DEPARTMENT OF CIVIL ENGINEERING

MG 6851 - PRINCIPALS OF MANAGEMENT

YEAR /SEM : IV/VIII

A.RAMACHANDRAN M.E,

ASSISTANT PROFESSOR

DEPARTMENT OF MECHANICAL ENGINEERING

 UNIT- I

INTRODUCTION TO MANAGEMENT AND ORGANIZATIONS

Define Management.
According to KOONTZ & WEIHRICH, “Management is the process of designing and maintaining
of an environment in which individuals working together in groups efficiently accomplish selected aims”.
“Management is the art of getting things through and with people in formally organized groups”.
Topic- Evolution of management
Management is defined for conceptual, theoretical and analytical purposes as that process by which
managers direct, maintain and operate purposive organizations through systematic, coordinated, cooperative
human efforts. Management is a process involving planning, organizing, staffing, directing and controlling
human efforts to achieve stated objective in an organization.
Contributions of:
Peter Drucker
F.W. Taylor
Elton Mayo
Henri Fayol
Characteristics of Management
 Mgt is Universal
 Mgt is dynamic
 Mgt is a group of managers
 Mgt is Purposeful
 Mgt is goal oriented
 Mgt is integrative Function
 Mgt is a Social process
 Mgt is a Multi-faceted discipline
 Mgt is a continuous process
Management as an Art
The main elements of an art are –
 Personal Skills
 Practical know-how
 Application of knowledge
 Result orientation
 Creativity
 Constant practice aimed at perfection
 ADMINISTRATION VS MANAGEMENT
Basis of Administration Management
Distinction
Policy and Determination of objectives Implementation of Policies
objectives & policies

Main Legislative & determination Executive Function

Functions function
Planning, Organising staffing Directing, Motivating,
Coordinating Controlling
Provides a sketch of the Provides the entire body
Enterprise
Influence Influenced mainly by public Influenced mainly by
opinion & other outside force administrative function
Levels of Mainly top level function Mainly middle level function
Management involves thinking & planning involves doing and acting
Level of Owners/ Board of Directors MD, GM & Managers
Executives

Management is basically an art because of the following reasons –

 A manager applies his knowledge and skills to coordinate the efforts of his people
 Mgt seeks to achieve concrete practical results
 Mgt is creative. It brings out new situation and converts into output
 Effective Mgt lead to realization of Organizational and other goals. Mastery in Mgt requires a
sufficiently long period of experience in, managing.
Management as Science because of the following reasons –
The essential elements of Science
 Systematised body of Knowledge
 Underlying principles and theories developed through continuous observation, inquiry,
experimentation and research.
 Universal truth and applicability
 Organised body of knowledge can be taught and learnt in class room and outside.
 Mgt is a social science. It contains all the essentials of science. It is an in exact science.
Managerial Skills
  Conceptual skills
 Human Skills
 Technical Skills
 Design Skills – Decision making
Nature of Management
a. It is multidisciplinary
b. It is continuous process
c. Universal activity
d. Science as well as art
e. Dynamic
f. Group activity
g. System of authority
Topic- Levels of Management
1. Top Level Mgt –
Board of Directors, MD, Owners, Chief Executives
 To analyse, evaluate and deal with th environmental forces
 To establish overall long term goals and broad policies of the company including the master
budget
2. Middle Level Mgt
Sales, Executives, Production Executives, Production executives etc…
 To interpret and explain the policies framed by top management
 To compile and issue detailed instruction regarding operations
3. Supervisory / Operating / Lower Level Mgt –
Superintendents, Branch managers, General Foremen
 To plan day to day production within the goals lay down by higher authority
 To assign jobs to workers and to make arrangement for their training and development
Topic- Roles of a manager
1. Interpersonal Role - Interacting with people inside and outside the Orgn
Figurehead – as a symbolic head of an organisation, the manager performs routine duties of a
legal nature
Leader – Hiring, Training, motivating and guiding subordinates
Liason - Interacting with other managers outside the orgn to obtain favours and information
2. Informational Role – Serving as a focal point for exchange of Information
Monitor – Seeks and receive information concerning internal and external events so as to gain
understanding of the Orgn and its environment.
 Disseminator – Transmits information to subordinates, peers and superiors within the
Organisation
Spokesperson – Speaking on behalf of the Orgn and transmitting information on Orgn plans,
policies and actions to outsiders.
3. Decisional Role – Makes important decision
Entrepreneur – Initiating changes or improvements in the activities of the Orgn
Disturbance handler- Taking charge and corrective action when Orgn faces unexpected crises
Resource allocator – Distributing Orgn‟s resources like money, time, equipment and labour
Negotiator – Representing the Orgn in bargaining and negotiations with outsiders and insiders
Topic - Scope of Management
It state the precisely and difficult with following aspects
 Functional areas of management
 Subject matter of management
 Inter disciplinary management
 Agent of change
Topic- Role of Scientific Management
“Scientific Management is concerned with knowing exactly what you want men to do and then see in
that they do it best and cheapest way”.
Features of Scientific Management are:-
 Separation of planning and working
 Functional foremanship
 Job analysers
 Time study or Work measurement
 Method study
 Motion study
 Fatigue study
 Standardization
 Scientific selection of training
 Financial incentives
 Economy and
 Mental revolution.
Topic- F.W.Taylor “Management”
Scientific management was introduced by F.W Taylor who is known as the Father of Scientific
Management. He adopted scientific methods to increase the productivity and greater efficiency in production.
Principles of Scientific Management:
• Replacing Rule of thumb with science
• Harmony in group action
• Cooperation
• Maximum output and
• Development of workers.
Features of Scientific Management are:-
 Separation of planning and working
 Functional foremanship
 Job analysers
 Time study or Work measurement
 Method study
 Motion study
 Fatigue study
 Standardization
 Scientific selection of training
 Financial incentives
 Economy
Topic- Contributions of Henri Fayol
Management is simply the process of decision-making and control over the action of human beings for the
expressed purpose of attaining pre-determined goals. “Management is the art of getting things through and
with people in formally organized groups”.
Administrative Theory of Management – Usage of the term „Administration‟; the six activities of an
industrial organization namely, technical, commercial, financial security, accounting and managerial.
Fourteen general Principles of Management –
1. Division of Work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of individual interest to general interest
7. Remuneration of personnel
8. Centralisation
9. Scalar Chain
 10. Order
11. Equity
12. Stability of Tenure of Personnel
13. Initiative
14. Esprit-de-corps
Five Elements of management –
Planning, Organizing, Commanding, Coordinating, Controlling
Six Managerial qualities –
Physical, Mental, Moral, Educational, Technical and Experience
Topic- functions of management
Functions Sub Functions
Planning Forecasting, decision making, strategy formulation, policy
making ,programming, scheduling, budgeting,
problem-solving, innovation, investigation and research.
Organising Grouping of Functions, Departmentation, delegation,
decentralisation, activity analysis, task allocation

Staffing Manpower planning, job analysis,Recruitment, Selection,

Training, Placement, Compensation, Promotion, appraisal, etc.
Directing Supervision, Motivation,communication, Leadership, etc
Controlling Fixation of standard, recording, measurement, reporting
corrective action.

Topic- Environmental factors of organization

Environment is a collectivity of all factors within the control of individual business and beyond the
control of individual business. Environment includes all the conditions, circumstances, and influences
surrounding the total organization or any of its part. The environment may be
• External and
• Internal
External Environment
It greatly influences the working of every business. Its major components are:
• Economic- capital, labor, suppliers, consumers and customers
• Technological
• Social
 • Political
• Ethical
Internal Environment
It is considered with the day to day work of the various departments of an organization. They may be
• Financial aspects
• HR policies and procedures
• Production activities
• Marketing and selling activities
• Information system
Topic- Forms of Business organizations
Definition: Business organization
A Business organization comes into existence when there are a number of persons in communication and
relationship to each other and are willing to contribute towards a common objective.
The classifications of Business Organizations are:
* Sole proprietorship concern
* Partnership concern
* Joint Stock Companies
- Private Limited Company
- Public Limited Company
* Co-operative societies
* Non- Profit Organizations.
Topic- Globalisation
 Globalization means covering or affecting the whole world.
 It means integration of the domestic economy of a country with the international economy.
 Recent developments in information and communication technology have accelerated the pace of
globalization.
 Globalisation means the internationalization of trade.
Benefits of Globalisation
 Improves efficiency
 Improves factor Income
 Improves finance
 Gains from Migrations
Drawbacks of Globalisation
 Globalisation increases the problems of unemployment
 Domestic Industries finds difficulty in survival.
  Only group of people who participate in the process of
 Globalization will be benefited, this creates income inequality within the country
 Control on domestic economy becomes more difficult
 Developing country suffers from the problem of brain-drain
UNIT- II
PLANNING
Define planning.
Planning is a process of selecting the objectives & determining the course of action required to achieve
these objectives.
Eg: The goal set for limited period like five year plans
Nature of Planning
 Primary function
 Dynamic process
 Based on objectives and policies
 Selective process
 Pervasiveness
 Intellectual process
 Directed towards efficiently
 Based on objectives
Objectives of planning
Primary of planning
uncertainty and change
facilitate control
Help in co-ordination
Planning Process

Identification of Opportunities

Establishment of objectives

Developing planning Premises

Identification of alternatives

Evaluation of alternatives

Selecting alternative
 Topic- Types of plans
There are 4 types of Plans are followed
 Operational plan
 Tactical plan
 Strategic plan
 Contingency plan
1. Operational plan
Standing plan & Single use plan
Standing plan
a) Mission
b) Objectives
c) Strategies
d) Policies
e) Procedures
Single use plan
a) Programme
b) Budget
c) Schedule
d) Methods
e) Projects
Objectives
It aims, purposes, goals that an organization wants to achieve over varying period or time
Objective setting
Clearly specified, should be too long, should be verifiable, challenging, co-ordinated with each other,
short term objectives
Benefits of objective setting
 Linked to business

 Shows Performance of employees

 Provide direction to the employees

 Improve motivation

 Focus a specific task

 Management By Objectives (MBO)
KOONTZ &WEIHRICH: Management by objectives (MBO) is defined as a comprehensive managerial
system that integrates many key managerial activities in a systematic manner and that is consciously directed towards
the effective and efficient achievement of organizational and individual objective.

Process of MBO
1. Setting preliminary objective
2. Fixing key result areas
3. Setting subordinate objective
4. Recycling objective
5. Matching resources with objective
6. Periodic performance reviews
7. Appraisal
Benefits of MBO
i. Clarification of organization
ii. Improve managing
iii. Personnel Satisfaction
iv. Team work
v. Development of effective control
vi. Quick decision making
 Topic- Strategic planning
Def:
“ It is the determination of basic long-term objectives and adoption of course of action and allocation
of resources to achieve these goals”.
Strategic planning process
i) Mission and objectives
ii) Environmental analysis
iii) Corporate analysis
iv) Identification of alternatives
v) Strategic decision making
vi) Implementation, review and control

Define policies
Policies are general statement or understanding which provides guidance in decisions making to
various managers
Policy formulation process
i) Evaluate policy alternatives
ii) Choice of policy
iii) Communication of policy
 iv) Implementation
v) Review
Types of policies
1. Formulated policies: it is originated by top level
2. Appealed policy : it is formulated on request of Lower level managers
3. Imposed policy: imposed by external factors
4. Implied policy: it is not clearly stated
UNIT-III
ORGANIZING
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.
Nature Or Characteristics Of Organizing
(1) Division of Work: Division of work is the basis of an organization. In other words, there can be no
organization without division of work. Under division of work the entire work of business is divided into
many departments
(2) Coordination: Under organizing different persons are assigned different works but the aim of all these
persons happens to be the some - the attainment of the objectives of the enterprise. Organization ensures
that the work of all the persons depends on each other‟s work even though it happens to be different.
(3) Plurality of Persons: Organization is a group of many persons who assemble to fulfill a common
purpose. A single individual cannot create an organization.
(4) Common Objectives: There are various parts of an organization with different functions to perform but
all move in the direction of achieving a general objective.
(5) Well-defined Authority and Responsibility: Under organization a chain is established between different
posts right from the top to the bottom. It is clearly specified as to what will be the authority and responsibility
of every post.
(6)Organization is a Dynamic Process: Organization is related to people and the knowledge and experience
of the people undergo a change. The impact of this change affects the various functions of the organizations.
Process of Organizing
- The manager differentiates and intergrates the activities of his Organisation
- Differentiation - the process of departmentalization or segmentation of activities on the basis of
some similarity
- Integration – Process of achieving unity of effort among the various departments
1. Establishing Enterprise Objectives
2. Formulating Supporting objectives, policies and Plans
3. Identifying and classifying the necessary to accomplish
 4. Grouping the activities in the light of human and material resources available
5. Delegating to the head of each group the activity necessary to perform
6. Tying the groups together horizontally and vertically through authority relationship
and information flows.

Topic- Organization Structure

 An organization structure is a framework that allots a particular space for a particular department or
an individual and shows its relationship to the other.
 An organization structure shows the authority and responsibility relationships between the various
positions in the organization by showing who reports to whom. It is an established pattern of
relationship among the components of the organization.
Significance of Organization Structure
 Properly designed organization can help improve teamwork and productivity by providing a
framework within which the people can work together most effectively.
 Organization structure determines the location of decision-making in the organization.
Organization Structure - Types
A ) Line and Staff Relationships:
Line authority refers to the scalar chain, or to the superior-subordinate linkages, that extend throughout
the hierarchy (Koontz, O'Donnell and Weihrich). Line employees are responsible for achieving the basic or
strategic objectives of the organization, while staff plays a supporting role to line employees and provides
services.
B ) Departmentalization:
Departmentalization is a process of horizontal clustering of different types of functions and activities
on any one level of the hierarchy. Departmentalization is conventionally based on purpose, product, process,
function, personal things and place.
C ) Span of Control:
This refers to the number of specialized activities or individuals supervised by one person. Deciding
the span of control is important for coordinating different types of activities effectively
D ) De-centralization and Centralization
De-centralization refers to decision making at lower levels in the hierarchy of authority. In contrast,
decision making in a centralized type of organizational structure is at higher levels. The degree of
centralization and de-centralization depends on the number of levels of hierarchy, degree of coordination,
specialization and span of control
 Topic- Formal & Informal Organization
The formal organization is built around four key pillars. They are:
• Division of labor
• Scalar and functional processes
• Structure and
• Span of control
Informal organization
• It blends with the formal organization to make it more effective.
• Informal organization acts as a means by which the workers achieve a sense of security andbelonging.
It provides social satisfaction to group members.
• An informal organization has a powerful influence on productivity and job satisfaction.
Differences Between Formal And Informal Organization

S.No Formal Organization Informal Organization

1 Formal organization is established with the Informal organization springs on its own. Its
explicit aim of achieving well-defined goals goals are ill defined and intangible.

2 Formal organization is bound together by Informal organization is characterized by a

authority relationships among members. A generalized sort of power relationships. Power in
hierarchical structure is created, constituting informal organization has bases other than
top management, middle management and rational legal right
supervisory management.

Formal organization recognizes certain Informal organization does not have

3 tasks which are to be carried out to achieve any well-defined tasks
its goals
4 The roles and relationships of people in In informal organization the relationships among
formal organization are impersonally people are interpersonal
defined

Topic- Span of Control

Span of Control means the number of subordinates that can be managed efficiently and effectively by
a superior in an organization. It suggests how the relations are designed between a superior and a subordinate
in an organization.
Factors Affecting Span of control:
a) Capacity of Superior: Different ability and capacity of leadership, communication affect
management of subordinates.
b) Capacity of Subordinates: Efficient and trained subordinates affect the degree of span of
management.
c) Nature of Work: Different types of work require different patterns of management.
Degree of Centralization or Decentralization:
Degree of centralization or decentralization affects the span of management by affecting the degree of
involvement of the superior in decision making.
Orgn with Narrow span – superior with less number of subordinate to monitor

Orgn with wide span - superior with more number of subordinate to monitor

Organisation Chart
“An Organisation chart is a graphic of the various positions in the enterprise andthe formal
relationships among them”.
- It is a blueprint of the company organization structure.
George Terry “ An Organisational Chart is a diagrammatical form, which shows important
aspects of an Organisation”.

Characteristics
1. A diagrammatical presentation
2. Represent the formal Organisation structure
3. It shows the main lines of authority in the Organisation
4. Indicates inter-play of various functions & relationships
5. Indicates the channel of communication
Types of organization Chart
1. Vertical Chart – lines of command proceeding from top to bottom in vertical lines
2. Horizontal Chart – Highest position shown in left
3. Concentric or Circular Chart
Topic- DEPARTMENTATION
As the process of grouping individual jobs in department. It involves grouping of activities and
employees into departments so as to facilitate the accomplishment of Organisation Objectives.
Need & Importance of Department
1. Specialisation
2. Expansion
3. Autonomy
4. Fixation of responsibility
5. Appraisal
6. Management development
7. Administrative control
Bases of Depart mentation
1. Depart mentation by Functional Basis

– Grouping of activities in accordance with the function of an enterprise. Each major function
of the enterprise is grouped into a department
2. Depart mentation by Territorial basis

– A company may have separate departments to serve the southern region, northern region etc. It has
the advantage of the intimate knowledge of local conditions.
3. Depart mentation by Process basis
 – It is done on the basis of several discrete stages in the process or technologies involved in the
manufacture of a product. Cotton textile mill have separate departments for ginning, spinning, weaving,
dyeing and printing and packing and sales.

4. Depart mentation by Product basis

– suited for a large organization manufacturing a variety of products. For each major product a semi-
autonomous department is created and is put under the charge of a manager who may also be made
responsible for producing a profit of a given magnitude
5. Depart mentation by Customer basis

– An enterprise may be divided into a number of departments on the basis of the customers that it
services. For eg. An educational institution may have separate departments for day.

Topic- AUTHORITY
 Power to take decision
 Right to get orders and obey orders
 Power – Ability of individual to influence the action of other person
  Authority – right in a position to exercise discretion in making decision affecting others.
Bases of Power
1. Legitimate
2. Expertness
3. Referent
4. Reward
5. Coercive
Types of Authority
Line authority –it is the direct authority which a superior exercises over his subordinates to carry out orders
and instructions.
Staff authority – Staff refers to those elements of the Organisation which help the line to work most
effectively in accomplishing the primary objectives of the enterprises
Functional authority - is the right which an individual or department has delegated to it over specialized
processes, practices, policies or other matters relating to activities undertaken by personnel in department
other than its own.
Topic- Centralization And Decentralization
Centralization:
It is the process of transferring and assigning decision-making authority to higher levels of an
organizational hierarchy. The span of control of top managers is relatively broad, and there are relatively
many tiers in the organization.
Characteristics
 Philosophy / emphasis on: top-down control, leadership, vision, strategy.
 Decision-making: strong, authoritarian, visionary, charismatic.
 Organizational change: shaped by top, vision of leader.
Decentralization:
It is the process of transferring and assigning decision-making authority to lower levels ofan
organizational hierarchy. The span of control of top managers is relatively small, and thereare relatively few
tears in the organization, because there is more autonomy in the lower ranks.
Characteristics
 Philosophy / emphasis on: bottom-up, political, cultural and learning dynamics.
 Decision-making: democratic, participative, detailed.
 Organizational change: emerging from interactions, organizational dynamics.
 Execution: evolutionary, emergent. Flexible to adapt to minor issues and changes.
 Topic- Delegation of Authority
Def. .
Koontz and O‟Donnel, “ 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.”
Types of delegation
1. General or Specific
2. Formal or Informal
3. Written or oral
4. Downward and sideward
Topic Staffing
Def –
Koontz and O‟Donnell “ The managerial functions of staffing involves manning the
Organisational structure through proper and effective selection, appraisal and development of personnel to fill
the roles designed into structure.
Functions of Staffing
1. Procurement
 Job analysis
 Man power planning
 Recruitment
 Selection
 Placement
2. Development
 Performance appraisal
 Training
 Management Development
 Career Planning & Development
 Promotion
3. Compensation
 Job evaluation
 Wage and Salary administration
 Incentives
 Fringe Benefits
 Social security measures
4. Human Relations
It Is an area of management in integrating people into work situation.

Topic- Recruitment & Selection

 1st Stage, continues with selection and stops with the placement of the candidate
 + ve it stimulates people to apply for jobs to increase the hiring ration. i.e. the number of applicants for
a job.
Sources of Recruitment
1. Internal sources – It includes personnel already on the payroll of an Organisation,
presenting working force.
2. External Sources – Fresh flood should be injected so as to make it more dynamic
- fresher‟s from college
- Unemployed with a wide range of skills and abilities
- Retired experienced person
Topic- Selection
 Process of discovering the most suitable and promising candidates to fill up the vacancies
 The goal of selection is to sort out or eliminate those judged unqualified to meet the job and
organizational requirements.
Steps in Selection
A process of rejecting the unwanted applicant
1. Receiving application

2. Preliminary screening / Interview

3. Application blank

4. Psychological test

5. Interview

6. Reference check

7. Physical Examination

8. Final Interview

Interview
The Interview is the most frequent method of selection. The Interview is a face to face conversation
between an applicant and the employer.
Purpose of Interview
 It is to collect information on behaviour, attitudes, opinions, maturity, emotional stability,
confidence, response and other commercial behaviour.
Placement
 The Placement of the individual on the new job and orienting him to the Organisation.
 Placement may be defined as the determination of the job to which an accepted candidate is to be
assigned to that job.
 A proper placement of a worker reduces Employee turnover, accident rates and improve morale.

Topic- Orientation / Induction / Indoctrination

Induction is a technique by which a new employee is rehabilitated into the changed surroundings and
introduced to the practices, policies and purposes of the Organisation
Main Objects of Orientation
1. Clarifying the job
2. Developing realistic expectation about the Organisation
3. Reducing the amount of stress of new employee
4. Reducing start-up costs
5. Strengthening the relationships between new employee, his superiors and peers

Topic- Carrier Development

Career development not only improves job performance but also brings about the growth of the
personality. Individuals not only mature regarding their potential capacities but also become better
individuals. Purpose of development Management development attempts to improve managerial performance
by imparting
• Knowledge
• Changing attitudes
• Increasing skills

Topic- Training & Development

 Training is an organized process for increasing the knowledge and skills of people for definite
purpose.

Training & Development

 Development involves the growth of the individual in all respects
 Training is job centred whereas development is career bound
 Aims at increasing the capacity for further tasks of greater difficulty
  Contents and techniques of employee training may differ from those of Management
Development.
Training & Development Process
1. Determining Training Needs
a. Organizational analysis – ( analyzing the present and future needs of the total
Organization)
b. Operational analysis – (need of a specific group of jobs)
c. Individual analysis – (analyzing the need of the specific Employee)
2. Deciding the purpose of Training
3. Choosing Training method
4. Evaluating Training Effectiveness

Executive Development / Management Development

Developing a manager is a progressive process in the same sense that educating a person it. Neither
development nor Education should be thought of as something that can ever be completed, for there are no
known limits to the degree to which one may be developed or educated”
Methods of Executive Development
1. ON the Job Method
a. Coaching and Understudy
b. Position rotation
c. Special projects and task forces
d. Committee assignments
2. OFF the Job Method
a. Special courses
b. Conferences and Seminars
c. Case study
d. Selective Readings
e. Brain Storming
f. Simulation, role Playing and Management Games
g. Sensitivity Training
Topic- Performance Appraisal
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.
Process of performance appraisal:
a) Establishing performance standards
b) Communicating the standards:
c) Measuring the actual performance
d) Comparing the actual with the desired performance
e) Discussing results
f) Decision making
UNIT-IV

DIRECTING

Meaning:
Directing concerns the total manner in which a manager influences the actions of subordinates. It
is the final action of a manager in getting others to act after all preparations have been completed.

Characteristics
1. Elements of Management
2. Continuing Function
3. Pervasive Function
4. Creative Function
5. Linking function
6. Management of Human Factor

Techniques Of Directing
1. Delegation
2. Supervision
3. Orders and instructions
4. Motivation
5. Leadership
6. Communication
Topic- Leadership

Definitions
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.
Leadership Styles
1. Autocratic Leader –Commands and expects compliance, is dogmatic andpositive, and leads by the
ability to withhold or give rewards and punishment.
2. Democratic or Participative – consults with subordinates on proposed actionsand 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 largelyon subordinates to set their own goals and the
means of achieving them,
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.
Theories of leadership

1. Trait Theory – A Leader is a one who has got a enthusiastic look, courageous look – describes the
external qualities of a person
2. Behavioral Theory – A person who intend to be leader, they do not have any qualities like Trait
Theory
3. Contingency Theory –
A. Fiedler Model
B. Likert Model
C. Managerial Grid Theory

A. Fiedler Model - Leaders can be classified as two -

a. Relationship Oriented
b. Task Oriented
Three situations been given to find the performance of two types of Leader-
– Leader member Relationships
- Task Structure
- Position Power
Employees under Relationship oriented Leader seems to achieve more performance than the other.

B. Likerts Model

System 1 – Exploitive Autocratic Leader (oriented towards task alone)

System 2 – Benevolent Autocratic Leader (task oriented but has the quality of opposing if things are good)
System 3 – Participative Leader (concerns the employees for a particular kind of work, though he concern
decision will be taken only by him.
System 4 – Democratic Leader
3 Situations
1. Confidence / Trust in Employees
2. Subordinates feeling of freedom
3. Managers seeking involvement with Subordinates
Ratings of the Leaders by their employees at different situations

Managerial Grid Theory

Proposed by Blake and Mounton
2 Kinds of Leader
1. Leaders concerned for People
2. Leader concerned for production / Task
Leader styles
1. Task Manager EgDefence , Concerned only on task
2. Team Builders – leaders high concern for production as well as people
3. Impoverished Style – Unfit for Leadership qualities, less concern for people as well as production
4. Country club Manager Eg – Trade union, high concern for people than production
 Topic - Communication

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

Channels of Communication

1. Formal Communication – follows the route formally laid down in the organization structure
a) Downward Communication – flow of communication from superior to subordinate
b) Upward Communication - flow of communication from subordinate to superior
c) Horizontal Communication – transmission of information among the positions at the same
level of the Organization.
2. Informal Communication or Grapevine – Communication among people through
informal contacts or relations.

Distinguish between Downward and Upward Communication

Down ward Down ward
From higher to lower levels From lower to higher levels
Flow is downward Flow is upward
Directive in nature Non-directive
Purpose is to get plans implemented Purpose is to provide feedback on results
Travels fast Travels slowly
Orders, instructions, lectures, manuals, Reports, suggestions, grievances, protests,
handbooks, etc are the main examples surveys are the main examples.
Distinction between Formal and Informal Communication

Formal Communication Informal Communication

Official Channel
Deliberately Planned and Systematic
Part of Organization Structure
Oriented towards goals and task of the
Enterprises
Unofficial Channel
Unplanned and Spontaneous
Cuts across formal relationships
Directed towards goals and need
satisfaction of individuals

Impersonal Personal and social

Stable and rigid Flexible and instable
Slow and Structured Fast and Unstructured

Media or Methods Of Communication

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

Topic- Barriers To Communication

a. Organisational Barriers
1. Ambiguous policies, rules and procedures
2. Status patterns
3. Long chain of Command
4. Inadequate Facilities
b. Mechanical Barriers
1. Overloading
2. Semantic barriers
3. Noise
c. Personal Barriers
1. Lack of attention or interest
2. Failure to Communicate
3. Hasty Conclusion
4. Distrust of communicator
5. Improper state of mind.

Topic- Making Communication Effective

1. Sound Organization Structure

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

Topic- Organizational Culture

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."

Elements

Johnson and Scholes described a cultural web, identifying a number of elements that can be used to
describe or influence Organizational Culture:
Types
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
Four types of corporate cultures:
a) Tough-Guy Culture or Macho Culture
b) Work Hard/Play Hard
c) Bet Your Company Culture
d) Process Culture
Managing Cultural Diversity
Experts indicate that business owners and managers who hope to create and manage an effective,
harmonious multicultural work force should remember the importance of the following:
 Setting a good example
 Communicate in writing
 Training programs
 Recognize individual differences
 Actively seek input from minority groups
 social events
 assume similar values and opinions
 Continuous monitoring
UNIT-V

CONTROLLING

Meaning:

Def. Koontz and O‟Donnell “ The managerial function of controlling is the measurement and correction of the
performance of activities of subordinate sin order to make sure that enterprise objectives and the plans devised
to attain them are being accomplished.
Nature & Purpose of Control

1. Control is an essential function of management

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

Topic - CONTROL PROCESS

The basic control process involves mainly these steps as shown in Figure
 a) 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
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.
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.
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
Types
The control systems can be classified into three types namely feed forward, concurrent and feedback
control systems

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.
Traditional Techniques
1. Personal Observation ( For Eg. A Factory manager goes around the plant, observes the performance
of Employees and Machines)
 2. Good Organisation Structure
3. Unity of Plans
4. Statistical Control Reports
5. Budgetary control – Statement expressed in financial terms
a) Master budget
b) Functional Budget - Sales budget, Production budget, Material budget, Labour budget,
Cash budget, Administrative Overhead budget,
c) Capital & Revenue budget
d) Fixed and Flexible Budget
e) Zero base budgeting ( the budget proposals are considered from the ground up ( zero base)
or from scratch
Topic- Objectives of Budgetary Control
a. Planning
b. Coordination
c. Control
d. Motivation
e. Efficiency
6. Profit & loss control
7. External audit Control
8. Overall Control criteria ( BEP Analysis)
9. Return on Investment Control
10. Management Audit
i. Organisation Structure
ii. Executive appraisal
iii. Functioning of the management board
iv. Soundness of Earning
v. Economic Functioning
vi. Service to stock holders
vii. R&D
viii. Fiscal Policy
ix. Production Efficiency
11. Responsibility accounting
i. Cost centre
ii. Profit centre
iii. Investment centre
 Topic- Budgetary Control Techniques

i) Revenue and Expense Budgets:

 The most common budgets spell out plans for revenues and operating expenses in rupee terms.
 The most basic of revenue budget is the sales budget which is a formal and detailed expression of
the sales forecast.
 The revenue from sales of products or services furnishes the principal income to pay operating
expenses and yield profits.
 Expense budgets may deal with individual items of expense, such as travel, data processing,
entertainment, advertising, telephone, and insurance.
ii) Time, Space, Material, and Product Budgets:
 Many budgets are better expressed in quantities rather than in monetary terms. e.g.direct-labor-
hours, machine-hours, units of materials, square feet allocated, and units produced.
 The Rupee cost would not accurately measure the resources used or the results intended.
iii) Capital Expenditure Budgets:
 Capital expenditure budgets outline specifically capital expenditures for plant, machinery,
equipment, inventories, and other items.
 These budgets require care because they give definite form to plans for spending the funds of an
enterprise.
 Since a business takes a long time to recover its investment in plant and equipment, (Payback
period or gestation period) capital expenditure budgets should usually be tied in with fairly long-
range planning.
iv) Cash Budgets:
 The cash budget is simply a forecast of cash receipts and disbursements against which actual cash
"experience" is measured.
 The availability of cash to meet obligations as they fall due is the first requirement of existence,
and handsome business profits do little good when tied up in inventory, machinery, or other
noncash assets.
v) Variable Budget:
 The variable budget is based on an analysis of expense items to determine how individual costs
should vary with volume of output.
 Some costs do not vary with volume, particularly in so short a period as 1 month, 6months, or a
year. Among these are depreciation, property taxes and insurance, maintenance f plant and
equipment, and costs of keeping a minimum staff of supervisory and other key personnel.
vi) Zero Based Budget :
 The idea behind this technique is to divide enterprise programs into "packages" composed of goals,
activities, and needed resources and then to calculate costs for each package from the ground up.
 By starting the budget of each package from base zero, budgeters calculate costs afresh for each
budget period; thus they avoid the common tendency in budgeting of looking only at changes from
a previous period.

Topic - Non-Budgetary Control Techniques

It is traditional control devices not connected with budgets, although some may be related to, and used
with, budgetary controls. Among the most important of these are: statistical data, special reports and analysis,
analysis of break- even points, the operational audit, and the personal observation.
i) Statistical data:
Statistical analyses of innumerable aspects of a business operation and the clear
presentation of statistical data, whether of a historical or forecast nature are, of course,
important to control. Some managers can readily interpret tabular statistical data, but most
managers prefer presentation of the data on charts.
ii) Break- Even Point Analysis:
An interesting control device is the break even chart. This chart depicts the relationship of sales and
expenses in such a way as to show at what volume revenues exactly cover expenses.
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:
In any preoccupation with the devices of managerial control, one should never overlook the
importance of control through personal observation.
vi) Pert:
The Program (or Project) Evaluation and Review Technique, commonly abbreviated PERT, 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
 Topic - Productivity Control

 Productivity which accounts for profitable operations of an enterprises and provides opportunities to
an enterprise for remaining competitive and successful in an area of global competition
a) Physical Productivity: This is a ratio of the amount of product to the resources consumed (usually
effort). Product maybe measured in lines of code, classes, screens, or any other unit of product.
b) Functional Productivity: This is a ratio of the amount of the functionality delivered to the resources
consumed(usually effort). Functionality may be measured in terms of use cases, requirements,
features, or function points (as appropriate to the nature of the software and the development method).
c) Economic Productivity: This is a ratio of the value of the product produced to the cost of the
resources used to produce it. Economic productivity helps to evaluate the economic efficiency of an
organization

Topic- Cost Control

Cost control is the measure taken by management to assure that the cost objectives set down in the
planning stage are attained and to assure that all segments of the organization function in a manner
consistent with its policies.
Steps involved in designing process of cost control system:
• Establishing norms: To exercise cost control it is essential to establish norms, targets or parameters
which may serve as yardsticks to achieve the ultimate objective. These standards, norms or targets may
be set on the basis of research, study or past actual.
• Appraisal: The actual results are compared with the set norms to ascertain the degree of utilization of
men, machines and materials. The deviations are analyzed so as to arrive at the causes which are
controllable and uncontrollable.
• Corrective measures: The variances are reviewed and remedial measures or revision of targets,
norms, standards etc., as required are taken.

Purchase Control

Purchase control is an element of material control. Material procurement is known as the purchase
function. The functional responsibility of purchasing is that of the purchase manager or the purchaser.

Maintenance Control

Maintenance department has to exercise effective cost control, to carry out the maintenance functions
in a pre-specified budget.
Quality Control

Quality control refers to the technical process that gathers, examines, analyze & report the progress of
the project & conformance with the performance requirements.

Steps involved in quality control process are

i. Determine what parameter is to be controlled.
ii. Establish its criticality and whether you need to control before, during or after results are
produced.
iii. Establish a specification for the parameter to be controlled which provides limits of
acceptability and units of measure.
Produce plans for control which specify the means by which the characteristics will be achieved and variation
detected and removed.
Planning Operations

An operational planning is a subset of strategic work plan.

 It describes short-term ways of achieving milestones and explains how, or what portion of, a
strategic plan will be put into operation during a given operational period, in the case of
commercial application, a fiscal year or another given budgetary term.
 Operational plans should be prepared by the people who will be involved in implementation.
 There is often a need for significant cross-departmental dialogue as plans created by one part of the
organization inevitably have implications for other parts.
Operational plans should contain:
• clear objectives
• activities to be delivered
• quality standards
• desired outcomes
• staffing and resource requirements
• implementation timetables