Professional Documents
Culture Documents
NOTES OF LESSON
(As per Anna University Syllabus)
Complied by
S.Solamalai
Assistant Professor -MBA
OBJECTIVES:
To enable the students to study the evolution of Management, to study the functions and
principles of management and to learn the application of the principles in an organization .
UNIT I INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS 9
According to Harold Koontz, “Management is the art of getting things done through and with
people in formally organized groups”.
Management is an ART:
Art involves the practical application of personal skills and knowledge to achieve concrete
results. It is the practical way of doing specific things. The function of the art is to effect change
and to achieve desired results. Art represent how of human behavior or the know how to do
work. Art is a personalized process and every artist has his own style. Art is essentially creative
and the success of an artist is measured by the result he achieves.
I) Like any other artist, a manager applies his knowledge and skills to coordinate the
efforts of his people.
II) Management seeks to achieve concrete practical results, eg., profit, growth, social
service etc in a given situation.
III) Like any other art, management is creative. It brings out new situations and convert
resources into output.
IV) Management is a personalized process. Every manager adopts his own approach
towards problems depending upon his perception and the environment conditions.
V) Effective /management leads to realization of organisational and other goals. The
success of a manager is measured by the results he achieves.
Management is a SCIENCE:
i) There is now a systematized body of knowledge. Principles and theories are now
available in every area of management.
ii) Principles of management have been evolved through practical experience and
theoretical research over several decades.
iii) Managerial Principles have a wide and repetitive range of application. Application of
management theory can be demonstrated through the quasi laboratory method of case
studies
iv) Management theory and principles can be taught in classrooms and in industry.
Motive The main motive of an entrepreneur is But, the main motive of a manager is
to start a venture by setting up an to render his services in an
enterprise. He understands the venture enterprise already set up by someone
for his personal gratification. else i.e., entrepreneur.
Status An entrepreneur is the owner of the Manager is the servant in the
enterprise. enterprise owned by the entrepreneur.
Risk Bearing An entrepreneur being the owner of the A manager as a servant does not bear
enterprise assumes all risks and any risk involved in the enterprise.
uncertainty involved in running the
enterprise.
Rewards The reward an entrepreneur gets for A manager gets salary as reward for
bearing risks involved in the enterprise the services rendered by him in the
is profit which is highly uncertain. enterprise. Salary of a manager is
certain and fixed
Innovation Entrepreneur himself thinks over what But, what a manager does is simply to
and how to produce goods to meet the execute the plans prepared by the
changing demands of the customers. entrepreneur. Thus, a manager simply
Hence, he acts as an innovator also translates the entrepreneur’s ideas
called a ‘change agent’ into practice.
Qualifications An entrepreneur needs to possess On the contrary, a manager needs to
qualities and qualifications like high possess distinct qualifications in
achievement motive, originality in terms of sound knowledge in
thinking, foresight, risk -bearing ability management theory and practice.
and so on.
4.Difference between management and administration
5. What are the types of Managers? -2 marks
- Top Managers: Managers at the upper level of the organisation structure who are
responsible for making organizational wide decisions and establishing the goals and plans
that affect the entire organisation.
- Middle Managers: Managers between the lowest level and top level of the organisation
who manage the wok or first line managers.
- First line managers: Managers at the lowest level of management who manage the work
of non-managerial employees.
Henry Mintzberg identified ten different roles, separated into three categories. The categories he
defined are as follows:
a) Interpersonal Roles
The ones that, like the name suggests, involve people and other ceremonial duties. It can be
further classified as follows:
• Leader – Responsible for staffing, training, and associated duties.
• Figurehead – The symbolic head of the organization.
• Liaison – Maintains the communication between all contacts and informers that compose
the organizational network.
b) Informational Roles
Related to collecting, receiving, and disseminating information.
• Monitor – Personally seek and receive information, to be able to understand the
organization.
• Disseminator – Transmits all import information received from outsiders to the members
of the organization.
• Spokesperson – On the contrary to the above role, here the manager transmits the
organization’s plans, policies and actions to outsiders.
c) Decisional Roles
Roles that revolve around making choices.
• Entrepreneur – Seeks opportunities. Basically they search for change, respond to it, and
exploit it.
• Negotiator – Represents the organization at major negotiations.
• Resource Allocator – Makes or approves all significant decisions related to the allocation
of resources.
• Disturbance Handler – Responsible for corrective action when the organization faces
disturbances.
i) Conceptual Skills: are skills managers use to think and to conceptualize about abstract and
complex situations. Using these skills, managers see the organisation as a whole, understand the
relationships among various subunits and visualize how the organisation fit into its broader
environment.
ii) Human Skills: which involve the ability to work well with other people both individually and
in a group. Because all managers deal with people, these skills are equally important to all levels
of management. They should know how to communicate, motivate, lead and inspire enthusiasm
an trust.
iii) Technical skills: are the job specific knowledge and technique needed to proficiently
perform work tasks. These skills tend to be more important for first line managers because they
typically are managing employees who use tools and techniques to produce the organizations
product or service the organizations customers.
- The Egyptian pyramids and the Great Wall of China are proof that projects of tremendous
scope, employing tens of thousands of people, were completed in ancient times.
- Another example of early management can be found in the city of Venice, which was a
major economic and trade center in the 1400s. The Venetians developed an early form of
business enterprise and engaged in many activities common to today’s organizations. For
instance, at the arsenal of Venice, warships were floated along the canals, and at each
stop, materials and riggings were added to the ship.
-
Adam Smith:
In 1776, Adam Smith published The Wealth of Nations, in which he argued the economic
advantages that organizations and society would gain from the division of labor (or job
specialization)—that is, breaking down jobs into narrow and repetitive tasks. Using the pin
industry as an example, Smith claimed that 10 individuals, each doing a specialized task, could
produce about 48,000 pins a day among them. However, if each person worked alone performing
each task separately, it would be quite an accomplishment to produce even 10 pins a day! Smith
concluded that division of labor increased productivity by increasing each worker’s skill and
dexterity, saving time lost in changing tasks, and creating laborsaving inventions and machinery.
Job specialization continues to be popular. For example, think of the specialized tasks performed
by members of a hospital surgery team, meal preparation tasks done by workers in restaurant
kitchens, or positions played by players on a football team.
Industrial Revolution:Large efficient factories needed someone to forecast demand, ensure that
enough material was on hand to make products, assign tasks to people, direct daily activities, and
so forth. That “someone” was a manager: These managers would need formal theories to guide
them in running these large organizations.
Classical Approach:
Two major theories comprise the classical approach: scientific management and general
administrative theory. The two most important contributors to scientific management theory
were Frederick W. Taylor and the husband-wife team of Frank and Lillian Gilbreth. The two
most important contributors to general administrative theory were Henri Fayol and Max Weber.
1. Develop a science for each element of an individual’s work to replace the old rule-of thumb
method.
2. Scientifically select and then train, teach, and develop the worker.
3. Heartily cooperate with the workers so as to ensure that all work is done in accordance
with the principles of the science that has been developed.
4. Divide work and responsibility almost equally between management and workers.
Management does all work for which it is better suited than the workers.
General administrative theory: focused more on what managers do and what constituted good
management practice.
14 principle’s of Henry Fayol:
1. Division of Work. Specialization increases output by making employees more efficient.
2. Authority. Managers must be able to give orders, and authority gives them this right.
3. Discipline. Employees must obey and respect the rules that govern the organization.
4. Unity of command. Every employee should receive orders from only one superior.
5. Unity of direction. The organization should have a single plan of action to guide managers
and workers.
6. Subordination of individual interests to the general interest. The interests of any one
employee or group of employees should not take precedence over the interests of the
organization as a whole.
7. Remuneration. Workers must be paid a fair wage for their services.
8. Centralization. This term refers to the degree to which subordinates are involved in decision
making.
9. Scalar chain. The line of authority from top management to the lowest ranks is the scalar
chain.
10. Order. People and materials should be in the right place at the right time.
11. Equity. Managers should be kind and fair to their subordinates.
12. Stability of tenure of personnel. Management should provide orderly personnel planning
and ensure that replacements are available to fill vacancies.
13. Initiative. Employees who are allowed to originate and carry out plans will exert high levels
of effort.
14. Esprit de corps. Promoting team spirit will build harmony and unity within the organization.
Quantitative Approach:
The quantitative approach focuses on improving decision making via the application of
quantitative techniques. Its roots can be traced back to scientific management.
(i) Management Science (Operations Research)
Management science (also called operations research) uses mathematical and statistical
approaches to solve management problems. It developed during World War II as strategists tried
to apply scientific knowledge and methods to the complex problems of war. Industry began to
apply management science after the war.
This approach focuses on the operation and control of the production process that transforms
resources into finished goods and services. It has its roots in scientific management but became
an identifiable area of management study after World War II. It uses many of the tools of
management science.
The quantitative approach contributes directly to management decision making in the areas of
planning and control. For instance, when managers make budgeting, queuing, scheduling, quality
control, and similar decisions, they typically rely on quantitative techniques. Specialized
software has made the use of these techniques less intimidating for managers, although many
still feel anxious about using them.
Behavioral Approach:
The field of study that researches the actions (behavior) of people at work is called
organizational behavior (OB). Much of what managers do today when managing people—
motivating, leading, building trust, working with a team, managing conflict, and so forth—has
come out of OB research.
The behavioral approach focused on trying to understand the factors that affect human behavior
at work.
The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of
researchers participated in the studies, including Elton Mayo. One of the major conclusions of
the Hawthorne studies was that workers' attitudes are associated with productivity. Another was
that the workplace is a social system and informal group influence could exert a powerful effect
on individual behavior. A third was that the style of supervision is an important factor in
increasing workers' job satisfaction.
Behavioral science and the study of organizational behavior emerged in the 1950s and 1960s.
The behavioral science approach was a natural progression of the human relations movement. It
focused on applying conceptual and analytical tools to the problem of understanding and
predicting behavior in the workplace.
The behavioral science approach has contributed to the study of management through its focus
on personality, attitudes, values, motivation, group behavior, leadership, communication, and
conflict, among other issues.
Contemporary Approach:
System Theory:
A system is a set of interrelated and interdependent parts arranged in a manner that produces a
unified whole. The two basic types of systems are closed and open. Closed systems are not
influenced by and do not interact with their environment. In contrast, open systems are
influenced by and do interact with their environment. Today, when we describe organizations as
systems, we mean open systems. Exhibit MH-7 shows a diagram of an organization from an
open systems perspective. As you can see, an organization takes in inputs (resources) from the
environment and transforms or processes these resources into outputs that are distributed into the
environment. The organization is “open” to and interacts with its environment.
Contingency Approach:
The contingency approach (sometimes called the situational approach) says that organizations
are different, face different situations (contingencies), and require different ways of managing. A
good way to describe contingency is “if, then.” If this is the way my situation is, then this is the
best way for me to manage in this situation. It’s intuitively logical because organizations and
even units within the same organization differ—in size, goals, work activities, and the like. It
would be surprising to find universally applicable management rules that would work in all
situations. But, of course, it’s one thing to say that the way to manage “depends on the situation”
and another to say what the situation is.
Sole proprietorship:
A form of business organisation in which a single individual owns and manages the business,
takes the profits and bears the losses, is known as sole proprietorship form of business
organisation.
(a) Single Ownership: The sole proprietorship form of business organisation has a single owner
who himself/herself starts the business by bringing together all the resources.
(b) No Separation of Ownership and Management: The owner himself/herself manages the
business as per his/her own skill and intelligence. There is no separation of ownership and
management as is the case with company form of business organisation.
(c) Less Legal Formalities: The formation and operation of a sole proprietorship form of
business organisation does not involve any legal formalities. Thus, its formation is quite easy and
simple.
(d) No Separate Entity: The business unit does not have an entity separate from the owner. The
businessman and the business enterprise are one and the same, and the businessman is
responsible for everything that happens in his business unit.
(e) No Sharing of Profit and Loss: The sole proprietor enjoys the profits alone. At the same
time, the entire loss is also borne by him. No other person is there to share the profits and losses
of the business. He alone bears the risks and reaps the profits.
(f) Unlimited Liability: The liability of the sole proprietor is unlimited. In case of loss, if his
business assets are not enough to pay the business liabilities, his personal property can also be
utilised to pay off the liabilities of the business.
(g) One-man Control: The controlling power of the sole proprietorship business always remains
with the owner. He/she runs the business as per his/her own will.
(a) Easy to Form and Wind Up: It is very easy and simple to form a sole proprietorship form of
business organisation. No legal formalities are required to be observed. Similarly, the business
can be wind up any time if the proprietor so decides.
(b) Quick Decision and Prompt Action: As stated earlier, nobody interferes in the affairs of the
sole proprietary organisation. So he/she can take quick decisions on the various issues relating to
business and accordingly prompt action can be taken.
(c) Direct Motivation: In sole proprietorship form of business organisations. the entire profit of
the business goes to the owner. This motivates the proprietor to work hard and run the business
efficiently.
(d) Flexibility in Operation: It is very easy to effect changes as per the requirements of the
business. The expansion or curtailment of business activities does not require many formalities
as in the case of other forms of business organisation.
(e) Maintenance of Business Secrets: The business secrets are known only to the proprietor. He
is not required to disclose any information to others unless and until he himself so decides. He is
also not bound to publish his business accounts.
(a) Limited Resources: The resources of a sole proprietor are always limited. Being the single
owner it is not always possible to arrange sufficient funds from his own sources. Again
borrowing funds from friends and relatives or from banks has its own implications. So, the
proprietor has a limited capacity to raise funds for his business.
(b) Lack of Continuity: The continuity of the business is linked with the life of the proprietor.
Illness, death or insolvency of the proprietor can lead to closure of the business. Thus, the
continuity of business is uncertain.
(c) Unlimited Liability: You have already learnt that there is no separate entity of the business
from its owner. In the eyes of law the proprietor and the business are one and the same. So
personal properties of the owner can also be used to meet the business obligations and debts.
‘Partnership’ is an association of two or more persons who pool their financial and managerial
resources and agree to carry on a business, and share its profit. The persons who form a
partnership are individually known as partners and collectively a firm or partnership firm.
CHARACTERISTICS OF PARTNERSHIP
Based on the definition of partnership as given above, the various characteristics of partnership
form of business organisation, can be summarised as follows:
(a) Two or More Persons: To form a partnership firm atleast two persons are required. The
maximum limit on the number of persons is ten for banking business and 20 for other businesses.
If the number exceeds the above limit, the partnership becomes illegal and the relationship
among them cannot be called partnership.
(b) Contractual Relationship: Partnership is created by an agreement among the persons who
have agreed to join hands. Such persons must be competent to contract. Thus, minors, lunatics
and insolvent persons are not eligible to become the partners. However, a minor can be admitted
to the benefits of partnership firm i.e., he can have share in the profits without any obligation for
losses.
(c) Sharing Profits and Business: There must be an agreement among the partners to share the
profits and losses of the business of the partnership firm. If two or more persons share the
income of jointly owned property, it is not regarded as partnership.
(d) Existence of Lawful Business: The business of which the persons have agreed to share the
profit must be lawful. Any agreement to indulge in smuggling, black marketing etc. cannot be
called partnership business in the eyes of law.
(e) Principal Agent Relationship: There must be an agency relationship between the partners.
Every partner is the principal as well as the agent of the firm. When a partner deals with other
parties he/she acts as an agent of other partners, and at the same time the other partners become
the principal.
(f) Unlimited Liability: The partners of the firm have unlimited liability. They are jointly as
well as individually liable for the debts and obligations of the firms. If the assets of the firm are
insufficient to meet the firm’s liabilities, the personal properties of the partners can also be
utilised for this purpose. However, the liability of a minor partner is limited to the extent of his
share in the profits.
MERITS OF PARTNERSHIP
(a) Easy to Form: A partnership can be formed easily without many legal formalities. Since it is
not compulsory to get the firm registered, a simple agreement, either in oral, writing or implied is
sufficient to create a partnership firm.
(b) Availability of Larger Resources: Since two or more partners join hands to start partnership
firm it may be possible to pool more resources as compared to sole proprietorship form of
business organisation.
(c) Better Decisions: In partnership firm each partner has a right to take part in the management
of the business. All major decisions are taken in consultation with and with the consent of all
partners. Thus, collective wisdom prevails and there is less scope for reckless and hasty
decisions.
(d) Flexibility: The partnership firm is a flexible organisation. At any time the partners can
decide to change the size or nature of business or area of its operation after taking the necessary
consent of all the partners.
(e) Sharing of Risks: The losses of the firm are shared by all the partners equally or as per the
agreed ratio.
LIMITATIONS OF PARTNERSHIP
A partnership firm also suffers from certain limitations. These are as follows:
(a) Unlimited Liability: The most important drawback of partnership firm is that the liability of
the partners is unlimited i.e., the partners are personally liable for the debt and obligations of the
firm. In other words, their personal property can also be utilized for payment of firm’s liabilities.
(b) Instability: Every partnership firm has uncertain life. The death, insolvency, incapacity or
the retirement of any partner brings the firm to an end. Not only that any dissenting partner can
give notice at any time for dissolution of partnership.
(c) Limited Capital: Since the total number of partners cannot exceed 20, the capacity to raise
funds remains limited as compared to a joint stock company where there is no limit on the
number of share holders.
(d) Non-transferability of share: The share of interest of any partner cannot be transferred to
other partners or to the outsiders. So it creates inconvenience for the partner who wants to
transfer his share to others fully and partly. The only alternative is dissolution of the firm.
(e) Possibility of Conflicts: You know that in partnership firm every partner has an equal right
to participate in the management. Also every partner can place his or her opinion or viewpoint
before the management regarding any matter at any time. Because of this, sometimes there is
friction and quarrel among the partners. Difference of opinion may give rise to quarrels and lead
to dissolution of the firm.
Co-operative Society:
It is a voluntary association of persons who work together to promote their economic interest. It
works on the principle of self-help and mutual help. The primary objective is to provide support
to the members. People come forward as a group, pool their individual resources, utilise them in
the best possible manner and derive some common benefits out of it.
Based on the above definition we can identify the following characteristics of cooperative
society form of business organisation:
(a) Voluntary Association: Members join the cooperative society voluntarily i.e., by their own
choice. Persons having common economic objective can join the society as and when they like,
continue as long as they like and leave the society and when they want.
(b) Open Membership: The membership is open to all those having a common economic
interest. Any person can become a member irrespective of his/her caste, creed, religion, colour,
sex etc.
(c) Number of Members: A minimum of 10 members are required to form a cooperative
society. In case of multi-state cooperative societies the minimum number of members should be
50 from each state in case the members are individuals. The Cooperative Society Act does not
specify the maximum number of members for any cooperative society. However, after the
formation of the society, the member may specify the maximum member of members.
(d) Registration of the Society: In India, cooperative societies are registered under the
Cooperative Societies Act 1912 or under the State Cooperative Societies Act. The Multi-state
Cooperative Societies are registered under the Multi-state Cooperative Societies Act 2002. Once
registered, the society becomes a separate legal entity and attain certain characteristics. These are
as follows.
(i) The society enjoys perpetual succession
(ii) It has its own common seal
(iii) It can enter into agreements with others
(iv) It can sue others in a court of law
(v) It can own properties in its name
(e) State Control: Since registration of cooperative societies is compulsory, every cooperative
society comes under the control and supervision of the government
(f) Capital: The capital of the cooperative society is contributed by its members. Since, the
members contribution is very limited, it often depends on the loan from government. and apex
cooperative institutions or by way of grants and assistance from state and Central Government.
(g) Democratic Set Up: The cooperative societies are managed in a democratic manner. Every
member has a right to take part in the management of the society. However, the society elects a
managing committee for its effective management. The members of the managing committee are
elected on the basis of one-man one-vote irrespective of the number of shares held by any
member. It is the general body of the society which lays down the broad framework within
which the managing committee functions.
(h) Service Motive: The primary objective of all cooperative societies is to provide services to
its members.
(i) Return on Capital Investment: The members get return on their capital investment in the
form of dividend.
(j) Distribution of Surplus: After giving a limited dividend to the members of the society, the
surplus profit is distributed in the form of bonus, keeping aside a certain percentage as reserve
and for general welfare of the society.
Company:
Merits of Company
The most important advantages of a company organisation may be stated as follows:
(i) Collection of huge financial resources: The biggest advantage of a company organisation is
that it has the ability to collect large amounts of funds. This is because a company can raise
capital by issuing shares to a large number of persons. Shares of small value can be subscribed
even by people with small savings. In addition, company can also raise loans from the public as
well as different lending institutions. Availability of necessary funds makes it possible for a
company to undertake business activities on a large scale.
(ii) Limited liability: Another advantage of the company form of organisation is the limited
liability of members
(iii) Free transferability of shares: A company permits its members to transfer their shares.
Free transferability of shares provides liquidity of the member’s investment. Thus, if a member
needs cash he can sell his shares. Or, he can use the same amount to buy shares of another more
profitable company. It enables profitable companies also to attract funds away from the less
profitable ones.
(iv) Durability and stability: A company is the only form of organisation which enjoys
continuous existence and stability. The funds invested in a company by shareholders
are not withdrawal until it is wound up. Also any change in the company’s membership does not
affect its life. As a result of this, a company can undertake projects of long duration and attract
people to invest in the business of the company.
(v) Growth and expansion: With the large resources at its command a company can organize
business on a large scale. Once the business is started on a large scale it gives the company
strength to grow and expand. This is because of high profits, which accrue from the economies
of large-scale organisation and production.
(vi) Efficient management: Since a company undertakes large-scale activities, it requires the
services of expert professional managers. Competent managers can be easily hired by a company
because it commands large financial resources. Thus, efficient management is ensured in a
company organisation.
(vii) Public confidence: A company enjoys great confidence and trust of the general people.
Companies have to disclose the results of their activities and financial position in the annual
reports. The reports are available to the public. It is on the basis of the annual reports and other
information that investment is made in companies.
Limitations of Company Organisation
A company organisation suffers from the following limitations:
(i) Lengthy and expensive legal procedure: The registration of a company is a long-drawn
process. A number of documents are to be prepared and filled . For preparing documents experts
are to be hired who charge heavy fees. Besides, registration fees have also to be paid to the
Registrar of Companies.
(ii) Excessive government regulations: A company is subject to government regulations at
every stage of its working. A company has to file regular returns and statements of its activities
with the Registrar. There is a penalty for noncompliance of the legal requirements. Filing returns
and
reports involving considerable time and money is the responsibility of a company. All this
reduces flexibility in operations.
(iii) Lack of incentive: The company is not managed by shareholders but by directors and other
paid officials. Officials do not have investment in the company and also do not bear the risks. As
such, they may not be as much motivated to safeguard the interests of the company as
the shareholders.
iv)Conflict of interest: A company is generally characterized by a large organisation with many
groups operating in it. So long as the interests of these groups do not clash with each other they
work for the good of the organisation.
Culture is defined as, "the specific collection of values and norms that are shared by people and
groups Organisational in an organization and that control the way they interact with each other
and with stakeholders outside the organization."
Organizational culture has been described as the shared values, principles, traditions, and ways
of doing things that influence the way organizational members act.
How Employees Learn Culture:
Johnson and Scholes described a cultural web, identifying a number of elements that can be used
to describe or influence Organizational Culture:
The six elements are:
a) Stories: The past events and people talked about inside and outside the company. Who and
what the company chooses to immortalize says a great deal about what it values, and perceives
as great behavior.
b) Rituals and Routines: The daily behavior and actions of people that signal acceptable
behavior. This determines what is expected to happen in given situations, and what is valued by
management.
c) Symbols: The visual representations of the company including logos, how plush the offices
are, and the formal or informal dress codes.
d) Organizational Structure: This includes both the structure defined by the organization chart,
and the unwritten lines of power and influence that indicate whose contributions are most valued.
e) Control Systems: The ways that the organization is controlled. These include financial
systems, quality systems, and rewards (including the way they are measured and distributed
within the organization.)
f) Power Structures: The pockets of real power in the company. This may involve one or two key
senior executives, a whole group of executives, or even a department. The key is that these
people have the greatest amount of influence on decisions, operations, and strategic direction.
TYPES OF ORGANIZATIONAL CULTURE
Deal and Kennedy argue organizational culture is based on based on two elements:
1. Feedback Speed: How quickly are feedback and rewards provided (through which the
people are told they are doing a good or a bad job).
2. Degree of Risk: The level of risk taking (degree of uncertainty).
The combination of these two elements results in four types of corporate cultures:
a) Tough-Guy Culture or Macho Culture (Fast feedback and reward, high risk):
• Stress results from the high risk and the high potential decrease or increase of the reward.
• Focus on now, individualism prevails over teamwork.
• Typical examples: advertising, brokerage, sports.
The most important aspect of this kind of culture is big rewards and quick feedback. This kind of
culture is mostly associated with quick financial activities like brokerage and currency trading. It
can also be related with activities, like a sports team or branding of an athlete, and also the police
team. This kind of culture is considered to carry along, a high amount of stress, and people
working within the organization are expected to possess a strong mentality, for survival in the
organization.
b) Work Hard/Play Hard (Fast feedback and reward, low risk):
• Stress results from quantity of work rather than uncertainty.
• Focus on high-speed action, high levels of energy.
• Typical examples: sales, restaurants, software companies.
This type of organization does not involve much risk, as the organizations already consist of a
firm base along with a strong client relationship. This kind of culture is mostly opted by large
organizations which have strong customer service. The organization with this kind of culture is
equipped with specialized jargons and is qualified with multiple team meetings.
c) Bet Your Company Culture (Slow feedback and reward, high risk):
• Stress results from high risk and delay before knowing if actions have paid off.
• Focus on long-term, preparation and planning.
• Typical examples: pharmaceutical companies, aircraft manufacturers, oil prospecting
companies.
In this kind of culture, the company makes big and important decisions over high stakes
endeavors. It takes time to see the consequence of these decisions. Companies that postulate
experimental projects and researches as their core business, adopt this kind of culture. This kind
of culture can be adopted by a company designing experimental military weapons for example.
d) Process Culture (Slow feedback and reward, low risk):
• Stress is generally low, but may come from internal politics and stupidity of the system.
• Focus on details and process excellence.
• Typical examples: bureaucracies, banks, insurance companies, public services.
This type of culture does not include the process of feedback. In this kind of culture, the
organization is extremely cautious about the adherence to laws and prefer to abide by them. This
culture provides consistency to the organization and is good for public services. One of the most
difficult tasks to undertake in an organization, is to change its work culture.
i) Political Factors
Political factors include government regulations and legal issues and define both formal and
informal rules under which the firm must operate. Some examples include: • tax policy,
employment laws, environmental regulations, trade restrictions and tariffs and political stability
ii) Economic Factors
Economic factors affect the purchasing power of potential customers and the firm's cost of
capital. The following are examples of factors in the macro economy:
• economic growth, interest rates, exchange rates and inflation rate
iii) Social Factors
Social factors include the demographic and cultural aspects of the external macro environment.
These factors affect customer needs and the size of potential markets. Some social factors
include: health consciousness, population growth rate, age distribution, career attitudes and
emphasis on safety
iv) Technological Factors
Technological factors can lower barriers to entry, reduce minimum efficient production levels,
and influence outsourcing decisions. Some technological factors include: • R&D activity,
automation, technology incentives and rate of technological change
UNIT II PLANNING 9
2marks
1. Define Planning.
Deciding in advance what to do, how to do, when to do and who is to do it. Bridges the gap
between where we are to where we want to go.
According to Koontz O'Donnel - "Planning is an intellectual process, the conscious
determination of courses of action, the basing of decisions on purpose, acts and considered
estimates".
-Planning is goal-oriented: Every plan must contribute in some positive way towards the
accomplishment of group objectives. Planning has no meaning without being related to goals.
-Primacy of Planning: Planning is the first of the managerial functions. It precedes all other
management functions.
-Pervasiveness of Planning: Planning is found at all levels of management. Top management
looks after strategic planning. Middle management is in charge of administrative planning.
Lower management has to concentrate on operational planning.
-Efficiency, Economy and Accuracy: Efficiency of plan is measured by its contribution to the
objectives as economically as possible. Planning also focuses on accurate forecasts.
-Co-ordination: Planning co-ordinates the what, who, how, where and why of planning.
Without co-ordination of all activities, we cannot have united efforts.
- Limiting Factors: A planner must recognize the limiting factors (money, manpower etc)and
formulate plans in the light of these critical factors.
-Flexibility: The process of planning should be adaptable to changing environmental conditions.
-Planning is an intellectual process: The quality of planning will vary according to the quality
of the mind of the manager.
7.Define forecasting.
Forecasting is the formal process of predicting future events that will significantly affect the
functioning of the enterprises.
Features
1. Involvement of Future events
2. Depends upon past and present events
3. Happening of future events
4. Make use of forecasting techniques
a) Perception of Opportunities:
Although preceding actual planning and therefore not strictly a part of the planning process,
awareness of an opportunity is the real starting point for planning. It includes a preliminary look
at possible future opportunities and the ability to see them clearly and completely, knowledge of
where we stand in the light of our strengths and weaknesses, an understanding of why we wish to
solve uncertainties, and a vision of what we expect to gain. Setting realistic objectives depends
on this awareness. Planning requires realistic diagnosis of the opportunity situation.
b) Establishing Objectives:
The first step in planning itself is to establish objectives for the entire enterprise and then for
each subordinate unit. Objectives specifying the results expected indicate the end points of what
is to be done, where the primary emphasis is to be placed, and what is to be accomplished by the
network of strategies, policies, procedures, rules, budgets and programs. Enterprise objectives
should give direction to the nature of all major plans which, by reflecting these objectives, define
the objectives of major departments. Major department objectives, in turn, control the objectives
of subordinate departments, and so on down the line. The objectives of lesser departments will
be better framed, however, if subdivision managers understand the overall enterprise objectives
and the implied derivative goals and if they are given an opportunity to contribute their ideas to
them and to the setting of their own goals.
(b) Appealed Policy. Appealed policy arises from the appeal made by a subordinate to
his superior for deciding an important case. The need for such an appeal may arise
because th particular case has not been covered by earlier policies. The appeals are taken
upward and decisions made on them set a kind of common law to be followed by others.
Appealed policies are mostly incomplete, unco-ordinated and confused. As such, if
frequent appeals are made, the managers should visualize their policy formulation, its
communication and interpretation so that guidelines become clear and specific.
(c) Implied Policy. Sometimes, policies are not clearly stated, and the actions of
managers, particularly at higher levels, provide guidelines for actions at the lower levels.
These actions might be constituting policy. Or sometimes, the orgnaisation have clearly
expressed policies for its image, but it is unable to enforce these. In such a case, the
action of a decision-maker, consciously or unconsciously, depends upon their own
guidelines, prejudices and whims. Moreover, in the absence of any specific guideline,
decision is based on individual interpretation of actions observed in the orgnaisation
crating chaos.
(d) Imposed Policy. Imposed policy arises from th influence of some outside forces like
government, trade unions, and trade associations. In the present social structure, external
variables affect the functioning of a business organisation to a great extent. These
variables may impose th specific policy or conditions may be created to adopt a particular
policy. In India, the rise of public sector and government regulations create such
situations.
Procedures:
A procedure is a chronological sequence of steps to be undertaken to enforce a policy and to
attain an objective. It lays down the specific manner in which a particular activity is to be
performed. It is a planned sequence of operations for performing repetitive activities uniformly
and consistently.
Rules: Rules are rigid and definite plans that specify what is to be done or not to be done in
given situations. A rule provides no scope for discretion and judgement. It is a prescribed guide
to conduct or action. No deviation is expected from the rule.
Budget: A budget is a statement of expected results expressed in numerical terms for a definite
period of time in the future. It expresses a plan in precise terms. Budget serve as means of
coordination and control. They provide clarity, direction and purpose in the activities of an
organisation by laying down verifiable and measurable goals for a specified period of time.
Schedules: A schedule specifies time limits within which activities are to be completed.
Scheduling is the process of establishing a time sequence for the work to be done. Schedules are
essential for avoiding delays and for ensuring continuity of operations.
Projects: A project is a distinct cluster of functions and facilities for a definite purpose and
definite time period. It is designed and executed as a distinct plan. It is integrated into a unity and
is designed to achieve a stated objective.
3. Explian the steps in MBO process and its advantages and disadvantages?
3) Reviewing Progress:
Performance is measured in terms of results. Job performance is the net effect of an employee's
effort as modified by abilities, role perceptions and results produced. Effort refers to the amount
of energy an employee uses in performing a job. Abilities are personal characteristics used in
performing a job and usually do not fluctuate widely over short periods of time. Role perception
refers to the direction in which employees believe they should channel their efforts on their jobs,
and they are defined by the activities and behaviors they believe are necessary.
4) Performance appraisal:
Performance appraisals communicate to employees how they are performing their jobs, and they
establish a plan for improvement. Performance appraisals are extremely important to both
employee and employer, as they are often used to provide predictive information related to
possible promotion. Appraisals can also provide input for determining both individual and
organizational training and development needs. Performance appraisals encourage performance
improvement. Feedback on behavior, attitude, skill or knowledge clarifies for employees the job
expectations their managers hold for them. In order to be effective, performance appraisals must
be supported by documentation and management commitment.
Advantages
• Motivation – Involving employees in the whole process of goal setting and increasing
employee empowerment. This increases employee job satisfaction and commitment.
• Better communication and Coordination – Frequent reviews and interactions between superiors
and subordinates helps to maintain harmonious relationships within the organization and also to
solve many problems.
• Clarity of goals
• Subordinates have a higher commitment to objectives they set themselves than those imposed
on them by another person.
• Managers can ensure that objectives of the subordinates are linked to the organization's
objectives.
Limitations
There are several limitations to the assumptive base underlying the impact of managing by
objectives, including:
• It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
• It underemphasizes the importance of the environment or context in which the goals are set.
That context includes everything from the availability and quality of resources, to relative buy-in
by leadership and stake-holders.
• Companies evaluated their employees by comparing them with the "ideal" employee. Trait
appraisal only looks at what employees should be, not at what they should do. When this
approach is not properly set, agreed and managed by organizations, self-centered employees
might be prone to distort results, falsely representing achievement of targets that were set in a
short-term, narrow fashion. In this case, managing by objectives would be counterproductive.
TYPES OF DECISIONS
1. Specific Objective: The need for decision making arises in order to achieve certain specific
objectives. The starting point in any analysis of decision making involves the determination of
whether a decision needs to be made.
2. Problem Identification: A problem is a felt need, a question which needs a solution. In the
words of Joseph L Massie "A good decision is dependent upon the recognition of the right
problem". The objective of problem identification is that if the problem is precisely and
specifically identifies, it will provide a clue in finding a possible solution. A problem can be
identified clearly, if managers go through diagnosis and analysis of the problem.
Diagnosis: Diagnosis is the process of identifying a problem from its signs and symptoms. A
symptom is a condition or set of conditions that indicates the existence of a problem. Diagnosing
the real problem implies knowing the gap between what is and what ought to be, identifying the
reasons for the gap and understanding the problem in relation to higher objectives of the
organization.
Analysis: Diagnosis gives rise to analysis. Analysis of a problem requires:
• Who would make decision?
• What information would be needed?
• From where the information is available?
Analysis helps managers to gain an insight into the problem.
3. Search for Alternatives: A problem can be solved in several ways; however, all the ways
cannot be equally satisfying. Therefore, the decision maker must try to find out the various
alternatives available in order to get the most satisfactory result of a decision. A decision maker
can use several sources for identifying alternatives:
• His own past experiences
• Practices followed by others and
• Using creative techniques.
4. Evaluation of Alternatives: After the various alternatives are identified, the next step is to
evaluate them and select the one that will meet the choice criteria. /the decision maker must
check proposed alternatives against limits, and if an alternative does not meet them, he can
discard it. Having narrowed down the alternatives which require serious consideration, the
decision maker will go for evaluating how each alternative may contribute towards the objective
supposed to be achieved by implementing the decision.
5. Choice of Alternative: The evaluation of various alternatives presents a clear picture as to
how each one of them contribute to the objectives under question. A comparison is made among
the likely outcomes of various alternatives and the best one is chosen.
6. Action: Once the alternative is selected, it is put into action. The actual process of decision
making ends with the choice of an alternative through which the objectives can be achieved.
7. Results: When the decision is put into action, it brings certain results. These results must
correspond with objectives, the starting point of decision process, if good decision has been
made and implemented properly. Thus, results provide indication whether decision making and
its implementation is proper.
Other tools:
Budgeting: A budget is a numerical plan for allocating resources to specific activities. Managers
typically prepare budgets for revenues, expenses, and large capital expenditures such as
equipment. It’s not unusual, though, for budgets to be used for improving time, space, and use of
material resources.
Scheduling: Allocating resources by detailing what activities have to be done, the order in which
they are to be completed, who is to do each, and when they are to be completed.
Break even analysis: It is a widely used resource allocation technique to help managers
determine breakeven point. To compute breakeven point (BE), a manager needs to know the unit
price of the product being sold (P), the variable cost per unit (VC), and total fixed costs (TFC).
An organization breaks even when its total revenue is just enough to equal its total costs.
Project management is the task of getting a project’s activities done on time, within budget, and
according to specifications.
UNIT III ORGANISING 9
1.Define organizing.
Allen defines Organising as “the process of identifying and grouping of the work to be
performed, defining and delegating responsibility and authority and establishing relationships for
the purpose of enabling people to work most effectively together in accomplishing their
objectives.”
2.Define organization.
Koontz and O’Donnell defines as “Organisation is the establishment of authority and
relationships with provision for coordination between them, both vertically and horizontally in
the enterprise structure.
Interview is a face to face conversation between an applicant and the employer. The purpose of
Interview is to collect information on behaviour, attitudes, opinions, maturity, emotional
stability, enthusiasm, confidence, response and other commercial behaviour.
Types of Interview
1. Structured Interview – is also called as patterned interview. The interviewers are trained in
the process to be used. A list of questions on analysis of the job specification is prepared. The
Interviewing process attempts to predict how candidates will perform in the work situations.
2. Group or Discussion Interview – The interviewees are given certain problems and are asked
to reach a specific decision within a particular time limit. The applicants enter into group
discussion, knowing that the interview is a test, but do not know which qualities are being
measured or tested. The object is to see how individuals perform on a particular task or in a
particular situations
3. Panel or Board Interview – Candidate is interviewed by a number of interviewers. Questions
may be asked in turn or asked in random order as they arise on any topic.
4. Stress Interview – The Interview assumes a hostile role toward the applicant. He deliberately
puts him on the defensive by trying to any, embarrass or frustrate him. The purpose is to find out
how a candidate behaves in a stress situation whether he loses his temper, gets confused or
frightened.
16 marks
1.Line organisation:
A line organisation has only direct, vertical relationships between different levels in the firm.
There are only line departments-departments directly involved in accomplishing the primary goal
of the organisation. For example, in a typical firm, line departments include production and
marketing. In a line organisation authority follows the chain of command.
Advantages:
1. Tends to simplify and clarify authority, responsibility and accountability relationships
2. Promotes fast decision making
3. Simple to understand.
Disadvantages:
1. Neglects specialists in planning
2. Overloads key persons.
These organisations have direct, vertical relationships between different levels and also
specialists responsible for advising and assisting line managers. Such organisations have
both line and staff departments. Staff departments provide line people with advice and
assistance in specialized areas (for example, quality control advising production
department).
Advantages:
1. Committee decisions are better than individual decisions
2. Better interaction between committee members leads to better co-ordination of activities
3. Committee members can be motivated to participate in group decision making.
4. Group discussion may lead to creative thinking.
Disadvantages:
1. Committees may delay decisions, consume more time and hence more expensive.
2. Group action may lead to compromise and indecision.
3. ‘Buck passing’ may result.
4. Divisional Organisational Structure:
In this type of structure, the organisation can have different basis on which departments are
formed. They are:
(i) Function, (ii) Product, (iii) Geographic territory, (iv) Project and(iv) Combination approach.
d) GEOGRAPHIC DEPARTMENTATION
Geographic departmentation is the process of grouping activities on the basis of territory. If an
organization's customers are geographically dispersed, it can group jobs based on geography. For
example, the organization structure of Coca-Cola Ltd has reflected the company’s operation in
various geographic areas such as Central North American group, Western North American
group, Eastern North American group and European group
Advantages
• Help to cater to the needs of local people more satisfactorily.
• It facilitates effective control
• Assists in development of all-round managerial skills
Disadvantages
• Communication problem between head office and regional office due to lack of means of
communication at some location
• Coordination between various divisions may become difficult.
• Distance between policy framers and executors
• It leads to duplication of activities which may cost higher.
e) PROCESS DEPARTMENTATION
Departmentation by process: - is done on the basis of several discrete stages in the process or
technologies involved in the manufacture of a product.
Advantages
• Oriented towards end result.
• Professional identification is maintained.
• Pinpoints product-profit responsibility.
Disadvantage
• Conflict in organization authority exists.
• Possibility of disunity of command.
• Requires managers effective in human relation.
f) MARTIX DEPARTMENTATION
Composite or hybrid method forms the common basis for classifying activities rather than one
particular method,. One of the mixed forms of organization is referred to as matrix or grid
organization’s According to the situations, the patterns of Organizing varies from case to case.
The form of structure must reflect the tasks, goals and technology if the originations the type of
people employed and the environmental conditions that it faces. It is not unusual to see firms that
utilize the function and project organization combination.
Advantages
• Efficiently manage large, complex tasks
• Effectively carry out large, complex tasks
Disadvantages
• Requires high levels of coordination
• Conflict between bosses
• Requires high levels of management skills
2. Explain HR planning?
3. Explain HRM process?
Human Resource planning: consists of putting right number of people, right kind of people at
the right place, right time, doing the right things for which they are suited for the achievement of
goals of the organization. The primary function of man power planning is to analyze and
evaluate the human resources available in the organization, and to determine how to obtain the
kinds of personnel needed to staff positions ranging from assembly line workers to chief
executives.
Recruitment: Recruitment is the process of finding and attempting to attract job candidates who
are capable of effectively filling job vacancies. Job descriptions and job specifications are
important in the recruiting process because they specify the nature of the job and the
qualifications required of job candidates.
Selection: Selecting a suitable candidate can be the biggest challenge for any organization. The
success of an organization largely depends on its staff. Selection of the right candidate builds the
foundation of any organization's success and helps in reducing turnovers.
Training: Training and Development is a planned effort to facilitate employee learning of job
related behaviors in order to improve employee performance. Experts sometimes distinguish
between the terms “training” and “development”; “training” denotes efforts to increase employee
skills on present jobs, while “development” refers to efforts oriented toward improvements
relevant to future jobs. In practice, though, the distinction is often blurred (mainly because
upgrading skills in present jobs usually improves performance in future jobs).
Training Process:
1) Identifying Training needs: A training program is designed to assist in providing solutions for
specific operational problems or to improve performance of a trainee.
• Organizational determination and Analysis: Allocation of resources that relate to
organizational goal.
• Operational Analysis: Determination of a specific employee behaviour required for a
particular task.
• Man Analysis: Knowledge, attitude and skill one must possess for attainment of
organizational objectives
2) Getting ready for the job: The trainer has to be prepared for the job. And also who needs to
be trained - the newcomer or the existing employee or the supervisory staff.
Preparation of the learner:
• Putting the learner at ease
• Stating the importance and ingredients of the job
• Creating interest
• Placing the learner as close to his normal working position
• Familiarizing him with the equipment, materials and trade terms
3) Presentation of Operation and Knowledge: The trainer should clearly tell, show, illustrate and
question in order to convey the new knowledge and operations. The trainee should be
encouraged to ask questions in order to indicate that he really knows and understands the job.
4) Performance Try out: The trainee is asked to go through the job several times. This gradually
builds up his skill, speed and confidence.
5) Follow-up: This evaluates the effectiveness of the entire training effort
Off-the-job training methods are conducted in separate from the job environment, study material
is supplied, there is full concentration on learning rather than performing, and there is freedom of
expression. Important methods include:
1. Lectures and Conferences:
Lectures and conferences are the traditional and direct method of instruction. Every training
programme starts with lecture and conference. It’s a verbal presentation for a large audience.
However, the lectures have to be motivating and creating interest among trainees. The speaker
must have considerable depth in the subject. In the colleges and universities, lectures and
seminars are the most common methods used for training.
2. Vestibule Training:
Vestibule Training is a term for near-the-job training, as it offers access to something new
(learning). In vestibule training, the workers are trained in a prototype environment on specific
jobs in a special part of the plant.
An attempt is made to create working condition similar to the actual workshop conditions. After
training workers in such condition, the trained workers may be put on similar jobs in the actual
workshop.
This enables the workers to secure training in the best methods to work and to get rid of initial
nervousness. During the Second World War II, this method was used to train a large number of
workers in a short period of time. It may also be used as a preliminary to on-the job training.
Duration ranges from few days to few weeks. It prevents trainees to commit costly mistakes on
the actual machines.
3. Simulation Exercises:
Simulation is any artificial environment exactly similar to the actual situation. There are four
basic simulation techniques used for imparting training: management games, case study, role
playing, and in-basket training.
(a) Management Games:
Properly designed games help to ingrain thinking habits, analytical, logical and reasoning
capabilities, importance of team work, time management, to make decisions lacking complete
information, communication and leadership capabilities. Use of management games can
encourage novel, innovative mechanisms for coping with stress.
Management games orient a candidate with practical applicability of the subject. These games
help to appreciate management concepts in a practical way. Different games are used for training
general managers and the middle management and functional heads – executive Games and
functional heads.
(b) Case Study:
Case studies are complex examples which give an insight into the context of a problem as well as
illustrating the main point. Case Studies are trainee centered activities based on topics that
demonstrate theoretical concepts in an applied setting.
A case study allows the application of theoretical concepts to be demonstrated, thus bridging the
gap between theory and practice, encourage active learning, provides an opportunity for the
development of key skills such as communication, group working and problem solving, and
increases the trainees” enjoyment of the topic and hence their desire to learn.
(c) Role Playing:
Each trainee takes the role of a person affected by an issue and studies the impacts of the issues
on human life and/or the effects of human activities on the world around us from the perspective
of that person.
It emphasizes the “real- world” side of science and challenges students to deal with complex
problems with no single “right” answer and to use a variety of skills beyond those employed in a
typical research project.
In particular, role-playing presents the student a valuable opportunity to learn not just the course
content, but other perspectives on it. The steps involved in role playing include defining
objectives, choose context & roles, introducing the exercise, trainee preparation/research, the
role-play, concluding discussion, and assessment. Types of role play may be multiple role play,
single role play, role rotation, and spontaneous role play.
(d) In-basket training:
In-basket exercise, also known as in-tray training, consists of a set of business papers which may
include e-mail SMSs, reports, memos, and other items. Now the trainer is asked to prioritise the
decisions to be made immediately and the ones that can be delayed.
4. Sensitivity Training:
Sensitivity training is also known as laboratory or T-group training. This training is about
making people understand about themselves and others reasonably, which is done by developing
in them social sensitivity and behavioral flexibility. It is ability of an individual to sense what
others feel and think from their own point of view.
It reveals information about his or her own personal qualities, concerns, emotional issues, and
things that he or she has in common with other members of the group. It is the ability to behave
suitably in light of understanding.
Performance appraisal is the process of obtaining, analyzing and recording information about the
relative worth of an employee. The focus of the performance appraisal is measuring and
improving the actual performance of the employee and also the future potential of the employee.
Its aim is to measure what an employee does.
Ranking Method: It is the oldest and simplest formal systematic method of performance
appraisal in which employee is compared with all others for the purpose of placing order of
worth. The employees are ranked from the highest to the lowest or from the best to the
worst. In doing this the employee who is the highest on the characteristic being measured
and also the one who is L lowest, are indicated. Then, the next highest and the next lowest
between next highest and lowest until all the employees to be rated have been ranked.
Thus, if there are ten employees to be appraised, there will be ten ranks from 1 to 10.
Paired Comparison: In this method, each employee is compared with other employees on one-
on one basis, usually based on one trait only. The rater is provided with a bunch of slips each
coining pair of names, the rater puts a tick mark against the employee whom he insiders the
better of the two. The number of times this employee is compared as better with others
determines his or her final ranking.
Check-List Method:The basic purpose of utilizing check-list method is to ease the evaluation
burden upon the rater. In this method, a series of statements, i.e., questions with their answers in
‘yes’ or ‘no’ are prepared by the HR department .The check-list is, then, presented to the rater to
tick appropriate answers relevant to the appraisee. Each question carries a weight-age in
relationship to their importance.
9.Explain career development stages?
1. Exploration
Many of the critical choices individuals make about their careers are made prior to entering the
workforce on a paid basis. Very early in our lives, our parents and teachers begin to narrow our
alternatives and lead us in certain directions.
The careers of our parents, their aspirations for their children and their financial sources are
crucial factors in determining our perception of what careers are open to us.
The exploration period ends for most of us in our mid-twenties as we make the transition from
college to work. From an organisational standpoint this stage has little relevance since it occurs
prior to employment.
2. Establishment
The establishment period begins with the search for work and includes our First job, being
accepted by our peers, learning the job and gaining the first tangible evidence of success or
failure in the real world. It is a time which begins with uncertainties, anxieties and risks.
It is also marked by making mistakes and learning from these mistakes and the gradual
assumption of increased responsibilities. However, the individual in this stage has yet to reach
his peak productivity and rarely gets the job that carries great power or high status.
3. Mid-career
Most people do not face their first severe dilemmas until they reach their mid-career stage. This
is a time when individuals may continue their prior improvements in performance or begin to
deteriorate. At this point in a career, one is expected to have moved beyond apprenticeship to
worker-status.
Those who make a successful transition assume greater responsibilities and get rewards. For
others, it may be a time for reassessment, job changes, adjustment of priorities or the pursuit of
alternative lifestyles.
4. Late career
For those who continue to grow through the mid- career stage, the late career usually is a
pleasant time when one is allowed the luxury to relax a bit. It is the time when one can enjoy the
respect given to him by younger employees. During the late career, individuals are no longer
learning, they teach others on the basis of the knowledge they have gained.
To those who have stagnated during the previous stage, the late career brings the reality that they
cannot change the world as they had once thought.
It is a time when individuals have decreased work mobility and may be locked into their current
job. One starts looking forward to retirement and the opportunities of doing something different.
5. Decline
The final stage in one’s career is difficult for everyone but it is hardest for those who have had
continued successes in the earlier stages. After several decades of continuous achievements and
high levels of performance, the time has come for retirement.
The forming stage has two phases. The first occurs as people join the group. In a formal group,
people join because of some work assignment. Once they’ve joined, the second phase begins:
defining the group’s purpose, structure, and leadership. This phase involves a great deal of
uncertainty as members “test the waters” to determine what types of behavior are acceptable.
This stage is complete when members begin to think of themselves as part of a group.
The storming stage is appropriately named because of the intra group conflict. There’s conflict
over who will control the group and what the group needs to be doing. During this stage, a
relatively clear hierarchy of leadership and agreement on the group’s direction emerge.
The norming stage is one in which close relationships develop and the group becomes cohesive.
There’s now a strong sense of group identity and camaraderie. This stage is complete when the
group structure solidifies, and the group has assimilated a common set of expectations (or norms)
regarding member behavior.
The fourth stage is the performing stage. The group structure is in place and accepted by group
members. Their energies have moved from getting to know and understand each other to
working on the group’s task. This is the last stage of development for permanent work groups.
However, for temporary groups—project teams, task forces, or similar groups that have a limited
task to do—the final stage is adjourning. In this stage, the group prepares to disband. The group
focuses its attention on wrapping up activities instead of task performance. Group members react
in different ways. Some are upbeat, thrilled about the group’s accomplishments. Others may be
sad over the loss of camaraderie and friendships.
1. Attentional processes. People learn from a model when they recognize and pay attention
to its critical features. We’re most influenced by models who are attractive, repeatedly available,
thought to be important, or seen as similar to us.
2. Retention processes. A model’s influence will depend on how well the individual remembers
the model’s action, even after the model is no longer readily available.
3. Motor reproduction processes. After a person has seen a new behavior by observing the
model, the watching must become doing. This process then demonstrates that the individual can
actually do the modeled activities.
4. Reinforcement processes. Individuals will be motivated to exhibit the modeled behavior if
positive incentives or rewards are provided. Behaviors that are reinforced will be given more
attention, learned better, and performed more often.
19.Define Motivation
Motivation refers to the process by which a person’s efforts are energized, directed, and
sustained toward attaining a goal. It is a process of stimulating someone to adopt a desired course
of action.
4.Define leadership.
Leadership is defined as influence, the art or process of influencing people so that they will strive
willingly and enthusiastically toward the achievement of group goals.
a) Leaders act to help a group attain objectives through the maximum application of its
capabilities.
b) Leaders must instill values – whether it be concern for quality, honesty and calculated risk
taking or for employees and customers.
Clarity of messages
Completeness of message
Consistency of message
proper timing
Credibility
Empathy
Follow-up
Economy
16marks
Maslow argued that each level in the needs hierarchy must be substantially satisfied before the
next need becomes dominant. An individual moves up the needs hierarchy from one level to the
next. In addition, Maslow separated the five needs into higher and lower levels. Physiological
and safety needs were considered lower-order needs; social, esteem, and self-actualization needs
were considered higher-order needs. Lower-order needs are predominantly satisfied externally
while higher-order needs are satisfied internally.
Goal-Setting Theory
Research provides substantial support for goal-setting theory, which says that specific goals
increase performance and that difficult goals, when accepted, result in higher performance than
do easy goals. First, goal-setting theory assumes that an individual is committed to the goal.
Commitment is most likely when goals are made public, when the individual has an internal
locus of control, and when the goals are self-set rather than assigned. Next, self-efficacy refers to
an individual’s belief that he or she is capable of performing a task.The higher your self-efficacy,
the more confidence you have in your ability to succeed in a task. So, in difficult situations, we
find that people with low self-efficacy are likely to reduce their effort or give up altogether,
whereas those with high self-efficacy will try harder to master the challenge. In addition,
individuals with high self-efficacy seem to respond to negative feedback with increased effort
and motivation, whereas those with low self-efficacy are likely to reduce their effort when given
negative feedback. Finally, the value of goal-setting theory depends on the national culture. It’s
well adapted to North American countries because its main ideas align reasonably well with
those cultures. It assumes that subordinates will be reasonably independent (not a high score on
power distance), that people will seek challenging goals (low in uncertainty avoidance), and that
performance is considered important by both managers and subordinates (high in assertiveness).
Don’t expect goal setting to lead to higher employee performance in countries where the cultural
characteristics aren’t like this.
Reinforcement Theory
Reinforcement theory says that behavior is a function of its consequences. Those consequences
that immediately follow a behavior and increase the probability that the behavior will be repeated
are called reinforcers. Reinforcement theory ignores factors such as goals, expectations, and
needs. Instead, it focuses solely on what happens to a person when he or she does something
Equity Theory:
Equity theory, developed by J. Stacey Adams, proposes that employees compare what they get
from a job (outcomes) in relation to what they put into it (inputs), and then they compare their
inputs–outcomes ratio with the inputs–outcomes ratios of relevant others . If an employee
perceives her ratio to be equitable in comparison to those of relevant others, there’s no problem.
However, if the ratio is inequitable, she views herself as under rewarded or over rewarded. When
inequities occur, employees attempt to do something about it.The result might be lower or higher
productivity, improved or reduced quality of output, increased absenteeism, or voluntary
resignation.
Expectancy Theory
The most comprehensive explanation of how employees are motivated is Victor Vroom’s
expectancy theory. Although the theory has its critics, most research evidence supports it.
Expectancy theory states that an individual tends to act in a certain way based on the expectation
that the act will be followed by a given outcome and on the attractiveness of that outcome to the
individual. It includes three variables or relationships.
1. Expectancy or effort–performance linkage is the probability perceived by the individual that
exerting a given amount of effort will lead to a certain level of performance.
2. Instrumentality or performance–reward linkage is the degree to which the individual believes
that performing at a particular level is instrumental in attaining the desired outcome.
3. Valence or attractiveness of reward is the importance that the individual places on the
potential outcome or reward that can be achieved on the job. Valence considers both the goals
and needs of the individual.
Each leadership situation was evaluated in terms of these three contingency variables, which
when combined produced eight possible situations that were either favorable or unfavorable for
the leader. (See the bottom of the chart in Exhibit 17-3.) Situations I, II, and III were classified as
highly favorable for the leader. Situations IV, V, and VI were moderately favorable for the
leader. And situations VII and VIII were described as highly unfavorable for the leader.
Hersey and Blanchard’s Situational Leadership Theory:
Paul Hersey and Ken Blanchard developed a leadership theory that has gained a strong following
among management development specialists. This model, called situational leadership theory
(SLT), is a contingency theory that focuses on followers’ readiness. Before we proceed, two
points need clarification: Why a leadership theory focuses on the followers, and what is meant by
the term readiness. readiness, as defined by Hersey and Blanchard, refers to the extent to which
people have the ability and willingness to accomplish a specific task.
SLT uses the same two leadership dimensions that Fiedler identified: task and relationship
behaviors. However, Hersey and Blanchard go a step further by considering each as either high
or low and then combining them into four specific leadership styles described as follows:
_ Telling (high task–low relationship): The leader defines roles and tells people what, how,
when, and where to do various tasks.
_ Selling (high task–high relationship): The leader provides both directive and supportive
behavior.
_ Participating (low task–high relationship): The leader and followers share in decision making;
the main role of the leader is facilitating and communicating.
_ Delegating (low task–low relationship): The leader provides little direction or support.
Path-Goal Model:
Path-goal theory, which states that the leader’s job is to assist followers in attaining their goals
and to provide direction or support needed to ensure that their goals are compatible with the
goals of the group or organization.
Developed by Robert House, path-goal theory takes key elements from the expectancy theory of
motivation. The term path-goal is derived from the belief that effective leaders remove the
roadblocks and pitfalls so that followers have a clearer path to help them get from where they are
to the achievement of their work goals.
House identified four leadership behaviors:
_ Directive leader: Lets subordinates know what’s expected of them, schedules work to be done,
and gives specific guidance on how to accomplish tasks.
_ Supportive leader: Shows concern for the needs of followers and is friendly.
_ Participative leader: Consults with group members and uses their suggestions before making a
decision.
_ Achievement oriented leader: Sets challenging goals and expects followers to perform at their
highest level.
Barriers of communication:
1. Define Control.
Koontz and O'Donnell - "Managerial control implies measurement of accomplishment against
the standard and the correction of deviations to assure attainment of objectives according to
plans”. It’s the process of monitoring, comparing, and correcting work performance.
a) Feed forward controls: They are preventive controls that try to anticipate problems and take
corrective action before they occur. Example – a team leader checks the quality, completeness
and reliability of their tools prior to going to the site.
Requirements of feed forward control:
← make a thorough and careful analysis of the planning and control system and identify the
more important input variables.
← - develop a model of the system
← - take care to keep the model up to date, in other words, the model should be reviewed
regularly to see whether the input variable identified and their interraltionbship continue
to represent realitie.
← - collect data on input variables regularly and put them into the system.
← regularly assess the variations of actual input data from planned for inputs and evaluate
the impact on expected end results.
← - take action.
b) Concurrent controls: They (sometimes called screening controls) occur while an activity is
taking place. Example – the team leader checks the quality or performance of his members
while performing.
c) Feedback controls: They measure activities that have already been completed. Thus
corrections can take place after performance is over. Example – feedback from facilities
engineers regarding the completed job.
7.Define productivity.
Productivity refers to the ratio between the output from production processes to its input.
Productivity is the amount of goods or services produced divided by the inputs needed to
generate that output. Organizations and individual work units want to be productive. They want
to produce the most goods and services using the least amount of inputs. Output is measured by
the sales revenue an organization receives when goods are sold (selling price _ number sold).
Input is measured by the costs of acquiring and transforming resources into outputs.
The balanced scorecard approach is a way to evaluate organizational performance from more
than just the financial perspective. A balanced scorecard typically looks at four areas that
contribute to a company’s performance: financial, customer, internal processes, and
people/innovation/growth assets. According to this approach, managers should develop goals in
each of the four areas and then measure whether the goals are being met.
Benchmarking should identify various benchmarks, which are the standards of excellence
against which to measure and compare. For instance, the American Medical Association
developed more than 100 standard measures of performance to improve medical care. Carlos
Ghosn, CEO of Nissan, benchmarked Walmart operations in purchasing, transportation, and
logistics.
Corporate governance, the system used to govern a corporation so that the interests of
corporate owners are protected, failed abysmally at Enron, as it has at many companies caught in
financial scandals. In the aftermath of these scandals, corporate governance has been reformed.
11. Explain the impact of computers on managers at different organizational levels and
challenges created by information technology?
At supervisory level, activities are usually higly programmable and repetitive. Consequently, the
use of computers is widespread at this level. Scheduling daily planning and controlling of the
operation are just a few examples.
Middle level managers, such as department heads or plant managers are usually responsible for
administration and coordination.
Top level managers are responsible for the strategy and overall policy of the organization. In
addition to determining the general direction of the company, they are responsible for the
appropriate interaction between the enterprise and its environment.
16-marks
1.Define productivity, causes for productivity problems and techniques for enhancement of
level of productivity.
Productivity is the input-output ratio within a time period with due consideration for quality.
The causes for productivity problems are: greater proportion of less skilled workers in respect in
respect to the total labour force, emphasis on immediate results at the cost of R&D , breakdown
in family structure, the workers attitudes and government policies and regulations.
iii) Operational audit: Another effective tool of managerial control is the internal audit or, as it
is now coming to be called, the operational audit. Operational auditing, in its broadest sense, is
the regular and independent appraisal, by a staff of internal auditors, of the accounting, financial,
and other operations of a business.
iv) Personal observation: personal observation means merely observing the performance
whether it is going according to the standards or not.It is the direct and undistorted method of
control.
v) PERT: Program Evaluation and Review Technique, commonly abbreviated PERT, is a is a
method to analyze the involved tasks in completing a given project, especially the time needed to
complete each task, and identifying the minimum time needed to complete the total project.
vi) GANTT CHART: A Gantt chart is a type of bar chart that illustrates a project schedule.
Gantt charts illustrate the start and finish dates of the terminal elements and summary elements
of a project. Terminal elements and summary elements comprise the work breakdown structure
of the project. Some Gantt charts also show the dependency (i.e., precedence network)
relationships between activities.
Vii) Financial statements and Ratio analysis: financial statements such as profit and loss
account and balance sheet are used for control the organization performance. Ratio analysis is
helpful in evaluation of financial data. Financial ratios such as liquidity ratio, solvency ratio are
expressed in mathematical terms.
3.Explain the classification of budgets?
Budgetary control is the establishment of budget relating the responsibility of executives to the
continuous comparison of actual with budgeted results either to secure by individual action of the
objective of that policy or to provide a basis for revision.
1. The budget help management to look at the success or failure of the past budget, isolate
errors, analyze their causes, establish the steps to be taken and to avoid repetition of such
errors.
2. Budget sereves as a means of coordination. Budget intergrates the various activities of the
organization.
3. Budgets help to minise waste and unproductive use of financial and other resources. They
help to keep expense under control and to increase profit. Thus budget serves as a profit
plan.
4. Budgets motive employees because employees know their responsibility and standards by
which their performance can be evaluated.
5. Budget force top level managers to anticipate future and forecast changes in external
environment.
- Over budgeting: There is a danger in over-budgeting through spelling out minor expense
in detail and depriving managers of needed freedom in managing their departments.In
one department, expenses were budgeted in such useless detail that the actual budgeting
cost of many items exceeded the expenses.
- Overriding enterprise goals: Another danger lies in allowing budgetary goals to
become more important than enterprise objectives.
- Hiding inefficiencies: Budgets have a way of growing from precedent, the fact that a
certain expenditure was made in the past can become evidence to its reasonableness in
the present. Thus, if a department once spent a given amount for supplies, this cost
becomes minimum for future budgets.
- Causing inflexibility: even if budgeting is not used to replace managing, the reduction of
plans to numerical terms gives them a kind of misleading definiteness.
• Budgets may be an essential part of any marketing activity they do have a number of
disadvantages, particularly in perception terms.
• Budgets can be seen as pressure devices imposed by management, thus resulting in:
a) bad labour relations
b) inaccurate record-keeping.
• Departmental conflict arises due to:
a) disputes over resource allocation
b) departments blaming each other if targets are not attained.
• It is difficult to reconcile personal/individual and corporate goals.
• Waste may arise as managers adopt the view, "we had better spend it or we will lose it".
This is often coupled with "empire building" in order to enhance the prestige of a
department.
• Responsibility versus controlling, i.e. some costs are under the influence of more than
one person, e.g. power costs.
• Managers may overestimate costs so that they will not be blamed in the future should
they overspend.
1. Top management support: To be most effective ,budget making and administration must
receive the wholehearted support of top management.
2. Participation: Related to the participation of top management, another means of making
budgets work is to make sure that all mangers expected to operate and live under budgets
have a part in their preparation.
3. Standards: many budgets fail for lack of such standards and some upper level managers
hesitate to allow subordinates to submit budget plans for fear that they may have no
logical basis for reviewing budgets request.
4. Information: Managers need ready information about actual and forecast performance
under budgets by their departments.
5. Budgets should be treated as tools only and not as substitutes of management. It means
that managers should make proper evaluation using budgets and they should understand
the limitations of budgetary control.
6. To be effective, budget preparation and budget control should receive top level
management support. The budget officer must assist them.
7. Budgets should be in consistent with organizational objectives.
8. Budgets targets or standards are quantifiable and clear and in precise terms so that
accurate measurement and evaluation of results can be possible.
9. Top level managers should allow subordinates to review the budget and budget plans
should be modified accordingly.
The normal procedure is to trace the cause of an unsatisfactory result back to the persons
responsible for it and get them to correct their practices is called direct control.
Managers who skillfully apply concepts, techniques and principles and who will look at
managing and managerial problems from a system point of view, thus eliminating
undesirable results caused by poor management. This is called preventive control.
DEFINITION:
----------------
A report is a formal communication written for a specific purpose; it includes a description of
procedures followed for collection and analysis of data, their significance, the conclusions drawn
from them, and recommendations, if required.
A written report is relatively more accurate and permanent. In certain cases the reader may just
skim through it, or read the abstract or the conclusions or recommendations only. It can be
referred to again and again and is by its very nature more formal than an oral report. written
report is then divided into two types. They are as follows:
· Formal report.
1. Informational.
2. Interpretive.
3. Routine.
· Informal report.
Formal reports vary a great deal according to their purposes and contents, and different
organizations have different ways of classifying them. some classify them according to their
source or frequency of appearance, others by their length or degree of formality or physical form.
Informational report:
---------------------
An informational report contains only the data collected or the facts observed in an organized
form. It presents the situation as it is and not as it should be. It does not contain any conclusions
or recommendations. It is useful because it presents relevant data put together in a form in which
it is required by the management to take decisions.
Interpretive report:
--------------------
An interpretive report, like an informational report, contains facts but it also includes an
evaluation or interpretation or analysis of data and the reporter’s conclusions. It may have
recommendations for actions. An interpretive report which consists principally of
recommendations is also called a recommendation or recommendatory report.
Routine report:
----------------
All that the report writer has to do is to put a tick mark against certain items listed in the form or
write very brief remarks against them. These reports are written usually for recording routine
matters at regular intervals, e.g. confidential reports on employees, periodic reports on the
progress of projects, reports on inspection of equipmendations also, they are called as Routine
reports. Routine reports are further divided into many types. They are as follows:
· Progress reports,
· Laboratory reports,
· Inspection reports,
· Inventory reports.
Progress reports:
------------------
The frequency of progress reports depends upon the practice followed in an organization. They
may be written and circulated at the end of each phase or a specified period of time or
completion of a stage of work. If they are prepared at regular intervals, they are called as
periodic reports. They contain the following information:
Laboratory reports:
--------------------
A laboratory report is an account of various steps, findings and conclusions put together in a
logical order. As a matter of fact, no scientific experiment can be considered valid unless it is
presented in terms intelligible to other scientists. Thus, writing laboratory reports is considered to
be an essential part of scientific investigation and experimentation. These reports contain the
following elements:
· Heading, Experiment No.,
· Date,
· Statement of analysis,
· Apparatus used.
Inventory reports:
--------------------
It is customary for every organization to take stock of equipment, furniture, stationery, etc. at
regular intervals. The person who checks the stock fills in his findings in a prescribed form.
Part- A
1. Define administration.
Administration is the function in industry concerned with the determination of corporate policy,
the coordination of finance, production and distribution , the settlement of the compass of the
organisation and ultimate control of the executive.
2. What is globalization?
Globalisation describes a process by which national and regional economies, societies, and
cultures have become integrated through the global network of trade, communication,
immigration and transportation.
5. Define organizing.
Allen defines Organising as “the process of identifying and grouping of the work to be
performed, defining and delegating responsibility and authority and establishing relationships for
the purpose of enabling people to work most effectively together in accomplishing their
objectives.”
a) Feed forward controls: They are preventive controls that try to anticipate problems and take
corrective action before they occur. Example – a team leader checks the quality, completeness
and reliability of their tools prior to going to the site.
b) Concurrent controls: They (sometimes called screening controls) occur while an activity is
taking place. Example – the team leader checks the quality or performance of his members
while performing.
c) Feedback controls: They measure activities that have already been completed. Thus
corrections can take place after performance is over. Example – feedback from facilities
engineers regarding the completed job.
1. Division of work: Division of work or specialization alone can give maximum productivity
and efficiency. Both technical and managerial activities can be performed in the best manner
only through division of labour and specialization.
2. Authority and Responsibility: The right to give order is called authority. The obligation to
accomplish is called responsibility. Authority and Responsibility are the two sides of the
management coin. They exist together. They are complementary and mutually interdependent.
3. Discipline: The objectives, rules and regulations, the policies and procedures must be
honoured by each member of an organization. There must be clear and fair agreement on the
rules and objectives, on the policies and procedures. There must be penalties (punishment) for
non-obedience or indiscipline. No organization can work smoothly without discipline –
preferably voluntary discipline.
4. Unity of Command: In order to avoid any possible confusion and conflict, each member of
an organization must received orders and instructions only from one superior (boss).
5. Unity of Direction: All members of an organization must work together to accomplish
common objectives.
6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is
also called principle of co-operation. Each shall work for all and all for each. General or common
interest must be supreme in any joint enterprise.
7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator
for good performance. Exploitation of employees in any manner must be eliminated. Sound
scheme of remuneration includes adequate financial and nonfinancial incentives.
8. Centralization: There must be a good balance between centralization and decentralization of
authority and power. Extreme centralization and decentralization must be avoided.
9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking
all members of the organization from the top to the bottom. Scalar denotes steps.
10. Order: Fayol suggested that there is a place for everything. Order or system alone can create
a sound organization and efficient management.
11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity
(i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint
collaboration.
12. Stability of Tenure: A person needs time to adjust himself with the new work and
demonstrate efficiency in due course. Hence, employees and managers must have job security.
Security of income and employment is a pre-requisite of sound organization and management.
13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is
strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible
for good performance.
14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial
planning and execution of predetermined plans.
Or
b) Explain the trends and challenges of management in global scenario?
The management functions are planning and decision making, organizing. leading, and
controlling — are just as relevant to international managers as to domestic managers.
International managers need to have a clear view of where they want their firm to be in the
future; they have to organize to implement their plans: they have to motivate those who work lot
them; and they have to develop appropriate control mechanisms.
a) Planning and Decision Making in a Global Scenario
To effectively plan and make decisions in a global economy, managers must have a broadbased
understanding of both environmental issues and competitive issues. They need to understand
local market conditions and technological factor that will affect their operations. At the corporate
level, executives need a great deal of information to function effectively. Which markets are
growing? Which markets are shrinking? Which are our domestic and foreign competitors doing
in each market? They must also make a variety of strategic decisions about their organizations.
For example, if a firm wishes to enter market in France, should it buy a local firm there, build a
plant, or seek a strategic alliance? Critical issues include understanding environmental
circumstances, the role of goals and planning in a global organization, and how decision making
affects the global organization.
b) Organizing in a Global Scenario
Managers in international businesses must also attend to a variety of organizing issues. For
example, General Electric has operations scattered around the globe. The firm has made the
decision to give local managers a great deal of responsibility for how they run their business. In
contrast, many Japanese firms give managers of their foreign operations relatively little
responsibility. As a result, those managers must frequently travel back to Japan to present
problems or get decisions approved. Managers in an international business must address the
basic issues of organization structure and design, managing change, and dealing with human
resources.
c) Leading in a Global Scenario
We noted earlier some of the cultural factors that affect international organizations. Individual
managers must be prepared to deal with these and other factors as they interact people from
different cultural backgrounds .Supervising a group of five managers, each of whom is from a
different state in the United States, is likely to be much simpler than supervising a group of five
managers, each of whom is from a different culture. Managers must understand how cultural
factors affect individuals. How motivational processes vary across cultures, how the role of
leadership changes in different cultures, how communication varies across cultures, and how
interpersonal and group processes depend on cultural background.
d) Controlling in a Global Scenario
Finally, managers in international organizations must also be concerned with control. Distances,
time zone differences, and cultural factors also play a role in control. For example, in some
cultures, close supervision is seen as being appropriate, whereas in other cultures, it is not
Likewise, executives in the United States and Japan may find it difficult to communicate vital
information to one another because of the time zone differences. Basic control issues for the
international manager revolve around operations management productivity, quality, and
technologyand information systems.
12.a) Define strategic planning . What are the steps involved in strategic planning?
Or
b) Define decision making process. Explain the process followed while taking a decision in
normal situation.
1. Specific Objective: The need for decision making arises in order to achieve certain specific
objectives. The starting point in any analysis of decision making involves the determination of
whether a decision needs to be made.
2. Problem Identification: A problem is a felt need, a question which needs a solution. In the
words of Joseph L Massie "A good decision is dependent upon the recognition of the right
problem". The objective of problem identification is that if the problem is precisely and
specifically identifies, it will provide a clue in finding a possible solution. A problem can be
identified clearly, if managers go through diagnosis and analysis of the problem.
Diagnosis: Diagnosis is the process of identifying a problem from its signs and symptoms. A
symptom is a condition or set of conditions that indicates the existence of a problem. Diagnosing
the real problem implies knowing the gap between what is and what ought to be, identifying the
reasons for the gap and understanding the problem in relation to higher objectives of the
organization.
Analysis: Diagnosis gives rise to analysis. Analysis of a problem requires:
• Who would make decision?
• What information would be needed?
• From where the information is available?
Analysis helps managers to gain an insight into the problem.
3. Search for Alternatives: A problem can be solved in several ways; however, all the ways
cannot be equally satisfying. Therefore, the decision maker must try to find out the various
alternatives available in order to get the most satisfactory result of a decision. A decision maker
can use several sources for identifying alternatives:
• His own past experiences
• Practices followed by others and
• Using creative techniques.
4. Evaluation of Alternatives: After the various alternatives are identified, the next step is to
evaluate them and select the one that will meet the choice criteria. /the decision maker must
check proposed alternatives against limits, and if an alternative does not meet them, he can
discard it. Having narrowed down the alternatives which require serious consideration, the
decision maker will go for evaluating how each alternative may contribute towards the objective
supposed to be achieved by implementing the decision.
5. Choice of Alternative: The evaluation of various alternatives presents a clear picture as to how
each one of them contribute to the objectives under question. A comparison is made among the
likely outcomes of various alternatives and the best one is chosen.
6. Action: Once the alternative is selected, it is put into action. The actual process of decision
making ends with the choice of an alternative through which the objectives can be achieved.
7. Results: When the decision is put into action, it brings certain results. These results must
correspond with objectives, the starting point of decision process, if good decision has been
made and implemented properly. Thus, results provide indication whether decision making and
its implementation is proper.
14.a) Discuss maslow need hierarchy theory.compare and discuss the maslow and Herzberg
theory of motivation.
Maslow's theory is based on the hierarchy of human needs. He identified five sets of human
needs (on priority basis) and their satisfaction in motivating employees.
Hertzberg refers to hygiene factors and motivating factors in his theory. Hygiene factors are
dissatisfiers while motivating factors motivate subordinates. Hierarchical arrangement of needs
is not given.
Maslow's theory is most popular and widely cited theory of motivation and has wide
applicability. It is mostly applicable to poor and developing countries where money is still a big
motivating factor.
Herzberg's theory is an extension of Maslow's theory of motivation. Its applicability is narrow. It
is applicable to rich and developed countries where money is less important motivating factor.
Maslow's theory or model is descriptive in nature.
Herzberg's theory or model is prescriptive in nature.
Or
b) What is organisational culture. Explain the types of organisational culture?
Organizational culture is an idea in the field of organizational studies and management which
describes the psychology, attitudes, experiences, beliefs and values (personal and cultural values)
of an organization. It has been defined as "the specific collection of values and norms that are
shared by people and groups in an organization and that control the way they interact with each
other and with stakeholders outside the organization."
1. Budgetary objectives:
Budgets are a means to certain ends. Therefore, the objectives to be attained during a particular
period of time should be described clearly and precisely before making budgets.
Those who prepare and execute budgets must understand fully the objectives and policies of the
enterprise.
2. Budgetary organization:
The proper organisation is essential for the successful preparation, maintenance and
administration of budgets. A budgetary committee is formed which comprises the departmental
heads of different departments. Departmental managers are given the authority to prepare
functional budgets. The chief executive is responsible for the co-ordination of different budgets.
3. Budget centres:
A budget centre is that part of the organisation for which the budget is prepared. A budget centre
may be department, section of a department, or any other part of the department. The
establishment of budget centre is necessary covering all parts of the organisation. The budget
centres are also necessary for cost control purposes.
4. Budget manual:
A budget manual is a document which spells out the duties and also the responsibilities of the
various executives concerned with the budgets. It specifies the relation among the various
functionaries. It lays down the budgetary procedures, organizational structure, fixation of
responsibilities and budget time table.
5. Budget controller:
A special officer is appointed for the administration of budgets. He gives useful advice and helps
in the construction, implementation, coordination and revision of business budgets. He also
provides timely warning of variations from the budgeted performance.
6. Budget committee:
A budget committee consisting of different executives is formed to assist the budget controller.
The chief executive acts as the chairman of the budget committee. The budget committee
approves the functional budgets or sends them for revision to the department heads. The budget
committee facilitates in securing participation of personnel in the preparation and administration
of budgets.
7. Budget period:
A budget period is the length of time for which the budget is prepared and employed. The period
or duration should be determined according to the circumstances of the organisation. The budget
period should correspond with the natural cycle of business. The nature of business and the
control factor influence the budget period.
ANNA UNIVERSITY EXAMINATION
April/May 2015
MG2351 – Principles of Management
PART –A
Part – B
11.A) Explain in detail henry fayol contribution towards classical approach towards
management.?
Henry Fayol contributed 14 principles to management which is widely applied in all the
organisation
1. Division of work: Division of work or specialization alone can give maximum productivity
and efficiency. Both technical and managerial activities can be performed in the best manner
only through division of labour and specialization.
2. Authority and Responsibility: The right to give order is called authority. The obligation to
accomplish is called responsibility. Authority and Responsibility are the two sides of the
management coin. They exist together. They are complementary and mutually interdependent.
3. Discipline: The objectives, rules and regulations, the policies and procedures must be
honoured by each member of an organization. There must be clear and fair agreement on the
rules and objectives, on the policies and procedures. There must be penalties (punishment) for
non-obedience or indiscipline. No organization can work smoothly without discipline –
preferably voluntary discipline.
4. Unity of Command: In order to avoid any possible confusion and conflict, each member of
an organization must received orders and instructions only from one superior (boss).
5. Unity of Direction: All members of an organization must work together to accomplish
common objectives.
6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is
also called principle of co-operation. Each shall work for all and all for each. General or
common interest must be supreme in any joint enterprise.
7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or
motivator for good performance. Exploitation of employees in any manner must be eliminated.
Sound scheme of remuneration includes adequate financial and nonfinancial incentives.
8. Centralization: There must be a good balance between centralization and decentralization of
authority and power. Extreme centralization and decentralization must be avoided.
9. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking
all members of the organization from the top to the bottom. Scalar denotes steps.
10. Order: Fayol suggested that there is a place for everything. Order or system alone can
create a sound organization and efficient management.
11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity
(i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint
collaboration.
12. Stability of Tenure: A person needs time to adjust himself with the new work and
demonstrate efficiency in due course. Hence, employees and managers must have job security.
Security of income and employment is a pre-requisite of sound organization and management.
13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is
strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible
for good performance.
14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial
planning and execution of predetermined plans.
Or
b) i) Discuss the relative importance of each type of the skills to lower , middle and upper
level managers?
Industry analysis—also known as Porter’s Five Forces Analysis—is a very useful tool for
business strategists. It is based on the observation that profit margins vary between industries,
which can be explained by the structure of an industry.
The Five Forces primary purpose is to determine the attractiveness of an industry. However, the
analysis also provides a starting point for formulating strategy and understanding the competitive
landscape in which a company operates.
Porter’s Five Forces Analysis
The framework for the Five Forces Analysis consists of these competitive forces:
Industry rivalry (degree of competition among existing firms)—intense
competition leads to reduced profit potential for companies in the same industry
Threat of substitutes (products or services)—availability of substitute products
will limit your ability to raise prices
Bargaining power of buyers—powerful buyers have a significant impact on
prices
Bargaining power of suppliers—powerful suppliers can demand premium prices
and limit your profit
Barriers to entry (threat of new entrants)—act as a deterrent against new
competitors
In market penetration strategy, the organization tries to grow using its existing offerings
(products and services) in existing markets. In other words, it tries to increase its market share in
current market scenario.This involves increasing market share within existing market segments.
This can be achieved by selling more products or services to established customers or by finding
new customers within existing markets. Here, the company seeks increased sales for its present
products in its present markets through more aggressive promotion and distribution.
This can be accomplished by: (i) Price reduction; (ii) Increase in promotion and distribution
support; (iii) Acquisition of a rival in the same market; (iv) Modest product refinements
Market development
In market development strategy, a firm tries to expand into new markets (geographies, countries
etc.) using its existing offerings.
This can be accomplished by: (i) Different customer segments; (ii) Industrial buyers for a good
that was previously sold only to the households; (iii) New areas or regions of the country (iv)
Foreign markets. This strategy is more likely to be successful where:- (i) The firm has a unique
product technology it can leverage in the new market; (ii) It benefits from economies of scale if
it increases output; (iii) The new market is not too different from the one it has experience of;
(iv) The buyers in the market are intrinsically profitable.
Product development
In product development strategy, a company tries to create new products and services targeted at
its existing markets to achieve growth.This involves extending the product range available to the
firm's existing markets. These products may be obtained by: (i) Investment in research and
development of additional products; (ii) Acquisition of rights to produce someone else's product;
(iii) Buying in the product and "branding" it; (iv) Joint development with ownership of another
product who need access to the firm's distribution channels or brands.
Diversification
In diversification an organization tries to grow its market share by introducing new offerings in
new markets. It is the most risky strategy because both product and market development is
required. (i) Related Diversification - Here there is relationship and, therefore, potential synergy,
between the firms in existing business and the new product/market space. (a) Concentric
diversification, and (b) Vertical integration. (ii) Unrelated Diversification: This is otherwise
termed conglomerate growth because the resulting corporation is a conglomerate, i.e. a collection
of businesses without any relationship to one another.A strategy for company growth through
starting up or acquiring businesses outside the company’s current products and markets
1. Specific Objective: The need for decision making arises in order to achieve certain specific
objectives. The starting point in any analysis of decision making involves the determination of
whether a decision needs to be made.
2. Problem Identification: A problem is a felt need, a question which needs a solution. In the
words of Joseph L Massie "A good decision is dependent upon the recognition of the right
problem". The objective of problem identification is that if the problem is precisely and
specifically identifies, it will provide a clue in finding a possible solution. A problem can be
identified clearly, if managers go through diagnosis and analysis of the problem.
Diagnosis: Diagnosis is the process of identifying a problem from its signs and symptoms. A
symptom is a condition or set of conditions that indicates the existence of a problem. Diagnosing
the real problem implies knowing the gap between what is and what ought to be, identifying the
reasons for the gap and understanding the problem in relation to higher objectives of the
organization.
Analysis: Diagnosis gives rise to analysis. Analysis of a problem requires:
• Who would make decision?
• What information would be needed?
• From where the information is available?
Analysis helps managers to gain an insight into the problem.
3. Search for Alternatives: A problem can be solved in several ways; however, all the ways
cannot be equally satisfying. Therefore, the decision maker must try to find out the various
alternatives available in order to get the most satisfactory result of a decision. A decision maker
can use several sources for identifying alternatives:
• His own past experiences
• Practices followed by others and
• Using creative techniques.
4. Evaluation of Alternatives: After the various alternatives are identified, the next step is to
evaluate them and select the one that will meet the choice criteria. /the decision maker must
check proposed alternatives against limits, and if an alternative does not meet them, he can
discard it. Having narrowed down the alternatives which require serious consideration, the
decision maker will go for evaluating how each alternative may contribute towards the objective
supposed to be achieved by implementing the decision.
5. Choice of Alternative: The evaluation of various alternatives presents a clear picture as to
how each one of them contribute to the objectives under question. A comparison is made among
the likely outcomes of various alternatives and the best one is chosen.
6. Action: Once the alternative is selected, it is put into action. The actual process of decision
making ends with the choice of an alternative through which the objectives can be achieved.
7. Results: When the decision is put into action, it brings certain results. These results must
correspond with objectives, the starting point of decision process, if good decision has been
made and implemented properly. Thus, results provide indication whether decision making and
its implementation is proper.
OR
b) i) Elaborate the different types of organisational plans?
Plans
Multi USE Plan
Single Use Plan
-Objectives
-Programmes
- Strategies
-Budgets
-Policies
-Schedules
-Procedures
-Projects
-Rules
-Methods
Objectives: objectives are the ends towards which the activities of an organisatiion are directed.
Objectives are known by different names eg, goals, aims, purposes, missions, targets etc. they are
the end points of planning as planning is done to achieve objectives. Objectives are established to
guide the efforts of an organisation and each of its constituents.
Strategy: A strategy is the complex plan for bringing the organisation from a given posture to a
desired position in a future period of time.Stratey is the basic plan chosen to achieve objectives
while tactics are the means of implementing the plan.
Types of strategies:
- Grand or Master strategy: it is the basic strategy of an organisation. ?It sets the task
of the organisation and serves as the basis for all other plans. It determines the nature
and scope of the enterprise.It is also known as corporate strategy.
- Stability strategy: An organisation which follows this strategy is satisfied with its
performance and wants the same rate of growth. Such a strategy may be followed
when the environment is stable, customer are limited, there is minimum need for
specialized knowledge and skill, values and attitudes of top management donot like
growth.
- Growth strategy: this means an enterprise wants to raise its level of performance or
rate of growth. The following ways may be adopted for this purpose:
Market penetration: Increasing sale of existing products in existing markets.
Market development: increasing sale of existing products in new markets.
Product development: developing new products for sale in existing markets.
Diversification: selling new products in new markets.
- Integration strategy: taking over or combining with other business firms is called
integration strategy. This may assume several forms eg; horizontal integration,
vertical integration, amalgamation, merger and conglomeration.
- Turnaround or Retrenchment strategy: this means reduction in the level of
performance. A firm may close down its unprofitable product lines.
- Divestment or closure strategy. This implies giving up operations altogether or
closing down.
- Functional strategies: these strategies are used for development of resources to
achieve specific objectives. They are also known as programme strategies or minor
strategies. For example, an intensive advertising campaign may be a substrategy to
support the master strategy.
Policies:
A policy is a general guide to thinking and action rather than a specific course of action. It
defines the area or limits within which decisions can be made to achieve organisational
objectives. Policies are flexible and broad plans providing scope for judgment and interpretation
on the opart of subordinate managers.
(b) Originated Policy. An originated policy is that which is formulated by the managers in
the organisation for their subordinate's action as well as their own action. Such a policy
flows form higher level because such a policy is originated in the broad framework of the
objectives which are set and defined by top management. This policy may be broad
giving a general guidance for the action or may be spelled so completely as to leave little
scope for definition and interpretation.
(b) Appealed Policy. Appealed policy arises from the appeal made by a subordinate to
his superior for deciding an important case. The need for such an appeal may arise
because th particular case has not been covered by earlier policies. The appeals are taken
upward and decisions made on them set a kind of common law to be followed by others.
Appealed policies are mostly incomplete, unco-ordinated and confused. As such, if
frequent appeals are made, the managers should visualize their policy formulation, its
communication and interpretation so that guidelines become clear and specific.
(c) Implied Policy. Sometimes, policies are not clearly stated, and the actions of
managers, particularly at higher levels, provide guidelines for actions at the lower levels.
These actions might be constituting policy. Or sometimes, the orgnaisation have clearly
expressed policies for its image, but it is unable to enforce these. In such a case, the
action of a decision-maker, consciously or unconsciously, depends upon their own
guidelines, prejudices and whims. Moreover, in the absence of any specific guideline,
decision is based on individual interpretation of actions observed in the orgnaisation
crating chaos.
(d) Imposed Policy. Imposed policy arises from th influence of some outside forces like
government, trade unions, and trade associations. In the present social structure, external
variables affect the functioning of a business organisation to a great extent. These
variables may impose th specific policy or conditions may be created to adopt a particular
policy. In India, the rise of public sector and government regulations create such
situations.
Procedures:
A procedure is a chronological sequence of steps to be undertaken to enforce a policy and to
attain an objective. It lays down the specific manner in which a particular activity is to be
performed. It is a planned sequence of operations for performing repetitive activities uniformly
and consistently.
Rules:
Rules are rigid and definite plans that specify what is to be done or not to be done in given
situations. A rule provides no scope for discretion and judgement. It is a prescribed guide to
conduct or action. No deviation is expected from the rule.
Programmes:
A programme is a concrete scheme of action designed to accomplish a given task. It specifies the
steps to be taken resources to be used , time limits for each step and assignments of task. IT is a
sequence of action steps arranged in the priority necessary to implement a policy and achieve an
objective.
Budget:
A budget is a statement of expected results expressed in numerical terms for a definite period of
time in the future. It expresses a plan in precise terms. Budget serve as means of coordination
and control. They provide clarity, direction and purpose in the activities of an organisation by
laying down verifiable and measurable goals for a specified period of time.
Schedules:
A schedule specifies time limits within which activities are to be completed. Scheduling is the
process of establishing a time sequence for the work to be done. Schedules are essential for
avoiding delays and for ensuring continuity of operations.
Projects:
A project is a distinct cluster of functions and facilities for a definite purpose and definite time
period. It is designed and executed as a distinct plan. It is integrated into a unity and is designed
to achieve a stated objective.
ii) What do you understand by management by objectives and its advantages and
disadvantages?
MBO process consists of:
1) Setting objectives:
For Management by Objectives (MBO) to be effective, individual managers must understand the
specific objectives of their job and how those objectives fit in with the overall company
objectives set by the board of directors.
The managers of the various units or sub-units, or sections of an organization should know not
only the objectives of their unit but should also actively participate in setting these objectives and
make responsibility for them.
Management by Objective (MBO) systems, objectives are written down for each level of the
organization, and individuals are given specific aims and targets.
2) Developing action plans
Actions plans specify the actions needed to address each of the top organizational issues and to
reach each of the associated goals, who will complete each action and according to what
timeline. An overall, top-level action plan that depicts how each strategic goal will be reached is
developed by the top level management. The format of the action plan depends on the objective
of the organization.
3) Reviewing Progress:
Performance is measured in terms of results. Job performance is the net effect of an employee's
effort as modified by abilities, role perceptions and results produced. Effort refers to the amount
of energy an employee uses in performing a job. Abilities are personal characteristics used in
performing a job and usually do not fluctuate widely over short periods of time. Role perception
refers to the direction in which employees believe they should channel their efforts on their jobs,
and they are defined by the activities and behaviors they believe are necessary.
4) Performance appraisal:
Performance appraisals communicate to employees how they are performing their jobs, and they
establish a plan for improvement. Performance appraisals are extremely important to both
employee and employer, as they are often used to provide predictive information related to
possible promotion. Appraisals can also provide input for determining both individual and
organizational training and development needs. Performance appraisals encourage performance
improvement. Feedback on behavior, attitude, skill or knowledge clarifies for employees the job
expectations their managers hold for them. In order to be effective, performance appraisals must
be supported by documentation and management commitment.
Advantages
• Motivation – Involving employees in the whole process of goal setting and increasing
employee empowerment. This increases employee job satisfaction and commitment.
• Better communication and Coordination – Frequent reviews and interactions between superiors
and subordinates helps to maintain harmonious relationships within the organization and also to
solve many problems.
• Clarity of goals
• Subordinates have a higher commitment to objectives they set themselves than those imposed
on them by another person.
• Managers can ensure that objectives of the subordinates are linked to the organization's
objectives.
Limitations
There are several limitations to the assumptive base underlying the impact of managing by
objectives, including:
• It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
• It underemphasizes the importance of the environment or context in which the goals are set.
Or
B)i)Delegations is the ability to get result through others- discuss. Explain the steps and
guidelines to be followed while delegating authority?
Koontz and O’Donnel, Delegation is defined as:“The entire process of delegation involves the
determination of results expected, the assignment of tasks, the delegation of authority for
accomplishment of these tasks, and the exaction of responsibility for their accomplishments.”
process of delegation?
a) Determination of results expected
b) Assignment of duties
c) Granting of authority
d) creating accountability for performance
principles/guidelines of delegation?
a. Delegation to conform to desired objectives
b. Responsibility not delegatable
c. Authority to match duties
d. Unity of command
e. Limits to authority to well-defined
ii) Discuss the obstacles to the leader flexibility and leader styles based on them?
1. Autocratic Leader –Commands and expects compliance, is dogmatic and positive, and leads
by the ability to withhold or give rewards and punishment.
2. Democratic or Participative – consults with subordinates on proposed actions and decision
and encourage participation from there
3. Free-rein leader / laissez-faire Leadership – uses his or her power very little, giving a high
degree of Interdepence in their operations. Leaders depend largely on subordinates to set their
own goals and the means of achieving them, and they see their role as one of aiding the operation
of followers by furnishing them with information and acting primarily as a contact with the
groups external Environment.
4. Paternalistic Leadership – Serves as the head of the family and treats his followers like his
family members. He assumes a paternal or fatherly role to help, guide and protect the followers.
Functions
Goal Determination
Motivating Followers
Direction
Coordination
Representation
Obstacles to leadership:
OR
b)Does motivation important for organisational development/achievement?justify your
answer with maslow hierarchy needs.
Importance of motivation:
- Higher effieciency: motivation is an effective instrument in the hands of management to
maximize efficiency of operations.
- Optimum utilization of resources: motivation inspires employees to make best possible use of
different factors of production.
- Reduction in labour turnover:
- Better industrial relations
- Easier selection of employees.
- it facilitiates change.
15.a) Explain the relationship between controlling and overall management.Disucss the
steps in controlling process?
CONTROL PROCESS
The basic control process involves mainly these steps as shown in Figure
a) The Establishment of Standards:
Because plans are the yardsticks against which controls must be revised, it follows logically that
the first step in the control process would be to accomplish plans. Plans can be considered as the
criterion or the standards against which we compare the actual performance in order to figure out
the deviations.
Examples for the standards
• Profitability standards: In general, these standards indicate how much the company would like
to make as profit over a given time period- that is, its return on investment.
• Market position standards: These standards indicate the share of total sales in a particular
market that the company would like to have relative to its competitors.
• Productivity standards: How much that various segments of the organization should produce is
the focus of these standards.
• Product leadership standards: These indicate what must be done to attain such a
position.
• Employee attitude standards: These standards indicate what types of attitudes the company
managers should strive to indicate in the company’s employees.
• Social responsibility standards: Such as making contribution to the society.
• Standards reflecting the relative balance between short and long range goals.
b) Measurement of Performance:
The measurement of performance against standards should be on a forward looking basis so that
deviations may be detected in advance by appropriate actions. The degree of difficulty in
measuring various types of organizational performance, of course, is determined primarily by the
activity being measured. For example, it is far more difficult to measure the performance of
highway maintenance worker than to measure the performance of a student enrolled in a college
level management course.
c) Comparing Measured Performance to Stated Standards:
When managers have taken a measure of organizational performance, their next step in
controlling is to compare this measure against some standard. A standard is the level of activity
established to serve as a model for evaluating organizational performance. The performance
evaluated can be for the organization as a whole or for some individuals working within the
organization. In essence, standards are the yardsticks that determine whether organizational
performance is adequate or inadequate.
d) Taking Corrective Actions:
After actual performance has been measured compared with established performance standards,
the next step in the controlling process is to take corrective action, if necessary. Corrective action
is managerial activity aimed at bringing organizational performance up to the level of
performance standards. In other words, corrective action focuses on correcting organizational
mistakes that hinder organizational performance. Before taking any corrective action, however,
managers should make sure that the standards they are using were properly established and that
their measurements of organizational performance are valid and reliable. At first glance, it seems
a fairly simple proposition that managers should take corrective action to eliminate problems -
the factors within an organization that are barriers to organizational goal attainment. In practice,
however, it is often difficult to pinpoint the problem causing some undesirable organizational
effect.