his fellow-workers and not by the kind of work he does. Abraham Maslow: Focusing on Human Needs In 1943. This theory also states the importance of attitudes and behaviors in managing the workforce effectively. These theories helped managers develop new ways of managing the workers. theorized that people were motivated by a hierarchy of needs. (v) self-actualization. dislike work. once needs at a specific level have been satisfied. Recent advances in computers have made it possible to use complex mathematical and statistical models in the management of organizations. worker. Perceived meaning and importance of the work determine output. want to avoid responsibility and need to be closely directed to make them work effectively. or self-fulfillment needs. it has its limitations also. Human Relations theory has made noteworthy contributions to the field of management. Fatigue is the main factor affecting output. have little ambition. Second. Douglas McGregor: Challenging Traditional Assumptions about Employees Douglas McGregor (1906-1964) developed two assumptions about human behavior. It visualizes management as a logical entity. Table 2. are willing to take responsibility. can exercise self-control and can enjoy their work. Managers who accepted Maslow‟s hierarchy of needs attempted to change their management practices so that employees‟ needs could be satisfied. relationships and measurement data. Theory X managers assume that workers are lazy.” Consequently. (iv) esteem or status needs. It provides valuable guidance in understanding the employees and managing them. Like Maslow‟s theory. the action of which can be expressed in terms of mathematical symbols.
the critical path method (CPM). According to this theory. the probability theory. an organizational system has four major components: inputs. (iii) production planning. It deals with the effective management of the production process and the timely delivery of an organization‟s products and services. networking models. time series analysis etc. economics and business background skills are required. external environment. (iv) facilities location and design. The systems approach gives managers a new way of looking at an organization as a whole and as a part of the larger. Operations Management Operations management is an applied form of management science. linear programming. Mazharul Islam Jony 16 | P a g e . there are certain modern approaches to management. services. materials. and (v) quality assurance. MODERN APPROACHES TO MANAGEMENT Besides the classical. Since one person cannot have all these skills the quantitative method requires a team approach to decisionmaking. This approach has been criticized for its overemphasis of mathematical tools. individuals with mathematical. statistical quality control methods. profits and other results produced by the organization. the simulation theory. Feedback refers to information about the outcomes and the position of the organization relative to the environment it operates in. Aircraft scheduling Various mathematical tools like the waiting line theory or queuing theory. Outputs are the products. the decision theory. the program evaluation review technique (PERT). output and feedback (see Figure 2. Operations management is concerned with: (i) inventory management. Two of these approaches are the systems theory and the contingency theory. men. The tools used by operations managers are forecasting. To apply a quantitative approach to decision-making. Many managerial activities cannot be quantified because they involve human beings who are governed by many irrational elements. statistical. Systems Theory Those who advocate a systems view contend that an organization cannot exist in isolation and that management cannot function effectively without considering external environmental factors. materials requirement planning systems. which have significantly shaped modern management thought. inventory analysis. Transformation processes or throughputs – managerial and technical abilities – are used to convert inputs into outputs. Inputs – money. sampling.4: A Systems View of Organizations Department of Finance Jagannath University Md. and project planning and control techniques. have increased the effectiveness of managerial decision-making. behavioral and quantitative approaches to management. (ii) work scheduling. transformation processes. Figure 2. engineering.4). machines and informational sources – are required to produce goods and services.
and who are the people to be involved in it. how to do. It involves anticipating the future and consciously choosing the future course of action. how they are to be carried out and how they would contribute to the achievement of the desired results. According to Peter Drucker. how and when to take a particular action. planning is “looking ahead. Dalton E. “Planning is a continuous process of making present entrepreneurial decisions (risk taking) systematically and with best possible knowledge of their futurity. and who does what. organizing systematically the efforts needed to carry out these decisions and measuring the result of those decisions against the expectations through an organized systematic feedback. a manager makes use of facts and reasonable premises and also considers the relevant constraints.” In the words of George R. DEFINITIONS OF PLANNING In simple words. planning involves determining organizational objectives and deciding how best to achieve them. Mazharul Islam Jony 17 | P a g e . The manager then decides what activities are needed. “Planning involves selecting mission and objectives and the actions to achieve them. it requires decision-making that is. Planning gives an organization the required focus and direction. “Planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results.Fundamentals of Planning Definitions of Planning Nature of Planning Significance of Planning Types of Plans Steps in the Planning Process Prerequisites for Effective Planning INTRODUCTION Planning is the process of bridging the gap between where we are and where we want to be in the future. planning is deciding in advance what action to take.” Thus. influencing and controlling the nature and direction of change. Planning involves determining organizational objectives and developing strategies to achieve the objectives. NATURE OF PLANNING Planning is Goal-oriented Planning is an Intellectual or Rational Process Planning is a Primary Function Planning is All-pervasive Planning is Forward-looking Planning is a Perpetual Process Planning is an Integrated Process Planning Involves Choice Department of Finance Jagannath University Md. while planning. Terry. In other words. when to do it. McFarland‟s definition of planning takes into account the dynamic nature of the environment.” Thus. Unless one knows where to go.” It is the process of deciding in advance what to do. Planning and controlling are inseparable. Thus planning is a prerequisite of the control function.” According to Heinz Weihrich and Harold Koontz. while controlling involves establishing standards of performance and comparing actual results with the planned results. relating today‟s events with tomorrow‟s possibilities. one cannot tell whether one is going in the right direction or not. choosing from alternative future courses of action. It involves looking ahead and relating today‟s events with tomorrow‟s possibilities. Controlling without planning is meaningless. He defines planning as follows: “Planning is a concept of executive function that embodies the skills of anticipating. Proper planning minimizes risk and ensures that resources are efficiently and effectively utilized.
It forces organizations to look ahead and decide their future course of action so as to improve their profitability. It ensures that the employees of an organization carry out their work in a systematic and methodical manner. analyze the various environmental factors that affect organizations.1: Planning and Management Levels Strategic plans These plans are designed to achieve strategic goals. Organizations that plan in advance are more likely to succeed than those which fail to plan for the future. Department of Finance Jagannath University Md.1 describes eight major areas for strategic goals. planning helps managers meet the challenges posed by the environment. Focuses Attention on Objectives Offsets Uncertainty and Risk Provides Sense of Direction Provides Guidelines for Decision-making Increases Organizational Effectiveness Provides Efficiency in Operations Ensures Better Coordination Facilitates Control Encourages Innovation and Creativity Facilitates Delegation Figure 4. It also helps coordinate and control various tasks and makes sure that resources are used optimally. and priorities and actions necessary for achieving strategic goals. strategic plans are general plans that indicate the resource allocation. Table 4. These plans which establish overall objectives for organizations. More precisely. Planning is the first step in the management process. Planning is a prerequisite not only for achieving success but also for surviving in a complex and competitive world.SIGNIFICANCE OF PLANNING In a complex business situation. while at the same time minimizing the risks associated with them. Mazharul Islam Jony 18 | P a g e . Planning is very important in all types of organizations.
Sources of capital supply and how capital will be utilized. Efficient use of resources relative to outcomes. However. Supply. tactical plans cover a shorter time frame (usually 1 to 3 years). Tactical plans essentially indicate the actions that major departments and sub-units should take to execute a strategic plan. such as a few months.3: The Basic Steps in the Planning Process Department of Finance Jagannath University Md. including areas in which new products are needed. or even a few days. weeks. Unless operational goals are achieved.3. Operational plans are developed by lower-level managers. Responsibilities in such areas as concern for the community and maintenance of ethical behavior. Operational plans Operational plans are developed to determine the steps necessary for achieving tactical goals. The information that he requires is also less and most of it can be derived from internal sources. Therefore operational plans are necessary for the success of tactical and strategic plans. These plans help support the implementation of strategic plans. Financial Resources Physical Resources Productivity Social Responsibility Profit Requirements Tactical plans They aim at achieving tactical or short-term goals. Hence. Mazharul Islam Jony 19 | P a g e . all planning processes contain some basic steps. if any. employee attitudes and development of skills. The information needed for operational planning can be obtained almost completely from within the organization. Such plans are more concerned more with actually getting things done than with deciding what to do. quantitative terms and serve as the department manager‟s guide to day-to-day operations. The process is constantly modified to suit changes in environmental conditions and changes in objectives and opportunities for the firm. A middle-level manager acting as a tactical planner deals with much less uncertainty and risk than the strategic planner. They spell out specifically what must be accomplished over short time periods in order to achieve operational goals. STEPS IN THE PLANNING PROCESS Planning is an endless process. the amount of risk involved in making operational plans is lesser than that involved in making tactical plans. which are represented in Figure 4.1: Eight Major Areas for Strategic Goals Major Areas Market Standing Innovation Human Resources Description Desired share of present and new markets. They are thus essential for the success of strategic plans. and service goals aimed at building customer loyalty. who may consult lower-level managers before finalizing the plan and communicating it to top-level management. Innovations in products or services as well as innovations in skills and activities required to supply them. These plans generally consider time frames of less than a year. Figure 4. development and performance of managers and other organization members. Physical facilities and how they will be used in the production of goods and services. tactical and strategic goals will not be achieved. Lower-level managers who develop operational plans work in an environment of relative certainty. relations with labor unions. no single planning procedure is applicable to all organizations. Level of profitability and other indicators of financial well-being.Table 4. Tactical plans are developed by middle-level managers. Compared to strategic plans. As organizations differ in terms of their size and complexity. They are stated in specific.
In order to avoid cynicism and fatigue from creeping into the planning process. Mazharul Islam Jony 20 | P a g e . Evaluating the plan – Feedback should be obtained regularly from the people implementing the plan. As a result. Establishing the Right Climate for Planning Clear and Specific Objectives Planning Premises Initiative at Top Level Participation in Planning Process Communication of Planning Elements Integration of Long-term and Short-term Plans Guidelines for Successful Planning and Implementation Involve the right people in the planning process – While planning. The feedback should address aspects such as how the planning process could have been made better. the key stakeholders may also request copies of the various plans of the organization. People who are involved in these plans should also be involved in reviewing and authorizing the plan. Acceptable – The goal should be acceptable to those who are to pursue it. whether the goals are realistic. it becomes difficult to remember who is supposed to do what and according to which version of the plan. Making people accountable – Plans should specify who is responsible for what results. This will help planners ensure that the plans meet the needs of the organization. Rewarding – The goal should be such that those involved in its accomplishment are rewarded. The persons responsible should periodically review the status of the plan. The following measures help to make the planning exercise more effective. Moreover. The persons responsible for implementing the plan should note such deviations when they occur and make necessary adjustments to the plan. Redesigning the plan – Sometimes. Goals should be SMARTER – A SMARTER goal or objective is: Specific – A goal should be specific. it would be in the best interests of the organization to put its plans in writing and make them known throughout the organization. Extending – The goal should stretch the capabilities of the performer and motivate him to extend his capabilities beyond the usual limit. Realistic – The goals to be achieved should be realistic. It forms the basis for other functions in the management process. employees have to continually solve one problem after the other.PREREQUISITES FOR EFFECTIVE PLANNING Planning is an essential managerial function and should be given due emphasis in order to make it more effective. Measurable – The outcomes of a goal should be measurable. one must acknowledge the good work done and have a little celebration. and whether sufficient resources are available for implementing the plan. Time frame – The goal should specify a time frame for achieving it. Acknowledging and Celebrating accomplishments – This step is frequently overlooked. It is often observed that new targets are set once desired results have been achieved. This would boost the morale of the planners and would ensure their fullest efforts in subsequent plans. it is essential to obtain inputs from those who will implement the plans and from representatives belonging to groups which will be affected by the plan. it is necessary to deviate from the plan. not vague and hard to understand. Department of Finance Jagannath University Md. Communicate the plan throughout the organization – As plans keep changing. Therefore.
grouping tasks. organizing refers to the grouping of activities and resources in a logical fashion. BENEFITS OF ORGANIZING Effective organizing provides numerous organizational benefits: The process of organizing helps an individual develop a clear picture of the tasks he or she is expected to accomplish. DEFINITIONS OF ORGANIZING According to Stephen P. A manager has to create the right conditions to enable the employees to effectively utilize the resources of the organization to achieve organizational goals. For a subordinate to understand his role. or a football team. how the tasks are to be grouped. and where decisions are to be made. This gives the subordinate an idea of what he must do to achieve the goals and objectives of the organization. Department of Finance Jagannath University Md. In addition. This applies to any organization – business. on what basis the tasks are to be grouped.A. who has to perform them. Organizing creates channels of communication and thus supports decision-making and control. delegating authority and responsibility and allocating resources to carry out a specific plan in an efficient manner. who has to report to whom and who should have the authority to take decisions. a manager must provide verifiable objectives and a clear picture of the major duties to be performed. Employees should understand their roles and responsibilities and should work together to achieve the organizational objectives. the next managerial function is to organize people and allocate resources to carry out the plan. L. „organizing‟ is “determining what tasks are to be done. a manager should provide the subordinates with necessary information and tools for effectively performing their roles. Organizing is therefore designing and maintaining a formal structure of roles and positions. The manager must also specify subordinates‟ authority and responsibility. If planning focuses on deciding what to do. Robbins and Mary Coulter.Fundamentals of Organizing Definitions of Organizing Benefits of Organizing Formal vs Informal Organization Span of Management The Process of Organizing Prerequisites for Effective Organizing INTRODUCTION Organizing is a very important managerial function. organizing is a management function involving assigning duties. The process of organizing supports planning and control activities by establishing accountability and an appropriate line of authority. People who know how to make effective use of their resources can make any organizational design or pattern work efficiently. Mazharul Islam Jony 21 | P a g e . In a nutshell. and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. organizing refers to important dynamic aspects such as what tasks are to be performed. He has to make the employees understand the necessity of cooperation for accomplishing tasks. who reports to whom. organizing focuses on how to do it. who is to do them. Thus. Allen defined organizing as “the process of identifying and grouping the work to be performed. after a manager has set goals and worked out a plan to accomplish those goals. Thus. government.” 1 According to this definition. defining and delegating responsibility and authority.
According to Louis E. This sometimes led to the failure of plans and inefficient handling of resources. the result can be predicted with certainty. By so doing. and bureaucracy) ignored the influence of the external environment. the final condition. even a relatively closed system. Prior knowledge of the following conditions and stimuli make it possible to accurately predict where each ball will come to rest: the position of every ball on the table the elasticity of the bumpers the coefficient of friction between the balls and the table the force with which the cue ball is hit the direction of the cue ball the type of spin on the cue ball Classical management theorists borrowed certain ideas from the closed-system concept that was popular during that period of time. Boone and David L Kurtz. former CEO of Intel Corp. Organizing coordinates activities that are diverse in nature and helps build harmonious relationships among members involved in those activities. Organizing helps an organization make efficient use of its resources and avoid conflict and duplication of effort. If the initial conditions and the stimuli in a closed system are known. – from the external environment in which they exist. Thus. As a result. like a wind-up alarm clock. etc. material and energy inputs. Open System View of Organizations Traditional closed-system views (like scientific management. “A corporation is a living organism. they regarded organizations as rational and economic entities. According to Andy Groove. technical. the open-system concept stressed the need for flexibility and adaptability in organizational structure. and that organizations were essentially closed systems. Let us consider the example of a pool table. and the mutual interdependence between the organization and its external environment. Consequently. these theorists emphasized structure and attempted to eliminate environmental disruptions that could affect their studies of planned systems activities. There is no exchange between the system and the external environment. The process of organizing helps managers to focus task efforts such that they are logically and efficiently related to a common goal. the universal process approach. For instance. and it has to continue to shed its skin. organizations should be adaptive and should take into consideration the influence of the external environment. The process of organizing helps maintain the logical flow of work activities.e. Department of Finance Jagannath University Md. i.” 2 This definition implies that closed systems require no inputs – human. requires outside intervention when it slows down or goes out of order. According to this concept. a totally closed system is only a theoretical concept. “Closed systems are sets of interacting elements operating without any exchange with the environment in which they exist. Unlike the closed-system approach. it helps individuals and workgroups to easily accomplish their tasks. The two basic characteristics of a closed system are: It is perfectly deterministic and predictable.. Different systems differ in the degree to which they depend on the external environment for information. Mazharul Islam Jony 22 | P a g e . But no organization can be a totally closed system. CLOSED SYSTEM VS OPEN SYSTEM Closed System View of Organizations The classical management theorists assumed that the primary goal of organizations was economic efficiency.
and the movement of people in and out of the labor force. Department of Finance Jagannath University Md. To cope up with this workload. The span of control is a very important principle that emphasizes the need for coordination among the subordinates working under a particular manager. Martin.” The principle of span of management states that there is a limit to the number of subordinates a manager can effectively supervise. The span of control refers to the number of subordinates a superior can supervise efficiently and effectively. his or her opponent may pick up a ball from the table.The modern open-system model of organizing allows an organization to interact with its environment and evolve its organizational structure gradually over time. As a player strikes the cue ball. the movement of goods and services (example: international trade). According to Kathryn M. open systems are based on a biological model rather than a physical one. THE PROCESS OF ORGANIZING The process of organizing follows a logical sequence. thereby increasing the workload of executives. What matters is how many people who have to work with each other report to a manager. and eight to fifteen subordinates at the lower levels. Here again. policies and plans should be formulated The activities required to achieve the objectives should be identified and classified The best way of grouping the activities and utilizing the available human and material resources should be chosen Authority should be delegated to the head of each group so that they can perform their activities The various groups should be connected to each other. and whose structure evolves over time as a result of interaction. The number of subordinates a manager has to supervise has a direct bearing on the degree to which managers can interact with and supervise subordinates. It is not how many people who report to a manager that matters. in turn. Lyndall Urwick. but the exact number will depend on the impact of underlying factors. “The span of management or span of control is the number of subordinates who report directly to a specific manager. is a subsystem of a larger system – social. political. Delegation of such activities would leave managers free to handle key strategic issues. Mazharul Islam Jony 23 | P a g e . Others are of the view that a manager can manage twenty to thirty subordinates. One important thing is to be noted in the definition cited above. are as important as the systems themselves. the ideal number of subordinates for a higher level executive should be four while the number of subordinates for an executive at the lower level may be eight or twelve. According to the British consultant. managers should delegate routine activities to their subordinates. both horizontally as well as vertically. The process of organizing consists of the following six steps: The objectives of the organization should be established The supporting objectives. let us consider the example of the pool table. like the movement of capital (example: corporate borrowings). Thus. This is analogous to the influence of the environment on the system. The organization. What counts are the number of relationships rather than the number of men. economic or legal system. This disturbs the game and it now becomes impossible to predict where the balls will ultimately come to rest. Bartol and David C. The open-system concept is based on the assumption that no system is totally deterministic or predictable because of the uncertainties in the external environment. An organization is a system consisting of several subsystems which interact with one another. Boone and Kurtz define an open system as “a set of elements that interact with each other and the environment. System-to-system interactions. by means of authority relationships and information flows. The question therefore arises: how many people can a manager supervise effectively? Students of management have come to the conclusion that a manager can effectively manage usually four to eight subordinates at the upper levels. SPAN OF MANAGEMENT Organizations are growing in terms of size and geographical coverage.
Mazharul Islam (Jony) ID no:091541. Mazharul Islam Jony 24 | P a g e .com Mobile: 01198150195 Department of Finance Jagannath University Md.PREREQUISITES FOR EFFECTIVE ORGANIZING The span of management and the levels of organization are clearly defined The factors determining the basic framework of departmentation. along with the degree of delegation. 3rd Batch. along with their strengths and weaknesses. Email:jony007ex@gmail. are taken into consideration The different kinds of authority and responsibility relationships that exist in an organization are understood The way authority is delegated throughout the organization structure. Jagannath University. is taken into consideration The way the manager implements organization theory is considered Prepared By Md. Department of Finance.
in such organizations. selection. The other steps in the HRM process – staffing. managers must recognize the potential of human resources. very important in managing an organization. and recruitment. (4) performance appraisal. The chapter concludes with a description of the socialization process of new employees. and conducted performance appraisal programs. The HRM process is an ongoing function that aims to keep the organization supplied with the right people in the right positions. Figure 12. In this chapter. includes five basic activities: (1) human resource planning. compensation and evaluation of performance to fill those needs. however. training and development. determined benefits and compensation. Mazharul Islam Jony 25 | P a g e . Traditionally. They developed staffing plans. such as increasing costs. To meet the challenges and competitive atmosphere of today‟s business environment. performance appraisal. Acquiring skilled. cannot always afford to have a separate HRM department that can continually follow the performance of individuals in the organization and review their accomplishment of goals. Larger firms usually have a separate HRM department.Human Resource Management and Staffing Human Resource Management: An Overview Staffing Recruitment Selection INTRODUCTION The most important resource of an organization is its human resources – the people who work in the organization. develop and retain these resources. Human resource management forms a crucial function in organizations of all sizes. HRM departments had a relatively small role to play in the organization‟s overall mission and plans. People are vital for the effective operation of a company. when they are needed. each manager is responsible for utilizing the skills and talents of the employees under him. talented. Human resource management: an overview Human Resource Management (HRM) may be defined as the organized function of planning for human resource needs. effectively. This forms the basis of human resource management (HRM). and motivated employees is an important part of HRM. handled complaints. However. and then acquire. These activities were. and still are. and (5) compensation.1 Human Resource Management Process Department of Finance Jagannath University Md. and compensation will also be discussed. These changes have led to the acknowledgment that human resources need careful attention and are vital to the success of any business. Changes in the environment. have created a strategic need for HRM expertise. development. shown in Figure 12. today HRM departments are playing a more strategic role in charting the course of their firms. changing demographics and limited skilled labor supply. The later part of the chapter will discuss the two important elements of staffing – recruitment and selection. The HRM process. HRM is the management of various activities that are designed to enhance the effectiveness of the manpower in an organization in the achievement of organizational goals.1. we will first discuss HR planning. (2) staffing. rapid technological changes and the need for new skills. (3) training and development. Instead. Small organizations.
Development is long-term in nature. the basic principles of teaching/learning are the same. technical and operative – will require some training at some point of time in their careers. and course or program contents often differ. employees might be instructed in new decision-making techniques or the capabilities of data processing systems. application blank. Training and Development Although organizations often recruit fully qualified individuals who require little or no training. evaluating and selecting qualified candidates for job positions in the organization. Although the objectives. These include preliminary screening. They also help them get accustomed to the organizational climate. who require improved skills in order to advance in the organization. The staffing process is a systematic attempt to implement the human resource plan by recruiting. and job specification are important tools in the recruitment process. Staffing involves a set of activities aimed at attracting and selecting individuals for positions in a way that will facilitate the achievement of organizational goals. selection test. Training is formally defined as a planned effort to improve the performance of the employee in his area of work. the management needs to find qualified people to fill the positions through the selection process. Employees at all levels – managerial. Mazharul Islam Jony 26 | P a g e . and helping the organization acquire the right number and the right kind of people when they are needed. Department of Finance Jagannath University Md. Recruitment involves finding and attempting to attract job candidates who are suitable for filling job vacancies.” staffing is just a part of the HRM process and plays an important role. It involves estimating the size and composition of the future work force. Development programs are designed to educate employees beyond the requirements of their present positions in order to prepare them for promotions. Once suitable candidates are attracted to the job position. training denotes efforts to increase employee skills in their jobs. comprehensive interviews.Human Resource Planning Human resource planning is the process of determining future human resource needs relative to an organization‟s strategic plan and devising the steps necessary to meet those needs . It helps the employee fit into the organization.2 Human Resource Planning Staffing Though the term “human resource management” is frequently used for the managerial function of “staffing. The two basic steps of staffing are recruitment and selection. Job analysis. etc. For instance. training is usually undertaken for new recruits as well as for existing manpower. Several methods are used in selecting prospective candidates. In other words. job description. Figure 12. methods.
Jagannath University. If performance is low. The process of performance appraisal involves defining the expectations for employee performance. some corrective action (such as additional training and development) might be arranged to make the performance meet the desired standards. Compensation Compensation consists of the wages paid directly to the employees for the amount of time worked or the number of units produced. Wages paid for time worked (or number of units produced) are typically payments made in the form of cash and reflect direct work-related remuneration such as basic pay.Thus. on the other hand. Mazharul Islam (Jony) ID no:091541. 3rd Batch. Prepared By Md. are forms of supplementary non-monetary payments over and above the wages paid.com Mobile: 01198150195 Department of Finance Jagannath University Md. the individual is likely to be rewarded (by a hike in pay or a promotion). When the performance is high. The compensation program affects every member of the organization. and it is one of the most important and time-consuming tasks of the human resources department. A sound compensation program enhances the organization‟s ability to attract and retain employees. Thus. the processes of training and development aim at increasing the ability of individuals and groups to contribute to organizational effectiveness. It also includes the monetary and non-monetary benefits that an employee receives as part of his employment relationship with the organization. Email:jony007ex@gmail. The major purpose of performance appraisal is to influence employee performance and development in a positive way. Mazharul Islam Jony 27 | P a g e . evaluating and recording employee performance against these expectations. requires standards. Department of Finance. effective performance appraisal as a control technique. Performance Appraisal Performance appraisal compares an individual‟s job performance against standards or objectives developed for the individual‟s position. or bonuses. merit increases. Benefits. Standards in performance evaluation are prior specifications of acceptable levels of job performance. pay for time not worked (such as during vacations or sick leave). and providing the employee with feedback regarding his performance. Corrective action must be taken by managers to restore any imbalance between actual and standard job performance. information and corrective action. measuring. services (such as company cafeteria). They include various protection plans (such as employee insurance). and income supplements (such as stock ownership plans). Information must be available in order to measure the actual job performance against the standard job performance.
Drives are directed at fulfillment of needs.” The three key elements in the above definitions are needs. Motivation is a human psychological characteristic that affects a person‟s degree of commitment. In order to motivate employees. values and attitudes. DEFINITIONS AND MEANING OF MOTIVATION According to Stephen P. It deals with how behavior is energized. It is the set of forces that move a person towards a goal. how it is directed and how it is sustained. a manager must know what motivates his workers in order to make each individual employee perform to the best of his ability. he is driven by a desire to fulfill the need. managers must consider how these factors influence and affect their job performance. the physiological or psychological balance is restored and the drive is cut off. is to channel this energy and direct this behavior toward the organization‟s ends. When an individual recognizes a need. Robbins. It is not an easy task to motivate employees because they respond in different ways to their jobs and to organizational practices. then. Mazharul Islam Jony 28 | P a g e . The manager‟s challenge. Once the goal is attained. policies. interests and abilities. managerial practices and reward systems. Needs exist in each individual in varying degrees. Need is the origin of any motivated behavior.Motivating Employees for Job Performance Definitions and Meaning of Motivation Classification of Motivation Theories Motivational Techniques INTRODUCTION In any type of organization. Incentives or goals are the instruments used to induce people to follow a desired course of action. Needs set up drives aimed at goals. Organizational practices that affect motivation include the rules. Figure 16. this is the basic process of motivation.1: The Basic Motivation Process Department of Finance Jagannath University Md. motivation is the willingness to exert high levels of effort toward organizational goals. Individuals differ in their personal needs. Drives are action-oriented and provide an energizing thrust toward reaching a goal. drives and goals. Need is a felt deprivation of physiological or psychological well-being. conditioned by the effort‟s ability to satisfy some individual need.1 depicts the motivation process. Fred Luthans views motivation as “a process that starts with a physiological or psychological deficiency or need that activates behavior or a drive that is aimed at a goal or incentive. Figure 16. Factors that affect work motivation include individual differences and organizational practices.
self-esteem needs and self-actualization needs.Expectancy theory 2. Maslow classified these needs into five groups: physiological needs. Figure 16.1: Approaches to Motivation Type Content Characteristics Concerned with factors that arouse. but also with the process.2). need for security. performance requirements and rewards. Mazharul Islam Jony 29 | P a g e . status. Abraham Maslow and popularized during the early 1960s.ERG theory Process Concerned not only with factors that arouse behavior. or choice of behavioral patterns 1.Two-factor theory 3. start or initiate motivated behavior Theories 1. Needs hierarchy theory 2.Equity theory Motivation by clarifying the individual‟s perception of work inputs. Maslow‟s hierarchy of needs theory argues that human needs form a five-level hierarchy (see Figure 16. and achievement.2: Maslow's Needs Hierarchy Department of Finance Jagannath University Md.Table 16. Maslow’s needs hierarchy theory One of the most popular explanations for human motivation was developed by the psychologist. social needs (love and belongingness). direction. Managerial Examples Motivation by satisfying individual needs for money.
McClelland’s needs theory David C. affiliation needs. safety and social needs. McClelland has contributed to the theories of motivation by highlighting the importance of three basic needs to understand motivation. They usually exhibit the following characteristics: i. It is very natural for people to attribute good results to their own efforts and blame external factors for their failures. ii. Table 16.Herzberg’s two-factor theory Motivators in the Herzberg‟s two-factor theory correspond to the higher-level needs of esteem and self-actualization in Maslow‟s needs hierarchy.2: Comparison of Maslow’s and Herzberg’s Theories of Motivation MASLOW‟S NEEDS HIERARCHY OF HERZBERG‟S THEORY Motivators: Self-actualization needs Esteem needs Responsibilities Challenging Work Recognition Achievement Social needs Safety and security needs Maintenance Factors: Job security Good pay Working conditions Physiological needs Type of Supervision Interpersonal relations TWO-FACTORY Several researchers have challenged Herzberg‟s findings. Need for achievement Achievement-motivated people thrive on pursuing and attaining goals. friendly relationships with others. the arguments put forth by Herzberg are characterized by logical inconsistencies. 2. there is confusion in the original classification and statements. According to some researchers. Need for affiliation Need for affiliation refers to the desire to maintain warm. Edwin Locke. It was. Table 16. McClelland‟s initial work centered on the need for achievement. and power needs. these researchers contended that satisfaction and dissatisfaction in individuals are not the outcome of different factors but it is individuals who assign different sources to their successes or failures. They suffer pain when they are rejected. Individuals with high need for achievement can be a valuable source of creativity and innovative ideas in organizations. People with a high need for achievement have an intense desire for success. the theory minimizes differences across people. therefore. They are 1. Thus. and 3. They typically seek competitive situations in which they can achieve results through their own efforts and which allow them to obtain immediate feedback on how they are doing. They take a realistic approach to risk. Supervisors who want to motivate achievement-oriented employees need to set challenging. They enjoy a sense of intimacy and understanding. People with high need for achievement are characterized by restlessness and willingness to work long hours. but reachable goals and provide immediate feedback about their performance. who reviewed research pertaining to Herzberg‟s theory spelt out the various problems associated with Herzberg‟s findings. and recognition. while the hygiene factors correspond to Maslow‟s physiological. Mazharul Islam Jony 30 | P a g e . They strive to maintain pleasant social relationships. it is easy to understand why people would associate feelings of satisfaction with factors such as challenge. Department of Finance Jagannath University Md. growth. Affiliation-motivated people are usually friendly and like to socialize with others. concluded that Herzberg‟s arguments did not withstand logical or empirical scrutiny.2 compares Maslow‟s and Herzberg‟s theories of motivation. They are achievement needs.
Rewards may be defined as material or psychological payoffs for the accomplishment of tasks. recognition. Vroom. McClelland‟s work suggests that individuals with a high need for institutional power become the best managers. Participation Motivation theories encourage the use of the participation techniques. In other words. They are willing to assert themselves when a decision needs to be made. Extrinsic rewards are pay-offs granted by others. Rewards can be broadly categorized into extrinsic and intrinsic rewards. In contrast. Mazharul Islam Jony 31 | P a g e . If the possible reward or outcome of the work is of interest to the individual performing it. Above all. The power motive has significant implications for organizational leadership and for the informal political aspects of organizations. Department of Finance Jagannath University Md. Instrumentality This refers to the probability that successful performance will lead to certain outcomes.‟ The valence component helps an individual assess the anticipated value of various outcomes. What is the probability that the performance will be up to the required level? What is the probability that the performance will lead to the desired outcomes? What is the value assigned by the individual to the potential outcomes? Motivational techniques Rewards Managers have found that job performance and satisfaction can be improved by properly administered rewards. Individuals prefer intrinsic rewards such as satisfaction from performing challenging and interesting jobs. expectancy is the probability (ranging from 0 to 1) that a particular action or effort will lead to a particular outcome. Intrinsic (job content) rewards are self-granted and internally experienced pay-offs. promotion. In situations that require a high level of cooperation with and support of others. The right kind of participation ensures an increase in the motivation and knowledge levels which contribute to the success of an enterprise. individuals with a high need for institutional power focus on working along with others to solve problems and achieve organizational goals. it signifies „how much reward one wants. Participation allows an individual to satisfy his or her need for esteem (from self and from others). Expectancy Expectancy is the probability that certain efforts will lead to the required performance. They are ready to console and help others in trouble. He contends that before putting in the effort to perform at a given level. They love to engage in friendly interaction with others. managers should provide them with a congenial and supportive work environment in which they can meet both corporate goals and their high affiliation needs by working with others. The motivation theories discussed in this chapter throw light on the role of the extrinsic and intrinsic rewards in improving productivity.iii. iv. because they are able to coordinate the efforts of others to achieve long-term organizational goals. Power-motivated individuals see almost every situation as an opportunity to seize control or dominate others. To motivate individuals with a high need for affiliation. the valence component will be high. MBO (discussed in Chapter 5) is the most popular and modern method of motivating employees at all levels for better performance. People with high need for personal power try to dominate others by demonstrating their ability to wield power. status symbols. and praise. since it ensures participation and freedom in setting goals and achieving them. In simple words. Vroom’s expectancy theory The expectancy theory of motivation was originally proposed by Victor H. he must see a non-zero probability of effort leading to that goal. It gratifies the need for affiliation and acceptance. individuals consider the following three issues: Valence Valence is the motivational component that refers to the preference of an individual for a particular outcome. including clients and customers. individuals with a high need for affiliation prove to be assets for an organization. They often run into difficulties as managers because they attempt to use the efforts of others for their own benefits. The major outcomes we consider are the potential rewards such as incentives or bonuses. it gives people a sense of accomplishment and a chance for advancement. The need for power is manifested in two forms: personal and institutional. perks and amenities. In other words. They include money. Need for power The need for power refers to the desire to be influential and to have an impact on a group. all individuals will be motivated to reach their goal only when they see some connection between their effort and performance. and offer constructive suggestions about how to use these rewards in organization settings. or a good feeling of accomplishment. For an individual to exert efforts towards a goal.
Mazharul Islam (Jony) ID no:091541.com Mobile: 01198150195 Department of Finance Jagannath University Md. lighting and cleanliness. It is a combination of several fields which include industrial and organization psychology and sociology. and Involving workers when bringing about changes in the physical aspects of their work environment. Allowing workers to make independent decisions on issues like work methods. the attempt is to build a higher sense of challenge and achievement in jobs. sequence and pace or the acceptance or rejection of materials. Making workers feel personally responsible for their tasks. Here. Managers see this concept as a promising means of dealing with productivity problems and workers‟ grievances. 6. 5. organization theory and development. and industrial relations. Email:jony007ex@gmail. Encouraging involvement and participation of employees and interaction between workers. Giving people feedback on their job performance. 4. 2. 3. A job may be enriched in the following ways: 1. such as the layout of office or plant. industrial engineering. temperature. Job Enrichment A modern and more permanent approach to motivation is job enrichment. Mazharul Islam Jony 32 | P a g e . Department of Finance. Jagannath University.Quality of Work Life (QWL) One of the most interesting approaches to motivation is the quality of work life (QWL) program. Prepared By Md. Ensuring that workers get to know how their tasks contribute to the finished product and the welfare of the enterprise. 3rd Batch. motivation and leadership theory. QWL is not only a very broad approach to job enrichment but also an interdisciplinary field of inquiry and action.
A leader‟s skill comprises of four major elements: (1) the ability to use power effectively and in a responsible manner. LEADERSHIP THEORIES Trait Theory of Leadership According to this theory. Department of Finance Jagannath University Md. Leadership involves other people – employees or followers – who by the degree of their willingness to accept direction. A person may be an effective manager – a good planner. Mazharul Islam Jony 33 | P a g e . It involves authority and responsibility. how they communicate with and try to motivate their followers or employees. and motivate behavior towards the achievement of those goals. researchers tried to study the behavioral aspects of effective leaders. It is a process in which one individual exerts influence over others. researchers tried to determine what effective leaders do – how they delegate tasks. leaders do not possess all the traits mentioned in these theories. the trait approach does not give one an estimate of how much of any given trait a person should possess. Still. Thus. how they carry out their tasks. leaders are born. they can and do shape group activities in a number of ways. organizing and controlling activities in order to achieve objectives. In other words. Managers are involved with bringing together resources. help to define the leader‟s status. developing strategies. DEFINITION AND MEANING OF LEADERSHIP Leadership is the use of non-coercive influence to shape the group or organization‟s goals. Leadership involves an unequal distribution of power between leaders and group members. Behavioral Theories When it became evident that effective leaders did not seem to have a particular set of distinguishing traits. Most of these traits are really patterns of behavior. (2) the ability to understand the fact that people are motivated by different forces at different times and in different situations. in terms of deciding the way ahead and being held responsible for the success or failure in achieving the agreed objectives. and an organized administrator – but lack the motivational skills of a leader. rather than try to figure out who effective leaders are. decide what is to be done and motivate people to do it. Leaders set goals and help subordinates find the right path to achieve these goals. They can be successful leaders by helping subordinates to find solutions to their problems. whereas many non-leaders possess many of them. most organizations today are putting a premium on managers who also possess leadership skills. KEY ELEMENTS OF LEADERSHIP It has been observed that every group that attains its goals or performs efficiently has a skilled leader. At the same time managers. the leader will usually have more power.Leadership Definition and Meaning of Leadership Key Elements of Leadership Leadership Theories INTRODUCTION The success or failure of managers depends on their leadership qualities. and so on. not made. mental. or how they are related to leadership behavior. Different studies do not agree about which traits are leadership traits. Group members are not powerless. (3) the ability to inspire and (4) the ability to behave in a manner that will develop a harmonious work culture. as leaders. have to select the goals and objectives of an organization. and personality traits of various leaders. Given the challenges of dynamic engagement in today‟s business world. leadership is that function of management which is largely involved with establishing goals and motivating people to help achieve them. Moreover. Many researchers have tried to identify the physical. Another may be an effective leader – skilled at inspiring enthusiasm and devotion – but lack the managerial skills to channel the energy he/she arouses in others.
Department of Finance Jagannath University Md. Task requirements Peers‟ expectations and behavior Organizational culture and policies There are four popular situational theories of leadership: (1) Fiedler‟s contingency approach to leadership (2) The path-goal theory. such as organizational culture and the nature of tasks. A large number of studies have been made on the premise that leadership is strongly affected by the situations in which the leader emerges. Taken together. Mazharul Islam Jony 34 | P a g e . 3.3: The Leadership Grid Situational or Contingency Theories The use of the trait and behavioral approaches to leadership showed that effective leadership depended on many variables. who must consider the situation when they design an environment for performance. therefore. 1. They started looking at and studying different situations in the belief that leaders are the products of given situations. the theories resulting from this type of study constitute the contingency approach to leadership. began trying to identify those factors in each situation that influenced the effectiveness of a particular leadership style. Researchers. They are important for practicing managers.Figure 17. No one style was effective in all situations. 2. The contingency theories focus on the following factors. Situational or contingency approaches obviously are of great relevance to managerial theory and practice. and in which he or she operates. (3) The Vroom-Yetton model and (4) Hersey and Blanchard‟s situational leadership model. No one trait was common to all effective leaders.
The path-goal theory indicates that effective leadership is dependent on. clearly defining. Department of Finance. Email:jony007ex@gmail. House and Terence R. and. the paths to goal attainment. Mazharul Islam (Jony) ID no:091541. the path-goal theory suggests that the leaders should set clear and specific goals for subordinates. firstly. Mazharul Islam Jony 35 | P a g e . secondly. the degree to which the leader is able to improve the chances that the subordinates will achieve their goals.Path-goal theory This theory was developed largely by Robert J. Mitchell.4: The Path-Goal Theory Prepared By Md. Figure 17. In other words.com Mobile: 01198150195 Department of Finance Jagannath University Md. for subordinates. They should help the subordinates find the best way of doing things and remove the impediments that hinder them from realizing the set goals. 3rd Batch. Jagannath University. The path-goal theory of leadership attempts to explain how a leader can help his subordinates to accomplish the goals of the organization by indicating the best path and removing obstacles to the goals.
decentralize authority. control is a tool that helps organizations measure and compare their actual progress with their established plan. Some people confuse „control‟ with „supervision. a plan. The control function is concerned with ensuring that the planning. IMPORTANCE OF CONTROLLING The control function is gaining importance in today‟s organizations due to a number of factors. When exercising the control function. they all involve the same basic process.Adjusting standards and measures when necessary Department of Finance Jagannath University Md. The process involves the following steps: i. minimize costs. leading. „control‟ refers to the evaluation of performance and the implementation of corrective actions to accomplish organizational objectives. it helps identify deviations from the established standards of performance. Planning sets forth the objectives a manager intends to achieve.Taking corrective action when necessary vii.Establishing standards iii. a manager measures the performance of an individual. In addition to addressing the above mentioned factors. In the management context.‟ Supervision is a part of control. handle complex situations. controlling plays an important role in helping managers detect irregularities. and cope with uncertainty. In other words. motivating and directing the human resources of the organization to achieve organizational goals.Determining areas to control ii. The management process includes planning. These factors include the need for accountability in organizations. the need to detect environmental changes that significantly affect organizations. organizing. Staffing involves the managerial function of placing the right person in the right job in the organization.The Control Function Importance of Controlling Levels of Control Basic Control Process Types of Control Requirements for Effective Controls INTRODUCTION Control is an essential function of management in every organization.Recognizing good or positive performance vi. The management process is incomplete and sometimes useless without the control function.Measuring performance iv. The term „control‟ has different meanings in different contexts. and controlling. Leading involves the managerial function of influencing. Organizing provides the structure of an organization by determining how and where the employees will be placed in the organization and the responsibilities that they will need to fulfill to attain predefined objectives. staffing and leading functions result in the attainment of organizational objectives. or a program against certain predetermined standards and takes corrective action if there are any deviations. Mazharul Islam Jony 36 | P a g e . staffing.Comparing performance against standards v. the growing complexity of present day organizations and the need to identify operational errors in organizations to avoid incurring excessive costs. organizing. BASIC CONTROL PROCESS Even though control systems need to be tailored to suit specific situations. identify opportunities.
Prepared By Md. Mazharul Islam Jony 37 | P a g e . Email:jony007ex@gmail. Feed forward control Type Control of Description Inputs are monitored to ensure that they meet the standards necessary for the transformation process.2: Major Control Types based on Timing Stages of Production Capital Labor Input Raw materials Market information Equipment Planning Organizing Transformation process Staffing Leading Controlling Goods Services Output Profits Waste materials Feedback control Exercised after a product or service has been produced to ensure that the final output meets quality standards and goals.com Mobile: 01198150195 Department of Finance Jagannath University Md. 3rd Batch. Concurrent control Regulates ongoing activities that are a part of the transformation process to ensure that they conform to organizational standards. REQUIREMENTS FOR EFFECTIVE CONTROLS Controls should reflect plans. positions and structures They should be understandable They should be cost-effective Controls should identify only important/major exceptions Control systems should be flexible Control systems should provide accurate information The End. Jagannath University. Mazharul Islam (Jony) ID no:091541. Department of Finance.TYPES OF CONTROL Controls Based on Timing Table 19.
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