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In this chapter we will discuss: • • • • Definitions of Management The Role of Management Functions of Managers Levels of Management
• Management Skills and Organizational Hierarchy Approaches to Management
One of the most important activities in business is the management of the 4M’s – men, machines, material and money. The term ‘management’ can be interpreted differently in different contexts. Hence, it is difficult to define. In one context, it may comprise the activities of executives and administrative personnel in an organization, while in another, it may refer to a system of getting things done. In a broad perspective, management can be considered as the proper utilization of people and other resources in an organization to accomplish desired objectives. With increasing global competition, changes in the world of technology, changing business practices and increasing social responsibility of organizations, the role of managers has become all the more significant. In this chapter, we will first examine the definitions of management given by some eminent management thinkers to understand the essence of management. Secondly, we will discuss the five basic functions of management i.e., planning, organizing, staffing, leading and controlling. The chapter also focuses on the managerial skills required at various levels of the organizational hierarchy and briefly explains the various approaches to management.
DEFINITIONS OF MANAGEMENT
The term ‘management’ can be interpreted in a variety of ways. To gain a better insight into the nature of management, let us look at some of the definitions of management: Harold Koontz and Heinz Weihrich define management as “the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.” Louis E. Boone and David L. Kurtz define management as “the use of people and other resources to accomplish objectives.” Dalton E. McFarland defines management as “a process, by which managers create, direct, maintain, and operate purposive organizations through systematic, coordinated, cooperative human effort.” Mary Parker Follet termed management as “the act of getting things done through people.” Definitions by Follet and Louis E. Boone and Kurtz call attention to the fact that managers achieve organizational goals by getting others to do the necessary tasks. The other two definitions suggest that management is much more than “just getting the work done” and (as shown in Figure 1.1) suggest the following aspects of management:
1. Managers carry out the functions of planning, organizing, staffing, leading and controlling: Henry Fayol was the first management thinker to outline the five basic functions carried out by managers. Every manager performs these basic functions. These functions are discussed in detail in the later part of this chapter. 2. Management is essential to any kind of organization: Wherever there are groups of people working together to achieve some common objectives, it becomes essential to guide, organize and control them. The term ‘management’ applies to any organization irrespective of the size or nature of operations. The prime concern of a CEO of a multinational company, the General Manager of a hotel, the first-level supervisor, the manager of a cricket team and the student president in a college is to manage their people and resources effectively. Figure 1.1: Key Aspects of the Management Process
3. Management is essential at all hierarchical levels: Management is necessary at all levels. However, the type of skills and the degree to which various skills are required at different levels of the hierarchy may vary. In order to perform their duties satisfactorily, managers need technical, human, conceptual and design skills. 4. The goal of all managers is to generate surplus: The aim of all business managers is to create a surplus. To accomplish this objective, the manager has to create an environment which encourages people to accomplish as much as possible with the least amount of resources and personal dissatisfaction. Even in non-profit organizations, the aim of managers is to accomplish their goals with the minimum amount of resources or to make as much surplus as possible with available resources. 5. The aim of all managers is to improve productivity, efficiency and effectiveness: Productivity is defined as “the output-input ratio within a time period with due consideration for quality.” It can be expressed as: Productivity = Outputs / Inputs (within a time period, quality considered)
Productivity can be improved in the following ways: • • • By producing more output with the same inputs. By reducing inputs, but maintaining the same level of outputs. By increasing outputs and reducing inputs, thereby, making the ratio more favorable.
Productivity can be improved by ensuring efficiency and effectiveness in the operations of the firm. Effectiveness refers to achievement of stated organizational objectives while efficiency denotes the judicious use of resources to achieve organizational objectives. In the words of Peter Drucker, efficiency means “doing things right”, while effectiveness means “doing the right things.” In his book, “Management – Tasks, Responsibilities, Practices”, Drucker states that effectiveness is the foundation of success whereas efficiency is a minimum condition for survival after success has been achieved.
THE ROLE OF MANAGEMENT
As mentioned earlier, managers perform five functions – planning, organizing, staffing, leading and controlling. Since these functions are very essential for effective management, they have been used as the basic framework for this book. They have been briefly explained in the next section of the chapter. In order to understand the role of management, in the late 1960s, Henry Mintzberg devised a new approach – the managerial roles approach – by observing what managers actually do. He did a careful study of five chief executives at work and found that they were involved in a number of varied, unpatterned activities of short duration. Using a method called structured observation, Mintzberg isolated ten roles which he believed were common to all managers. As shown in Table 1.1, these ten roles were grouped into three categories – interpersonal roles, informational roles and decisional roles. A manager is required to interact with many people, both within and outside the organization and hence, the need to perform interpersonal roles. The three interpersonal roles of a manager are figurehead, leader and liaison. In his role as a figurehead, a manager performs all the ceremonial or symbolic duties. Example, it would be the duty of a college dean to award diplomas at the convocation ceremony. In the leadership role, a manager is required to motivate the employees to perform at their best to achieve the company’s objectives. In the liaison role, a manager is required to interact with people both within and outside the organization. A manager acts as a channel of information within the organization. The three informational roles of a manager are that of a recipient, disseminator and spokesperson. In the role of a recipient, a manager receives information pertaining to changes, opportunities and problems that the organization may face. As a disseminator, a manager provides information to subordinates that would influence their performance at work. And finally, a manager performs the role of a spokesperson when he or she represents the organization in public.
Table 1.1: Mintzberg's 10 Managerial Roles INTERPERSONAL Figurehead Leader Liaison INFORMATIONAL Monitor Disseminator Spokesperson DECISIONAL Entrepreneur Disturbance Handler Resource Allocator Negotiator Performs ceremonial and symbolic duties such as greeting visitors, signing legal documents. Direct and motivate subordinates, training, counseling, and communicating with subordinates. Maintain information links both inside organization, use mail, phone calls, meetings and outside
Seek and receive information, scan periodicals and reports, maintain personal contacts Forward information to other organization members, send memos and reports, make phone calls Transmit information to outsiders through speeches, reports, memos Initiate improvement projects, identify new ideas, delegate idea responsibility to others Take corrective action during disputes or crises; resolve conflicts among subordinates; adapt to environmental crises Decide who gets resources, scheduling, budgeting, setting priorities Represent department during negotiation of union contracts, sales, purchases, budgets, represent departmental interests
FUNCTIONS OF MANAGERS
The functions of a manager provide a useful framework for organizing management knowledge under the various heads of planning, organizing, staffing, leading and controlling. Managerial functions are effective tools for managers to achieve the organization’s planned objectives. They include the general administrative duties that need to be carried out in virtually all organizations. Figure 1.2 depicts the management process and shows the various functions that managers are involved in. It is evident from the figure that managers are involved in more than one activity at the same time. Figure 1.2: Management Functions
promotion and career planning. and (4) the authority and reporting relationships within the corporate hierarchy. At the same time. The basic control process involves (1) comparing performance with standards. the owner is the only member of the management team. as the size of an organization increases. This function also deals with compensation. depending upon the size. In simple words. (2) middle-level management. Organizing Organizing is the process of assigning tasks and allocating resources to individuals to enable them to accomplish organizational goals. Staffing Today. If plans are not organized properly even the best of plans can fail. culture.Planning can be defined as the process. LEVELS OF MANAGEMENT In many small business enterprises. Activities like determining manpower requirements.” It is the management function that involves influencing and inspiring team members to perform well and accomplish corporate objectives. In most of the organizations. (3) how jobs can be grouped into various units. Controlling The final step in the management process is to monitor the progress of an organization towards its goals. (2) how tasks can best be combined into specific jobs. The organizational structure of a firm is a key element in determining its success or failure. Planning helps a firm decide its future course of action. and directing people towards the achievement of organizational goals. if any. managers decide the mission and objectives of the firm and take necessary steps to achieve the desired objectives. and (3) supervisory or first-level management.3 illustrates the levels of management. Leading Leading is defined as “the management function of influencing. The duties and responsibilities at these three levels of management vary from organization to organization. Figure 1. managers need to determine the future trends in business and incorporate change and innovation into the organization from time to time. Leading involves (1) communicating with others. technology. motivating. staffing is better known as “human resource management” and involves manning or filling the various positions in the organizational hierarchy. But. training and placing them in the organization come under the purview of staffing. there are more positions at the first-level. Controlling can be defined as the continuous measurement and analysis of actual operations against the established industry standards developed during the planning process and corrections of deviations. prevailing in the organization. Organizing is a continuous process of determining (1) which tasks are to be performed. fewer in the middle. it is the act of making things happen through others. and (3) motivating people to put forth the effort required to achieve organizational goals. the pitfalls associated with a poor plan can be eliminated by excellent organization. and very few at . a more sophisticated organizational structure is required. There are various types of plans and they may range from planning to define the overall purposes and objectives of an organization to planning for a specific action. The number of managerial positions at each level varies from organization to organization. etc. by which. It is a normal practice to categorize management into three basic levels: (1) top-level management. assessing the number of people presently available in the organization. performance appraisal. (2) leadership styles and approaches. and (3) developing remedial measures to correct deviations. On the other hand. recruiting and selecting candidates. (2) determining where negative deviations occur.
2. Figure 1. The various activities performed at each of these levels of management are illustrated in Table 1.4: Managerial Levels and Areas Top-Level Managers . Many describe this kind of an organizational structure as a pyramid. as the managerial positions gradually decline as one progresses towards the higher levels of management (see Figure 1.4).the top.3: Levels of Management Figure 1.
the number of board members vary from 15 to 25. When a board comprises a majority of individuals who have close ties with the management. “department head” and “divisional head. and in a large office – the clerical supervisor. Middle-Level Managers Middle-level managers deal with the actual operation of various departments in an organization.” The number of middle-level managers in complex organizations is far higher than other managers. human and conceptual skills. and maintaining overall control over organizational performance. During the early 1970s. and quality control. they essentially act as “rubber stamps. They look to the top management for direction and guidance and are answerable to them. the power of these managers has gradually decreased because of union influence. Thus. They are usually called supervisors. “director”. the increasing educational level of workers. inventory levels. Their typical titles include “manager”. Robert K.Top-level managers are usually appointed. In many organizations. First-level managers implement the operational plans developed by middle managers and take corrective actions. when needed. online technical assistance has become available to firstlevel managers.” Toplevel managers are responsible for taking major decisions for the organization as a whole. In public limited companies. MANAGEMENT SKILLS AND ORGANIZATIONAL HIERARCHY A manager’s job is varied and complex. “Senior Vice President” and “Executive Director. They may be addressed by different names.” But. managers need certain skills to perform the functions associated with their jobs. In recent times. They are responsible for output variables like number of units produced. Though it is a usual practice to elect the CEO as the chairperson of the board. elected or designated by the organization’s governing body. they often confront conflicting demands. top-level managers report to the Board of Directors. “Vice President”. Hence. in a research department – the technical supervisor. the first-level manager may be called a foreman. This has resulted in making middle-level managers redundant and has thus reduced the number of middle-level managers in many organizations First-Level Managers First-level managers are directly responsible for the performance of employees involved in operations. Depending on the size of the company. “chief”. as he/she helps the board to monitor the performance of the top management objectively. and they include job classifications such as the “Chief Executive Officer” (CEO). they play a vital role in the success of the organization. The toplevel managers are responsible for the overall activities of the business and are accountable for its impact on the society at large. In a manufacturing plant. These managers are responsible for implementing the plans and strategies developed by top management for the accomplishment of organizational goals. These are technical. and the growing use of computers to track many activities formerly monitored by first-level managers. labor costs. a study has suggested that companies having an outsider as a board chairperson perform better. They work to some extent with the middle-level managers in implementing the plans. on the other hand. Kalz identified three kinds of skills for administrators. Members of the board are selected by shareholders. “President”. A fourth skill – the ability to design solutions – was later added to the above mentioned skills. Since first-level managers act as a link between the management and the rest of the workforce. middle-level managers serve as a source of innovation and creativity. boards with more outsiders operate more independently and are more proactive. Technical Skills . They are few in number. They are directly responsible for the performance of managers at lower levels. Due to the advent of information technology.
accountants and employees in manufacturing departments all have the necessary technical skills for their specialized fields. We can briefly summarize them as follows: Figure 1. in which people feel comfortable and are free to voice their opinions. Managers at upper organizational levels should be able to design a rational and feasible solution to the problem by considering the various internal and external factors. one needs to have knowledge of methods.6. they become mere “problem watchers. It is the ability to lead. processes and procedures. Engineers. peers and people outside the work unit such as suppliers. computer specialists. customers and the general public.” and will prove ineffective. Design Skills Design skills refer to the ability of a person to find solutions to problems in ways that would benefit the organization. These skills are important for all levels in the organization. and communicate with people to accomplish certain objectives. Conceptual Skills Conceptual skills refer to the ability of a person to think and conceptualize abstract situations. and their supervisors must be able to teach them how to perform the tasks assigned to them using these tools. motivate. Technical skills are essential for first-level managers. Top managers should not only recognize a problem but also suggest ways to overcome them. Human skills are of paramount importance in the creation of an environment. employees at the operational level work with tools. These skills are most important at the top management level.” to understand how the various parts of the organization relate to one another and associate the organization with the external environment. These skills aid employees during interaction with their supervisors. It is the ability to understand and coordinate the full range of corporate objectives and activities. The relative significance of these skills varies at different levels in the organizational hierarchy as shown in Figure 1. First-level managers spend much of their time in training subordinates and clarifying doubts in work-related problems. as top-level managers have the greatest need to see the “big picture.Technical skills refer to the ability of a person to carry out a specific activity.6: Relative Need for the Main Categories of Skills APPROACHES TO MANAGEMENT . If they only see the problem. Human Skills Human skills or interpersonal skills refer to the ability of a person to work well with other people in a group. For example. In order to do so.
informational and decisional roles. Managerial practice depends upon circumstances. Evolution of Management Thought • • • • Classical Approach Behavioral Approach Quantitative Approach Modern Approaches to Management . The managerial roles approach: This approach had been developed by studying the work methods of five chief executives. The empirical or case approach: In this approach. etc. structure. which can be expressed in terms of mathematical symbols and relationships. 12. The decision theory approach: The focus in this approach is on the decision-making process and people involved in it. The cooperative social systems approach: It advocates a system of cooperation using both interpersonal and group behavioral aspects. It recognizes the importance of the inter-relationship between planning. The systems approach: It considers organizations to be open systems as they interact with the external environment. 3. 6. 5. The interpersonal behavior approach: This approach is based on individual psychology and focuses on interpersonal relationships. systems. which were grouped into three catsegories – interpersonal. 11. principles. staff. the main assumption is that there is no hard and fast rule for all situations. Different circumstances may necessitate the use of different methods. The group behavior approach: This approach is based on sociology and social psychology. 4. style. The contingency or situational approach: In this approach. The mathematical or “management science” approach: This approach treats management as a logical process. one tries to understand management principles with the help of cases. The study identified ten managerial roles. This approach focuses on areas involving close relationships between technical systems and the people involved such as production. It also identifies the situations. office operations. wherein organizations have either succeeded or failed by following this approach. shared values and skills. The operational approach: This approach attempts to develop the science and theory of management by drawing upon concepts. techniques and knowledge from other fields and managerial approaches. 7. 9. 2. It stresses on the behavior of people in groups. The sociotechnical systems approach: It realizes the impact of technical systems on personal attitudes and group behavior. 8. organizing and controlling. 10.1. The McKinsey’s 7-S framework: The seven S’s used in this approach are strategy.
1): (i) the classical approach.1: Major Classification of Management Approaches and their Contributors Major Classification of Management Approaches Classical approach Scientific management Bureaucratic management Administrative management Behavioral approach Group influences Hawthorne studies Maslow’s theory needs Major Contributors Frederick W. Taylor. However. Like most modern disciplines.INTRODUCTION According to one school of thought. Hence. In this chapter. history has no relevance to the problems faced by managers today. We then focus on four well-established schools of management thought (see Table 2. Frank and Lillian Gilbreth and Henry Gantt Max Weber Henri Fayol Mary Parker Follet Elton Mayo Abraham Maslow Douglas McGregor Chris Argyris William Ouchi Theory X and Theory Y Model I versus Model II values Quantitative approach Management science Operations management Management information system Modern approaches The Systems Theory Contingency Theory Emerging pproaches: Theory Z and Quality management CLASSICAL APPROACH . an awareness and understanding of important historical developments and theories propounded by early thinkers is important for today’s managers. (iii) the quantitative approach and (iv) the modern approaches to management. A theory is a conceptual framework for organizing knowledge that provides a blueprint for various courses of action. we first take a look at the early approaches to management. (ii) the behavioral approach. some emerging approaches in management thought are discussed. both theory and history are indispensable tools for managing contemporary organizations. Finally. Some are also of the opinion that management theory is too abstract to be of any practical use. Table 2. contemporary management thought has its foundations in the history of management and the many significant contributions of theorists and practitioners.
Supervise employees to make sure they follow the prescribed methods for performing their jobs. workers indulge in soldiering for three main reasons: 1. scientific management as propounded by Taylor emphasizes: i. . their jobs.Classical management thought can be divided into three separate schools: scientific management. Lillian Gilbreth (1878-1972). slow pace. Classical theorists formulated principles for setting up and managing organizations. or reasoning. Frank Gilbreth (1868-1924). scientific management was defined as “that kind of management which conducts a business or affairs by standards established. 2. Some of the earliest advocates of scientific management were Frederick W. According to Taylor. considered “father of scientific management”. Taylor (1856-1915). The major contributors to the three schools of management thought – scientific management. An engineer and inventor. Henry Fayol and Max Weber respectively. wrote The Principles of Scientific Management in 1911. In the early 19 th century. by facts or truths gained through systematic observation. Taylor. administrative theory and bureaucratic management. administrative theory and bureaucratic management – are Frederick W.4: Four Steps in Scientific Management Step Step 1 Step 2 Step 3 Step 4 Description Develop a science for each element of the job to replace old rule of thumb methods. Outdated methods of working handed down from generation to generation led to a great deal of wasted efforts.” In other words. Table 2. At Midvale. his rise from laborer to chief engineer within 6 years gave him the opportunity to tackle a grave issue faced by the organization – the soldiering problem. In essence. experiment. other workers would lose Faulty wage systems employed by the organization encouraged them to work at a 3. Scientifically select employees and then train them to do the job as described in Step 1. Continue to plan the work but use workers to actually get the work done. Taylor first began to experiment with new managerial concepts in 1878 while employed at the Midvale Steel Co. ‘Soldiering’ refers to the practice of employees deliberately working at a pace slower than their capabilities. These views are labeled “classical” because they form the foundation for the field of management thought. and Henry Gantt (1861-1919). Scientific Management Scientific management became increasingly popular in the early 1900s. Need for developing a scientific way of performing each job. Workers feared that if they increased their productivity. it is a classical management approach that emphasizes the scientific study of work methods to improve the efficiency of the workers. Frederick Winslow Taylor Frederick Winslow Taylor took up Henry Towne’s challenge to develop principles of scientific management. Taylor.
Establishing harmonious relations between management and workers so that the job is performed in the desired way. Lillian’s doctoral thesis (published in the early 1900s as The Psychology of Management) was one of the earliest works which applied the findings of psychology to the management of organizations. workers increased the number of bricks laid per day from 1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves. Frank Gilbreth (1868-1924) is considered the “father of motion study. he was able to reduce the motions involved in bricklaying from 18 ½ to 4. The Gilbreths devised a classification scheme to label seventeen basic hand motions – such as “search.” and “hold” – which they used to study tasks in a number of industries. Figure 2. Motion study involves finding out the best sequence and minimum number of motions needed to complete a task.” “position. Frank and Lillian Gilbreth After Taylor.ii. Training and preparing workers to perform that particular job. He is best known for his experiments in reducing the number of motions in bricklaying. By carefully analyzing the bricklayer’s job. Frank Gilbreth also developed the micromotion study. Frank and Lillian Gilbreth were mainly involved in exploring new ways for eliminating unnecessary motions and reducing work fatigue. She continued her innovative work even after Frank’s death in 1924. These 17 motions. Using his approach. and became a professor of management at Purdue University. she received twenty-two honorary degrees.” Lillian Gilbreth (1878-1972) was associated with the research pertaining to motion studies. A motion picture camera and a clock marked off in hundredths of seconds was used to study motions made by workers as they performed their tasks. which they called therbligs (Gilbreth spelled backward with the‘t’ and ‘h’ transposed). She had great interest in the human implications of scientific management and focused her attention on designing methods for improving the efficiency of workers. Frank and Lillian Gilbreth made numerous contributions to the concept of scientific management. allowed them to analyze the exact elements of a worker’s hand movements. In recognition of her contributions to scientific management. iii. Lillian was the first woman to gain eminence as a major contributor to the development of management as a science.1 Gantt scheduling chart .” “select.
1 compares a firm’s scheduled output and expected completion dates to what was actually produced during the year. The Gantt chart in Figure 2. Gantt later became an independent consultant and made several contributions to the field of management. in less than the standard time. if the worker completed the work fast. The vertical axis identifies the individuals and machines assigned to these work schedules. Gantt felt that this system would motivate foremen to train workers to perform their tasks efficiently. he received a bonus. Along the horizontal axis of the chart. Gantt (1861-1919) was a close associate of Taylor at Midvale and Bethlehem Steel.1) is still used today by many organizations. time. The chart indicates the progress of production in terms of time rather than quantity. He is probably best remembered for his work on the task-and-bonus system and the Gantt chart. The Gantt Chart (see Figure 2.e. Limitations of scientific management . It is a simple chart that compares actual and planned performances. He also introduced an incentive plan for foremen. If all the workers under a foreman reached the daily standard. Under Gantt’s incentive plan. The Gantt chart was the first simple visual device to maintain production control. Gantt’s charting procedures were precursors of today’s program evaluation and review techniques. who would be paid a bonus for every worker who reached the daily standard. i. he would receive an extra bonus. work scheduled and work completed are shown.Henry Laurence Gantt Henry L.
there are a few limitations of scientific management. developed a general theory of management. These principles focus on the solutions of problems from an engineering point of view. satisfactory results were inevitable. became increasingly ineffective. the business operations of an organization could be divided into six activities (see Figure 2. which were based on the “rational worker” model. another classical theory – the administrative management theory – focused on principles that could be used by managers to coordinate the internal activities of organizations. was translated into English in 1949.2) Figure 2. General and Industrial Management. Fayol believed that “with scientific forecasting and proper methods of management. Administrative Theory While the proponents of scientific management developed principles that could help workers perform their tasks more efficiently. According to Fayol. The most prominent of the administrative theorists was Henri Fayol.Scientific management has provided many valuable insights in the development of management thought.2: Business Operations of an Organization Fayol outlined fourteen principles of management: . Many of the managerial concepts that we take for granted today were first articulated by Fayol. • The proponents of scientific management were of the opinion that people were “rational” and were motivated primarily by the desire for material gain.” Fayol was unknown to American managers and scholars until his most important work. French industrialist Henri Fayol (1841-1925). They are: • The principles of scientific management revolve round problems at the operational level and do not focus on the management of an organization from a manager’s point of view. principles of scientific management. • Scientific management theorists also ignored the human desire for job satisfaction. Taylor and his followers overlooked the social needs of workers and overemphasized their economic and physical needs. In spite of the numerous contributions it made. a prominent European management theorist. Since workers are more likely to go on strike over factors like working conditions and job content (the job itself) rather than salary.
1. meaning office) referred to organizations that operated on a rational basis. he should be held responsible for getting the work done in the desired manner. Weber felt that nepotism was grossly unjust and hindered the progress of individuals.” Management must inculcate a team spirit in its employees. 4. The characteristics of Weber’s ideal bureaucratic structure are outlined in Table 2. Formal authority is derived from one’s official position and personal authority is derived from factors like intelligence and experience.” In other words. and impersonal organization. Centralization: Depending on the situation. 14. 5. Similarly. He therefore identified the characteristics of an ideal bureaucracy to show how large organizations should be run. Order: This refers to both material and social order in organizations. . Discipline: Discipline is vital for running an organization smoothly. cost of living. The term “bureaucracy” (derived from the German buro. It involves obedience to authority. According to Weber. respect for superiors and dedication to one’s job. 6. 9. Initiative: Employees should be encouraged to give suggestions and develop new and better work practices. one of the schools of classical management.” Authority can be formal or personal. 2. Division of work: Work specialization results in improving efficiency of operations. Remuneration: The compensation paid to employees should be fair and based on factors like business conditions. Stability of tenure of personnel: A high labor turnover should be prevented and managers should motivate their employees to do a better job. Unity of command: Each employee should receive orders or instructions from one superior only. Espirit de corps: This means “a sense of union. Unity of direction: Activities should be organized in such a way that they all come under one plan and are supervised by only one person. 10. Scalar chain: This refers to the chain of authority that extends from the top to the bottom of an organization. The scalar chain defines the communication path in an organization. The concept of division of work can be applied to both managerial and technical functions. “a bureaucracy is a highly structured. Bureaucratic Management Bureaucratic management. an organization should adopt a centralized or decentralized approach to make optimum use of its personnel. Material order indicates that everything is kept in the right place to facilitate the smooth coordination of work activities. Weber (1864-1920). A manager should treat all employees in the same manner without prejudice. He observed that nepotism (hiring of relatives regardless of their competence) was prevalent in most organizations. productivity of employees and the ability of the firm to pay. formalized. Subordination of the individual interest to the general interest: Individual interests should not take precedence over the goals of the organization. Equity: All employees should be treated fairly. adherence to rules. emphasizes the need for organizations to function on a rational basis. 13.5. 8. 3. it is a formal organization structure with a set of rules and regulations. was one of the major contributors to this school of thought. Authority and responsibility: Authority is defined as “the right to give orders and the power to exact obedience. a contemporary of Fayol. social order implies that the right person is placed in the right job (this is achieved by having a proper selection procedure in the organization). 12. 11. 7. Authority and responsibility go hand-in-hand. When a manager exercises authority.
Work specialization and Jobs are divided into tasks and subtasks. Subordinates do not take any decision on their own and structure always look up to their superiors for approval of their ideas and opinions. yet. This view attacked the assumption that workers can be motivated to work only through fear. Elton Mayo: Focusing on Human Relations Elton Mayo (1880-1949). Table 2. and recognized the significance of behavioral processes in the workplace. hatred and passion so as to remain unattached and unbiased towards their subordinates. Whitehead and William Dickson. The study was started in 1924 by Western Electric’s industrial engineers to examine the impact of illumination levels on worker productivity. Impersonality managers Managers make rational decisions and judgments based purely on facts. The behavioral approach to management emphasized individual attitudes and behaviors and group processes. of They try to be immune to feelings like affection.These characteristics would exist to a greater degree in “ideal” organizations and to a lesser degree in other. This theory believes that each individual is unique and the attitude and behavior of an employee determines the way he or she works. enthusiasm. the behavioral theorists viewed it from the individual’s point of view. BEHAVIORAL APPROACH The behavioral school of management emphasized what the classical theorists ignored – the human element. Table 2. Each employee is given a division of labor particular task to perform repeatedly so that he acquires expertise in that task. The researchers and scholars associated with the Hawthorne experiments were Elton Mayo.N. Exhibit 2. Eventually the study was extended through the early 1930s.” led the team which conducted a study at Western Electric’s Hawthorne Plant between 1927 and 1933 to evaluate the attitudes and psychological reactions of workers in on-the-job situations. Abstract rules regulations and The rules and regulations that are to be followed by employees are well defined to instill discipline in them and to ensure that they work in a cocoordinated manner to achieve the goals of the organization. Fritz Roethlisberger. less perfect organizations. The limitations of the Human Relations theory are: • The Human Relations theorists are of the opinion that by removing fear. This theory is against the view that people respond automatically to monetary stimulus. T.3 Limitations of Human Relations Approach Human relations theory recognizes the significance of human resources. people would perform effectively. the “Father of the Human Relations Approach. The Human Relations approach made a significant contribution at a time when it was generally being assumed that workers have to be coerced to work.6 gives an overview of the key contributions to management theory by the behavioral management school of thought. it did not succeed in establishing new concepts. While classical theorists viewed the organization from a production point of view. this . Yet.5: Major Characteristics of Weber’s Ideal Bureaucracy Characteristic Description The duties and responsibilities of all the employees are clearly defined. The National Research Council sponsored this research in cooperation with the Western Electric Company. The activities of employees at each level are monitored by employees at Hierarchy of organization higher levels. Human relations theory was one of the greatest advances in management.
Workplace culture production standards. First. Although this theory has given great insights. The positive motivation aspect has been generalized by the Human Relations theorists. sets its own Abraham Maslow: Focusing on Human Needs In 1943. it has its limitations also. Therefore. Abraham H. It provides valuable guidance in understanding the employees and managing them. (iv) esteem or status needs. • Human Relations does not understand the economic implications of organizational problems. which he labeled “Theory X” and “Theory Y. theorized that people were motivated by a hierarchy of needs. According to Maslow. want to avoid responsibility and need to be closely directed to make them work effectively. dislike work. Third. This theory also states the importance of attitudes and behaviors in managing the workforce effectively. or self-fulfillment needs. they no longer act as motivators of behavior. these two theories reflect the two extreme sets of belief that different managers have about their workers. Second. (iii) belongingness or social needs. the work determine output. Theory X managers assume that workers are lazy. These theories helped managers develop new ways of managing the workers. Managers who accepted Maslow’s hierarchy of needs attempted to change their management practices so that employees’ needs could be satisfied. Management sets production standards. Theory Y is more positive and presumes that workers can be creative and innovative. It emphasizes more on interpersonal relations and on “the informal group. It stresses on “giving the workers a sense of responsibility” but hardly tells what their responsibilities are. McGregor’s Theory X and Theory Y influenced many practicing managers. Maslow (1908-1970). can exercise self-control and can enjoy their work. behavior and effectiveness is predominantly determined by his relation with his fellow-workers and not by the kind of work he does.approach has very little to say about positive motivation. Theory X presents an essentially negative view of people. Management Science . Fatigue is the main factor affecting Perceived meaning and importance of output. human needs occur in the following hierarchical manner: (i) physiological needs. have little ambition. are willing to take responsibility. a Brandeis University psychologist. once needs at a specific level have been satisfied.” Consequently. Human Relations theory has made noteworthy contributions to the field of management. through our actions we try to fulfill our unsatisfied needs. His theory rested on three assumptions. Douglas McGregor: Challenging Traditional Assumptions about Employees Douglas McGregor (1906-1964) developed two assumptions about human behavior. Table 2. most of the principles advocated cannot be applied in the organizational context.7: Elton Mayo and the Hawthorne Studies Pre-judgments Findings Job performance individual worker. This theory focuses more on the informal group and is very vague about the positive motivation aspects. • Human Relations theory does not provide enough focus on work. Like Maslow’s theory. Then the individual strives to fulfill needs at the next level. depends on the The group is the key factor in job performance. this approach assumes that a worker’s attitudes.” According to McGregor. They generally have higher-level needs which have not been satisfied by the job. Human Relations is one of the foundations on which the building of management is to be built. (ii) safety or security needs. Human Relations theory also tends to be very vague. (v) selfactualization. all of us have needs which are never completely fulfilled.
the action of which can be expressed in terms of mathematical symbols. the decision theory. which have significantly shaped modern management thought. Many managerial activities cannot be quantified because they involve human beings who are governed by many irrational elements. It visualizes management as a logical entity. materials. linear programming. (ii) work scheduling. Operations management is concerned with: (i) inventory management. sampling. Since one person cannot have all these skills the quantitative method requires a team approach to decision-making. relationships and measurement data. According to this theory. Inputs – money. MODERN APPROACHES TO MANAGEMENT Besides the classical. time series analysis etc.4). machines and informational sources – are required to produce goods and services. statistical. Transformation processes or throughputs – managerial and technical abilities – are used to convert inputs into . To apply a quantitative approach to decision-making. the program evaluation review technique (PERT). (iii) production planning. and (v) quality assurance. (iv) facilities location and design. the simulation theory. The tools used by operations managers are forecasting. and project planning and control techniques. transformation processes. This approach has been criticized for its overemphasis of mathematical tools.The management science approach stresses the use of mathematical models and statistical methods for decision-making. It deals with the effective management of the production process and the timely delivery of an organization’s products and services. engineering. economics and business background skills are required. there are certain modern approaches to management. the critical path method (CPM). Two of these approaches are the systems theory and the contingency theory. Operations Management Operations management is an applied form of management science. men. Systems Theory Those who advocate a systems view contend that an organization cannot exist in isolation and that management cannot function effectively without considering external environmental factors. inventory analysis. Recent advances in computers have made it possible to use complex mathematical and statistical models in the management of organizations. individuals with mathematical. an organizational system has four major components: inputs. Another name commonly used for management science is operations research. Management science techniques are widely used in the following areas: • • • • • • Capital budgeting and cash flow management Production scheduling Development of product strategies Planning for human resource development programs Maintenance of optimal inventory levels Aircraft scheduling Various mathematical tools like the waiting line theory or queuing theory. behavioral and quantitative approaches to management. the probability theory. networking models. output and feedback (see Figure 2. statistical quality control methods. materials requirement planning systems. external environment. have increased the effectiveness of managerial decision-making. The systems approach gives managers a new way of looking at an organization as a whole and as a part of the larger.
and who does what. how to do. Proper planning minimizes risk and ensures that resources are efficiently and effectively utilized. Planning involves determining organizational objectives and developing strategies to achieve the objectives. while controlling involves establishing standards .4: A Systems View of Organizations Fundamentals of Planning • • • • • • Definitions of Planning Nature of Planning Significance of Planning Types of Plans Steps in the Planning Process Prerequisites for Effective Planning INTRODUCTION Planning is the process of bridging the gap between where we are and where we want to be in the future. profits and other results produced by the organization. services. Figure 2. Outputs are the products.outputs. Feedback refers to information about the outcomes and the position of the organization relative to the environment it operates in. Planning and controlling are inseparable. In other words. when to do it. relating today’s events with tomorrow’s possibilities. planning is “looking ahead.” It is the process of deciding in advance what to do.
organizing systematically the efforts needed to carry out these decisions and measuring the result of those decisions against the expectations through an organized systematic feedback. It involves anticipating the future and consciously choosing the future course of action. planning is deciding in advance what action to take. it requires decision-making that is. Planning is very important in all types of organizations. while planning. It involves looking ahead and relating today’s events with tomorrow’s possibilities. Planning gives an organization the required focus and direction. Planning is a prerequisite not only for achieving success but also for surviving in a complex and competitive world. It also helps coordinate and control various tasks and makes sure that resources are used optimally. “Planning is a continuous process of making present entrepreneurial decisions (risk taking) systematically and with best possible knowledge of their futurity. “Planning involves selecting mission and objectives and the actions to achieve them. According to Peter Drucker. DEFINITIONS OF PLANNING In simple words. Thus planning is a prerequisite of the control function.of performance and comparing actual results with the planned results. NATURE OF PLANNING Planning is Goal-oriented Planning is an Intellectual or Rational Process Planning is a Primary Function Planning is All-pervasive Planning is Forward-looking Planning is a Perpetual Process Planning is an Integrated Process Planning Involves Choice SIGNIFICANCE OF PLANNING In a complex business situation. how and when to take a particular action. planning helps managers meet the challenges posed by the environment. He defines planning as follows: “Planning is a concept of executive function that embodies the skills of anticipating. . how they are to be carried out and how they would contribute to the achievement of the desired results. It forces organizations to look ahead and decide their future course of action so as to improve their profitability. Dalton E. and who are the people to be involved in it. “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. one cannot tell whether one is going in the right direction or not.” Thus. Unless one knows where to go. Planning is the first step in the management process. influencing and controlling the nature and direction of change. a manager makes use of facts and reasonable premises and also considers the relevant constraints. choosing from alternative future courses of action. Terry. McFarland’s definition of planning takes into account the dynamic nature of the environment. planning involves determining organizational objectives and deciding how best to achieve them. Organizations that plan in advance are more likely to succeed than those which fail to plan for the future. Controlling without planning is meaningless. The manager then decides what activities are needed.” Thus.” In the words of George R.” According to Heinz Weihrich and Harold Koontz. while at the same time minimizing the risks associated with them. It ensures that the employees of an organization carry out their work in a systematic and methodical manner.
1: Eight Major Areas for Strategic Goals Major Areas Market Standing Description Desired share of present and new markets. and priorities and actions necessary for achieving strategic goals.Focuses Attention on Objectives Offsets Uncertainty and Risk Provides Sense of Direction Provides Guidelines for Decision-making Increases Organizational Effectiveness Provides Efficiency in Operations Ensures Better Coordination Facilitates Control Encourages Innovation and Creativity Facilitates Delegation Figure 4. analyze the various environmental factors that affect organizations. Table 4.1: Planning and Management Levels Strategic plans These plans are designed to achieve strategic goals.1 describes eight major areas for strategic goals. including areas . More precisely. Table 4. strategic plans are general plans that indicate the resource allocation. These plans which establish overall objectives for organizations.
Responsibilities in such areas as concern community and maintenance of ethical behavior. Compared to strategic plans. tactical and strategic goals will not be achieved. Physical facilities and how they will be used in the production of goods and services. such as a few months. However. tactical plans cover a shorter time frame (usually 1 to 3 years). Tactical plans essentially indicate the actions that major departments and sub-units should take to execute a strategic plan. These plans help support the implementation of strategic plans. Sources of capital supply and how capital will be utilized. which are represented in Figure 4. or even a few days. Unless operational goals are achieved. Operational plans are developed by lower-level managers. Such plans are more concerned more with actually getting things done than with deciding what to do. Operational plans Operational plans are developed to determine the steps necessary for achieving tactical goals. no single planning procedure is applicable to all organizations. relations with labor unions. Efficient use of resources relative to outcomes. the amount of risk involved in making operational plans is lesser than that involved in making tactical plans. development and performance of managers and other organization members. STEPS IN THE PLANNING PROCESS Planning is an endless process. They are thus essential for the success of strategic plans. The process is constantly modified to suit changes in environmental conditions and changes in objectives and opportunities for the firm. Hence. The information needed for operational planning can be obtained almost completely from within the organization. if any. A middle-level manager acting as a tactical planner deals with much less uncertainty and risk than the strategic planner. who may consult lower-level managers before finalizing the plan and communicating it to top-level management. all planning processes contain some basic steps. for the Level of profitability and other indicators of financial wellbeing. Figure 4.in which new products are needed. employee attitudes and development of skills. Tactical plans are developed by middle-level managers. They spell out specifically what must be accomplished over short time periods in order to achieve operational goals. weeks. Supply.3. Tactical plans They aim at achieving tactical or short-term goals. As organizations differ in terms of their size and complexity. They are stated in specific. Innovation Human Resources Financial Resources Physical Resources Productivity Social Responsibility Profit Requirements Innovations in products or services as well as innovations in skills and activities required to supply them. The information that he requires is also less and most of it can be derived from internal sources. Therefore operational plans are necessary for the success of tactical and strategic plans.3: The Basic Steps in the Planning Process . quantitative terms and serve as the department manager’s guide to day-today operations. and service goals aimed at building customer loyalty. Lower-level managers who develop operational plans work in an environment of relative certainty. These plans generally consider time frames of less than a year.
. Establishing the Right Climate for Planning Clear and Specific Objectives Planning Premises Initiative at Top Level Participation in Planning Process Communication of Planning Elements Integration of Long-term and Short-term Plans Guidelines for Successful Planning and Implementation Involve the right people in the planning process – While planning. the key stakeholders may also request copies of the various plans of the organization.PREREQUISITES FOR EFFECTIVE PLANNING Planning is an essential managerial function and should be given due emphasis in order to make it more effective. Realistic – The goals to be achieved should be realistic. it is essential to obtain inputs from those who will implement the plans and from representatives belonging to groups which will be affected by the plan. People who are involved in these plans should also be involved in reviewing and authorizing the plan. Communicate the plan throughout the organization – As plans keep changing. The persons responsible should periodically review the status of the plan. not vague and hard to understand. Time frame – The goal should specify a time frame for achieving it. It forms the basis for other functions in the management process. Goals should be SMARTER – A SMARTER goal or objective is: Specific – A goal should be specific. Moreover. Rewarding – The goal should be such that those involved in its accomplishment are rewarded. Acceptable – The goal should be acceptable to those who are to pursue it. Making people accountable – Plans should specify who is responsible for what results. Extending – The goal should stretch the capabilities of the performer and motivate him to extend his capabilities beyond the usual limit. it would be in the best interests of the organization to put its plans in writing and make them known throughout the organization. The following measures help to make the planning exercise more effective. Therefore. Measurable – The outcomes of a goal should be measurable. it becomes difficult to remember who is supposed to do what and according to which version of the plan.
Redesigning the plan – Sometimes. The manager must also specify subordinates’ authority and responsibility. People who know how to make effective use of their resources can make any organizational design or pattern work efficiently. Thus. or a football team. Fundamentals of Organizing • • • • • • Definitions of Organizing Benefits of Organizing Formal vs Informal Organization Span of Management The Process of Organizing Prerequisites for Effective Organizing INTRODUCTION Organizing is a very important managerial function. organizing focuses on how to do it. In order to avoid cynicism and fatigue from creeping into the planning process. after a manager has set goals and worked out a plan to accomplish those goals. The persons responsible for implementing the plan should note such deviations when they occur and make necessary adjustments to the plan. whether the goals are implementing the plan. Organizing is therefore designing and maintaining a formal structure of roles and positions. a manager must provide verifiable objectives and a clear picture of the major duties to be performed. This gives the subordinate an idea of what he must do to achieve the goals and objectives of the organization. one must acknowledge the good work done and have a little celebration. Employees should understand their roles and responsibilities and should work together to achieve the organizational objectives. This applies to any organization – business. employees have to continually solve one problem after the other. A manager has to create the right conditions to enable the employees to effectively utilize the resources of the organization to achieve organizational goals. should be obtained regularly from the people implementing the aspects such as how the planning process could have been made realistic. government. it is necessary to deviate from the plan. In addition. Evaluating the plan – Feedback plan. It is often observed that new targets are set once desired results have been achieved. the next managerial function is to organize people and allocate resources to carry out the plan. He has to make the employees understand the necessity of cooperation for accomplishing tasks. For a subordinate to understand his role. As a result. This would boost the morale of the planners and would ensure their fullest efforts in subsequent plans. DEFINITIONS OF ORGANIZING . The feedback should address better. If planning focuses on deciding what to do. This will organization. and whether sufficient resources are available for help planners ensure that the plans meet the needs of the Acknowledging and Celebrating accomplishments – This step is frequently overlooked. a manager should provide the subordinates with necessary information and tools for effectively performing their roles.
organizing refers to important dynamic aspects such as what tasks are to be performed. it helps individuals and workgroups to easily accomplish their tasks. • The process of organizing helps managers to focus task efforts such that they are logically and efficiently related to a common goal. In a nutshell. According to Louis E. technical. even a relatively closed system. who reports to whom. like a wind-up alarm clock. • The process of organizing helps maintain the logical flow of work activities. who has to perform them. defining and delegating responsibility and authority. organizing is a management function involving assigning duties. • Organizing creates channels of communication and thus supports decision-making and control. requires outside intervention when it slows down or goes 1 2 . Consequently. BENEFITS OF ORGANIZING Effective organizing provides numerous organizational benefits: • The process of organizing helps an individual develop a clear picture of the tasks he or she is expected to accomplish. But no organization can be a totally closed system.A. they regarded organizations as rational and economic entities. and that organizations were essentially closed systems.According to Stephen P. ‘organizing’ is “determining what tasks are to be done. on what basis the tasks are to be grouped.”1 According to this definition. and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. delegating authority and responsibility and allocating resources to carry out a specific plan in an efficient manner. who is to do them. and where decisions are to be made. • Organizing helps an organization make efficient use of its resources and avoid conflict and duplication of effort. Allen defined organizing as “the process of identifying and grouping the work to be performed. – from the external environment in which they exist. etc. who has to report to whom and who should have the authority to take decisions. Thus. Boone and David L Kurtz. • The process of organizing supports planning and control activities by establishing accountability and an appropriate line of authority.”2 This definition implies that closed systems require no inputs – human. grouping tasks. For instance. how the tasks are to be grouped. CLOSED SYSTEM VS OPEN SYSTEM Closed System View of Organizations The classical management theorists assumed that the primary goal of organizations was economic efficiency. “Closed systems are sets of interacting elements operating without any exchange with the environment in which they exist. • Organizing coordinates activities that are diverse in nature and helps build harmonious relationships among members involved in those activities. Robbins and Mary Coulter. organizing refers to the grouping of activities and resources in a logical fashion. L. By so doing.
the result can be predicted with certainty. the final condition. Boone and Kurtz define an open system as “a set of elements that interact with each other and the environment. Thus. The open-system concept is based on the assumption that no system is totally deterministic or predictable because of the uncertainties in the external environment. and whose structure evolves over time as a result of interaction. open systems are based on a biological model rather than a physical one. There is no exchange between the system and the external environment. the movement of goods and services (example: international trade). Let us consider the example of a pool table. is a subsystem of a larger system – social. like the movement of capital (example: corporate borrowings). This disturbs the game and it now becomes impossible to predict where the balls will ultimately come to rest. The modern open-system model of organizing allows an organization to interact with its environment and evolve its organizational structure gradually over time. and the movement of people in and out of the labor force. According to this concept. let us consider the example of the pool table. economic or legal system. the universal process approach. This is analogous to the influence of the environment on the system. Open System View of Organizations Traditional closed-system views (like scientific management. and it has to continue to shed its skin. material and energy inputs. in turn. The two basic characteristics of a closed system are: • • It is perfectly deterministic and predictable. . former CEO of Intel Corp. his or her opponent may pick up a ball from the table. a totally closed system is only a theoretical concept. As a player strikes the cue ball.out of order. Unlike the closed-system approach. and bureaucracy) ignored the influence of the external environment.. System-to-system interactions. This sometimes led to the failure of plans and inefficient handling of resources. According to Andy Groove. these theorists emphasized structure and attempted to eliminate environmental disruptions that could affect their studies of planned systems activities. Thus. organizations should be adaptive and should take into consideration the influence of the external environment. the open-system concept stressed the need for flexibility and adaptability in organizational structure. are as important as the systems themselves. i. political.e. If the initial conditions and the stimuli in a closed system are known. Different systems differ in the degree to which they depend on the external environment for information. The organization. “A corporation is a living organism. Prior knowledge of the following conditions and stimuli make it possible to accurately predict where each ball will come to rest: • • • • • • the position of every ball on the table the elasticity of the bumpers the coefficient of friction between the balls and the table the force with which the cue ball is hit the direction of the cue ball the type of spin on the cue ball Classical management theorists borrowed certain ideas from the closed-system concept that was popular during that period of time. An organization is a system consisting of several subsystems which interact with one another. and the mutual interdependence between the organization and its external environment. As a result. Here again.
but the exact number will depend on the impact of underlying factors. Lyndall Urwick. The number of subordinates a manager has to supervise has a direct bearing on the degree to which managers can interact with and supervise subordinates.” The principle of span of management states that there is a limit to the number of subordinates a manager can effectively supervise. What counts are the number of relationships rather than the number of men. by means of authority relationships and information flows. One important thing is to be noted in the definition cited above. What matters is how many people who have to work with each other report to a manager. the ideal number of subordinates for a higher level executive should be four while the number of subordinates for an executive at the lower level may be eight or twelve.SPAN OF MANAGEMENT Organizations are growing in terms of size and geographical coverage. Others are of the view that a manager can manage twenty to thirty subordinates. According to the British consultant. policies and plans should be formulated The activities required to achieve the objectives should be identified and classified • The best way of grouping the activities and utilizing the available human and material resources should be chosen • Authority should be delegated to the head of each group so that they can perform their activities • The various groups should be connected to each other. Bartol and David C. “The span of management or span of control is the number of subordinates who report directly to a specific manager. The question therefore arises: how many people can a manager supervise effectively? Students of management have come to the conclusion that a manager can effectively manage usually four to eight subordinates at the upper levels. The span of control refers to the number of subordinates a superior can supervise efficiently and effectively. Delegation of such activities would leave managers free to handle key strategic issues. Martin. PREREQUISITES FOR EFFECTIVE ORGANIZING • The span of management and the levels of organization are clearly defined . According to Kathryn M. It is not how many people who report to a manager that matters. To cope up with this workload. both horizontally as well as vertically. thereby increasing the workload of executives. The process of organizing consists of the following six steps: • • • The objectives of the organization should be established The supporting objectives. and eight to fifteen subordinates at the lower levels. managers should delegate routine activities to their subordinates. The span of control is a very important principle that emphasizes the need for coordination among the subordinates working under a particular manager. THE PROCESS OF ORGANIZING The process of organizing follows a logical sequence.
HRM is the management of various activities that are designed to enhance the effectiveness of the manpower in an organization in the achievement of organizational goals. performance appraisal. managers must recognize the potential of human resources. have created a strategic need for HRM expertise. includes five basic activities: (1) human resource planning. Larger firms usually have a separate HRM department. and still are. Traditionally. compensation and evaluation of performance to fill those needs. and then acquire. development. handled complaints. along with the degree of delegation. HRM departments had a relatively small role to play in the organization’s overall mission and plans. Figure 12. cannot always afford to have a separate HRM department that can continually follow the performance of individuals in the organization and review their accomplishment of goals. talented. in such organizations. Small organizations. and recruitment. They developed staffing plans. However. such as increasing costs. changing demographics and limited skilled labor supply. we will first discuss HR planning. These activities were. Instead. along with their strengths and weaknesses.1. determined benefits and compensation. This forms the basis of human resource management (HRM). (2) staffing. is taken into consideration • The way the manager implements organization theory is considered Human Resource Management and Staffing • • • • Human Resource Management: An Overview Staffing Recruitment Selection INTRODUCTION The most important resource of an organization is its human resources – the people who work in the organization. and conducted performance appraisal programs. and motivated employees is an important part of HRM. each manager is responsible for utilizing the skills and talents of the employees under him. effectively. The – recruitment and new employees. Human resource management: an overview Human Resource Management (HRM) may be defined as the organized function of planning for human resource needs. The chapter concludes with a description of the socialization process of process – staffing.1 Human Resource Management Process . develop and retain these resources. very important in managing an organization. The HRM process is an ongoing function that aims to keep the organization supplied with the right people in the right positions. selection. rapid technological changes and the need for new skills. however. Acquiring skilled. today HRM departments are playing a more strategic role in charting the course of their firms. Human resource management forms a crucial function in organizations of all sizes. To meet the challenges and competitive atmosphere of today’s business environment. and (5) compensation. (3) training and development. and compensation will also later part of the chapter will discuss the two important elements of staffing selection. Changes in the environment. (4) performance appraisal. These changes have led to the acknowledgment that human resources need careful attention and are vital to the success of any business.• The factors determining the basic framework of departmentation. when they are needed. be discussed. People are vital for the effective operation of a company. In this chapter. are taken into consideration • The different kinds of authority and responsibility relationships that exist in an organization are understood • The way authority is delegated throughout the organization structure. shown in Figure 12. The HRM process. The other steps in the HRM training and development.
It involves estimating the size and composition of the future work force.2 Human Resource Planning . Figure 12. and helping the organization acquire the right number and the right kind of people when they are needed.Human Resource Planning Human resource planning is the process of determining future human resource needs relative to an organization’s strategic plan and devising the steps necessary to meet those needs .
measuring. Standards in performance evaluation are prior specifications of acceptable levels of job performance. The process of performance appraisal involves defining the expectations for employee performance. some corrective action (such as additional training and development) might be arranged to make the performance meet the desired standards. In other words. When the performance is high. Development is long-term in nature. Once suitable candidates are attracted to the job position. If performance is low. employees might be instructed in new decisionmaking techniques or the capabilities of data processing systems. Compensation . requires standards. Performance Appraisal Performance appraisal compares an individual’s job performance against standards or objectives developed for the individual’s position. and course or program contents often differ. and providing the employee with feedback regarding his performance. Information must be available in order to measure the actual job performance against the standard job performance. training is usually undertaken for new recruits as well as for existing manpower. etc. technical and operative – will require some training at some point of time in their careers. Corrective action must be taken by managers to restore any imbalance between actual and standard job performance. It helps the employee fit into the organization. Recruitment involves finding and attempting to attract job candidates who are suitable for filling job vacancies. Several methods are used in selecting prospective candidates. evaluating and recording employee performance against these expectations. the management needs to find qualified people to fill the positions through the selection process. Thus. comprehensive interviews. evaluating and selecting qualified candidates for job positions in the organization. the basic principles of teaching/learning are the same. who require improved skills in order to advance in the organization. For instance. effective performance appraisal as a control technique. They also help them get accustomed to the organizational climate. training denotes efforts to increase employee skills in their jobs. Thus. Training is formally defined as a planned effort to improve the performance of the employee in his area of work. Employees at all levels – managerial. Although the objectives. Training and Development Although organizations often recruit fully qualified individuals who require little or no training. Job analysis. Staffing involves a set of activities aimed at attracting and selecting individuals for positions in a way that will facilitate the achievement of organizational goals. the processes of training and development aim at increasing the ability of individuals and groups to contribute to organizational effectiveness. the individual is likely to be rewarded (by a hike in pay or a promotion). The staffing process is a systematic attempt to implement the human resource plan by recruiting. These include preliminary screening. application blank. selection test.” staffing is just a part of the HRM process and plays an important role. Development programs are designed to educate employees beyond the requirements of their present positions in order to prepare them for promotions. and job specification are important tools in the recruitment process. The major purpose of performance appraisal is to influence employee performance and development in a positive way. methods. job description. The two basic steps of staffing are recruitment and selection.Staffing Though the term “human resource management” is frequently used for the managerial function of “staffing. information and corrective action.
Individuals differ in their personal needs. and it is one of the most important and time-consuming tasks of the human resources department. In order to motivate employees. is to channel this energy and direct this behavior toward the organization’s ends. Factors that affect work motivation include individual differences and organizational practices. Wages paid for time worked (or number of units produced) are typically payments made in the form of cash and reflect direct work-related remuneration such as basic pay. interests and abilities. It is the set of forces that move a person towards a goal. It deals with how behavior is energized. It is not an easy task to motivate employees because they respond in different ways to their jobs and to organizational practices. values and attitudes. . The compensation program affects every member of the organization. are forms of supplementary non-monetary payments over and above the wages paid. They include various protection plans (such as employee insurance). Organizational practices that affect motivation include the rules. managers must consider how these factors influence and affect their job performance. on the other hand. Motivation is a human psychological characteristic that affects a person’s degree of commitment. managerial practices and reward systems. services (such as company cafeteria). A sound compensation program enhances the organization’s ability to attract and retain employees. The manager’s challenge. Motivating Employees for Job Performance • • • Definitions and Meaning of Motivation Classification of Motivation Theories Motivational Techniques INTRODUCTION In any type of organization. policies.Compensation consists of the wages paid directly to the employees for the amount of time worked or the number of units produced. It also includes the monetary and non-monetary benefits that an employee receives as part of his employment relationship with the organization. a manager must know what motivates his workers in order to make each individual employee perform to the best of his ability. pay for time not worked (such as during vacations or sick leave). or bonuses. Benefits. then. merit increases. how it is directed and how it is sustained. and income supplements (such as stock ownership plans).
conditioned by the effort’s ability to satisfy some individual need. Figure 16. motivation is the willingness to exert high levels of effort toward organizational goals. Incentives or goals are the instruments used to induce people to follow a desired course of action.1: The Basic Motivation Process Table 16. and achievement. Needs exist in each individual in varying degrees. drives and goals. Robbins. Drives are directed at fulfillment of needs. Needs hierarchy theory 2. Managerial Examples Motivation by satisfying individual needs for money. he is driven by a desire to fulfill the need.Equity theory Motivation by clarifying the individual’s perception of work inputs.1: Approaches to Motivation Type Content Characteristics Concerned with factors that arouse.Expectancy theory 2. but also with the process.Two-factor theory 3. Need is the origin of any motivated behavior. start or initiate motivated behavior Theories 1.” The three key elements in the above definitions are needs. performance requirements and rewards. Fred Luthans views motivation as “a process that starts with a physiological or psychological deficiency or need that activates behavior or a drive that is aimed at a goal or incentive. Need is a felt deprivation of physiological or psychological well-being. When an individual recognizes a need. direction. Drives are action-oriented and provide an energizing thrust toward reaching a goal.ERG theory Process Concerned not only with factors that arouse behavior. Needs set up drives aimed at goals. .1 depicts the motivation process. or choice of behavioral patterns 1. Once the goal is attained.DEFINITIONS AND MEANING OF MOTIVATION According to Stephen P. this is the basic process of motivation. status. the physiological or psychological balance is restored and the drive is cut off. Figure 16.
2: Maslow's Needs Hierarchy Herzberg’s two-factor theory Motivators in the Herzberg’s two-factor theory correspond to the higher-level needs of esteem and self-actualization in Maslow’s needs hierarchy. Maslow classified these needs into five groups: physiological needs. Maslow’s hierarchy of needs theory argues that human needs form a five-level hierarchy (see Figure 16. Abraham Maslow and popularized during the early 1960s. self-esteem needs and self-actualization needs.2). while the hygiene factors correspond to Maslow’s physiological. social needs (love and belongingness). Table 16.Maslow’s needs hierarchy theory One of the most popular explanations for human motivation was developed by the psychologist.2 compares Maslow’s and Herzberg’s theories of motivation. Figure 16.2: Comparison of Maslow’s and Herzberg’s Theories of Motivation MASLOW’S NEEDS HIERARCHY OF HERZBERG’S TWO-FACTORY THEORY Self-actualization needs Esteem needs Social needs Safety and security needs Physiological needs Several researchers have challenged Herzberg’s findings. Table 16. need for security. . it is easy to understand why people would associate feelings of satisfaction with factors such as challenge. According to some researchers. safety and social needs.
individuals with a high need for institutional power focus on working along with others to solve problems and achieve organizational goals. They typically seek competitive situations in which they can achieve results through their own efforts and which allow them to obtain immediate feedback on how they are doing. The need for power is manifested in two forms: personal and institutional. It was. Thus. affiliation needs. They often run into difficulties as managers because they attempt to use the efforts of others for their own benefits.the arguments put forth by Herzberg are characterized by logical inconsistencies. They usually exhibit the following characteristics: i. and recognition. They are willing to assert themselves when a decision needs to be made. ii. Need for affiliation Need for affiliation refers to the desire to maintain warm. They love to engage in friendly interaction with others. because they are able to coordinate the efforts of others to achieve long-term organizational goals. but reachable goals and provide immediate feedback about their performance. and 3. They are achievement needs. They suffer pain when they are rejected. these researchers contended that satisfaction and dissatisfaction in individuals are not the outcome of different factors but it is individuals who assign different sources to their successes or failures. . Edwin Locke. individuals with a high need for affiliation prove to be assets for an organization. and power needs. They take a realistic approach to risk. They enjoy a sense of intimacy and understanding. McClelland’s work suggests that individuals with a high need for institutional power become the best managers. Affiliation-motivated people are usually friendly and like to socialize with others.the theory minimizes differences across people. McClelland’s needs theory David C. who reviewed research pertaining to Herzberg’s theory spelt out the various problems associated with Herzberg’s findings. Need for power The need for power refers to the desire to be influential and to have an impact on a group. The power motive has significant implications for organizational leadership and for the informal political aspects of organizations. They are ready to console and help others in trouble. Powermotivated individuals see almost every situation as an opportunity to seize control or dominate others. friendly relationships with others. They strive to maintain pleasant social relationships. iv. including clients and customers. therefore. Individuals with high need for achievement can be a valuable source of creativity and innovative ideas in organizations.there is confusion in the original classification and statements. iii. Need for achievement Achievement-motivated people thrive on pursuing and attaining goals. Supervisors who want to motivate achievement-oriented employees need to set challenging. In situations that require a high level of cooperation with and support of others. It is very natural for people to attribute good results to their own efforts and blame external factors for their failures. managers should provide them with a congenial and supportive work environment in which they can meet both corporate goals and their high affiliation needs by working with others. People with high need for personal power try to dominate others by demonstrating their ability to wield power. 2.growth. People with a high need for achievement have an intense desire for success. In contrast. McClelland’s initial work centered on the need for achievement. concluded that Herzberg’s arguments did not withstand logical or empirical scrutiny. They are 1. McClelland has contributed to the theories of motivation by highlighting the importance of three basic needs to understand motivation. To motivate individuals with a high need for affiliation. People with high need for achievement are characterized by restlessness and willingness to work long hours.
status symbols. MBO (discussed in Chapter 5) is the most popular and modern method of motivating employees at all levels for better performance. Vroom. and praise. It gratifies the need for affiliation and acceptance. It is a combination of several fields which include industrial and organization psychology and sociology. Quality of Work Life (QWL) One of the most interesting approaches to motivation is the quality of work life (QWL) program. Extrinsic rewards are pay-offs granted by others. In other words. motivation and leadership . promotion. all individuals will be motivated to reach their goal only when they see some connection between their effort and performance. Instrumentality This refers to the probability that successful performance will lead to certain outcomes. The major outcomes we consider are the potential rewards such as incentives or bonuses. Participation Motivation theories encourage the use of the participation techniques. In other words. Rewards can be broadly categorized into extrinsic and intrinsic rewards.Vroom’s expectancy theory The expectancy theory of motivation was originally proposed by Victor H. What is the probability that the performance will be up to the required level? What is the probability that the performance will lead to the desired outcomes? What is the value assigned by the individual to the potential outcomes? Motivational techniques Rewards Managers have found that job performance and satisfaction can be improved by properly administered rewards. He contends that before putting in the effort to perform at a given level. They include money. the valence component will be high. perks and amenities. he must see a non-zero probability of effort leading to that goal. organization theory and development. recognition. individuals consider the following three issues: • • • Valence Valence is the motivational component that refers to the preference of an individual for a particular outcome. expectancy is the probability (ranging from 0 to 1) that a particular action or effort will lead to a particular outcome. industrial engineering. The motivation theories discussed in this chapter throw light on the role of the extrinsic and intrinsic rewards in improving productivity. Above all.’ The valence component helps an individual assess the anticipated value of various outcomes. it gives people a sense of accomplishment and a chance for advancement. Individuals prefer intrinsic rewards such as satisfaction from performing challenging and interesting jobs. Expectancy Expectancy is the probability that certain efforts will lead to the required performance. The right kind of participation ensures an increase in the motivation and knowledge levels which contribute to the success of an enterprise. Intrinsic (job content) rewards are self-granted and internally experienced pay-offs. or a good feeling of accomplishment. it signifies ‘how much reward one wants. since it ensures participation and freedom in setting goals and achieving them. Rewards may be defined as material or psychological payoffs for the accomplishment of tasks. If the possible reward or outcome of the work is of interest to the individual performing it. For an individual to exert efforts towards a goal. QWL is not only a very broad approach to job enrichment but also an interdisciplinary field of inquiry and action. Participation allows an individual to satisfy his or her need for esteem (from self and from others). and offer constructive suggestions about how to use these rewards in organization settings. In simple words.
They can be successful leaders by helping subordinates to find solutions to their problems. have to select the goals and objectives of an organization. most organizations today are putting a premium on managers who also possess leadership skills. decide what is to be done and motivate people to do it. Leadership • • • Definition and Meaning of Leadership Key Elements of Leadership Leadership Theories INTRODUCTION The success or failure of managers depends on their leadership qualities. and motivate behavior towards the achievement of those goals. the attempt is to build a higher sense of challenge and achievement in jobs. such as the layout of office or plant. as leaders. Job Enrichment A modern and more permanent approach to motivation is job enrichment. 2. 5. Leaders set goals and help subordinates find the right path to achieve these goals. Making workers feel personally responsible for their tasks. At the same time managers. organizing and controlling activities in order to achieve objectives. Allowing workers to make independent decisions on issues like work methods. A person may be an effective manager – a good planner. temperature. Given the challenges of dynamic engagement in today’s business world. Involving workers when bringing about changes in the physical aspects of their work environment. Another may be an effective leader – skilled at inspiring enthusiasm and devotion – but lack the managerial skills to channel the energy he/she arouses in others. and 6. DEFINITION AND MEANING OF LEADERSHIP • Leadership is the use of non-coercive influence to shape the group or organization’s goals. Here. Encouraging involvement and participation of employees and interaction between workers. Giving people feedback on their job performance. Managers are involved with bringing together resources. 4. 3. lighting and cleanliness. Thus. and an organized administrator – but lack the motivational skills of a leader. Ensuring that workers get to know how their tasks contribute to the finished product and the welfare of the enterprise. developing strategies. and industrial relations. A job may be enriched in the following ways: 1. . leadership is that function of management which is largely involved with establishing goals and motivating people to help achieve them.theory. sequence and pace or the acceptance or rejection of materials. Managers see this concept as a promising means of dealing with productivity problems and workers’ grievances.
3: The Leadership Grid . (2) the ability to understand the fact that people are motivated by different forces at different times and in different situations. Different studies do not agree about which traits are leadership traits. • Leadership involves an unequal distribution of power between leaders and group members.• It is a process in which one individual exerts influence over others. researchers tried to determine what effective leaders do – how they delegate tasks. and so on. whereas many non-leaders possess many of them. LEADERSHIP THEORIES Trait Theory of Leadership According to this theory. Figure 17. Still. mental. • Leadership involves other people – employees or followers – who by the degree of their willingness to accept direction. Behavioral Theories When it became evident that effective leaders did not seem to have a particular set of distinguishing traits. the leader will usually have more power. in terms of deciding the way ahead and being held responsible for the success or failure in achieving the agreed objectives. rather than try to figure out who effective leaders are. they can and do shape group activities in a number of ways. Most of these traits are really patterns of behavior. A leader’s skill comprises of four major elements: (1) the ability to use power effectively and in a responsible manner. help to define the leader’s status. In other words. researchers tried to study the behavioral aspects of effective leaders. Many researchers have tried to identify the physical. Group members are not powerless. or how they are related to leadership behavior. KEY ELEMENTS OF LEADERSHIP It has been observed that every group that attains its goals or performs efficiently has a skilled leader. how they carry out their tasks. the trait approach does not give one an estimate of how much of any given trait a person should possess. Moreover. • It involves authority and responsibility. leaders do not possess all the traits mentioned in these theories. (3) the ability to inspire and (4) the ability to behave in a manner that will develop a harmonious work culture. how they communicate with and try to motivate their followers or employees. leaders are born. not made. and personality traits of various leaders.
therefore. who must consider the situation when they design an environment for performance. A large number of studies have been made on the premise that leadership is strongly affected by the situations in which the leader emerges. No one style was effective in all situations. They are important for practicing managers. Taken together.Situational or Contingency Theories The use of the trait and behavioral approaches to leadership showed that effective leadership depended on many variables. Researchers. Path-goal theory . began trying to identify those factors in each situation that influenced the effectiveness of a particular leadership style. the theories resulting from this type of study constitute the contingency approach to leadership. No one trait was common to all effective leaders. Situational or contingency approaches obviously are of great relevance to managerial theory and practice. such as organizational culture and the nature of tasks. 1. Task requirements Peers’ expectations and behavior 3. 2. (3) The Vroom-Yetton model and (4) Hersey and Blanchard’s situational leadership model. and in which he or she operates. They started looking at and studying different situations in the belief that leaders are the products of given situations. The contingency theories focus on the following factors. Organizational culture and policies There are four popular situational theories of leadership: (1) Fiedler’s contingency approach to leadership (2) The path-goal theory.
the degree to which the leader is able to improve the chances that the subordinates will achieve their goals. In other words. the path-goal theory suggests that the leaders should set clear and specific goals for subordinates. and.This theory was developed largely by Robert J. the paths to goal attainment. Mitchell. clearly defining. Figure 17. secondly. House and Terence R.4: The Path-Goal Theory . The path-goal theory indicates that effective leadership is dependent on. for subordinates. They should help the subordinates find the best way of doing things and remove the impediments that hinder them from realizing the set goals. The path-goal theory of leadership attempts to explain how a leader can help his subordinates to accomplish the goals of the organization by indicating the best path and removing obstacles to the goals. firstly.
The term ‘control’ has different meanings in different contexts. In addition to addressing the above mentioned factors. The management process is incomplete and sometimes useless without the control function. controlling plays an important role in helping managers detect irregularities. the growing complexity of present day organizations and the need to identify operational errors in organizations to avoid incurring excessive costs. organizing. When exercising the control function. staffing and leading functions result in the attainment of organizational objectives. Organizing provides the structure of an organization by determining how and where the employees will be placed in the organization and the responsibilities that they will need to fulfill to attain predefined objectives. and controlling. identify opportunities. a plan. The management process includes planning. Planning sets forth the objectives a manager intends to achieve. decentralize authority. handle complex situations. staffing. The process involves the following steps: i.’ Supervision is a part of control. ii. they all involve the same basic process. motivating and directing the human resources of the organization to achieve organizational goals. organizing. ‘control’ refers to the evaluation of performance and the implementation of corrective actions to accomplish organizational objectives. The control function is concerned with ensuring that the planning. iii. In the management context. and cope with uncertainty. Determining areas to control Establishing standards Measuring performance Comparing performance against standards Recognizing good or positive performance . Staffing involves the managerial function of placing the right person in the right job in the organization. These factors include the need for accountability in organizations. a manager measures the performance of an individual. iv. IMPORTANCE OF CONTROLLING The control function is gaining importance in today’s organizations due to a number of factors. it helps identify deviations from the established standards of performance. Leading involves the managerial function of influencing. v. or a program against certain predetermined standards and takes corrective action if there are any deviations. In other words. control is a tool that helps organizations measure and compare their actual progress with their established plan. minimize costs. the need to detect environmental changes that significantly affect organizations. BASIC CONTROL PROCESS Even though control systems need to be tailored to suit specific situations. Some people confuse ‘control’ with ‘supervision. leading.The Control Function • • • • • Importance of Controlling Levels of Control Basic Control Process Types of Control Requirements for Effective Controls INTRODUCTION Control is an essential function of management in every organization.
. vii.2: Major Control Types based on Timing Stages of Production Capital Labor Input Raw materials Market information Equipment Planning Transformation process Organizing Staffing Leading Controlling Goods Services Output Profits Waste materials Feedback control Concurrent control Regulates ongoing activities that are a part of the transformation process to ensure that they conform to organizational standards. positions and structures They should be understandable They should be cost-effective Controls should identify only important/major exceptions Control systems should be flexible Control systems should provide accurate information The End. Feed forward control Type of Control Description Inputs are monitored to ensure that they meet the standards necessary for the transformation process. Exercised after a product or service has been produced to ensure that the final output meets quality standards and goals.vi. Taking corrective action when necessary Adjusting standards and measures when necessary TYPES OF CONTROL Controls Based on Timing Table 19. REQUIREMENTS FOR EFFECTIVE CONTROLS Controls should reflect plans.
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