Professional Documents
Culture Documents
Management is the art of getting things done through others and with
formally organized groups.
OR
Management is the art and science of organizing and directing human efforts
applied to control the forces and utilize the material of nature for the benefit of
man. American society of mechanical engineers.
1
--Management means designing, organizing defining goals formulating
policies and strategies in accordance with the prevalent environmental conditions
and these environmental conditions are known as situations.
In latest view:
Now a days in corporate sector taking advantage of the opportunities does
not matter. What matters is to convert or translate the opportunities then to face
difficulties.
Conclusion:
On the basis of all the above-mentioned definitions it can be asserted.
Management is the process which by planning, organizing, staffing, leading and
controlling, a human group makes possible the maximum and efficient use of
physical resources and helps in realizing the pre-determined objectives of any
organization.
2
Now the question arises whether all the people’s comprising a particular
human group are competent enough to achieve success in their activities without
any outside discussion and control.
The obvious to this all-important question can only be in the negative. The
reason for such an answer is complex. So long particular human groups for into
have their air aims, definite planning, proper distribution of work, defining rights
and duties, establishing proper co-ordination among them, directing and
controlling their activities, success cannot be achieved. These are the problems,
which give rise to another question, which is equally important, and the question is
how to overcome these problems? The answer to this really complex question in
inherent in management.
Through the medium of management all these above-mentioned problems
can be solve. The activities of a human group can be efficiently managed on the
pre-determined problems can be effectively achieved handling by a manager. It
would not be out of place to mention here that the absence of proper management,
the activities of a human group are like a ship without a captain. Thus it is evident
that success of collective efforts requires some special power. AND THAT
POWER IS THE MANAGER, who ensures the success of different activities by
the process of management. It is important to classify here that the importance of
management is not limited to business alone but it is needed at all those places
where human activities take place-for example: educational Institutions, Religious
Institution, Govt. departments, unions, forces, families.
MEANING OF MANAGEMENT
“Anything minus Management is nothing”
--‘Sherlekar and Sherlekar’—
MANAGEMENT:
The word “management” can be styled as MANAGE-MEN-T. That means
manage men tactfully. Why manage men tactfully. This is with a view to get the
things done being with them. Thus management means managing men tactfully to
get the things done being with them. Thus management. In order to manage men
tactfully, one has to understand the highly unpredictable and uncertain human
nature owing to this management is very complicated and challenging activity.
Some times it is known as a group of administration officers working in a
particular institution and sometimes it means a process of planning, organizing,
staffing, directing, co-coordinating and controlling.
3
In the light of different opinions the meaning of management can be
analyzed in the following ways:
4
(vii) Art as well as science
(viii) Multi disciplinary
(ix) Intangible
(x) Optimum co-ordination between human and material resources.
(xi) The combination of multiple functions
(xii) Management is a distinct entity.
(xiii) Management is a profession
(xiv) Management based on authorities
(xv) It is needed at all level
(xvi) It is a social responsibilities
(xvii) Purposeful
(xviii)It is an executive function
(xix) It is a coordinating force
(xx) Dynamic in nature
(xxi) Management principles are relative not absolute ---- it means that
management results are according to the situation.
(xxii) Management is creative and innovative formulate creativity; creativity is
the process of developing new ideas.
OR
5
objectives; with out objectives management would be difficult if not
impossible.
(v) Management has a distinct entity: in view of the widening scope of
business it is not possible for an owner to perform all functions himself.
We can say that specially qualified experts are needed for managing the
company.
(vi) Management is a universal activity: it is clear that management is not
only connected with business but also with non-business activities also,
which is also important. Management is everywhere.
(vii) Management as a profession: when we have recognized the distinct
entity of management, there should not be any doubt or hesitation to call
it a profession. The quality of a profession is that he must posses some
special qualifications or ability for which he is paid remuneration. The
knowledge of management is also a qualification and managers also get
their remuneration for it. Hence, management is considered a profession.
(viii) Management is an intangible force: management is a force, which is
not visible. It can only be feel or realized on the basis of the success of an
organization.
(ix) It is a combination of multiple functions: the basic function of
management is to achieve the objectives of the organization successfully.
That is why a manager has to perform various function like planning,
organizing, staffing, leading and controlling etc. hence management does
not mean one particular job but it happens to be a combination of various
jobs.
6
MANAGEMENT AS AN ART:
Firstly, the process of management involves the use of knowledge and skills in
solving various problems.
It seeks to achieve concrete practical results that is output, profits, growth
etc.
Lastly, the manager gets perfection in the art of managing through continuous
practice.
Thus management fully lives up to the description of an Art and therefore it
is an art.
OR
Art implies the application of knowledge and skills to bring about the
desired results.
Features:
7
Similarly a person cannot become a successful manager simply by
reading the theory if must also learn to apply his knowledge in solving
managerial problems in practical life. A manager is judged not just by his
technical knowledge but his efficiency in applying that knowledge.
2. Personal skill: every artist has his own style and approach to his job.
This is level of their personal skill. Similarly every manager has
his individual approach and style on solving managerial problems. The
success of a manager depends on his personality in addition to his
technical knowledge.
3. Result oriented approach: art seeks to achieve concrete results. Every
manager applies certain knowledge and skills to achieve the desired
results. He uses CM’s to the growth of his organization.
4. Creativity: art is basically creative therefore every piece of art requires
imagination and intelligence to create. A manager effectively combines
and coordinates the factors of production to create goods and services.
5. Improvement through practice: every artist becomes more and more
efficient through constant practice. Similarly a manager gains experience
through regular practice and becomes more effective.
Conclusion:
One cannot become efficient and effective manager simply by learning.
Management principles by heart it also requires practical application of those
results.
MANAGEMENT AS A SCIENCE:
8
subjects are human beings whose behaviors cannot be predicted with absolute
accuracy.
Thus management cannot be regarded as an exact science like physics and
chemistry. It deals with the study of behavior of human beings, which is subject to
constant changes and difficult to predict.
Thus management cannot be regarded as exact science like physics,
chemistry etc. therefore management may be called an inexact science, as is the
case with other social science like psychology, sociology.
OR
Science means a systematic body of knowledge pertaining to a specific field
of study. It contains general principal and facts which explains a phenomenon.
Features:
1. Systematic body of knowledge: management is a systematic body of
knowledge consisting of general principles and techniques. These help to
explain events and serve as guidelines for managers in different types of
organization.
2. Universal application: scientific principles represent basic facts about and a
particular field of enquires. These principles may be applied in all situations
and at all times. Management contains some fundamentals principles, which
can be universally applied. These principles are flexible and need to be
modified in different situations.
3. Scientific enquiry and experiment: scientific principles and derived
through scientific investigation and reasoning. So they can be explained
logically, scientific principles are critically tested. Management principles
are also based on scientific enquiry and investigation. These have been
developed through practical and experimental experience of a large number
of managers.
4. Cause and effect relationship: principles of science lay down a cause and
effect relationship between related factors; similarly the principles of
management establish cause and effect relationship between different
variables.
5. Test of validity and predictability: validity of scientific principles can be
tested at any time and any number of times. Every time the test will give the
same result.
Principles of science can also be tested for their validity.
Conclusion:
Management is not a perfect science like other physical science such as
astronomy, physics, chemistry, and biology etc. management deals with people and
9
it is very difficult to predict their behavior accurately so management is a social
science.
Management as a profession:
Features:
1. Specialized body of knowledge: every profession has a well-defined body
of knowledge relevant to the area of specialization. In order to practice a
profession a person requires specialized knowledge of its principles and
techniques. There exists a substantially and rapidly expanding body of
knowledge in management. Today, management is a separate discipline
having a specialized and organized body of knowledge.
2. Restricted entry: there exist institutions and universities to impart
education and training for a profession. No one can enter a profession
without going through the prescribe course of learning. Many institutions
have been set up which offer courses for specialized training in
management. Formal education and training has become very helpful in
getting jobs as managers.
3. Service motive: a profession is a source of livelihood but professional are
primarily motivated by the desire to serve the community. A profession
enjoys community sanction or respect. A manager of a factory is responsible
not only to its owners, by the is also expected to produce quality goods at
reasonable costs and to contribute to the well being of the community.
4. Representative association: in every profession there is a statutory
association or institution, which regulates that profession. Managers have
formed certain associations for the regular exchange of knowledge and
experience.
5. Code of conduct: members of one profession have to abide by a code of
conduct, which contains rules and regulations providing the norms of
honesty integrity and professional ethics. The representative association to
ensure self-discipline among its members enforces the code of conduct. Any
member violating the code can be punished and his membership can be
cancelled.
10
Conclusion:
Management fulfills several essentials of a profession but like other
professions management does not restrict entry into managerial jobs, to people
with a special academic degree.
OR
11
2. Maximum utilization of resources of production: management
is that power which by establishing an effective coordination between the
various resources of production makes an optimum use of these resources.
Most efficient use of the limited resources is the key to the successful
business and thus this fact can be converted into reality with the help of
management.
3. Overcoming competition: these days business is not localized but
it has assumed national or even international dimensions. Competition is
increasing day by day. In these competition days only that organization can
survive which can make available to its customers the best quality of goods
at the cheapest rates. Only an efficient and clever manager can make it a
reality and save the reputation of an organization.
4. Integration with changing environment: management is not only
limited to various internal function of an organization but it has to
compromise with the outer atmosphere also. So many goods having modern
techniques are in the bazaar customers accept only those products which are
cheap and the best. With the help of efficient and effective management a
co-ordination between the new and prevalent work system and methods can
be established to save the reputation of an organization.
5. Research and investigation: a recent research has brought out the
fact that only those companies or business enterprises which are constantly
taking interest in research activities are developing very fast.
6. Increased profits.
7. To maintain a sound organizational structure.
8. Fulfilling the social responsibility: Sound management monitors
the environment of business and makes necessary changes in the business
policies and practices so as to keep the consumers and workers satisfied to
this way manager’s help an enterprise to fulfill its obligation towards
different sections of society.
9. Management minimizes risks.
10. Reduces cost of production.
11. Economic growth: Management is the catalyst of economic
growth, development is a matter of human energies rather than of economic
growth and generation of human energies is the task of management.
Management is the mover ad development in the consequence.
12. Stability: management ensures the survival of an organisation in a
fast changing environment. It co-ordinates the activities of different
departments in an organisation and maintains team spirit amongst the
personnel.
12
13. Human development: Management is not simply directions of
things but the development of men. It improves the personality and caliber
of people to raise their efficiency and productivity. A good manager serves
as a friend and guide to his subordinates.
14. Meets the challenge of change: Management is a catalytic force
that enables an organisation to face the challenge of change. The
environment of business has become very turbulent. Managers maintain a
dynamic equilibrium between an enterprise and its environment through
innovation and creativity.
On the basis of different opinions of the experts over the world management
and administration, there are three prevalent concepts: -
13
is to be done and when it is to do the function and how he
be done. will do it, where he will do it.
5. Scope The term administration is The term management is more
applicable at the top level of applicable at middle level and
management. lower level of management.
6. Usage The term administration is Management is generally used
generally used from business with reference to business
organizations like govt., enterprises.
offices, colleges, universities
etc.
7. Features Administration decisions are Management decisions are
affecting influenced by govt. policies, mainly influenced by the
decisions social and political target of enterprise.
circumstances and economic
additions.
8. Relationship Administration is related Management is related with
mainly with the owner and the workers and employers of
top-level managers. organization.
9. Function It is a determinative or It is an executive or doing
thinking function. function.
10. Concerned It is concerned with It concerned with the
determination of major object implementation of policies.
and policies.
11. Level It is mainly top-level It is largely a middle and
function. lower level function.
12. Influence Its services are influenced Managerial decisions are
mainly by public opinion and influenced mainly by
other outside forces. objectives and policies of
organization.
13. Concerned It is not directly concerned It is a activity concerned with
with direction of human directions of human efforts in
efforts. the executions of plans.
14. Involvement Planning and controlling are Directing and organizing are
the main functions involved main functions involved in it.
in it.
15. Skills Conceptual and human skills Technical and human skills
used eagerly in govt. and used mainly in business
public sector. organization.
16. Minister, Commander, Managing director, general
14
Commissioner, Registrar, Vice manager, sales manager,
- Chancellor, Governor etc. branch manager etc.
LEVELS OF MANAGEMENT (MANAGERIAL HIERARCHY)
Features:
(i) To analyse and interpret changes in external environment of the
company.
(ii) To establish long term corporate plans.
(iii) To formulate and approve the master budget and departmental
budgets.
(iv) To design broad organization structure.
(v) To appoint departmental heads and key executives.
(vi) To coordinate and integrate the activities of different departments
and divisions of the company.
(vii) To provide overall direction and leadership to the company.
(viii) To exercise the overall review and control of the financial and
operating results of the company.
(ix) To represent the company to the outside world.
(x) To decide the distribution of profits.
Intermediate management:
Intermediate or upper middle management comprises departmental or
divisional heads.
15
E.g. works manager, marketing manager, finance manager etc.
It is also known as departmental or functional management. Every divisional
head is the overall uncharged of one particular division or department. He is
accountable for the performance of his division or department to the chief
executive. He performs the usual managerial functions of planning, organizing,
staffing, directing and controlling in relation to one department. He coordinates
and controls the activities of all personal working in different branches of his
department.
Middle management:
Middle management consists of all sectional heads.
E.g. plant manager, area sales manager, branch manager, office manager etc.
These executives serve as a link between intermediate or top management
and the operating management.
Function:
(i) To interpret and explain the plans and policies formulated by top
management.
(ii) To control the operating performance.
(iii) To cooperate among themselves so as to integrate the various activities of
department.
(iv) To train, motivate and develop supervisory personal.
(v) To lay down rules and regulations to be followed by supervisory
personnel.
Function:
1. To plan day-to-day production with is the goals laid down by higher
authorities.
2. To assign jobs to workers and to make arrangements for their training and
development.
3. To issue orders and instructions.
4. To supervise and control workers operations and to maintain personal
connection with them.
5. To arrange material and tools is maintain machinery.
16
6. To advice and assist workers by explaining work procdures, solving
problems etc.
7. To maintain discipline and good human relations among workers.
8. To report feedback information and workers problems to the higher
authorities.
CONCEPTS OF MANAGEMENT
(b) As a profession: you need proper degree. There are certain legal
rules.
SKILLS OF A MANAGER
17
MANAGEMENT AND SOCIAL RESPONSIBILTIES
FOR:
Manager should have social responsibility for the people. Because manager
is a person who is very skilled, if he will take interest in the social functions or
problem, it will create a good impression on other people living or working under
him it will motivate the sub-ordinates working under him. Thus, it creates a
favorable impression on the society, which will ultimately helps the business.
Managers have a creative and also communicative skill. As their main task
is to have the cordial relations with people inside the organization or outside the
organization. The had to interact with his subordinates, superiors and other
members relating to business.
So, the managers are very creative and if they will take part in social
problems, the society is bound to improve in some kind or others. Managers take
the input from the society e.g. education values etc. if managers will take part in
social event or they will become responsible towards society, the society is sure to
make progress become one man can change the whole environment. It will thus
create the source of motivation towards the society. According to System theory,
for the efficient working and smooth working small sub-systems should work
properly.
AGAINST:
The main function of the manager is to govern his organization smoothly
and efficiently. So, he should not make himself responsible towards the society. He
should not be able to do his work properly. The social problem should be left for
those people. So generally take the responsibility (political parties, interest groups
etc) of improving are solving the problem of the society. Manager takes the salary
for gobering his organizing properly not for solving the social problem of the
society. Thus, manager should not move his mind towards social responsibilities of
the society.
OR
There are many thinkers who have supported this, but there are others who have
expressed their opinion both sides are given as under:-
18
Arguments against social responsibility:
19
1. Business is a part of society: Since business organizations are a part of
society they must have a positive attitude towards the needs of society.
Business is only a sub-system of society and this sub-system must
contribute to the welfare of the main system.
2. Avoidance of govt. regulation: If business does not care of its social
responsibility, the govt. has to interfere increasingly in the business
system, which adversely affects the progress of business.
3. Long term self-interest of business: the social responsibility of
business, if taken care of in the present ensures the success of the
organization in the future.
4. Code of conduct: Members of a profession are bound to follow a code of
conduct. Code of conduct includes rules connected with profession,
honesty and morality, which form its base.
5. Business is a creation of the society and so it should respond to the
demands of the society: Since business uses the resources which belong
to the society. It is necessary that every business are obliged to use the
social resources for the common good of society.
6. The long-term self interests of the business are best served when
business assumes social responsibilities: There is a growing realization
on the part of the enlightened businessmen that it is in their self-interest
to fulfill the demands and aspirations of the society. People who have
good environment, education, and opportunity make better employees,
customers and neighbours for business than those who are poor, ignorant
or oppressed.
7. It is the moral and right thing to do: It is widely agreed that
businessmen today have considerable social power. This power is
virtually granted to them by the society, which must have a general
relationship with social responsibilities. The social responsibilities of
businessmen must be proportionate to their social power. If the
businessmen do not assume social responsibilities, their social power
must be taken away by the society through government controls and
regulations and other measures.
8. Public image of business would be improved: The business will retain
the needed credibility with the public if it performs its social obligations.
It will also avoid conflict with the society in its own interest. Good
relation with the workers, consumers and suppliers will lead to success of
business.
9. The consumers are well informed: They expect higher quality products
at responsible rates. If they don’t get fair treatment form business, they
20
will organize themselves and compel the business its social
responsibilities.
MANAGERIAL SKILLS:
1. Planning skills: the manager must passes the skills of thinking the skills of
analyzing the environment, it includes what is happening in the society
organization and political system. He must be able to assess or guess the
changes in environment, traits offered by the changes in environment. He
must be able to match two sets of environment on the basis of external and
internal analysis.
2. Organizing skills: organizing skill is needed to specify who will achieve
what and how manager must be in a position of identification of specific
activities and specific jobs. A manager must be clear about grouping of
various jobs, span of management, type of relationship to be established
between various people and various jobs.
3. Leading skill: leadership is the ability of individual to influence the people.
Recognition of human factor is also included in leading skill of human factor
various leadership track like communication and motivation are also
included in the leadership skills.
4. Technical skills: technical skills refer to the ability and knowledge in using
the equipment, techniques and procedures involved in performing specific
tasks. These skills require specialized knowledge and proficiency in
mechanics of a particular job. A manager must know which skills should be
employed in his particular enterprise and be familiar enough with their
potentiality to ask discerning question of his technical advisors.
5. Human skills: human skills consist of the ability to work effectively with
other people. These are required to win co-operation of others and to build
effective work teams. Human skills are reflected in the way a manager
perceives his superiors, subordinates and peers. An awareness of the
importance of human skills should be part of manager’s orientation.
6. Conceptual skills: conceptual skills comprise the ability to see whole
organization and interrelationships between its parts. These skills refer to the
ability to visualize the entire picture or to consider a situation in its totality.
Such skills help the manager to analyse the forces working in a situation and
to take a broad and foresighted view of the organization.
7. Diagnostic skills: it includes the ability to determine by analyzing and
examination, the nature and circumstances of a particular condition. It is not
only the ability to specify why something happened but also the ability to
21
develop certain possible outcomes. It is the ability to it through unimportant
aspects and quickly gets though the heart of problem.
8. Controlling skill: there are certain standards, which are fixed in a way such
that accomplishment of those standards leads to the accomplishment of
goals. A manager must keep check on the activities of subordinates and must
rectify them if there are any problems.
9. Decision making skills: there are two types of decisions to be taken by the
manager.
(i) Routine and program decision
(ii) Non-routine and non-program decisions.
Responsibilities of manager:
22
3. Responsibility towards union: employees union is recognized as the
enemy of the organisation.
4. Responsibility towards govt.: Birth growth and death of any organisation
will generate according to statuary provisions and these will be governed by
the government of the organisation and this can be done by
(i) Sending the correct information.
(ii) Taxes and duties must be paid regularly.
(iii) Organisation must try to operate as a model citizen.
(iv) Organisation must not try to damage the culture of that
area and must try to maintain the rich culture of that area.
5. Responsibility towards customers:
6. Responsibility towards society:
7. Responsibility towards competitors:
8. Responsibility towards workers:
9. Responsibility towards shareholders or owners:
Roles of a manager:
There are different types of managerial roles some of them are given below:
23
7. Entrepreneur: It involves initiating changes or acting as a change agent.
For example a manager decides to launch a feasibility study for setting up a
new plant.
8. Disturbance handler: This refers to taking charge when the organisation
faces a problem or crises. For example a strike, feud between subordinates,
boss of an important customer. A manager handles conflicts, complaints and
competitive actions.
9. Resource allocate: In this role a manager approves budgets and schedules
sets priorities and distribute resources.
10. Negotiator: As a negotiator a manager bargains with suppliers, dealers,
trade union’s agents etc.
Functions of management:
1. Planning:
It is a process of thinking before doing. It involves determinations of goals
and the activities required to be performed to achieve the goals. It consists:
What is to be done?
(i) How it is to be done?
(ii) Where it is to be done?
(iii) When it is to be done?
(iv) By whom it is to be done?
So planning is a process of shorting out the path for attaining the determined
objective of the business. Over all planning is deciding that in present, what is to
do in future.
2. Organising:
Organizing refers to the way in which work of a group of people is arranged
and distributed among the group members to achieve the objectives of an
organisation. As a function of management organizing refers to the following:
(a) Bringing together human and non-human resources that
is the work to be done and its distribution in human resources.
(b) To define and establish authority responsibility
relationship for the achievement of goals.
(c) Determination of objectives.
(d) Division of activities into jobs
(e) Fitting individuals into jobs, and
(f) Developing relationships.
24
In conclusion we can say that organizing refers to distribution of work to the
superiors and sub-ordinates and fixing there authorities and responsibilities.
3. Staffing:
Staffing is the process of determining the manpower requirement that could
meet the company’s objectives. Staffing is a managerial function of attracting,
acquiring, developing and maintaining the human resources required to achieve the
organisation objective efficiently.
Staffing also involves upgrading of quality/skills of the staff to get higher
performance from then. Personnel department of an organisation looks after the
function of staffing. Staffing usually includes the following activities:
(i) Human resource planning.
(ii) Announcing vacant positions, that is recruitment.
(iii) Receiving applications.
(iv) Administering test.
(v) Interviewing.
(vi) Medical test.
(vii) Final selection and appointment letter.
(viii) Orientation and placement.
4. Directing or Leading:
Directing as a function of management is concerned with instructing,
guiding and inspiring people in the organisation to contribute to the best of their
capabilities for the achievement of organizational objectives. As a conclusion
directing includes the following:
(a) Communication: it is the process of passing
information and understanding from one person to another. This
process is necessary for making the subordinates understand what the
management expects of them. A manager has always to tell the
subordinates what to do, how to do it and when to do it. He has to
create an understanding in their minds in regard to these matters.
(b) Leadership: a good manager must also be an effective
leader. Leadership is concerned with influencing the behavior of
followers. In order to get the cooperation of employees, the manager
must have leadership skills. The style of leadership will vary from
situation to situation.
(c) Motivation: effective motivation is necessary for getting
voluntary cooperation of the subordinates. Different types of rewards
motivate different people. Every manager should study the behaviour
of individuals working under him to provide him or her proper
25
inducements. To some financial incentives are important, while others
are motivated by non-pecuniary incentives like job security, job
enlargement, freedom to do work and recognition.
(d) Issuing orders and instruction by the superior.
(e) Leading the subordinates to influence their activities
towards achievement of goals.
(f) To ensure that the subordinates are working as per plans
and policies.
5. Controlling:
Controlling is a process of verifying whether actual performance is in
accordance to the planned performance and to take corrective action wherever
required.
It involves comparison of actual performance with the planned performance
as to quality, quantity, time taken etc. and than analyse the deviations and to take
corrective measures to correct the deviations. It involves the following steps:
1. Establishment of standards.
2. Measurement of actual performance.
3. Comparison of actual performance with the planed
performance.
4. Find out deviations.
5. Taking corrective action.
MANAGERIAL ETHICS:
The term ‘ethics’ refers to value-oriented decisions and behaviour. The word
ethics comes from the Greek root, ethros, meaning character, giving beliefs,
standards, or deals that pervade a group, a community, a people--------. Today
ethics is the study of moral behaviour—the study of how the standards of moral
conduct among the individuals are established and expressed behaviourally. Terms
such as business ethics, corporate ethics, medical ethics, or legal ethics are used to
indicate the particular area of application. But to have meaning, the ethics involved
in each area must still refer to the value-oriented decisions and behaviour of
individuals. Ethics refer to a set of moral principles, which should pay a very
significant role in guiding the conduct of managers and employees in the operation
of any enterprise. Ethics is concerned with what is right and what is wrong is
human behaviour. It is normative and prescriptive, not neutral. It addresses the
question of what ought to be. Ethics refer both to the body of moral principles
governing a particular society or group and to the personal normal precepts of an
individual.
26
Some people subscribe to a utilitarian reference in determining what is
wrong and what is right. They hold that a proposed course of action should be
judged from the standpoint of greatest good for the greatest number of people.
From this point of view, there are few absolute standards and each issue must be
judged by studying its impact upon all affected parties.
27
ETHICS AND SOCIAL RESPONSIBILITIES:
The term ‘social responsibility’ conveys the moral conduct that relates to
such broad issues as environmental pollution, discrimination, poverty,
unemployment and inflation. Accordingly, an organization whose practices
contribute to inflation, unemployment, increased poverty and like would be viewed
as socially irresponsible---as not fulfilling its responsibility to society. An
automobile manufacturer who produces cars with faulty brakes, a pharmaceutical
house that makes false claims about its comd remedies, or a food company house
TV ads promote substandard food items are socially irresponsible.
Some people feel that social responsibility is linked to organisation and
ethics to individuals, but this is not a useful distinction. In the final analyses,
decisions are made by people and therefore, individual managers at some level
must assume responsibility for every corporate decision. The executive who lies
about a competitor’s product, the manufacturer who markets a highly inflammable
article of clothing, the industrialist who dumps pollutants into a stream-all behaves
in an ethically irresponsible way. The most responsible way to distinguish business
ethics from social responsibility is in terms of a decision’s implications for society
as a whole. Within this frame of reference, business ethics are concerned with
microethics (relating to daily operating decisions with limited social impact), social
responsibility is concerned with macroethics relating to decision with broad
implications for a large segment of society.
However this distinction is not even followed in practice. The term ‘ethics’
is used to convey both ‘microethics’ and ‘macroethics’.
28
bribes or similar actions unless a law is violated. In management, the legal system
also becomes the ethical system and where higher standards of behaviour than
those required by law are desired, there is no way to enforce them.
There are four ways to establish acceptable standards of behaviour. The first
is the establishment of minimum standards of behaviour by law. But if law dictates
ethical behaviour, the true meaning of personal morality, individual responsibility
and free choice is lost. Secondly, an attempt should be made to develop accepted
code of ethics to guide managerial action. In India and other countries,
management associations have attempted this approach. But how to enforce the
standards and make allowances for organizational and environmental differences is
the main problem.
The third approach is to follow the lead of medicine, law, engineering and
accounting and establish a professional society to enforce codes of behaviour for
the managers. This option would, however, require a new type of management
organisation with mandatory membership, professional certification, and so on.
Nothing approaching this presently exists. Any move n this direction would be, at
best, long-range in character. One final option is the development of individual
organizational code of behaviour. This idea has a great deal of support and short-
term promise. But the individual organizational codes do not provide for uniform
standards required of business.
29
EVOLUTION OF MANAGEMENT THOUGHT:
Classical theory:
The classical organisation theory is also called the traditional theory. In this
theory, we shall discuss the ideas of several contributors such as Taylor, Fayol,
Luther Gulick, and Max Weber. All these thinkers were dissatisfied, in one way or
the other, with the organizational practices of their time.
The classical organisation theorists dealt almost exclusively with the
anatomy of formal organisation. Organisation is treated like a machine and so
making each individual, working in the organisation efficient, can increase
efficiency. For instance, F.W. Taylor emphasized on division of labour, fixing
everybody’s work for the day and functional formanship. That is why; Taylor’s
scientific management has been referred to as ‘machine theory’. It may be noted
that scientific management group emphasized efficiency of lower levels of
organisation. It was Henri Fayol who showed concern for efficiency at the higher
levels for the first time.
30
Features:
The classical theory is more or less mechanical in nature as is revealed by its
following features:
a. Classical organisation theory is built around an accounting
model.
b. The relationship between workers and management is
established through formal communications, defined tasks and
accountability and formalized procedures and practices to minimize conflict
between them.
c. The worker is essentially an ‘economic man’ who can be
motivated basically by economic rewards. Money is considered the main
motivator under this theory.
d. This approach to the organisation is the embodiment of the
extra pair of hands concept.
e. In designing the hob and in picking the extra pair of hands,
classical theory assumes man to be relatively homogenous and relatively
unmodifiable.
f. Stability of the employees-stability in the sense of minimizing
changes within the employees-is a goal in the organisation.
g. Classical theory is in its essential character centralized, and the
integration of the system is achieved though the authority and control of the
central mechanism.
31
structure appears to be neglected by the classical writers. Bennis feels that
the focus of classical theory is on ‘organisation without people’.
(d) Economic rewards as main motivators: the assumption that people
at work can be motivated solely through economic rewards is also wrong.
Several researches in human behaviour have contradicted this assumption.
Non-monetary factors like better status and job enrichment can also motivate
the workers.
(e) Hierarchical structure: the classical theory is based upon the
hierarchical structure that establishes the authority relationship between
individuals in an organisation. It attempted to prescribe the ‘right’
organisational structure. This was a very narrow approach as it concentrated
only on line and staff structures. The classical writers did not explore why
certain forms of organisational structure are more effective than others.
(f) Over emphasis on universality: classical theorists have claimed that
these principles have universal application. This suggests that the same
principles can be applied in: (i) different organisations, (ii) different
management levels in the same organisation, and (iii) different functions of
the same organisation. The empirical researches, however, suggest that none
of the principles has such characteristics. Moreover, there are many of the
principles, which are actually contradictory with other principles. For
example, principle of specialization is quite in conflict with the principles of
unity of command. Peter Drucker, Ernest Dale, etc. have also criticized
universality concept.
(g) Bureaucratic behaviour: Weber’s ‘ideal’ bureaucracy, a major
constituent of classical theory, suggested strict adherence to rules and
regulations. The scope for individual initiative and their contribution to the
organisation goal is thus limited. The result is red-tapism and observation of
rules and regulations becomes the main objective while the real objectives
for which these rules and regulations are formed are forgotten.
Bureaucracy:
Characteristics:
(a) A well-defined hierarchy of authority with clear lines of authority and
control and responsibility concentrated at the top of the hierarchy.
32
(b) A high degree of specialization.
(c) A division of work based on functional departmentation.
(d) A system of rules covering the rights and duties of employees.
(e) A definite system of procedures for dealing with the work situation
and “rationally” coordinating activities.
(f) A centralized system of written documents (“the files”) for collecting
and summarizing the activities of the organisation.
(g) Impersonality of relationships between employees.
(h) Recruitment of managers on the basis of ability and technical
knowledge.
Criticism of bureaucracy:
Today when we hear the word “bureaucracy”, it immediately brings to mind
visions of a ponderous, slowly moving organisation-one steeped in red tape,
meaningless hurdles, and inefficiency. Various grounds of criticism of bureaucracy
are as under:
33
5. Personnel in a bureaucracy tend to use their positions and resources to
perpetuate self-interests or the interests of their sub-units. Every superior ties
to increase the number of his subordinates as if this number is considered a
symbol of power and prestige. It is hard to destroy bureaucracy even if it has
outlived its utility.
6. Bureaucratic procedures involve inordinate delays and frustration in
the performance of tasks. The procedures are nevertheless valued,
perpetuated and multiplied for their own sake as also to pass the buck.
34
highly opposed by the management and the workers and his services were
terminated unceremoniously in 1901. Taylor presented his first paper entitled
“Shop management” was published in 1903; it focused attention on his philosophy
on management. His famous book “principles and methods of scientific
management” was published in 1911 and his other contribution was “testimony
before the special house committee” which was given in 1912. it may be pointed
out that the last two works were combined in one book entitled ‘scientific
management’ in 1947 by Harper and Brothers.
35
6. Maximum prosperity for employers and employees: this principle
requires that the aim of management should be to secure maximum prosperity for
the employers along with the maximum welfare of employees.
36
10. Lack of initiative: no chance is left to show their ability only a
mechanized process of work is followed.
11. Lack of employment opportunities: more work by lesser worker
thus reduces the chance of more employment.
12. Exploitation: workers are not given their due shares in the gains
due to increased productivity of the enterprise. Comparatively, less efficient
workers who are failed to achieve the standard are penalized
wages do not rise in the same proportion in which productivity of labour
increases.
13. Weakness of trade unionism: scientific management reduces the role
of trade unions as standards of outputs, wages and working conditions are
determined on scientific bases. There is little scope of bargaining on this
ratter. The differential piece-wage divides the worker into efficient and
inefficient. Scientific management may lead to accuracy, as workers
have to carry out the instructions of their functional basis. It cuts the roots of
trade union movement.
OR
37
7. Undemocratic in nature: workers object that scientific management is
undemocratic in nature as it gives absolute control over workers to the functional
bosses. The workers have to follow the instruction of the bosses without thinking
on the part of the workers.
8. Unsuitable for small-scale unit: some employers are of the opinion that
scientific management is only suitable for large-scale units. Small-scale units
cannot afford to introduce the scheme of scientific management.
38
capacity and so the habit of doing the best and more in an efficient manner is
develop.
7. Mental revolution: working of the subordinate and superior is based on
whether they are mentally prepare for doing the job or not. A positive attitude of
both towards each other each necessary there must be an environment in an
organisation in which the workers feel that the management is exploiting them. On
the other hand management also should have no concept that the workers have a
tendency of miss use of tools and equipments, resulting wastages.
8. Time study: time study is a technique, which is used to measure/determine
the time that may be taken by workmen of average skills/ability to perform a
job/task. Purpose of time study is to determine standard time required to perform a
specified job and so fair days work/workman. Time study is conducted with the
help of stopwatch.
9. Motion study: motion study is a technique, which involves close
observation of movements of body and limps required to perform a job. Its purpose
is to determine the best way of doing a job by eliminating the wasteful motion,
which will further reduce the fatigue resulting improvement in efficiency. Micro
chronometer is the tool of study.
Administrative theory:
39
1. Division of labour: division of labour means dividing the work among
members of organisations. It leads to specialization. It increases the efficiency of
individual employee.
2. Parity of authority and responsibility: authority and responsibility are two
sides of same coin. Authority refers to the right of a superior to give orders to
subordinates regarding use resources of the organisation and to take decisions on
specified matter. Responsibility on the other hand, means obligation with respect to
the performance of functions and achieving goals. There must be parity between
authority and responsibility.
3. Discipline: discipline in the context of management means obedience that is
complying with rules and regulations of the organisation.
4. Unity of command: according to this principle, a subordinate should
receive orders and be accountable to one and only one superior. No employees
therefore, should be asked to receive orders and instructions from more than one
superior.
5. Unity of direction: efforts of all the members of the organisation should be
directed towards common goals. This principle ensures “unity of action, and
coordination”.
6. Subordination of individual interest to general interest: the interest of the
organisation must precedence over the interest of individuals. In other words,
individuals should give up their personal interest in the interest of the enterprise.
7. Fair remuneration to employees: remuneration of employees should be
fair and reasonable wages should be determined on the basis work assigned cost of
living, and financial position of the business.
8. Centralisation and decentralization: when top management retains most
of the decision making authority, is called centralisation, sharing authority
downwards leads to decentralization Fayol says that an organisation should strive
to achieve a balance between centralisation and decentralization.
9. Scalar chain: it includes the chain of superiors from the top to the lowest
rank in management. Each manager is superior to the manager below him but he is
also subordinate to his own superior. According to this principle each superior is to
provide direction or instruction to immediate subordinate and subordinate to
suggest or to complain to his immediate superior. Some times orders, directions,
suggestion, complain got delate. While communicating because of the strict
compliance of scalar chain. Therefore the avoid the delays Fayol suggested the
concept of “gang plank”. According to which two employees at the same level can
communicate each other directly. But each one of them must inform to his own
superior.
40
10. Order: this principle is important to make the best use of personal and to
avoid unnecessary delay in work. The principle is concerned with arrangement of
things, which is called material orders, and placement of people called social order.
11. Equity: the principle of equity suggests that similar treatment is given to the
people in similar positions workers performing similar jobs should be paid the
same wage rate.
12. Stability of tenure of personnel: this principle stresses on the stability of
terms of employee on the job and in the organisation. Employees should not be
moved from their positions frequently. Fir wages recognisation of work, incentives
and dimensions provided to the employees help in reduction of absenteeism and
frequent turnover, and provides efficiency teamwork and loyalty.
13. Initiative: the employees at all levels should be given some freedom to
adopt techniques and methods to accomplish their tasks. This will create initiative
and enforce efficiency. It increases zeal and belongingness.
14. Esprit de corps: these French words are the synonyms of English proverb
“union is strength”. Group efforts are more effective than the total of individual’s
efforts. Thus this principle, therefore emphasis the need for team works.
41
1. Taylor called his philosophy scientific ‘management’ while Fayol described
his approach as “general theory of administration”.
2. Taylor looked at management from the supervisory viewpoint and tried to
improve efficiency at the operating level. He moved upwards while formulating his
theory. On the other hand, Fayol analysed management from the angle of top
management downward, with emphasis on coordination. He, therefore, had a
broader vision and a wider perspective than Taylor.
3. Taylor focused his attention on factory management and his principles are
directly applicable at the shop floor. But Fayol concentrated on the functions of
managers and on the general principles of management, which could be equally
applied to all spheres of human activity.
4. The aims of Taylor were to improve productivity of labour and to eliminate
all types of waste through standardization of work and tools. Fayol attempted to
develop a universal theory of management. He also stressed upon the need for
teaching the theory and practice of management.
5. Taylor developed techniques of management through scientific observation
and measurement of workers operations. But Fayol tried to develop universal
truths or principles from personal experiences.
42
3. Mass interviewing programme: the researchers conducted thousands of
interviews to determine the attitudes of employees towards their job, working
conditions, supervision and the company. The main findings of the programme
were as under: (a) Merely giving a person an opportunity to talk and air his
grievances has a beneficial effect on his morale. (b) Worker’s complaints are not
necessarily objective statements of facts. (c) Workers are influenced in their
demands by experiences both inside and outside the factory.
4. Bank wiring observation room study: this study was conducting to
analyse the functioning of a small group and its impact on the behavior of
individual workers. Fourteen workers constituted the work group on piecework
basis. The hypothesis was that each worker would produce mare. However, the
result was different. The group was restricting the output of individual worker
through various forms of social pressure. The findings of Bank wiring experiment
included: (a) Each individual was restricting output. (b) The group had its own
“unofficial” standards of performance. (c) Individual output remained fairly
constant over a period of time. (d) Departmental records were distorted due to
differences between actual and reported output or between standard and reported
working time.
43
8. Money is only one of the motivators, but not the sole motivator of human
behaviour. Man is diversely motivated and socio-psychological factors act as
important motivators.
9. Man’s approach is not always rational. He may behave irrationally as far as
rewards from the job are concerned.
44
Sr. Scientific management Human Relations Approach
No.
1. Propounded by F.W. Taylor. Propounded by Elton Mayo.
2. Suggested an engineering approach Suggested human relations as a
to management problems. It applied method of achieving higher
scientific method. productivity. It discarded the
engineering approach.
3. Focused on the study of the Focused on the study of individuals,
productivity problems of industry. his needs and behaviour.
4. The main concepts are scientific The main concepts are job
task setting, scientific selection and satisfaction, motivation and
training of people and mental employee morale.
revolution.
5. Originated from the experiments of Originated from the Hawthorne
Taylor in dealing with the problems experiments conducted by the
of factories. psychologists and sociologists.
6. Scientific management is a part of Human relations approach represents
classical theory of organisation. neo-classical theory of organisation.
45
(c) It discussed the psychological variables like motivations, leading etc.
(d) Man is a self-actualizing being.
1. Physiological needs: these needs are related to the survival and maintenance
of life. These include food, clothing, shelter etc.
2. Safety needs: these consist of safety against murder, fire, accident, security
against unemployment etc.
3. Social needs: these needs include need for love, affection, belonging or
association with family, friends and other social groups.
4. Ego or esteem needs: these are the needs derived from recognition status,
achievement, power, prestige etc.
5. Self-fulfillment: it is the need to fulfill what a person considers to be his
real mission of life.
Maslow is of the opinion that these needs have a hierarchy and are satisfied
one by one. When first needs are satisfied then person moves to second---------so
on.
46
(manger) may be more effective and acceptable to the subordinates if he adopts the
democratic style of leadership. If the subordinates are encouraged to participate in
establishing the goals, there will be positive effect on their attitude towards work.
Changes in technology and methods of work, which are often resisted by
employees, can be brought about more easily by involving the employees in
planning and designing the jobs.
5. By nature most people enjoy work and are motivated by self-control and
self-development. It is for the managers to identify and provide necessary
conditions for the human potential to be used in the service of the organisation.
The manager’s attitude towards human behaviour should be positive.
The behavioural scientists have shown how human beings bring to their task
aspects of behaviour, which the effective manager should profitably understand.
After all, it is individuals and groups with which a manager is concerned and while
organisational roles are designed to accomplish group purposes, people must fill
these roles.
Thus, the behavioural sciences have provided managers with a ore
systematic understanding of one of the most critical factors in the process of
management—the human element. Insights evolving from that understanding have
been used to design work situations that encourage increased productivity. It has
enabled organisations to formulate programmes to more efficiently train workers
and managers, and it has effects in numerous other areas of practical significance.
MODERN APPROACH:
47
The management science approach differs from the classical and behavioral
approaches in several ways. Its distinguishing features are given below.
48
The attention should be given so overall effectiveness of the system rather than
effectiveness of any sub-system if isolation.
It took where management process school left off in attempting to unify
management theory. It emphasizes the inter-relatedness and inter-dependence of all
activities within an organisation. It is based on system analysis. It attempts to
identify the nature of relationships of various parts of the system. A system is a set
of inter-connected elements or component parts to achieve certain goals. An
organisation is viewed by the modern authors as an op0en system. An organisation
as a system has five basic parts:
1. Input,
2. Process,
3. Output,
4. Feedback and
5. Environment.
Features:
1. An organisation consists of many sub-systems.
2. All the sub-systems are mutually related to each other.
3. The sub-parts should be studied in their enter-relationships rather than in
isolation from each other.
4. The organisation provides a boundary, which separates it from other
systems. It determines which parts are internal and which parts are external.
5. The organisation is responsive to environmental effect. It is vulnerable is the
changes in environment.
6. An organsiation is a system consisting of many interrelated and
interdependent parts or sub-systems. These elements are arranged orderly
according to some scheme such that the is more than the sum of the parts.
7. As a system an organisation draws inputs (energy. Information, materials,
etc.). From its environment. It transforms these inputs and returns the output back
into the environment in the form of goods and services.
8. Every system is a part of a super system.
9. Organisation is an open system and it interacts with its environment. It is
also a dynamic system ass the equilibrium in it is always changing.
49
10. Management is expected to regulate and adjust the system to secure better
performance.
11. Management is multidisciplinary as it draws and integrates knowledge from
various disciplines.
50
the issue. This approach is both analytical and situational, with the purpose of
developing a practical answer to the question at hand.
There are three major elements of the overall conceptual framework for
contingency management; the environment, management concepts and techniques
and the contingent relationship between them.
51
COMPARISON OF SYSTEMS APPROACH AND CONTIGENCY
APPROACH:
OEPRATIONAL APPROACH:
52
Many other pertinent elements of knowledge are derived from other fields
such as application of systems theory, motivation and leadership, decision-making,
group behaviour and cooperative systems, communication, and mathematical
analysis and practices.
Operational management has a central core of knowledge not found
elsewhere. It also draws from other fields of knowledge and adopts within it those
parts of these fields, which are especially useful for managers. The operational
approach regards management as a universally applicable body of knowledge that
can be brought to bears at all levels of managing and in all types of enterprises. At
the same time, the approach recognizes that the actual problems managers face and
the environment in which they operate may vary between enterprises and levels,
and it also recognizes that application of science by a perceptive practioner must
take this into account in designing practical problem-solutions.
The operational approach is quite similar to the modified management
process approach advocated by G.R.Terry. It may also be called eclectic process
school of management, featuring the basic framework of the process approach
modified by certain theories from other appropriate schools of management
thought. Eclectic means consisting of “what is selected” and this term has been
interpreted to indicate taking the best from what is available in the management
thought and working into it a single molded around the process framework as the
central core.
53
PLANNING AND DECISION MAKING:
Planning:
Planning is the process of deciding in advance what is to be done, who is to
do it, how it is to be done and when it is to be done. It is the process of determining
a course of action, so as to achieve the desired results. It helps to bridge the gap
from where we are, to where we want to go. It makes it possible for things to occur
which would not otherwise happen. Planning is a higher order mental process
requiring the use of intellectual faculties, imagination, and foresight and sound
judgment. Accounting to Koontz, O’Donnell and weihrich, “planning is an
intellectually demanding process; it requires the conscious determination of
courses of action and the basing of decisions on purpose, knowledge and
considered estimates.
Planning is a process, which involves anticipation of future course of events
and deciding the best course of action. It is a process of thinking before doing. “To
plan is to produce a scheme for future action; to bring about specified results, at
specified cost, in a specified period of time. It is deliberate attempt to influence,
exploit, bring about, and controls the nature, direction, extent, speed and effects of
change. It may even attempt deliberately to create change, remembering alwas that
change (like decision) in any one sector will in the same way affect other sectors”.
Planning is a deliberate and conscious effort done to formulate the design and
orderly sequence actions through which it is expected to reach the objectives.
Planning is a systematic attempt to decide a particular course of action for the
future; it leads to determination of objectives of the group activity and the steps
necessary to achieve them. Thus, it can be concluded that “planning is the selecting
and relating of facts and the making and using of assumptions regarding the future
in the visualization and formulation of proposed activities believed necessary to
achieve desired results.
OR
54
In other words we can say that Planning is a process of thinking before
doing. It involves determinations of goals and the activities required to be
performed to achieve the goals. It consists:
1. What is to be done?
2. How it is to be done?
3. Where it is to be done?
4. When it is to be done?
5. By whom it is to be done?
So planning is a process of shorting out the path for attaining the determined
objective of the business. Overall planning is deciding that in present, what is to do
in future.
Features/Nature/characteristics of planning:
1. Goal oriented: the main purpose of plan is always to determine the goal to
be achieved and the activities to be performed to achieve these goals. So planning
relates to creative thinking for the solution of various problems.
2. Primacy (basic function) of planning: it means planning is the basic
function of all other managerial functions. It provides a base for other managerial
functions like organizing, staffing, directing and controlling. We can say that
structure of all other functions depends on planning.
3. Forward looking: planning is never done for past but is done for the future
to achieve certain objective. Therefore, it is said that planning is thinking before
doing. Planning is based on estimated future trends of social, economic and
technological changes because it has to tackle the future requirements.
4. Pervasiveness: planning is required in all sectors, i.e. business, industry,
profession etc. whether it is of large scale or small scale and in all the department
of organisation like purchase, production, marketing, finance department etc.
however nature of planning differs from one department to another.
5. Involving choice (alternative): planning can be when there are two or more
alternatives and the planner can make a choice for the best, in other words, in the
absence of choice there will be no planning because then there is a single way of
doing something i.e. to be adopted.
6. Continuous process: planning is an ongoing process, planning starts before
performing the job and them goes an with the activities to be performed to do that
job and them just after the competition of the job planning regarding starting the
new job. Moreover changes take place in business environment and regular plans
are made to face such changes.
55
7. Flexible: there must be flexibility in planning, because plans are always
based on future, which is uncertain. So flexibility will give a chance to make
changes as per future requirements.
8. Efficiency of operations: planning is made with the objective of raising
efficiency of operations but it is not necessary that efficiency will raised, if may or
may not. So the management should make continuous efforts to minimize the cost
of wastage and improving the efficiency by use of latest change in technology.
9. Planning is a primary function: planning is the basis or foundation of the
management process. All other functions of management are designed its attain the
goals set under planning.
10. Planning is the fundamental premise of all management functions: as
managerial operations in organizing, staffing, leading, and controlling are designed
to support the accomplishment of enterprise objectives, planning logically precedes
the execution of all other managerial functions.
11. Planning is closely linked to objectives: each plan specifies the objectives
to be attained in the future and the steps necessary to reach them. As Billy E. Goetz
said, “plans forecast which actions will tend towards the ultimate objective…
Managerial planning seeks to achieve a consistent, coordinated structure of
operations focused on desired ends.”
12. The effectiveness of planning is measured in terms of what it
contributes to the objectives: a plan is efficient if it, when put into action, brings
about the achievement of the objectives with the minimum of unsought
consequences and with positive gains greater than the costs.
13. Planning is a pervasive function of management: planning is a function
performed by all managers, although the character and breadth of planning will
vary with their authority and with the nature of policies and plans outlined by their
superiors.
14. Planning is a highly skilful intellectual activity: it involves active use of
higher mental process like thinking, innovation or creativity, etc.
15. Planning involves selection among the alternatives: it is a highly selective
process in which all the alternatives need to be listed and best alternatives are
selected or decided.
Importance of planning:
56
1. Makes the objectives clear and specific: planning clearly specifies the
objectives and the policies or activities to be performed to achieve these
objective in other words what is to be done and how it is to be done are
clarified in planning.
2. Off setting the uncertainty and change: planning is necessary to look
ahead towards future and to take decisions regard facing the expected
changes/requirement of the future. E.g. before coming of summer session
producers started production for the products to be used in summer.
3. Plans facilitate decision-making: to achieve the objective predetermined
under planning, business has to take various decisions by considering the
available resources. If job may be completed by using various alternatives
(e.g. manually or by machines) and the best alternative is decided by the
management, which is more helpful in achieving the objective.
4. Provides basis of control: under controlling actual performance is
compared with the planed performance (target/objective). So planning is the
base of controlling process.
5. Leads to economy and efficiency: planning clarifies the work and its
method of doing. Resultantly it reduces confusion and wastage of resources
in the form of thinking at the time of doing. So efficiency of the worker will
risen which will further result economy in production.
6. Facilitates integration: under planning proper directions as per plane are
provided to the subordinates. Resultantly they all make effort towards the
achievement of preplanned objective. Such co-ordination of sub-ordinates
and their departments will certainly help the organisation in achieving its
objective.
7. Encourages innovation and creativity: planning is the process of thinking
in advance and so plans are made to achieve a target at future date by using
latest methods and technology to perform the industrial/business activities
and so plans lead to innovation.
8. Facilitates control: planning facilitates the managers in performing their
function of control. Planning and control are inseparable in the sense that
unplanned action cannot be controlled because control involves keeping
activities on the predetermined course by rectifying deviations from plans.
Planning facilitates control by furnishing standards of control. It lays down
objectives and standards of performance, which are essential for the
performance of control function.
9. Improves motivation: the effective planning system ensures participation
of all managers, which improves their motivation. It improves the
motivation of workers also because they know clearly what is expected of
57
them. Moreover, planning also serves as a good training device for future
managers.
10. Improves competitive strength: effective planning gives a competitive
edge to the enterprise over other enterprises that do not have planning or
have ineffective planning. This is because planning may involve expansion
of capacity, changes in work methods, changes in quality, anticipation of
tastes and fashion of people and technological changes, etc.
11. Encourages innovation and creativity: planning helps innovative and
creative thinking among the managers because many new ideas come to the
mind of a manager when he is planning. It creates a forward-looking attitude
among the managers.
12. Achieves better coordination: planning secures unity of direction towards
the organisational objectives. All the activities are directed towards the
common goals. There is an integrated effort throughout the enterprise. It will
also help in avoiding duplication of efforts. Thus, there will be better
coordination in the organisation.
LIMITATIONS OF PLANNING:
58
5. Psychological barrier: people in organisation have to work strictly
according to plan where as they may be able to give better performance in a way
decided by themselves. Secondly they do not think beside the plan and performs
their activities like a machine without using their psychology.
6. Limited flexibility: there may be some changes in planning only up to some
extent because measure changes in plan will further attract the changes in
supporting plans also and as such the whole system is disturbed moreover changes
in plans time and again will prove a wastage of time and money spent on previous
plan (pre-changed plan).
7. Human elements: planning are the results of thinking of human being.
Information on the basis of which plan is formulated may not be free form bias or
there may be some other errors which will further Reebok (problem) the better
plan.
8. Limited practical value: planning is too much theoretical and have a less
practical use planning is more suitable when environment is suitable but due to
unsuitability of environment business has to take various quick steps/decision time
and again and as such the importance of other resources which are used according
to changing environment, is more than that of planning.
9. Improper plan: planning/target set at the lower side than the capability of
or resources and target on over side than the capacity of the resources both are
termed as improper planning because lower target will be easily achieved and we
will feel false sense of security. On the other hand over planned target beyond
resources cannot be achieved even all effort both are the situation of improper
plan.
10. Planning is a time-consuming and costly process: this may delay action if
certain cases. But it is also true that, if sufficient time is not given to the planning
process, the plans so produced may prove to be unrealistic. Similarly, planning
involves costs of gathering and analyzing information and evaluation of various
alternatives. If the management is not willing to spend on planning, the result may
not be good.
11. Planning is a forward-looking process: the planner must possess the
required initiative. He should be an active planner and should take adequate follow
up measures to see that plans are understood and implemented properly.
12. Resistance to change is another important factor, which puts limits on
planning: It is commonly experienced phenomenon in many organisations.
Sometimes, planners themselves do like change and on other occasion, they do not
think it desirable to bring change, as it will create resistance on the part of the
workers. This attitude makes the planning process ineffective.
13. Internal inflexibility in the organisation may compel the planners to
make rigid plans: this may deter the managers from taking initiative and doing
59
innovative thinking. So, the planners must have sufficient discretion and flexibility
in the enterprise. They should not always be required to follow the procedures
rigidly.
14. Psychological factors also limit the scope of planning: some people
consider present as more important than future because present is less uncertain.
Such persons are psychologically opposed to planning. But it should not be
forgotten that dynamic managers always look ahead. Long-term well being of the
enterprise cannot be achieved unless proper planning is done for future.
15. The effectiveness of planning is sometimes limited: because of external
factors, which are beyond the control of the planners. External stringencies are
very difficult to predict. Sudden breakout of war, government controls, natural
havocs and may other factors are beyond the control of management. They make
the execution of plans very difficult.
KINDS/TYPES OF PLANS:
60
3. Policies: policies are general statements, which guide the thinking in
decision making. These are concerned with administrative action and serve a
principle for conduct. These are predetermining decisions these helps the managers
in achieving the objectives. E.g. policy of hiring a trained engineer or to promote
from within the staff. By way of training, policy of setting competitive prices,
policy of quick after sale service with in three months from the date of sale. In
other words these guidelines (policies) helps the management for taking decision in
proper direction to achieve the objective. Policy increase in taking decisions but
within limits and so the decision depends on the authority given in the policy.
4. Procedures: the procedure is defined as pre-determined se2quence of steps
to initiate action and complete the task. E.g. export and import procedure,
admission procedure in a school i.e. application in schedule time, screening of
facts/data’s, rank of merit and them decision regarding admission; Procedure are
the clear cut steps to be taken to perform a job in an optimum manner so that the
objectives can be achieved policies and procedures are also interrelated like there
will be a policy of summer vacations in the schools. But fixing of schedule of
vacations is the procedure. To ensure that orders are handled in a specific way
there must be a procedure. So procedure helps the management to rich its
objective.
5. Rules: rules are specific directions to perform an action or not to perform an
action these are the directives to the people in organisation, finding them to do or
not to do, to behave or not to behave in a particular way. Rules are always in the
form of order’s or directions and not in the form of request. Rules are a set of
instructions to be followed in a particular way. These are generally in writing and
are impersonal in nature. In business organisations rules are framed regarding
recruitment, promotion, managerial decisions ae taken within the boundaries of
rules. There is no discretion in there application. When ever the decisions are
within rules the person who has taken decision is safe and secured as he is working
as per rules, which are acceptable by the people.
6. Methods: a method is a prescribed process in which a particular task is
performed. Its specifies any best and efficient way of performing the task: - e.g.
methods of valuation of stock-cost or market price, which is less, is consider in
final accounts. Moreover there are several methods like method of calculating
depreciation. Which method will be the basis of nature of business and once
selected the method becomes a prescribed manner of performing a job.
7. Programme: programme refers to the outline of plans of work to be carried
out in proper sequence. Do that the objectives can be achieved. E.g. management
want to expand the size of business by 70% so to implement this programme
management must lay down certain policies, procedures, methods, rules etc. so that
with the co-ordination of these we may become successful to implement this
61
programme. A primary programme may call for any supporting programme in
above. E.g. the programme i.e. programme of making arrangement of finance
required for expansion, programme of arrangement of trained workers required
after expansion and so for the successful implementation behave to make a
combination of goals, policies, procedures, rules, tasks, steps to be taken to
perform these task, employees and other resources, this over all process
combination is known as programme.
8. Budget: budget is a statement of exceptive result expressed in numerical
term. Budget is a single use plan and can be expressed in respect of finance,
material time, etc. so budget is a finance and/or quantitative statement prepare and
approved prior to a specified period. Budget always pertains to future it is prepared
in advance and expressed in qualitative financial terms.
62
2. Time limit Policies go on until these Objectives are the ends to
are changed and so no achieved by performing
time limit. activities in a specified
period.
3. Basis of existence An organisation is There will be no
function without policies. organisation without
objectives.
4. Purpose Policies are the guidelines Objectives refer to the
to achieve the objective. target to be achieved.
5. Place Policies have lower place Objectives have higher
than objectives. place than policies.
6. Formulation Policies are formulated at The owner or top-level
top level, middle level and management of the
lower level management. business determines
objectives.
63
*Difference between policies and rules*
*Levels of planning*
64
In management theory, it is usual to consider that there are three basic levels
of planning, though in practice there may be more than three levels of management
and to an extent, there will be some overlapping of planning operations. The theree
levels of planning are discussed below:
1. Top level planning: also known as overall or strategic planning, top level
planning is done by the top management, i.e., board of directors or
governing body. It encompasses the long-range objectives and policies or
organisation and is concerned with corporate results rather than sectional
objectives. Top level planning is entirely long-range and inextricably linked
with long-term objectives. It might be called the ‘what’ of planning.
2. Second level planning: also known as tactical planning, it is done by
middle level managers or departmental heads. It is concerned with ‘how’ of
planning. It deals with development of resources to the best advantage. It is
concerned mainly, not exclusively, with long-range planning, but its nature
is such that the time spans are usually shorter than those of strategic
planning. This is because its attentions are usually devoted to the step-by-
step attainment of the organisation’s main objective. It is, in fact, oriented to
functions and departments rather than to the organisation as a whole.
3. Third level planning: also known as operational or activity planning, it is
the concern of departmental managers and supervisors. It is confined to
putting into effect the tactical or departmental plans. It is usually for a short-
term and may be revised quite often to be in tune with the tactical planning.
*Steps/Stages of planning*
Planning is a process consisting many steps, which may differ from one plan
to another. But following are the common steps: -
65
increasing sale, decreasing cost, introducing new product of better technology, rise
in process etc. which of these alternatives is beneficial for business be adopted.
Considering the merits and demerits of each alternative is also termed as
development of premises of each alternative.
3. Choose the best alternative: after considering the list of alternatives and
merits of each management has to decide which of these alternatives will be the
best in consideration with the human and nonhuman resources available with the
business.
4. Formulation of supporting plans: supporting plans are those plans, which
provides support to the main plan. E.g. if the business wants to produce according
to objective there may be many supporting plans like planning of purchase of
rawmateiral, planning of recruitment and training of the man power etc.
5. Put the plans into action: after that plan formulated is ready to be put into
action and so function should be started according to the plan all supporting plans
should effort to help the main plan in reaching the objective and so in this all
process is done in any effective manner we will get desired results of the plan.
6. Follow up: once the plan is put into action it monitoring/supervision is
equally important. In the main time management should see whether we are going
towards achievement of objective or not. There may be some changes required
before reaching the objective. E.g. a company is to sell 1200 refrigerators per year
than directors should see that at least 100 units per month on average basis should
be sold to achieve the target.
*DICISION MAKING*
66
actual performance of a course of action that has been chosen. In terms of
managerial decision-making, it is an act of choice, wherein a manager selects a
particular course of action from the available alternatives in a given situation.
Managerial decision making process involves establishing of goals, defining tasks,
searching for alternatives and developing plans in order to find the best answer fo
the decision problem. The essential elements in a decision making process include
the following:
1. The decision maker,
2. The decision problem,
3. The environment in which the decision is to be made,
4. The objectives of the decision maker,
5. The alternative courses of action,
6. The outcomes expected from various alternatives, and
7. The final choice of the alternative.
Characteristics of decision-making:
1. It is a process of choosing a course of action from among the alternative
courses of action.
2. It is a human process involving to a great extent the application of
intellectual abilities.
3. It is the end process preceded by deliberation and reasoning.
4. It is always related to the environment. A manager may take one decision in
a particular set of circumstances and another in a different set of circumstances.
5. It involves a time dimension and a time lag.
6. It always has a purpose. Keeping this in view, there may just be a decision
not to decide.
7. It involves all actions like defining the problem and probing and analyzing
the various alternatives, which take place before a final choice is made.
67
dimensions to determine rationality: (i) the extent to which a given action satisfies
human interests; (ii) feasibility of means to the given end; (iii) consistency. Steps
of decision-making process are given below:
68
can afford. It should also be noted that fact finding for the purpose of decision-
making should be solution-oriented. The manager must lay down the various
alternatives first and then proceed to collect fact, which will help in comparing
alternatives.
4. Developing alternatives: after defining and analyzing the problem, the next
step in the decision making process is the development of alternative courses of
action. Without resorting to the process of developing alternatives, a manager is
likely to be guided by his limited imagination. It is rare for alternatives to be
lacking for any course of action. But sometimes, a manager assumes that there is
only one way of doing a thing. In such a case, what the manager has probably not
done is to force himself decision, which is the best possible. From this can be
derived a key planning principle which may be termed as the principle of
alternatives. Alternatives exist for every decision problem. Effective planning
involves a search for the alternatives towards the desired goal. Once the manager
starts developing alternatives, various assumptions come to his mind, which he can
bring to the conscious level. Nevertheless, development of alternatives cannot
provide a person with the imagination, which he lacks. But most of us have
definitely more imagination than we generally use. It should also be noted that
development of alternatives is no guarantee of finding the best possible decision,
but it certainly helps in weighing one alternative against others and, thus,
minimizing uncertainties.
5. Review of key factors: while developing alternatives, the principle of
limiting factor has to be taken care of. A limiting factor is onw which stands in the
way of accomplishing the desired goal. It is a key factor in decision-making. It
such factors are properly identified, manager can confine his search for alternative
to those, which will overcome the limiting factors. In choosing from among
alternatives, the more an individual can recognize those factors which are limiting
or critical to the attainment of the desired goal, the more clearly and accurately he
or she can select the most favourable alternatives. It is not always necessary that
the alternatives solutions should lead to taking some action. To decide to take no
action is also a decision as much as to take a specific action. It is imperative in all
organisational problems that the alternative of taking no action is being considered.
For instance, if there is an unnecessary post in the department, the alternative not
to fill it will be the best one. The ability to develop alternatives is often as
important as making a right decision among the alternatives. The development of
alternatives, if thorough, will often unearth so many choices that the manager
cannot possibly consider them all. He will have to take the help of certain
mathematical techniques and electronic computers to make a choice among the
alternatives.
69
6. Selecting the best alternative: in order to make the final choice of the best
alternative, one will have to evaluate all the possible alternatives. There are various
ways to evaluate alternatives. The most common method is through intuition, i.e.,
choosing a solution that seems to be good at that time. There is an inherent danger
in this process because a manager’s intuition may be wrong on several occasions.
The second way to choose the best alternative is to weigh the consequences of one
against those of the others. Peter Drucker has laid down four criteria in order to
weigh the consequences of various alternatives. They are: (i) Risk: a manager
should weigh the risks of each course of action against the expected gains. As a
matter of fact, risks are involved in all the solution. What matters is the intensity of
different types of risks in various solutions. (ii) Economy of effort: the best
manager is one who can mobilize the resources for the achievement of results with
the minimum of efforts. The decision to be chosen should ensure the maximum
possible economy of efforts, money and time. (iii) Situation or timing: the choice
of a course of a action will depend upon the situation prevailing at a particular
point of time. If the situation has great urgency, the preferable course of action is
one that alarms the organisation that something important is happening. If a long
and consistent effort is needed, a ‘slow start gathers momentum’ approach may be
preferable. (iv) Limitation of resources: in choosing among the alternatives,
primary attention must be given to those factors that are limiting or strategic to the
decision involved. The search for limiting factors in decision-making should be a
never-ending process. Discovery of the limiting factor lies at the basis of selection
from the alternatives and these are experience, experimentation and research and
analysis which are discussed as: (a) Experience: in making a choice, a manager is
influenced to a great extent by his past experience. Sometimes, he may give undue
importance to past experience. He should compare both the situations. However,
he can give more reliance to past experience in case of routine on his past
experience to reach at a rational decision. (b) Experimentation: under this
approach, the manager tests the solution under actual or simulated conditions. This
approach has proved to be of considerable help in many cases in test marketing of
a new product. But it is not always possible to put this technique into practice,
because it is very expensive. It is utilized as the last resort after all other techniques
of decision making have been tried. It can be utilized on a small scale to test the
effectiveness of the decision. For instance, a company may test a new product in a
certain territory before expanding its scale nationwide. (c) Research and analysis:
it is considered to be the most effective technique of selecting among alternatives,
where a major decision is involved. It involves a search for relationships among
the more critical variables, constraints and premises that bear upon the goal sought.
In a real sense, it is the pencil and paper approach to decision making. It weighs
various alternatives by making models. It takes the help of computers and certain
70
mathematical techniques. This makes the choice of the alternative more rational
and objective.
7. Putting the decision into practice: the choice of an alternative will not
serve any purpose if it not put into practice. The manager is not only concerned
with taking a decision, but also with its implementation. He should try to ensure
that systematic steps are taken to implement the decision. The main problem
whi8ch the manager may face at the implementation stage is the resistance by the
subordinates who are affected by the decision. If the manager is unable to
overcome this resistance, the energy and efforts consumed in decision-making will
go waste. In order to make the decision acceptable. It is necessary for the manager
to make the people understand what the decision involves, what is expected of
them and what they should expect from the management. The principle of slow
and steady progress should be followed to bring a change in the behaviour of the
subordinates. In order to make the subordinates committed to the decision, it is
essential that they should be allowed to participate in the decision making process.
The managers, who discuss problems with their subordinates and give them
opportunities to ask questions and make suggestions, find more support for their
decisions than the managers who don’t let the subordinates participate. Now the
question arises at what level of the decision making process the subordinates
should participate. The subordinates should not participate at the stage of defining
the problem because the manager himself is not certain as to whom the decision
will affect. The area where the subordinates should participate is the development
of alternatives. They should be encouraged to suggest alternatives. This may bring
to surface certain alternatives, which may not be thought of by the manager.
Moreover, they will feel attached to the decision. At the same time, there is also a
danger that a group decision may be poorer than the one-man decision. Group
participation does not necessarily improve the quality of the decision, but
sometimes impairs it. Someone has described group decision like a train in which
every passenger has a brake. It has also been pointed out that all employees are
unable to participate in decision-making. Nevertheless, it is desirable if a manager
consults his subordinates while making decision. Participative management is
more successful than the other styles of management. It will help in the effective
implementation of the decision.
8. Follow up: it is better to check the results after putting the decision into
practice. The reasons for the following up of decision are as follows: (i) if the
decision is good one, one will know what to do, if faced with the similar problem
again. (ii) If the decision is bad one, one will know what not to do, the next time.
(iii) If the decision is bad and one follows up soon enough, corrective action may
still be possible.
71
In order to achieve proper follow up, the management should devise
an efficient system of feedback information. This information will be very
useful in taking the corrective measures and in taking right decisions in the
future.
72
*LEADING MANAGEMENT CONTROL*
*Features/Elements of leadership*
OR
1. Leadership is a process of influence: leadership is a process whose
important ingredient is the influence exercised by the leader on goup members. A
person is said to have an influence over others when they are willing to carry out
his wishes and accept his advice, guidance and direction. Successful leaders are
able to influence the behaviour, attitudes and beliefs of their followers.
2. Leadership is the function of stimulation: leadership is the function of
motivating people to strive willingly to attain organisational objectives. Leaders
are considered successful when they are able to subordinate the individual interests
of the employees to the general interests of the organisation. A successful leader
guides his subordinates to have their individual goals set by themselves in such a
73
way that they do not conflict with the organisational objectives. When this
congruency is achieved, workers act enthusiastically to achieve these goals.
3. Leadership gives an experience of helping attain the common
objectives: under successful leadership, every person in the organisation feels that
his operation, however minor it may be, is vital to the attainment of organisational
objectives. It happens when the manager feels the importance of individuals, gives
them recognition and tells them about the importance of activities performed by
them.
4. Employees must be satisfied with the type of leadership provided: only
short-term productivity of employees can be increased by pressure and
punishment. This approach is not in the long-term interests of the organisation.
Force generates counter force, which results in a decreased long-term productivity.
Long-term interests of the organisation are best served when managers allow
subordinates to influence their behaviour, particularly when subordinates are
knowledgeable and competent. A good manager recognizes the fact that leadership
is a shared function. A good leader shares everything with his followers; he shares
credit, he shares blame, he shares ideas, opinion and experience.
5. Leadership is related to a situation: when we talk of leadership, it is
always related to a particular situation, at a given point of time and under a specific
set of circumstances. That means leadership styles should be different under
different circumstances. At one point of time, the subordinates may accept the
autocratic behaviour of the leader while at a different point of time and under a
different set of circumstance, only participative leadership style may be successful.
That is why, it is said that leadership is always particular and not general.
Leadership and managership are not same thing a manager is a leader as well
as manager as he influence the behaviour of his subordinates to work willingly
towards achievement of organisational goals in the interest of subordinates as well
as organisation. A manager can be more effective if he is a good leader. Manager is
more than a leader because he performs all the five functions of management
(planning, organizing, staffing, directing, and controlling) where as a leader
performs only leadership functions which is just a part of directing.
A leader need not necessarily be a manager. Leader acquires powers due to
acceptance of his role by his followers. Where as a manager acquires powers due
to delegation by his superiors.
*Importance of leadership*
74
1. Helps in guiding and inspiring the employees: leader guides and inspires
his subordinates towards higher performance and so helps in achieving the
business goals.
2. Creates confidence: leader creates confidence among the employees by
understanding and handling the situations as per proper requirement. Sometimes
individuals fail to recognize their qualities and capabilities than he provides
psychological support to the followers by his conduct and expression.
3. Improves productivity: the main purpose is to use the available human and
non-human resources of the organisation efficiently and efficiency of performance
= the product of capability and willingness. By raising willingness leader helps in
improving the productivity.
4. Improves job satisfaction: effort from monitory incentives and better
physical working conditions, the job satisfaction of employees also depends on the
behaviour of their managers. Leaders ensure that managers in organisation should
adopt behaviour, which is acceptable to the subordinates. Moreover leaders support
and encourage the subordinates to meet particular situations. Overall these
activities improve job satisfaction among the employee. A satisfied human
resource is always better than unsatisfied.
5. Acts as an intermediary: leader communicates the expectations of the
management to the subordinates and also leads the subordinates to resolve their
problems and from the management. So leader is a middleman between manager
and worker.
6. Acts as a counselor: while taking various decisions by the management,
leaders of the workers are also invited to act as a counselor of the subordinates.
7. Enhances group efforts: leadership prepares the people at workplace to
perform the job with mutual trust co operative and friendly manner. Subordinates
and the management should make collective efforts and give priority to the
achievement of organisational objectives.
8. Determination of goals: a leader performs the creative function of laying
down goals and policies for the followers. He acts as a guide in interpreting the
goals and policies.
9. Organisation of activities: a good leader divides organisational activities
among the employees in a systematic manner. The relationships between them are
clearly laid down. This reduces the chances of conflict between them.
10. Representation of workers: the leader is a representative of his group. He
takes initiative in all matters of interest to the group and attempts to fulfill the
psychological needs of the subordinates.
11. Achieving coordination: a leader integrates the goals of the individuals
with the organisational goals and creates a commonality o interests. He keeps
75
himself informed about the working of the group and shares information with
group for the coordination of its efforts.
12. Providing guidance: a leader guides the subordinates towards the
achievement of organisational objectives. He is available for advice whenever a
subordinate faces any problem.
13. Building employees Morale: good leadership is indispensable to high
employee morale. The leader shapes the thinking and attitudes of the group. He
develops good human relations and facilitates interactions between the members of
the group. He maintains voluntary cooperation and discipline among followers.
14. Facilitating change: dynamic leadership is the cornerstone of organisational
change. An effective leader is able to overcome resistance to change on the part of
workers and thus facilitate change.
Manager Leader
1. He drives and orders. He coaches and advises.
2. He depends blames and finds faults. He depends on his confidence and
goodwill.
3. He engenders fear. He inspires enthusiasm.
4. He fixes blames and funds faults. He solves problems.
5. He knows all the answers. He consults and seeks advice.
6. He makes the work drudgery. He makes the work a game.
7. He believes in “I”. He believes in “We” and “you”.
76
*Formal and informal leaders*
It has been observed above that a manager should also be a good leader. But
in actual practice, every manager is not able to provide the kind of leadership
desired by his subordinates. This gives rise to informal leaders who do not hold
any managerial post in the organisation. A formal leader, on the other hand, is one
who possesses organisational authority to direct and control the activities of his
subordinates. He can issue orders and instructions to his subordinates by virtue of
his formal authority in the organisation. An informal leader is elected by the
management, as in case of a formal leader.
Sometimes, informal leaders become more acceptable to the workers as
compared to the formal leaders. In such a situation, the formal leaders become the
position-holders only. They are not able to achieve the voluntary cooperation of the
workers in all matters. It is also true that a work-group may have different leaders
for different purposes. The members of a work-group may be influenced by one
leader while doing their jobs. But as regards their personal problems, they may go
to another leader as far as their reaction is concerned.
Management often tries to suppress informal leaders. But it should be
remembered that the trouble they cause reflects the desires of the group. If they are
suppressed, the workers may become more antagonistic to management, morale
may fall even lower and new informal leaders may step to the fore. Therefore, it is
better to work with informal leaders. There are many ways in which a manager can
build up good relations with the informal leaders working with him. Among other
things, he can pall necessary information to them first, seek their advice on
technical and human relations problems, and assign them to train other.
*Communication*
77
In simple words, exchange of ideas/messages, response there off in total is
known as communication. Any method of communication like words—oral or
written, pictures, graphs, diagrams, etc. may be adopted to communicate. Effective
communication is that communication in which the receiver is understood actually
what the sender wants to convey, and in the same form. ‘Noise’ is something,
which has disturbed the effective sending and receiving of communication.
*Characteristics/features of communication*
*Advantages/Importance of communication*
78
can be removed. Moreover clear and accurate information can be communicated at
proper time resulting better relations between the two.
6. Helps in motivating: communication helps in the process of motivation by
sharing of information, consultation and discussion of various problems for prompt
redressed/solution, quick solution of problems creates satisfaction resulting
motivation towards work.
7. Information regarding organisational rules: subordinates should be
informed by communicating them, rules and principles of the organisation and any
misunderstanding regarding there of must also be clarified. This will necessarily
improve the acceptance of organisational rules.
8. Facilitates directing function: communication makes a link between
managers and workforce of the organisation resulting a continuous flow of
directions, instructions, orders, suggestions, problems etc. so it facilitates directing
function.
9. Better public relations: by way of communication customers, suppliers,
shareholders, govt. and society may be provided required information. Resulting
better co-operation and good relations among all these groups.
10. Improves efficiency: an effective communication helps in understanding
ideas, instructions or guidelines in a close and clear way and removes all
confusions. Resulting better understanding, better efficiency.
*Process/Steps of communication*
1. Sender: according to this model, the first element is the source of the
communication. The person who initiates the communication process in known as
sender, source or communicator. The sender has some need, information, thought,
idea or inform which he wants too communicate to some other person to achieve
some purpose. By initiating the message, the sender attempts to achieve
understanding and a change in the behaviour of the receiver.
2. Encoding or communication symbol: the next element in the process is
that of encoding the information to be transmitted. The sender of information
organizes his ideas into a series of symbols (words, signs, etc.), which, he feels,
will communicate to the intended receiver or receivers. This is known as encoding
of message, i.e., converting to communicable codes which will be understood by
the receiver of the message.
3. Message: the next element in the process of communication is message. The
message is the physical form into which the sender encodes the information. The
message may be in any form that could be experienced and understood by one or
more of the senses of the receiver. Speech may be heard, written words may be
read and gestures may be seen or felt. Thus, a message may taken any of the two
79
form i.e. verbal or non verbal. Verbal message is in the form of word language,
while non-verbal would be in the form of gestures like wink, smile, grunt, frown,
warming of hand, shaking of head, etc.
4. Communication channel: the next element in the process of
communication is the channel or the mode of transmission (such as air for spoken
words and paper for letters). The mode of transmission is often inseparable from
the message. The channel is the link that connects th sender and the message. Air,
sight and sound are important communication channels. The receiver must be
considered while selecting a channel. Some people respond better to formal letters
or communications, others to the informally spoken words. The channels of
communication which are officially recognized by the organisation are known as
formal channels. For communication to be effective the channel used should be
appropriate for the message as well as the receiver. For an urgent message, telefax,
telephone, electronic mail, telegram, radio, television transmission would be
appropriate.
5. Receiver: the next element in the process of communication is the receiver,
the person who receives the message is called receiver. The communication
process is incomplete without the existence of receiver of the message. It is the
receiver who receives and tries to understand the message. If the message does not
reach the receiver, communication cannot be said to have taken place. The socio-
demographic and physiographic characteristics of the receivers influence in
selection of an appropriate channel of communication.
6. Decoding: decoding is the process by which the receiver’s draws meaning
from the symbols encoded by the sender. It is affected by the receiver’s past
experience, education, perception, expectations and mutuality of meaning with the
sender. The greater the overlap or commonality of the receiver’s field of
experience and sender, the greater success of the probability of expected
communication. A model of communication by Wilbur Schramm. It illustrates that
an individual with significantly different educational or cultural background ahs to
put in greater effort to ensure successful communication.
7. Feedback: after receiving the message, the receiver will take necessary
action and send feedback information to the communicator. Feedback is a reversal
of the communication process in which a reaction to the sender’s message is
expressed. The receiver becomes the sender and feedback goes through the same
steps as the original communication. The feedback is optional and may exist in any
degree (from minimal to complete) in any given situation. Generally, greater the
feedback, the more effective the communication process is likely to be. For
example, early feedback will enable the manager (sender) to know if his
instructions have been properly understood and carried out.
80
Two-way communication takes place when the receiver provides feedback
to the sender. For instance, giving an instruction to a subordinate and receiving it
acceptance is an example of two-way communication. On the other hand, in case
of one-way communication, feedback is totally absent. Here the sender
communicates without expecting or getting feedback from the receiver.
A policy statement from the chief executive is an example of one-way
communication. One-way communication takes less time than two-way
communication. In certain situations one-way communication is more effective to
get work from the subordinates. Two-way communication is superior to one-way
communication in the following respects:
(i) Two-way communication is more accurate than one-way
communication. The feedback allows the sender to refine his communication, so
that it becomes more precise and accurate.
(ii) Receiver’s self-confidence is higher in case of two-way communication, as
they are permitted to ask questions and seek clarification from the senders.
81
2. On the basis of flow or types of formal communication: (a)
downward communication, (b) upward communication, (c) horizontal
communication, (d) diagonal communication.
82
8. Channel of It is mostly expressed in It is mostly expressed in
communicatio written form. verbal form.
n
9. Interpretation Message is correctly Messages may be distorted
of messages interpreted due to written as it flows verbally,
form. between different persons.
10. Source or Source and direction of flow It is difficult to traceout
direction can be easily traced. source and direction of
flow.
11. Remorse Due to written form it does Due to verbal form it may
not lead to remorse. lead to remorse.
12. Personal Generally there is no Generally there is personal
involvement personal involvement. involvement.
83
interested in knowing the reaction of the receiver quickly. But verbal
communication is not possible there.
8. Emotional and psychological barriers: these barriers arise from emotions,
attitudes and social values of the participants. People may refuse to accept the
messages affecting them emotionally.
9. Symbolic barriers: sometimes the some word of language/symbol may
carry different meaning to different parties as per their traditions, customs or
religion and in that case communication will not be an effective communication.
10. Lack of organisational facilities: in some organisations there are no
suggestion boxes regarding complaints and also the subordinate can’t disturb the
chain of command. Such lack of organisational facilities is also barrier in effective
communication.
11. Specialization barrier: when a department or a person treats him more
specialized, it will result no attention towards other departments/persons.
12. Complex organisational structure: when organisational structure is of
complex nature, the information may get filtered, modified or lost at different
levels before reaching to the last level.
13. Semantic problems: effective communication does not only include of
transmission of information/idea but also includes that the receiver has understood
the information in the same way as was desired by the sender. E.g. announcement
in increase in budget is meant for increase by installing new plan and new
technology machines and plant. But workers may think that due to increase budget
their salary and wages will raise.
84
grievances to the top management. Two-way communication is also necessary for
feedback for the purpose of control.
6. Effective channels: management should try to cut the roots of the rumours.
If the communication channel is well maintained, there will be no room for
rumours, lies, guesses and misconceptions. Worker should get open doors for any
clarification or consideration at all times. This will also increase the morale of the
employees.
85
receiver of information. But feedback principle is often given a back seat by most
managers, which defeats the very purpose of communication.
7. Principle of time: information should be communicated at the right time.
The communicator must consider the timing of communication so that the desired
response is created in the minds of the receivers.
*MOTIVATION*
Introduction:
To the behavioural scientists, the word motivation is something stemming
from within a person. According to them, motivation refers to a dynamic driving
force, which stems from within. It is an “inner striving condition, which activates
or moves individual into action and continues him in the course of action
enthusiastically”. Thus, motivation is defined as an inner state that activates,
energizes or moves behaviour towards goals. And, the forces inside the individual
that inspire him to continue work are variously called as wishes, drives, needs etc.
According to Rensis Likert motivation is the “core of management.”
Motivation is an important function performed by manager for actuating the people
to work for the accomplishment of organisational objectives. Issuance of well-
conceived instructions and orders does not mean that they will be followed. A
manager has to make appropriate use of various techniques of motivation to
enthuse the employees to follow them. Effective motivation succeeds not only in
having an order accepted but also in gaining a determination to see that it is
executed efficiently and effectively.
Motivation is an effective and dynamic instrument in the hands of a manager
for inspiring the workforce and creating confidence in them. Through the
motivation of the workforce, management creates ‘will to work’ which is
necessary for the achievement of organisational goals and objectives. Motivation is
the process of getting the members or the group to pull weight effectively, to give
their loyalty to the group and to carry out properly the purpose of the organisation.
The term ‘motivation’ has its origin in the Latin word “mover” which means
to “move”. Thus, motivation stands for movement. One can get a donkey to move
by using a “carrot or a stick”, with people one can use incentives, or threats or
reprimands. However, these only have a limited effect. These work for a while and
then need to be repeated, increased or reinforced to secure further movement. The
86
term motivation may be defined as “the managerial function of ascertaining the
motives of subordinates and helping them to realize those motives”.
According to Dubin motivation could be defined as “the complex of forces
starting and keeping a person at work in an organisation. Motivation is something
that moves the person to action, and continues him in the course of action already
initiated”. Motivation refers to the way a person is enthused at work to intensify
his/her desire and willingness to use and channelise his/her energy for the
achievement of organisational objectives. It is something that moves a person into
action wand continue him in the course of action enthusiastically. The role of
motivation is to develop and intensify the desire in every member of the
organisation to work effectively and efficiently in his position.
In the words of Dalton E. McFarland, motivation is the way in which urges,
desires, aspiration, striving or needs direct, control or explain the behaviour of
human being”. Motivation has very close relationship with the behaviour. It
explains how and way the human behaviour is caused. According to McFarland
motivation is a form of tension occurring within individual, with resulting
behaviour aimed at reducing, eliminating or diverting the tension. Understanding
the needs and drives and their resulting tensions helps to explain and predict
human behaviour ultimately providing a sound basis for managerial decision and
action.” Thus, motivation is the term, which applies to the entire class of urges,
drives, desires, needs and similar forces.
*Models of motivation*
87
clothing, air, water and other necessaries of life, which are biological in
nature. These needs are primary needs.
2. Safety and security needs: after satisfying the physiological needs, people
want the assurance of maintaining a given economic level. They want job
security, personal bodily security, security of source of income, provision for
old age, insurance against risks, etc.
3. Social needs: man is a social being. He is, therefore, interested in
conversation, sociability, exchange of feelings and grievances,
companionship, recognition, belongingness, etc.
4. Esteem and status needs: these needs embrace such things as self-
confidence, independence, achievement, competence, knowledge and
success. These needs boost the ego of individual. They are also known as
egoistic needs. They are concerned with prestige and status of the individual.
5. Self-fulfillment needs: the final step under the need priority model is the
need for self-fulfillment or the need to fulfill what a person considers being
his mission in life. It involves realizing one’s potentialities for continued
self-development and for being creative in the broadest senses of the word.
After his other needs are fulfilled, a man has the desire for personal
achievement. He wants to do something, which is challenging and since this
challenge gives him enough dash and initiative to work, it is beneficial to
him in particular and to the society in general. The sense of achievement
gives him psychological satisfaction.
Note:
Maslow proposed that all human needs are kept as per rank of importance
and human behaviour is to fulfill its needs as per importance rank and so he
continuous in a proper sequence but after fulfillment of a need another need arise.
Moreover satisfied need will no longer be a motivator and needs and wants are
infinity.
88
differences. Thus, need hierarchy may not follow the sequence postulated by
Maslow. Even if safety need is not satisfied, the egoistic or social need may
emerge.
Proposition that one need is satisfied at one time is also of doubtful validity.
The phenomenon of multiple motivation is of great practical importance in
understanding the behaviour of man. Man’s behaviour at any time is mostly guided
by multiplicity of motives. However one or two motives in any situation may be
prepotent, while others may be of secondary importance. Moreover, at different
levels of needs, the motivation will be defferent. Money can act as a motivator
only for physiological and social needs, not for satisfying higher level needs.
Employees are enthusiastically motivated by what they are seeking, more than by
what they already have. They may react cautiously in order to keep what they
already have, but they move forward with enthusiasm when they are seeking
something else. In other words, man works for bread alone as long as it is not
available.
There are always some people in whom, for instance, need for self-esteem
seems to be more prominent then that of love. There are important also creative
people in whom the drive for creativeness seems to be more important. In certain
people, the level of operation may be permanently lower. For instance, a person
who has experienced chronic unemployment may continue to be satisfied for the
rest of his life if only he can get enough food. Another cause of reversal of need
hierarchy is that when a need has been satisfied for a long time, it may be under-
valued.
Douglas McGregor who set forth in his book “Human Side of Enterprise”
two pairs of assumptions about human beings which he thought were implied by
the actions of autocratic and permissive managers. The first set of assumptions is
contained in “Theory X” and the second set of assumptions in “Theory Y”. It is
important to note that these sets of assumptions were not based on any research,
but is intuitive deductions.
1. Theory X:
Theory X’ believes that autocratic managers often make the following
assumptions about their subordinates. Accordingly, the subordinate in general:
(i) Has an inherent dislike for work and will avoid it, if he can;
(ii) Is lazy and avoids responsibility.
(iii) Is indifferent to organisational goals; and
89
(iv) Prefers to be directed, wishes to avoid responsibility, has relatively
little ambition and wants security above all.
According to McGregor, this is a traditional theory of what workers are like
and what management must do ot motivate them. Workers have to be persuaded
and pushed into performance. This is management’s task. Management can offer
rewards to a worker who shows higher productivity and can punish him if his
performance is below standard. This is also called ‘carrot and stick’ approach to
motivation. It suggests that threats of punishment and strict control are the ways to
control the people. McGregor questioned the assumptions of Theory X, which
followed carrot and stick approach to motivation of people and suggested
autocratic style of leadership. He felt that management by direction and control is a
questionable method for motivating such people who’s physiological and safety
needs have been satisfied and whose social esteem and self-actualization needs are
becoming important. For such people, Theory Y seems to be applicable.
2. Theory Y:
Managers with Theory Y orientation make the following assumptions about
their subordinates. Accordingly, the subordinate in general:
(i) Does not inherently dislike work. Depending upon controllable
conditions, work may be a source of satisfaction or a source of
punishment;
(ii) Will exercise self-direction and self-control in the service of
objectives to which he is committed;
(iii) Commitment to objectives is a function of the rewards associated with
their achievement;
(iv) Learns under proper conditions, not only to accept, but also to seek
responsibility; and
(v) The capacity to exercise a relatively high degree of imagination,
ingenuity and creativity in the solution of organisational problems is widely, not
narrowly, distributed in the population.
90
Theory Y assumes that goals of the organisation and those of the individuals
are not necessarily incongruent. The basic problem in most of the organisations is
that of securing commitment of workers to organisational goals. Worker’s
commitment is directly related to the satisfaction of their needs. Thus, this theory
places great emphasis on satisfaction of the needs, particularly the higher once, of
the employees. It does not rely heavily on the use of authority as an instrument of
command and control. It assumes that employees exercise self-direction and self-
control in the direction of the goals to which they feel themselves committed. They
could be motivated by delegation of authority, job enlargement, and management
by objectives and participative management practices.
91
these background factors which had caused them to believe that they were being
treated unfairly. This led to draw a distinction between what are called as
‘motivators’ and ‘hygiene factors’. To this group of engineers and accountants, the
real motivators were opportunities to become more expert and to handle more
demanding assignments. Hygienie factors served to prevent loss of money and
efficiency. Thus, hygienie factors provide no motivation to the employees, but the
absence of these factors serves as dissatisfiers.
Some job conditions operate primarily to dissatisfy employees when they are
absent, but their presence does not motivate employees in a strong way. Many of
these factors are traditionally perceived by management as motivators, but the
factors are really more potent as dissatisfiers. They are called maintenance factors
in job because they are necessary to maintain a reasonable level of satisfaction
among the also known as dissatisfiers or “hygienie factors” because they support
primarily to build strong motivation and high job satisfaction among the
employees. These conditions are ‘motivational factors’. Herzberg’s maintenance
and motivational factors have been shown in the table
92
and include such factors as recognition, feeling of accomplishment and
achievement, opportunity of advancement and potential for personal growth,
responsibility and sense of job and individual importance, new experience and
challenging work etc.
Herzberg further stated that managers have hitherto been very much
concerned with hygienie factors. As a result, they have not been able to obtain the
desired behaviour from employees. In order to increase the motivation of
employees, it is necessary to pay attention to the satisfiers or motivational factors.
Herzberg also said that to-day’s motivators are tomorrow’s hygienes because
they stop influencing the behaviour of persons when they get them. When a person
gets one thing, then something else will motivate him and the need, which has been
fulfilled, will have only negative significance in determining his behaviour. It
should also be noted that one’s hygiene may be the motivator of another. For
instance, it is likely that workers in underdeveloped societies will designate some
of the maintenance factors as motivators because their primary needs have not
been fulfilled and they continue to be motivated by these factors.
93
(b) Difference: Herzberg’s model differs from Maslow’s model in respect of the
following:
(i) An important point of difference is that the lower level needs of individuals
like food, shelter, and job security are regarded by Maslow as having the
power or potency to motivate them. But to Herzberg these are just hygienie
factors; of they are absent, there is dissatisfaction, but their presence does not
by itself provide any motivation. The motivators in Herzberg’s theory are a
class apart from hygiene factors. But all the needs according to Maslow are
motivators, depending on the mental level, in which an individual is placed.
(ii) Another difference is that Maslow formulated his theory out of his insight,
individual thinking and experience as a psychiatrist, but Herzberg arrived at
his findings from the responses to questions put by his team of researchers to
a specified class of employees, viz., engineers and accountants.
(iii) Maslow emphasized the need of human beings for all 24hours of the day
whereas; Herzberg was concerned with the needs of employees in relation to
their work and work environment. So, the claim to universality is stronger in the
case of Maslow’s theory than in that of Herzberg’s theory.
94
common bias among human beings to take more credit for good things and put the
blame on others for bad things.
(iii) Herzberg gave too much emphasis on job enrichment. But job enrichment is
not the only answer. Off-the-job satisfaction of the workers is also very important.
Herzberg did not attach much importance to pay, status of interpersonal
relationship, which are generally held as important contents of satisfaction.
95
People have different valence for various outcomes. The relative valence
they attach to various outcomes is influenced by conditions such as age, education
and type of work. The valence of a person for a goal may be positive or negative
depending upon his positive or negative preference for this goal. If a person is
indifferent to an outcome, his valence is zero. Thus, the total range of valence is
from –1 to +1.
(b) Expectancy (Effort-Reward Probability): it refers to the extent, to which the
person believes that his efforts will lead to the first level outcome, i.e., completion
of a task. Expectancy is stated as a probability, i.e., as individual’s estimate of the
probability of an outcome from an action. Since, it is an association between effort
and performance, its value may range from 0 to 1. if the individual feels that
chances of achieving an outcome are zero, he will not even try. On the other hand,
if expectancy is higher, the individual will put higher efforts to achieve the desired
outcome.
(c) Instrumentality (performance-Reward Probability): it refers to the
probability to which the performance (first level outcome) will lead to the desired
reward (second level outcome). For instance, an individual wants a promotion and
feels that superior performance is very important in achieving promotion. Superior
performance is the first level outcome and promotion is the second level outcome.
The first-level outcome of high performance acquires a positive valency by virtue
of its expected relationship to the preferred second level outcome of promotion. In
other words, superior performance (first-level outcome) will be instrumental in
obtaining promotion (second level outcome). The value of instrumentality also
ranges from 0 to 1, as it is the probability of achieving the desired outcome.
Motivation is the product of valance, expectancy and instrumentality. These
three factors in the expectancy model may exist in an infinite number of
combinations depending upon the range of valence and the degrees of expectancy
and instrumentality. The combination that produces the strongest motivation is
high positive valence, high expectancy and high instrumentality. If all the three are
low, the resulting motivation will be weak. In other cases, motivation will be
moderate. Similarly, the strength of avoidance behaviour will be determined by the
negative valence and expectancy and instrumental factors.
As said above, the motivational force will be highest when expectancy,
instrumentality and valence are all high. The management must recognize factors
for behavioural modification, so that these three elements achieve the highest value
individually.
A worker may exhibit a poor behaviour due to:
(i) Low effort-performance expectancy: the worker may lack the
necessary skills and training to believe that his extra efforts will lead to better
96
performance. The management could provide the relationship between efforts and
performance.
(ii) Low performance-reward instrumentality relationship: similar
performance may not lead to similar rewards. The reward policy may be
inconsistent and may depend upon factor other than performance, which the
worker may not be aware of or may not consider fair. The management must re-
evaluate the appraisal techniques and formulate policies that strengthen
performance-reward relationship as just and equitable.
The important contribution of Vroom’s model is that it explains how the
goals of individuals influence their efforts and that the behaviour individuals select
depends upon their assessment of the probability that the behaviour will
successfully lead to the goal. For instance, all people in an organisation may not
place the same value on such job factors as promotion, high pay, job security and
working conditions. In other words, they may rank them differently. Broom is of
the opinion that what is important is the perception and value the individual places,
high value on salary increase and perceives superior performance as instrumental
in reaching that goal. According to broom, this individual will strive towards
superior performance in order to achieve the salary increase. One the other hand,
another individual may highly value promotion and perceive political behaviour as
instrumental in achieving it. This individual is not likely to emphasize superior
performance to achieve the goal.
In essence, vroom emphasizes the importance of individual perception and
assessment to organisational behaviour. What is important here is that what the
individual perceives as the consequence of a particular behaviour is far more
important than what the manager believes the individual should perceive. Thus,
Vroom’s model attempts to explain how individual’s goals influence his efforts
and like need-based models reveal that individual’s behaviour is goal-oriented.
97
attractions of the Vroom model is that it recognizes the importance of various
individual needs and motivations. It does seem more realistic”.
(iii) Clue to harmonization of individual and organisation goals: it clarifies the
relationship between individual goals and organisational objectives and thus points
to the way how the two can be harmonized. It is thus a step further from
management by objectives. Instead of assuming that satisfaction of a specific need
is likely to influence organisational objectives in a certain way we can find out
how important to the employee are: the various first-level outcomes (organisational
objectives) for their attainment, and the expectancies that are held with respect to
the employees ability to influence the first-level outcome. For instance, suppose
the organisation sets a certain standard for production (first-level outcome of
organisational goal) for the purpose of incentive pay, promotion, etc. (second-level
outcome). If the workers do not put forth adequate efforts to achieve the
organisational goal, it may be assumed that either (a) they do not place much value
on the second-level outcomes (incentive, promotion); (b) they feel that their efforts
will not lead to the production standard; and (c) they may not believe that if they
achieve the standard, it will be instrumental in getting them higher remuneration or
promotion.
(iv) Contingency approach: indirectly, Broom draws attention to an all-important
fact that there is no one set formula for the motivation of individuals. He looked at
effective motivation not in terms of either a fixed set of human needs or as a
uniform configuration of external motivations. His is the contingency approach, so
to speak. In other words, if any method of motivation is found to be productive,
managers should continue it, on the other hand, if it does not produce the desired
results, it should be given up for something better. By measuring and analyzing the
workers’ output managers can get clues to their motivation, identify some of the
important variables and formulate their reward plans accordingly.
(v) Practical utility: according to R.J. House and M.A. Wahba, the Broom model
has been used to predict a wide variety of work-related variables in a number of
studies. These include job effort and performance, organisational practices,
managerial motivation, occupational choice, importance of pay and pay
effectiveness, leadership behaviour and leadership effectiveness.
In the opinion of Leon Reinharth and M.A. Wahba, “the expectancy theory
has served as the basis for research in such diverse areas such as decision-making,
learning theory, verbal conditioning, attitudes and organisational behaviour. All
these impart a certain amount of generality and practical utility to the model.
(vi) Popular support: it is said that since the model had been proposed, at least
one issue of every journal in organisational behaviour reported some result on its
application in practice. Alan C. Filley, Robert J. House and Steven Kerr analyzed
the numerous studies, more than 32, from 1962 to 1974 and came to the general
98
conclusion that there was empirical support to the expectancy theory. Similarly,
some of its propositions were confirmed by studies made by T.R. Mitchell and A.
Biglan, who reviewed six cases in the area of industrial psychology; H. G.
Heinemann, III and D. P. Schwab who investigated nine field enquiries in
managerial settings and further M. Wahba and R. House who apprised fourteen
investigations also confirmed the propositions. However, most researchers
suggested the need for further study to test some of the principal variables, on
which the model is based.
Serious doubts have been expressed about the existence of the five distinct
need categories, which Maslow hypothesized. There seems to be some overlapping
between esteem, social, and physiological needs. Also, the lines between esteem,
99
social, and self-actualization needs are not entirely clear. With these points in
mind, Clayton Alderfer condensed Maslow’s five need categories into three sets:
(i) Existence need: these include all forms of material and physiological and
safety needs. i.e., Maslow’s first two level needs.
(ii) Relatedness need: this includes all needs that involve relationships with
other people we care about. Thus, the opposite of satisfaction or relatedness needs
is emotional distance rather than hatred. Relatedness needs cover Maslow’s social
needs and that of esteem needs which are derived from other people.
(iii) Growth need: these needs involve persons making creative efforts to
achieve full potential in the existing environment. It is like Maslow’s last level
need of self-actualization.
100
There are some similarities as well as dissimilarities between Alderfer’s
ERG theory and Maslow’s theory of Need Hierarchy, which are as follows:
(a) Similarities: (i) both are content theories; (ii) the basic needs emphasized in
both are the same; (iii) the overall structure of need categories is also the same;
Alderfer has grouped further the five needs enunciated by Maslow; and (iv) both
deal with upward movement of motivation according to the hierarchy.
(b) Dissimilarities: (i) Maslow’s main contention is hierarchy of needs, whereas
Alderfer focused more on a continuum of needs than their hierarchical levels; (ii)
thus, ERG needs do not maintain sharp lines of demarcation; (iii) unlike Maslow,l
Alderfer also envisaged downward movement in the hierarchy. In his opinion,
there can be not only satisfaction progression but frustration regression as well;
and (iv) Alderfer also recognized the influence of a man’s personal background
and his natural environment. Accordingly, related needs may in some cases take
precedence over existence needs.
101
Achievement motivation: some people have a compelling drive to succed and
they strive for personal achievement rather than the rewards of success that
accompany it. They have a desire to do something better or more efficiently than it
has been done before. This drive is the achievement need. From researches into the
area of achievement need, McClelland found that high achievers differentiate
themselves from others by their desire to do things better. They seek situations
where they can attain personal responsibility for finding solutions to problems,
where they can receive rapid feedback on their performance so they can set
moderately challenging goals. High achievers are not gamblers; they dislike
succeeding by chance. They prefer the challenge of working at a problem and
accepting the personal responsibility for success or failure, rather than leaving the
outcome to chance or the actions of others.
Power motivation: the need for power is a drive to have impact, to be influential,
and to control others, individuals high in nPow enjoy being “in charge”, strive for
influence over others, prefer to be placed into competitive and status-oriented
situations, and tend to be more concerned with gaining influence over others and
prestige than with effective performance. Power-motivated people wish to create
an impact on their organisations and are willing to take risks to do so.
Affiliation motivation: this need has received the least attention of researchers.
Affiliation need can be viewed as the desire to be liked and accepted by others. It is
the drive to relate to people on a social basis. Individuals with a high affiliation
motive strive for friendship, prefer cooperative situations rather than competitive
ones, and desire relationships involving a high degree of mutual understanding.
People possess the above needs in varying degrees. However, one of the
needs will tend to be more characteristic of the individual rather than the other two.
Individual with a high need for achievement thrive on jobs and projects that tax
their skills and abilities. Such individuals are goal-oriented in their activities, seek
a challenge and want task relevant feedback. Individuals with high affiliation needs
value interpersonal relationships and exhibit sensitivity towards other people’s
feeling. But individuals with the high power needs seek to dominate, influence or
have control over others.
McClelland’s concept of achievement motivation can be related to
Herzberg’s motivation-hygiene theory. People with high achievement motivation
tend to be interested in the motivators and with low achievement tend to be
interested in the motivators and with low achievement tend to be interested in the
motivators and with low achievement tend to be interested in environmental or
hygienie factors. McClelland’s research revealed that managers generally score
102
high in the need for achievement. In other words, motivating forces for managers
lie in the challenge and potential of the job.
103