MANGALMAY INSTITUTE OF MANAGMENT &

TECHNOLOGY

GREATER NOIDA

BBA I SEMESTER

QUESTION BANK

FUNDAMENTALS OF MANAGEMENT

COURSE CODE - BBA 106

BY MEENAKSHI BHASKAR

ASSISTANT PROFESSOR
 MANGALMAY INSTITUTE OF MANAGMENT & TECHNOLOGY

FUNDAMENTALS OF MANAGEMENT

Very short answer type questions :

Ques 1. Write a brief note on organizing?

Ans 1 . Definitions

Allen defines Organising as “ the process of identifying and grouping of the work to be performed,
defining and delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most effectively together in accomplishing their objectives.”

Koontz and O’Donnell defines as “ Organisation is the establishment of authority and relationships
with provision for coordination between them, both vertically and horizontally in the enterprise
structure.

- Organising is the task of mobilizing resources

- A structure involving a large number of people engaging themselves in multiplicity of
tasks, a systematic and rational relationship with authority and responsibility between
individuals and groups.
Process of organizing

1. Establishing Enterprise Objectives

2. Formulating Supporting objectives, policies and Plans
3. Identifying and classifying the necessary to accomplish
4. Grouping the activities in the light of human and material resources available
5. Delegating to the head of each group the activity necessary to perform
6. Tying the groups together horizontally and vertically through authority relationship and
information flows.

Ques 2. Draw an organizational chart of any organization?

Ans 2. Organisation Chart

“ An Organization chart is a graphic of the various positions in the enter[prise and the formal
relationships among them”.

- It is a blueprint of the company organization structure.

- George Terry “ An Organizational Chart is a diagrammatical form, which shows important aspects
of an Organization including the major functions and the respective relationships, the channels of
supervision and the relative authority of each employee.
Characteristics
- a diagrammatical presentation
- represent the formal Organization structure
- it shows the main lines of authority in the Organization
- indicates inter-play of various functions & relationships
- indicates the channel of communication
 Ques 3. Explain functions of staffing.

Ans 3. Staffing

 Filling and keeping filled, positions in the Organisation structure.

 Def – Koontz and O’Donnell “ The managerial functions of staffing involves manning the
Organisational structure through proper and effective selection, appraisal and development of
personnel to fill the roles designed into structure.

Functions of Staffing

1. Procurement
– Job analysis
– Man power planning
– Recruitment
– Selection
– Placement
2. Development
- Performance appraisal
- Training
- Management Development
- Career Planning & Development
- Promotion
3. Compensation
– Job evaluation
– Wage and Salary administration
– Incentives
– Fringe Benefits
– Social security measures
4. Human Relations
- is an area of management in integrating people into work situation in a way that motivates them to
work together productively, co-operatively and with economic, psychological and social
satisfaction.

 Sequence of activity in Staffing

 Preemployment activities - Requisitioning, Recruiting & Selecting
 Post employment activities - Training, appraising, Promoting and Compensating,
Providing miscellaneous services

Ques 4. Differentiate authority and responsibility.

Ans 4.

Authority Responsibility

Web definitions Authority is the power or Responsibility is the state or

right to give orders, make fact of having a duty to deal
decisions, and enforce with something, or of having
obedience. control over someone.

Basically It is power. It is a duty.

Main functions Here, orders and commands Here, duties and obedience
play a vital role. play a vital role.

Time duration It stays for a longer period as It gets completed with the
compared to responsibility. completion of the task so it
has a shorter period.

Direction Flow It flows downwards. It flows upwards.

Delegation It can be delegated to others. It cannot be delegated.

Example The right of a manager to The obligation of a

command his subordinates. subordinate to complete an
assigned work.

Ques 5. What is decentralization? What are the various factors influencing the centralization
and decentralization?

Ans 5. Decentralization -

Decentralization is the policy of delegating decision making authority throughout the organization,
relatively away from central authority.
Factors-
 Centralization -

• Stable environment.
• Low capability of lower level managers to take decision as top level managers.
• Company is large.
• Organization is facing a crises or the risk of company failure.

Decentralization -

• Environment is complex, uncertain.

• Lower-level managers are capable and experienced at making decisions.
• Decisions are relatively minor.
• Corporate culture is open to allowing.
• Company is geographical dispersed. Decisions are significant.

Ques 6. Co-ordination is the essence of management. Discuss.

Ans 6 . Coordination is sometimes considered a separate function of management.

• It is however, the essence ( important quality) of management, for achieving harmony among
individual efforts towards the accomplishment of group goals.

• Each managerial function is an exercise contributing individually to coordination.

• Coordination is implicit and inherent in all functions of an organisation.

• It is through the process of coordination that a manager ensures the orderly arrangement of
individual and group efforts to ensure unity of action in the realisation of common objectives.

The process by which a manager

synchronises the activities of different
departments is known as coordination.

Coordination deals with

synchronising and unifying the
actions of a group of people.

Coordination is Coordination is
brain in the the force that
body of binds all the
management other functions
skills. of management.
 • Coordination is working together by

Interpreting
programmes, plans,
Providing growth and
policies and practices development of
employees

Keeping in touch with

employees and a sense
of perspective
Providing the climate for
success
Providing for the free flow of
information

Ques 7. Elaborate relationship between planning and controlling.

Ans 7. The planning and controlling functions of management are very closely related. The
relation between both the functions is explained below:
1. Meaning:
Planning is the basic function of every enterprise as in planning we decide what is to be done, how it
is to be done, when it is to be done and by whom it must be done. Planning bridges the gap between
where we are standing today and where we want to reach.

Controlling means keeping a check that everything is in accordance with plan and if there is any
deviation, taking preventive measures to stop that deviation.

2. Planning and controlling are interdependent and interlinked:

Planning and controlling functions always co-exist or have to exist together as one function depends
on the other. The controlling function compares actual performance with the planned performance and
if there is no planned performance then controlling manager will not be able to know whether the
actual performance is O.K. or not.

On the other hand, the planning function is also dependent on controlling function as plans are not
made only on papers but these have to be followed and implemented in the organisation.

3. Planning and controlling are both backward looking as well as forward looking:
Controlling is backward looking because like a post-mortem of past activities the manager looks back
to previous year’s performance to find out its deviation from standard planning is also backward
looking because planning is guided by past experiences and feedback report of controlling function.

Planning is forward looking because plans are prepared for future. It involves looking in advance and
making policy for maximum utilisation of resources in future.

Controlling is also forward looking because controlling does not end only by comparing past
performance with standard.

Quse 8. Define types of decisions and process of decision making.

Ans 8. TYPES OF DECISIONS:

PROGRAMMED DECISIONS:

Programmed decisions are routine and repetitive, and the organization typically develops specific
ways to handle them. A programmed decision might involve determining how products will be
arranged on the shelves of a supermarket. For this kind of routine, repetitive problem, standard
arrangement decisions are typically made according to established management guidelines.

NON PROGRAMMED DECISIONS:

Non programmed decisions are typically one shot decisions that are usually less structured than
programmed decision.

5 ELEMENTS OF THE DECISION SITUATION:

1. The Decision Makers

2. Goals to be served
3. Relevant Alternatives
4. Ordering of Alternatives
5. Choice of Alternatives

DECISION MAKING PROCESS:

Decision making steps this model depicts are as follows:

1. Identify an existing problem

2. List possible alternatives for solving the problem
3. Select the most beneficial of these alternatives.
4. Implement the selected alternative.
5. Gather feedback to find out if the implemented alternative is solving the identified problem.
Short answer type questions :

Ques 1. What is Departmentation and explain bases for Departmentation.

Ans 1. Departmentation

As the process of grouping individual jobs in department. It involves grouping of activities and
employees into departments so as to facilitate the accomplishment of Organisation Objectives.

Need & Importance of Department

- Specialisation
- Expansion
- Autonomy
- Fixation of responsibility
- Appraisal
- Management development
- Administrative control

Choosing a basis for Departmentation

- Specialisation
- Coordination
- Control
- Economy
- Attention
- Human Consideration

Basis of Departmentation

Departmentation by Functional Basis – Grouping of activities in accordance with the function of

an enterprise. Each major function of the enterprise is grouped into a department.

Merits

- It is a logical and time proven method

- It follows the principles of specialization
- Authority and responsibility can be clearly defined and fixed
- Since the top managers are responsible for the end results control shall become effective

Demerits

- This type of departmentation shall develop a loyalty towards the functions and not towards the
enterprise as whole.
- Co-ordination of different function shall become difficult
- Only the departmental heads are held responsible for defective work

Departmentation by Territorial basis – A company may have separate departments to serve the
southern region, northern region etc. It has the advantage of the intimate knowledge of local
conditions.

Merits
  It motivates each regional head to achieve high performance
 Provides each regional head an opportunity to adapt to his local situation and customer need
with speed and accuracy.
 It affords valuable top-management training and experience to middle level executives]enables
the organization to take advantage of locational factors, such as availability of raw materials,
labour, market, etc.
 Enables the Organisation to compare regional performances and invest more resources in
profitable regions and withdraw resources from unprofitable ones.
Demerits

 May give rise to duplication of various activities. Many routine and service functions performed
by all the regional units can be performed centrally b the head office very economically
 Various regional units may become so engrossed in short run competition among themselves
that they may forget the overall interest of the total organization.

Departmentation by Process basis – is done on the basis of several discrete stages in the process or
technologies involved in the manufacture of a product. A cotton textile mill have separate
departments for ginning, spinning, weaving, dyeing and printing and packing and sales.

Merits

 Facilitates the use of heavy and costly equipment in an efficient manner.

 It follows the principle of specialization – each dept is engaged in doing a special type of work.
This increases efficiency.
 It is suitable for Organisation which are engaged in the manufacture of those product which
involve a number of processes.

Demerits

 Difficult to compare the performance of different process based departments

Departmentation by Product basis – suited for a large organization manufacturing a variety of

products. For each major product a semi-autonomous department is created and is put under the
charge of a manager who may also be made responsible for producing a profit of a given magnitude.
Product dept is the logical pattern to follow when each product requires raw materials, manufacturing,
technology and marketing methods and that are markedly different from those used by other products
in the Organisation. Eg HLL manufacturing detergents, toiletries, Clearasil cream and soap.

Departmentation by Customer basis – An enterprise may be divided into a number of departments

on the basis of the customers that it services. For Eg. An educational institution may have separate
departments for day, evening and correspondence course to impart education to full time students,
locally employed students and outstation students respectively.

Merits

 It ensures full attention to major customer groups and helps the company to earn goodwill.
Demerits

 It may result in under utilization of resources and facilities in some department.

 There may be duplication of facilities
Ques 2. What is decision making ? and Explain techniques of decision making.

Ans 2. Decision Making

-is the process of choosing a course of action from available alternatives

-Definition Haynes & Massie “ Decision making is a process of selection from a set
of alternative courses of action which is thought to fulfills the objective of the
decision – problem more satisfactorily than others.”
Types of Managerial Decisions

1. Organizational and Personal Decisions

2. Routine and Strategic Decisions
3. Programmed and Non programmed Decision
4. Policy and Operating Decision
5. Individual and Group decision
Decision making Process

1. Defining the problem

2. Analysing the problem
3. Developing alternative solutions
4. Evaluating the Alternatives
5. Selecting the best alternatives
6. Implementing the decision
 •HABBITS
•STANDARD PROCEDURES
TECHNIQUES FOR •ORGANIZATION STRUCTURE
PROGRAMMED

•LINEAR PROGRANNING
•QUEUING THEORY
•GAMES THEORY
•PROBABILITY THEORY
TECHNIQUES FOR
•SIMULATION
NON-
•NETWORKTECHNIQUES
PROGRAMMED

•HEURISTIC TECHNIQUES
•PARTICIPATIVE DECISIONS
MODERN
TECHNIQUES
•CREATIVITY

•BRAINSTROMING
•DELPHI TECHNIQUE
GROUP
TECHNIQUES •NOMINAL GROUP TECHNIQUE

Ques 3. What is line & staff organization? What are its limitations? How can be removed
these limitations?

Ans 3. Line & staff organization

Line & staff org., the work of administration of business units is divided into two head categories ,
namely ,the ‘staff’ which is responsible for planning the ‘line’ for actual execution of work. Staff
officers are attached to line managers to advice in the area of their specialization. They are advisors.
The staff personnel prepare plans & recommend to the line officials who implement them. The line
officers may or may not rely on their advice. Thus, in simple terms, it can be concluded that, “staff
members are thinkers while the line officials are doers”.

Merits-

It facilitates the workers to work faster & better.

Specialization is attained when the staff officers concentrate on planning function & the line
officers concentrate on execution function.
It enables the organization effectively utilize the staff officers experience & advice.
The line officers can take sound decision whit the help of proper advice from the staff officers.
The new technology or a new procedure can be introduced in the org., with out any dislocation.
A new variety of responsible jobs can be given to skilled workers.

Demerits-

If the powers of authority pertaining to the line officer & staff officers are not clearly defined, there
may be confusion through-out the org.,
It is very difficult to control the line officer’s to when they reject the advice of the staff officers.
 The line officers may reject the advice without assigning any reasons for their action.
The staff officers may under-estimate the authority of line officers. The reason is that they are
superior to the line officers.
The staff officers are not involved in the actual implementation of the program. So, it is not
obligatory on their part to give advice with care & caution.
The staff officers are not responsible if favorable results are not obtained.

Line and staff conflict - Generally staff people are relatively young, better educated and more
sophisticated in appearance. They also suffer the notion that their ideas, if implemented, will produce
miraculous result.

Complaints of line against staff

 Line personnel view their staff counterparts as a source of irritation because the advice and
recommendations may involve change in the status.
 The ideas, suggestions or recommendations by the staff are theoretical and Impractical.
 Many a times, staff officials render untimely advice
 Staff people steal the credit for the successful ideas while blame for the failure against line.
 There is lack of authority, for the staff.
 Line people resist new ideas of the staff.
 Line officials consult the staff only as a matter of last resort

Suggestions for resolving line-staff conflict.

 There must be clear definition of the authority, responsibility, areas and manners of functioning
of line and staff officials.
 Staff must appreciate the problem of line and line must be made to listen to the staff.
 There must be open channels of communication between the line and staff for transmission of
understanding and betterment of human relations.
 Proper use of the staff—line officers are dependent on staff officers for solving the problems
which require expertise knowledge and the skill.
 Setting congenial organizational climate—congenial organizational climate full of mutual trust,
respect, Self-restrain and control, coordinated approach and mutual help is another important
factor for successful operation of line and a staff personnel.

Ques 4. Why is it said that “controlling is blind without planning”?

Ans 4. The relationship between planning and control can be divided into the following two parts:

(1) Interdependence between Planning and Controlling

(2) Difference between Planning and Controlling.

1. Interdependence between Planning and Controlling

There is a deep relationship between the controlling and planning functions of management. Showing
the importance of their relationship, it is generally said that planning is meaningless without
controlling and controlling is blind without planning. Both the aspects of the interdependence of
planning and control have been detailed below:

(i) Planning is Meaningless without Controlling:

In the first part of interdependence between planning and controlling it has been said that planning
can be successful only in the presence of controlling. It means that if the control is not present it is
useless to have planning.

If the process of controlling is taken away from management, no person working in the enterprise will
take it seriously to work according to the plans and consequently, the plans will fail.

(ii) Controlling is blind without Planning:

Under the system of controlling actual work performance is compared with the standards. Hence, if
the standards are not determined there is no justification left for control, and the standards are
determined under planning. It is, therefore, said that control is blind without planning or it is without
any base.

2. Difference between Planning and Controlling

It is correct that planning and controlling are incomplete and ineffective without each other and hence,
dependent on each other. But it does not mean that both are not independent. The following points are
helpful to clarify their independent character:

(i) Planning is Looking Ahead whereas Controlling is Looking Back:

Plans are always formulated for future and determine the future course of action for the achievement
of objectives laid down.

On the contrary, controlling is looking back because under it a manager tries to find out, after the
work is completed, whether it has been done according to the standards or not. It is thus clear that
planning looks ahead and controlling looks backward or in the past.

This difference between planning and control can be stated in the reverse position also. It means
Planning is looking back whereas controlling is looking ahead. Planning is called looking back
because the plans are formulated on the basis of the happenings of the past or on the basis of
experience.

On the other hand, controlling evaluates the work done in the past but under it corrective action is
taken in respect of future. Hence, there should not be any hesitation in saying that planning looks
backward while controlling looks ahead,

(ii) Planning is the First Function and Controlling is the Last Function of Managerial Process:

The managerial process moves in a definite sequence like planning, organising, staffing, directing and
controlling. This sequence shows that planning is the first step in the managerial process and
controlling happens to be the last step.
Long answer type questions:

Ques 1. “Organizing is a mechanism of management .”discuss. explain its characteristics also.

Ans 1. Role of organizing

 Specialization - Organizational structure is a network of relationships in which the work is

divided into units and departments. This division of work is helping in bringing specialization in
various activities of concern.

 Well defined jobs - Organizational structure helps in putting right men on right job which can
be done by selecting people for various departments according to their qualifications, skill and
experience. This is helping in defining the jobs properly which clarifies the role of every person.

 Clarifies authority - Organizational structure helps in clarifying the role positions to every
manager (status quo). This can be done by clarifying the powers to every manager and the way
he has to exercise those powers should be clarified so that misuse of powers do not take place.
Well defined jobs and responsibilities attached helps in bringing efficiency into managers
working. This helps in increasing productivity.

 Co-ordination - Organization is a means of creating co-ordination among different departments

of the enterprise. It creates clear cut relationships among positions and ensure mutual co-
operation among individuals. Harmony of work is brought by higher level managers exercising
their authority over interconnected activities of lower level manager.

Authority responsibility relationships can be fruitful only when there is a formal relationship
between the two. For smooth running of an organization, the co-ordination between authority-
responsibility is very important. There should be co-ordination between different relationships.
Clarity should be made for having an ultimate responsibility attached to every authority. There
is a saying, “Authority without responsibility leads to ineffective behaviour and responsibility
without authority makes person ineffective.” Therefore, co-ordination of authority-
responsibility is very important.

 Effective administration - The organization structure is helpful in defining the jobs

positions. The roles to be performed by different managers are clarified. Specialization is
achieved through division of work. This all leads to efficient and effective administration
.
 Growth and diversification - A company’s growth is totally dependant on how efficiently
and smoothly a concern works. Efficiency can be brought about by clarifying the role
positions to the managers, co-ordination between authority and responsibility and
concentrating on specialization. In addition to this, a company can diversify if its potential
grow. This is possible only when the organization structure is well- defined. This is possible
through a set of formal structure.

 Sense of security - Organizational structure clarifies the job positions. The roles assigned to
every manager is clear. Co-ordination is possible. Therefore, clarity of powers helps
automatically in increasing mental satisfaction and thereby a sense of security in a concern.
This is very important for job- satisfaction.

 Scope for new changes - Where the roles and activities to be performed are clear and every
person gets independence in his working, this provides enough space to a manager to develop
his talents and flourish his knowledge. A manager gets ready for taking independent decisions
 which can be a road or path to adoption of new techniques of production. This scope for
bringing new changes into the running of an enterprise is possible only through a set of
organizational structure.

Characteristics of organizing

(1) Division of Work:

Division of work is the basis of an organisation. In other words, there can be no organisation without
division of work. Under division of work, the entire work of business is divided into many
departments. The work of every department is further subdivided into sub works.

2) Coordination:

Under organisation different persons are assigned different works but the aim of all these persons
happens to be the same the attainment of the objectives of the enterprise. Organisation ensures that the
work of all the persons depends on each other’s work even though it happens to be different. Hence, it
helps in establishing coordination.

(3) Plurality of Persons:

Organisation is a group of many persons who assemble to fulfill a common purpose. An individual
cannot create an organisation.

(4) Common Objectives:

There are various parts of an organisation with different functions to perform but all move in the
direction of achieving a general objective.

(5) Organisation is a Machine of Management:

Organisation is considered to be a machine of management. It is that machine in which no part can

afford to be ill- fitting or non-functional. In other words, if the division of work is not done properly
or posts are not created correctly the whole system of management collapses.

Ques 2. Discuss the need for and nature of communication in organizations. And explain
barriers to communication and how to overcome these barriers?

Ans 2. COMMUNICATION

Communication is derived from the Latin word Communis which implies common.
Communication is the interchange of thoughts and information.

ELEMENTS

1. Sender
2. Message – The Subject matter of Communication
3. Encoding – act of translating he msg into words, pictures, symbols
4. Channel – Media used
5. Receiver –
6. Decoding – interprets the msg to draw meaning from it. He converts symbols, signs or
pictures into meaning
 7. Feedback –

Sound Communication provides the following advantage

1. Improves Managerial Performance

2. Facilitates Leadership
3. Increases job Satisfaction
4. Reduces time and efforts
5. Enhances coordination
6. Help public relations

CHANNELS OF COMMUNICATION

1. Formal Communication – follows the route formally laid down in the organization structure
a. Downward Communication – flow of communication from superior to subordinate
b. Upward Communication - flow of communication from subordinate to superior
c. Horizontal Communication – transmission of information among the positions at
the same level of he Organization.

2. Informal Communication or Grapevine – Communication among people through informal

contacts or relations.

Distinction between Formal and Informal Communication

Formal Communication Informal Communication

Official Channel Unofficial Channel

Deliberately Planned and Systematic Unplanned and Spontaneous

Part of Organization Structure Cuts across formal relationships

Oriented towards goals and task of the Directed towards goals and need satisfaction of
enterprises individuals

Impersonal Personal and social

Stable and rigid Flexible and instable

Slow and Structured Fast and Unstructured

Grapevine Merits and Demerits

Merits Demerits

Useful for developing group cohesiveness Based on rumors

Serves as an emotional safety value Misleads People

Effective source of knowledge feelings and May breed against particular executives
attitudes of Employees

Supplements the channels of official May lead to more talk and less work
communication

Tells mgt when to be firm and when to yield May distort official channels of communication

MEDIA OR METHODS OF COMMUNICATION

1. Oral Communication
2. Written Communication
3. Gestural Communication

ORAL COMMUNICATION

Oral Communication involves exchange of messages through spoken words. It may take place. i) by
face- to face contacts ii) through mechanical devices like telephone.

Merits

Oral or Verbal communication offers the following advantages:

1. Economical
2. Personal touch
3. Speed
4. Flexibility
5. Quick response

Demerits

Oral Communication suffers from the following weaknesses-

1. Lack of record
2. Time Consuming
3. Lengthy message
4. Physical distance
5. Misunderstanding

WRITTEN COMMUNICATION

Written Communication is transmitted through written words in the form of letter, circular, memos,
bulletins, instruction cards, manuals, handbooks, reports, returns,

Merits

1. Effectiveness
2. Lengthy messages
3. Economical
4. Repetition
 5. Permanent record
6. Better response
Demerits

1. Time Consuming
2. Expensive
3. Inflexibility
4. Little secrecy
5. Lack of personal touch
6. Misunderstanding

COMMUNICATION NETWORKS

1. Circle Network
2. Chain Network
3. Wheel Network
4. All Channel Network

BARRIERS TO COMMUNICATION

a. Organisational Barriers

1. Ambiguous policies, rules and procedures

2. Status patterns
3. Long chain of Command
4. Inadequate Facilities

b. Mechanical Barriers

1. Overloading
2. Semantic barriers
3. Noise

c. Personal Barriers

1. Lack of attention or interest

2. Failure to Communicate

3. Hasty Conclusion

4. Distrust of communicator

5. Improper state of mind.

MAKING COMMUNICATION EFFECTIVE

1. Sound Organization Structure

2. Clear messages
3. Two-way Communication
4. Multiple Channels
5. Good Listening
 6. Effective Control
7. Modern Instrument
8. Human Relations attitude

ESSENTIALS OF GOOD COMMUNICATION SYSTEM

1. Clarity of messages
2. Completeness of message
3. Consistency of message
4. proper timing
5. Credibility
6. Empathy
7. Follow-up
8. Economy

Ques 3. What is leadership and motivation ? and how they contribute in directing function of
management in detail.

Ans 3. Definition

Leadership is defined as influence, the art or process of influencing people so that they will strive
willingly and enthusiastically toward the achievement of group goals.

- Leaders act to help a group attain objectives through the maximum application of its
capabilities.
- Leaders must instill values – whether it be concern for quality, honesty and calculated
risk taking or for employees and customers.

Leadership types-

a) Autocratic leader-the leader expect complete obedience from his subordinates and all
decision making is centralized in the leader. All decision major or small are taken by the
leader & sub-ordinates are forced to obey them without questioning.

b) Laissez leader-under this type of leadership maximum freedom is allowed to sub-ordinates

they are given free hand in deciding their own policies & methods & take there own decision.
The leader provides help only when required by the sub-ordinates otherwise he does not
interfere in there work.

c) Democratic leader-under this type the leader act according to the mutual consent & the
decision are reached often consulting the sub-ordinates.

d) Bureaucratic leader-in this style everything is influenced by the rules regulations and
procedures. The leader setup a procedure ordering to the rule book. All the decision are taken
on the basis on the rules & regulation. The employees are not encouraged to take the
initiatives.
e) Manipulative leader-the employees are exploited through different means for extract in
more & more work from them & not compensating them for there additional efforts.
 When the co-operation of employees is needed urgently for specific task.
 When the projects are of short duration.
 When long term relationship may not be required.
 (f) Paternalistic leader-it is based upon the sentiments and emotions of people. A paternalistic
leader is like a father figure to the sub-ordinates . the leader looks after the needs & aspirations of sub-
ordinates. He helps guides & protects all of his sub-ordinates.

Motivation:
Motivation is a general term applying to the entire class of drives, desire needs
similar forces. To say that managers motivate their subordinates is to say that they do
those things which they hope will satisfy these drives and desire and induce the
subordinates to act in a desired manner.

Needs want- satisfaction chain

The chain explanation is complex. In the first place, except for physiological needs,
such as food, need are not independent of person's environment. Many physiological
needs are stimulated by environmental factors the small of food may cause hunger, a
lower thermometer reaching may cause chills.

Environment has a major influence on our perception of secondary needs. The

promotion of a colleague may arouse one's desire for higher position.
In second place, the need want satisfaction chain does not always operate as simply as
portrayed. Needs do cause behaviour but needs also may result from behaviour.
Satisfying one deed may lead to a desire to satisfy more needs.

COMPLEXITY OF MOTIVATIONS:

Motivation can be explain by a chain reaction:

Felt needs give rise to want or goal sought which cause tensions (that is unfulfilled
desired), which give rise to action toward achieving goals which finally result in
satisfaction. This chain can be explained by figure.

Needs Give Rise to

Wants

Which cause
Tension

Give Rise to
Action

Which result in
Satisfaction

Role of leadership and motivation in directing function

 Effective
leadership

Effective
SUPERVISION motivation
PRINCIPLES OF
DIRECTING

UNITY OF Effective
COMMAND Communication

Ques 4. Explain the importance of control in a business organisation . discuss the process of
control.

Ans 4. Controlling

Definition

as the process of analyzing actual operations and seeing that actual performance is guided towards
expected performance.
- Comparing operating results with plans and taking corrective action when results deviate
from plans
- Def. Koontz and O’Donnell “ The managerial function of controlling is the measurement
and correction of the performance of activities of subordinates in order to make sure that
enterprise objectives and the plans devised to attain them are being accomplished.

Nature & Purpose of Control

1. Control is an essential function of management

2. Control is an ongoing process
3. Control is forward – working because pas cannot be controlled
4. Control involves measurement
5. The essence of control is action
6. Control is an integrated system

Elements of Control

1. Planning
2. Information Feedback
3. Delegation of Authority
4. Remedial action
THE BASIC CONTROLL PROCESS

The basic control process involves three steps.

1. Establishing standards.
2. Measuring performance against these standards.
3. Correcting variations from standard and plans / correction of deviations.

1. ESTABLISHING STANDARD

Standards are by definition is simply criteria of performance. Standards are the

selected points in a planning performance at which performance is measured, so that
managers can receive signals about how things are going

There are many kinds of standard.

(1)Physical Standard (2) cost Standard (3) capital Standard (4)
revenue Standard (5) program Standard (6) intangible Standard (7) goals/ objectives
Standard (8) Strategic plans as control point strategic control.

2. MEASUREMENT OF PERFORMANCE

It is the second step of control process. Although such measurement is not always
predictable, but if standard are appropriately drown and if means are available for
determining exactly what subordinates are doing then measurement of performance is
fairly easy. But there are many activities for which it is difficult to develop accurate
standards and there are many activities that are hard to measure. Technical kind of
work is hard to measure performance.

3. CORRECTION OF DEVIATIONSS

It is third and last step of control process. If performance is measured accurately, t is

easier to correct deviations manage know exactly where the corrective measure
measure must be applied correction of deviations is the point at which contact can be
related to the other managerial factions. Managers may correct deviations by
redrawing their plans or by modifying their goals or they may correct deviations by
clarification of duties.

Problems in the Control Process

 Magnitude of Change
 Time rate of Change
 Erroneous standard ( Mistakes in setting standard)
 Workers Resistance
 Communication Problems

Characteristic of an ideal Control system

 Suitable
 Flexible
 Economical
 Simple
 Objective
 Prompt
 Forward looking
 Suggestive
  Strategic point control
 Motivational

Techniques of Managerial Control

Traditional Techniques

1. Personal Observation ( For E.g. A Factory manager goes around the plant, observes the
performance of Employees and Machines)
2. Good Organisation Structure
3. Unity of Plans
4. Statistical Control Reports
5. Budgetary control – Statement expressed in financial terms
a. Master budget
b. Functional Budget - Sales budget, Production budget, Material budget,
Labour budget, Cash budget, Administrative Overhead budget,
c. Capital & Revenue budget
d. Fixed and Flexible Budget
e. Zero base budgeting ( the budget proposals are considered from the ground
up ( zero base) or from scratch
Objectives of Budgetary Control

a. Planning
b. Coordination
c. Control
d. Motivation
e. Efficiency
Merits

 Optimum use of resources

 Fixation of Responsibility
 Effective coordination
 Planned approach

6. Profit & loss control

7. External audit Control
8. Overall Control criteria ( BEP Analysis)
9. Return on Investment Control
10. Management Audit
 Organisation Structure
 Executive appraisal
 Functioning of the management board
 Soundness of Earning
 Economic Functioning
 Service to stock holders
 R&D
 Fiscal Policy
 Production Efficiency
11. Responsibility accounting
 Cost centre
 Profit centre
 Investment centre