PRINCIPLES OF MANAGEMENT

(BCA- 104)

By: DR. PREETI MALIK

UNIT – I
Management: Meaning & concept, Management principles (Fayol & Taylor), Management process
(in brief), Managerial levels, Roles & skills of a manager, Management Theories (Classical, Neo
classical, Behavioural, Systems & Contingency)

UNIT – II
Planning: Meaning, Purpose & process, Decision making: Concept & process
Organizing: Process, Departmentation, Authority & Responsibility relationships, Decentralization.
Staffing: Nature & Importance

UNIT-III
Staffing: Concept, nature & importance of Staffing.
Directing: Motivation: concept & theories (Maslow’s, Herzberg Two factor, McGregor’s theory X &
Y), Leadership: Concepts & styles.
Controlling: Nature, Importance, significance & Process of control.

UNIT – IV
Managing People - Meaning, Need of understanding human behaviour in organization, Models of OB
Major concepts in OB (elementary) - Personality, Learning, Perception & Attitude Building.

Reference Books:-
• Title of the Book:
Principles of Management/ Management Process & Organisational Behaviour
• Author:
By: 1) C. B. Gupta, 2) T. N. Chhabra
 UNIT-I
Management: Meaning & concept, Management principles (Fayol & Taylor),
Management process (in brief), Managerial levels, Roles & skills of a manager,
Management Theories (Classical, Neo classical, Behavioural, Systems & Contingency)

CHAPTER-1
INTRODUCTION TO MANAGEMENT
The term ‘management’ has been used in different senses. Sometimes it refers to the process of
planning, organizing, staffing, directing, coordinating and controlling; at other times it is used to
describe it as a function of managing people. Management is a continuous, lively and fast developing
science. Management is needed to convert the disorganized resources of men, machines, materials and
methods into a useful and effective enterprise. Management is a pipeline, the inputs are fed initially, go
through management functions and ultimately we get the end results or inputs in the form of goods,
services, productivity, information and satisfaction. Management is a comprehensive word which is
used in different sciences in the modern business and industrial world. In the narrow sense, it signifies
the technique of taking work from others. In this way a person who can take work from others is called
manager. In the wide sense, the management is an art, as well as science, which is concerned with the
different human efforts so as achieve the desired objective. It is also referred to as a body of
knowledge, a practice and discipline. There are some who describe management as a technique of
leadership and decision-making while some others have analyzed management as an economic
resource, a factor of production or a system of authority.

1.1 DEFINITIONS OF MANAGEMENT

It is very difficult to give a precise definition of the term ‘management’. Different scholars from
different disciplines view and interpret management from their own angles. The economists consider
management as a resource like land, labour, capital and organisation. The bureaucrats look upon it as a
system of authority to achieve business goals. The sociologists consider managers as a part of the class
elite in the society. The definitions by some of the leading management thinkers and practitioners are
given below:

(A) Art of Getting Things Done:

Mary Parker Follett:
“Management is the art of getting things done through others.” Follett describes management as an art
of directing the activities of other persons for reaching enterprise goals. It also suggests that a manager
carries only a directing function.
Harold Koontz:
“Management is the art of getting things done through and with people in formally organized groups.”
Koontz has emphasized that management is getting the work done with the co-operation of people
working in the organization.
J.D. Mooney and A.C. Railey:
“Management is the art of directing and inspiring people.” Management not only directs but motivates
people in the organization for getting their best for obtaining objectives.
As per the above mentioned definitions, management is the art of getting things done through people
who may be managers or non-managers. At the level of chief executive, the work is got done through
functional managers, at middle level the things are implemented through supervisors and at lower level
of management through workers. Human and technical skills play an important role for getting things
done. These definitions represent the traditional view point of management while workers are treated
as a factor of production only. They are paid wages for doing their work.
This view point suffers from the following deficiencies:
(i) This concept does not specify what type of functions is required to be performed for getting things
done from others.
(ii) Management is treated as an art. These days management has also acquired the status of science.
(iii) The workers are treated as means of getting results. The needs and aspirations of workers are not
taken into account.
Management is much more than just getting the things done through others. Management may be a
technique for getting things done through others by satisfying their needs and helping them grow.
Harold Koontz emphasized the attainment of business goals with the co-operation of people working
in the organization.

(B) Management as a Process:

Some authors view management as a process because it involves a number of functions. Management
refers to all Involves different a manager does. Various functions which are performed by managers to
make the efficient use of the available material and human resources so as to achieve the desired
objectives are summed up as management. Thus, the functions of planning, organizing, staffing,
directing, co-coordinating and controlling fall under the process of management.
Henry Fayol:
“To manage is to forecast and plan, to organize, to command, to co-ordinate, and to control.” Fayol
described management as a process of five functions such as planning, organizing, commanding,
coordinating and controlling. Modern authors, however, do not view co-ordination as a separate
function of management.
George R. Terry:
“Management is a distinct process consisting of activities of planning, organizing, actuating and
controlling, performed to determine and accomplish stated objectives with the use of human beings
and other resources.” Though Terry has described four functions to be a part of management process
but managerial functions are classified into five categories.
James L. Lundy:
“Management is principally the task of planning, coordinating, motivating and controlling the efforts
of others towards a specific objective.” Lundy has also specified some functions which management
has to perform for achieving organizational goals.
Louis Allen:
“Management is what a manager does.” This is a broad definition linking all the activities of the
manager to the concept of management. Whatever work is undertaken by a manager forms a part of
management. Above definitions associate management with the functions undertaken for running a
business. There may be a difference as to what functions are required to be taken up by the
management but functions such as planning, organizing, staffing, directing and controlling form the
process of management.
These functions are continuously taken up. On the completion of last function, the first function starts
again. The functions of management are interdependent and interlinked. In order to achieve the
objectives, a manager has to perform various functions simultaneously.

(C) Management as a Discipline:

Sometimes the term ‘management’ is used to connote neither the activity nor the personnel who
performs it, but as a body of knowledge, a practice and a discipline. In this sense, management refers
to the principles and practices of management as a subject of study. Management is taught as a
specialized branch of knowledge in educational institutions. It has drawn heavily from Psychology,
Sociology, and Anthropology etc. A person acquiring degree or diploma in management can try for a
managerial job.
Management is treated both as an art as well as science. An art is often regarded as the systematic
application of skill or knowledge in effecting accomplishment of results. In management one has to
use personal skill and knowledge in solving many complicated problems to achieve enterprise
objectives. Management is regarded as a science because it has developed certain principles,
generalizations and techniques which have more or less universal application. So management is a
study of a specific discipline. When one says that a particular person is in management stream then it
is assumed that he is studying a particular field of learning.

(D) Art and Science of Decision-Making and Leadership:

Decision-making and guiding others is considered an important element of management. A manager
has to take various decisions every day for properly running an enterprise.
Donald J. Clough:
“Management is the art and science of decision-making and leadership.” The author views
management as an art and science of decision-making. The quality of decisions determines the
performance of a manager. He has also to provide leadership to subordinates for motivating them to
undertake their work.
Rose Moore:
“Management means decision-making.” Decision-making cannot be the only function of management
even though it is very important.
Stanley Vance:
“Management is simply the process of decision-making and control over the action of human beings
for the express purpose of attaining predetermined goals.” Stanley Vance has emphasized decision-
making and control over the actions of employees for reaching the enterprise goals.
Association of Mechanical Engineers, U.S.A.: “Management is the art and science of preparing,
organizing and directing human efforts applied to control the forces and utilize the materials of nature
for the benefit of man.” The association has given a wide definition where it has emphasized that
management controls and directs human efforts for utilizing natural resources for the benefit of man.
The above mentioned definitions describe management as a science and art of decision making and
controlling the activities of employees for obtaining enterprise objectives.

(E) An Art of Increasing Productivity:

Some authors are of the view that the science of management is used to increase productivity of the
enterprise.
John F. Mee:
“Management may be defined as the art of securing maximum prosperity with a minimum of effort so
as to secure maximum prosperity and happiness for both employees and employer and give public the
best possible service.”
F.W. Taylor:
“Management is the art of knowing what you want to do in the best and cheapest way.”
Management is the art of securing maximum productivity at the minimum of cost so that it helps
employers, employees and public in general. Public is also a stake holder in business, it should also
benefit from good performance of business.

(F) Integration of Efforts:

Management makes use of human and physical resources for the benefit of the enterprise.
Keith and Gubellini:
“Management is the force that factors integrates men and physical plant into an effective operating
unit.” Management integrates physical and human resources for operating the manufacturing process
in a better way.
Barry M. Richman:
“Management entails the coordination of human and material resources towards the achievement of
organizational objectives as well as the organization of the productive functions essential for achieving
stated or accepted economic goals.” Management alms to co-ordinate and integrate various resources
in the organization for achieving enterprise objectives. The thrust of above mentioned definitions is
that integration and co-ordination of various factors of production is essential for running a business
properly and this function is undertaken by management.
(G) Management as a Group of Managers:
The term management is frequently used to denote a Refers to managerial group of managerial
personnel. When one says that personnel management of such and such company is efficient, he refers
to the group of persons who are looking after the working of the enterprise. These persons individually
are called managers. “Management is the body or group of people which performs certain managerial
functions for the accomplishment of pre-determined goals.”
All managers perform managerial functions of planning, organizing, staffing, directing and controlling.
These persons collectively arc called ‘body of managerial personnel.’ In actual practice the term
‘management’ is used to denote top management of the organization. Top management is mainly
concerned with determination of objectives, strategic planning, policy formulation and overall control
of the organization.

1.2 CONCEPT OF MANAGEMENT

The term management has been interpreted in several ways; some of which are given below:

(A) Management as an Activity

Management is an activity just like playing, studying, teaching etc. As an activity management has
been defined as the art of getting things done through the efforts of other people. Management is a
group activity wherein managers do to achieve the objectives of the group. The activities of
management are:
• Interpersonal activities
• Decisional activities
• Informative activities

(B) Management as a Process

Management is considered a process because it involves a series of interrelated functions. It consists of
getting the objectives of an organisation and taking steps to achieve objectives. The management
process includes planning, organising, staffing, directing and controlling functions.
Management as a process has the following implications:
• Social Process: Management involves interactions among people. Goals can be achieved
only when relations between people are productive. Human factor is the most important
part of the management.
• Integrated Process: Management brings human, physical and financial resources together to
put into effort. Management also integrates human efforts so as to maintain harmony
among them.
• Continuous Process: Management involves continuous identifying and solving problems. It
is repeated every now and then till the goal is achieved.
• Interactive process: Managerial functions are contained within each other. For example,
when a manager prepares plans, he is also laying down standards for control.

(C) Management as an Economic Resource

Like land, labour and capital, management is an important factor of production. Management occupies
the central place among productive factors as it combines and coordinates all other resources which is
shown in the following figure.
 Manpower

Money Management Materials

Machinery

(D) Management as a Team

As a group of persons, management consists of all those who have the responsibility of guiding and
coordinating the efforts of other persons. These persons are called as managers who operate at
different levels of authority (top, middle, operating). Some of these managers have ownership stake in
their firms while others have become managers by virtue of their training and experience. Civil
servants and defence personnel who manage public sector undertakings are also part of the
management team. As a group managers have become an elite class in society occupying positions
with enormous power and prestige.

(E) Management as a Group

Management means the group of persons occupying managerial positions. It refers to all those
individuals who perform managerial functions. All the managers, e.g., chief executive (managing
director), departmental heads, supervisors and so on are collectively known as management. For
example, when one remarks that the management of Reliance Industries Ltd. is good, he is referring to
the persons who are managing the company.
There are several types of managers which are listed as under.
• Family managers who have become managers by virtue of their being owners or relatives
of the owners of a company.
• Professional managers who have been appointed on account of their degree or diploma in
management.
• Civil Servants who manage public sector undertakings.
Managers have become a very powerful and respected group in modern society. This is because the
senior managers of companies take decisions that affect the lives of a large number of people. For
example, if the managers of Reliance Industries Limited decide to expand production it will create job
for thousands of people. Managers also help to improve the social life of the public and the economic
progress of the country. Senior managers also enjoy a high standard of living in society. They have,
therefore, become an elite group in the society.

(F) Management as an Academic Discipline

Management has emerged as a specialised branch of knowledge. It comprises principles and practices
for effective management of organizations. Management has become a very popular field of study as is
evident from the great rush for admission into institutes of management. Management offers a very
rewarding and challenging career.
1.3 NATURE OF MANAGEMENT
A. Universal process: Wherever there is human activity, there is management. Without efficient
management, objectives of the company cannot be achieved.
B. Factor of production: Qualified and efficient managers are essential to utilization of labour
and capital.
C. Goal oriented: The most important goal of all management activity is to accomplish the
objectives of an enterprise. The goals should be realistic and attainable.
D. Supreme in thought and action: Managers set realizable objectives and then mastermind
action on all fronts to accomplish them. For this, they require full support form middle and
lower levels of management.
E. Group activity: All human and physical resources should be efficiently coordinated to attain
maximum levels of combined productivity. Without coordination, no work would accomplish
and there would be chaos and retention.
F. Dynamic function: Management should be equipped to face the changes in business
environment brought about by economic, social, political, technological or human factors.
They must be adequate training so that can enable them to perform well even in critical
situations.
G. Social science: All individuals that a manager deals with have different levels of sensitivity,
understanding and dynamism.
H. Important organ of society: Society influences managerial action and managerial actions
influence society. Its manager’s responsibility that they should also contribute towards the
society by organizing charity functions, sports competition, donation to NGO’s etc.
I. System of authority: Well-defined lines of command, delegation of suitable authority and
responsibility at all levels of decision-making. This is necessary so that each individual should
what is expected from him and to whom he need to report to.
J. Profession: Managers need to possess managerial knowledge and training, and have to
conform to a recognized code of conduct and remain conscious of their social and human
obligations.
K. Process: The management process comprises a series of actions or operations conducted
towards an end.

1.4 CHARACTERISTICS/ FEATURES OF MANAGEMENT

The main characteristics of management are as follows:
 A. Management is an activity: Management is an activity which is concerned with the efficient
utilization of human and non-human resources of production.
B. Invisible Force: Management is an invisible force. Its existence can be felt through the
enterprise or institution it is managing.
C. Goal Oriented: Management is goal oriented as it aims to achieve some definite goals and
objectives. According to the Haimann, “Effective management is always management by
objectives”. Managers and other personnel officers apply their knowledge, experience and
skills to achieve the desired objectives.
D. Accomplishment through the efforts of Others: Managers cannot do everything themselves.
They must have the necessary ability and skills to get work accomplished through the efforts of
others.
E. Universal activity: Management is universal. Management is required in all types or
organizations. Wherever there are some activities, there is management. The basic principles of
management are universal and can be applied anywhere and in every field, such as business,
social, religious, cultural, sports, administration, educational, politics or military.
F. Art as well as Science: Management is both an art and a science. It is a science as it has an
organized body of knowledge which contains certain universal truths and an art as managing
requires certain skills which apply more or less in every situation.
G. Multidisciplinary Knowledge: Though management is a distinct discipline, it contains
principles drawn from many social sciences like psychology, sociology etc.
H. Management is distinct from ownership: In modern times, there is a divorce of management
from ownership. Today, big corporations are owned by a vast number of shareholders while
their management is in the hands of paid qualified, competent and experienced managerial
personnel.
I. Need at all levels: According to the nature of task and scope of authority, management is
needed at all levels of the organization, i.e., top level, middle and lower level.
J. Integrated process: Management is an integrated process. It integrates the men, machine and
material to carry out the operations of the enterprise efficiently and successfully. This
integrating process is result oriented.

1.5 OBJECTIVES/ PURPOSE/ AIMS OF MANAGEMENT

The primary objective of management is to run the enterprise smoothly. The profit earning objective of
a business is also to be kept in mind while undertaking various functions.
Following are the broad objectives of management:
(A) Proper Utilization of Resources:
The main objective of management is to use various resources of the enterprise in a most
economic way. The proper use of men, materials, machines and money will help a business to
earn sufficient profits to satisfy various interests. The proprietors will want more returns on
their investments while employees, customers and public will expect a fair deal from the
management. All these interests will be satisfied only when physical resources of the business
are properly utilized.
(B) Improving Performance:
Management should aim at improving the performance of each and every factor of production.
The environment should be so congenial that workers are able to give their maximum to the
enterprise. The fixing of objectives of various factors of production will help them in
improving their performance.
(C) Mobilizing Best Talent:
The management should try to employ persons in various fields so that better results are
possible. The employment of specialists in various fields will be increasing the efficiency of
various factors of production. There should be a proper environment which should encourage
good persons to join the enterprise. The better pay scales, proper amenities, future growth
potentialities will attract more people in joining a concern.
 (D) Planning for Future:
Another important objective of management is to prepare plans. No management should feel
satisfied with today’s work if it has not thought of tomorrow. Future plans should take into
consideration what is to be done next. Future performance will depend upon present planning.
So, planning for future is essential to help the concern.

The objectives of management can also be categorised as under.

(A) Organisational objectives: Management is expected to work for the achievement of the
objectives of the particular organisation in which it exists. Organisational objectives include:
• Reasonable profits so as to give a fair return on the capital invested in business
• Survival and solvency of the business, i.e., continuity.
• Growth and expansion of the enterprise
• Improving the goodwill or reputation of the enterprise.
(B) Personal objectives: An organisation consists of several persons who have their own
objectives. These objectives are as follows:
• Fair remuneration for work performed
• Reasonable working conditions
• Opportunities for training and development
• Participation in management and prosperity of the enterprise
• Reasonable security of service.
(C) Social objectives: Management is not only a representative of the owners and workers, but is
also responsible to the various groups outside the organisation. It is expected to fulfil the
objectives of the society which are given below:
• Quality of goods and services at fair price to consumers.
• Honest and prompt payment of taxes to the Government.
• Conservation of environment and natural resources.
• Fair dealings with suppliers, dealers and competitors.
• Preservation of ethical values of the society.

1.6 ROLE AND IMPORTANCE OF MANAGEMENT

A. It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It directs
group efforts towards achievement of pre-determined goals. By defining objective of
organization clearly there would be no wastage of time, money and effort. Management
converts disorganized resources of men, machines, money etc. into useful enterprise. These
resources are coordinated, directed and controlled in such a manner that enterprise work
towards attainment of goals.
B. Optimum Utilization of Resources - Management utilizes all the physical & human resources
productively. This leads to efficacy in management. Management provides maximum
utilization of scarce resources by selecting its best possible alternate use in industry from out of
various uses. It makes use of experts, professional and these services leads to use of their skills,
knowledge, and proper utilization and avoids wastage. If employees and machines are
producing its maximum there is no under employment of any resources.
C. Reduces Costs - It gets maximum results through minimum input by proper planning and by
using minimum input & getting maximum output. Management uses physical, human and
financial resources in such a manner which results in best combination. This helps in cost
reduction.
D. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfilment of this, it establishes effective
authority & responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates. Management fills up various
 positions with right persons, having right skills, training and qualification. All jobs should be
cleared to everyone.
E. Establishes Equilibrium - It enables the organization to survive in changing environment. It
keeps in touch with the changing environment. With the change is external environment, the
initial co-ordination of organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for growth and survival of
organization.
F. Essentials for Prosperity of Society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income in hands.
Organization comes with new products and researches beneficial for society.

1.7 MANAGEMENT AS BOTH SCIENCE AND ART

Management is both an art and a science. The below mentioned points clearly reveals that management
combines features of both science as well as art. It is considered as a science because it has an
organized body of knowledge which contains certain universal truth. It is called an art because
managing requires certain skills which are personal possessions of managers. Science provides the
knowledge & art deals with the application of knowledge and skills.
A manager to be successful in his profession must acquire the knowledge of science & the art of
applying it. Therefore management is a judicious blend of science as well as an art because it proves
the principles and the way these principles are applied is a matter of art. Science teaches to ’know’ and
art teaches to ’do’. E.g. a person cannot become a good singer unless he has knowledge about various
ragas & he also applies his personal skill in the art of singing. Same way it is not sufficient for
manager to first know the principles but he must also apply them in solving various managerial
problems that is why, science and art are not mutually exclusive but they are complementary to each
other (like tea and biscuit, bread and butter etc.).

The old saying that “Managers are Born” has been rejected in favour of “Managers are Made”. It has
been aptly remarked that management is the oldest of art and youngest of science. To conclude, we can
say that science is the root and art is the fruit.

A. Management as a Science

Science is a systematic body of knowledge pertaining to a specific field of study that contains general
facts which explains a phenomenon. It establishes cause and effect relationship between two or more
variables and underlines the principles governing their relationship. These principles are developed
through scientific method of observation and verification through testing.
Science is characterized by following main features:
• Universally acceptance principles - Scientific principles represents basic truth about a
particular field of enquiry. These principles may be applied in all situations, at all time & at all
places. E.g. - law of gravitation which can be applied in all countries irrespective of the time.
• Experimentation & Observation - Scientific principles are derived through scientific
investigation & researching i.e. they are based on logic. E.g. the principle that earth goes round
the sun has been scientifically proved. Management principles are also based on scientific
enquiry & observation and not only on the opinion of Henry Fayol. They have been developed
through experiments & practical experiences of large no. of managers. E.g. it is observed that
fair remuneration to personal helps in creating a satisfied work force.
• Cause & Effect Relationship - Principles of science lay down cause and effect relationship
between various variables. E.g. when metals are heated, they are expanded. The cause is
heating & result is expansion.
The same is true for management, therefore it also establishes cause and effect relationship.
E.g. lack of parity (balance) between authority & responsibility will lead to ineffectiveness. If
 you know the cause i.e. lack of balance, the effect can be ascertained easily i.e. in effectiveness.
Similarly if workers are given bonuses, fair wages they will work hard but when not treated in
fair and just manner, reduces productivity of organization.
• Test of Validity & Predictability - Validity of scientific principles can be tested at any time or
any number of times i.e. they stand the test of time. Each time these tests will give same result.
Moreover future events can be predicted with reasonable accuracy by using scientific
principles. E.g. H2 & O2 will always give H2O.
Principles of management can also be tested for validity. E.g. principle of unity of command
can be tested by comparing two persons - one having single boss and one having 2 bosses. The
performance of 1st person will be better than 2nd.

B. Management as an Art

Art implies application of knowledge & skill to trying about desired results. An art may be defined as
personalized application of general theoretical principles for achieving best possible results. Art has
the following characters:
• Practical Knowledge: Every art requires practical knowledge therefore learning of theory is
not sufficient. It is very important to know practical application of theoretical principles. E.g. to
become a good painter, the person may not only be knowing different colour and brushes but
different designs, dimensions, situations etc to use them appropriately. A manager can never be
successful just by obtaining degree or diploma in management; he must have also know how to
apply various principles in real situations by functioning in capacity of manager.
• Personal Skill: Although theoretical base may be same for every artist, but each one has his
own style and approach towards his job. That is why the level of success and quality of
performance differs from one person to another. E.g. there are several qualified painters but
M.F. Hussain is recognized for his style. Similarly management as an art is also personalized.
Every manager has his own way of managing things based on his knowledge, experience and
personality, that is why some managers are known as good managers (like Aditya Birla, Rahul
Bajaj) whereas others as bad.
• Creativity: Every artist has an element of creativity in line. That is why he aims at producing
something that has never existed before which requires combination of intelligence &
imagination. Management is also creative in nature like any other art. It combines human and
non-human resources in useful way so as to achieve desired results. It tries to produce sweet
music by combining chords in an efficient manner.
• Perfection through practice: Practice makes a man perfect. Every artist becomes more and
more proficient through constant practice. Similarly managers learn through an art of trial and
error initially but application of management principles over the years makes them perfect in
the job of managing.
• Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same
manner, management is also directed towards accomplishment of pre-determined goals.
Managers use various resources like men, money, material, machinery & methods to promote
growth of an organization.

Thus, we can say that management is an art therefore it requires application of certain principles rather
it is an art of highest order because it deals with moulding the attitude and behavior of people at work
towards desired goals.

1.8 SCOPE/ BRANCHES OF MANAGEMENT

Management is an all pervasive function since it is required in all types of organized endeavour. Thus,
its scope is very large. Planning, organizing, directing, coordinating and controlling are the activities
included in the subject matter of management. Although it is difficult to precisely define the scope of
management, yet the following areas are included in it:
(A) Functional areas of management: These include:
 • Financial management includes accounting, budgetary control, quality control, financial
planning and managing the overall finances of an organization.
• Personnel management includes recruitment, training, transfer promotion, demotion,
retirement, termination, labor-welfare and social security industrial relations.
• Purchasing management includes inviting tenders for raw materials, placing orders, entering
into contracts and materials control.
• Production management includes production planning, production control techniques, quality
control and inspection and time and motion studies.
• Maintenance management involves proper care and maintenance of the buildings, plant and
machinery.
• Transport management includes packing, warehousing and transportation by rail, road and
air.
• Distribution management includes marketing, market research, price-determination, taking
market risk and advertising, publicity and sales promotion.
• Office Management includes activities to properly manage the layout, staffing and equipment
of the office.
• Development management involves experimentation and research of production techniques,
markets, etc.
(B) Management is an inter-disciplinary approach: For the correct implementation of the
management, it is important to have knowledge of commerce, economics, sociology, psychology and
mathematics.
(C) Universal application: The principles of management can be applied to all types of organizations
irrespective of the nature of tasks that they perform.
(D) Essentials of management: Three essentials of management are:
• Scientific method
• Human relations
• Quantitative technique
(E) Modern management is an agent of change: The management techniques can be modified by
proper research and development to improve the performance of an organization.

The following activities are covered under the scope of management:

(i) Planning,
(ii) Organization
(iii) Staffing.
(iv) Directing,
(v) Coordinating, and
(vi) Controlling.

The operational aspects of business management, called the BRANCHES OF MANAGEMENT,

are as follows:
1. Production Management
2. Marketing Management
3. Financial Management.
4. Personnel Management and
5. Office Management.
1. Production Management:
Production means creation of utilities. This creation of utilities takes place when raw materials are
converted into finished products. Production management, then, is that branch of management ‘which
by scientific planning and regulation sets into motion that part of enterprise to which has been
entrusted the task of actual translation of raw material into finished product.’
It is a very important field of management ,’for every production activity which has not been
hammered on the anvil of effective planning and regulation will not reach the goal, it will not meet the
customers and ultimately will force a business enterprise to close its doors of activities which will give
birth to so many social evils’.
Plant location and layout, production policy, type of production, plant facilities, material handling,
production planning and control, repair and maintenance, research and development, simplification
and standardization, quality control and value analysis, etc., are the main problems involved in
production management.
2. Marketing Management:
Marketing is a sum total of physical activities which are involved in the transfer of goods and services
and which provide for their physical distribution. Marketing management refers to the planning,
organizing, directing and controlling the activities of the persons working in the market division of a
business enterprise with the aim of achieving the organization objectives.
It can be regarded as a process of identifying and assessing the consumer needs with a view to first
converting them into products or services and then involving the same to the final consumer or user so
as to satisfy their wants with a stress on profitability that ensures the optimum use of the resources
available to the enterprise. Market analysis, marketing policy, brand name, pricing, channels of
distribution, sales promotion, sale-mix, after sales service, market research, etc. are the problems of
marketing management.
3. Financial Management:
Finance is viewed as one of the most important factors in every enterprise. Financial management is
concerned with the managerial activities pertaining to the procurement and utilization of funds or
finance for business purposes.
The main functions of financial management include:
(i) Estimation of capital requirements;
(ii) Ensuring a fair return to investors;
(iii) Determining the suitable sources of funds;
(iv) Laying down the optimum and suitable capital
Structure for the enterprise:
(i) Co-coordinating the operations of various departments;
(ii) Preparation, analysis and interpretation of financial statements;
(iii) Laying down a proper dividend policy; and
(iv) Negotiating for outside financing.
4. Personnel Management:
Personnel Management is that phase of management which deals with the effective control and use of
manpower. Effective management of human resources is one of the most crucial factors associated
with the success of an enterprise. Personnel management is concerned with managerial and operative
functions.
Managerial functions of personnel management include:
(i) Personnel planning;
(ii) Organizing by setting up the structure of relationship among jobs, personnel and physical factors to
contribute towards organization goals;
(iii) Directing the employees; and
(iv) Controlling
The operating functions of personnel management are:
(i) Procurement of right kind and number of persons;
(ii) Training and development of employees;
(iii) Determination of adequate and equitable compensation of employees;
(iv) Integration of the interests of the personnel with that of the enterprise; and
(v) Providing good working conditions and welfare services to the employees.
5. Office Management:
The concept of management when applied to office is called ‘office management’. Office management
is the technique of planning, coordinating and controlling office activities with a view to achieve
common business objectives. One of the functions of management is to organize the office work in
such a way that it helps the management in attaining its goals. It works as a service department for
other departments.
The success of a business depends upon the efficiency of its administration. The efficiency of the
administration depends upon the information supplied to it by the office. The volume of paper work in
office has increased manifold in these days due to industrial revolution, population explosion,
increased interference by government and complexities of taxation and other laws.
Harry H. Wylie defines office management as “the manipulation and control of men, methods,
machines and material to achieve the best possible results—results of the highest possible quality with
the expenditure of least possible effect and expense, in the shortest practicable time, and in a manner
acceptable to the top management.”

1.9 RELATIONSHIP OF MANAGEMENT WITH OTHER DISCIPLINES

1.10 LEVELS OF MANAGEMENT

The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain of
command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories: -

(A) Top level / Administrative level managers

(B) Middle level / Executory managers
(C) Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions.

• Executive, Coaching, Change
Management, Leadership, Delegation
TOP & Empowerment etc.

• Problem Solving, Team Building, Talent

Development, Performance Mnagement etc
MIDDLE

• Emotional Intelligence, Coaching for Performance etc

LOW

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is
the ultimate source of authority and it manages goals and policies for an enterprise. It devotes
more time on planning and coordinating functions. The role of the top management can be
summarized as follows -

A. Top management lays down the objectives and broad policies of the enterprise.
B. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
C. It prepares strategic plans & policies for the enterprise.
D. It appoints the executive for middle level i.e. departmental managers.
E. It controls & coordinates the activities of all the departments.
F. It is also responsible for maintaining a contact with the outside world.
G. It provides guidance and direction.
H. The top management is also responsible towards the shareholders for the performance
of the enterprise.
 2. Middle Level of Management
The branch managers and departmental managers constitute middle level. They are responsible
to the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of
middle level of management but in big enterprises, there may be senior and junior middle level
management. Their role can be emphasized as -

A. They execute the plans of the organization in accordance with the policies and
directives of the top management.
B. They make plans for the sub-units of the organization.
C. They participate in employment & training of lower level management.
D. They interpret and explain policies from top level management to lower level.
E. They are responsible for coordinating the activities within the division or department.
F. It also sends important reports and other important data to top level management.
G. They evaluate performance of junior managers.
H. They are also responsible for inspiring lower level managers towards better
performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
“Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees”. In other words, they are concerned
with direction and controlling function of management. Their activities include -

A. Assigning of jobs and tasks to various workers.

B. They guide and instruct workers for day to day activities.
C. They are responsible for the quality as well as quantity of production.
D. They are also entrusted with the responsibility of maintaining good relation in the
organization.
E. They communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
F. They help to solve the grievances of the workers.
G. They supervise & guide the sub-ordinates.
H. They are responsible for providing training to the workers.
I. They arrange necessary materials, machines, tools etc for getting the things done.
J. They prepare periodical reports about the performance of the workers.
K. They ensure discipline in the enterprise.
L. They motivate workers.
M. They are the image builders of the enterprise because they are in direct contact with the
workers.

1.11 MANAGERIAL ROLES

As a manager, you probably fulfil many different roles every day. For instance, as well as leading your
team, you might find yourself resolving a conflict, negotiating new contracts, representing your
department at a board meeting, or approving a request for a new computer system.
Put simply, you're constantly switching roles as tasks, situations, and expectations change.
Management expert and Professor Henry Mintzberg recognized this, and he argued that there are ten
primary roles or behaviours that can be used to categorize a manager's different functions.
Mintzberg published his Ten Management Roles in his book, "Mintzberg on Management: Inside our
Strange World of Organizations," in 1990.
The ten roles are:
A. Figurehead.
B. Leader.
C. Liaison.
D. Monitor.
E. Disseminator.
F. Spokesperson.
G. Entrepreneur.
H. Disturbance Handler.
I. Resource Allocator.
J. Negotiator.
The 10 roles are then divided up into three categories, as follows:

MANAGERIAL ROLES

Interpersonal Roles Informational Roles Decisional Roles

A. INTERPERSONAL ROLES
The managerial roles in this category involve providing information and ideas.
• Figurehead – As a manager, you have social, ceremonial and legal responsibilities. You're expected
to be a source of inspiration. People look up to you as a person with authority, and as a figurehead.
• Leader – This is where you provide leadership for your team, your department or perhaps your
entire organization; and it's where you manage the performance and responsibilities of everyone in
the group.
• Liaison – Managers must communicate with internal and external contacts. You need to be able to
network effectively on behalf of your organization.

B. INFORMATIONAL ROLES
The managerial roles in this category involve processing information.
• Monitor – In this role, you regularly seek out information related to your organization and industry,
looking for relevant changes in the environment. You also monitor your team, in terms of both their
productivity, and their well-being.
• Disseminator – This is where you communicate potentially useful information to your colleagues
and your team.
• Spokesperson – Managers represent and speak for their organization. In this role, you're
responsible for transmitting information about your organization and its goals to the people outside
it.

C. DECISIONAL ROLES
The managerial roles in this category involve using information.
• Entrepreneur – As a manager, you create and control change within the organization. This means
solving problems, generating new ideas, and implementing them.
• Disturbance Handler – When an organization or team hits an unexpected roadblock, it's the
manager who must take charge. You also need to help mediate disputes within it.
• Resource Allocator – You'll also need to determine where organizational resources are best applied.
This involves allocating funding, as well as assigning staff and other organizational resources.
• Negotiator – You may be needed to take part in, and direct, important negotiations within your
team, department, or organization.
1.12 SKILLS OF MANAGEMENT
A good manager is required to possess the following three fundamental skills:
A. TECHNICAL
The manager should be proficient at specific tasks. This in turn helps to provide the credibility or
knowledge to persuade people to do certain things.
B. HUMAN
The manager has to know how to work with people.
C. CONCEPTUAL
The manager can see the organisation as a whole. In other words, there has to be some knowledge of
the organisation and what it does and how it interacts with other organisations.
The most important skill of a manager: Hence the most important skill of a manager is to
understand people and what makes them motivated to do the work in the achievement of certain
goal(s). For more specific skills, here is a list compiled by management experts in decreasing order of
importance:
a) People skills
b) Strategic thinking (planning ahead and predicting what was going to happen)
c) Visionary
d) Flexible/adaptable to change
e) Self-management
f) Team player
g) Solve-complex problems and make decisions
h) Ethical/high personal standards

What makes a good manager?

A management expert by the name of Charles Gibbon described the key elements of a quality manager
as follows:
1. Possess well-defined goals.
2. Be able to allocate resources according to priorities.
3. Be able to make decisions, act upon them, and accept responsibility for them.
4. Be willing to compromise.
5. Be able to delegate and to depend on subordinates.
6. Be self-motivated and self-controlled.
7. Be able to organize, plan, and communicate for effective use of resources.
8. Maintain good relationships with others.
9. Possess emotional maturity and the internal resources to cope with frustration, disappointment, and
stress.
10. Be able to appraise oneself and one's performance objectively, to admit to being wrong.
11. Expect that one will keep on growing, improve one's performance, and continue to develop.

1.13 DISTINCTION BETWEEN ADMINISTRATION AND MANAGEMENT

S. No. Points of Distinction Administration Management

1 Meaning It is concerned with formulation It is an art of getting things done
of broad objectives, plans & through others by directing their
policies. efforts towards achievement of
pre-determined goals.
2 Nature It is a determinative or thinking It is an executive or doing
function function
3 Type of work It is concerned with the It is concerned with the
determination of major objectives implementation of policies
and policies
4 Process It decides what is to be done & It decides who should as it & how
when it is to be done. should he dot it.
5 Levels of function It is mainly a top and authority It is largely a middle and lower
 level function level function
6 Influence Administrative decisions are Managerial decisions are
influenced mainly by public influenced by objectives and
opinion and other outside forces policies of the organisation
7 Direction of human It is not directly concerned with It is actively concerned with
efforts the direction of human efforts direction of human efforts in the
execution of plans
8 Main functions Planning and control are the main Directing and organising are the
functions involved in it. main functions involved in it.
9 Skills required Conceptual and human skills Technical and human skills

10 Usage Used largely in Government and Used mainly in business

Public sector organisations
11 Illustrations Commissioner, Registrar, Vice- Managing Director, General
Chancellor, Governor etc. Manager, Sales Manager, Branch
Manager etc.
12 Status It represents owners of the It constitutes the employees of the
enterprise who earn return on their organization who are paid
capital invested & profits in the remuneration (in the form of
form of dividend. salaries & wages).

Practically, there is no difference between management & administration. Every manager is concerned
with both - administrative management function and operative management function as shown in the
figure. However, the managers who are higher up in the hierarchy denote more time on administrative
function & the lower level denote more time on directing and controlling worker’s performance i.e.
management.

ADMINISTRATION TOP LEVEL MANAGEMENT

MIDDLE LEVEL MANAGEMENT

MANAGEMENT LOWER LEVEL MANAGEMENT

1.14 FUNCTIONS OF MANAGEMENT

Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfilment of given purposes. It is a
dynamic process consisting of various elements and activities. These activities are different from
operative functions like marketing, finance, purchase etc. Rather these activities are common to each
and every manger irrespective of his level or status. Different experts have classified functions of
management. But the most widely accepted are functions of management given by KOONTZ and
O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling. For theoretical purposes, it
may be convenient to separate the function of management but practically these functions are
overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each
affects the performance of the other functions.

A. Planning
It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-determined
goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do &
how to do. It bridges the gap from where we are & where we want to be”. A plan is a future
course of actions. It is an exercise in problem solving & decision making. Planning is
determination of courses of action to achieve desired goals. Thus, planning is a systematic
thinking about ways & means for accomplishment of pre-determined goals. Planning is
necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages
etc.
B. Organizing
It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals. According to
Henry Fayol, “To organize a business is to provide it with everything useful or its functioning
i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining
& providing human and non-human resources to the organizational structure. Organizing as a
process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
C. Staffing
It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc. The main purpose o staffing is to put right
man on right job i.e. square pegs in square holes and round pegs in round holes. According to
Kootz & O’Donell, “Managerial function of staffing involves manning the organization
structure through proper and effective selection, appraisal & development of personnel to fill
the roles designed un the structure”. Staffing involves:
• Manpower Planning (estimating man power in terms of searching, choose the person
and giving the right place).
 • Recruitment, selection & placement.
• Training & development.
• Remuneration.
• Performance appraisal.
• Promotions & transfer.
D. Directing
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising, motivating sub-
ordinate for the achievement of organizational goals. Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.
E. Controlling
It implies measurement of accomplishment against the standards and correction of deviation if
any to ensure achievement of organizational goals. The purpose of controlling is to ensure that
everything occurs in conformities with the standards. According to Koontz & O’Donell
“Controlling is the measurement & correction of performance activities of subordinates in
order to make sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:
• Establishment of standard performance.
• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out deviation if any.
• Corrective action.

1.15 PROCESS OF MANAGEMENT

Definition of Coordination

Co-ordination is the unification, integration, synchronization of the efforts of group members so as to

provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other
functions of management. Management seeks to achieve co-ordination through its basic functions of
planning, organizing, staffing, directing and controlling. That is why, co-ordination is not a separate
function of management because achieving of harmony between individuals efforts towards
achievement of group goals is a key to success of management. Co-ordination is the essence of
management and is implicit and inherent in all functions of management.

A manager can be compared to an orchestra conductor since both of them have to create rhythm and
unity in the activities of group members. Co-ordination is an integral element or ingredient of all the
managerial functions as discussed below: -
 A. Co-ordination through Planning - Planning facilitates co-ordination by integrating the
various plans through mutual discussion, exchange of ideas. e.g. - co-ordination between
finance budget and purchases budget.
B. Co-ordination through Organizing - Mooney considers co-ordination as the very essence of
organizing. In fact when a manager groups and assigns various activities to subordinates, and
when he creates department’s co-ordination uppermost in his mind.
C. Co-ordination through Staffing - A manager should bear in mind that the right no. of
personnel in various positions with right type of education and skills are taken which will
ensure right men on the right job.
D. Co-ordination through Directing - The purpose of giving orders, instructions & guidance to
the subordinates is served only when there is a harmony between superiors & subordinates.
E. Co-ordination through Controlling - Manager ensures that there should be co-ordination
between actual performance & standard performance to achieve organizational goals.

From above discussion, we can very much affirm that co-ordination is the very much essence of
management. It is required in each & every function and at each & every stage & therefore it cannot be
separated.
 CHAPTER-2
THEORIES OF MANAGEMENT
2.1 INTRODUCTION TO MANAGEMENT THEORIES

Management theories are concepts surrounding recommended management strategies, which may
include tools such as frameworks and guidelines that can be implemented in modern organizations.
Generally, professionals will not rely solely on one management theory alone, but instead, introduce
several concepts from different management theories that best suit their workforce and company
culture.

1. Classical theory
Scientific management theory, also called classical management theory, entered the
mainstream in the early 1900s, with an emphasis on increasing worker productivity. Developed
by Frederick Taylor, the classical theory of management advocated a scientific study of tasks
and the workers responsible for them. Although its goal was providing workers the tools
necessary for maximizing their efficiency and output, it is also criticized for creating an
"assembly-line" atmosphere, where employees do only menial jobs. For this reason, it has
fallen out of favor among many companies and schools of thought, but could still be a valuable
tool for your organization, provided you carefully examine all of its principles. For example,
the scientific theory of management is considered better suited to businesses based on
repetitive tasks, such as a factory.

2. Neo-classical theory
Neo-classical theory deals with the human factor. Elton Mayo pioneered the human relations to
improve levels of productivity and satisfaction. This approach was first highlighted by the
improvements known as ‘Hawthrone Experiments’ conducted at Illionois plant of Western
Electric Company between 1927 and 1932. Elton Mayo and Mary Parker Follett are the main
contributors of human relations approach. Neo-classical approach also causes ‘Behavioural
Science Management’ which is a further refinement of human relations approach.

3. Behavioral Theory
The behavioral management theory is often called the human relations movement because it
addresses the human dimension of work. Behavioral theorists believed that a better
understanding of human behavior at work, such as motivation, conflict, expectations, and group
dynamics, improved productivity. Behavioral management theory was developed in response
to the need to account for employee behavior and motivation. The shift
moved management from a production orientation (classical leadership theory) to a leadership
style focused on the workers' human need for work-related satisfaction and good working
conditions.

4. Systems Theory
Managers who understand systems theory recognize how different systems affect a worker and
how a worker affects the systems around them. A system is made up of a variety of parts that
work together to achieve a goal. Systems theory is a broad perspective that allows managers to
examine patterns and events in the workplace. This helps managers to coordinate programs to
work as a collective whole for the overall goal or mission of the organization rather than for
isolated departments.

5. Contingency Theory
This theory asserts that managers make decisions based on the situation at hand rather than a
"one size fits all" method. A manager takes appropriate action based on aspects most important
to the current situation. Managers in a university may want to utilize a leadership approach that
 includes participation from workers, while a leader in the army may want to use an autocratic
approach.

Scientific Management by Taylor

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as ’Father of
Scientific Management’ started his career as an operator and rose to the position of chief engineer. He
conducted various experiments during this process which forms the basis of scientific management. It
implies application of scientific principles for studying & identifying management problems.
According to Taylor, “Scientific Management is an art of knowing exactly what you want your men to
do and seeing that they do it in the best and cheapest way”. In Taylors view, if a work is analyzed
scientifically it will be possible to find one best way to do it.
Hence scientific management is a thoughtful, organized, dual approach towards the job of management
against hit or miss or Rule of Thumb.

Principles of Scientific Management

1. Development of Science for each part of men’s job (replacement of rule of thumb)

• This principle suggests that work assigned to any employee should be observed, analyzed with
respect to each and every element and part and time involved in it.
• This means replacement of odd rule of thumb by the use of method of enquiry, investigation,
data collection, analysis and framing of rules.
• Under scientific management, decisions are made on the basis of facts and by the application of
scientific decisions.
2. Scientific Selection, Training & Development of Workers

• There should be scientifically designed procedure for the selection of workers.

• Physical, mental & other requirement should be specified for each and every job.
• Workers should be selected & trained to make them fit for the job.
• The management has to provide opportunities for development of workers having better
capabilities.
• According to Taylor efforts should be made to develop each employee to his greatest level and
efficiency & prosperity.
3. Co-operation between Management & workers or Harmony not discord

• Taylor believed in co-operation and not individualism.

• It is only through co-operation that the goals of the enterprise can be achieved efficiently.
• There should be no conflict between managers & workers.
• Taylor believed that interest of employer & employees should be fully harmonized so as to
secure mutually understanding relations between them.
4. Division of Responsibility

• This principle determines the concrete nature of roles to be played by different level of
managers & workers.
• The management should assume the responsibility of planning the work whereas workers
should be concerned with execution of task.
• Thus planning is to be separated from execution.
5. Mental Revolution

• The workers and managers should have a complete change of outlook towards their mutual
relation and work effort.
 • It requires that management should create suitable working condition and solve all problems
scientifically.
• Similarly workers should attend their jobs with utmost attention, devotion and carefulness.
They should not waste the resources of enterprise.
• Handsome remuneration should be provided to workers to boost up their moral.
• It will create a sense of belongingness among worker.
• They will be disciplined, loyal and sincere in fulfilling the task assigned to them.
• There will be more production and economical growth at a faster rate.
6. Maximum Prosperity for Employer & Employees

• The aim of scientific management is to see maximum prosperity for employer and employees.
• It is important only when there is opportunity for each worker to attain his highest efficiency.
• Maximum output & optimum utilization of resources will bring higher profits for the employer
& better wages for the workers.
• There should be maximum output in place of restricted output.
• Both managers & workers should be paid handsomely.

Techniques of Scientific Management

1. Time Study
a. It is a technique which enables the manager to ascertain standard time taken for
performing a specified job.
b. Every job or every part of it is studied in detail.
c. This technique is based on the study of an average worker having reasonable skill and
ability.
d. Average worker is selected and assigned the job and then with the help of a stop watch,
time is ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determined through observations,
experiment and analysis by keeping in view an average worker.

Standard Time × Working Hours = Fair Day’s Work

2. Motion Study
a. In this study, movement of body and limbs required to perform a job are closely
observed.
b. In other words, it refers to the study of movement of an operator on machine involved
in a particular task.
c. The purpose of motion study is to eliminate useless motions and determine the bet way
of doing the job.
d. By undertaking motion study an attempt is made to know whether some elements of a
job can be eliminated combined or their sequence can be changed to achieve necessary
rhythm.
e. Motion study increases the efficiency and productivity of workers by cutting down all
wasteful motions.
3. Functional Foremanship
a. Taylor advocated functional foremanship for achieving ultimate specification.
b. This technique was developed to improve the quality of work as single supervisor may
not be an expert in all the aspects of the work.
c. Therefore workers are to be supervised by specialist foreman.
d. The scheme of functional foremanship is an extension of principle pf specialization at
the supervisory level.
e. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at
implementation level.
 f. The names & function of these specialist foremen are: -
▪ Instruction card clerk concerned with tagging down of instructions according to
which workers are required to perform their job
▪ Time & cost clerk is concerned with setting a time table for doing a job &
specifying the material and labor cost involved in it.
▪ Route clerk determines the route through which raw materials has to be passed.
▪ Shop Disciplinarians are concerned with making rules and regulations to ensure
discipline in the organization.
▪ Gang boss makes the arrangement of workers, machines, tools, workers etc.
▪ Speed boss concerned with maintaining the speed and to remove delays in the
production process.
▪ Repair boss concerned with maintenance of machine, tools and equipments.
▪ Inspector is concerned with maintaining the quality of product.
4. Standardization
a. It implies the physical attitude of products should be such that it meets the requirements
& needs of customers.
b. Taylor advocated that tools & equipments as well as working conditions should be
standardized to achieve standard output from workers.
c. Standardization is a means of achieving economics of production.
d. It seems to ensure -
▪ The line of product is restricted to predetermined type, form, design, size,
weight, quality. Etc
▪ There is manufacture of identical parts and components.
▪ Quality & standards have been maintained.
▪ Standard of performance are established for workers at all levels.
5. Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker.
b. The efficient workers are paid more wages than inefficient one.
c. On the other hand, those workers who produce less than standard no. of pieces are paid
wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
d. This system is a source of incentive to workers who improving their efficiency in order
to get more wages.
e. It also encourages inefficient workers to improve their performance and achieve their
standards.
f. It leads to mass production which minimizes cost and maximizes profits.
6. Other Techniques
a. Various other techniques have been developed to create ordeal relationship between
management and workers and also to create better understanding on part of works.
b. Those includes use of instruction cards, strict rules & regulations, graphs, slides, charts
etc, so as to increase efficiency of workers.

Principles of Henri Fayol

Henri Fayol
The Father of Modern Management Theory, Henri Fayol, proposed a theory of general
management which is applicable to all types of fields and administration. He divided all activities
of an industrial enterprise in the following six groups:

1. Technical activities pertaining to production

2. Commercial activities (buying/selling)
3. Financial activities pertaining to the optimum utilization of capital
4. Accounting activities (final accounts, costs, statistics, etc.)
5. Security-related activities (protecting the premises)
6. Managerial activities
Of these, Fayol focused his work on describing and explaining managerial activities. He grouped
managerial functions around the activities of planning, organizing, commanding, coordinating,
and controlling. He suggested the following 14 principles of management:

1. Division of Work: to ensure optimum performance with minimal effort.

2. Authority and Responsibility: Every authority comes with certain responsibilities.
3. Discipline: Employees must respect and obey their superiors.
4. Unity of Command: Every employee must receive orders from only one senior.
5. Unity of Direction: If there are a group of tasks with a common objective, then there must be a
single head and a single plan.
6. Subordination: Individual interest is secondary to the general interest.
7. Remuneration: Wages must afford maximum satisfaction to the employees and the firm.
8. Centralization: The organization must decide about the amount of authority that the higher
levels would retain or dispersed in the organization.
9. Scalar Chain: The relations between the superiors and subordinates should be short-circuited
and not detrimental to the business.
10. Order: All employees and process must have an appointed place.
11. Equity: Managers must strive for equity and equality of treatment while dealing with the
employees. They must display a combination of kindness and justice.
12. Stability of Tenure of Personnel: Managers must try to reduce employee turnover.
13. Initiative: Managers must take initiatives.
14. Espirit de Corps: There must be an emphasis on teamwork and effective communication for
achieving it.

1. Division of Labor
a. Henry Fayol has stressed on the specialization of jobs.
b. He recommended that work of all kinds must be divided & subdivided and allotted to
various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility
a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have
concerned authority.
d. Authority refers to the right of superiors to get exactness from their sub-ordinates
whereas responsibility means obligation for the performance of the job assigned.
 e. There should be a balance between the two i.e. they must go hand in hand.
f. Authority without responsibility leads to irresponsible behavior whereas responsibility
without authority makes the person ineffective.
3. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one boss at a
time.
b. In other words, a sub-ordinate should not receive instructions from more than one
person because -
- It undermines authority
- Weakens discipline
- Divides loyalty
- Creates confusion
- Delays and chaos
- Escaping responsibilities
- Duplication of work
- Overlapping of efforts

c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely

essential.
d. Unity of command provides the enterprise a disciplined, stable & orderly existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan for a
group of activities having similar objectives.
b. Related activities should be grouped together. There should be one plan of action for
them and they should be under the charge of a particular manager.
c. According to this principle, efforts of all the members of the organization should be
directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. In fact, unity of command is not possible without unity of direction.

Basis Unity of command Unity of direction

Meaning It implies that a sub-ordinate should It means one head, one plan for a
receive orders & instructions from only group of activities having similar
one boss. objectives.

Nature It is related to the functioning of It is related to the functioning of

personnel’s. departments, or organization as a
whole.

Necessity It is necessary for fixing responsibility of It is necessary for sound organization.

each subordinates.

Advantage It avoids conflicts, confusion & chaos. It avoids duplication of efforts and
wastage of resources.

Result It leads to better superior sub-ordinate It leads to smooth running of the

relationship. enterprise.
Therefore it is obvious that they are different from each other but they are dependent on each other i.e.
unity of direction is a pre-requisite for unity of command. But it does not automatically comes from
the unity of direction.

5. Equity
a. Equity means combination of fairness, kindness & justice.
b. The employees should be treated with kindness & equity if devotion is expected of
them.
c. It implies that managers should be fair and impartial while dealing with the
subordinates.
d. They should give similar treatment to people of similar position.
e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
f. Equity is essential to create and maintain cordial relations between the managers and
sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, “at times force and harshness might become necessary for
the sake of equity”.
6. Order
a. This principle is concerned with proper & systematic arrangement of things and people.
b. Arrangement of things is called material order and placement of people is called social
order.
c. Material order- There should be safe, appropriate and specific place for every article
and every place to be effectively used for specific activity and commodity.
d. Social order- Selection and appointment of most suitable person on the suitable job.
There should be a specific place for every one and everyone should have a specific
place so that they can easily be contacted whenever need arises.
7. Discipline
a. According to Fayol, “Discipline means sincerity, obedience, respect of authority &
observance of rules and regulations of the enterprise”.
b. This principle applies that subordinate should respect their superiors and obey their
order.
c. It is an important requisite for smooth running of the enterprise.
d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if -
- There are good superiors at all levels.
- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.

8. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
b. It means eagerness to initiate actions without being asked to do so.
c. Fayol advised that management should provide opportunity to its employees to suggest
ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the employees.
c. Wages should be determined on the basis of cost of living, work assigned, financial
position of the business, wage rate prevailing etc.
 d. Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education, medical &
residential facilities to workers.
10. Stability of Tenure
a. Fayol emphasized that employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be fixed.
b. Therefore employees should be appointed after keeping in view principles of
recruitment & selection but once they are appointed their services should be served.
c. According to Fayol. “Time is required for an employee to get used to a new work &
succeed to doing it well but if he is removed before that he will not be able to render
worthwhile services”.
d. As a result, the time, effort and money spent on training the worker will go waste.
e. Stability of job creates team spirit and a sense of belongingness among workers which
ultimately increase the quality as well as quantity of work.
11. Scalar Chain
a. Fayol defines scalar chain as ’The chain of superiors ranging from the ultimate
authority to the lowest”.
b. Every orders, instructions, messages, requests, explanation etc. has to pass through
Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut
is known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to facilitate
quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the help
of E and F to G which will take quite some time and by that time, it may not be worth
therefore a gang plank has been developed between the two.

e. Gang Plank clarifies that management principles are not rigid rather they are very
flexible. They can be moulded and modified as per the requirements of situations
12. Sub-Ordination of Individual Interest to General Interest
a. An organization is much bigger than the individual it constitutes therefore interest of
the undertaking should prevail in all circumstances.
b. As far as possible, reconciliation should be achieved between individual and group
interests.
c. But in case of conflict, individual must sacrifice for bigger interests.
d. In order to achieve this attitude, it is essential that -
 - Employees should be honest & sincere.
- Proper & regular supervision of work.
- Reconciliation of mutual differences and clashes by mutual agreement. For
example, for change of location of plant, for change of profit sharing ratio, etc.

13. Espirit De’ Corps (can be achieved through unity of command)

a. It refers to team spirit i.e. harmony in the work groups and mutual understanding among
the members.
b. Spirit De’ Corps inspires workers to work harder.
c. Fayol cautioned the managers against dividing the employees into competing groups
because it might damage the moral of the workers and interest of the undertaking in the
long run.
d. To inculcate Espirit De’ Corps following steps should be undertaken -
▪ There should be proper co-ordination of work at all levels
▪ Subordinates should be encouraged to develop informal relations among
themselves.
▪ Efforts should be made to create enthusiasm and keenness among subordinates
so that they can work to the maximum ability.
▪ Efficient employees should be rewarded and those who are not up to the mark
should be given a chance to improve their performance.
▪ Subordinates should be made conscious of that whatever they are doing is of
great importance to the business & society.
e. He also cautioned against the more use of Britain communication to the subordinates
i.e. face to face communication should be developed. The managers should infuse team
spirit & belongingness. There should be no place for misunderstanding. People then
enjoy working in the organization & offer their best towards the organization.
14. Centralization & De-Centralization
a. Centralization means concentration of authority at the top level. In other words,
centralization is a situation in which top management retains most of the decision
making authority.
b. Decentralization means disposal of decision making authority to all the levels of the
organization. In other words, sharing authority downwards is decentralization.
c. According to Fayol, “Degree of centralization or decentralization depends on no. of
factors like size of business, experience of superiors, dependability & ability of
subordinates etc.
d. Anything which increases the role of subordinate is decentralization & anything which
decreases it is centralization.
e. Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.
 UNIT-II
Planning: Meaning, Purpose & process, Decision making: Concept & process;
Organizing: Process, Departmentation, Authority & Responsibility relationships,
Decentralization.

CHAPTER-3
PLANNING

3.1 INTRODUCTION TO PLANNING

Planning means looking ahead and chalking out future courses of action to be followed. It is a
preparatory step. It is a systematic activity which determines when, how and who is going to perform a
specific job. Planning is a detailed programme regarding future courses of action. It is rightly said
“Well plan is half done”. Therefore planning takes into consideration available & prospective human
and physical resources of the organization so as to get effective co-ordination, contribution & perfect
adjustment. It is the basic management function which includes formulation of one or more detailed
plans to achieve optimum balance of needs or demands with the available resources.

According to Koontz & O’Donell, “Planning is deciding in advance what to do, how to do and who is
to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible
things to occur which would not otherwise occur”.

3.2 NATURE/ CHARACTERISTICS/ FEATURES OF PLANNING

• Planning is goal-oriented.
• Planning is made to achieve desired objective of business.
• The goals established should have general acceptance otherwise individual efforts & energies
will go misguided and misdirected.
• Planning identifies the action that would lead to desired goals quickly & economically.
• It provides sense of direction to various activities.
• Planning is looking ahead i.e. is done for future.
• It requires peeping in future, analyzing it and predicting it. Thus planning is based on
forecasting.
• A plan is a synthesis of forecast. It is a mental predisposition for things to happen in future.
• Planning is an intellectual process - Planning is a mental exercise involving creative thinking,
sound judgment and imagination.
• It is not a mere guesswork but a rotational thinking.
• A manager can prepare sound plans only if he has sound judgment, foresight and
imagination.
• Planning is always based on goals, facts and considered estimates.
• Planning involves choice & decision making. Planning essentially involves choice among
various alternatives. Therefore, if there is only one possible course of action, there is no need
of planning because there is no choice. Thus, decision making is an integral part of planning.
A manager is surrounded by no. of alternatives. He has to pick the best depending upon
requirements & resources of the enterprises.
• Planning is the primary function of management / Primacy of Planning. Planning lays
foundation for other functions of management. It serves as a guide for organizing, staffing,
directing and controlling.
 • All the functions of management are performed within the framework of plans laid out.
Therefore planning is the basic or fundamental function of management.
• Planning is a Continuous Process. Planning is a never ending function due to the dynamic
business environment.
• Plans are also prepared for specific period f time and at the end of that period, plans are
subjected to revaluation and review in the light of new requirements and changing conditions.
• Planning never comes into end till the enterprise exists; issues, problems may keep cropping
up and they have to be tackled by planning effectively.
• Planning is all Pervasive. It is required at all levels of management and in all departments of
enterprise.
• Of course, the scope of planning may differ from one level to another. The top level may be
more concerned about planning the organization as a whole whereas the middle level may be
more specific in departmental plans and the lower level plans implementation of the same.
• Planning is designed for efficiency. Planning leads to accomplishment of objectives at the
minimum possible cost. It avoids wastage of resources and ensures adequate and optimum
utilization of resources. A plan is worthless or useless if it does not value the cost incurred on
it. Therefore planning must lead to saving of time, effort and money. Planning leads to proper
utilization of men, money, materials, methods and machines.
• Planning is Flexible. Changes can be made to existing plans.
• Planning is done for the future. Since future is unpredictable, planning must provide enough
room to cope with the changes in customer’s demand, competition, govt. policies etc. Under
changed circumstances, the original plan of action must be revised and updated to make it
more practical.

3.3 PURPOSE /AIM OF PLANNING

Planning facilitates management by objectives. Planning begins with determination of objectives. It

highlights the purposes for which various activities are to be undertaken. In fact, it makes objectives
more clear and specific. Planning helps in focusing the attention of employees on the objectives or
goals of enterprise. Without planning an organization has no guide.

Purpose of planning process is listed below:

• Planning compels manager to prepare a Blue-print of the courses of action to be followed for
accomplishment of objectives.
• Therefore, planning brings order and rationality into the organization.
• Planning minimizes uncertainties. Business is full of uncertainties. There are risks of various
types due to uncertainties. Planning helps in reducing uncertainties of future as it involves
anticipation of future events.
• Although future cannot be predicted with cent percent accuracy but planning helps
management to anticipate future and prepare for risks by necessary provisions to meet
unexpected turn of events.
• Planning facilitates co-ordination.
• Planning revolves around organizational goals. All activities are directed towards common
goals.
• It avoids duplication of efforts. In other words, it leads to better co-ordination.
• Planning improves employee’s moral.
• Planning creates a healthy attitude towards work environment which helps in boosting
employees moral and efficiency.
• Planning helps in achieving economies.
• Planning facilitates controlling.
• Planning facilitates existence of certain planned goals and standard of performance.
Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys
as a result, uncertainties are minimized to a great extent. There is an integrated effort throughout the
enterprise in various departments and groups. It helps in finding out problems of work performance
and aims at rectifying the same. Planning creates an atmosphere of order and discipline in
organization. Employees know in advance what is expected of them and therefore conformity can be
achieved easily. This encourages employees to show their best and also earn reward for the same.

Effective planning secures economy since it leads to orderly allocation ofresources to various
operations. It also facilitates optimum utilization of resources which brings economy in operations. It
also avoids wastage of resources by selecting most appropriate use that will contribute to the objective
of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be
minimized. At the same time it ensures regular supply for the production department, that is, overall
efficiency. It provides basis of controlling.

We cannot think of an effective system of controlling without existence of well thought out plans.

Planning provides pre-determined goals against which actual performance is compared.

In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the
fruit. Planning provides competitive edge. Planning provides competitive edge to the enterprise over
the others which do not have effective planning. This is because of the fact that planning may involve
changing in work methods, quality, quantity designs, extension of work, redefining of goals, etc.

With the help of forecasting not only the enterprise secures its future but at the same time it is able to
estimate the future motives of it’s competitor which helps in facing future challenges.

Therefore, planning leads to best utilization of possible resources, improves quality of production and
thus the competitive strength of the enterprise is improved. Planning encourages innovations.

In the process of planning, managers have the opportunities of suggesting ways and means of
improving performance. Planning is basically a decision making function which involves creative
thinking and imagination that ultimately leads to innovation of methods and operations for growth and
prosperity of the enterprise.

3.4 DISADVANTAGES/ DRAWBACKS/ LIMITATIONS OF PLANNING

The drawbacks of the planning process is categorised as Internal and External limitations. They are
discussed as follows:

(A) Internal Limitations - There are several limitations of planning. Some of them are inherit in
the process of planning like rigidity and other arise due to shortcoming of the techniques of
planning and in the planners themselves.
• Rigidity - Planning has tendency to make administration inflexible.
Planning implies prior determination of policies, procedures and programmes and a strict
adherence to them in all circumstances. There is no scope for individual freedom. The
development of employees is highly doubted because of which management might have
faced lot of difficulties in future. Planning therefore introduces inelasticity and discourages
individual initiative and experimentation.
• Misdirected Planning - Planning may be used to serve individual interests rather than the
interest of the enterprise. Attempts can be made to influence setting of objectives,
formulation of plans and programmes to suit one’s own requirement rather than that of
 whole organization. Machinery of planning can never be freed of bias. Every planner has
his own likes, dislikes, preferences, attitudes and interests which are reflected in planning.
• Time consuming- Planning is a time consuming process because it involves collection of
information, its analysis and interpretation thereof. This entire process takes a lot of time
specially where there are a number of alternatives available. Therefore planning is not
suitable during emergency or crisis when quick decisions are required.
• Probability in planning - Planning is based on forecasts which are mere estimates about
future. These estimates may prove to be inexact due to the uncertainty of future. Any
change in the anticipated situation may render plans ineffective. Plans do not always reflect
real situations inspite of the sophisticated techniques of forecasting because future is
unpredictable. Thus, excessive reliance on plans may prove to be fatal.
• False sense of security- Elaborate planning may create a false sense of security to the
effect that everything is taken for granted. Managers assume that as long as they work as
per plans, it is satisfactory. Therefore they fail to take up timely actions and an opportunity
is lost. Employees are more concerned about fulfilment of plan performance rather than any
kind of change.
• Expensive - Collection, analysis and evaluation of different information, facts and
alternatives involves a lot of expense in terms of time, effort and money. According to
Koontz and O’Donell,’ Expenses on planning should never exceed the estimated benefits
from planning. ’

(B) External Limitations of Planning

• Political Climate- Change of government from Congress to some other political party, etc.
• Labor Unions- Strikes, lockouts, agitations.
• Technological changes- Modern techniques and equipments, computerization.
• Policies of competitors- E.g. Policies of Coca Cola and Pepsi.
• Natural Calamities- Earthquakes and floods.
• Changes in demand and prices- Change in fashion, change in tastes, change in income
level, demand falls, price falls, etc.

3.5 TYPES OF PLANNING

The planning may be classified into different categories on the following basis:

(A) Nature of Planning:

Formal Planning Informal Planning

i. Formal Planning:
Planning is formal when it is reduced to writing. When the numbers of actions are large it is good to
have a formal plan since it will help adequate control.

The term formal means official and recognised. Any planning can be done officially to be followed or
implemented. Formal planning is aims to determine and objectives of planning. It is the action that
determines in advance what should be done.
Advantages:
1. Proper Cooperation among employees,
2. Unity of Action,
3. Economy,
4. Proper coordination and control,
5. Choosing the right objectives, and
6. Future plan.
 ii. Informal Planning:
An informal plan is one, which is not in writing, but it is conceived in the mind of the manager.
Informal planning will be effective when the number of actions is less and actions have to be taken in
short period.

(B) Duration of planning:

Short term planning Long term planning

i. Short term Planning:

Short term planning is the planning which covers less than two years. It must be formulated in a
manner consistent with long-term plans. It is considered as tactical planning. Short-term plans are
concerned with immediate future; it takes into account the available resources only and is concerned
with the current operations of the business.
These may include plans concerning inventory planning and control, employee training, work methods
etc.
Advantages:
1. It can be easily adjustable.
2. Changes can be made and incorporated.
3. Easy to Gauge.
4. Only little resources required.
Disadvantages:
1. Very short period-left over things will be more.
2. Difficult to mobiles the resources.
3. Communication cycle will not be completed.

ii. Long-Term Planning:

Long-term planning usually converse a period of more than five years, mostly between five and fifteen
years. It deals with broader technological and competitive aspects of the organisation as well as
allocation of resources over a relatively long time period. Long-term planning is considered as
strategic planning.
Short-term planning covers the period of one year while long term planning covers 5-15 years. In
between there may be medium-term plans. Usually, medium term plans are focusing on between two
and five years. These may include plan for purchase of materials, production, labour, overhead
expenses and so on.
Advantages:
1. Sufficient time to plan and implement.
2. Effective control.
3. Adjustment and changes may be made gradually.
4. Periodic evaluation is possible.
5. Thrust areas can be identified easily.
6. Weakness can be spotted and rectified then and there.
Disadvantages:
1. Prediction is difficult.
2. Full of uncertainties.
3. Objectives and Targets may not be achieved in full.
4. More resources required.

(B) Levels of Management:

Strategic Planning Intermediate Planning

Operational Planning

i. Strategic Planning:
The strategic planning is the process of determining overall objectives of the organisation and the
policies and strategies adopted to achieve those objectives. It is conducted by the top management,
which include chief executive officer, president, vice-presidents, General Manger etc. It is a long range
planning and may cover a time period of up to 10 years.

It basically deals with the total assessment of the organisation’s capabilities, its strengths and its
weaknesses and an objective evaluation of the dynamic environment. The planning also determines the
direction the company will be taking in achieving these goals.

ii. Intermediate Planning:

Intermediate planning cover time frames of about 6 months to 2 years and is contemplated by middle
management, which includes functional managers, department heads and product line mangers. They
also have the task of polishing the top management strategic plans.

The middle management will have a critical look at the resources available and they will determine the
most effective and efficient mix of human, financial and material factors. They refine the broad
strategic plans into more workable and realistic plans.

iii. Operational Planning:

Operational planning deals with only current activities. It keeps the business running. These plans are
the responsibility of the lower management and are conducted by unit supervisors, foremen etc. These
are short-range plans covering a time span from one week to one year.

These are more specific and they determine how a specific job is to be completed in the best possible
way. Most operational plans .ire divided into functional areas such as production, finance, marketing,
personnel etc.

Thus even though planning at all levels is important, since all levels are integrated into one, the
strategic planning requires closer observation since it establishes the direction of the organisation.

(C) Use:

Standing Plan Single-use Plan

i. Standing Plan:
Standing plan is one, which is designed to be used over and over again. Objectives, policies
procedures, methods, rules and strategies are included in standing plans. Its nature is mechanical. It
helps executives to reduce their workload. Standing plan is also called routine plan. Standing or
routine plan is generally long range.

ii. Single Use Plan:

Single use plan is one, which sets a course of action for a particular set of circumstances and is used up
once the particular goal is achieved. They may include programme, budgets, projects and schedules. It
is also called specific planning. Single use plan is short range.

3.6 PROCESS OF PLANNING

Planning requires a systematic approach. The effective planning process is described as an eight step
process of planning.

Setting Objectives

Considering the
Follow Up/ Appraisal of Plans
planning premises

Implementation of the Plan along Identifying alternative

with supportive plans course of action

Select the best alternative and Comparison of

formulate the supportive plans alternatives

(A) Setting Objectives

Objectives are the goals which the management tries to achieve. The objectives are the end products
and all energies are diverted to achieve these goals. Goals are a thread which binds the whole
company. Planning starts with the determination of objectives. The tie between planning and
objectives helps employees to understand their duties. Objectives are the guides of employees. It is
essential that objectives should be properly formulated and communicated to all members of the
organization.
Planning starts with the setting of goals and objectives to be achieved - Objectives provide a rationale
for undertaking various activities as well as indicate direction of efforts. Moreover objectives focus the
attention of managers on the end results to be achieved. As a matter of fact, objectives provide nucleus
to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous
language. Otherwise the activities undertaken are bound to be ineffective. As far as possible,
objectives should be stated in quantitative terms. For example, Number of men working, wages given,
units produced, etc. But such an objective cannot be stated in quantitative terms like performance of
quality control manager, effectiveness of personnel manager. Such goals should be specified in
qualitative terms. Hence objectives should be practical, acceptable, workable and achievable.

(B)Considering the Planning Premises

Planning is always for uncertain future. Though nothing may be certain in the coming period but still
certain assumptions will have to be made for formulating plans. Forecasts are essential for planning
even if all may not prove correct. A forecast means the assumption of future events. The behaviour of
certain variables is forecasted for constituting planning premises. Establishment of Planning Premises -
Planning premises are the assumptions about the lively shape of events in future. They serve as a basis
of planning. Establishment of planning premises is concerned with determining where one tends to
deviate from the actual plans and causes of such deviations. It is to find out what obstacles are there in
the way of business during the course of operations. Establishment of planning premises is concerned
to take such steps that avoid these obstacles to a great extent. Planning premises may be internal or
external. Internal includes capital investment policy, management labor relations, philosophy of
management, etc. whereas external includes socio- economic, political and economical changes.
Internal premises are controllable whereas external are non- controllable. Forecasts will generally be
made for the following:
(a) The expectation of demand for the products.
(b) The likely volume of production.
(c) The anticipation of costs and the likely prices at which products will be marketed.
(d) The supply of labour raw materials etc.
(e) The economic policies of the government.
(f) The changing pattern of consumer preferences.
(g) The impact of technological changes on production processes.
(h) The sources for supply of funds.
It is on the basis of these forecasts that planning is undertaken. The success or failure of planning will
depend upon the forecasts for various factors mentioned above. If the forecasts are accurate then
planning will also be reliable. The effect of various factors should be carefully weighed.

(C) Identifying Alternatives Course of Action

The next step in planning will be choosing the best course of action. There are a number of ways of
doing a thing. The planner should study all the alternatives and then a final selection should be made.
Best results will be achieved only when best way of doing a work is selected. According to Koontz and
O’Donnell, “There is seldom a plan made for which reasonable alternatives do not exist.” All the pros
and cons of methods should be weighed before a final selection. When forecast are available and
premises are established, a number of alternative course of actions have to be considered.

(D)Comparison of Alternatives
After choosing a course of action, the next step will be to make an evaluation of those courses of
actions. Evaluation will involve the study of performance of various actions. Various factors will be
weighed against each other. A course of action may be suitable but it may involve huge investments
and the other may involve fewer amounts but it may not be very profitable. The evaluation of various
action patterns is essential for proper planning. For this purpose, each and every alternative will be
evaluated by weighing its pros and cons in the light of resources available and requirements of the
organization. The merits, demerits as well as the consequences of each alternative must be examined
before the choice is being made. After objective and scientific evaluation, the best alternative is
chosen. The planners should take help of various quantitative techniques to judge the stability of an
alternative.

(E)Selecting the best alternative

This step involves selecting of most desirable course of action. This is the point at which the plan is
adopted the real point of decision making. The various alternatives identified are evaluated and
compared in terms of their expected costs and benefits. Many quantitative techniques are available to
evaluate alternatives. After evaluating the various alternatives the best alternative should be selected
for implementation.

(F) Formulating the Supportive Plans

Once a main plan is formulated then a number of supportive plans are required. In fact secondary plans
are meant for the implementation of principal plan. For example, once production plan is decided then
a number of plans for procurement of raw materials, purchase of plant and equipment, recruitment of
personnel will be required. All secondary plans will be a part of the main plan. Derivative plans are the
sub plans or secondary plans which help in the achievement of main plan. Secondary plans will flow
from the basic plan. These are meant to support and speed up the achievement of basic plans. These
detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if
profit maximization is the main aim of the enterprise, derivative plans will include sales maximization,
production maximization, and cost minimization. Derivative plans indicate time schedule and
sequence of accomplishing various tasks.

(G) Implementation of Plans

The last step in planning process is the implementation part. The planning should be put into action so
that business objectives may be achieved. The implementation will require establishment of policies,
procedures, standards and budgets. These tools will enable a better implementation of plans. After the
plans have been determined, it is necessary rather advisable to take subordinates or those who have to
implement these plans into confidence. The purposes behind taking them into confidence are:-
• Subordinates may feel motivated since they are involved in decision making process.
• The organization may be able to get valuable suggestions and improvement in formulation as well
as implementation of plans.
• Also the employees will be more interested in the execution of these plans.

(H) Follow up/Appraisal of plans

After choosing a particular course of action, it is put into action. After the selected plan is
implemented, it is important to appraise its effectiveness. This is done on the basis of feedback or
information received from departments or persons concerned. This enables the management to correct
deviations or modify the plan. This step establishes a link between planning and controlling function.
The follow up must go side by side the implementation of plans so that in the light of observations
made, future plans can be made more realistic.

3.7 REQUIREMENTS/ ESSENTIALS OF EFFECTIVE PLANNING

(A) Top Management Support:

Planning should start from the top. As Koontz, O'Donnell and Weihrich have pointed out, "the
example and drive of top managers are the most important single force in planning".
Top management must lay down broad objectives of the enterprise and encourage and support planned
operations at different levels of the organisation.

(B) Involvement of subordinates:

There should be wide participation in planning from the very formulation stage. In particular, those
who will be required to implement the plan should be associated with its preparation. This will make
planning more realistic and motivate the subordinate better.

(C) Proper assessment of resources:

The resources available within the organisation should be properly assessed while making a plan. This
involves maintenance of continuous inventory of physical facilities, manpower and other inputs.

(D) Management Information System:

Flow of information should be organized as part of a full-fledged information system. It implies that
collection, compilation, classification and dissemination of data should be done as regular activities
instead of on ad-hoc basis. There should also be provision for prompt feedback information.

(E) Awareness and acceptance of change:

Business now-a-days is much dynamic. In order to survive, all enterprises must move with the time.
As Koontz 0' Donnell and Weibrich have emphasized, "it must be an objective of managers to build in
their organizations an awareness of change, an ability to forecast in and a welcoming attitude towards
it".
 CHAPTER-4
DECISION MAKING
4.1 INTRODUCTION TO DECISION MAKING

Decision making is a daily activity for any human being. There is no exception about that. When it
comes to business organizations, decision making is a habit and a process as well. Effective and
successful decisions make profit to the company and unsuccessful ones make losses. Therefore,
corporate decision making process is the most critical process in any organization.
In the decision making process, we choose one course of action from a few possible alternatives. In
the process of decision making, we may use many tools, techniques and perceptions. In addition, we
may make our own private decisions or may prefer a collective decision. Usually, decision making is
hard. Majority of corporate decisions involve some level of dissatisfaction or conflict with another
party.

4.2 NATURE/ CHARACTERISTICS/ FEATURES OF DECISION-MAKING

A decision is always related to some problem, difficulty or conflict. Decisions help in solving
problems or resolving conflicts. There are always differences of opinions, judgments, etc. Managerial
decision helps in maintaining group effectiveness. All problems may not require decision- making but
merely the supply of information may be sufficient. For example, when will different groups report for
re-orientation? The supply of information about training programme may be enough. Decision
problems necessitate a choice from different alternatives. A number of possibilities are selected before
making a final selection. Decision-making requires something more than a selection. The material
requiring a decision may be available but still a decision may not be reached. A decision needs some
sort of prediction for the future on the basis of past and present available information. The effect of a
decision is to be felt in future so it requires proper analysis of available material and a prediction for
the future. If decision premises do not come true, then decision itself may be wrong.

1. Rational Thinking
It is invariably based on rational thinking. Since the human brain with its ability to learn,
remember and relate many complex factors, makes the rationality possible.
2. Process
It is the process followed by deliberations and reasoning.
3. Selective
It is selective, i.e. it is the choice of the best course among alternatives. In other words, decision
involves selection of the best course from among the available alternative courses that are
identified by the decision-maker.
4. Purposive
It is usually purposive i.e. it relates to the end. The solution to a problem provides an effective
means to the desired goal or end.
5. Positive:
Although every decision is usually positive sometimes certain decisions may be negative and
may just be a decision not to decide.
6. Commitment
Every decision is based on the concept of commitment. In other words, the Management is
committed to every decision it takes for two reasons- viz.,
(i) it promotes the stability of the concern and
(ii) every decision taken becomes a part of the expectations of the people involved in the
organisation.
Decisions are usually so much inter-related to the organisational life of an enterprise that any
change in one area of activity may change the other areas too. As such, the Manager is
 committed to decisions not only from the time that they are taken but upto their successfully
implementation.
7. Evaluation
Decision-making involves evaluation in two ways, viz.,
(i) the executive must evaluate the alternatives, and
(ii) he should evaluate the results of the decisions taken by him.

4.3 PROCESS OF DECISION MAKING

Following are the important steps of the decision making process. Each step may be supported by
different tools and techniques.

Step 1: Identification of the purpose of the decision

In this step, the problem is thoroughly analysed. There are a couple of questions one should ask when
it comes to identifying the purpose of the decision.

• What exactly is the problem?

• Why the problem should be solved?
• Who are the affected parties of the problem?
• Does the problem have a deadline or a specific time-line?
Step 2: Information gathering
A problem of an organization will have many stakeholders. In addition, there can be dozens of factors
involved and affected by the problem.
In the process of solving the problem, you will have to gather as much as information related to the
factors and stakeholders involved in the problem.
Step 3: Principles for judging the alternatives
In this step, the baseline criteria for judging the alternatives should be set up. When it comes to
defining the criteria, organizational goals as well as the corporate culture should be taken into
consideration. As an example, profit is one of the main concerns in every decision making process.
Companies usually do not make decisions that reduce profits, unless it is an exceptional case.
Likewise, baseline principles should be identified related to the problem in hand.
Step 4: Brainstorm and analyse the different choices
For this step, brainstorming to list down all the ideas is the best option. Before the idea generation
step, it is vital to understand the causes of the problem and prioritization of causes.
For this, you can make use of Cause-and-Effect diagrams and Pareto Chart tool. Cause-and-Effect
diagram helps you to identify all possible causes of the problem and Pareto chart helps you to
prioritize and identify the causes with highest effect.
Then, you can move on generating all possible solutions (alternatives) for the problem in hand.
Step 5: Evaluation of alternatives
Use your judgement principles and decision-making criteria to evaluate each alternative. In this step,
experience and effectiveness of the judgement principles come into play. You need to compare each
alternative for their positives and negatives.
Step 6: Select the best alternative
Once you go through from Step 1 to Step 5, this step is easy. In addition, the selection of the best
alternative is an informed decision since you have already followed a methodology to derive and
select the best alternative.
Step 7: Execute the decision
Convert your decision into a plan or a sequence of activities. Execute your plan by yourself or with
the help of subordinates.
Step 8: Evaluate the results
Evaluate the outcome of your decision. See whether there is anything you should learn and then
correct in future decision making. This is one of the best practices that will improve your decision-
making skills.
Conclusion
When it comes to making decisions, one should always weigh the positive and negative business
consequences and should favour the positive outcomes.
This avoids the possible losses to the organization and keeps the company running with a sustained
growth. Sometimes, avoiding decision making seems easier; especially, when you get into a lot of
confrontation after making the tough decision.
ORGANISING

INTRODUCTION

Organising in a general sense means systematic arrangement of activities. In this sense, organising is
done by each individual. However, organising as a process of management essentially relates to sub-
dividing and grouping of activities.

Steps in the process of organising

Organising is a “process of defining the essential relationships among people, tasks and activities in
such a way that all the organisation’s resources are integrated and coordinated to accomplish its
objectives efficiently and effectively”. — Pearce and Robinson

The process of organising consists of the following steps:

1. Determining the activities to be performed to achieve the objectives of the organisation.

2. Identification of major functions to which these activities relate.

3. Grouping and sub-dividing the activities within each function on the basis of similarity or
relatedness.

4. Establishing relationship among individuals and groups.

1. Determining the activities to be performed to achieve the objectives of the organisation:

Business organisations undertake economic activities with a view to earning profit. They may perform
manufacturing, trading or service activity. In a manufacturing organisation, production and sales are
the two major activities. In a trading organisation, purchases and sales are the two main activities.
Service organisations provide services such as transportation to their customers. In carrying out these
major activities, business units have to perform a number of other activities such as producing,
financing, marketing, accounting, recruiting employees, etc. Since the objectives of different
organisations are different, it is therefore, necessary to determine the activities of each organisation
separately.

2. Identification of major functions to which these activities relate: The next step is to identify the
major functions to which these activities relate. In a manufacturing organisation, production, selling,
finance and personnel are the major functions. If the amount of work to be done in connection with
each of these functions is large, separate departments may be created for each of these functions.
Managerial positions will have to be created to supervise the activities of these departments. At this
stage, a list of activities relating to each function must be prepared.

3. Grouping and sub-dividing the work within each function: In this step, it is decided how best the
activities can be grouped on the basis of similarity or relatedness. The activities of a production
department, for example, can be divided into a number of workshops where production will actually
take place. Besides, separate sections may be created for such production related activities as quality
control and repairs. The activities of other departments can similarly be sub-divided. This division and
subdivision of activities goes on till individual positions have been created for performing all types of
work in an organisation. The reasons of dividing and sub-dividing functions and activities are as
follows— (i) The total work may be so large that it cannot be done by a single individual or by a few
persons. (ii) If the work is divided into smaller units, it becomes easy to assign work to individuals
who have the necessary skill and knowledge to perform the work efficiently.

4. Establishing relationship among individuals and groups: Managers divide activities to increase
efficiency and to ensure that work is properly done. The activities which are performed by persons
holding different positions must be related. The responsibility, authority and accountability of each
person must be well defined. This is necessary to avoid conflict and confusion and to ensure that work
is performed as planned. Establishing relationships among individuals and groups is, therefore, an
important aspect of the organising process.

It would be useful at this stage to explain the meaning of responsibility, authority, and accountability.

(i) Responsibility: Responsibility is the obligation of a subordinate to perform the assigned duties.
When a subordinate accepts duties, he has to perform those duties in the manner desired by the
superior. Duties are assigned to subordinates when a manager has to share the work with them.
(ii) Authority: When a person is given certain duties to perform, he must be given necessary
authority also. Otherwise, he will not be able to do the work. A typist, for example, cannot do
the typing job if he is not given the right to use facilities such as a place to sit in, a table, a
chair, a typewriter, typing and carbon papers. etc. Authority includes the right to take decision,
right to issue orders and the right to take action if orders are not carried out. An engineer
responsible for the construction of a bridge has the authority to command his subordinates,
procure the needed material, seek assistance of architects and other experts in the completion
of the project. No person should be given any authority unless certain duties have been
assigned to him. Authority should always follow responsibility.
(iii) Accountability: After assigning duties and granting authority, one more relationship becomes
necessary. This is the relationship of accountability. Accountability means answerability. That
is, each person has to report to his superior how the work has been done and how authority has
been used. Accountability is always upward. Each subordinate is accountable to his superior
who in turn is accountable to his own superior. In this way, every person becomes accountable
to top management. Accountability ensures that the work is done as planned and authority is
properly used. An important principle of accountability is the principle of single accountability.
A person should be accountable to one superior only. If a person is accountable to two or more
persons, he may avoid the work or he may be in difficulty to decide whom to obey first.

Characteristics
The following are the important characteristics of organization.

• Specialization and division of work. The entire philosophy of organization is centered on the
concepts of specialization and division of work. The division of work is assigning responsibility
for each organizational component to a specific individual or group thereof. It becomes
specialization when the responsibility for a specific task lies with a designated expert in that field.
The efforts of the operatives are coordinated to allow the process at hand to function correctly.
Certain operatives occupy positions of management at various points in the process to ensure
coordination.
• Orientation towards goals. Every organization has its own purposes and objectives. Organizing is
the function employed to achieve the overall goals of the organization. Organization harmonizes
the individual goals of the employees with overall objectives of the firm.
• Composition of individuals and groups. Individuals form a group and the groups form an
organization. Thus, organization is the composition of individual and groups. Individuals are
grouped into departments and their work is coordinated and directed towards organizational goals.
• Continuity. An organization is a group of people with a defined relationship in which they work
together to achieve the goals of that organization. This relationship does not come to end after
completing each task. Organization is a never ending process.

Importance

• Helps to achieve organizational goal. Organization is employed to achieve the overall objectives
of business firms. Organization focuses attention of individuals objectives towards overall
objectives.
• Optimum use of resources. To make optimum use of resources such as men, material, money,
machine and method, it is necessary to design an organization properly. Work should be divided
and right people should be given right jobs to reduce the wastage of resources in an organization.
• To perform managerial function. Planning, Organizing, Staffing, Directing and Controlling
cannot be implemented without proper organization.
• Facilitates growth and diversification. A good organization structure is essential for expanding
business activity. Organization structure determines the input resources needed for expansion of a
business activity similarly organization is essential for product diversification such as establishing
a new product line.
• Humane treatment of employees. Organization has to operate for the betterment of employees
and must not encourage monotony of work due to higher degree of specialization. Now,
organization has adapted the modern concept of systems approach based on human relations and it
discards the traditional productivity and specialization approach.

Applications
Organizing, in companies point of view, is the management function that usually follows after
planning. And it involves the assignment of tasks, the grouping of tasks into departments and the
assignment of authority with adequate responsibility and allocation of resources across the
organization to achieve common goals.
Structure
The framework in which the organization defines how tasks are divided, resources are deployed, and
departments are coordinated.

1. A set of formal tasks assigned to individuals and departments.

2. Formal reporting relationships, including lines of authority, decision responsibility, number of
hierarchical levels and span of managers control.
3. The design of systems to ensure effective coordination of employees across departments.
Work specialization
Work specialization (also called division of labour or job specialization) is the degree to which
organizational tasks are sub-divided into individual jobs. It may increase the efficiency of workers, but
with too much specialization, employees may feel isolated and bored. Many organizations enlarge jobs
or rotate assigned tasks to provide greater challenges.
Chain of command
Chain of command is the vertical lines of a command structure that is used for the purposes of overall
responsibility and accountability in the achieving of stated goals and objectives through the use of
orders one direction and reports of compliance in the other direction. Chain of command differs from
horizontal lines in an organization which are basically the communication and coordinating lines of the
organization.
Authority, responsibility, and accountability

• Authority is a manager's formal and legitimate right to make decisions, issue orders, and allocate
resources to achieve organizationally desired outcomes.
• Responsibility means an employee's duty to perform assigned task or activities.
• Accountability means that those with authority and responsibility must report and justify task
outcomes to those above them in the chain of command.
Delegation
Delegation is the process managers use to transfer authority and responsibility to positions below
them. Organizations today tend to encourage delegation from highest to lowest possible levels.
Delegation can improve flexibility to meet customers’ needs and adaptation to competitive
environments. Managers often find delegation difficult reasons for delegation(when a manager is
advised to carry out delegation) 1 where there is need to carry out more important work that reflect
organization's objective 2. where there is need to give more training to his supervisors, juniors,en
employees as well 3.if there is need of improvement/acquisition of skills by people in that organization
then the manager will find well to delegate authority 4.where there is need to save time, utilize
organizational resources then the manager finds is way best to delegate
Types of authority (and responsibility)
Line authority managers have the formal power to direct and control immediate subordinates. The
superior issues orders and is responsible for the result and the subordinate obeys and is responsible
only for executing the order according to instructions.
Functional authority is where managers have formal power over a specific subset of activities. For
instance, the Production Manager may have the line authority to decide whether and when a new
machine is needed but the Controller demands that a Capital Expenditure Proposal is submitted first,
showing that the investment will have a yield of at least x%; or, a legal department may have
functional authority to interfere in any activity that could have legal consequences. This authority
would not be functional but it would rather be staff authority if such interference is "advice" rather
than "order".
Staff authority is granted to staff specialists in their areas of expertise. It is not a real authority in the
sense that a staff manager does not order or instruct but simply advises, recommends, and counsels in
the staff specialists' area of expertise and is responsible only for the quality of the advice (to be in line
with the respective professional standards etc.) It is a communication relationship with management. It
has an influence that derives indirectly from line authority at a higher level.
Line and Staff Authority is the combination of Line organization and Staff organization. Such
organization follows both the principles of scalar chain of command and there is a provision for
specialized activities to be performed by staff officers who act in an advisory capacity
Span of management
Categories:

• Direct single relationship.

• Direct group relationships.
• Cross relationship.
Factors influencing larger span of management.

1. Work performed by subordinates is stable and routine.

2. Subordinates perform similar work tasks.
3. Subordinates are concentrated in a single location.
 4. Subordinates are highly trained and need little direction in performing tasks.
5. Rules and procedures defining task activities are available.
6. Support systems and personnel are available for the managers.
7. Little time is required in non-supervisory activities such as coordination with other departments
or planning.
8. Managers' personal preferences and styles favor a large span.
Tall versus flat structure –

• Tall - A management structure characterized by an overall narrow span of management and a

relatively large number of hierarchical levels. Tight control. Reduced communication overhead.

• Flat - A management structure characterized by a wide span of control and relatively few
hierarchical levels. Loose control. Facilitates delegation.
Centralization, decentralization, and formalization

• Centralization - The location of decision-making authority near top organizational levels.

• Decentralization - The location of decision-making authority near lower organizational levels.
• Formalization - The written documentation used to direct and control employees.
Departmentalization
Departmentalization is the basis on which individuals are grouped into departments and departments
into total organizations. Approach options include:

1. Functional - by common skills and work tasks

2. Divisional - common product, program or geographical location
3. Matrix - combination of Functional and Divisional
4. Team - to accomplish specific tasks
5. Network - departments are independent providing functions for a central core breaker
Importance of organizing

• Organizations are often troubled by how to organize, particularly when a new strategy is developed
• Changing market conditions or new technology requires change
• Organizations seek efficiencies through improvements in organizing

Definition of Formal Organization

By the term formal organisation, we mean a structure that comes into existence when two or more
people come together for a common purpose, and there is a legal & formal relationship between them.
The formation of such an organisation is deliberate by the top level management. The organisation has
its own set of rules, regulations, and policies expressed in writing.

The basic objective of the establishment of an organisation is the attainment of the organisation’s goal.
For this purpose, work is assigned, and authorities are delegated to each member and the concept of
division of labour and specialisation of workers are applied and so the work is assigned on the basis of
their capabilities. The job of each is fixed, and roles, responsibilities, authority and accountability
associated with the job is clearly defined.

In addition to this, there exists a hierarchical structure, which determines a logical authority
relationship and follows a chain of command. The communication between two members is only
through planned channels.

Definition of Informal Organization

An informal organisation is formed within the formal organisation; that is a system of interpersonal
relationships between individuals working in an enterprise, that forms as a result of people meet,
interact and associate with one another. The organisation is created by the members spontaneously, i.e.
created out of socio-psychological needs and urge of people to talk. The organisation is featured by
mutual aid, cooperation, and companionship among members.

In an informal organisation, there are no defined channels of communication, and so members can
interact with other members freely. They work together in their individual capacities and not
professional.

There is no defined set of rules and regulations that govern the relationship between members. Instead,
it is a set of social norms, connections, and interaction. The organisation is personal i.e. no rules and
regulations are imposed on them, their opinions, feelings, and views are given respect. However, it is
temporary in nature, and it does not last longer.

Comparison Chart

BASIS FOR FORMAL ORGANIZATION INFORMAL ORGANIZATION

COMPARISON

Meaning An organization type in which the job An organization formed within the formal
of each member is clearly defined, organization as a network of interpersonal
whose authority, responsibility and relationship, when people interact with
accountability are fixed is formal each other, is known as informal
organization. communication.

Creation Deliberately by top management. Spontaneously by members.

Purpose To fulfill, the ultimate objective of the To satisfy their social and psychological
organization. needs.

Nature Stable, it continues for a long time. Not stable

Communication Official communication Grapevine

Control Rules and Regulations Norms, values and beliefs

mechanism

Focus on Work performance Interpersonal relationship

Authority Members are bound by hierarchical All members are equal.

structure.

Size Large Small

DEPARTMENTATION

Meaning of Departmentation:
Departmentation is the foundation of organisation structure, that is, organisation structure depends
upon departmentation. Departmentation means division of work into smaller units and their re-
grouping into bigger units (departments) on the basis of similarity of features.As the organisation
grows in size, the work is divided into units and sub-units. Departments are created and activities of
similar nature are grouped in one unit. Each department is headed by a person known as departmental
manager.

Departmentation as is defined follows:

Louis A. Allen:
“Divisionalisation is a means of dividing the large and monolithic functional organisation into smaller,
flexible administrative units”.

Pearce and Robinson:

“Departmentalisation is the grouping of jobs, processes and resources into logical units to perform
some organisational task.”

Terry and Franklin:

“Departmentalisation is the clustering of individuals into units and of units into departments and larger
units in order to facilitate achieving organisational goals.”

Importance of Departmentation
The following points highlight the importance of departmentation:
1. Organisation structure:
Division of work into units and sub-units creates departments. Supervisors and managers are appointed
to manage these departments. People are placed in different departments according to their specialised
skills. The departmental heads ensure efficient functioning of their departments within the broad
principles of organisation (scalar chain, unity of command, unity of direction etc.).

Thus, organisation structure is facilitated through departmentation. If there are no departments, it will
be difficult to keep track of who is doing what and who is accountable to whom.

Departmentation creates departments, assigns tasks to people, fixes their responsibility and
accountability to their departmental heads, creates a span of management so that work can be easily
supervised. This network of authority- responsibility relationships is the basis of designing a sound
organisation structure.

2. Flexibility:
In large organisations, one person cannot look after all the managerial functions (planning, organising
etc.) for all the departments. He cannot adapt the organisation to its internal and external environment.
Such an organisation would become an inflexible organisation. Creating departments and departmental
heads makes an organisation flexible and adaptive to environment. Environmental changes can be
incorporated which strengthen the organisation’s competitiveness in the market.

3. Specialisation:
Division of work into departments leads to specialisation as people of one department perform
activities related to that department only. They focus on a narrow set of activities and repeatedly
performing the same task increases their ability to perform more speedily and efficiently.
Specialisation promotes efficiency, lowers the cost of production and makes the products competitive.

4. Sharing of resources:
If there are no departments, organisational resources; physical, financial and human, will be commonly
shared by different work units. Departmentation helps in sharing resources according to departmental
needs. Priorities are set and resources are allocated according to the need, importance and urgency
regarding their use by different departments.

5. Co-ordination:
“The organisation is a system of integrated parts, and to give undue emphasis to any functional part at
the expense of the entire organisation creates organisational islands, thus, resulting in inefficiency and
significant behavioural problems”. Creating departments focuses on departmental activities and
facilitates co-ordination.

6. Control:
Managers cannot control organisational activities if they have to be collectively supervised.
Departmentation facilitates control by departmental manager over the activities of his department only.
Activities are divided into smaller segments, standards of performance can be framed, factors affecting
performance can be identified and control can be more objective in nature.

7. Efficiency:
Flow of work from one level to another and for every department, i.e., vertical and horizontal flow of
work in the organisation increases organisational efficiency.

8. Scope for growth and diversification:

In the absence of departmentation, managers can supervise a limited number of activities, depending
upon their skills and abilities. Departmentation enables them to expand their area of operation into new
product lines and geographical divisions. Departmentation provides scope for organisational growth
(along the same product lines) and expansion (adding new product lines).

9. Responsibility:
Since similar activities are grouped in one department headed by departmental managers, it becomes
easy for top managers to fix responsibility of respective managers for achieving the desired results. If
planned performance is not achieved, the department responsible becomes answerable. When
responsibility is clear, authority can also be delegated to managers. Clear identification of
responsibility and authority increases efficiency of the departmental activities.

10. Development of managers:

Departmentation enables departmental heads to be creative in making decisions with respect to their
departmental activities. Training needs can also be identified because manager’s task is clear and
specific. There are opportunities to improve performance in their area of specialisation.
This develops their potential to be promoted to higher managerial positions in the organisation. It also
facilitates recruitment and selection of top managers from within the organisation rather than
depending on outside sources.

Basis of Departmentation:
There are two broad forms of departmentation:
a. Functional departmentation, and

b. Divisional departmentation.

a. Functional Departmentation:
Functional organisation creates departments along activities or functions of the undertaking (functions
do not refer to managerial functions of planning, organising , staffing, directing and controlling). It is
grouping of activities on the basis of similarities of functions.

The nature of activities performed by different organisations is different. For example, activities
carried by a manufacturing organisation are production, finance, personnel and sales. For a trader, the
major activities are buying and selling, a bank performs borrowing and lending functions. Functional
departmentation is, “the grouping of jobs and resources within the company in such a way that
employees who perform the same or similar activities are in the same department”.

It is the simplest, logical and most widely accepted form of creating departments. It is suitable for
organisations where limited number of products are produced. The major functional departments
further have derivative departments. Production department, for example, has sub-departments to
manage purchase, production planning and control, manufacturing etc. Finance department creates
departments to look into capital budgeting (fixed assets) and current assets, cash management and
budgets.

Personnel department has sub-departments to take care of appointments, training, placement and
promotion of employees. These sub-departments can be further sub-divided if needed. Advertising
department (sub-department of marketing department), for example, can further have sub-departments
like advertising in Newspapers, Radio, TV etc.

Organisation Chart Showing Functional Departmentation:

Merits of Functional Departmentation:
It has the following merits:
1. Simple and logical basis of creating departments:
Production, marketing, finance and personnel are widely accepted and recognised functions of a
manufacturing organisation and, therefore, it is a simple basis of departmentation.

2. Specialisation:
Since workers in one functional area focus on that area only, they acquire expertise and specialised
skills in performing their duties. This offers the benefits of specialisation; efficiency and speed.

3. Co-ordination:
People working in one department are closely knitted and work collectively towards achievement of
departmental goals. The departmental manager can co-ordinate various derivative activities.

4. Training and control:

The departmental manager is accountable for functions performed by his department. He ensures that
activities are performed strictly according to rules and procedures laid down for the department. He
can, thus, exercise control over his departmental activities. If workers are not able to carry out the
activities efficiently, managers can train them to do so.

5. Supervision:
It is easy for managers to supervise the departmental activities as they have to supervise a narrow set
of functional skills.

6. Suitable for stable organisations:

Organisations which do not frequently change their work units and work force are suitable for creating
departments on the basis of functional activities.

7. Suitable for small organisations:

This basis of departmentation is suitable for small sized organisations which produce a limited line of
products. Even for large organisations, it is suitable only for top levels. Thereafter, some other basis of
departmentation has to be used. Marketing department, for instance, can be further branched out on the
basis of territorial or geographical departmentation.

Limitations of Functional Departmentation:

This form of departmentation suffers from the following limitations:
1. Overall organisational goals:
The employees become so focused on departmental goals that they lose sight of the overall
organisational goals.

2. Delayed decisions:
Since decisions are made by departmental heads for their respective departments, it may delay
decision-making for the organisation as a whole.

3. Co-ordination:
Water-tight compartments are sometimes created amongst departments as people show loyalty towards
their departmental managers. Top manager finds it difficult to co-ordinate various functional activities.

4. Accountability:
Top managers find it difficult to hold accountability of any one department for failure of the product in
the market. For example, if the product does not earn profits, top managers cannot say with assertion
whether the problem lies with production department or sales department.

5. Unsuitable for dynamic organisations:

As this is a suitable form of departmentation for stable organisations, organisations operating in the
dynamic environment do not accept functional activities as the basis of departmentation. They use
other basis of departmentation also to remain competitive in the market; either customer or product or
territorial departmentation depending upon where and how they want to reach, grow and expand their
business.

6. Complexity:
As organisations grow complex in terms of size and operations, they add more products to their line of
products and expand into new geographical areas for marketing the existing products. Functional
departmentation is not suitable in such cases.

b. Divisional Departmentation:
Divisional structures are created on the basis of smaller divisions where each division has its own
functional activities (production, finance, personnel and marketing).

Major divisions that determine the organisation structure are as follows:

1. Product Departmentation:
This form of departmentation is suitable for companies that produce multiple products. Product
departmentation is grouping of jobs and resources around the products or product lines that a company
sells. With increase in operations of a company, it adds more products to its line of products which
require various functional activities (production, marketing etc.). Product departmentation is suitable
for product diversification where marketing characteristics of each product are different from others.

An organisation selling stationery, for example, also starts selling cosmetics and pharmaceuticals.
While marketing strategies for cosmetics need to be intensive, it is not so in case of stationery or
pharmaceuticals. Similarly, funds required for each product line are different.

The focus is on the product line and all functional activities associated with the product line.
Departments are created on the basis of products and product manager has the authority to carry out
functional activities for his department. Each product manager is in charge of his product line though
general managers of various functional areas provide them the necessary support. It helps in
coordinating the activities of different products.

Organisation Chart Showing Product Departmentation:

Product departmentation, along with various functional areas appear on the organisation chart as
follows:

There could be further extension of this basis of departmentation. For instance, if product C is a car,
the department can be branched out for commercial car, luxury car, special utility vehicle etc.

Merits of Product Departmentation:

Departmentation on the basis of product has the following merits:
(i) Better performance:
One manager may not have skills to carry out all operations for different product lines. By creating
departments where each product department looks after one product or product line only, decision-
making, fixing responsibilities and assessment of performance can be done efficiently. Sales people for
one product will concentrate on sales promotion of that product only. This ensures better performance
of employees of each department.
(ii) Flexibility:
Firms operating in the dynamic environment are well suited for this form of departmentation as it helps
them respond to environmental changes, analyse competitors’ products and change their product line,
if necessary. The focus is completely on one product and all functional activities related to that product
rather than one functional activity related to all products. This promotes product specialisation which
helps in product growth.

(iii) Fast decisions:

Since all decisions related to a product are taken by product manager (under the guidance of General
Managers of different functional areas), decisions are taken quickly.

(iv) Co-ordination:
All the primary and auxiliary activities are managed by one manager. He can co-ordinate the efforts of
people working under him.

(v) Control:
Every product manager wants to maximise profits of his product, for which he delegates authority to
people of his department and establishes authority-responsibility relationships amongst them.
Subordinates are trained to carry out functions related to each product. He, thus, controls activities of
his department to ensure that the product contributes to the organisational goals.

(vi) Responsibility:
Product managers are accountable for results of their product departments. This promotes performance
and profitability of different product departments.

(vii) Efficiency:
The costs and revenues of all the products can be compared. This helps in eliminating the unprofitable
products and promoting the profitable ones thereby increasing organisational efficiency.

Limitations of Product Departmentation:

Some of the limitations of product departmentation are as follows:
(i) Co-ordination:
Coordination becomes difficult when departments focus excessive attention on activities of their
departments without linking their performance with other departments.

(ii) Expensive:
This is comparatively a costly basis of departmentation than functional departmentation because every
department appoints people to look after specialised activities, like accounting, finance, marketing,
personnel etc. It results in duplication or multiplication of efforts because same functional activities are
performed for different products.

(iii) Control:
If every product division works as an autonomous unit, tries to maximise its goals/profits without
linking them with overall organisational needs, it will be difficult for top management to control the
overall organisational activities.

2. Process or Equipment Departmentation:

In manufacturing organisations where the product passes through different stages of production, each
stage is designated as a process and department is created for each process. It is called process
departmentation.

Manufacturing paper, for example, requires processes like crushing the bamboo, making pulp,
purifying the pulp, making paper rolls, and cutting it into rims. For each process, departments are
created and headed by people skilled and competent to carry that process.

Since finished product goes through different processes, each process is assigned to a different
department. This form of departmentation is suitable for medium and large-sized organisations where
goods are produced through a series of operations.

Organisation Chart Showing Process Departmentation:

Merits of Process Departmentation:

The merits of process departmentation are as follows:
(i) Specialisation:
As work is divided into different processes, the process manager and his team specialise in that process
by constantly carrying out activities related to that process only.

(ii) Economic considerations:

Specialisation results in economy of time, money and managerial skills.

(iii) Technological consideration:

Large organisations, where each process requires different technology, operate most suitably under
process departmentation. It also helps in maintenance of the equipment’s related to a process because
specialised technology requires specialised skills to maintain that process.

(iv) Facilitates training:

Since employees carry out only one operation or process on the work activity, managers can train
people to efficiently carry out that process.

Limitations of Process Departmentation:

Process departmentation suffers from the following limitations:
(i) Co-ordination:
Output of one process department is input of the other. If different departments work at different
speed, co-ordination amongst different processes becomes difficult. This can also result in conflict
amongst process managers.

(ii) Boredom:
Repeated handling of the same job with a very short cycle (time required to complete that process)
leads to boredom. This can affect efficiency of the process. An alternative to this is parallel pattern of
process departmentation against the serial pattern (work moves in a series of steps) as described above.
In the parallel process of departmentation, the number of steps to accomplish the task is the same.

For example, a job requires three steps for its completion. Step 1, Step 2, and Step 3. Rather than A (a
worker) handling step 1, B handling step 2 and C handling step 3, A may carry out all the steps on
product X, B carries out the same set of steps for product Y and C for product Z.

Though this reduces boredom on the work process, it requires trained workers who can carry out all
the processes. This form of departmentation is suitable for small organisations where limited number
of products with limited processes are produced.

3. Customer Departmentation:
When organisations sell to customers with different needs, departments are created on the basis of
customers. Customer departmentation is “the organising of jobs and resources in such a way that each
department can carefully understand and respond to different needs of specific customer groups”.

A lending institution, for example, gives loan to meet different customer requirements like housing
loan, car loan, commercial loan etc. An educational institution which provides academic and non-
academic subjects (vocational subjects), full-time or part-time courses, morning or evening shifts is a
typical case of customer departmentation. Clear identification of customers and their needs is the basis
of customer departmentation. This method of departmentation can be followed only in marketing
division.

Organisation Chart Showing Customer Departmentation:

The organisation chart for customer departmentation (for a lending company) appears as follows:
Merits of Customer Departmentation:
Customer departmentation has the following merits:
(i) Competitive advantage:
Contemporary marketing world revolves around customers. ‘Consumer is the king.’ By catering to
varied customer needs, companies have an edge over competitors and, therefore, better chances of
survival and growth.

(ii) Customer orientation:

The goal of an organisation is to earn profits by customer satisfaction. An organisation where the basis
of departmentation is to sell goods according to customer needs justifies its existence.

(iii) Specialisation:
A department created for satisfying customer requirements becomes specialized in that area resulting
in cost efficiency. Sales people understand consumer behaviour and provide them the desired services.
They develop understanding with the consumers and build clientele for the organisation.

Limitations of Customer Departmentation:

Customer departmentation has the following limitations:
(i) Co-ordination:
Excessive involvement of employees in their respective departments makes it difficult for top
managers to co-ordinate the functions of different departments.

(ii) Identification of consumer groups:

It is not easy to identify various consumer groups. A large industrial buyer for one product, for
example, may be a small buyer for another product. The same product may be of industrial use for one
buyer and personal use for another. Identifying buyers as industrial and non-industrial is not very easy.

(iii) Change in consumer behaviour:

Consumer department managers cannot easily frame policies for their departments because of
changing consumer behaviour. Demand for the same product for same set of consumers differs during
different times. Marketing managers have to balance the time and money spent in framing policies so
that organisation can adapt to the changing customer environment.

(iv) Specialised staff:

Change in consumer behaviour, their demand for different goods at different times cannot be easily
predicted. The departmental managers, therefore, must have specialised skills to determine the
consumer needs.

4. Territory or Geographic Departmentation:

In territorial departmentation, organisation creates departments:
(i) Close to its customers because they are geographically dispersed over different areas, or

(ii) Near the sources of deposits.

Each geographic unit has resources to cater to the needs of consumers of that area. The production,
purchase, personnel and marketing activities are looked after by departmental managers but finance is
vested at the headquarters. General Manager of every department looks after functional activities of his
geographical area but overall functional managers provide supporting services to the managers of
different areas.

Thus, customers of different regions with different tastes and preferences for the same product are
looked after by geographical departments set up in their territories. The product or customer
differentiation, both can be the basis of geographic or territorial departmentation. This basis is suitable
for large-sized organisations which have activities dispersed over different geographical areas.

Organisation Chart Showing Geographic Departmentation:

Division of organisation on the basis of geographic dispersal of activities appears on the organisation
chart as follows:

Merits of Geographic Departmentation:

It has the following merits:
(i) Training and development:
Employees are trained to sell goods in specific areas according to customer needs.

(ii) Customer orientation:

The emphasis is on selling in different regions according to customer needs. ‘Consumer is the king’ is
duly recognised by departmental managers as they develop their skills to know the customs, styles and
preferences of customers of different regions. Managers are able to promote sales as they are aware of
the local conditions of the area where they are operating.

(iii) Low cost of production:

If firms establish their areas of operation near the sources of raw material, they will be able to produce
at low cost and take advantage of economies of operation.

(iv) Communication:
The sales people belong to local areas of operation. They can directly communicate with the
consumers and frame policies to satisfy their needs.

Limitations of Geographic Departmentation:

Territorial departmentation has the following limitations:
(i) Co-ordination and control:
Since departments are widely dispersed, top managers find it difficult to control and co-ordinate their
activities. While some of the functional activities are decentralised, others are centralised. Policy
framers are at the head quarters and policy executors are at the regional offices. Different local
conditions can create problems of understanding.

(ii) Expensive:
Since each department has auxiliary departments like personnel, accounting etc. to offer specialised
services to managers, this is a costly method of departmentation. Before adopting this basis of
departmentation, therefore, benefits must be weighed against costs. This method is suitable for large-
scale organisations who can afford its cost.

(iii) Managerial skills:

Managers should be competent to perform functional activities (production, marketing etc.) related to
their departments. They may not specialise in all the functional activities.

5. Departmentation by Time:
This method of departmentation is used in situations where work is done round the clock because:
1. The machine cannot be stopped before finishing the work.

2. The demand is high and the machine has to work overtime.

3. The nature of work entrusted to the organisations is such.

4. The services are essential in nature (health and fire services).

5. Workers work in shifts; morning, afternoon and night, so that work can progress continuously.

These points are illustrated below:

1. The machine cannot be stopped in manufacturing steel and workers, therefore, have to work in
shifts.

2. During boom conditions, the demand increases and, therefore, extra load has to be borne by
machines. This is possible through shift duties.

3. Airlines, where flights arrive and depart, work throughout the day.

4. Essential services like hospitals and fire stations deal with emergencies and, thus, people work in
shifts.

Departments are created for each shift though the objectives and nature of work carried in all the
departments is the same.

This method of departmentation results in optimum utilisation of machines as they work continuously
which otherwise may remain idle. It is also good for workers who cannot work during day time. They
can be gainfully employed during evening or night shifts.

There are problems of co-ordination and supervision of employees who work in shifts. Employees
have to explain to the workers joining the next shift about the stage of completion at which they are
leaving the work which may not always be possible.

It is also a costly form of departmentation as each shift has separate functional departments.

6. Departmentation by Size:
This method is followed in army where number of workers in the unit is important. The company’s
performance is judged by the number of people working with it, and therefore, it adopts
departmentation by size. Departments are created on the basis of number of people who form the
department. Soldiers in army are grouped in numbers to form departments.

7. Departmentation by Task Force:

When organisation has a number of projects, it forms task forces which consist of people from
different units having different skills to complete those projects. These groups are formed temporarily
till completion of the project. They are similar to project organisations.

AUTHORITY-RESPONSIBILITY RELATIONSHIPS

Authority is the power to give orders and get it obeyed or in other words it is the power to take
decisions.
 Responsibility means state of being accountable or answerable for any obligation, trust, debt or
something or in other words it means obligation to complete a job assigned on time and in best way.

Authority and responsibility are closely related and this principle states that these two must go hand in
hand. It means that proper authority should be delegated to meet the responsibilities.

A match should be there between these two because of two main reasons:--

i) Firstly, if a person is given some responsibility without sufficient authority

he can’t perform better, and also could not accomplish the desired goal.
ii) Secondly, if there is excess authority being delegated to an individual
without matching responsibility then the delegated authority will be misused
in one way or the other.

This is an important and useful principle of management because if adequate authority is not delegated
to the employees they cannot discharge their duties with efficiency and this in turn will hamper the
achievement of the organizational goal. Sometimes the relation between management and employees
is also badly affected by non delegation of proper authority.

Positive impacts of this principle:

Ø No misuse of authority.
Ø Helps to complete job effectively and efficiently.
Ø Individuals can be held accountable.
Ø Systematized and effective achievement of organizational objectives.

Consequences of violation of this principle:

Ø Misuse of authority.
Ø Responsibility can’t be discharged effectively.
Ø No one can be held accountable.
Ø Conflicts between management and employees.

Comparative Study of Authority & Responsibility

Authority and Responsibility are two sides of the same coin. The term ‘authority’ stands for
power or rights assigned to an individual to make decisions, whereas ‘responsibility’ is a duty to
maintain and manage the assigned authority.

Authority and Responsibility are the basic functions considered at the primary stage in a management
system. In successful enterprises, these are the basic functions that are maintained by the respective
superior authorities of an organization. Moreover, responsibility is often considered as control and
management over something.

Authority is an entity or power to enforce certain laws, rules and expectations. An authoritative power
is always granted with the freedom of taking decisions and managing necessary controls, for the
benefits of an organization. The great Henri Fayol described authority as, “the right to give orders and
the power to exact obedience”. Without authority, a manager ceases to be a manager, because he
cannot get his policies carried out through others. Hence, it is considered to be one of the founding
stones of formal and informal organizations. It flows downwards in an organization, i.e. it works from
the upper superiors to the lower followers.
Responsibility is an entity which is prone to follow and obey some specifically assigned rules in order
to accomplish a task. To maintain responsibility is actually a tough task. The actions taken by a
typically responsible party have a moral, ethical, or rational foundation. Responsibility according to
Davis, is defined as "an obligation of individual to perform assigned duties to the best of his ability
under the direction of his executive leader." It is a relationship, in which a person is responsible to
ensure and guarantee the accomplishment of an assigned task. In a business organization,
responsibility is solely dependent on the authoritative managers to manage and conduct the operations.
These are performed in order to uplift the organization.

Authority and responsibility are notable features in the field of management. There are various
authoritative powers in the society, which are solely responsible for conducting and following
operations and tasks related to development. The authoritative powers are to be managed with the all
care and effort possible, in order to maintain stability in an organization. On the other hand,
responsible duties have to be followed with by working hard and observing good management. They
both work in correspondence to one another in a business enterprise.

Comparison between Authority and Responsibility:

Authority Responsibility

Authority is the power or right to give Responsibility is the state or fact of

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

Basically It is power. It is a duty.

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

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

Direction
It flows downwards. It flows upwards.
Flow

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

The right of a manager to command his The obligation of a subordinate to

Example
subordinates. complete an assigned work.

DECENTRALISATION
Meaning:
Decentralisation can be viewed as an extension of delegation.

When a part of the work is entrusted to others, it is known as delegation. Decentralisation extends to
the lowest level of the organisation.

A few definitions are given below:

1. “Decentralisation refers to tire systematic effort to delegate to the lowest levels all authority except
that which can only be exercised at central points.” —Louis A. Allen

2. “Decentralisation means the division of a group of functions and activities into relatively
autonomous units with overall authority and responsibility for their operation delegate to timd of cacti
unit.’—Earl. P. Strong

3. “Decentralisation is simply a matter of dividing up the managerial work and assigning specific
duties to the various executive skills.”

Thus, decentralisation is concerned with the decentralisation of decision-making authority to the lower
levels in managerial hierarchy.

Degree of Decentralisation:

The degree of decentralisation is determined by:

(a) Nature of the authority delegated,

(b) How far down in the organisation it is delegated,

(c) How consistently it is delegated.

So, the degree of decentralisation is determined by the authority given. For example, manager A in a
company is given the authority to buy certain material worth Rs. 1500 whereas manager B is allowed
to do similar type of work to the extent of Rs. 4500.

It is clear that the degree of decentralisation is less in case of A. Similarly decisions about the matters
referred, measure the degree of decentralisation depending upon the power to take decisions vested in
an officer without the need of getting consent of somebody else.

Advantages of Decentralisation:

1. Reduces the burden on top executives:

Decentralisation relieves the top executives of the burden of performing various functions.
Centralisation of authority puts the whole responsibility on the shoulders of an executive and his
immediate group. This reduces the time at the disposal of top executives who should concentrate on
other important managerial functions. So, the only way to lessen their burden is to decentralise the
decision-making power to the subordinates.

2. Facilitates diversification:
Under decentralization, the diversification of products, activites and markets etc., is facilitated. A
centralised enterprise with the concentration of authority at the top will find it difficult and complex to
diversify its activities and start the additional lines of manufacture or distribution.
3. To provide product and market emphasis:
A product loses its market when new products appear in the market on account of innovations or
changes in the customers demand. In such cases authority is decentralised to the regional units to
render instant service taking into account the price, quality, delivery, novelty, etc.

4. Executive Development:
When the authority is decentralised, executives in the organisation will get the opportunity to develop
their talents by taking initiative which will also make them ready for managerial positions. The growth
of the company greatly depends on the talented executives.

5. It promotes motivation:
To quote Louis A. Allen, “Decentralisation stimulates the formation of small cohesive groups. Since
local managers are given a large degree of authority and local autonomy, they tend to weld their people
into closely knit integrated groups.” This improves the morale of employees as they get involved in
decision-making process.

6. Better control and supervision:

Decentralisation ensures better control and supervision as the subordinates at the lowest levels will
have the authority to make independent decisions. As a result they have thorough knowledge of every
assignment under their control and are in a position to make amendments and take corrective action.

7. Quick Decision-Making:
Decentralisation brings decision making process closer to the scene of action. This leads to quicker
decision-making of lower level since decisions do not have to be referred up through the hierarchy.

Disadvantages of Decentralisation:
Decentralisation can be extremely beneficial. But it can be dangerous unless it is carefully constructed
and constantly monitored for the good of the company as a whole.

Some disadvantages of decentralisation are:

1. Uniform policies not followed:

Under decentralisation, it is not possible* to follow uniform policies and standardised procedures.
Each manager will work and frame policies according to his talent.

2. Problem of Co-Ordination:
Decentralisation of authority creates problems of co-ordination as authority lies dispersed widely
throughout the organisation.

3. More Financial Burden:

Decentralisation requires the employment of trained personnel to accept authority, it involves more
financial burden and a small enterprise cannot afford to appoint experts in various fields.

4. Require Qualified Personnel:

Decentralisation becomes useless when there are no qualified and competent personnel.

5. Conflict:
Decentralisation puts more pressure on divisional heads to realize profits at any cost. Often in meeting
their new profit plans, bring conflicts among managers.
 UNIT-3

CHAPTER 1
STAFFING
1.1 INTRODUCTION
Staffing is the managerial function of recruitment, selection, training, developing, promotion and
compensation of personnel.
Staffing may be defined as the process of hiring and developing the required personnel to fill in the
various positions in the organization. It involves estimating the number and type of personnel required.
It involves estimating the number and type of personnel required, recruiting and developing them,
maintaining and improving their competence and performance.
Staffing is the process of identifying, assessing, placing, developing and evaluating individuals at
work.
Definition:
According to Koontz and O’Donnell:
“The managerial function of staffing involves manuring the organizational structure through proper
and effective selection, appraisal and development of personnel to fill the roles designed into the
structure.”
Staffing is defined as, “Filling and keeping filled, positions in the organizational structure. This is done
by identifying work-force requirements , inventorying the people available, recruiting, selecting,
placing, promotion, appraising, planning the careers, compensating, training, developing existing staff
or new recruits, so that they can accomplish their tasks effectively and efficiently.”
1.2 IMPORTANCE
1. Staffing helps in discovering and obtaining competent and personnel for various jobs.
2. It helps to improve the quantity and quality of the output by putting the right person on the right job.
3. It helps to improve job satisfaction of employees.
4. It facilitates higher productive performance by appointing right man for right job.
5. It reduces the cost of personnel by avoiding wastage of human resources.
6. It facilitates growth and diversification of business.
7. It provides continuous survival and growth of the business through development of employees.
1.3 RECRUITMENT AND SELECTION
Recruiting involves attracting candidate to fill the positions in the organization structure. Before
recruiting, the requirement of positions must be cleared identified. It makes easier to recruit the
candidates from the outside. Enterprises with a favorable public image find it easier to attract qualified
candidates.
Definitions –
1. Mc Fariand, “The term recruitment applies to the process of attracting potential employees of the
company.”
2. Flippo, “Recruitment is the process of searching prospective employees and stimulating them to
apply for the jobs in the organization.”
Thus recruitment may be considered as a positive action as it involves attracting the people towards
organization.
1.3.1 Need of recruitment
The need of recruitment may arise due to following situations:
1. Vacancies due to transfer, promotion, retirement, permanent disability or death of worker.
2. Creation of vacancies due to expansion, diversification or growth.
1.3.2 Methods and sources of recruitment:
According to ‘Dunn and Stephens’ recruitment methods can be classified into three categories :
1) Direct Methods
2) Indirect Methods
3) Third Party Methods
1) Direct Methods include travelling visitors to educational and professional institutions, employee’s
contacts with public and manned exhibits and waiting lists.
2) Indirect Methods include advertising in newspaper radio, in trade and professional journals,
technical journals, brochures etc.
3) Third Party Methods includes the use of commercial and private employment agencies, state
agencies, placement offices of the colleges and universities, and professional association recruiting
firms.
Sources of Recruitment
The various sources of recruitment may be classified as
A. Internal sources or from within the organisation
B. External sources or recruitment from outside.
A. Internal sources – Many organisations in India give preference to people within the company
because the best employees can be found from within the organization itself. Under this policy, if there
is any vacancy the persons already working in the organisation are appointed to fill it. This method is
followed mostly in Government organisations.
B. External sources or recruitment from outside – Internal sources may not always fulfill the needs
of an organisation. Naturally, most of the concerns have to look for the external sources for
recruitment the required number of employees with the requisite qualifications.
The external sources of recruitment include.
1. Direct Recruitment – Many organizations having one separate department called personnel
department to select right employees. For that organisaton may receive direct applications from the
candidate. The technical and clerical staff is appointed in this way.
2. Recruitment through the jobbers or Intermediaries – In India mostly unskilled or illiterate
workers are recruited through this method. Under this system the intermediary keeps a vital link
between workers and employers. They are always willing to supply the required number of workers.
3. Recruitment at the factory gate – Mostly unskilled workers are appointed through this method.
Under this system, large number of unemployed workers assembles at the factory gate for
employment. The factory manager, or labour superintendent or some other official may select the
necessary workers.
4. Recruitment through advertisement – This is most common method for recruiting skilled
workers, clerical staff, managerial personnel, technical personnel.
The vacancies are advertised in the popular daily newspapers and applications are invited from the
persons having required qualifications.
5. Recruitment through the recommendation of the existing employees – The existing employees
recommend the suitable names for the employment.
6. Recruitment from colleges or universities or educational institutions – This method is used in
some enterprises or Government department, when the recruitment of persons required for
administration and technical personnel.
7. Recruitment through employment exchange – The workers who want help in finding jobs make
their registration in the nearest employment office where details are recorded. Employment exchanges
are the special offices for bringing together those workers who are in need of employment.
8. Other methods –
i) Badli Control system or Decasualisation of labour – It means efforts taken for regularizing the
system or recruitment by means of controlling substitute of badly labour. Under this system, on the
first day of each month, special badli cards are given to a selected number of persons who are advised
to present themselves every morning at the factory when temporary vacancies are filled up from
amount them.
ii) Contract labour – Under this method contractor supplies labours to the industrial
enterprises according to their requirement.
Selection:
Selection is the process of choosing the most suitable person for the current position or for future
position from within the organization or from outside the organization. The selection of managers is
one of the most critical steps in the entire process of managing.
1.4 PROCESS OF SELECTION
Selection means the taking up the different workers by various acts from the application forms invited
through different sources of internal and externals. According to Dale Yoder, “Selection is the process
in which candidates by employment are divided into two classes those who are to be offered
employment and those who are not.”
Selection Procedure:
Selection of workers is regarded as a policy matter. Every enterprise has its own policy
for recruitment. The following procedure is adopted.
1) Receiving and screening the application: After receiving the applications have to be screened. In
this process the applications of candidates without the requisite qualification are rejected.
2) Sending the Blank application form : After preparing the list of candidates suitable for job, blank
application forms will be sent to the candidates. In this application form information should be given
about the name and address of the candidate, educational qualification, experience, salary expected etc.
3) Preliminary Interview : The interviewer has to decide whether the applicant is fit for job or not.
By this interview the appearance, attitudes, behaviour of the candidate can be known easily.
4) Administering Tests : Different types of test may be undertaken. Tests are conducted for the
knowledge of personal behaviour, efficiency of work and interest. Generally, following types of tests
are conducted.
i) Achievement Test
ii) Aptitude test
iii) Trade Test
iv) Interest Test
v) Intelligence Test etc.
5) Checking References on Investigation of Previous History : Applicants are generally asked to
give names of at least two persons to whom the firm may make a reference.
6) Interviewing: Interview is the most important step in the selection procedure. In interview, the
intimation given in the application form is checked. Interview helps in finding out the physical
appearance and mental alertness of the candidate and whether he possesses the required qualities.
Interviews may be of various kinds these are
1) Direct Interview
2) Indirect Interview
3) Patterned Interview
4) Stress interview
5) Systematic in – depth interview
6) Board of panel interview
7) Group interview
7) Final Selection : On the basic of results of previous interview the candidate is informed whether
he/she is selected for the said post or not.

1.5 TRAINING AND DEVELOPMENT

Meaning:
Training is an instrument of developing the employees by increasing their skills and improving their
behavior. Technical, managerial skills are needed by the employees for performing the jobs assigned to
the. Training is required to be given to new employees as well as existing employees. The methods to
be used for training and the duration for which training should be given is decided by the management
according to the objectives of the training, the number of persons to be trained and the amount of
training needed by the employees. Training leads to overall personal development. The major outcome
of training is learning. Trainees learn new habits, new skills, useful information that helps to improve
their performance.
Definition:
According to Flippo:
“Training is an act of increasing the knowledge and skill of an employee for doing a particular job.”
Importance of training and development:
1. Reduction in learning time
2. Better performance
3. Reduced supervision
4. Increases Morale of the employees
5. Facilitates organizational stability and flexibility
6. Develops employees skills, talents, competency
7. Decreased accidents
8. Better use of raw material and other resources
9. Increase in production
Methods of training:
Training methods
ON the job & OFF the job
Instruction method Lecture method
Apprenticeship method Conferences
Training by supervisors Seminars
Vestibule training Role play
Training by experienced persons Case studies
1.5.1 Development
Development is a continuous process. It is fox for refreshing information knowledge and skills of the
executives. In the case of development, off the job methods are used. It provides wider them capable to
face organizational problems and challenges is a bold manner. Management development is a planned
systematic process of learning. It is designed to induce behavioural change in individuals by
cultivating the mental abilities and inherent qualities through the acquisition and Understanding of use
of new knowledge.
1.6 PERFORMANCE APPRAISAL
Performance appraisal is one of the oldest and most accepted universal principles of management. It
refers to all the formal procedures used in working organizations to evaluate the personalities,
contributions and potentials of group members. It is used as a guide by formulating a suitable training
and development programme to improve the quality of performance in his present work. Performance
appraisal is the judgment of an employee’s performance in a job.
It is also called as merit rating. All managers’ are constantly forming judgment of their subordinates
and are continuously making appraisals. It is the systematic evaluations of the individuals with respect
to his performance on the job and his potential for development. The immediate superior is in-charge
of such appraisal. The managerial appraisal should measure both
performances in achieving goals and plans as well as all managerial function such as planning,
organizing, leading and controlling.
Objectives of performance appraisal:
1. To help a manager to decide the increase in pay on ground of merits.
2. To determine the future use of an employee
3. To indicate training needs.
4. To motivate the employees to do better in his or her present job.
5. To contribute the growth and development of an employee.
6. To identify employees for deputation to other organizations
7. To help in creating a desirable culture and tradition in the organization.
8. To nominate employees for training programmes.
 CHAPTER 2
DIRECTING

2.1 INTRODUCTION
Directing is a very essence of management. It is the important element of management without which
nothing in the managerial process can be successful. Directing helps to create an appropriate work
environment that facilitates efficient discharge of duties to the employees.
Directing and leading comprise the managerial functions of guiding, overseeing and leading people.
The primary function of directing is to deal with human elements to build personal relationships.
Directing is concerned with directing human efforts towards organizational
goal achievements. The success of these directional efforts determines the satisfactory or
unsatisfactory performance within the organization. Thus, directing is the function the will test the
managerial capability in running the organization.
Definition:
According to Haimann:
“Directing consists of the process and techniques utilized in issuing instructions and making certain
that operations are carried on as originally planned.”
According to Koontz and O’Donnel:
“Direction is the interpersonal aspect of managing by which subordinates are led to understand and
contribute effectively to the attainment of enterprise objectives”
According to Urwick and Brech:
“Directing is the guidance, the inspection, the leadership of those men and women that constitute the
real course of responsibility of management.”
Direction focused on:
1. To ensures that sub-ordinates do their work.
2. The subordinates do it well not only according to plan but also as per the expectation of
management in order to achieve the goals.
3. To develop interpersonal relations n a group.
2.2 NATURE OF DIRECTION
Directing is the heart & soul of management. Without directing management may come to stand still.
1) Important function of management: -
Any amount of planning, organizing & staffing can be done with proper direction. Responsibility for
attaining the objectives must be guided and directed for truthful result.
2) Performed by all levels of management: -
Direction function is performed by top level, middle level or low level. Every superior is expected to
provide guidance and direction to those who lose to him for such direction.
3) Continuous process: -
It is an unending process. It goes with work. As long as work is there direction is there.
4) Result oriented: -
a) To get the work done.
b) To see the management work more responsibly.
The manager’s job is not only to see that the work is completed according to him and proper direction
is provided but he has to ensure that the problems faced by men are solved without delay.
5) Provides link between different management functions: -
It provides effective link in planning, organizing, staffing in the organization with proper control.
6) Involvement of human relationship: -
Directing creates co-operation & harmony among the members of the group.
2.3 IMPORTANCE OF DIRECTION
Direction is described as the heart of the management process. It is the life spark of an organisation
which sets the organizational machine into motion. Thus direction is an important function of
management on account of following reasons.
1) Direction initiates action : Management through direction conveys and motivates individuals in the
organisation to function in the desired way to achieve organisational objectives in the absence of
direction.
2) Direction integrates an effort of employees in order to achieve organizational objectives interrelated
activities of all the employees need to by systematically integrated which is done through direction.
3) Direction attempts to get maximum from individuals : Individuals in the organisation have enough
potentialities and capabilities, which can be used through proper motivation leadership and
communication which are the elements of direction.
4) Direction facilities changes in the organisation : Organisation is described as a subsystem of a social
system, hence any change in the social system, has to be accommodated by the organisation by
changing itself. In order to accept and implement these changes management has to motivate the
employees affected by these changes, which is the essential part of direction.
5) Direction provides stability and balance in the organisation : Direction through effective motivation
communication and leadership provides stability in the organisation and helps in maintaining balances
between different departments in the organisation. Hence the organisation can function efficiently and
effectively over a long period of time.Thus direction stands out as an important function of
management. It has also been observed that there is a high correlation between direction and work
performance.
2.4 PRINCIPLES OF DIRECTON
1) Principle of Harmony of objectives: -
The direction is effective only when the individual objectives are harmonized with group activities.
Directing is regarded as essential in personnel management directing helps all the members to satisfy
their personal goals as well as organizational goals.
2) Principle of efficiency: -
The executive should try to motivate sub-ordinates to increase performance & attain objectives at
minimum cost; otherwise direction will be ineffective.
3) Principle of unity of command: -
Command must be come from only one executive or one superior. Workers come to know from one of
the executives what to achieve & how to achieve. If there is no unity of command there will be a
duplication of work.
4) Principle of direct supervision: -
Direct supervision and advice by the executive will boost the Morale of the workers. This makes the
atmosphere trustworthy in the organization.
5) Principle of communication: -
A good system of communication between executives & sub-ordinates ensures the success. Effective
communication serves as an instrument of direction, supervision & advice.
6) Principle of leadership:
Everyone wants a good executive who is interested in the work & who is interested in solving
problems faced by workers. Good leadership will lead to cooperation, co-ordination & confidence in
the working force.
2.5 ELEMENTS OF DIRECTION
1) Motivation: -
Employees come forward to work in any organization to satisfy their needs. Motivation relates to
continuous attempt made by executives to influence on the behavior without any force.
2) Leadership: -
Leadership is essential aspect of directing. Inspiring leadership act as a spark plug for lightening the
efforts and a desire to work in sub-ordinates. The success depends upon good quality leaders.
3) Communication: -
It creates mutual understanding between management & other members of the organization. The
manager should explain in simple and clear terms what to do, how to do & whom to do to the workers.
Modern management needs effective communication as well as active participation by all the
members.
4) Co-ordination: -
It is the essence of management. It is the duty of manager to co-ordinate all the activities within the
organization. Co-ordination will lead to unity of direction.
5) Supervision: -
The supervision means a job of sub-ordinate is supervised by the superior. It is essential part in
directing. It is to be done at all levels of management from top to bottom. He gives instructions and
guide to the people for attaining the objectives.The supervisory management supervises the workers
for solving their problems.
 CHAPTER 4
MOTIVATION

4.1 INTRODUCTION
Motivation is a general term that is applicable to the entire class drives, desires, needs wishes and
similar forces. Motivation is productivity factor in industry. It is the same total managerial science.
Motivating workers is to create desire in the mind of workers for better performance.
One can buy employee’s physical presence at work place for a certain time but cannot buy his
willingness to work. The capacity to work and willingness to work is important to get better results.
Hence, motivation is the function of a manger to induce the employees to work willingly, efficiently,
effectively and contribute their best to the achievement of the goals of the organization.
Definition:
Motive:
“An inner state that energizes, activates or moves and that directs or channels behavior towards goals”
According to W.A. Scott:
“Motivation means process of stimulating people to action to accomplishment of desired goals.”
Motivation can be defined as: ‘willingness to expand energy to achieve goals and getting rewards.’
4.2 OBJECTIVES OF MOTIVATION
Motivation is one of the primary functions of a manager. He has to motivate his sub-ordinates to
perform their activities at high level & to make positive contribution towards the efficient & effective
achievement of organizational objectives. The work performance of an individual depends upon
motivation as well as his ability and environmental conditions. The performance on the job is
determined by following relationship:
P = F [M, A & E]
P = Performance
M = Motivation
A = Activity
E = Environment
Using this relationship and employee who can achieve high level of desire & ability to perform his job
must be provided with proper material equipment & process. It is the responsibility of the manager to
ensure that all these 3 parts are essential i.e.
Motivation, ability & environment.
Motivation aims at creating an environment which will make the personnel of
an organisaton.
1. To take initiative
2. To show dynamism and curiosity
3. To work willingly and co – operatively
4. To work in a disciplined manner
5. To take interest in their work
6. To be dynamic and enthusiastic
7. To be responsible and loyal
8. To take pride in their job
9. To have job satisfaction
10. To have personal and group morale satisfaction and
11. To contribute their best to achieve their personal and organizational
objectives.

4.3 TYPES OF MOTIVATION

1) Motivation may be positive or negative: -
Positive motivation is the process which influences the employee through rewards. E.g. Bonus,
promotion, permanent settlement, increase in working condition, etc. Negative motivation is based on
fear. i.e. fine, discharge, lay-off etc.
2) Motivation may be financial or non-financial: -
Financial motivations are those which are associated with money. It includes wages, salaries, bonus
and retirement benefit. Non-financial motivations are not associated with monetary rewards. It
includes ego satisfaction, participation in the process of decision making, providing good working
conditions and providing more responsibility to them.
3) Primary & secondary motivation: -
Primary motivation relates to satisfying basic human needs & secondary motivation relates to social
needs & self acquisition.
4.4 THEORIES OF MOTIVATION
4.4.1 Maslow’s Need of Hierarchy Theory : -
Abraham Maslow was the Pioneer in contributing to a system of hierarchy of needs. Maslow’s
concluded that there are certain needs of employee when he joins an organization. They have certain
expectations from the organization where they are motivated to satisfy their own needs.
The following are important positions advocated by Maslow about human behavior.
1) Man is a wanting being. Man is a continuously working more & more. What he wants or will want
depend upon what he has. As soon as man’s one need is satisfied another immediately takes place. It
keeps a man to work continuously, demanding more & more.
2) A satisfied need is not a motivator where as an unsatisfied needs work as motivator. Hence a man
works to satisfy his needs.
3) The need of man has hierarchy: -
Maslow thinks that a man’s needs are arranged in a series of level. As soon as the need at lower level
is satisfied, a worker is motivated to satisfy another need in hierarchy.
Different types of needs: -
1) Physiological needs: -
It is the lowest level in hierarchy. These needs which are most the important in the human life must be
satisfied by him. It includes food, clothing, housing, air, water, etc. Physiological needs arise for the
survival of human being. Physiological needs are important for every human being.
2) Safety needs: -
Safety needs are known as ‘security needs’. These needs are concerned with protection i.e. financial
security, job security, emotional harm, etc. As soon as physiological needs are satisfied these needs
emerge. It acts as motivating factor.
3) Social needs: -
Social needs relates to love, affection & belonging & social security. Every individual is associated
with group members or group of society. He gets affection from his group members. A man is
motivated to satisfy his social needs in following ways by:
1. Establishing a team work, team culture & team spirit.
2. Providing proper training facilities.
3. Conducting frequent meetings with team members.
4. Providing extra activities like social, cultural, sports to encourage the people.
5. Arranging periodical get together & participation with managers.
4) Esteem needs: -
It includes two parts i.e. internal esteem & external esteem needs, such as achievement of respect &
status. It can be done in following ways by:
1. Providing higher level of training & better educational facility.
2. Assigning challenging task, high responsibility & position.
3. Delegating some powers to subordinates.
4. Involving sub-ordinates in goal setting & decision making.
5) Self actualization: -
This includes self fulfillment of job growth & achieving once potential.
Some methods to satisfy self actualization needs are: -
1. Involvement of capable people in policy making.
2. Realizing a sense of fulfillment & development.
3. Providing opportunity for involvement.
4. Providing training facility according to capacity.
Limitations / Disadvantages of Maslow’s Theory: -
1) It is general expression not specific.
2) The level in the hierarchy are not fixed, the boundaries are overlapping.
3) This approach is related to personal inner action needs. But person does not have any single need at
a time. He has many needs. These limitations should be kept in the mind by the management while
preparing any plan for motivation. The people are different in their expectation. The same need cannot
act as a motivating factor to many people in the same manner.
4.4.2 Fredrick Herzberg’s two factor theory: -
Maslow Hierarchy of need point out about the behavior of the people. Using this as a base, Herzberg
& his associates interviewed 200 engineers & accountants. The engineer & accountant describe the
factors about the feelings. He asked them what are the good times & the bad times on their jobs.
Engineer & accountants brought up the things [bad]. Unfair co policies, poor relationship with boss,
low payment etc. They did not mention about good job experience. They talked about the opportunities
they got for personal growth & development. Then they took interview with the workers with different
industries. The results were same. So he developed 2 factors theory. As per him a man has two sets of
needs:
1. Lower level needs: It denotes hygiene, maintenance or environmental factors which do not motivate
satisfaction, but their absence causes dissatisfaction.
2. Higher level needs: these needs are termed as motivators because they area the real cause of job
satisfaction and they lead to better performance.

HYGIENE / MAINTENANCE
FACTORS
MOTIVATIONAL FACTORS
Company policies and administration Achievement of a challenging task, Relationship with
supervisors, Recognition for accomplishment, Working conditions Challenging work, Relationship
with peers, Increased responsibility Money, wages and salaries, Opportunity for growth and
development, Status Enriched challenging job Security, Personal life supervision, Relationship with
subordinates, Natural Motivators High state of motivation, Maintenance factors Motivational factors,
Maintenance Seeker Motive seeker.
Herzberg explains his theory with maintenance seeker & motivation seeker. Maintenance seekers are
explained in natural state of motivation. These are important for the growth of the organization. It
mainly satisfies security, psychological, social & esteems needs. In absence of maintenance factor
worker may feel dissatisfied so absenteeism & labour turn over will increase but if they are present it
will act as natural motivating factor.
Motivation seekers are explained by him in 6 points in high state of motivation & job satisfaction.
However if these factors are not present, they do not lead to strong dis-satisfaction. Maintenance
seekers are more important in every organization.
* Merits: -
1) According to Herzberg one important way to increase job satisfaction is to enhance job enrichment,
job enrichment means more challenging work.
2) Introducing new & more difficult task not handle earlier.
3) Eliminating a layer of supervision.
4) Increased worker’s autonomy & authority.
5) Workers may be given a complete natural unit of work. A natural unit of work helps to increase
identity.
* Demerits: -
1) Limited samples: -
A theory is based on a sample of 200 accountants & engineers. The critical question is that these
samples are limited & they are from different occupation.
2) Critical Methodology: -
It suffers from ego defense at work. Motivational & maintenance factors are not completely described.
4.4.3 McGregor’s Theory of X & Theory of Y: -
According to McGregor’s theory of X & Theory of Y explains the relationship of man & his behavior.
He has explained his theory in 2 terms. They are theory of X & theory of Y.
Theory X has traditional approach where as theory of Y has modern approach. This is traditional
theory of human behavior. The management has to motivate human beings in the organization.
Theory X:
It involved certain assumptions are follows: -
1. The average human being has an inherent dislike of work & will avoid it.
2. The average human beings are lazy & avoid responsibility.
3. The average human being is not aware about the goals of the organization.
4. The average human being prefers to be directed.
5. Management is responsible for organization. The elements of production are money, machine,
material, people etc.
6. It is the process of directing the people, motivating them & controlling their action by management.
7. Without any intervention by management people would be passive they must be punished,
controlled or rewarded.
8. He lacks ambitions; avoids responsibility & prefer to be led.
Some assumptions deal with human behavior, human nature. Some assumptions deal with managerial
actions. These all assumptions are negative in their approach. The manager feels that control is the
most appropriate for dealing with subordinates.
McGregor believes that these assumptions about human nature can not drastically change. There is
considerable change.
Theory Y : -
According to McGregor theory of Y has the following assumptions: -
1. The average human being does not inherently dislike work, depending upon controllable condition
work may be a source of satisfaction or punishment.
2. The average human being will excuse self direction, self control.
3. Commitment to objective is the function of reward associated with their achievement the human
being is directed for self actualization.
4. The average human being likes to accept the responsibility. Avoidance of responsibility is lack of
ambition for them.
5. Under the modernization & competitive world potential of the workers should be utilized.
Theory Y produces better results because there is no domination. There is no harsh leadership. It is not
optimistic. It is a participative. Theory Y is more realistic so it gives better results than Theory X. So
Theory Y should be used frequently in the organization.
Difference between Theory X & Theory Y: -
Theory X Theory Y
1. Assumption regarding work & human being:
Theory X assumes human being to be inherently dislikes the work.
Theory Y assumes that human being work as natural as play.
2. Motivating factor:
In the Theory X motivating factors are the lower needs.
In Theory Y high order needs are more important for motivation. Though unsatisfied lower needs are
important.
3. Need for supervision:
In Theory X people lack self motivation & required to be control extremely. After strict control large
output can be achieved.
In Theory Y people are self directed & prefer self control & are creative.
4. Emphasis:
Theory X emphasizes scale system & centralization of authority in the organization.
Theory Y emphasizes decentralization of authority & greater participation in the decision making
process.
5. Extent of capacity for creativity: -
According to Theory X most people have little capacity for creativity.
According to Theory Y there is capacity as well as creativity in the individual. Many
problems can be solved with the capacity of individual.
 CHAPTER 5
LEADERSHIP
5.1 INTRODUCTION
Leadership is the ability to persuade others to seek certain goals. Effective direction is not possible
without leadership. Leadership is a means of direction. It means the activity by the manager for
guidance to his sub ordinates for achieving the goal. The qualities of the leader are natural and inborn.
It is an art & science. Leaders must maintain his separate identity .Leadership
is a dynamic process and it involves influence, direction & guidance.
Definitions:
According to Chester Barnard, “Leadership is the quality of the individual where by he guides the
people on there activities in organized efforts.”
According to Koontz & Donnell, “Leadership is influencing people to follow you & work willingly for
the advancement of common goal.”
Leadership is the process of influencing group activities toward achievement of goals in a given
situation.
Thus the leadership may be defined as
L = F (f, g, w, s)
L = Leadership
F = is a function of (or depends upon)
f = followers
g = goal
w = willingness on the post of followers
s = a given situation
5.2 FEATURES OF LEADERSHIP
1. Co-existence:
Leadership cannot function in isolation and it cannot be conferred or ordered but it must be learned.
2. Functional relationship:
The relationship between a leader and the followers is functional. It is not a mere passive status but
provides the basis for some definite activity.
3. Situational:
Leadership is the interpersonal influence relationship exercised in a situation and in the abstract.
Leadership cannot be same in every situation, but is bound to change according to need of situation.
4. Communication of interests:
There must be a proper communication between a leader and his followers. He should try to reconcile
differences and bring out a workable compromise between the goals of the organization which he
presents.
5.3 NATURE/CHARACTERISTICS OF LEADERSHIP
1. Leadership is a personal quality. It is ability to induce subordinates of followers to work with
confidence and zeal towards the achievement of organizational goals. Leadership is the ability to form
a group of followers voluntarily, without the use of coercion.
2. The essence of leadership is followers. It is the willingness of people to follow that makes a person a
leader. People accept a person as their leader when they feel that he can satisfy their needs and goals.
3. Leadership is a process of interpersonal influence by which one person influences others in a
situation to strive willingly towards the realization of common goals.
4. Leadership involves a community of interests between the leader and his followers. The objectives
of both are one and the same.
5. Leadership is a continuous process of influencing behaviour of his followers. An individual is a
leader when he is accepted as a leader by a group of persons and there is communication between the
leader and the group.
6. Leadership is exercised in a particular situation at a given point of time and under a specific set of
circumstances. The effectiveness of leadership depends upon the situational variables. Different
leadership styles will be appropriate under different circumstances. The leadership is an dynamic art.
7 Leadership is a reciprocal relationship. A leader not only influences his group but at the same time is
influenced by it Thus leadership is a psychological process of influencing followers and
providing guidance to them. Leadership is essential to influence people to achieve mutually compatible
objectives. Hence all organizational success can be attributed to leadership.
5.4 PRINCIPLES OF LEADERSHIP
Principles are given by Koontz & Donnell: -
1. Principle of Harmony: -
The harmony of the objectives must be followed by proper leader. They must see that they have
understood their personal goals in the organization, to maintain harmony of objectives in the
enterprise.
2. The principle of motivation: -
Motivation is not a simple task. The manager is responsible for this, should make motivational
program by:
A) Carefully giving proper reward structure.
B) Looking it from a situational point of view.
3. The principle of supplemental use of informal organization: -
The manager should make proper communication with his sub-ordinates. The informal organization
works as an effective tool in the organization.
4. Principle of maximum clarity in the communication: -
When there is no proper communication then organization can not achieved its goals. Communication
must be clear so that each individual will understood what they want to achieve & he will give proper
co-operation.
5. The principle of leadership: -
Manager will act as a effecting leader when he knows correctly the motivating factor & application of
it.
5.5 IMPORTANCE OF LEADERSHIP
1. Leadership serves as a motive to group efforts. Management has to provide leadership in the
organization in order to get work done by others. Leadership becomes important for teamwork & co-
operation. Manager as a leader can influence any group for achieving goals & high level of
performance.
2. Leadership is an important authority. A manager can exercise authority in managing the members.
Authority helps him for effective leadership. Leadership contains proper direction, inspiration in
people & accomplishment of goals.
3. Leadership provides a basis for co-operation in several ways. Two way communications, man to
man personal relationship, use of participation & creation of opportunity for needed satisfaction are
important. It will lead to increase understanding.
4. In leadership there is emphasis on human performance. Leadership is needed at all levels of
management from top to bottom. Management is transformed as a social process with leadership
action. It is a social scheme of leadership that to achieve objective with proper utilization of people.

5.6 DIFFERENT STYLES OF LEADERSHIP

1) Autocratic style: -
Under this style of leadership, all decisions are taken by the leader. The authority & power is vested in
the hands of leader. There is no participation by subordinates in decision making process. Leader never
allows his sub-ordinates to think or participate in the decision making. He gives order & assign task
without taking subordinate into confidence. Normally sub-ordinates dislike this type of leadership.
Advantages: -
1. It provides strong motivation & reward for the leader.
2. No delay in the process of decision making.
3. Responsibility can be easily fixed.
Disadvantages: -
1. It creates low Morale & less confidence in subordinates.
2. Ideas and capabilities of subordinates are not fully utilized.
3. Subordinates will never get an opportunity for development.
Autocratic leadership may be appropriate when subordinates are uneducated, unskilled, lack of
knowledge & experience in modern competitive world. This type of leadership becomes less desirable
for the employees.
2) Democratic style or participative style: -
The participative leadership allows an active participation of the subordinates in the process of
decision making. The leaders adopting this style of leadership always allow participation of his sub-
ordinates in the process of decision making. The leaders follow majority of opinions which are
expressed in a group & his decision is always depend upon these. The relationship between leaders &
sub-ordinate is friendly. It creates positive impact on subordinates. This style of leadership is preferred
by the subordinates & managers.
Advantages: -
1. It creates job satisfaction & increases the moral of subordinates.
2. It develops positive attitude & reduces resistance to change.
3. It helps to think over creative ideas of all sub-ordinates.
Disadvantages: -
1. Participative style is time consuming & delays in decision making.
2. These types do not yield positive results.
3. It requires more communication between subordinates & superiors.
4. When leader is incompetent it will create problems.
This type of leadership is considered to be more effective than autocratic style. It is more useful in this
competitive world as it helps to increase productivity.
3) Free-rein style: -
Unlike autocratic style free-rein style falls on other extremes. It includes complete surrender of
decision making power to a group leader. A leader leaves all the control & decisions with
subordinates. Leader leaves all responsibility & most of the work of him to the group, interference of a
leader is very less. It is known as lazy fair & permissive style. In this style a leader gives complete
freedom to his group & sub-ordinate in their work.

Advantages: -
1. Maximum development of sub-ordinate.
2. Full utilization of the capacity of sub-ordinate.
3. It creates job satisfaction & increase Morale of sub-ordinate.
4. This style produces good & quick results when sub-ordinates are highly educated & brilliant.
Disadvantages: -
1. Sub-ordinate does not get guidance to leader.
2. It ignores the contribution of leader just as autocratic style where contribution sub-ordinate is totally
ignored.

5.8 QUALITIES OF A LEADER

1. Physical and mental vigour:
A leader should be ready to work hard. His physical stamina and mental vigour to sustain long and
irregular hour of work is the most required to be successful.
2. Ability to understand others:
A leader should possess emotional feelings such as confidence, respect, love and faith. He should be
able to analyze the problems rationally and logically .the leader must share with his followers and at
the same time must influence them.
3. Quick grasping:
A leader should understand human psychology. His grasping of situation should be quick and decision
should also be communicated at the earliest. He should possess understanding of human behavior,
emotions, sentiments, needs, motives etc. This needs maturity of mind and scientific way of approach.
4. Initiative:
The leader must possess certain creative abilities, quality of imagination, invention and courage to face
realities of life boldly.
5. Ability to inspire:
The leader must have the knowledge of men working under him. He must be skillful in handling
human relations that helps to inspire subordinates.
6. Ability to communicate:
A leader should be good at communication ideas, feelings, decisions, orders etc. He should be a good
and effective speaker, writer so that he will be able to inform, stimulate and direct his subordinates.
7. Acceptance of responsibility:
A reliable leader is one who is prepared to shoulder the responsibility for the consequences of any
steps he takes. He has to be aware of the duties and obligations associated with the position he holds.
8. Intelligence and technical competence:
A leader should possess a thorough knowledge of the theory and practice of his job. With this quality,
he can perform the functions of planning, organizing, directing and controlling.
9. Motivation:
In order to motivate others, one must be well motivated. The desire to lead should come from within.
If a person is forced to do his job under the fear, he would behave like a follower than a leader.
10. Flexibility:
A leader should be ready to absorb and adopt new ideas and views of others as per demanded by the
situation. He should not be critical of others. He should be ready to accept others’ views and alter his
decisions. Open-mindedness of a leader makes the leader more identified with the group.
11. Impressive personality:
A leader should have an impressive and pleasing personality. He must possess cheerful and an
optimistic outlook. He must have physical mad mental health in order to influence others and induce
them to work with energy, vigour, energy and creativity.
 CHAPTER 6
CONTROLLING

6.1 INTRODUCTION
Control is a fundamental managerial function. With the help of controlling, the management measures
the performance of the subordinate units. Controlling is associated with planning. Control can come
into effect only when plans have been adopted and instructions are issued to all affected by designing
the plans to take appropriate actions. The objective of control is to see that everything is carried out in
its predetermined order. Controlling is a continuous process of measuring actual results of operations
of an organization, in comparison with the standards laid down as a guide. Proper Control smoothen
the working of an organization. In the process of delegation control is complementary.
Controlling involves setting up standards of individuals and organizational performance and measuring
actual performance.
Definitions:
According to George Jerry:
“Determining what is being accomplished, that is, evaluating the performance and if necessary
applying corrective measures to see that the performance takes place according to the plans.”
According to Henry Fayol:
“Control consists in verifying whether everything occurs in conformity with the plan adopted, the
instructions issued and the principles established.”
According to Koontz and O’Donnell:
“Controlling implies measurement of accomplishment against the standard and the correction of
deviations to assure attainments of objectives according to plans.”

6.2 FEATURES OF CONTROL

1) Control is the function of Management: Control is a follow-up action to the other functions of
Management. This function is performed by all the managers in the organization.
2) Control is a continuous process: Control process does not stop anywhere. It involves analysis of
establishment of standards policies and procedure and taking corrective actions.
3) Control is flexible and dynamic process: It involves continuous review of standard of performance.
4) Control is forward looking: Control is always related to future events as we can’t control past
events.
Corrective measures for wastage and production can be taken for future with past reference. It helps to
check individual performance.
5) Planning and Controlling are closely related: Planning is based on control and control on planning.
Control includes setting of standards and measurement of performance. So it is more important in
planning.It helps in establishing new aims, change in structure, staff pattern and changes in the
direction technique.
6) The essence of control is action:Process of control will finish when corrective action is taken. This
action is depending upon setting of standard and comparison of standard with actual. Deviation has to
be controlled and minimum wastage will be achieved.

6.3 IMPORTANCE OF CONTROL

1. Basis for future action: A continuous flow of control information provides the basis for future
action. It gives correct action and gives correct picture.
2. Control helps in decision making: The control system helps the management to take right
decision. Follow-up action is essential for successful completion of objective.
3. It helps in decentralization:
Control helps the top management to get the feedback information which helps them to ensure that the
decision taken at the lower level is helpful for implementation of policies.
4. Helps in co-ordination:
It helps to each member of organization to move towards common goal with coordinate direction. It
provides boundaries for pre determined goals and provide guidance for each member.
5. It has positive impact on employee:
The existence of control system has positive impact on the behavior of the employee. Employees are
cautious because actual results are compared with budged one.
6. Control helps to point out Managerial weakness:
Control is depend upon proper feedback so it help in to point out managerial weakness.
7. Control should reflect organization pattern:
Control should reflect the organization pattern because it is exercised with managerial position. Each
managerial position should be provided with adequate authority to exercise self control and take
corrective actions.
8. Control should be economical:
Control must be worth its cost. A small company cannot afford the extensive control system like large
company.
9. Control should be easy to understand:
Control system should be simple to understand. This is necessary for smooth working and
effectiveness of the system. The system of control should be easily understood by the management.
10. Control should indicate corrective action:
Control should detect deviation and also suggest corrective actions promptly.

6.4 STEPS IN CONTROL PROCESS

1. Establishment of standards:
The first step in control process is the setting up of standards of measurement. Standards represent
criteria for performance. A standard acts as a reference line or a basis of comparison of actual
performance. Standards should be set precisely and preferable in quantitative terms. Different
standards of performance are set up for various operations at the planning stage. Establishment of
standards in terms of quantity, quality and time is necessary for effective control because it is essential
to determine how the performance is going to be appraised.
2. Measurement of performance:
The second step is to measure actual performance of various individuals, groups or units. Management
should measure the performance and compare it with the standards. The quantitative measurement
should be done in cases where standards have been set in numerical terms. This will make evaluation
easy and simple.
On other cases the performance should be measured in terms of qualitative factors e.g. performance of
industrial relations manager. His performance can be measured in terms of attitude of workers,
frequency of strikes and morale of workers.
3. Comparing performance with standards:
Comparison is easy where standards have been set quantitatively as in production and marketing. In
other cases, where results are intangible and cannot be measured quantitatively, direct personal
observation, inspection and reports are a few methods used for evaluation. The evaluation will reveal
some deviations from the set standards. The evaluator should point out the defects or deficiencies in
performance and investigate the causes responsible for these.
4. Taking corrective actions:
The final step in the control process is taking corrective actions so that deviations may not occur again
and the objectives of the organization are achieved. This will involve taking certain decisions by the
management, replanning or redrawing of GOALS or STANDARDS, reassignment of classification of
duties. Thus, control function may require change in all other managerial functions. If the standards are
found to be defective, they will be set up again by observations.
The final test of a control system is to take corrective action at the correct time.
6.5 ESSENTIALS OF GOOD CONTROL
The following are the requirements of effective control.
1. Control should report deviations promptly:
The ideal control system detects deviation before they actually occur. The manager should be provided
with information as early as possible.
2. Control should be forward looking:
Managerial control is not same as mechanical or electronic control. It must exist a time lag between
recording, reporting and deviation. Those deviations are predicted well in time and corrective actions
are taken before deviations occur.
3. Control must reflect natural and needs of the activity:
Control must apply with the help of budget, break even points, and standard hours whenever
necessary.
4. Control should be objective:
The control should be definite, objective and verifiable. It should not be influenced by personality of
the superior or subordinate.
5. Control should be flexible:
Control is a dynamic process. Plans and Objectives may change according to the needs of the situation
and must adjust it to them.
 UNIT IV
MANAGING PEOPLE
Effective managers are good at managing people. This means having the skills to get the best out of
people. It doesn't mean narrowly controlling them. Skilled managers are good at inspiring, coaching,
empowering, developing and motivating people.
There is a fine balance to be struck. Managers need to serve the needs of the business first and
foremost but do so in a way that employee needs are met as well.
Managers can't be too nice or friendly with employees because there is no avoiding their responsibility
to the business and this means making hard decisions about people: who to hire, who to promote, who
to delegate challenging tasks to, how much to pay people, who to discipline and who to let go when
performance isn't meeting expectations.
Consider the problem of what to pay people. No business today can pay people as much as they would
like to be paid. Hyper competition demands sensitivity to prices. To be competitive, all businesses
need to strike the right balance between paying people enough to keep them while not paying them so
much that their products or services are too expensive for their markets.
No matter how much a manager might like to develop people, there is always the cost of that
development to consider and this is never unlimited. It is not that managers want to be stingy but they
must always keep in mind the impact on the competitiveness of their business's pricing.
Keeping hard business realities in mind, what are the critical people skills that effective managers
need? The hard realities of business mean that managers can't literally serve the needs of their
employees but they will be successful if they are relatively selfless.
Being selfless means putting the needs of others ahead of your own. But managers need to balance the
needs of their bosses and those of their employees. Putting the needs of one set of stakeholders too
much ahead of the other is career suicide, a recipe for failure.
Selfless managers pay a lot of attention to what motivates individual employees. More than that, they
are continually letting employees share the limelight. They give them due credit for their achievements
rather than being self-promoting and hogging the limelight.
Employees are made to feel valued by managers who ask them for their input to the solutions of
problems. Managers who are less selfless prefer to do all their own thinking, solve all their own
problems and make all their own decisions. Often there isn't time to involve employees in making
important decisions, but they can at least ask employees what they think when they come to the
manager to ask what to do to solve a problem.
Managers who are quick to give their own solutions are too focused on their own sense of satisfaction
for being seen as knowledgeable. They thus fail to develop the problem solving skills and confidence
of their employees.
Skilled managers are thus more than just good communicators. That is, they recognize that it is not just
about delivering clear, consistent messages regularly. More importantly, they foster frequent two-way
dialogue with the aim of making employees feel engaged and valued by asking them for their
suggestions.
The best managers are therefore active listeners. They do more question asking and less talking. Self-
centered managers ask factual questions to gather information to make their own decisions. More
selfless managers ask what employees think more often.

NEED OF UNDERSTANDING HUMAN BEHAVIOUR

It is very essential to understand human behaviour in today's world as the existence of the organisation
depends on the employees/individuals. Without understanding human behaviour it is very difficult to
work in an organisation. In order to understand human behaviour let us see how the perception of
human being has changed from time to time. All organisations are composed of individuals, with
different personality, attitudes, values, perception, motives, aspirations and abilities. The main reason
to understand behaviour is that individuals are different. No two individuals are similar. In the early
studies, theories of organisation and management treated people as though they were the same;
scientific management was based on the similarities among workers, not the differences. In contrast,
modern theories of human behaviour are based upon the differences among people and how those
differences can affect the organisation. Individual differences are many for example some employees
are motivated to work and some are not. This can be due to several reasons, and can be known by
further reading the unit. Before we proceed to understand human behaviour, it is better to know what
the term `behaviour' means. Behaviour can be defined as a response/s which is observed
directly/indirectly. Direct observation is possible by studying the responses of people to a work
environment. Indirect observations are decision making processes and attitudes, in terms of results or
how people describe them verbally. Human behaviour is very much unpredictable. In behaviour we
cannot assume one set pattern of behaviour. Dan's analyses the nature of people in terms of four
assumptions.

1) Individual Differences

Behaviour is the result of interaction between individual characteristics and the characteristics of the
environment in which the behaviour occurs. Each person has a unique combination of characteristics.
Some of these characteristics are present from birth; others develop over time. These can be called as
inherited and learned characteristics. Although there are some inherited characteristics, but these are
very few, and not so significant. Learned characteristics are very important. Individual differences can
be because of environment, personal and psychological factors. It is also due to physical and social
factors. Learned characteristics are acquired as people grow, develop and interact with their
environments.

`Environmental factors' are characteristics of the broader environment such as economic conditions,
social and. cultural norms, and political factors that can affect the individuals behaviour. Personal
factors include physical and personal attributes e.g., age, sex, race, education and abilities,
psychological factors are less observable. They are mental characteristics and attributes such as values,
attitudes, personality and aptitudes that affect behaviour through complex psychological processes.
These are studied, in the subsequent units. All aspects of the physical world that can be seen, heard,
felt, smelled or touched are part of the physical environment of behaviour. The social environment of
an individual includes relationships with family, friends, co-workers, supervisors and subordinates and
membership in groups such as unions. The behaviour of others (as distinct from the individuals
relationship with them) is also part of an individual's social environment. Any 'norms, rules, laws or
reward systems that originate with other individuals or groups help to form an individual's social
environment.

2) A Whole Person

When an employee works in an organisation, the organisation takes care of that person by making him
effective, as a worker and as a person.

3) Caused Behaviour (Motivation)

People's behaviour is need based. By fulfilling these needs he is motivated positively and there occurs
effective performance. So the management in the organisation has to take care of these needs in order
to have an effective performance. The management can show them how certain actions will increase
their need fulfilment and if not; how it decreases their need fulfilment.

4) Value of the Person (Human Dignity)

People have to be treated with respect and as individuals and they can not be treated like machines as
how scientific management use to treat them. By recognising them and treating them with uniqueness
the value of the person gets increased. By this we can understand how the concepts of treating human
beings from machines to human capitals have evolved. If one accepts the fact that human skill
development is necessary then managers and leaders must have necessary understanding in order to
influence the behaviour of other people. It was felt that the managers acquire three levels of expertise.
Firstly they have to understand the past and current behaviour, so that they are able to predict
behaviour and than they learn to direct change, and control behaviour.

While it may seem obvious in this day and age that a company’s treatment and understanding of its
employees is instrumental to its success, it was not until the late 19th century and beginning of the
20th century that behavioral theorists really began to focus on how an employee’s behavior and
motivation play a vital part in increasing an organization’s productivity.

Known as behavioral management theory, this field of research looks at how the attitudes and actions
of a company’s workforce can directly influence its prosperity. Today, there are few who would
dispute that a firm’s ability to thrive is inextricably linked to its employees’ levels of commitment,
unity and satisfaction. This human-behavior-centered approach to corporate success takes the focus
away from the methods of production and instead analyzes employees as integral elements who can
significantly increase the profitability of a business’s services or end products.

MODELS OF HUMAN BEHAVIOUR

Psychoanalytic Model: Freudian approach depends on conflict model of humans. By using clinical
techniques of free association and psychotherapy Freud felt that behaviour is not always consciously
explained. "Unconscious" is the major factor which guides the individual's behaviour. Freud felt that
the individual's behaviour depends on three factors: (i) id, (ii) Ego and (iii) Super ego.

Id: By Id it means pleasure. To certain degree of having Id in an individual is constructive but may
also lead to destructive tendencies like being aggressive, dominating, fighting and generally destroy.
This kind of instinctive is more dominating in childhood. But once individuals develop and mature
they learn to control the id. But it is always unconscious. Throughout life the `id' becomes important
source of thinking and behaving.

Ego: Ego represents `conscious' stage in one's behaviour. Though Id comes in conflict with ego, the
ego depends on the super ego.

Superego: It represents "conscience". An individual is not aware of the superego's functioning. The
conscience is dependent on two factors that is cultural values and moral of a society. Superego's
development depends mostly on parent's influence. Once the child grows up the child will
unconsciously identifies with parents value and morals. There is always tussle between id, ego and
superego. The degree of each of them varies from person to person. So the variations in individual's
behaviour can be better understood with the help of this model. But the modern theories have severely
criticised this theory as it is not based on any empirical facts and as such it can not be accepted in
totality. But the concept of "unconscious" is a significant contribution in understanding specific
behaviour of humans.

Existential Model: This model is not scientifically based. It's base is literature and philosophy. The
existentialists believe that the depersonalising effects of this environment forces individuals to make
their own destiny. So the individuals shape their own identity and make their "existence" meaningful
and worthwhile to themselves. This is more true and happening in today's urbanisation. Because
people have become so materialistic and busy, they do not have time for traditional values and norms
and it becomes impractical sometimes to follow them. Existential model is, especially true when you
are employed in today's world. Though this model is not scientific it can be definitely be used in
understanding human behaviour.

Internal vs. External Determinants of Behaviour

Environment plays a major role in shaping behaviour and genetic endowment and personality
development is influenced by our historical heritage.

Personality vs the Environment

Both personality and situational variables must be taken into account in order to explain an individual's
behaviour but a focus on the environment is as important or perhaps slightly more important than
focusing on personality traits.

Cognition vs the Environment

To understand one's behaviour all we have to know is the individual's past responses to similar
(stimulus) situations and the rewards or punishments that followed that response.

There are two models which come out of these approaches:

2) Behaviouristic Model: In this model the behaviour is dependent on two factors i.e.,
stimulus and response. Learning occurs with this kind of model. Pavlov and Watson
with their research felt that behaviour can be best understood by stimulus and response.
Behaviourist model is represented as: S - R (Stimulus-Response)

3) Cognitive Model: S-OR-R. This model emphasises the positive and free-will factors of
human beings and uses concepts such as expectancy, demand and incentive. Tolman
with his experiments found that the basis of learning as of `expectancy' which is
understood as one particular event leading to a particular consequence i.e., goal. Human
behaviour is based on these goals. The cognitive model is represented as: S - O - R
(Stimulus-Organism-Response model)

Both approaches see learning and the environment as having a major impact on behaviour. From these
different approaches it can be said that:

• Behaviour is caused by instincts, genetic background and personality traits that are formed at
an early age. Change is very difficult for the individual and that one's capacity is severely
limited.

• Behaviour is mostly learned through our interactions with the environment. Present events
rather than past events are important. Even though there are some limitations on. one's
capacities, one is capable of great amounts of change.

MODELS OF ORGANIZATIONAL BEHAVIOR

Models are the techniques which help us to understand complex things and ideas in a clear manner.
Models are frameworks or possible explanations why do people behave as they do at work. There are
so many models as many are organizations. Varying results across the organizations are substantially
caused by differences in the models of organizational behaviour. All the models of organizational
behaviour are broadly classified into four types: autocratic, custodial, supportive and collegial. We
discuss these four models beginning with the autocratic. O.B. is the study of human behaviour in
organizations, the interface between human behaviour and the organization and the organization itself.

1) The Autocratic Model

 The basis of this model is power with a managerial orientation of authority. The employees in turn
are oriented towards obedience and dependence on the boss. The employee need that is met is
subsistence. The performance result is minimal.

In case of an autocratic model, the managerial orientation is doctorial. The managers exercise their
commands over employees. The managers give orders and the employees have to obey the orders.
Thus, the employees orientation towards the managers/bosses is obedience. Under autocratic
conditions, employees give higher performance either because of their achievement drive or their
personal liking to the boss or because of some other factor.

Evidences such as the industrial civilization of the United States and organizational crises do
suggest that the autocratic model produced results. However, its principal weakness is its high human
cost. The combination of emerging knowledge about the needs of the employees and ever changing
societal values and norms suggested managers to adopt alternative and better ways to manage people
at work. This gave genesis to the second type of models or organizational behaviour.

2) The Custodial Model

The basis of this model is economic resources with a managerial orientation of money. The
employees in turn are oriented towards security and benefits and dependence on the organization. The
employee need that is met is security. The performance result is passive cooperation.

While studying the employees, the managers realized and recognized that although the employees
managed under autocratic style do not talk back to their boss they certainly think back about the
system. Such employees filled with frustration and aggression vent them on their co-workers, families
and neighbors. This made the managers think how to develop better employee satisfaction and
security. It was realized that this can be done by dispelling employees' insecurities, frustration and
aggression. This called for introduction of welfare programmers to satisfy security needs of
employees. Provision for an on site day-care centre for quality child care is an example of welfare
programme meant for employees. Welfare programmes lead to employee dependence on the
organization. Stating more accurately, employees having dependence on organization may not afford
to quit even there seem greener pastures around. he basis of this model is partnership with a
managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior
and self-discipline.

Although the custodian approach brings security and satisfaction, it suffers from certain flaws also.
Employees produce anywhere near their capacities. They are also not motivated to increase their
capacities of which they are capable. Though the employees are satisfied, still they do not feel
motivated or fulfilled in their work they do. This is in conformity with the research finding that the
happy employees are not necessarily most productive employees. Consequently managers and
researchers started to address yet another question. "Is there better approach/way to manage people?"
The quest for a better way provided a foundation for evolvement to the supportive type of model of
organizational behaviour.

3) The Supportive Model

 The basis of this model is leadership with a managerial orientation of support. The employees in
turn are oriented towards job performance and participation. The employee need that is met is status
and recognition. The performance result is awakened drives.

The supportive model is founded on leadership, not on money or authority. In fact, it is the
managerial leadership style that provides an atmosphere to help employees grow and accomplish their
tasks successfully. The managers recognize that the workers are not by nature passive and disinterested
to organizational needs, but they are made so by an inappropriate leadership style. The managers
believe that given due and appropriate changes, the workers become ready to share responsibility,
develop a drive to contribute their mite and improve themselves. Thus, under supportive approach, the
management's orientation is to support the employee's job performance for meeting both
organizational and individual goals.

However, the supportive model of organizational behaviour is found more useful and effective in
developed nations and less effective in developing nations like ours because of employee's more
awakening in the former and less one in the latter nations.

4) The Collegial Model

The collegial model is an extension of the supportive model. As the literal meaning of the work
'college' means a group of persons having the common purpose, the collegial model relates to a team
work/concept. The basic foundation of the collegial model lies on management's building a feeling of
partnership with employee. Under collegial approach, employees feel needed and useful. They
consider managers as joint contributors to organizational success rather than as bosses.

Its greatest benefit is that the employee becomes self-discipline. Feeling responsible backed by self-
discipline creates a feeling of team work just like what the members of a football team feel. The
research studies report that compared to traditional management model, the more open, participative,
collegial managerial approach produced improved results in situations where it is appropriate.

Although there are four separate models, almost no organization operates exclusively in one. There
will usually be a predominate one, with one or more areas overlapping in the other models.

The first model, autocratic, had its roots in the industrial revolution. The managers of this type of
organization operate out of McGregor's Theory X. The next three models begin to build on
McGregor's Theory Y. They have each evolved over a period of time and there is no one "best" model.
The collegial model should not be thought as the last or best model, but the beginning of a new model
or paradigm.

Now, the sum and substances of these four models of organizational behaviour are summarized in
Table 1.1.

Interpretation of Different Models

Various conclusions may be drawn from the study of different models as follows :
 (i) As soon as the understanding of human behaviour develops or social conditions change, the
model is bound to change. No one model is best for all times.

(ii) Models or organizational behaviour are related to hierarchy of human needs. As society
advances on the need hierarchy, new models are developed to serve the higher order needs that is
paramount at that time.

(iii) Present tendency towards more democratic models of organizational behaviour will continue to
develop for long run.

(iv) Different models will remain in use though new model predominates as most appropriate for
general use at any given time as task conditions differ from time to time and organization to
organization.

Four Models of Organizational Behaviour

MAJOR CONCEPTS IN OB

PERSONALITY

The Meaning of Personality

The term personality is derived from the Latin word persona meaning a mask. Personality is a
patterned body of habits, traits, attitudes and ideas of an individual as these are organized externally
into roles and statuses and as they relate internally to motivation, goals and various aspects of
selfhood.
According to Robert Park and Earnest Burgess Personality is the sum and organization of those traits
which determine the role of the individual in the group.
According to Linton, personality embraces the total organized aggregate of psychological processes
and status pertaining to the individual.Parsonality says Maclver is all that an individual is and has
experienced so far as this all can be comprehended as unity. According to Lundberg the term
personality refers to the habits, attitudes and other social traits that are characteristic of a given
individual's behavior.
By personality Ogburn means the integration of the socio-psychological behavior of the human being,
represented by habits of action and feeling, attitudes and opinions.
Davis regards personality a psychic phenomenon which is neither organic nor social but an emergent
from a combination of the two. According to Young personality is the totality of behavior of an
individual with a given tendency system interacting with a sequence of situations.
On the basis of these definitions it may be said there are two main approaches to the study of
personality:

1. The psychological
2. The sociological

The psychological approach considers personality as a certain style peculiar to the individual. This
style is determined by the characteristic organization of mental trends, complexes, emotions and
sentiments. The psychological approach enables us to understand the phenomena of personality
disorganization and the role of wishes, of mental conflict and of repression and sublimation in the
growth of personality. The sociological approach considers personality in terms of the status of the
individual in the group, in terms of his conception of his role in the group of which he is a member.
What others think of us plays a large part in the formation of our personality.
Thus personality is a sum of the ideas, attitudes and values of a person which determine his role in
society and form an integral part of his character.
Personality is acquired by the individual as a result of his participation in group life. As a member of
the group he learns certain behavior systems and symbolic skills which determine his ideas, attitudes
and social values. These ideas, attitudes and values which an individual holds comprise his personality.
In brief it can be said:

1. Personality is not related to bodily structure alone. It includes both structure and dynamics.
2. Personality is an indivisible unit.
3. Personality is neither good nor bad.
4. Every personality is unique
5. Personality refers to persistent qualities of the individual. It expresses consistency and
regularity.
6. Personality is acquired.
7. Personality is influenced by social interaction. It is defined in terms of behavior.

The term ‘personality’ is derived from the Latin word ‘persona’ which means a mask. According to K.
Young, “Personality is a …. patterned body of habits, traits, attitudes and ideas of an individual, as
these are organised externally into roles and statuses, and as they relate internally to motivation, goals,
and various aspects of selfhood.” G. W. Allport defined it as “a person’s pattern of habits, attitudes,
and traits which determine his adjustment to his environment.”

On the basis of these definitions it may be said there are two main approaches to the study of
personality:
(1) The psychological, and

(2) The sociological.

Although there is also a third approach, the biological approach, but the biological definition of
personality which comprehends only the bio-physical characteristics of the individual organism is
inadequate. The psychological approach considers personally as a certain style peculiar to the
individual. This style is determined by the characteristic organisation of mental trends, complexes,
emotions and sentiments.

The psychological approach enables us to understand the phenomena of personally disorganisation and
the role of wishes, of mental conflict, and of repression and sublimation in the growth of personality.
The sociological approach considers personality in terms of the status of the individual in the group, in
terms of his own conception of his role in the group of which he is a member. What others think of us
plays a large part in the formation of our personality.

Thus personality is the sum of the ideas, attitudes and values of a person which determine his role in
society and form an integral part of his character. Personality is acquired by tie individual as a result of
his participation in group life. As a member of the group he learns certain behaviour systems and
symbolic skills which determine his ideas, attitudes and social values. These ideas, attitudes and values
which an individual holds, comprise his personality. The personality of an individual denotes an
adult’s inner construction of the outer world. It is the result of the inter-action processes by which
standards of ethical judgment, belief and conduct are established in social groups and communities.

To sum up we would say that:

(i) Personality is not related to bodily structure alone. It includes both structure and dynamics

(ii) Personality is an indivisible unit.

(iii) Personality is neither good nor bad.

(iv) Personality is not a mysterious phenomenon.

(v) Every personality is unique.

(vi) Personality refers to persistent qualities of the individual. It expresses consistency and regularly.

(vii) Personality is acquired.

(viii) Personality is influenced by social interaction. It is defined in terms of behaviour.

Determinants of Personality:
Personality is a result of the combination of four factors, i.e., physical environment, heredity, culture,
and particular experiences. Here we discuss each factor determining personality separately.

Personality and Environment:

Above we described the influence of physical environment on culture and pointed out that
geographical environment sometimes determines cultural variability. That the Eskimos have a culture
different from that of the Indians is due to the fact that the former have a geography different from the
latter.

Man comes to form ideas and attitudes according to the physical environment he lives in.
To the extent that the physical environment determines cultural development and to the extent, that
culture in turn determines personality, a relationship between personality and environment becomes
clear. Some two thousand years ago, Aristotle claimed that people living in Northern Europe were
owing to a cold climate, full of spirit but lacking in intelligence and skill. The natives of Asia, on the
other hand, are intelligent and inventive but lack in spirit, and are, therefore, slaves.

Montesquieu, in the eighteenth century, claimed that the bravery of those blessed by a cold climate
enables them to maintain their liberties. Great heat enervates courage while cold causes a certain
vigour of body and mind. At high temperatures, it is said there is disinclination to work and so
civilizations have grown up where the temperatures have been average near or below the optimum.

The people of mountains as well as deserts are usually bold, hard and powerful. Huntington’s
discussion of the effects of physical environment on man’s attitudes and mental make-up is very
exhaustive. However, as told previously, the physical conditions are more permissive and limiting
factors than causative factors. They set the limits within which personality can develop.

Thus, climate and topography determine to a great extent the physical and mental traits of a people, but
it cannot be said that they alone determine human behaviour. Most kinds of personality are found in
every kind of culture. The fact remains that civilizations have appeared in regions of widely different
climate and topography. Christianity knows no climate belts.

Peoples are monogamous in high altitudes and flat lands, under tropical temperate and arctic
conditions. Men’s attitudes and ideas change even when no conceivable geographic change has
occurred. Proponents of geographic determinism oversimplify the human personality and so their
interpretations are to be accepted only after close scrutiny.

Heredity and Personality:

Heredity is another factor determining human personality. Some of the similarities in man’s
personality are said to be due to his common heredity. Every human group inherits the same general
set of biological needs and capacities. These common needs and capacities explain some of our
similarities in personality. Man originates from the union of male and female germ cells into a single
cell which is formed at the moment of conception.

He tends to resemble his parents in physical appearance and intelligence. The nervous system, the
organic drives and the duchess glands have a great bearing upon personality. They determine whether
an individual will be vigorous or feeble, energetic or lethargic, idiot of intelligent, coward or
courageous.

A man with a good physical structure and health generally possess an attractive personality. A man of
poor health, pigmy size and ugly physical features develops inferiority complex. The growth of his
personality is checked. Rejected and hated by the society he may turn out to be a thief, dacoit, or
drunkard. It is also probable that he may become a leader, or a genius like Socrates and Napoleon.
Likewise the nervous system and glandular system may affect the personality of an individual.

The nervous system affects the intelligence and talent of the individual. The hormones affect the
growth of personality. Too many or too less of hormones are harmful. Some men are over-patient,
overzealous, overactive and overexcited while others are lazy, inactive, and weak. The reason may be
secretion of more hormones in the first case and less hormones in the latter case. For a normal
personality there should be a balanced secretion of hormones.

Heredity may affect personality in another way, i.e., indirectly. If boys in a society prefers slim girls as
their companion, such girls will receive greater attention of the society providing them thereby more
opportunities to develop their personality. According to Allport, Gordon, W. no feature of personality
is devoid of hereditary influence.
However, heredity does not mould human personality alone and unaided. “For the present, we can only
assume that there are -genes for normal personality traits just as there are genes for other aspects of
human make-up and functioning. Where in members of the same family, in a similar environment, we
can see great differences in personality, we may ascribe these in part at least to differences in gene
contributions.

We can also guess that some of the family similarities in personality are genetically influenced. But we
are still a long way from identifying specific ‘personality’ genes, gauging their effects or hazarding
predictions as to what the personality of a given child will be on the basis of what we know about its
parents.” However, according to a news report (Times of India, Jan. 3, 1996) the scientists have
identified a gene which influences impulsiveness, excitability and extravagance.

Of course, there are some traits which seem to be more directly affected by heredity than others.
Manual skills, intelligence and sensory discriminations are some of the abilities which appear more
highly developed in some family lines than others. But other traits such as one’s beliefs, loyalties,
prejudices and manners are for the most part the result of training and experience.

Heredity only furnishes the materials out of which experience will mould the personality. Experience
determines the way these materials will be used. An individual may be energetic because of his
heredity, but whether he is active on his own belief or on behalf of others is a matter of his training.

Whether he exerts himself in making money or in scholarly activity is also dependent upon his
bringing. If personality is a direct consequence of heredity tendencies or traits then all the sons and
daughters of the same parents brought up in the same environment should have identical personalities
or at least personalities that are very much alike.

But investigation shows that even at the tender age of three or four years they show quite distinct
personalities. The new born human being is, to use the phrase of Koenig, Hopper and Gross, a
“candidate for personality.” It is, therefore, clear that an individual’s heredity alone would not enable
us to predict his traits and values.

Personality and Culture:

There can be little doubt that culture largely determines the types of personality that will predominate
in the particular group. According to some thinkers, personality is the subjective aspect of culture.
They regard personality and culture as two sides of the same coin.

Spiro has observed, ‘The development of personality and the acquisition of culture are not different
processes, but one and the same learning process.” Personality is an individual aspect of culture, while
culture is a collective aspect of personality.” Each culture produces its special type or types of
personality.

In 1937 the anthropologist Ralph Linton and the psychoanalyst Abram Kardinar began a series of joint
explorations of the relationship between culture and personality by subjecting to minute study reports
of several primitive societies and one modern American village. Their studies have demonstrated that
each culture tends to create and is supported by a “basic personality type.” A given cultural
environment sets its participant members off from other human beings operating under different
cultural environments.

According to Frank, ‘culture is a coercive influence dominating the individual and moulding his
personality by virtue of the ideas, conceptions and beliefs which had brought to bear on him through
communal life.” The culture provides the raw material of which the individual makes his life. The
traditions, customs, mores, religion, institutions, moral and social standards of a group affect the
personality of the group members. From the moment of birth, the child is treated in ways which shape
his personality. Every culture exerts a series of general influences upon the individuals who grow up
under it.

Ogburn as we noted above, divided culture into “material” and “non-material.” According to him, both
material and non-material culture have a bearing on personality. As for the termer he provides
examples of the influence of plumbing on the formation of habits and attitudes favourable to
cleanliness and the relation of time-pieces to punctuality. The American Indians who have no clocks or
watches in their culture have little notion of keeping appointments with any exactness.

According to him, they have no sense of time. The personality of an American Indian differs from that
of a white man in the matter of punctuality and this is because of differences in their culture. Similarly,
some cultures greedy value cleanliness as witnessed by the saying: “Cleanliness is next to godliness.”
This trait of cleanliness is greatly encouraged by the technology of plumbing and other inventions that
are found with it.

The Eskimos are dirty because they have to hang a bag of snow down their backs to melt it in order to
get water. A man who has just to turn on a tap of water will naturally be more clean than an Eskimo.
Cleanliness, therefore, is a matter not of heredity but of the type of culture. As for the connection
between the non-material culture and personality, language affords an instructive example. We know
that one of the principal differences between man and animals is that he alone possesses speech.

Language can be learnt only in society. People who cannot speak exhibit warped personality. Since
language is the essential medium through which the individual obtains his information and his
attitudes, therefore, it is the principal vehicle for the development of personality. Moreover, speech
itself becomes a trait of personality. The coarse voice of woodcutter can be readily distinguished from
the hushed tones of a man.

The short, crisp, guttural speech of the German seems to be part of his personality, as does the fluid,
flowing voluble speech of the Spaniard. Movements of the hands and shoulders in speech are regarded
as part of the very core of the personalities of Italians and Jews. The Jews use their gestures for
emphasis only, while Italians depend upon them to convey part of the meaning.

Another illustration of the influence of culture on personality is the relationship of men and women. In
the earlier period when farming was the principal business, women generally had no occupations
outside the home, and naturally, therefore, they were economically dependent upon their fathers or
husbands. Obedience was a natural consequence of such conditions. But today hundreds of women
work outside the homes and earn salaries.

They enjoy equal rights with men and are not so dependent upon them as they were in the past.
Attitude of independence instead of obedience has today become a trait of women’s personality. With
the growing realisation of the importance of culture for personality, sociologists have recently made
attempts to identify the factors in particular cultures which give a distinctive stamp to the individuals
within the group. Ruth Benedict analyzed the cultures of three primitive tribes and found that cultures
may be divided into two major types—The Apollonian and the Dionysian.

The Apollonian type is characterised by restraint, even temperances, moderation and co-
operativeness, whereas the Dionysian type is marked by emotionalism, excess, pursuit of prestige,
individualism and competitiveness. The Zuni culture is classified as Appollonian, while the Kwakiuti
and Dobuans as Dionysian.

The personality of the Hindus in India differs greatly from that of Englishmen. Why ? The answer is ‘a
different Hindu culture’. The Hindu culture lays emphasis not on material and worldly things, but on
things spiritual and religious. In every Hindu family there is a religious environment. The mother gets
up early in the morning, takes bath and spends an hour in meditation. When the children get up, they
go and touch the feet of their parents and bow before the family gods or goddesses. The Hindu child
from the very birth begins to acquire a religious and philosophical personality built on the “inner life.”

From the various illustrations cited so far it is thus clear that culture greatly moulds personality. The
individual ideas and behaviour are largely the results of cultural conditioning. There is a great
difference of ideas between the Hindu devotee immersed in religion and the Russian Communist who
thoroughly rejects it.

However, it should not be concluded that culture is a massive die that shapes all who come under it
with an identical pattern. All the people of a given culture are not of one cast. Personality traits differ
within any culture, some people in any culture are more aggressive than others, some are more
submissive, kind and competitive. Personality is not totally determined by culture, even though no
personality escapes its influence. It is only one determinant among others. Ruth Benedict writes, “No
anthropologist with a background of experiences of other cultures has ever believed that individuals
were automatons, mechanically carrying out the decrees of their civilizations.

No culture yet observed has been able to eradicate the difference in the temperaments of the persons
who compose it. It is always a give and take affair.” Linton classified cultural influence into the
universals, specialities and alternatives and came to the conclusion that culture makes for uniformity of
personality only through the universals and since universals are few in number as compared with
specialities and alternatives, the effect of culture is to make for variety as well as uniformity.

Personality and Particular Experiences:

Personality is also determined by another factor, namely, the particular and unique experiences. There
are two types of experiences one, those that stem from continuous association with one’s group,
second, those that arise suddenly and are not likely to recur. The type of people who meet the child
daily has a major influence on his personality. The personality of parents does more to affect a child’s
personality.

If the parents are kind, tolerant of boyish pranks, interested in athletics and anxious to encourage their
child’s separate interests the child will have a different experience and there shall be different
influence on his personality than the one when the parents are unkind, quick tempered and arbitrary. In
the home is fashioned the style of personality that will by and large characterise the individual
throughout his life.

Social rituals,’ ranging from table manners to getting along with others, are consciously inculcated in
the child by parents. The child picks up the language of his parents. Problems of psychological and
emotional adjustments arise and are solved appropriately by each child in terms of the cultural values
and standards of the family. The family set up tends to bring the child into contact with his play-mates
and teachers. What his play-game members are, and his school teachers are will also determine his
personality development.

Group influences are relatively greater in early childhood. This is the period when the relationships of
the child with his mother, father and siblings affect profoundly the organisation of his drives and
emotions, the deeper and unconscious aspects of his personality.

A certain degree of maturation is needed before the child can understand the adult norms. The basic
personality structure that is formed during this period is difficult to change. Whether a person becomes
a leader, a coward, an imitator? whether he feels inferior or superior, whether he becomes altruistic or
egoistic depends upon the kind of interaction he has with others. Group interaction moulds his
personality.

Away from the group he may become insane or develop queer attitudes. As a child grows he develops
wish for response and wish for recognition. To his organic needs are added what are called
‘sociogenic’ needs which are highly important motivating forces in personality. How the idea of self
develops in the child is an important study. The self does not exist at birth but begins to arise as the
child learns something of the world of sensation about him.

He comes to learn of what belongs to him and takes pride in his possessions. He learns that parts of his
body belong to him. He becomes acquainted with his name and paternity and comes to distinguish
himself from others. The praise and blame he receives from others account in large measure for his
conduct. The development of self leads to the growth of conscience and ego.

Our view of self conception is usually based on the opinion of others about us. It does not. however,
mean that we value all opinions about our conduct equally. We attach importance only to the opinions
of those whom we consider for one reason or the other significant than others.

Our parents are usually most significant than others since they are the ones who are intimately related
to us and have greatest power than others over us especially during the early years of life. In short, our
early experiences are very important in the formation of our personality. It is in early life that the
foundations of personality are laid.

Why are the children brought up in the same family differ from one another in their personality, even
though they have had the same experiences? The point is that they have not had the same experiences.
Some experiences are similar while others are different. Each child enters a different family unit.

One is the first born, he is the only child until the arrival of the second. The parents do not treat all
their children exactly alike. The children enter different play groups, have different teachers and meet
different incidents. They do not share all incidents and experiences. Each person’s experience is
unique as no body else perfectly duplicates it. Thus, each child has unique experiences exactly
duplicated by no one and, therefore, grows a different personality.

Sometimes a sudden experience leaves an abiding influence upon the personality of an individual.
Thus a small child may get frightened at the view of a bloody accident, and even after the accident he
may be obsessed of the horror of fear. Sometimes a girl’s experience with a rapist may condemn her to
a life of sexual maladjustment.

A book may not uneaten challenge a man to renounce the world and seek God. If a man meets an
accident which cripples or weakens him, he may come to entertain the feelings of inadequacy. Lord
Buddha is said to have been led to renunciation by the sight of a funeral procession. In this way
experiences also determine one’s personality.

However, it may be noted that one’s own personality that one has acquired at any moment will in part
determine how the experiences influence his pre-acquired personality. Thus a child who is robust,
outgoing, athletic would find his parents in the first case a model for behaviour, a model that would
deepen the already apparent personality traits. But if the child is shy, retiring and bookish he may find
such parents’ personality distasteful and intensify the opposed personality trends already apparent.

It may also be referred that personality is a matter of social situations. It has been shown by social
researchers that a person may show honesty in one situation and not in another. The same is true for
other personality traits also. Personality traits tend to be specific responses to particular situations
rather than general behaviour patterns. It is a dynamic unity with a creative potential.

Heredity, physical environment, culture and particular experiences are thus the four factors that
explain personality—its formation, development and maintenance. Beyond the joint influence of these
factors, however, the relative contribution of each factor to personality varies with the characteristic or
personality process involved and, perhaps, with the individual concerned.
Genetic or hereditary factors may be more critical for some personality characteristics, while
environmental factors, (cultural, financial), may be more important for others. Furthermore, for any
one characteristic, the relative contribution of one or another factor may vary from person to person.

Also there is no way yet known to measure the effect of each factor or to state how the factors combine
to produce a given result. The behaviour of a juvenile delinquent is affected by his heredity and by his
home life. But how much is contributed by each factor, cannot be measured in exact terms.

LEARNING
Meaning and Nature:
Learning is a key process in human behaviour. All living is learning. If we compare the simple, crude
ways in which a child feels and behaves, with the complex modes of adult behaviour, his skills, habits,
thought, sentiments and the like- we will know what difference learning has made to the individual.

The individual is constantly interacting with and influenced by the environment. This experience
makes him to change or modify his behaviour in order to deal effectively with it. Therefore, learning is
a change in behaviour, influenced by previous behaviour. As stated above the skills, knowledge,
habits, attitudes, interests and other personality characteristics are all the result of learning.

Learning is defined as “any relatively permanent change in behaviour that occurs as a result of practice
and experience”. This definition has three important elements.

a. Learning is a change in behaviour—better or worse.

b. It is a change that takes place through practice or experience, but changes due to growth or
maturation are not learning.

c. This change in behaviour must be relatively permanent, and it must last a fairly long time.

All learning involves activities. These activities involve either physical or mental activities. They may
be simple mental activities or complex, involving various muscles, bones, etc. So also the mental
activities may be very simple involving one or two activities of mind or complex which involve higher
mental activities.

What activities are learned by the individual refer to types of learning. For example, habits, skills,
facts, etc. There are different types of learning. Some of the important and common learning activities
are explained here.

Types of Learning:

1. Motor learning:
Most of our activities in our day-to-days life refer to motor activities. The individual has to learn them
in order to maintain his regular life, for example walking, running, skating, driving, climbing, etc. All
these activities involve the muscular coordination.

2. Verbal learning:
This type of learning involves the language we speak, the communication devices we use. Signs,
pictures, symbols, words, figures, sounds, etc, are the tools used in such activities. We use words for
communication.
3. Concept learning:
It is the form of learning which requires higher order mental processes like thinking, reasoning,
intelligence, etc. we learn different concepts from childhood. For example, when we see a dog and
attach the term ‘dog’, we learn that the word dog refers to a particular animal. Concept learning
involves two processes, viz. abstraction and generalisation. This learning is very useful in recognising,
identifying things.

4. Discrimination learning:
Learning to differentiate between stimuli and showing an appropriate response to these stimuli is
called discrimination learning. Example, sound horns of different vehicles like bus, car, ambulance,
etc.

5. Learning of principles:
Individuals learn certain principles related to science, mathematics, grammar, etc. in order to manage
their work effectively. These principles always show the relationship between two or more concepts.
Example: formulae, laws, associations, correlations, etc.

6. Problem solving:
This is a higher order learning process. This learning requires the use of cognitive abilities-such as
thinking, reasoning, observation, imagination, generalization, etc. This is very useful to overcome
difficult problems encountered by the people.

7. Attitude learning:
Attitude is a predisposition which determines and directs our behaviour. We develop different attitudes
from our childhood about the people, objects and everything we know. Our behaviour may be positive
or negative depending upon our attitudes. Example: attitudes of nurse towards her profession, patients,
etc.

Theories of Learning:
Psychologists have tried to explain how people learn and why they learn. They have conducted many
experiments on animals and children and come to certain definite conclusions which explain the modes
of learning.

These are called as theories of learning. In many books, these explanations are treated as kinds of
learning. In a sense it is true. But the term learning is very comprehensive. It covers a wide range of
activities which cannot be explained within a limited framework. There are many theories explaining
modes of learning. Important among them are:

Trial and Error Learning Theory:

This theory was developed by an American psychologist EL Thorndike (1874-1949). He argues that
learning takes place through trial and error method. According to him learning is a gradual process
where the individual will make many attempts to learn. The essence of this theory is-as the trials
increase, the errors decrease.

This is possible because of association formed between sense impressions and impulses to action. Such
an association comes to be known as a ‘bond’ or a ‘connection, because it is these bonds or
connections which become strengthened or weakened in making and breaking of habits. According to
this theory when an individual is placed in a new situation, he makes a number of random movements.
Among them, those which are unsuccessful are eliminated and the successful ones are fixed.

These random movements are not eliminated at once. In the first attempt their number is very large, in
the second attempt the number of errors diminishes and the range of activity becomes narrower.
Gradually the individual learns to avoid unnecessary movements and reaches the goal. Improvement
takes place through repetition.

Thorndike studies the character of trial and error learning in a number of experiments on cats-using a
box which he called ‘puzzle box’. In one of the experiments a hungry cat was placed in the box and the
door was closed which could be opened by pressing a Latch. A fish was placed outside the box in a
plate.

The cat could see this fish. The cat was given 100 trials-ten in the morning and ten in each afternoon
for five days. The cat was fed at the end of each experimental period and then was given nothing more
to eat until after the next session. If, succeeded in opening the door in any trial by chance, he went to
eat food (fish). A complete record was made of the cat’s behaviour during each trial.

In the beginning the cat made a number of random movements like biting, clawing, dashing, etc.
gradually in subsequent trials the cat reduced the incorrect responses (errors), as it was in a position to
manipulate the latch as soon as it was put in the box.

This experiment revealed that the random movements were decreased gradually, that is-as the trials
increased the errors decreased. As the trials increased the solution to open the door (pressing the latch)
was discovered and at the end, the cat could open the door with zero error. The time taken in each trial
was eventually reduced.

Thorndike conducted many experiments with maze and puzzle box learning in which cats and rats
were used. He has demonstrated that through numerous trials the animal learns much and gradually
improves his effort.

We all learn many skills like swimming, cycling, riding, etc., through this method. Children learn to
sit, stand, walk, and run by this method only. However, this method involves considerable waste of
time and effort.

Learning by Conditioning:
In literal sense, conditioning means ‘getting used’ to, or ‘adjusted ‘to a new situation, or a stimulus. It
is a process of substituting the original stimulus by a new one and connecting the response with it.
There are two types of conditioning theories:

1. Classical conditioning:
This method of conditioning got its name from the fact that, it is a kind of learning situation that
existed in the early classical experiments of Ivan P Pavlov (1849-1936), Russian physiologist who was
awarded Nobel Prize, in 1904 for his experiments.

Pavlov designed an apparatus to measure the quantity of saliva produced in response to food (meat
power). At the beginning of his experiment Pavlov noted that no saliva flowed when he rang the bell.
He then trained the dog by sounding the bell, and shortly afterwards presenting food.

After the sound of the bell had been paired with food a few times, he tested the effects of the training
by measuring the amount of saliva that flowed when he rang the bell and did not present food. He
found that some saliva was produced in response to the sound of the bell alone. He then resumed the
training-paired presentation of bell and food a few times and then tested again with the bell alone.

As the training continued, the amount of saliva on tests with the bell alone increased. Thus, after
training the dog’s mouth watered-salivated- whenever the bell was sounded. This is what was learned;
it is the conditioned response.
This theory states that CS (bell) becomes a substitute after pairing with UCS (food) and acquires the
capacity to elicit a response. It is because the association (conditioning) is formed between CS and
UCS. This may be symbolically presented as follows:

UCS<———————————à UCR

(Food) (Saliva)

↓ (Conditioning)

CS<————————————-à CR

(Bell) (Saliva)

Sub-principles of Classical Conditioning:

There are certain sub-principles which explain the different phenomena of this experiment.

a. Extinction and spontaneous recovery:

Extinction means cessation of a response. The strength of the CS gradually decreases when it is
presented alone and not followed by UCS for a number of trails. This process is called ‘extinction’. In
this experiment when only bell is presented without food for a number of trials, the dog stopped
salivation gradually.

But when the CS (bell) was paired again with UCS (food) for some trials, the CR (salivation)
recovered. This is known as ‘spontaneous recovery’. In spontaneous recovery the dog required less
number of trials than the first time, because the association between CS and UCS still existed in the
brain of the animal.

b. Stimulus generalization:
A tendency to respond to a stimulus which is similar to original one is called stimulus generalization,
the greater the similarity, the more the generalization. In this experiment, the dog started salivating
even for the sound of a buzzer which was similar to bell.

c. Stimulus discrimination:
When there is much difference between two stimuli, the animal can discriminate between the two. For
example, if the dog is conditioned to salivate at the signal of red light, it will not salivate when green
light is presented.

d. Higher order conditioning:

If a ‘light’ is presented followed by bell and then by food for a number of trials, the dog will start
salivating to light itself. This phenomenon is called higher order condition.

All these principles are very useful in behaviour therapy. Conditioning is not confined only to the
laboratory.

In our day-to- day’s life we come across many instances of such learning. For example, a small child
who does not know, touches a burning candle, it gives him a painful experience and withdraws his
hand. Later this experience will make him withdraw from burning objects and avoid them all together.

Conditioning is used as psychotherapeutic technique very effectively in the treatment of abnormal

behaviours such as phobias, alcoholism, enuresis, etc. These are called behaviour modification
techniques. Watson and others have conducted many experiments to prove the usefulness of this
method.
2. Operant Conditioning:
This method of conditioning was developed by an American psychologist BF Skinner. This theory is
also known as ‘Instrumental conditioning’, because the animals use certain operations or actions as
instruments to find solution.

Skinner conducted his famous experiment by placing a hungry rat in a box called after his name
‘Skinner box’. This box was containing a lever and a food tray in a corner of the box. It was so
arranged, that the animal was free to move inside the box, but the pressing of the lever would get the
animal a pallet of food in the tray as reinforcement.

Arrangement was also made to record the number of pressings of the lever by a mechanical device. It
was found in the beginning that the rat pressed the lever occasionally and used to get food as
reinforcement for each pressing.

Gradually, as the animal learnt the pressing of lever would give some food, it repeated the responses
very rapidly. This rapid increase in pressing the lever is the indication of the animal conditioned to get
food.

In day-to-day’s life also, much learning takes place in animals as well as in human beings by this
method. The reinforcement will be the motivating factor. It will make the organism to repeat its action.

It is on the basis of these experiments, Skinner made his famous statement “Rewarded behaviour is
repeated”. Instrumental conditioning involves more activity by the learner than classical conditioning.
Skinner conducted his experiments on different animals like pigeons, rats, etc.

Reinforcement which is the most important aspect of this experiment is divided into two types:
positive reinforcement is used in reward training. Negative reinforcement-like punishment is used to
stop undesired responses or behaviours. Operant conditioning is useful in shaping undesirable
behaviour and also in modification of behaviour.

This is also useful in training of mentally retarded children to learn dressing, eating and toilet training
skills, treatment of phobias, drug and alcohol addictions, and psychotherapy and to teach needed
behaviour in children. Further, these experiments have proved that intermittent reinforcement yields
better results than continuous reinforcement.

PERCEPTION
Everyday different stimuli around us will be stimulating our sense organs. Many of these stimuli are
received by our sense organs and are converted into sensations.

These sensations are transmitted to the concerned parts of brain.

In turn the brain will interpret these sensations. It is only after such interpretation we understand what
the stimulus is.

Hence in understanding the world around us, attention occurs first, followed by sensation and finally
interpretation by brain.

This process of ‘interpretation of stimulus is known as perception’. So perception involves two

processes: sensation interpretation. But interpretation of any stimulus requires past experience also.
For example, a child who has not seen an elephant earlier either in photo or directly cannot identify
that animal, whereas another child who has seen earlier will identify the animal easily.
Hence, perception may be defined as “a process of interpretation of a present stimulus on the basis of
past experience”.

Perception is not as simple as said here. It is an integrated approach. It is a synthetic process where
different physiological and psychological processes are involved. For example, the accuracy of sense
organs, clarity of sensations, mental set of an individual, etc. Otherwise our perception may go wrong.

Factors Affecting Perception:

There are individual differences in perceptual abilities. Two people may perceive the same stimulus
differently.

The factors affecting the perceptions of people are:

a. Perceptual learning:
Based on past experiences or any special training that we get, every one of us learns to emphasise
some sensory inputs and to ignore others. For example, a person who has got training in some
occupation like artistry or other skilled jobs can perform better than other untrained people. Experience
is the best teacher for such perceptual skills.

For example, blind people identify the people by their voice or by sounds of their footsteps.

b. Mental set:
Set refers to preparedness or readiness to receive some sensory input. Such expectancy keeps the
individual prepared with good attention and concentration. For example, when we are expecting the
arrival of a train, we listen to its horn or sound even if there is a lot of noise disturbance.

c. Motives and needs:

Our motives and needs will definitely influence our perception. For example, a hungry person is
motivated to recognise only the food items among other articles. His attention cannot be directed
towards other things until his motive is satisfied.

d. Cognitive styles:
People are said to differ in the ways they characteristically process the information. Every individual
will have his or her own way of understanding the situation. It is said that the people who are flexible
will have good attention and they are less affected by interfering influences and to be less dominated
by internal needs and motives than or people at the constricted end.

Errors in Perception:
As seen above perception is process of analysing and understanding a stimulus as it is. But it may not
be always possible to perceive the stimuli as they are. Knowingly or unknowingly, we mistake the
stimulus and perceive it wrongly.

It may be due to defect in our sense organs or defective functioning of the brain. Many times the
prejudices in the individual, time of perception, unfavourable background, lack of clarity of stimulus,
confusion, conflict in mind and such other factors are responsible for errors in perception. There are
two kinds of errors:

a. Illusion:
Illusion is a false perception. Here the person will mistake a stimulus and perceive it wrongly. For
example, in the dark, a rope is mistaken as a snake or vice versa. The voice of an unknown person is
mistaken as a friend’s voice. A person standing at a distance who is not known may be perceived as a
known person.
b. Hallucination:
Sometimes we come across instances where the individual perceives some stimulus, even when it is
not present. This phenomenon is known as hallucination. The person may see an object, person, etc. or
he may listen to some voice though there are no objects and sounds in reality.

Hallucinations pertain to all the sensations appear in people, but visual and auditory hallucinations are
more common. Usually persons with unsound mind, emotionally disturbed, alcoholics and those who
are in confused states may experience hallucinations. However, among abnormal people and
intoxicated persons hallucinations are very common.

In addition to these errors, there are some abnormalities in our sense perceptions called anaesthesia (no
sensation), hyperesthesia (excessive sensitivity) and paraesthesia (distorted or wrongly localised
sensation). In these cases the tactile (skin) sensation is wrongly perceived.

Observation and Nurse:

Good and keen observational ability is an essential characteristic of a nurse. The most important
activities of a nurse include observation of changes in pulse, respiration, heart beat and blood pressure
because they indicate general condition of a patient. The condition of the postoperative case, the
emergency cases also require accurate observation.

Observation involves attention and perception. The nurse should always concentrate her attention on
duties.

Distraction of attention may lead to serious consequences like death of a patient. Attention helps to
understand the problems of patient. At the same time, accurate perception helps the nurse to have a
clear picture of the condition of the patient.

While attending the emergency cases, during operations and other serious conditions accurate
perception of the situations help the nurse to deal with the situation in an effective manner.

ATTITUDE BUILDING

Attitude can also be defined as a mental or neural state of readiness organized through experience
influencing dynamically or directly the individuals’ response to all objects and situations with which it
is related.

Some others have said that attitude is a learned or more or less organized tendency to respond in a
persistent manner usually negatively or positively with reference to some situation, idea, object or
class of such objects.

Some have also tried to define attitudes on the basis of its components or structures. Such components
include cognitive component, affective component and behavioural component.

(a) The cognitive component of a social attitude consists of a person’s system of beliefs, perceptions
and stereotypes about the attitudinal object. In other words, it refers to his ideas about the object. The
term opinion is often used as a substitute for the cognitive component of an attitude particularly when
it is relevant to some issue or problem.
(b) The affective component of social attitude refers to the emotional aspect of the attitude which is
very often a deep rooted component and resists most to change. In other words, it indicates the
direction and intensity of an individual’s evaluation.

In further simple terms, it involves a kind of emotion experienced towards the object of attitude say
love or hatred, like or dislike, palatable or unpalatable feelings. The emotional component as already
indicated it is quite strong normally stands on the way of attitude change.

(c) Finally, the behavioural component of social attitudes indicates the tendency to react towards the
object of attitude in certain specific ways. In other words, it is a predisposition to act in a certain
manner towards the attitude object. This is known by observing the behaviour of the individual i.e.,
what he says he will do or actually how he behaves, does or reacts.

A person who shows strong unpalatable attitude towards dowry by not accepting any dowry during his
marriage or a person who fights against corruption by remaining honest and upright throughout his life
and by not allowing and tolerating injustice to occur with his knowledge is an example demonstrating
the behavioural component of attitude.

Results show that there is internal organisation among these components of the attitude. Thus, some
attitudes form inter connections with other attitudes to create organised patterns instead of standing in
isolation from one another.

From this it can be concluded that the above three components of attitude are related and a change in
one component is likely to produce a change in others so as to maintain internal consistency within the
total attitude structure.

Further, these components can either remain at a simple level or at a complex level depending upon
their strength. For instance, if the affective component is at a simple level, it may involve mere like or
dislike towards the attitudinal object while a complex affective component may induce reactions of
love or hatred, anger or contempt, fear and anxiety etc.

In the same way, the cognitive component at a simple level may have enough knowledge about the
attitudinal object while at a complex level, he has detailed and extensive system of beliefs and clear
ideas about the attitudinal object in question.

The behaviour component usually depends upon the cognitive and affective components as they
ordinarily direct his behaviour keeping other factors constant as other factors besides attitude also
determine ones behaviour.

On the basis of the above facts and definitions or the ‘what’ of attitude, attitude can be broadly defined
as a relatively permanent system of the organisation of the behaviour shown by an individual towards
an object, person, event, action or stimulus and this stable mental organisation ordinarily has cognitive,
affective and action or behaviour components which interact with each other and influence an
individual’s behaviour in different ways.

Concept of Attitude:
The concept of attitude is perhaps the most indispensable and distinctive concept in contemporary
social psychology. The study of the concept of attitude is important for psychologists and particularly
social psychologists and sociologists.

As a consequence of interaction between the individual and the society certain beliefs, opinions,
values, norms, customs and traditions grow to which the individual usually conforms. Through the
process of socialization the human being conforms to these social norms and traditional values.
Socialization develops mainly through attitude and confirming behaviour.

This confirmation to social traditions, customs and cultural values occurs through the formation of
appropriate and positive beliefs and ideas in relation to various socially standardized values, norms,
rules, regulations or various other criteria of conduct of his reference groups. This is otherwise called
attitude in a wider sense. The sociogenic and biogenic motives of a person are also reflected in his
attitudes.

From the above stand-point, attitude has got wide spread repercussions in one’s social, personal and
emotional life. It not only determines the behaviour of an individual in a particular situation, it also
directs the person to act in a particular situation, it also directs the person to act in a particular manner
by providing a readymade set.

Characteristics and Properties of Attitudes:

1. Attitudes always imply a subject-object relationship. They are associated with ideas, ways and
external objects. It is always related to definite stimulus situations.

This stimulus situation may be towards:

(a) Objects such as home, automobile, TV, kitchen

(b) Persons like own self, father, mother, in laws, brother and sister etc.

(c) Institutions like school, college, church, club

(d) Concepts, values, norms and symbols like flag, truth, democracy, justice, religion, God, philosophy
etc. These subject object relationship are neither innate nor biologically determined but acquired from
the environment. An individual’s attitude, therefore, organises his behaviour with reference to a
particular object.

2. Attitudes in relation to objects, persons and values may or may not have motivational appeal
initially. Gradually individuals through social interaction develop either positive or negative attitude
which depend upon their experience and need.
In other words, the individual first comes in contact with certain objects, develops a particular likeness
or dislikeness depending upon the fulfilment of his need or motive or due to any other factors.

The organism first perceives and then develops an attitude. Thus, the perceptual stage is most
important particularly where there is no motive. Many social attitudes are found to develop through
verbal judgements of adults even though there may not be any motive.

3. Attitudes give a direction to one’s behaviour and actions. Because of a particular positive attitude
the organism either approaches it or because of a negative attitude avoids it. A positive attitude will
reinforce the behaviour and help in its continuance. A negative attitude conversely will make the
response weak and finally lead to avoidance behaviour.

4. Attitudes are coloured with motivational and evaluative characteristics. A favourable attitude is
considered as having some positive values while a negative attitude is looked upon as having
unpalatable and negative implications. The directive properties or attitude make our goal purposive
and direct our behaviour.

5. Attitudes are not innate but learned, acquired and conditioned. They grow in the society in the minds
of men through various modes of training. As a result of our first hand and second hand experience
with objects, ideas, situations and through the process of social interaction and socializations attitudes
grow.

Direct or firsthand experience is perhaps the fundamental factor in the formation and growth of
attitudes. But often the attitude of our parents, relations, friends, teachers, peers and of course the
loved ones, and attitude of the society helps in the development of individual’s attitude in the
particular direction. Thus, the attitude develops both through direct and indirect sources.

6. Attitude is never neutral. It can be either positive or negative, favourable or unfavourable, palatable
or unpalatable. Thus, it is always coloured with some sort of emotion. A neutral view is said to be the
opinion and not attitude where there is no emotional tone.

7. Attitudes have affective properties of varying degrees. They are linked with feelings and emotions
like pleasant, unpleasant, fear, love. An attitude which works as a tendency for future activity is
marked by emotionality. The reaction is either mild or violent or normal. The emotional feeling tone in
attitude may be due to motivational as pointed out earlier.

The individual is forced to develop either a favourable or an unfavourable attitude because of the
pressure of social environment or due to the nature of reaction of one individual with another
individual which is always attached with some feeling tone.

8. Attitudes are more or less enduring organisations or enduring state of readiness. Thus, attitudes once
formed and relatively stable, consistent and permanent can be normally predicted. The cognitive
component developing during the perceptual stage makes attitude relatively permanent. If you have
liked a particular type of music say light music, you will tend to like it atleast for quite a long period.

But that does not mean that attitudes are absolute and fixed stages of readiness or are rigid, and hence
not liable to change. The very fact that attitudes are learned behaviour indicates that they can be
changed through subsequent learning or experience. It can be strengthened or weakened, can be
changed from palatable to unpalatable or from favourable to unfavourable and vice versa.

9. From the above facts, it follows that attitudes can be changed depending upon the circumstances,
experiences and how of information’s through various processes of communication or through direct
interaction. A number of studies on attitude change support the above fact.

10. Attitude is called the evaluative orientation towards the social world which is mostly expressed
verbally and, therefore, it can be measured. In attitude the intensity of emotion is measured through a
five point or six point scale like very favourable, favourable, moderately favourable, neither favourable
nor unfavourable, unfavourable and extremely unfavourable.

You can express your attitude towards the extremists creating problems in Kashmir or Assam through
the above scale, by saying very much against them, moderately against them or strongly in favour of
them etc.

11. Attitudes have cognitive, affective and behavioural components.

12. Attitudes range in the number and variety of stimuli to which they are referred. The strength and
range of an attitude depends upon the strength of the experience and learning of the organism.

If the organism has learned that people of certain caste are inferior, he will have a negative attitude
towards such castes. Similarly, if somebody is taught from the childhood that girls are mentally
inferior than boys he will develop similar attitude towards girls in general unless otherwise happens.

13. Except a few, most of the attitudes are clustered or related to each other. If you have unfavourable
attitude towards male sex, any other object, idea, value or incident related to men folk in general will
also be looked upon in a similar manner.

Thus, attitudes mostly become organised and structured when connected highly with other attitudes.
Only a very few attitudes can be thought of existing in isolation. Strong attitudes form the centre of a
cluster of attitudes. Around these attitudes which remain in the centre other related attitudes are
organised.

Classification of Attitude:
Attitudes have been classified in several ways such as positive and negative, common or personal,
reciprocal etc.
Based on the existing relation between the individual of the society different categories of
attitudes develop:
(a) Reciprocal attitude:
The attitude between employee and the employer, student and teacher is reciprocal. Such attitudes are
designated as reciprocal ones.

(b) Common attitude:

When large number of people in the society have similar or uniform attitude towards an organisation,
groups or political parties, religion etc. it is known as common attitude. If most of the people in a
particular society do not like to take dowry, this is considered as a common attitude.

(c) Private attitude:

The name itself is explanatory. Such attitudes are absolutely the individual’s personal attitudes and are
not shared by others. Likeness or dislikeness for a particular person comes under this category. But
completely private attitudes are rarely found.

Sometimes people develop secret ambitions which are neither reciprocal nor common but private.
Most individuals have secret areas of guilt and they often take elaborate pain to conceal their guilt
feelings from others.

Attitudes also form a hierarchical order. Every person gives more importance to some attitudes and
less to others. Attitude is also selective. The selective nature of the attitude is a function of the factors
within the individual himself. This implies a functional state of readiness in relation to the stimuli in
question. The psychology of attitude is highly related to the general selectivity of the whole organism.

Attitudes can also be classified in the following way into six groups:
(i) Theoretical (ii) Economic (iii) Aesthetic (iv) Social (v) Political (vi) Religious.

(i) Theoretical:
Those who always desire to discover the reasons and truth behind everything come under this
category. Hearing a beautiful story, a mathematician said “Beautiful, but what does it prove?”
Scientists, philosophers and scholars are of this type. Their attitude is more theoretically oriented.

(ii) Economic:
Guided by utility and practical value of an object economic type persons try to find out the benefit and
utility of an object. Their attitude towards any object is utility oriented. They are very practicable
persons. They judge people on the basis of their earning capacity. If there is a flood, they will be
interested to know how it has economically affected the flood devastated areas.

(iii) Aesthetic:
People having aesthetic attitudes attempt to discover the beauty of an object. It helps in fulfilment and
self realization. They like to imagine beautiful things and get satisfaction out of it. If there is flood they
go by the beautiful scenery or miserable scenes.
(iv) Social:
Persons with social attitude judge the situation from the social standpoint. It involves love for
fellowmen and self sacrifice. It is perhaps the most dignified attitude in life. Such people try to help
others in distress. Gopabandhu Das was a person with social attitude.

(v) Political:
People with political attitude like to dominate and control other people. They are lovers of power.
They try to control a situation by self display. Such people want to be leaders and ascent over others
for the sake of power. Politicians come under this category.

(vi) Religious:
The desire to explore the final secret of nature, mystic aspect of life is found among persons with a
religious attitude. Such attitude is qualified by faith and belief and emotion and not coloured by
reasoning.

People of all other attitudes would try to examine the cause of flood with reason while people with
religions attitude will say that Gods’ desire has been implemented and what God has done is for the
well being of the people. They will never blame God for anything whatsoever, rather they may say that
because of lots of corruption, God has become angry on people and penalized them in this way.

Functions of Attitude:
An individual, in his life time, is bound to develop some attitudes. These attitudes may be favourable
or unfavourable or both. The personality of a person is coloured by his attitudes. Attitudes determine
ones personality.

A person can be called good or bad, sociable or unsociable, acceptable or unacceptable depending
upon his attitude. If a person mostly develops all unfavourable attitude, his life becomes miserable. He
cannot accept or believe or love anybody. He becomes a social or antisocial. Conversely nobody will
accept him as this is a reciprocal process.

From the above stand points it is well evident that attitude determines one’s behaviour, one’s
personality and one’s position in the society. While favourable attitude towards others make him
pleasant, sociable and acceptable, unfavourable attitudes make many enemies and develop hostile
feelings and hatred in his mind.

Attitudes have, therefore, significant functions in moulding, influencing and determining one’s
behaviour in all contexts. As already discussed, on the basis of attitude personality can be typed.

Attitudes function as a source of motivation which helps in the adjustment to the environment.
According to Katz (1960), four different personality functions are served by the maintenance and
modifications of social attitudes. They are adjustment, value expression, knowledge and ego defence.
(i) Adjustment Function:
The holding of a particular attitude leads to reward or the avoidance of punishment. It is the utilitarian
or instrumental function of attitude which motivates the person to adjust with the environment to gain
social approval and support of family, friends and neighbours.

In case of certain social issues like marriage, death, democracy, religion, sacrifice and helping others,
he holds opinions similar to his parents and relations and friends. Further favourable attitudes are
developed towards those stimuli which satisfy one’s needs and unfavourable attitudes towards those
which stand on the fulfilment of his needs and motives.

(ii) Value Expression Function:

On the basis of identification with parents and other relatives the child develops certain personal
values and self concepts. These values are integrated in the form of different attitudes. Attitudes help
in expressing these values. The individual gets satisfaction by expression of attitudes appropriate to his
personal values.

Religious, ideological and patriotic beliefs and values normally are based on this function. People get
self satisfaction by engaging themselves in social work, care for the aged persons, by helping at the
time of flood and famines, by taking care of the orphans or by raising their voice against corruption
and social injustice.

(iii) Knowledge Function:

According to Mann this function of attitude is based on the need to understand, make sense and give
adequate structure to the universe. Attitudes have a cognitive function in the sense that they help in
understanding things properly for the sake of quick adjustment.

Attitudes which prove inadequate dealing with new and changing situations are discarded because,
otherwise, they lead to contradictions and inconsistency. The need for cognitive consistency, meaning
and clarity is fulfilled by the knowledge function of attitude.

(iv) Ego Defensive Function:

The ego defensive function of attitude provides protection against the knowledge and acceptance of
basic unpleasant truths about disease, death, weakness, insecurity, frustration, unemployment, illness
and various other harsh realities of life.

By rationalizing and distorting attitudes on the above harsh realities of life the ego tries to defend itself
and lead a happy life by avoiding unpleasantness arising out of these unpleasant truths. All these facts
lead to believe the tremendous significance of the functions of attitude in human life.

Formation of Attitude:
Attitudes are not biologically inherited but built out of continuous experiences of the world around us.
They are the outcome of complex function of both cultural and functional factors. From birth onwards,
every individual is exposed to direct and indirect stimuli of the environment which teach him to hold
certain ideas, values and beliefs.

Through the process of socialisation when one is taught to associate good or bad feelings, dos or
dont’s, favourable and unfavourable experiences with certain actions or behaviour patterns, he
develops certain consistent attitudes. When some action is rewarded one develops a favourable attitude
towards it and any action or view which is punished one develops an unfavourable attitude towards it.

Attitudes also occur when one imitates his parents and other intimate friends, relations. Children and
adults form attitudes very often based on suggestions and second hand experiences. Many adults are
also found forming attitudes spontaneously based on their own personal and first hand experiences.
Nevertheless, attitudes grow in the mind of individual through the process of socialization.

Social attitudes develop out of verbal value judgements, dos and donots. But personal attitudes may
develop out of one’s own interaction, contact and firsthand experience with the attitudinal objects and
other objects related to it. In case of social attitudes one is taught to hold a particular attitude towards
an attitudinal objects like “Mama says not to play with girls” or blacks.

Parents, family members, media and press, peers, teachers and well wishers acquaintances, all play a
tremendous role in the formation and growth of attitudes. Some studies relating to attitudes and values
of American, British and Indian students and Indian and Western Children are quite simulating.

Through attitudinal socialization experiences, people come to learn appropriate attitudes towards
certain people, different types of food, toy, playmates, play materials and develop negative attitudes
towards others. According to Sherif, our attitudes are centralized in the objects of values which may be
social institutions, individuals, neutral objects, parties etc.

The development of values out of which attitudes are formed are the outcome of social traditions,
customs learning and social institutions. Initially the infant being only concerned with the satisfaction
of his basic needs like food and care is socially blind and is not concerned about the social sanctions.

Through the process of need satisfaction the child gets a scope to develop attitude. Those objects and
persons which satisfy his needs he develops a favourable attitude towards them. But when an object or
person stands on the way of his need satisfaction, unfavourable attitude develops towards it.

In his routine behaviour he never shows the matured direction of attitude. So upto the preschool age
i.e., the third or fourth year, attitude in its proper connotation does not appear.

But when the child goes to school, certain values and disciplines are imposed upon him and these
values gradually become the core of attitude formation. In the beginning the child’s mental level being
less matured, his values are shapeless and the attitude formation is in a completely defused stage.
Piaget and others have held that the child in his disposition to a dog, football player or an actor never
shows the diverse tinges of attitude which are the characteristics of an adult.
To all these objects, he will simply say like or dislike but he cannot discriminate. At this stage, there is
no selectivity of perception which is necessary for the formation of attitude. This selectivity of
perception and values gradually grow in children out of which attitudes are formed.

This is called differentiation to the objects or stimuli around him which grows in course of years. In
the beginning the child reacts equally say to three different objects. But when differentiation is built
up, he becomes sympathetic and protective to the dog or demanding to his mother or appreciates an
actor.

These clear cut differentiations in course of years indicate that attitude undergoes development in a
social context depending upon its existing cultural pattern and social sanctions. After differentiation
integration of different value structures and attitudes which encompass them take place.

This gives a direction to any attitude. For this, cognitive clarity is essential. Depending upon the value
attached to a particular attitudinal object, favourable or unfavourable attitudes develop. As the child
gets maturity by power, prestige, recognition, social approval, rewards and punishment, he gradually
attends to the social world.

Frame of reference and reference groups often help in supporting or rejecting a particular value, norm
or standard. The direction of attitude is based on this. In daily life, many of our attitudes are formed on
the basis of short cut values and dictums coming form other people before we make up out- mind
ourselves through actual contact with the situation, person or object, comments Sherif.

A standard or norm having an authoritarian source or frame of reference may produce organisation at a
higher level. Similarly, a standard carrying with it the sanction of public approval is accepted than
when the same or a similar standard is evolved by the individual himself.

Secondly many of our attitudes also develop due to second level and indirect experience like TV, radio
and news papers to which the individual is exposed daily. These mass communication medias actually
are responsible for the development of many of our attitudes in the modern age.

The cognitive components of the attitude mostly develop out of these indirect and second hand
information’s, the communication media. The attitudes may be right or wrong, but undoubtedly the
communication network plays a vital role in the formation of attitudes.

One’s affiliation to the groups helps in the formation of attitude. He usually accepts the attitudes
developed by such groups, may be his family school, neighbourhood, peer groups, various relations,
social and ethnic groups. However, there may be some exception and individual difference depending
upon the personality of the concerned individual. Personality plays a key role helping in the diversity
of attitudes.