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Introduction to management

Part I - Nature and Scope of Management
1. What is Management? There is no definition of management every one agrees upon. There is no universally accepted definition of management. There are almost as many definitions of management as there are books on the subject. However, most definitions of management do share a common idea – Management is concerned with the accomplishment of objectives through the efforts of other people. The various definitions of management by different writers are outlined and analyzed here under:  Management is the development of people and not the directions of things---- Management is personnel administration. (Lawrence A. Apply.)  Management is simply the process of decision-making and control over the actions of human beings for the express purpose of attaining pre-determined goals.( Stanley Vance).   Management is the function of executive leadership anywhere. (R.C Davis). Management is that function of an enterprise, which concerns itself with the direction & control of various activities to attain the business objective. Management is essentially an executive function; it deals particularly with the active direction of the Human effort. (William Spreigel)  Management is concerned with seeing that the jobs get done: its tasks all center on planning and guiding the operations that are going on in the enterprise.( E.F.L Brech.) Appley – regards Personnel Management as coterminous with Management. Stanley Vance Views decision-making and control as the only functions of management. Davis & Spreigel – consider leadership as the only managerial function Brech: According to him planning and guiding constitute management. * All take a partial view of Management.  Peter Drucker: takes a more pragmatic view of Management. According to him Management is what is does because “Management is an organ; an organ can be described and defined only through their function.

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Newman and summer: regard management as a social process. According to them, it is a process, as it comprises a series of actions that lend to the accomplishment of objectives. It is a social process because these actions are principally concerned with relations between people. Taking these approaches into consideration, Management may be defined as follows for the purpose of study and analysis here:

Management is the social process of PLANNING, ORGANIZING STAFFING, LEADING, & CONTROLLING for the determination and achievement of organizational objectives in a dynamic environment. 2. The Nature of Management Management science or an Art? Management as a science is of recent origin, even though its practice is ages old. Frederick W. Taylor was the first Manager theorist who made significant contributions to the development of management as a science. He used the scientific methods of analysis, observation and experiment in the management of production function. A perceptive manager, as he was he distilled certain fundamental principles, and propounded the theory and principles of Scientific Management. Many others including Gantt, Emerson, Fayol, and Barnard etc followed his work. During the last few decades, great strides have been made in the development of management as a systematized body of knowledge, which can be learnt, taught and researched. It has also provided powerful tools of analysis, prediction and control to practicing managers. Management scientists who have developed mathematical models of decision-making have particularly strengthened the scientific character of management. Another characteristic of science in management is it uses scientific methods of observation, experimentation and laboratory research. Management principles are firmly based on observed phenomena, and systematic classification and analysis of data. Even though Management is a science so far as it possesses a systematized body of knowledge and uses scientific methods of research, it is not an exact science like natural sciences. This is simply because management is a social science, and deals with the behavior of people in organizations.

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Behavior of people is much more complex and variable than the behavior of inanimate things such as light or heat. This makes controlled experiments very difficult. As a result, management principles lack the rigor and exactitude, which is found in physics and chemistry. In fact, many natural sciences, which deal with living phenomena such as botany and medicine, are also not exact. Management is a social science like economics or psychology, and has the same limitations, which these and other social sciences have. However, this does not in any way diminish the value of management as a body of knowledge and discipline. It has provided powerful tools of analysis, prediction and control to practicing managers and helped them in performing their managerial tasks more efficiently and effectively. Management as an Art Just as an engineer uses the science of engineering while building a bridge, a manager uses the knowledge of management theory while performing his managerial functions. Engineering is a science; its application to the solution of practical problems is an art. Similarly, management as a body of knowledge and discipline is a science; its application to the solution of organizational problems is an art. The practice of medicine is firmly grounded in an identifiable body of concepts, theories and principles. A medical practioner who does not base his diagnosis and prescription on the science of medicine, endangers the life of his patient. organization. Principles of management like the principles of medicine are used by the practioner not as rules of thumb but as guides in solving practical problems. To sum-up, management is a science as well as an Art. b) Management levels, skills and roles i) Management levels There are three distinct levels of management. These are:    Top Management Middle Management Supervisory Management Similarly, a manager who manages without possessing the knowledge of management creates chaos and jeopardizes the well being of his

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Conceptual skills are most important in strategic (long-range) planning. and communicate effectively with other workers. Management success depends both on fundamental understanding of the principles of management and on the application of management skills. . Technical Skills: are the specialized knowledge and abilities that can be applied to specific tasks. Human relations skills are equally important at all 4 . Conceptual skills: are the abilities needed to view the organization from a broad perspective and to see the interrelations among its components. lead. they are more important to top-level executive. Supervisors manage workers who perform the most basic job duties required in the business. Human Relation Skills: levels of management. therefore.A company’s top management is made up of individuals who have the responsibility for making the decisions and formulating the policies that affect all aspects of the firms operations. Management Skills Good management practices can be learned and applied. There are three management skills. These are:    Technical skills Human relations skills. Normally. are the abilities needed to resolve conflict. technical skills are most important at lower levels of management and much less important at upper levels. than to middle managers and supervisors. and Conceptual skills. Middle Management: includes all managers above the supervisory level but below the level where overall company policy is determined. motivate. Supervisory Management: is at the base of the pyramid.

government agencies.  Decisional Role: The third set of managerial activities involves decision-making. trains. resource allocator and negotiator. the manager tries to keep informed about what is happening in the organ or group. Interpersonal roles: These are those in which the manager interacts with others is that of figurehead. disturbance handler. Signing documents or presiding at a ceremonial event is examples of figurehead duties. These informational roles require managers to serve as monitors. but non-involves significant decision-making.  As a disseminator.  As a monitor. evaluates. Some figurehead duties are largely ceremonial and others relatively important. conferences. informational. The leader role is evident in the interpersonal relationship between manager and subordinates. Mintzberg identified 10 management roles related to the interpersonal. as a leader. social events and so forth. and promoter subordinates. As decision maker. Management Roles Carrying out the management functions requires a manager to behave in a certain way to fill certain roles. motivates. customers. disseminators. the manager becomes as an entrepreneur. Often he/she may create new projects. the manager hires. including the press. change original structure. and institute other important programs for improving the company's performance. A manager acting as an entrepreneur recognizes problems and opportunities and initiates action that will move the organ in the desired direction. a manager sends outside information into the organ and internal information from one subordinate to another  A manager serves as a spokesperson whenever he/she represents the company or its position to other groups. and decision aspects. Informational roles: A second set of managerial activities relates to receiving and transmitting information. 5 . and spokespersons. and trade organizations. He or she fulfills this role through community service. The manager also serves as a liaison between the company and the external community.i.

approving budgets. The Manger acting as a negotiator represents the firm in financial matters. organizing. on the other 6 . the manager is a negotiator when the company tries to buy another firm. These plans may require opening new branch banks. As a disturbance handler. deciding on pay increases. These may involve conflict between people or groups. staffing. and other maters related to the firms Human Financial and Material Resources.planning. This involves assigning work to subordinates. the manager must divide the company's resources as well as personal time among the various demands on them. Top-level managers set plans for the entire company. the manager deals with situations over which he/she has control. scheduling meetings. lower level managers prepare plans for their immediate areas of responsibility.   c) Functions of Management Regardless of the type of firm. all managers have certain functions . modifying interest rates. Branch Managers. For example. or offering additional services. For example. These are: Planning Organizing Staffing Leading. making purchasing decisions. or unexpected events outside the company that may affect the firms operation. or with members of the financial community to negotiate a new stock issue. top-level managers of a bank plan ways to increase its deposits and to enlarge its share of the market. leading. There are 5 major functions of management. The scope and nature of these functions differ from manager to manager and from firm to firm. when meeting with a union seeking a new contract. As a resource allocator. and Controlling Planning Planning encompasses determining specific objectives and how to accomplish them. and controlling.

a manager must create a way to accomplish them. the number of hierarchical levels in the organization. new management skills may be required. he or she must develop a system in which people can perform tasks that lead to the desired results. the branch manager's plan to take care of customers efficiently would be affected by staffing limitations and other events beyond his or her control. managers must constantly organize and reorganize. Their plans may call for adequate staffing at peak periods. Each. 7 . new production methods may be instituted. personnel requirements. most organizations also undergo continual change. It is done in light of budgetary constraints. economic. and values might change. competition. In other words. Similarly.hand. the most appropriate way to set up departments (departmentation). new laws and regulations might be enacted. procedures for opening and closing accounts. and people. or eliminated. and other factors. organizing by top-level executives includes the following activities: Creating job positions with defined duties. a bank's plans to modify its interest rates would be influenced by what other financial institutions do and by how such actions would affect earnings. Planning doesn't occur in a vacuum. additional positions may be created. External forces or change may be social. requirements. diminished. and technological. Initially. or reporting relationships may be altered. responsibilities. plan for taking care of walk-in customers. political. and periodic teller balancing. Determining the number of subordinates each manager should have reporting to him or her (called span of control or span of management). Developing a structure like this ensures that duties are well defined and coordinated. Both internal and external forces bring about such change. For example. Organizing When goals have been established. structure. Position in the organization is accountable for identifiable tasks that contribute to its overall purpose. and salary ranges based on job requirements Arranging positions into a hierarchy by establishing authority-reporting relationships. Of course. More technologically advanced production methods might be developed. Jobs may be enlarged. through organizing. Internal forces result from the interaction of an organization's technology. Because these internal and external forces of change always exist.

Staffing involves the recruitment. Staffing usually is systematic and includes many of the following activities:        Human resource planning Announcing and advertising vacant positions Receiving applications Preliminary and final interviewing Testing Medical examination Final selection and orientation Staffing has undergone remarkable change in recent years. To be effective leaders. However. affirmative action.Staffing As we have pointed out. Staffing is one of the manager's most important duties because the success of any organization depends on the quality of its employees. techniques of motivation. Leading Leading involves influencing others in order to accomplish specific objectives. Managers must develop relationships that ensure adequate communication with their subordinates. 8 . equal employment opportunity. organizing involves creating job positions with assigned duties and responsibilities. equal pay for equal work. For the most part. development. and similar terms were rarely mentioned twenty-five years ago. Today. selection. the changes have benefited employers and employees alike because they have resulted in a better matching of people and jobs. choose their new employees very carefully. managers need to understand individual and group behavior. and retention of employees with appropriate qualifications for positions created by the manager. managers involved in staffing are tremendously aware of the importance of these concepts. Human resource planning. they also have created problems that managers of the past could not have imagined. and effective styles of leadership. Most managers therefore.

but the three that require the most attention are product quality. disciplining employees. a manager continually compares the performance of the organization with its goals and takes corrective action. helping employees deal with changing conditions. The manager also must recognize and reward outstanding performance. measurable. and equitable? Effective leadership is built on a foundation of mutual trust and respect. In other words. just. Objectives must be identifiable. For instance. It involves developing a climate of individual integrity. if needed. raw materials used in the manufacturing process may be inferior. and cost control. This void. Even in the most freewheeling of companies. Making decisions with a question in mind can best create a climate like this: what is right. Of the five basic functions of management. The quality of the company's product may not measure up for a number of reasons. To be effective. he or she must make certain that everyone in the unit knows exactly what is expected in terms of performance. For instance. corporate honesty. he says. worker performance. a manager should use all the organizational resources available especially people. chairman emeritus of the American Management Association (AMA). managers also must surround themselves with competent employees and ask their advice when making decisions that affect them. Controlling In controlling. and in some cases. Lawrence Appley. and high productivity. This involves setting up an appraisal reward system that rewards superior performance and does not reward mediocrity. or their blending or mixing may 9 . Effective leadership is always at the core of effective management. happy family" atmosphere. leading is more than creating a "one big. Actual results may differ from desired results in any area. and individually attainable.Leading also includes managing personal conflict. A manager must do a number of things to be an effective leader. stems from managers' failure to recognize human development and the demands this places on mangers in the workplace. contends that American businesses are suffering from the greatest leadership vacuum this nation has ever seen. leading is perhaps the one area where most managers are weakest.

measuring worker output and comparing it with standards. disciplinary action is required. some method for measuring worker performance must be developed. A more realistic description of what managers do is provided by Leonard Sayles: 1. managers do perform these functions. new developments. Managers seek to be sensitive and responsive to the needs of their superiors. For example. The third major area requiring significant attention. Variations from the standards helps managers find problem areas and can lead to cost-reduction programs. where they are masters of their fate and captains of their souls. An informal View of the Manager's Job The functions just discussed tell us what managers should do. Managers spend as much . In so doing. cost control. 3. In some cases. and overhead. some over which they have little control. in other cases. Controlling people follows the same procedure as controlling product quality: establishing standards. Employee performance standards are formulated through experience. but their duties are much more complicated. and taking corrective action when necessary. additional training and instruction are needed. 10 . the employee is told which areas need improvement and how to bring it about. Managers strive to implement their personal career plans. and observation. They try to keep abreast of new pressures.and perhaps more . In an appraisal interview. a machine breakdown may cause the quality of the final product to be unacceptable. judgment. Actual costs are compared with standards set before actual production for such items as materials. each employee is formally evaluated annually on all critical job elements.be improper. labor. In James Cribbin's opinion. What do mangers actually do? In reality. They are entangled in many relationships and situations. 2. Managers negotiate with peers in other interdependent departments in an effort to get their jobs done effectively. Once standards are determined. using the firm as a vehicle. these functions depict managers of ideal firms under ideal conditions. Typically. and new requirements that may affect the way they do their work. they seek to satisfy the requirements of the organization.time reacting as they do acting. Product quality also will suffer if the manufacturing process malfunctions. Control also is required when employees fail to meet desired performance standards. involves comparing expenditures with budgeted funds.

Thus. levels and sizes of organizations.4. wants. 5. Thus. a civil servant could manage and industrial organization. demands. and so on. government. Management can be applied to all organized human efforts whether they are in business. Managers oversee the flow of work into. 6. and themselves. Managers represent their subordinates and their subordinates' view to higher-level managers and to individuals in other departments. and out of their departments to assure that it goes smoothly. and eccentricities. a retired army general could manage a university. social religious or other fields. 11. and requirements of various individuals and groups in order to retain their good will.job goals d) Universality of Management Is the manager’s job universal? Are the principles of management universally applicable? It has already been stated that management is found in all types. and morale of their subordinates. 10. Managers try to retain control over their own lives while accommodating the needs of the firm. 7. Managers are alert to the work output. and they interact with their subordinates while maintaining a managerial perspective. they must be flexible in adjusting to a variety of personalities. the firm. Accordingly. within. they set up priorities and engage in those activities that satisfy the demands of their families. 9. cliques. Managers cultivate good personal relations with staff and service groups whose actions can impact their jobs for better or worse. Universality of management suggests that the manager uses the same managerial skills and principles in each managerial position held in various organizations. functions. 8. educational. 11 . needs. Managers respond to the requests. Managers attempt to cope with stress so as to receive psychic as well as economic income from their work. Managers strive to attain organization rewards which they use to secure more important off . an industrial manager could manage a philanthropic organization.the .

It means that management is generic in content and applicable to all types of organizations. Classical writers like Fayol. The Internal environment includes the day-to-day forces within the organization in which mangers perform their functions. political. cultural. Other not . Such principles as one man one boss.obvious forces include technological. Appley declared that 'He who can manage can manage anything. leading coordinating and controlling must be accomplished under constantly changing conditions. For example.D Eisenhower went from a general in the US army to president of Columbia University to president of United States. Lawrence A. 12 . countries. which are universally applicable." Let us examine the factors that have contributed to the universal application of management in every level of organ and at every level of organization. a church or a university are same. economic.so . 3. social and international forces. division of work to improve speed and efficiency etc. competitors. 2. Management and its Environment Many different forces outside and inside of an organization influence manager's performance. the difference lies in the techniques employed and practices followed. suppliers and human resource are some of the obvious forces in an organization's external environment. staffing. The very fact that managers regularly move from public to private sector organs bears ample testimony to the fact that management concepts are universal across organizational types. 4. The managerial functions of planning. D. The fundamentals governing the management of a business. 3. Urwick and others believed that there are certain principles in management. organizing. Managers must deal with both the external environment and the Internal environment.Universality implies transferability of managerial skills across industries. Managers perform the same functions irrespective of their level in the organ. 1. The External Environment includes all the forces acting on the organization from the outside. Customers. industry or country. legal regulatory.

Robert Owen:(1771-1858) His ideas laid the groundwork for the human relations movement. and Henry R.1871)--. the development of management as a field of knowledge is much more recent. Interested in working & living conditions of his employees while Tried to improve the living conditions of employees by upgrading running a cotton mill in Scotland. Successful British entrepreneur Recognized the importance of human resources. Known as the father of modern computing. streets. houses. 13 . With the proliferation of factories came the widespread need to coordinate the efforts of large numbers of people in the continual production of goods. Charles Babbage: (1792. Early influences Although examples of management practice go back to several thousand years.Chapter Two The Development of Management Thought 1. which spawned the growth of factories in the early 1800s. This group. This challenge brought forth a number of individuals who begun to think about innovative ways of running factories effectively. Among the pre-classical contributors are Robert Owen. known as the pre-classical contributors to Mgt. Much of the impetus for developing management theories and principles stemmed from the industrial revolution. Produced the first mechanical calculator& an analytic engine. Towne. sanitation and the education system. focused largely on particular techniques that might be applied to solve specific problems.English mathematician. Charles Babbage.

Taylor. F. the degree to which Devised a profit sharing plan that had two parts. administrative management. The Classical Theories Henry Towne’s call for mgt as a separate field of inquiry helped usher in a major new approach called the classical viewpoint. ASSESSMENT OF THE PRE-CLASSICAL CONTRIBUTORS: their efforts were somewhat fragmentary.(1844-1924)--. It is made up of three different approaches: scientific management. and Henry Gantt. Outlined the importance of management as a science & called for the development of management principles.- Enthralled with the idea of work specialization. Is the father of scientific management. a bonus and a work is divided in to various jobs. portion of wages that was dependent on factory profits. Towne. Scientific management Scientific management is an approach within classical management theory that emphasizes the scientific study of work methods in order to improve workers efficiency. and bureaucratic management. Frank & Lillian Gilberth. The classical viewpoint is a perspective on mgt that emphasizes finding work and organizations more efficiently. This view is labeled classical because it encompasses early works and related contributions that have formed the main roots of the field of management.was the president of Yale & Towne manufacturing Company & mechanical engineer. Major representatives of this approach include F. often to solve visible problems. ways to manage 14 . Henry R.W.(1856-1915) An American Jew.Taylor-. They were largely oriented toward developing specific techniques.W.

1972) were other advocates of scientific management. faulty wage systems set up by mgt encouraged workers to operate at a slow pace. they feared that increasing their productivity would cause them or other workers to lose their jobs. 15 . The Gilberths-Frank (1868-1924) and Lillian (1878 . Rose to chief engineer in 6 years. 4. Taylor believed that workers engaged in soldiering for three main reasons. First. Second. Taylor believed that managers could resolve the soldiering problem by developing a science of management based on four principles namely: 1. decided to become a bricklayer because of the importance of the profession at the time. Divide work & responsibility so that management is responsible for planning work methods using scientific principles & workers are responsible for executing the work accordingly.had qualified for admission to the Massachusetts Institute of Technology. F. Taylor also pioneered a method now known as Time and Motion Study (Taylor called it “Time Study”).Taylor observed and tackled soldiering by workers. Thirdly. general methods of working & rules of thumb handled down from generation to generation were often very inefficient. Soldiering is deliberately working at less than full capacity.W. He also advocated the use of Wage Incentive Plans. Scientifically study each part of a task & develop the best method for performing the task. Frank . 2. Cooperate fully with workers to ensure that they use the proper method.- Became an apprentice patternmaker & a machinist at Midvale Steel. Carefully select workers & train them to perform the task by using scientifically developed method 3.

and hold that they used to study tasks in a number of industries. which included motions as search find. 2. continued at eliminating unnecessary motion and expanded their interests to exploring ways for reducing task fatigue • They have isolated 18 basic motions.1919) • Worked with Taylor in several companies including Midvale • Known for his Gantt chart . wait when available. transport empty. • He also devised a unique pay incentive system that not only paid workers extra for reaching standard in the allotted time but also awarded bonuses to supervisors to coach workers who were having difficulties.g. scheduling and control that is still in use today. rest for overcoming fatigue.2 Bureaucratic Management. inspect.The Psychology of Management With her husband. grasp. Gantt (1861 . professor and author • Reacted to the prevailing norms of class consciousness and nepotism (e. release load. each called a therbligs. load transport. Aristocratic birth.• • He noticed the inefficiencies that were handed down from experienced workers He proposed using motion studies to streamline the bricklaying process • Was able to reduce the motions involved in bricklaying from 18 ½ to 4. assemble. select.become officers) 16 .a graphic aid to planning. workers increased the number of bricks laid per day from 1000 to 2700 with no increase in physical exertion. Using these motions. Henry L. position. Max-Weber (1864 . pre-position.1920) German sociologist consultant. disassemble.is an approach that emphasizes the need for organizations to operate in a rational manner rather than relaying on the arbitrary whims of owners and managers. Lillian Moller • • • Doctorate in psychology Published the book . avoid delay. in Prussian Army. use.

 Well defined hierarchy: multiple levels of positions. provide supervision of lower offices by higher ones. Because of the possibility of carrying Weber’s ideas to excess.   Assignment of activities to individuals as fixed duties A hierarchy of authority and chain of command running throughout the organization. well-defined tasks so that members know what is expected of them and can become extremely competent at their particular subset of tasks. He coined the term bureaucracy to identify large organizations that operated on rational basis Major characteristics of Weber’s ideal bureaucracy are:  Specialization: jobs are broken in to routine. the term “bureaucracy” is sometimes used in pejorative sense to denote red tape and excessive rules. a means of handling exceptions. there clearly are advantages to the bureaucratic characteristics outlined by Weber. which carefully determined reporting relationships among levels. Yet.  Impersonality: rules procedures and sanctions are applied uniformly regardless of individual personalities and personal considerations.• Believed that running organizations on the basis of whom one knows rather than what one knows and engaging in nepotism tended to interfere with organizational effectiveness • He formulated the characteristics of ideal bureaucracy. and the ability to establish accountability of actions.  Career advancement based on merit: selection and promotion is based on the qualification and performance of members.  Formal rules and procedures: written rules and procedures specifying the behaviors desired from members facilitate coordination and ensure uniformity. with a regulated system of appeal 17 .

  decisions are impersonal 

Administration through a well-defined rules Decision making on rational and objective criteria so that all Employment and promotion based on demonstrated competence; protection against arbitrary dismissal, and training of officials Office holding as a career within the hierarchical order Fixed salary based on status or rank rather than on the work performed, and a pension on supernuation as security for old age The major advantage of bureaucracy is that, “precision, speed unambiguity, knowledge of the files, continuity, discretion, unity, strict subordination, reduction of friction, and of material and personal costs are raised to the optimum point”. Its major disadvantages lie in red tape, rigidity and neglect of human factor. 2.3 Administrative Management- is an approach that focuses on principles that can be used by managers to coordinate the internal activities of organizations. The major contributors include Henri Fayol and Chester Barnard, both of whom were executives of large enterprises. Henri Fayol (1841 - 1923) French Industrialist • Trained as mining engineer guaranteed

• Convinced that it should be possible to develop theories about management
that could be then taught to individuals with administrative responsibilities. (His efforts toward developing such theories were published in a monograph titled - General and Industrial Management)

• He delineated five major functions namely planning, organizing,
commanding, coordinating and controlling which is called the functional approach to management

• Fayol also outlined 14 general principles of management namely 1. Division of work- work specialization can result in efficiencies and
is applicable to both managerial and technical functions. Yet there are limitations to how much that work should be divided.

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2. Authority- is the right to give orders and the power to exact
obedience. it derives from the formal authority of the office and from personal authority based on factors like intelligence and experience. With authority comes responsibility.

3. Discipline- is absolutely necessary for the smooth running of an
organization, but the state of discipline depends essentially on the worthiness of its leaders.

4. Unity of command- an employee should receive orders from one
superior only.

5. Unity of direction- activities aimed at the same objective should be
organized so that there is one plan and one person in charge.

6. Subordination of individual interests to general interest- the
interests of one employee or group should not prevail over the interests and goals of the organization.

7. Remuneration- compensation should be fair to both the employee
and the employer.

8. Centralization-

the

proper

amount

of

centralization

or

decentralization depends on the situation. The objective is the optimum use of the capabilities of personnel.

9. Scalar chain- a scalar (hierarchical) chain of authority extends from
the top to the bottom of an organization and defines the communication path. However, horizontal communication is also encouraged as long as the managers in the chain are kept informed.

10. Order- materials should be kept in well-chosen places that facilitate
activities. Similarly, due to good organization and selection, the right person should be in the right place.

11. Equity- employees should be treated with kindness and justice. 12. Stability of personal tenure- because time is required to become
effective in new jobs, high turn over should be prevented.

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13. Initiative- managers should encourage and develop subordinate
initiative to the fullest.

14. Esprit de corps- since union is strength, harmony and teamwork are
essential. Chester Barnard (1886 -1961) ---- Born in Massachusetts, attended Harvard but did not complete his degree work. One of Barnard’s best-known contributions is his Acceptance theory of authority- a theory that argues that authority does not depend as much on person of authority who gives orders as on the willingness to comply of those who receive the orders. He argued that employees are more willing to accept directions from manager if they (1) understand the communication, (2) see the communication as consistent with the purpose of the organization, (3) feel that the actions indicated are in line with their needs and those of other employees and, (4) view themselves as mentally and physically able to comply.

2. The Behavioral Theories The classical theorists generally viewed individuals as mechanisms of production. As a result, they primarily interested in finding ways for organizations to use these productive mechanisms more efficiently. In Contrast, the behavioral viewpoint is a perspective that emphasizes the importance of attempting to understand various factors that affect human behavior in organization. In exploring this viewpoint, we examine four aspects of its development: the contributions of the early behaviorists, the Hawthorne studies, the human relations movement, and the more contemporary behavioral science approach. 3.1Early behaviorists: Two early behaviorists, psychologists Hugo Munster berg and political scientist Mary Parker Follett contributed pioneering ideas that helped make the behavioral perspective a major viewpoint. Huge Munsterberg (1863-1916) − Born and educated in Germany 20

Psychology could study jobs and find ways of analyzing the individuals who are best suited to particular jobs. iii.− Earned a Ph. The book argued that psychologist could help industry in three major ways. Psychologists could help industry in identifying the psychological conditions under which individuals are likely to do their best work. − She argued that the groups within which they operate continually influence members of organizations. he set up a psychological laboratory at Harvard and Began seeking practical applications of Psychology.2 Hawthorne Studies 21 . Mary Parker Follett (1868-1933) − Born in Boston. Psychologists could help by developing strategies that would influence employees to behave in ways that are compatible with management interests. He published a book . ii. rather than a coercive concept based on hierarchical pressure.Psychology and Industrial efficiency in 1913. to her. She argued that power should be jointly developed. These ideas ignited and led to the establishment of the field of Industrial Psychology. − Another of Follett's forward-looking ideas was her belief that organizations should operate on the principle of "power with" rather than "Power over". Power. Munsterberg is considered to be the father of Industrial Psychology. − Interested in employment and work place issues − Attributed much greater significance to the functioning of groups in organs than proponents of the classical view of management. 3. involving employees and mangers working together. D in Psychology and a Medical degree In 1892. was the general ability to influence and bring about change. i. cooperative concept.

an Australian who immigrated to the United States with a group of researches from Harvard University had conducted Hawthorne experiments at Western Electrics Hawthorne. performance in the experimental group finally began to decline. First set of studies: The illumination studies (1924-1927) − Light was decreased over successive period for the experimental group while light was held at a constant level for the control group. − The researchers changed the usual supervisory arrangement so that there would be no official supervisor. even though the lighting for the experimental group became so dim that the workers complained they could hardly see. Illinois. − The researchers concluded that factors other than lighting are at work and the project was discontinued.Elton Mayo (1880-1949). where they were away from other workers and the researchers could alter work conditions and evaluate the results. − Instead. − In both groups. set of Studies (1927-1933) Relay assembly Test room. plant from 1924 to 1932. performance rose steadily. − The workers were also given special privileges such as being able to leave their workstation without permission. a behavioral approach that emphasized concern for the worker. the workers would operate under the general direction of the experimenters. The Hawthorne studies are a group of studies whose results ultimately led to the human relations movement. Second. At that point. − The most famous study involved five women who assembled electrical relays in the relay assembly test room. Three sets of studies were conducted. 22 .

free lunches. 3. − The researchers concluded that the change in the supervisory arrangement was the major reason for the increase in the productivity. Researchers felt that the physical changes.− The study was aimed at exploring the best combination of work and rest periods. Third. set of studies (1931-1932) Bank wiring observation Room study. As one writer has pointed out. particularly the effects of personal attention from supervisors and relationships among group members. − Studying the group provided knowledge about informal social relations within groups and about the use of group norms to restrict output when doing so seems advantageous to the group. such as pay. but a number of other factors were also varied (sometimes simultaneously). − Generally productively increased over the period of the study. which effectively fulfills their needs and achieves organizational goals (Keith Davis). and shortened ours.is motivating people in organizations in order to develop teamwork. − Built on the emerging findings of the second set − 14 male workers were formed in to small work group and intensively observed for 7 months in the bank wiring room. regardless of how the factors under consideration were manipulated. 23 . and provision for free lunches. such as rest periods.3 Human Relations movement Human relation . length of work day. as well as the group incentive pay plans were factors of less importance. "No other theory or set of experiments has stimulated more research and controversy nor contributed more to a change management thinking than the Hawthorne studies and the human relation movement they spawned. Impact of the Hawthorne Studies The Hawthorne studies pointed to the impact that social aspects of the job had on productivity.

Ph. lower-level needs at the bottom to higher level needs at the top. Abraham Maslow & Douglas McGregor. − Developed a theory of motivation that was based on three assumptions about human nature. Maslow's hierarchy of needs theory is probably the best known among mangers today. which emphasized the importance of pay.Two major theorists. •Human beings have needs that are never completely satisfied. 2. Have little ambition. − He developed the concept of theory X Versus Theory Y. a dichotomy dealing with the possible assumptions that mangers make about workers. Douglas McGregor (1906-1964) … Earned Ph.D. 4.D. Physiological (lowest) Safety Belongingness Esteem Self-actualization (highest) Maslow's work dramatized to mangers that workers have needs beyond the basic requirements of earning money to put a roof over their heads. Maslow out lined five levels of needs 1. and 24 . •Needs fit in to a somewhat predictable hierarchy. ranging from basic. 3. Need to be coerced. This concept conflicted with the views of scientific management. from Harvard was professor of Industrial management. were among those who came forward with ideas that mangers found helpful with respect to human relations. Of all the management related theories. 5. − Theory X mangers tend to assume that:    Workers are lazy. in Psychology. •Human action is aimed at fulfilling the needs that are unsatisfied at a given point in time. Abraham Maslow (1908-1970) .

workers are likely to respond in a manner that reinforces the manager’s original assumptions. and attempt to make the work more interesting and satisfying in regard to higher level needs. Focused mainly on the security needs. however. McGregor believed this integration could occur if managers give workers latitude in performing their tasks. McGregor understood. workers are likely exhibit greater commitment to organizational goals. managers with Theory Y assumptions have the potential for integrating individual goals with organizational goals.4. because the goals coincide more closely with their own. McGregor believed that managers who hold Theory X assumptions are likely to treat workers accordingly. In contrast. 25 . 3. minimize the use of controls. and Generally have high level needs that are often unmet on the job These theory-helped mangers develop a broader perspective on the nature of workers a new alternative for interacting with them. encourage creativity and innovation. some relatively immature and dependant workers might require greater control at first in order to develop the maturity needed for the Theory Y approach. Hence. Behavioral Science approach − The behavioral science approach is an approach that emphasizes scientific research as the basis for developing theories about human behavior in organizations that can be used to establish practical guidelines for mangers. Under such conditions. Theory Y managers tend to assume that     Workers do not inherently dislike work. such a manager sets up elaborate controls and attempts to motivate strictly through economic incentives . Are capable of self control Have the capacity to become creative and innovative.As a result.

but attainable.This approach is based on the notion that organizations can be visualized as a system.refers to the field of management that focuses on designing and implementing computer based information systems for use by management. 3. 4. 5.1 Systems theory . rather than seeking universal principles 26 . The theory views organization as an open system. As open system. organizations are in a continuous interacting and interdependent relationship with their environment. − Operations management. goals than they do without goals. which is composed of interacting and 5. − Management Science is an approach aimed at increasing decision effectiveness through the use of sophisticated mathematical models and statistical methods. goal. Two of the most important contemporary viewpoints are the systems and contingency theories. A system is a set of interrelated parts that operate as a whole in pursuit of common interdependent parts. Hence. − Management Information Systems . − An example of the useful outcomes of behavioral science research is the idea that individuals perform better with challenging.is a viewpoint that argues that appropriate managerial action depends on the particular parameters of the situation. The theory stresses that organizations must be viewed as total systems.− The ultimate aim of behavioral science approach is to develop theories that mangers can use as guides in assessing various situations and deciding on appropriate actions.2 Contingency theory . Three main branches have evolved: Management science. and management information systems. Contemporary views: These views represent major innovations in ways of thinking about management. statistics. and information aids to support managerial decisionmaking and organizational effectiveness.is the function. with each part linked to every other part. or field of expertise that is primarily responsible for managing the production and delivery of an organization's products and services. operations management. Quantitative Management View Point: Focuses on the use of mathematics.

 Emphasizing group responsibility. Planning A) Nature and Purpose of Planning Every human activity under taken with a view to achieve something must be preceded by planning.that apply to every situation.  Establishing gradual advancement policies. one has to decide the course of action to adopt-which would bring better results. Chapter Three Management Functions 1. on which topics to lay a greater stress and so on.  Increasing quality.  More informal controls. In other words. Emerging views . and  Showing greater concern for employees' work and non-work well-being. contingency theory attempts to identify contingently principles that prescribe actions to take depending on the characteristics of the situation. Theory Z approach involves:  Giving workers job security  Including them in decision making. and broader career paths.Japanese Management approach Management expert William Ouchi has outlined theory Z. This will mean deciding as to how much time he would devote for different subjects. 27 . A student desirous of securing a good grade in the examination has to plan his study. The approach seeks to match different situations with different management methods. 6.

the products to be sold. Managerial operation must be based on suitable and sufficient planning. confusion and wastage of resources. which would help the enterprise to achieve its objectives most expeditiously and economically. management would be a random activity producing nothing but chaos. before actually starting operations. Planning is the determination of the course and sequence of activities. Managerial success depends to a very great extent upon good and effective planning. the location. In its absence. policies. knowledge and considered estimates. A teacher has to plan his teaching. Planning will involve deciding a course of action from amongst a number of alternative courses." Planning is an intellectual process. the conscious determination of the course of action and the taking of decisions on purpose. planning is the function of forecasting. haphazard and success will be doubtful. Planning is basically making a choice from a number of alternative courses of action. 28 . Everybody has to plan in his own field. It is the application of creative thinking to choose the best possible course. For this. It is the primary function of management. It is therefore a mental process. To quote Harold Koontz and Cyrie O' Donnel. All our activities undertaken individually or in groups have the element of planning whether done consciously or unconsciously or whether elaborated or in brief outlines. visualizing the future and finalizing the course of action. Thus in the context of management." planning bridges the gap between where we are and what we want to achieve. considered various aspects and taken many decisions if not all.. What is planning? Planning is the chalking out of the course of action. It is the preparation of the blue print. He has to plan within available resources. i. Without planning Work will be. procedures. framing of the objectives. Planning is the task of thinking in advance. The chief function of the management is to attain the objective of the enterprise. which would help the enterprise to attain its objective. it has to plan not only in the beginning but also throughout the operations. schedules. Even a housewife plans her daily chores. It is the spelling out of what is to be done. customers to be approached or the market to be entered. budgets etc.A person intending to set up a business can not do so unless he has done a lot of previous thinking. Planning is the basic activity for all managerial operations. when how and by whom.e.

Taking stock of the present resources. Forecasting the likely possible problems to be faced in achieving the objectives. Discovering alternative course of action and Choosing the most expedient and effective courses of action What is to be done Identification When is it to be done Righ time How is it to be 29 .To summarize. planning involves: Determination of objectives to be achieved.

All plans of the company should be coordinated with one another so as to produce an integrated plan. 3. which should be removed or modified if plans are to be formulated for the achievement of its objectives. The assumptions made must be as accurate as possible. 4. Principle of limiting factor. Principle of coordinated planning. Principle of sound and consistent premising. 6. Principle of commitment. 2. This should encompass the period during which the resources expended on the implementation of plans are fully recovered. The basic purpose of planning for the future is to ensure effectiveness and efficiency. Principle of contribution to objective. Principle of timing 30 . The limiting factors are those elements in a company’s internal and external situation. 5.Method Where is it to be done? Elements of planning Place Principles of planning The following principles underlie sound planning: 1. and provides the criterion for the period to be covered by the long-range plans. This relates to the time period of planning.

Plans should aim at minimizing the cost and there by achieve the most efficient utilization of scarce resources. ii. i. It is essential that plans should be understood and accepted by employees. hiring etc. Planning is an intellectual activity Planning pervades every department of managerial activity Planning aims at targets Planning is a continuous activity Importance of planning The importance of planning lies in its utility. E. iii. iii. iv. construction. 7. which establishes the importance of a thing.Plans should be synchronized as to the time of their implementation. chaos and confusion. 9.Principle of acceptance. iv. v. Principle of navigational change. Plans should have an in-built flexibility so that they do not become in operational or outmoded when actual environment turns out to be different from predictions. Planning is basic to managerial operations. Principle of flexibility. Focuses attention on objectives Planning is essential in modern business Planning brings economy in to operation Planning makes control possible Planning helps motivation possible Planning ensures against failures and setbacks. 8. 10. 31 . and as to their results in relation to the planned goals. Absence or lack of it would only bring wastage. Plans should be reviewed periodically as to their premises in relation to actually operating environment and future expectations. Nature of planning: i. vi. derivative plans for purchasing. v. ii.g. It is the function. Stating the following can emphasize the importance of planning. Principle of efficiency.

Lack of reliable data Expensive Time consuming Stifles initiative Psychological hurdle External factors B) The Planning Process Determining objectives and outlining the course of action needed to achieve these objectives is referred to as the planning process.vii. Developing Premises (Collect & forecast information): . Objectives must be specific. iii. ii. where action should take place.The first step in planning process is identifying the goals of the organization. vi. Some of these are: i. managers should try to restate the broad objectives in definite and clear terms that will encourage checking and measuring performance against targeted performance in the plan. In other words. who is to perform it. premises are the assumptions about the environment 32 . attainable. v. The actual steps in the planning process are difficult to specify for all organs because of wide differences in size and complexity. reliable. The objectives fixed must clearly indicate what is to be achieved. and time bound (SMART).After establishing objectives it is necessary to collect and forecast information. measurable. Identify goals: . Planning helps decision making Limitations of planning Planning has its own limitations. iv. 2. Planning premises supply the necessary information concerning internal as well as external environment. it is possible to reduce the planning process to the following steps: 1. However. how is it to be undertaken and when it is to be accomplished. The current status of the organization in the environment must be assessed with a forward look at the future changes. Actually.

Therefore. Developing alternative courses of action is not a tough exercise. derivative plans must be developed to support it within the framework of the basic plan. 33 . Hence. 3.Plan proposals and targets should be thoroughly communicated to very employee of the enterprise. sectional and individual plans. 4. it is unrealistic to make assumptions in great detail about environmental factors.In the third step. financial problems and other intangible factors make the evaluation process very difficult and complex usually alternative plans are evaluated against such factors like cost. In order to be effective. Once a choice is made and a master plan drafted. risks. 5. so that the more fruitful ones can be analyzed. The divisions of master plan into departmental. alternatives plans are developed and evaluated thoroughly. it is wise to limit assumptions to those items that are critical to the planning process. Future uncertainties. benefits. as they would be mentally prepared for the plan even before its final communication. they must be evaluated. The difficulty lies in reducing the alternative. Once alternative courses of action have been determined. the planning process should also provide for a feedback mechanism . It should be noted in this aspect that the personnel should also be involved in some way or the other in the preparations of plans. provides a realistic picture of things to come in future. organizational facilities etc. derivative plans are formulated in each functional area. This will invite voluntary and wholehearted cooperation from the staff. Everyone should understand it. Select the plan and develop sub-plans: . where the future is highly uncertain adaptation of several courses of action rather than one would be advisable.The forth step involves selection of the most desirable plan and the development of derivative plans. Determine and evaluate alternative plans: .in which plans are to be implemented. " Because the future is so uncertain. Computer Oriented Mathematical planning techniques can also be used to find out the best course of action. Selection of one course of action to face future challenges introduces rigidity and inflexibility in the planning process. Communication of the plan: .

Time series and explanatory methods. steps should be taken to adjust the plan. purchasing. sales analysis. budgeting. or qualitative. Eg. and judgmental. Expert knowledge.6. and judgment are used in technological forecasting. logistics planning. Jury of executive opinion and sales force composites. Evaluation: . Therefore. marketing planning. or qualitative. 34 . Forecasting is used in variety of areas. creativity. forecasting is aimed primarily at predicting long-term trends in technology and other important aspects of the environment. If necessary. Skills required in planning Planning requires forecasting and decision-making skills. Quantitative forecasting relies on numerical data and mathematical models to predict future conditions. Eg. Technological. Decision-making is the process through which mangers identify organizational problems and attempt to resolve them. and product planning. Forecasting is the process of making predictions about changing conditions and future events that may significantly affect the business of conditions and future events that may significantly affect the business of an organization. technological. The plan should device the scheme of continuous appraisal. The forecasting process is important to both planning and decision-making because each depends heavily on assessment of future conditions. inventory control. They have to see that the plan is worked out as desired and the targets are being achieved. Eg. Forecasting methods fall into three major categories: quantitative. This will reveal the pitfalls and the shortcomings in the actual working of the plan.The managerial responsibility includes following the action being taken on the plan. such as production planning. strategic planning. the manager should know the techniques of fallow-up. material requirements planning. Delphi methods & scenario analysis Judgmental forecasting relies mainly on individual judgments or committee agreements regarding future conditions.

is an issue that requires resolution but does not simultaneously have the importance and immediacy characteristics of a crisis.is a situation that offers strong potential for significant organizational gain if the appropriate actions are taken. Severe cash-flow deficiency. E. well structured situations through the use of predetermined decision rules. Programmed decisions are those made in routine. Planning sills need creativity and some of the following suggestions. I) What do you want to do? . are more creative in your planning and your daily life. Non-crisis problem . repetitive. A crisis problem is a serious difficulty requiring immediate action. which are based on research and thinking on creativity. may help you. Most of the significant decisions that managers made fall into the non-programmed category. managers also typically deal with different types of decision-making situations.Some of the following suggestions. E. are more creative in your planning and your daily life.g. These are: Programmed decisions and nonprogrammed decisions.Managerial decision-making typically centers on three types of problems-crisis. An opportunity problem: . In addition to facing three types of decision problems.G. and opportunity problems.Get all the facts clearly in mind. which are based on research and thinking on creativity.Identify the facts that seem to be the most important before you try to work out a detailed solution ii) How can you do it? 35 .Take time to understand a problem before you begin trying to solve it. Factory that needs to be brought into conformity with new state antipollution standard during the next 3 years and an employee who is frequently late for work. These may be based on habit computational techniques. . . or established policies and procedures. no crisis. Non-programmed Decisions . may help you.are those for those pre-determined decision rules are impractical because the situations are novel and/or ill structured.

Think of a similar problem you have solved in the past and build on the strategy you used them.If you get stuck on one approach. . Solve part of a problem and go on from these you don't have to do everything at once. strategies verbal.Try to be right the first time. This allows you to capture important points and to come back to them later.Look for relationships among various facts.Imagine you acting out the problem. . . . . .Eliminate cultural taboos in your thinking (such as gender stereo typing) that might interfere your ability to come up with a novel situation. Try looking at the same situation in a number of different ways. .Use several different problems solving to yourself out loud. Take a guess and see whether you can back it up. See whether you can generalize from a similar situation to your current problem. or walk through a situation.Try consciously to be original. 36 ..Trust your intuition. visual.Play with ideas and possible approaches. rather than attending to it in scattered sessions. . but if you are not. ask whether you made assumptions that might not be true. to come up with new ideas . Draw a diagram to help you visualize the problem. explore as many alternatives as you need to.Don't worry about looking foolish if you say or suggest something unusual or if you come up with the wrong answer.Set aside a sizable block of time to focus on particular problem. . Write out your thought. . It also allows you to look for patterns. . talk iii) How can you do it better? . . Actually act out the problem. .Establish sub-goals. acting.Use analogies whenever possible. If your initial approach doesn't work.Workout a plan for attacking the problem. mathematical. try to get the solution by other route.Keep an open mind.

without evaluating any of them until the end of the session.Think of unconventional ways to use objects and the environment. This involves trying to produce as many new and original ideas as possible. . 37 .Be alert to odd or puzzling facts. your solution may be at hand. If you can explain them. From the point of view of approach. Look at similar things as if you have never seen them before. In other words. D) Types of plans Plans can be classified in different ways from different points of view. .Strive for objectively. . planning may be . Formal planning should be undertaken when the course of action is prolonged or it has to cover a long period of time.. and force yourself to figure out new ways. Formal planning is the name given to the type of planning in which the plan is in the form of a written document. Short range planning or long-range planning.Formal or Informal From the point of view of the period covered by the plan it may be From the point of view of use the plan may be Standing plan or Single use plan.Consider taking a detour that delays your goal but eventually leads to it. . .Do some brainstorming with one or more other people. the course of action is systematically written.Discard habitual ways of doing things. Evaluate your own ideas as you would those of a stranger. Important project planning should always be formal.

It may be a planning for five. if it is a single action for which planning is to be done it should be informally planned. Short & Long range Planning As the very name implies a short range planning covers a very short period of time. Usually the period of a few days. Long range planning aims to achieve long-range goals. for the work in hand. It is concerned with the immediate future. This will depend on the nature and scale of business.On the other hand. Standing and single use plans Plan 38 . It is to be done for a single activity in a short period of time. V) It takes in to account the possible competition and plans how to overcome it. VI) Ensures that projects are assigned to the executives Properly. It is based on the long-term plan. The top management does this planning. Long range planning is done with a long period in view. I) It ensures replacement of capital in time II) It ensures availability of adequate personnel III) It ensures that decisions are not taken in haste. is roughly made & covered orally. few weeks or few months will be a short period. The following are some of the advantages of long-range planning. What time can be reckoned as a short period? Nothing definite can be said in this connection. A short-range plan is made for the current operation. It is a step-by-step approach to cover the long-range plan. Informal planning refers to a plan. It involves the setting up of the machinery to make sure that these goals are attained. which is in the minds of the planners. or even greater number of years. It foresees not the immediate future but the distant future. Short range planning is done to achieve the immediate target. It may be extended even to a year. IV) It provides standards for measurement of overall performance.

stated in concrete or non-concrete terms. In other words. It is also called a specific plan. On the other hand. they can be applied in similar situations. They are the goals. Objectives can be general or specific. a single use plan is one. which an enterprise would like to achieve. which can be used over and over again. which every enterprise should aim at: Maximization of profit Reduction in cost 39 . policies. Objectives are what the organization would like to attain. Objectives The first thing for planning will be to lay down objectives. In the words of Louis Allen "Objectives are the goals established to guide the efforts of the management and each of its components. rule. Profit making is one. General objectives are common to every enterprise. strategies and procedures are kinds of standing plans. Planning has to b e done within the framework of the objectives.Standi standing plans Single use plans Objective s Policies Progra programs Budgets Projects Procedure s Plans are also classified as standing and single use plans. objectives. The following is a list of objectives. Standing plans come from top management while those at the lower levels prepare single use plans. which is prepared for a particular situation or a particular operation. A standing plan is one.

Policy Policies are statements. apart from general objectives organizations should set out their own objectives. . Policies do not require action. other wise there may become contradiction or overlapping. In matters of personnel. levels in all departments in taking decisions on problems likely to come up in the course of working. thus. It boosts the confidence of the managers. a standing plan.- Optimum use of physical resources Procurement of qualified and expert personnel. but are intended to help managers in their decision commitment. Procedure 40 . when they make decisions. because in the absence of a policy there are chances that dissimilar decisions may be taken in similar cases.In line with the objectives of the departments. The essence of policy is the existence of discretion. Maintenance of healthy industrial relations etc. They should be: . It ensures uniformity of action. Policies give a unified structure to the plan.Within the framework of general objectives. It helps in taking prompt decisions. Uses of policy Helps the manager to make decisions without referring the matter to the higher authorities. which guides managers at all. it avoids dissatisfaction heart burning. department. According to Harold Koontz "Policies are general statements or understandings which guide or channelize thinking in decision making of the subordinates. These would be referred to as specific objective. However. of those principles and rules that are set up by the executive leadership as guides and constraints for the thoughts and action of the managers at different levels in the organization.wise. A policy is. Preferably. A policy defines the limit within which managerial decisions can be taken.

It is necessary that the distinction between them be properly understood.Procedure is a type of plan. It lays down the sequence in which operations will be performed. Procedures are laid down for routine matters like payment of wages. Policy is guide to decision making. raw materials and stores etc. how to do it. In this 41 . In bigger concerns. the emphasis is on the general approach. purchase of certain items. Sometimes the procedure is laid down in a chronological order. Method Apart from policy and procedure. policies and procedures can be converted into a program. contingencies. Policy provides a direction. Policy suggests what to do. the case method of study and so on. i) ii) iii) iv) In policy. Advantages They minimize the burden of decision making of the individual. they are written in the company’s handbook. The procedures will lay the activities step by step by which the work will be performed. The method tells us the manner of performance. the discussions method. procedure is guide to routine activities. The staff is supplied with a copy of the handbook. a policy gives rise to the method. For example in teaching learning process there are several methods. the question answer method. A program will be a course described step by step. chalk and talk method. handling of cash. while in procedure it is on the details. They bring out uniformity. Program Objectives. In fact. procedure suggest. certainty & consistency of action They enhance the efficiency They help to divide the work They help in saving time They solve as the basis of evaluation of workers performance Policy Vs Procedure Policy and procedure are often mixed up. However. in detail as to how the resources will be applied for each objective. there is also the need of laying down the method. traveling allowances. procedure deals with the approach.

A program gives a concrete shape to the policy and method. George Odiorne has defined MBO as a management process whereby the supervisor and the subordinate. and use these measures as guides for operating the unit and assessing the contribution of each of its members. management by objectives and results plan management. MBO involves setting specific. it may be specific in which case it is planned for a single action. and from multinational corporations to the family owned grocery store-managers are familiar with the term.respect. In fact. The program may be a standing plan if it can be put to repeated use. Financial budgets. Capital budgets relating to new investment in product diversification. Otherwise. sales budgets etc. E) Management by Objectives (MBO) The phrase Management By Objectives or MBO has become part of the language of managers throughout the world. etc may extend over a period of one year. objectives and policies will be of little use if a program is not made out. Budgets Budgets are the most widely used instrument of planning as well as control. performance budget. These are often called numerical plans as they are quantitative in nature. In virtually every type of organization-from churches to military. measurable goals with subordinates and then periodically discussing their progress. Success of a program will near success of managerial planning. It has appeared under several names: result-oriented management. also called profit plans are an estimate of revenue and expenditure for one year. jointly identify the individual's major areas of responsibility in terms of the results expected of him or her. Non-financial budgets include manpower budgets. operating under a clear definition of the common goals and priorities of the organization established by top management. it is a type of plan. A program is a course of integrated action intended to implement the planned actions. 42 . to name a few. and management by agreement. plant expansion. material budgets. MBO is the only method used for appraising the performance of supervisory personnel. In some firms.

specific objectives to be achieved over a set period of time. supervisors evaluate how well objectives have been met. 3. The most common mistakes that managers make in attempting to institute MBO are these: Managers fail to support the program fully.MBO can be used with any employee to make certain that each employee gets timely feed back on his or her performance. Overall goals are usually are set by top management. 1. Precisely defining the job that needs to be done. supervisors usually set specific departmental goals. Evaluating results. and the process of setting objectives begins again. MBO essentially has four steps. 4. 2. Purposes of MBO The primary purpose of MBO is to improve the effectiveness of the individual and of the organization as a whole. and what should they be? After that question has been answered. At the end of the time period. Pitfalls of MBO The secret of success in implementing and utilizing MBO program is recognizing the pitfalls that trap a manager. Subordinates are informed of their progress. Providing feedback to the subordinate. MBO forces managers to answer the question posed by Peter Drucker: What are the purposes and nature of organization. Then an environment is created in which employees' exercises self-direction and self-control by monitoring their results and taking corrective action as needed. 43 . Establishing goals. along with priorities and measurable performance. It also guides the management process itself. Supervisors and workers together set attainable. clear objectives are established.

Supervisors are not trained properly in the process and mechanics involved. Objectives are never modified. Too many objectives are set. Planning consequently requires organizing the efforts of many people. Subordinates are not given an equal voice in the setting of the objectives. PART IV ORGANIZING A) Meaning of organizing It has been pointed out that planning involves setting objectives and then determining exactly what to do to attain those objectives. Too much paper work is required. Managers fail to prepare adequately for evaluation and feedback. It forces us to address several basic questions: ∗ ∗ ∗ ∗ ∗ What specific tasks are required to implement our plans? How many organizational positions are needed to perform all the required tasks? How should these positions be grouped? How these activities are effectively coordinated? How many layers of management (organizational levels) are needed to coordinate them? 44 .2. A system of rewards is omitted. 8. Of course. 4. no one person can implement all the plans of a modern organization. Managers fail to recognize that a subordinate can meet an objective and still have unsatisfactory performance. Nor can one person do everything to meet the goals set forth in those plans. 3.

another of manager’s major duties involves arranging human and physical resources to help attain organizational objectives. iii) centralization. A number of theories have been propounded from time to time with a view to providing guidelines for designing organizations. for putting plans in to action. He recognized the tentative nature of these principles and held that the art of management consisted in selecting the appropriate principles for a given situation. duties and goals. The classical approach Fayol proposed that the following principles underlie the designing of organizational structure: I) division of work. ii) unity of direction. Providing a framework of decision making. systems and contingency approaches to organization. bureaucratic. a structure. Organizing. 45 . This leads to the creation of an organization structure or a framework for decision-making and task performance. B) Basic concepts of organizing. and Creating a network of communications for the purpose of achieving the enterprise objective with optimum efficiency and effectiveness.∗ How many people should a manager supervise directly? The answers to these and other questions enable us to create an organizational arrangement. It aims at: I) II) III) IV) Defining every employee’s tasks. as it is created and defined by the exercise of executive authority. We will briefly discuss here the classical. and v) scalar chain. The concept of organization has been a subject of much controversy with the result that it is not easy to set forth its precise definition. human relations. Establishing authority-responsibility relationships for cooperative and concerted efforts. The organizing process results in to a hierarchy of tasks and relationships among various position holders. This organization structure is called the formal organization. Organizing is the development of jobs and the arrangement of them in to structure that will assure that duties are accomplished in a coordinated way. iv) authority and relationship.

authorityresponsibility relationships and unity of command. and Etzioni agreeing with both. though stated differently. stability. and procedures. an organization should be designed on the following principles: I) All the activities required for the attainment of organizational goals should be divided in to highly specialized jobs. Argyris regards such organizations as damaging to the development of mature employees. rules. namely precision. The classical principles of organizing formulated by Fayol. scalar principle or the chain of command. Weber views bureaucracy as the only appropriate design. emphasis on authority-responsibility relationships and resistance to change. and stability. Organizations designed on classical principles were visualized by Fayol to be characterized by order. Gouldner`s studies also support these views. Weberian principles of organizing are aimed at attaining the same goals. initiative and esprit de corps. unity of direction. v) Employment should be used on the criterion of merit.The Bureaucratic Approach Max Weber held that in order to maximize the benefits of the bureaucratic form. so that job holders acquire special abilities in the performance of their jobs. emphasizes that these types of organizations stifle individual initiative. strong attachment to sub-goals. and bureaucratic principles advanced by Max Weber are characterized by marked similarities among them. where as Fayol advocated the classical principles of organizing should be applied with discretion. 46 . He found that employees in bureaucratic organizations tend to gear their activities to the minimum acceptable levels prescribed by the rules and procedures. ii) Jobs should be performed in accordance with definite policies. Thompson argues that organizations designed on these principles are characterized by excessive insistence on procedures and routines. discipline. Central to both sets of principles of designing the organizations are the concepts of division of work and specialization. iii) Each job holder should be accountable to a superior in the chain of command. The classical as well as the bureaucratic principles have been subjected to much criticism during recent years. iv) Decisions should be made in a formalistic and personal manner. and alienate the employees. reliability.

broad span of control with fewer levels in the organizations. group and inter group behavior are McGregor. which is not applicable to all kinds of organizations because of differences on their goals and environment. They emphasize group oriented management. They are mainly characterized by :I) division of labor and specialization. The human relation approach has been subjected to severe criticism. voluntary cooperation and self control in place of hierarchical coordination and control. management by objectives in place of close supervision. enrich jobs instead of task specialization.Likert and Argyris.  Maintaining interrelated parts. System Theory Approach: Regards organizations as an “open System” which is in a continuous interact ional and interdependent relationship with its environment. ii) precise definitions of role requirements. group decision-making instead of management prerogative. which emphasized the importance of human factor in organizations. iii) use of authority for achieving coordination. team work. 47 . According to Argyris. It ignores the basic characteristics of formal organizations that they are deliberately created mechanisms for the achievement of explicit common goals. Human Relations Approach: The Hawthorne studies led to the emergence of the human relations of school of thought. The chief exponents of viewing organizations in terms of a pattern of interpersonal. A system is defined as “anything that consist of interdependent elements. and seeks to control and adapt it. It naively assumes that organizations tasks can be performed by voluntary cooperation resulting from interpersonal and group processes. The behavior or the state of each element is dependent upon the behavior of or state of the other elements.Organizations designed on classical-bureaucratic principles have also been found to be mechanistic.  Achieving specific objectives. and use of informal norms and standards in place of policies and rules as framework of decision-making. It prescribes a universal approach.  Maintaining themselves through their interrelatedness. and v) emphasis on positions as means to goal attainment rather than on the goals. an organization is:  A plurality of parts.

design and structure of an organization are the function of the environment within which it operates. These strategic choices or decisions determine organizational goals. outcomes of the organizing 48 . The assignment of each grouping to a manager with the authority (delegation) necessary to supervise it. Grouping of activities necessary to attain objectives. The process of organizing The organizing process involves: 1. The contingency approach is the latest and the most widely accepted view of organization. It attempts to achieve its goals as efficiently and effectively as possible by coping with uncertainty resulting from the dynamic nature of its environment. It attempts to attain its goals by attempting to make rational choices within the constraints imposed by its internal and external environments. Identification and classification of required activities. It emphasizes that the goals. Contingency Approach: Integrates close and open system approach to organization. structure. 2. 4. is official. The word “formal” in this context refers to the fact that management typically creates organization structures for specific purposes and. and the manner in which it adapts and influences its environment. or formal. its form. It has limited utility for practicing managers as requires him to comprehend and evaluate the multiple environmental factors that affect his decisions. According to this approach. which is the function of power distribution within it. hence. C. Organizational structure is the formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organizational goals. The ability of an organization to respond to its environment depends on the “strategic choices” that it makes.Systems approach to organizations is regarded as highly “exacting and expensive” when used for research. an organization has multiple goals and a form and structure. and The provision for coordinating horizontally and vertically in the organization structure. The strategic decisions are in return determined by the internal power policies of an organization. 3.

 The various mechanisms required facilitating vertical (top-to-bottom) co-ordination. Organization charts vary in detail. which are not designed by management but usually emerge because of common interest or friendship. the reporting relationships from lower to higher levels. and the official channels of communicating information. but they typically show the major positions or departments in the organization. The Organization Chart: is a line diagram that depicts the broad outlines of an organization’s structure. They also indicate the way the positions are grouped into specific units. such as task forces and interdepartmental teams. Organization structure consists mainly of four elements:   The assignment of tasks and responsibilities that define the job of individuals and units. The clustering of individual positions into units and of units into departments and larger units to form an organizations hierarchy. president.  The various mechanisms needed to foster horizontal (across departments) coordination. Organizational chart for ABC Insurance Company is depicted as under: Chairman. Organizations also have informal structures. and chief executive officer Secretary V/P Marketing Communication General Counsel V/P Operations Insurance Operations V/P – Human V/P Finance Resources HR Developmen Internal Audit 49 . such as the number of individuals reporting to any given managerial position and the degree of delegation of authority. The process of developing an organization structure is some times referred to as organization design. or pattern of interaction.function.

Badway further noted that 50 . in all formal structures. it does not appear on the organizational chart Informal leadership and communication channels. Informal structures. group gossip. because of the spontaneous nature of the informal structure. and well defined tasks to be performed. there are established policies and channels of communications. and social activities of individuals. are shadow organizations that evolve through the personal interactions. and grapevines are all powerful components of the informal structure of an organization. sentiments. Informal Organizational Structure As discussed above. Keith Davis on the other hand described informal organization as “ a net work of personal and social relations note established and required by the formal organization but arising spontaneously as people associate with on another. friendships. cliques. small group interactions. clear lines of authority. on the other hand. Formal Organizational Structure: is a framework of officially established relationship between divisions (horizontal level) and various management levels (vertical). they do not have job titles or formal descriptions of authority. has two types of organizational structures. lunch at coffee break conversations. Chester Barnard described informal organization as “any joint personal activity without conscious joint purpose. regardless of its size.Market Support Field Management I Field Management II Actuarial Information Management system Health Unit Investment Training Real Estate Financial Analysis Tax Every organization. According to Badway. These are formal and informal organizational structures. even though contributing to joint results”. This structure is an outcome of the organizing process and is clearly represented by the organizational chart. there exists an informal organization. yet they are often more influential than formal structures of authority. With every formal organization. They are not written down.

and should not be considered as to be exhaustive.1.social. and identification needs are usually largely satisfied through the informal organization system. Basic Principles of Organizational Structure There are some basic principles and guidelines to follow in designing an organization. These are:     Scalar Principle Unity of Command Authority and responsibility Influence.1 2.2 2. these principles will enable managers or experts in the field to use them while designing an organization. security. Each principle consists of other principles.1.1 Scalar Principle The Scalar principle establishes that authority and responsibility flow from the top management to the lowest level in an organization. since an employee reports to his immediate boss who also in turn reports to his immediate boss. 51 . 2. 2.1 Authority and Power Principles The authority and power system in an organization is composed of four major principles. This principle suggests that an employee should not feel free to contact his immediate boss’s boss.2 Unity of Command The unity of command principle suggests that an employee should have one boss to whom he/she is directly responsible. power and Accountability 2. These are: 2.3 Authority and power principles Division of labor and specialization principles Coordination and communication principles. However. there is no ambiguity about who should report to whom. 2. Here. It refers to the reporting relationship in which an employee should receive orders from and reports to only one boss. It is important to keep in mind that this is a practical classification.

the organization is centralized. responsibility cannot be assigned or given away. unlike authority.This one-man one boss principle has several justifications according to Badway.3 Authority and Responsibility Authority refers to the rights inherent in a managerial position to give orders and expect the orders to be obeyed. Responsibility. When authority is dispersed throughout the organization. with ultimate power resting at the top. it is said have to be decentralized. Authority decreases all the Responsibility Vs Accountability Responsibility which complements authority. way to the bottom of the chart. 2. It must be willingly accepted. is felt obligation. Hence.1. For this reason. the principle:     Minimizes duplication and conflict in instruction down the line Decreases confusion since every one is accountable to only one boss Prevents diffusion since every one is accountable to only one boss Prevents diffusion of responsibility since the boss is ultimately accountable for getting the job done. In practice. the principle refers to the reporting relationship in which an employee should receive orders from and reports to only one boss. the amount of authority a manager can exercise depends on his/her boss's willingness to let the manager make decisions. Authority is also the right to command subordinates action. It is legal or institutionalized responsibility. The chain of command that limits the organizational levels in a hierarchy is represented in the organizational chart. authority should be given to managers who are willing to assume equal amount of responsibility. Higher-level positions have greater authority. 52 . Hence. when most decisions are made at the top. on the other hand refers to the obligation to perform a task.  Helps improve communication and promote mutual understanding between the boss and his subordinate. This one-man one boss principle has several justifications according to Badway.

as the ability to influence others’ behavior to accomplish preferred results.1 the objectives 2. or may even be fired.2 Division of Labor Principles There are seven major principles relating to how the entire work of an organization is broken down into components and assigned to individuals or groups. It is an obligation to report to one’s superior for the achievement of objectives. process. a manager certainly can hold subordinates accountable for their actions e. It is important to note that responsibility and authority can be delegated to others.2 Job design and task specialization 2. accountability can never be delegated.4 Span of control 2.2. guide performance.4 Influence. Power can be defined. a manager who uses authority irresponsibly who consistently makes poor decisions may be reprimanded.2. may have the authority taken away.7 Line-staff relationship 2.g.2. Accountability on the other hand. 2.2.2.2.1. These principles are: 2.1 The objectives Since the organizational structure is a mean toward an end. and Accountability Influence is the right to control and direct the actions of others’ by suggestion or example rather than by command. power.Although accountability can't be delegated.2 Job Design and Task Specialization Clearly formulated objectives provide the organization a sense of direction.5 Decentralization versus centralization 2.2.6 Delegation 2. 2.3 Departmentalization 2. is the liability created for the use of authority.2. 2. and facilitate the overall management 53 . the preparation of objectives must precede the design of the organizational structure.2.

staff’s backgrounds. expert activities create a functional pattern of an organization. According to Holt. For example. customers. regions.1 Products Departmentalization An approach to departmentalization based on grouping people according to an organization’s products or services. 2. 2. geographic.4.2. maternity. or projects to enhance planning. employees in an accounting department are all responsible in keeping financial records and balance of the books. technology. 2. southern.3 Departmentalization It is classifying Departmentalization is a logical grouping of work activities based on expertise. markets. each based on a different way of grouping specialists. etc.2.2. product.2.4. leading. 2. western and northern 54 . with functional activities relocated under product or service divisions. These approaches are called functional. and then giving them authority for those. cardiac. organizational functions and responsibilities into distinct administrative units. the An approach to departmentalization based on geography or territory. Here job design refers to the structuring of individual jobs. 2. Here organizations organize their employees and functions according to the type of customers they are going to serve. there are four approaches to departmentalization. products.2.4 Functional Departmentalization Bringing together people with similar skills and expertise. and controlling. a hospital might be organized by separating pediatrics.2 Geographic Departmentalization For example. It is important to bear in mind that task specialization largely depends on the nature of functions to be carried out.4. manufacturing function of an organization may have eastern.3 Customer Departmentalization This is grouping activities based customers’ need. For example.This principle suggests that the overall work of the organization should be divided into specialties. and making efficient and interesting. integrating them within work groups. and customer patterns of organization. and cost consideration.

Activities may be organized on the basis of . which may be given one of many titles such as Chief.g.Some organizations. baking. The goal of departmentalization is to perform the work of an enterprise in the most efficient manner. Manager. and financial resources. e. Other Bases of Departmentalization There is no one best way to departmentalize activities or divide the work of an organization. packaging the finished products.  Project Organization: . Vice president.  Matrix organization: .that is. The project may be temporary. such as building a new manufacturing plant or a new weapons system. and -Task force  Process Departmentalization: . This is called Process Departmentalization. enabling a dual rather than a single chain of command. or Administrator. group similar manufacturing production processes into departments. Step3--The department head accepts responsibility for achieving organizational goals and is held accountable to a superior for performance. The four bases of departmentalization that have been discussed are the most common.is a method of structuring an enterprise in order to carry out a specific mission.Authority to perform these activities is assigned to a department head.is the grouping of activities according to functional departments and projects. Departmentalization involves 3 steps Step 1.Matrix. Chairperson.Departmentation is also the arrangement of the work of an enterprise into manageable parts. material.Project . 55 . Commander. to obtain the best possible use of human.Process . Step 2 .reasonably like or similar tasks are grouped together. Bakery – mixing ingredients. but an organization may find it more efficient to organize some or all of its activities on still design plans. particularly production enterprises.

and the kind of organization are factors that help to determine the ideal span of control applicable in a particular situation. ii) Group. The organizational level. Task force Departmentalization: – A task force is a temporary kind of organization that is formed to study and solve or prepare a recommendation for a unique problem that will not likely recur.2. the cost of managing will be unnecessarily higher. The principle has to do with the number of people who directly report to a given manager or the number of people whose work a manager can effectively manage. and iii) Cross. iii) Review the structure frequently: . an excessive number of people report to one manager). 2. i) Single direct. ii) Commit organizational relationships in writing: – organization should have an original chart that clarifies relationships among departments. a French Management Consultant recognized three types of relationships i. an excessive number of managers are employed).e. is n 2n + n-1 Where n = the number of subordinates 56 .A Graicunas. If the span is too narrow (that is.An organization structure should be as simple as possible. A task force is used when no one manager has the expertise to solve a Guidelines for effective Departmentalization i) Strive for simplicity: . problem It typically represents an interdisciplinary approach to goal achievement. Span of Management can be wider or narrow If the span of management is too wide (that is.Departmentalization should never be regarded as finished. This varies from one situation to another. Limits of the span of management. the nature of tasks.5 Span of Control Span of control is also called the “span of management” and the “span of supervision”. subordinates will receive less supervision than they need and various forms of waste will occur. With this rationale devised a formula that fro calculating the number of relationships given any number of subordinates. shows lines of authority and accountability and indicates the chains of command. There is no magic number. the kind of personnel.V.

The only time higher-level managers become involved is in new.2. 2.6 Decentralization Versus Centralization Decentralization is the degree to which responsibility and decision making authority is dispersed throughout the organization. limits his/her span of control.2 Factors affecting the Span of Management i) Routines and simplicity of work – Mangers supervising people with simple and repetitive jobs are able to manage more immediate subordinates than are those who supervise people with complex. exceptional situations.g. iv) Management by Exception – Management by exception is a philosophy of supervision that encourages lower level managers to take decisions on routine matters with in set guidelines. including the more assistants the manager has to help handle details. In centralized organizations. Tasks are usually more repetitive at lower levels than at upper levels of an organization. Use of assistants – The number of assistants that a manager has is related to the span of management. That is. e. decisions are concentrated at the highest level in the organization. v) Management by exception therefore requires A manager who insists on making all decisions. the greater the support given a manager.the amount of training. iii) Subordinates training and experience. there is an inverse relationship between a managers span of control and the geographic dispersion of his or her subordinates. decentralized decision. Knowledgeable subordinates who work well on their own require less supervision than inexperienced. non-repetitive tasks. regardless of their importance. 57 . the wider the span of management can be. experience and ability that subordinates have is directly related to managers span of control.making.Normally. ii) Geographic dispersion of subordinates: . poorly trained workers do. on the other hand. A sales manager whose sales people are scattered over a wide geographic region cannot supervise as many subordinates as manager can whose subordinates are in one building.

58 . he must delegate part of his authority and responsibility to another person.2. several reasons why managers hesitate to delegate authority to organization. Delegating important tasks to subordinates gives them opportunities for valuable training and skill growth and development 2. there are many good reasons for delegation. the manger the opportunity to do what he was hired to do managing.7 Delegation Delegation is the process of partially distributing authority to subordinates for making decisions or performing tasks. Delegating gives subordinates the opportunity to participate in decision-making and thus creates a commitment toward putting these decisions into action. Decisions made by lower level managers usually are timelier than those that go through several layers of management. nevertheless. including: 1. system for controlling each person’s performance. he must establish a There are. It frees a manager from those time. Others lack confidence in their subordinates or fear the consequences of having subordinates make decisions. 5. in order to get things done with and through other people. A manger.2. In some instances. 4. It is important to remember that delegation involves:     subordinates. Delegating gives. The allocation of duties The delegation of authority The assignment of responsibility The creation of accountability Some managers feel the need to be in total control of every aspect of an chance to make Since at the manger is ultimately responsible for the achievement of the organizational objectives.Consuming duties that can be adequately handled by subordinates and lets the manager devote more time to problems requiring his/her full attention. Delegating enhances effective communication with subordinates 3. Subordinate managers can reach their full potential only if given the decisions and to assume responsibility for them. According to Badway. 6. 7. subordinates are reluctant to assume an equal amount of responsibility.

According to William Newman.  Subordinates are already over worked  Subordinates lack self-confidence  There is lack of incentive or reward for assuming a greater workload.2 Policies and procedures 59 . and individuals.  Subordinate managers don't have enough factual information on which to base a decision. enhance communication and achieve coordination in the organization. Guidelines for effective delegation Grant proper amount of authority Define the results expected Consider the capabilities of the subordinates Make that authority is clearly stated Modify the authority whenever necessary Follow unity of command and chain of command Develop a willingness to delegate 2. The following major mechanisms. on the other hand. 2. service as counsel to the line employees. Staff employees. teachers are all line employees in educational institution.2.3.3 Coordination and Communication Principles This principle enables managers to maintain effective coordination among departments. subordinates inhibit the delegation process for a variety of reasons:  It’s easier to let the boss make the decision.1 Formal structure or hierarchy 2. according to Badway. For example.  Subordinates fear criticism for making bad decision. Example of staff employees in a business firm is lawyers who give legal counsel to the top management.3. groups. 2. are those who provide advice. subordinates usually feel that making decisions is the boss's job.8 Line-staff Relationships The line employees are those who are directly concerned with primary operations of the organization.

and harmonious relationships with people in his and other divisions or on other level of management. and  Decision making up. They eliminate uncertainty in dealing with a recurring situation and ensure conformity and consistency. the manager can get faster action and handle more problems and situations without burdening the formal hierarchy with an excessive number of rules and procedures. 2.3. Procedures.4 Committees and task forces 2. is a means for coordinating. It 2.3.3. through informal contacts. and across the organization.1 Formal Structure As discussed earlier. a central element in any bureaucratic organization. the step-by-step guides to action. on the other hand. D) Organizational Relationships 60 .3 Informal communications 2.2 Policies and Procedures Policies and procedures are another set of coordination mechanisms. As Badway. including: • • • Group judgment can be better than individual judgment Cooperation is assured in the execution of plans developed by the committee Coordination between various activities and functions can be improved. friendships. the formal structure is an official relationship among various management levels on organizational hierarchy. stated.3 Informal communications The informal communication network is an important medium for coordination. Badway identified many good reasons for the creation of a committee in an organization. down. Procedures assist employees at any level exactly what to do in the described situation.2. This formal hierarchy is the most basic means of organizational coordination and is therefore.  Tasks  Communication flows.3. A policy is a set of general guidelines formulated by the top management to enable lower level mangers in dealing with organizational problems.3.3.4 Committees and Task Forces Committees and task forces are found in all organizations. 2.

3. Line positions have authority over business operation. research. serve as advisers and are auxiliary to the organization in terms of helping it achieve its goals. However. 2. the following points may help to determine whether a position is line or staff. and Staff authority Line managers are involved in carrying out the primary activities of the organization. quality control and legal services. medical services. It is common to refer to staff managers as "advisors" and line managers as "doers". They are the original commanders. People with line positions are responsible for physically producing the product or service and for selling it. 1. even authors of books on management and organization theory cannot agree on the distinguishing characteristics. the people who make decisions that relate to the enterprises raison d` etre.Line and staff positions and their relationships: Managers in an organization exercise two different kinds of authority: Line authority. Many large organizations create as many as four different types of staff positions. for example. Assistant to .Specialized staff and 61 . but line managers retain formal authority and decide what to do with a staff person's advice. Some common staff activities are public relations. guide. such as production and selling in a manufacturing firm.on the other hand. The distinction between a line job and a staff job is baffling to most people. Staff Managers: . personnel management. purchasing. Staff people may make recommendations. Staff people advice and assist line people. are line jobs. Staff managers counsel. accounting. That is the only reason these positions exist. and serve line managers. Types of staff positions Much of the confusion over line and staff positions occurs because we sometimes fail to realize that there are different types of staff jobs. 4. Usually they are involved in either production or marketing. Sales manager and production supervisor. advise. All staff positions are advisory.

No single military officer could possibility gather and analyze all necessary information and make timely decisions without the help of other people. because of its ties with a high-ranking manager.- General staff . Today.most people in operating services have tasks not directly related to the purpose of the business. Operating services:. and corporate attorneys.Operating services Assistant to: .An assistant-to is a personal assistant to someone holding an office or position that is usually high in the organization. lower-ranking officers. General staff: . Duties: . they still are used more in the military and in government than in business. the assistant may be Trouble shooter Speech writer Advisor or anything that helps the boss Although the position is powerful. personnel managers.including whatever the boss directs him/her to do so. and other. skills. academic training. it carriers no formal authority over other positions in the organization. A specialized staff includes accountants.specialized staff positions are filled with people with special training. large corporations have created general staff positions to help develop strategic. and experience. Their efforts benefit the entire organization indirectly. longrange plans. computer programmers. These staff officers prepared plans in their own areas and submitted them to the commanding officer. However. operations and training. and grounds keepers at a university are not directly concerned with educating students. the military begun using planning specialists in areas like Personnel. intelligence. the general staff assists the general commanding an army. Consequently. cafeteria workers. Specialized staff: . their physical contributions to the organization are worthwhile. custodians. they are hired because they have formal. and supply and logistics. 62 . engineers. the general commanding a division.The idea of general staff was originally conceived by the military as a way to help line officers develop strategic battle plans. In most cases. For example. Recently. It is this category that we normally think of as "staff". nevertheless.

for instances. they have staff authority. and the like.As already pointed out. Three distinct types of authority are evident in business organizations. and Functional Line authority: . Both line and staff managers have line authority over their subordinates.Line and Staff Relationships Now that we understand the difference between line and staff positions. people in staff positions assist and advise line managers. the attorney may insist that they follow prescribed hiring procedures to assure compliance with federal laws prohibiting employment discrimination. the corporate attorney may exercise functional authority over the vice presidents in hiring. The safety director may be given functional authority over people who work under the production supervisor when it comes to established safety procedures. Usually limited in scope and duration. Staff authority: . have the authority to offer advice and make recommendations. People in these positions. Similarly.is exercised over people or activities in other departments. Functional authority: .Line authority enable a manager to tell subordinates what to do. which links superiors and subordinates from top to bottom in an organization. For example. He/she may be given the authority to direct workers to wear safely goggles. we need to examine the authority relationships between them more closely. They relieve some of the line managers’ burdens by giving them the information they need to make operational decisions. 63 . it is exercised one level below the person who has it. Line Staff. This authority is represented by the chain of command. hard hats.

companies are recognizing that having committed employees with superior competencies can represent an important source of competitive advantage.2 The staffing process The staffing process encompasses recruitment. 5. evaluation. development. A critical element in building competitive advantage through people is attracting and hiring the right people through the recruitment and selection process associated with staffing.PART V Staffing 5. 64 .1 The meaning of staffing Staffing is the set of activities aimed at attracting and selecting individuals for positions in a way that will facilitate the advancement of organizational goals.2. selection. 5. Increasingly.1 Recruitment Recruitment is the process of finding and attempting to attract job candidates who are capable of effectively filling job vacancies. and compensation.

The advantages and disadvantages of external recruitment are depicted below. Unsuccessful contender may become upset. There may be few new ideas. Internal recruitment: most vacant positions in organizations are filled with through internal recruitment. External recruitment External recruitment is the process of finding potential external candidates and encouraging them to apply for and/or be willing to accept organizational jobs that are open. Good performance is rewarded. Reliable information is available about candidates. Recruitment costs are lower. 4. Internal morale is increased as a result of upward mobility opportunities. 4. Candidates’ current wok may be disrupted. Candidates are already oriented to the organization.Job descriptions and job specifications are important in the recruiting process because they specify the nature of the job and the qualifications required of job candidates. 65 . The advantages and disadvantages of internal recruitment are outlined below. 2. 2. a practice whereby information about job vacancies is placed in conspicuous places in an organization. 3. One major method of recruiting internally is job posting. Recruiting can be conducted both internally and externally. such as on bulletin boards or in organizational newsletters. Advantages 1. Disadvantages 1. 5. 3. Advantages 1. Expensive training may be necessary. Selection is more susceptible to office politics. Candidates are potential source of new ideas. 5. the process of finding potential internal candidates and encouraging them to apply for and/or be willing to accept organizational jobs that are open.

An application blank is a form containing a series of inquiries about an applicants` educational background. Candidates may have new specialties. The new employee may have a slower start because of the need for orientation to the organization. 2. 3. 4. and other information that may be useful in 66 . managers must determine the extent to which job candidates have the skills. 4. Major selection methods More than one selection method is typically used in assessing job candidates. and referrals by employees. Rather than focusing on a particular recruitment source per se.2. The most prevalent methods include the use of: • • • • • Application blanks Selection interviews Tests Assessment centers. Disadvantages 1. Candidates may have broader experience. employment agencies. Potential internal candidates may be resentful. and Reference checks. The probability of mistake is higher because of less reliable information. Other sources include college recruiting programs.2. previous job experience. Candidates may be familiar with competitors. 3. During this process.2 Selection Selection is the process of determining which job candidates best suit organizational needs. recruiters should usually concentrate first on the types of qualifications that are required and then think of the best way to locate individuals who have those qualifications. Advertising is generally the most heavily used recruiting source. The recruitment process may be expensive. 5. physical health. A variety of sources exist for obtaining external job candidates. abilities and knowledge required to perform effectively in the positions for which they are being considered.

sometimes.2. and behaviors that are distinctly combined in a particular individual and influence those individuals interaction in various situations. both they and their employing organizations will ultimately gain from efforts aimed at enhancing their knowledge. skills. mechanical and clerical abilities or sensory capacities (such as vision & hearing). and it allows preliminary comparisons with the credentials of other candidates. independence. Such checks are conducted to verify information on application blanks and resumes and. the tests are usually paper-and-pencil type. and Performance tests. feelings. 5. The situations are essentially performance tests that reflect the type of work done in managerial positions. Except for measures for sensory capacities. Performance tests are means of measuring practical ability on a specific job. skills. Selection interview is a relatively formal in depth conversation conducted for the purpose of assessing the candidates` knowledge. Major approaches to increasing 67 . Employment Test is a means of assessing job applicants` characteristics through paper-and-pencil responses on simulated exercises.3 Development and Evaluation After individuals are hired. and abilities. and need for achievement. Personality tests are means of measuring characteristics.assessing individuals` ability to perform a job. Reference checks are attempts to obtain job-related information about job applicants from individuals who are knowledgeable about the applicants` qualifications. Three major types of tests used in the selection process are: • • • Ability Personality. Paper-and-pencil personality tests measure such characteristics as sociability. and abilities as well as providing information to the candidate about the organization and potential jobs. An assessment center is a controlled environment used to predict the probable managerial success of individuals mainly on the basis of evaluations of their behaviors in a variety of simulated situations. It serves as prescreening device to help determine whether an applicant meets the minimum requirements of a position. to collect additional data that will facilitate the selection decision. Ability test measures mainly mental (such as intelligence). such as patterns of thought.

1 Training and Development Training and Development is a planned effort to facilitate employee learning of job-related behaviors in order to improve employee performance. In practice. Types of training programs The most common types of training programs are: • • Orientation training. Training design and implementation phase involves determining training methods. the distinction is often blurred (mainly because upgrading skills in present jobs usually improves performance in future jobs). and 68 . though. as well as performance appraisal. developing training materials. and Evaluation phase Assessment phase involves identifying training needs. Technical skill training. setting training objectives.the effectiveness of organization members include training and development. tasks associated with jobs for which training is needed. and developing criteria against which to evaluate the results of the training program. while “development” refers to efforts oriented toward improvements relevant to future jobs. and actually conducting the training. “training” denotes efforts to increase employee skills on present jobs. Training requirements are determined by conducting a needs analysis. 5.3. Evaluation phase entails evaluating the results of the training in terms of the criteria developed during the assessment phase.2. Needs analysis is an assessment of an organizations` training needs that is developed by considering overall organizational requirements. Experts sometimes distinguish between the terms “training” and “development”. Phases of the training process Training efforts generally encompass three main phases. These are: • • • Assessment phase Training design and implementation phase. and the degree to which individuals are able to perform those tasks effectively.

managerial.5. 5.3. Orientation training is usually a formal program designed to provide new employees with information about the company and their jobs. or bonuses. Management development training focuses on developing managerial skills for use at the supervisory. in a positive way. the process is used for a variety of other organizational purposes.4 Compensation Compensation consists of wages paid directly for time worked. as well as more indirect benefits that employees receive as part of their employment relationship with an organization. planning future performance goals.• Management development training. including various protection plans (such as health insurance or life insurance). Benefits. 5. Wages paid for time worked are typically payments made in cashable form that reflect direct work-related remuneration such as base pay. A major purpose of performance appraisal is to influence. and assessing the promotional potential of employees.2.In addition. and executive levels. on the other hand. evaluating and recording employee performance relative to those expectations. such as determining merit pay increases.2 Performance appraisal Performance appraisal is the process of defining expectations for employee performance. measuring. Technical skill training is oriented toward providing specialized knowledge and developing facility in the use of methods. and techniques associated with a particular discipline or trade. and providing feed back to the employee. merit increase. are forms of compensation beyond wages for time worked. 69 . Benefits are considered a more indirect form of compensation because they are generally not as closely tied to job and performance issues as other forms of remuneration. process. employee performance and development . determining training and development needs.

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