DR.

R K SHANMUGAM COLLEGE OF ARTS AND SCIENCE, INDILI

DEPARTMENT OF BUSINESS ADMINISTRATION

MANAGEMENT CONCEPTS

SYLLABUS
UNIT - I
Management-Meaning and Definition-Importance-nature and scope of Management-
Process-Role and Functions of Manager-Levels of Management-Taylor’s contribution-Fayol’s
contribution-Elton Mayo’s contribution-Systems approach-Contingency approach.
UNIT - II
Planning-Meaning and Definition of Planning-Nature of Planning-Purpose of Planning-
Steps in planning process-Types of Planning-Merits and Demerits of Planning-Objectives-Nature
and Purpose of Objectives-Functions of Objectives - MBO-Meaning and Definition-nature of
MBO-process of MBO-Advantages and disadvantages of MBO.
UNIT - III
Organizing-meaning and definition of organizing-nature and purpose of organizing-
Organizational structure-types of organizational structure-Line and Staff Organization-
Committee Organization-Departmentation-Span of control-Delegation of Authority-difference
between authority and power-Types of authority-uses of authority-Centralization and
Decentralization of Authority-elements of responsibilities-differences between authority and
responsibilities.
UNIT - IV
Directing-Nature of Directing-purpose of directing-Leadership-nature of leadership-
Importance of leadership-Functions of leadership-qualities of effective leaders-styles of
leadership-Motivation-nature of Motivation-Importance of Motivation-theories of Motivation-
Communication-process of Communication-Principles of Communication-Barriers of
Communication.
UNIT - V
Controlling-meaning and definition of Controlling-nature of controlling-objectives and
importance of controlling-Control process-technique of controlling-Co-ordination-need of co-
ordination-principles of co-ordination-technique of co-ordination-requisites of excellent co-
ordination-Approaches to achieve effective Co-ordination.
 UNIT-1

Definition of Management

According to George R.Terry ,management as a process ”consist of planning, organising, actuating and
controlling, performed to determine and accomplish the objectives by the use of people and resources”.

According to Louis Allen, ”Management is what a manager does”.

According to Henry Fayol,” to manage is to forecast and plan, to organise, to command, to coordinate,
and to control”.

Importance of Management

Management is essential in all organised efforts, be it a business activity or any other activity. Principles
of management are now universally used not for managing business organisation, they are also applied to
various other type of organisations, such as educational, social, military and Government.

Management is a critical element in the economic growth of a country. By bringing together the four
factors of production management men, money, material, and machines enables a country to experience
a level of economic development. Peter Drucker rightly observes that without management, a country’s
resources of production remains resources and never become production.

Management is the dynamic, life-giving element in every organisation. It is the element that coordinates
current organisational activities and plans future ones. In the words of Claude S. George, management is
“the central core of our national as well as personal activities, and the way we manage ourselves and our
institutions reflects with alarming clarity what we and our society will become.”

The purpose of influencing is to increase productivity. Human-oriented work situations usually generate
higher levels of production over the long term than do task oriented work situations because people find
the latter type distasteful.

NATURE & SCOPE OF MANAGEMENT

1. Management is an activity
2. Management is a purposeful activity.
3. Management is concerned with the efforts of a group
4. Management applies economic principles.
5. Management involves decision making.
6. Management is getting things done through others.
7. Management is an integrating process.
8. Management co-ordinates all activities and resources.

Role of Managers

To meet the many demands of performing their functions, managers assume multiple roles. A role is an
organized set of behaviours. Henry Mintzberghas identified ten roles common to the work of all
managers. The ten roles are divided into three groups.

Interpersonal

Informational

Decisional

The performance of managerial roles and the requirements of these roles can be played at different times
by the same manager and to different degrees depending on the level and function of management. The
ten roles are described individually, but they form an integrated whole.

Interpersonal Roles

The interpersonal roles link all managerial work together. The three interpersonal roles are primarily
concerned with interpersonal relationships.

Figurehead Role: The manager represents the organization in all matters of formality. The top level
manager represents the company legally and socially to those outside of the organization. The supervisor
represents the work group to higher management and higher management to the work group.

Liaison Role: The manger interacts with peers and people outside the organization. The top level
manager uses the liaison role to gain favours and information, while the supervisor uses it to maintain the
routine flow of work.

The leader Role: It defines the relationships between the manger and employees.

Informational Roles

The informational roles ensure that information is provided. The three informational roles are primarily
concerned with the information aspects of managerial work.

Monitor Role: The manager receives and collects information about the operation of an enterprise.

Disseminator Role: The manager transmits special information into the organization. The top level
manager receives and transmits more information from people outside the organization than the
supervisor.
Spokesperson Role: The manager disseminates the organization’s information into its environment.
Thus, the top level manager is seen as an industry expert, while the supervisor is seen as a unit or
departmental expert.

Decisional Roles

The decisional roles make significant use of the information and there are four decisional roles.

Entrepreneur Role: The manager initiates change, new projects; identify new ideas, delegate idea
responsibility to others.

Disturbance Handler Role: The manager deals with threats to the organization. The manager takes
corrective action during disputes or crises; resolve conflicts among subordinates; adapt to environmental
crisis.

Resource Allocator Role: The manager decides who gets resources; schedule, budget set priorities and
chooses where the organization will apply its efforts.

Negotiator Role: The manager negotiates on behalf of the organization. The top level manager makes the
decisions about the organization as a whole, while the supervisor makes decisions about his or her
particular work unit.

Functions of Manager

Planning : Planning is the most fundamental and the most pervasive of all management functions. If
people working in groups have to perform effectively, they should know in advance what is to be done,
what activities they have to perform in order to do what is to be done, and when it is to be done. Planning
is concerned with 'what', 'how, and 'when' of performance. It is deciding in the present about the future
objectives and the courses of action for their achievement
.
It thus involves:
(a) determination of long and short-range objectives;
(b) development of strategies and courses of actions to be followed for the achievement of these
objectives; and
(c) formulation of policies, procedures, and rules, etc., for the implementation of strategies, and plans.

Organizing : Organizing involves identification of activities required for the achievement of enterprise
objectives and implementation of plans; grouping of activities into jobs; assignment of these jobs and
activities to departments and individuals; delegation of responsibility and authority for performance, and
provision for vertical and horizontal coordination of activities. Every manager has to decide what
activities have to be undertaken in his department or section for the achievement of the goals entrusted to
him. Having identified the activities, he has to group identical or similar activities in order to make jobs,
assign these jobs or groupsof activities to his subordinates, delegate authority to them so as to enable them
to make decisions and initiate action for undertaking these activities, and provide for coordination
between himself and his subordinates, a nd among his subordinates.
Organizing thus involves the following sub-functions :
(a) Identification of activities required for the achievement of objectives and implementation of plans.
(b) Grouping the activities so as to create self-contained jobs.
(c) Assignment of jobs to employees.
(d) Delegation of authority so as to enable them to perform their jobs and to command the resources
needed for their performance.
(e) Establishment of a network of coordinating relationships.

Staffing : Staffing is a continuous and vital function of management. After the objectives have been
determined, strategies, policies, programmes, procedures and rules formulated for their achievement,
activities for the implementation of strategies, policies, programmes, etc. identified and grouped into jobs,
the next logical step in the management process is to procure suitable personnel for manning the jobs.
Since the efficiency and effectiveness of an organization significantly depends on the quality of its
personnel and since it is one of the primary functions of management to achieve qualified and trained
people to fill various positions, staffing has been recognized as a distinct function of management.

It comprises several subfunctions :

(a) Manpower planning involving determination of the number and the kind of personnel required.
(b) Recruitment for attracting adequate number of potential employees to seek jobs in the enterprise.
(c) Selection of the most suitable persons for the jobs under consideration.
(d) Placement, induction and orientation.
(e) Transfers, promotions, termination and layoff.(f) Training and development of employees.

Directing : Directing is the function of leading the employees to perform efficiently, and contribute their
optimum to the achievement of organizational objectives. Jobs assigned to subordinates have to be
explained and clarified, they have to be provided guidance in job performance and they are to be
motivated to contribute their optimum performance with zeal and enthusiasm

The function of directing thus involves the following sub-functions :

(a) Communication
(b) Motivation

(c) Leadership

Coordination : Coordinating is the function of establishing such relationships among various parts of the
organization that they all together pull in the direction of organizational objectives. It is thus the process
of tying together all the organizational decisions, operations, activities and efforts so as to achieve unity
of action for the accomplishment of organizational objectives.

Coordination, as a management function, involves the following sub-functions:

(a) Clear definition of authority-responsibility relationships

(b) Unity of direction
(c) Unity of command
(d) Effective communication(e) Effective leadership
 Controlling : Controlling is the function of ensuring that the divisional, departmental, sectional and
individual performances are consistent with the predetermined objectives and goals. Deviations from
objectives and plans have to be identified and investigated, and correction action taken. Deviations from
plans and objectives provide feedback to managers, and all other management processes including
planning, organizing, staffing, directing and coordinating are continuously reviewed and modified, where
necessary. Controlling implies that objectives, goals and standards of performance exist and are known to
employees and their superiors.

Level Of Management

(i) Top management of a company consists of owners/shareholders, Board of Directors, its

Chairman, Managing Director, or the Chief Executive, or the General Manager or Executive Committee
having key officers.

(ii) Middle management of a company consists of heads of functional departments viz. Purchase
Manager, Production Manager, Marketing Manager, Financial controller, etc. and Divisional and
Sectional Officers working under these Functional Heads.

(iii) Lower level or operative management of a company consists of Superintendents, Foremen,

Supervisors, etc.

1. Top management : Top management is the ultimate source of authority and it lays down goals,
policies and plans for the enterprise. It devotes more time on planning and coordinating functions. It
is accountable to the owners of the business of the overall management. It is also described as the
policy making group responsible for the overall direction and success of all company activities.

The important functions of top management include :

(a) To establish the objectives or goals of the enterprise.

(b) To make policies and frame plans to attain the objectives laid.
(c) To set up an organizational frame work to conduct the operations as per plans.
(d) To assemble the resources of money, men, materials, machines and methods to put the plans into action.
(e) To exercise effective control of the operations.(f) To provide overall leadership to the enterprise.

2. Middle management : The job of middle management is to implement the policies and plans framed
by the top management. It serves as an essential link between the top management and the lower level or
operative management. They are responsible to the top management for the functioning of their
departments. They devote more time on the organization and motivation functions of management. They
provide the guidance and the structure for a purposeful enterprise. Without them the top management's
plans and ambitious expectations will not be fruitfully realized.

The followingare the main functions of middle management :

(a) To interpret the policies chalked out by top management.

(b) To prepare the organizational set up in their own departments for fulfilling the objectives implied in
various business policies.
(c) To recruit and select suitable operative and supervisory staff.
(d) To assign activities, duties and responsibilities for timely implementation of the plans.
(e) To compile all the instructions and issue them to supervisor under their control.
(f) To motivate personnel to attain higher productivity and to reward them properly.(g) To cooperate with
the other departments for ensuring a smooth functioning of the entire organization.
(h) To collect reports and information on performance in their departments.
(i) To report to top management
(j) To make suitable recommendations to the top management for them better execution of plans and
policies.

3. Lower or operative management: It is placed at the bottom of the hierarchy of management, and
actual operations are the responsibility of this level of management. It consists of foreman, supervisors,
sales officers, accounts officers and so on. They are in direct touch with the rank and file or workers.
Their authority and responsibility is limited. They pass on the instructions of the middle management to
workers. They interpret and divide the plans of the management into short-range operating plans. They
are also involved in the process of decisions-making. They have to get the work done through the
workers. They allot various jobs to the workers, evaluate their performance and report to the middle level
management. They are more concerned with direction and control functions of management. They devote
more time in the supervision of the workers.

MANAGEMENT THOUGHTS
FREDERICK WINSLOW TAYLOR [1856-1916]
[SCIENTIFIC MANAGEMENT]
F.W.Taylor is known as the “father of scientific management”. He was born in 1856.He
started his career as on apprentice in Philadelphia in 1875.
F.W.Taylor had wide-range experience in three companies: Midvale Steel works,
Simonds Rolling Machines and Bethlehem steel co.
He found that there was inefficiency and wastage. Workers were performing much below
their capacity. Trail and error or rule of thumb methods were used.
F.W.Talyor to develop scientific methods to replace the trial and error approach, he
conducted several experiments e.g. pig iron handling, shoveling and metal cutting experiments,
etc.
Taylor defined management as, “the art of knowing exactly what you want men to do and
seeing that they do it in the best and cheapest way”.
Taylor’s theory came to be called “scientific management’. The objective of management
should be securing the maximum prosperity for both the employer and the employees.
PRINCIPLES OF SCIENTIFIC MANAGEMENT
F.W.Taylor list the principles of management are as

1. Science not rule of thumb

The replacement of old method of doing work scientifically. The nature of work
performed by each worker should be clearly determined.
2. Harmony in Group Action

Dissatisfaction of any worker is to be avoided in the group action. The dissatisfaction is

eliminated through scientific selection, training and strategic placing of workers.
3. Co-operation
Workers should help the management to get larger profits, better quality products and
lower costs of production.
Management should give fair wages to workers recognize the performance of work.
4. Maximum Output
Maximum output is achieved through division of work and assumption of responsibilities
by the management.
Maximum output results in the increasing profit to the management and wages, bonus to
the workers.
Management should provide standard materials tools and working conditions to perform
the work economic and efficiency.
5. Improvement of Workers
The management should find out the physical, educational and psychological requirements of
each job and find suitable persons to each job. Workers are scientifically selected and provided
with the job training.
CRITICISM OF SCIENTIFIC MANAGEMENT
Some of the criticisms of scientific management are as,
1. Mechanistic approach
The main criticism is that scientific management ignores the human element in production.
The workers treated as a factor of production and not as human beings.
2. Unrealistic Assumptions
Scientific management is based on the assumption that people are rational. They
motivated by material and gains. Workers also want job satisfaction, participation and
recognition.
3. Narrow View

Scientific management is quite limited in scope. Scientific management described as a

theory of industrial engineering. It does not deal with management of the total organization.
4. Impracticable
Many ideas of Taylor are said to be infeasible in practice. Functional foremanship is
likely to create problems because it violates the principle of unity of command.
5. Exploitation of labour

Increasing efficiency, workers were forced to speed up affecting their physical and mental
health.Specialization and standardization make the job dull.

HENRY FAYOL'S 14 PRINCIPLES OF MANAGEMENT:

The principles of management are given below:

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.
FAYOL’S CONTRIBUTION TO MANAGEMENT
Fayol’s contribution to management can be classified into four categories,

1. Classification of Business Activities

Henry Fayol classified all the business activities into six functions, they
are, (i)Technical (production or manufacturing)
(ii)Commercial (buying, selling and exchange)
(iii)Financial (optimum use of capital)
(iv)Security (protection of property and
persons)
(v) Accounting (record keeping, Costing, Statistics)

(vi) Managerial (planning, organizing, commanding, coordinating, and controlling)

2. Elements of Management
Fayol classified the elements or functions of management as follows;
(i) Planning

(ii) Organising
(iii) Commanding
(iv) Coordinating
(v) Controlling
3. Universal principle of management
Fayol gave fourteen basic principles of management. The principles are, Division of
work, Authority and Responsibility, Discipline, Unity of command, Unity of direction,
Subordination of
individual interest to group interest, Remuneration of personnel, Centralization, Scalar chain,
Order, Equity, Stability of tenure of personnel, Initiative, Esprit De Crops.
4. Managerial quantities and Training

Fayol identified the following qualities of an effective

manager; (i)Physical (health, vigor and address)
(ii) Mental (ability to understand and learn, judgement and adaptability)

(iii) Moral (energy, firmness, willingness to accept responsibility, initiative, loyalty, fact
and dignity)

(iv) General education (general acquaintance with matters not, belonging exclusively to
the function performed)
(v) Special knowledge (peculiar to the function being

performed) (vi)Experience (knowledge arising from work

proper)

GEORGE ELTON MAYO [1880-1949]

Elton mayo was a professor of industrial psychology at the Harvard Business School. He
published several books and papers E.g. The Human problem of an Industrial Civilisation(1933),
Management and Morale(1941), Training for Human Relations (1949).
He served as the leader of the team which carried out the famous Hawthorne
Experiments. Hawthorne Experiments conducted in the Hawthorne plant of Western Electric
company in Chicago (USA) from 1927 to 1932
HAWTHORNE EXPERIMENTS CLASSIFIED INTO FOUR STAGES;
1. Illumination Experiments
2. Test Room Experiments
3. Mass interviewing programme
4. Bank wiring observation room study.
1. Illumination Experiments
Workers were divided into two groups. One group was placed in a room where lighting
remained constant. Another group was placed in a different room where lighting was varied.
Hypothesis of scientific management, production increased in both the rooms.

2. Relay Assembly Test Room Experiments

This experiment to find out the relationship between working conditions and
productivity. A small group of six female workers was asked to work in a separate room. The
course of experiments serious changes as piece work, rest period, shorter working hours. Giving
opportunity
to express their view points and concerns to the supervisor. The researcher concluded that
productivity increased due to a change in the girls attitudes toward work and their work groups.
3. Mass Interviewing Programme

The researcher conducted thousands of interviews to determine the attitudes of

employees towards their job working conditions, supervision and the company. Interviews were
conducted through direct questioning.
The main findings of the programme are as;
(a) Male workers were more economically oriented than the female workers.

(b)A satisfaction or dissatisfaction of an employee comes from his social

status.
(c) The personal situation of the worker is arising out of mode of arrangement of his
sentiments, desires and interest.
(d) A social demand for a worker is influenced by gaining experience both inside and
outside the working place.

(e) The individual behaviour was being influenced by group behaviour.

4. Bank Wiring Observation Room Experiments

This experiment was conducted between 1931 and May 1932.A group has been formed
to conduct this experiments. It consisted of fourteen male workers.
The main aim of this experiment was to analyse how a group could influence a worker to
restrict his output.
Mayo derived the following conclusions from Hawthorne Experiments;
1. Physical factors do not materially influence workers behaviour and performance.
2. Psychological and social factors like sense of security, recognition, belonging
influence on productivity and performance.
3. Social norms and informal group determine the behaviour and efficiency of workers.

4. An organization is a social system much more then a formal arrangement or structure

of functions.
5. A worker is motivated solely by pay. He/she responds to the total work situation.

APPROACHES TO MANAGEMENT

Modern management has developed through several stages or approaches. The approaches
are as;
 1. Classical Approach
2. Behavioural Approach
3. Management science Approach

4. Systems Approach
5. Contingency Approach
1. CLASSSICAL APPROACH
The classical approach is based on the following points are as;
(a) Management is a process consisting of interrelated functions performed to achieve the
desired goals.
(b) The experience of managers in different organization, principles or guidelines can be
derived.
(c) The principles which can be applied in different organization to improve managerial
efficiency.

(d) managers can developed through formal education and

training. (e)People are motives mainly by incentives and

principles.
2. BEHAVIOURAL APPROACH
Behavioural science approach involves the application of knowledge drawn from
behavioural sciences (psychology, sociology, etc) to managerial problems.
The main propositions of this approach are as;
(a) The attributes and performance of an employee are dominated by the social group.

(b) Social and psychological incentives exercise a greater influence on employee

motivation than working conditions and economic factors.
(c) Management must understand and develop interpersonal relations among his
subordinates.
(d) Management requires social skills to make employees feel a part of

organization. (e)Employees are capable of self-direction and control.

3. MANAGEMENT SCIENCE APPROACH
This approach is known by several names, decisions theory approach/ mathematical
approach, quantitative approach, operations research approach, etc.

THE FEATURES OF MANAGEMENT SCIENCE APPROACH ARE AS;

(a) Rational decision making

An organization is considered a decision-making unit and main job of a manager is to

make decisions and solve problems.

(b) Mathematical models

A model is a simplified representation of a real life situation. It utilizes mathematical

symbols and relationship.
(c) Computer applications

The use of computers has been the driving force in the development of the management
science approach.
(d) Evaluation criteria

Management science approach is on scientific decision-making, models are evaluated for

effectiveness like cost reduction, return on investment, schedules, etc.
4. SYSTEMS APPROACH

The systems approach to management was developed in 1950s. The features of the
systems approach are as,
(a) An organization is a system consisting of many interrelated and interdependent parts
or subsystems.
(b) The system of organization draws inputs (energy, information, materials, etc) from its
environment.
(c) Every system is a part of a environment.

(d) Management is expected to regulate and adjust the system to secure better performance.

5. CONTINGENCY APPROACH
The contingency approach to management from the real experience. The idea of this
approach is that no management technique appropriate in all situations.
The contingency are related to the external and internal environments of an organization.
These include;

(a) Technical constraints

Nature and types of the process used to produce goods and services.
(b) Task Constraints

Nature of tasks performed by individual workers.

(c) People constraints
Types of individual employed and their levels of competence.
 UNIT-2

Definition & Meaning of Planning

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".

According to ‘James Lundy’:

“Planning is determination of what is to be done, how and where it is to done , who is to do it & how
results are to be evaluated.”

Nature and Purpose of Planning

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.

Importance of Planning

To manage by objectives: All the activities of an organization are designed to achieve certain specified
objectives. However, planning makes the objectives more concrete by focusing attention on them.
To offset uncertainty and change: Future is always full of uncertainties and changes. Planning foresees
the future and makes the necessary provisions for it.

To secure economy in operation: Planning involves, the selection of most profitable course of action that
would lead to the best result at the minimum costs.

To help in co-ordination: Co-ordination is, indeed, the essence of management, the planning is the base of
it. Without planning it is not possible to coordinate the different activities of an organization
.
To make control effective: The controlling function of management relates to the comparison of the
planned performance with the actual performance. In the absence of plans, a management will have no
standards for controlling other's performance.

Types of Plans & Forms of Planning

In the process of planning, several plans are prepared which are known as components of planning. Plans
can be broadly classified as

Strategic plans

A strategic plan is an outline of steps designed with the goals of the entire organization as a whole in
mind, rather than with the goals of specific divisions or departments.

Tactical plans

A tactical plan is concerned with what the lower level units within each division must do, how they must
do it, and who is in charge at each level. Tactics are the means needed to activate a strategy and make it
work. Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans.
These plans usually span one year or less because they are considered short-term goals. Long-term goals,
on the other hand, can take several years or more to accomplish. Normally, it is the middle manager's
responsibility to take the broad strategic plan and identify specific tactical actions.

Operational plans

The specific results expected from departments, work groups, and individuals are the operational goals.
These goals are precise and measurable. “Process 150 sales applications each week” or “Publish 20 books
this quarter” are examples of operational goals. An operational plan is one that a manager uses to
accomplish his or her job responsibilities. Supervisors, team leaders, and facilitators develop operational
plans to support tactical plans (see the next section). Operational plans can be a single-use plan or a
standing plan.

Contingency plans

Intelligent and successful management depends upon a constant pursuit of adaptation, flexibility, and
mastery of changing conditions. Strong management requires a “keeping all options open” approach at all
times — that's where contingency planning comes in. Contingency planning involves identifying
alternative courses of action that can be implemented if and when the original plan proves inadequate
because of changing circumstances. Keep in mind that events beyond a manager's control may cause even
the most carefully prepared alternative future scenarios to go awry.

OBJECTIVES OF PLANNING

Objectives oriented:

The main purpose of a plan is to accomplish the objectives of the organization.

Basic function of management:

Planning is the foundation of organization. No planning, no organization. The manager decides upon the
policies, procedures, programmes and projects before proceeding with his work.

Directed towards efficiency:

The plan is said to be efficient, when the objectives are accomplished.

It is flexible and dynamic:

Planning leads to the adoption of a specific course of action and the rejection of other possibilities.
Management is dynamic as well as flexible because future is unpredictable, and when future cannot be
moulded to confirm to the course of action, flexibility has to be ingrained.

METHODS & STEPS OF PLANNING

1) Identification of problems & awareness of opportunities:-

The manager must identify the problems while planning so that suitable action can be taken. This will
help to take further steps for completing the objectives. Planning starts with analysis & external
environment. This is essential for businessmen to be aware of opportunities in the market. They must
consider changes in consumer demand, number of competitors, change in habits, change in technology
etc. At the same time the businessmen has to conduct internal analysis of its strengths & weaknesses. It
means it has to examine its resources & production.

E.g. An audio cassette manufacturer must have awareness of new opportunities in the market.
At the same time he has to verify availability of resources while planning.

2) Establishing Objectives: -

The entire planning activity is directed towards achieving the objectives of the enterprise. Determining
objectives is a real starting point of planning process. Once the objectives are fixed it is necessary to
finalize objectives for various department.

E.g. 1. Increase sales by 30% or 40%

2. Provide better working conditions to workers.
3. Reduction in cost of production by 25%
3) Establishing Planning Premises: -

On the basis of information collected assumption about the future should be made. This process is known
as planning premises. Premises are forecast about the future. Premises may be internal or external; it may
be controllable &uncontrollable. Normally, internal premises are controllable & external are
uncontrollable. Internal premises include capital investment, availability of material, labour & financial
position. It includes the part of decision making
&external premises include economical, social, political & competitors. It also includes
government policies.

4) Determining Alternative Courses: -

In this step various possible course of action or plans are developed to achieve a particular object.

5) Selecting Ideal Courses of Action: -

After the careful examination of various alternatives ideal course of action, the most suitable course of
action or plan is selected to achieve pre-determine objective.

6) Formulation of Derivative Plans: -

Once the overall plan is selected it becomes essential to fix the detail sequence & timing of the plan. Then
subsidiary or derivative plan is to be considered. Primary plan of action is decided by preparing separate
derivative plans for each section or division of the enterprise.

7) Provision for Follow-up: -

Planning is always followed by action. Some modifications may be required for achieving pre-determined
objective & adequate follow up provides assurance about fulfillment of objective.

MANAGEMENT BY OBJECTIVES (MBO)

MEANING:
Management by Objectives (MBO) is a personnel management technique where
managers and employees work together to set, record and monitor goals for a specific period of
time. Organizational goals and planning flow top-down through the organization and are
translated into personal goals for organizational members. The technique was first championed
by management expert Peter Drucker and became commonly used in the 1960s.

FOUR STAGES ( OR ) STEPS IN THE MBO PROCESS

Generally, there are four stages or steps in the MBO process.
Stage 1. Collectively fixing objectives
The superior and subordinate managers collectively fix the objectives. The objectives are fixed
for the Key Result Areas (KRAs). KRAs are those areas which are very important for the long-
term success of the organisation. For e.g. R & D, Production, Finance, Marketing, etc. Definite
and measurable objectives should be fixed for each KRA. The time limit for achieving the
objectives should also be fixed. The objectives should be achieved by the subordinate manager.
For e.g. The objective for the marketing managers may be to increase the sales of product XYZ
by 50% for the year 2010-2011.
Stage 2. Collectively making a plan
After fixing the objective, the superior and subordinate managers make an action plan. This plan
will be used by the subordinate manager to achieve the objective.
Stage 3. Subordinates implements the plan

The subordinate manager implements the plan. That is, he puts the plan to action. He makes
optimum use of the resources. If required, he takes guidance from the superior managers.
Stage 4. Collectively monitoring performance
This is the final stage in the MBO process. Here, the subordinate monitors (evaluates or
measures) his own performance. He compares his performance with the planned targets
(objectives). If there are any deviations, then the superior and subordinates managers fix new
objectives. In this stage, the superior acts like a coach and guide. He does not act like a
judge.
PROCESS OF MBO
The processes of MBO are as follows,
1. Defining Organizational objectives
Organizational objectives are framed by the top level employees of an organization.

Both short-term and long-term objectives are framed. Short term are framed taking into
account the feasibility of achieving the long-term objectives.
2. Goals of each section
Objectives for each section framed on the basis of overall objectives of the organization.
Period with in these objectives should be achieved is also fixed.

3. Fixing key result areas

Key result areas are fixed on the basis of organizational objective premises. It indicates
the strength of an organization.
Examples – Profitability, market standing, innovation, etc.
4. Setting subordinate objectives or targets

The objective of each subordinate or individual are fixed. Discussion between the
superior and his subordinates should be free and frank.
Subordinates are induced to set standards themselves by giving an opportunity.
5. Matching resources with objectives
The objectives are framed on the basis of availability of resources.

If certain resources (technical personnel or scare raw material) are not adequately
available, the objectives of an organization are changed.
6. Periodical review meetings
The superior and subordinates should hold meeting periodically in which they discuss the
progress in the accomplishment of objectives.
7. Appraisal of activities

The end of the fixed period for achieving the objectives, there should be a discussion
between the superior and subordinates.
The discussion is related with subordinate’s performance against the specified standards.
The superior should take corrective action.

8. Reappraisal of objectives

The top management executive should review the organization’s objectives to frame the
objectives according to the changing situation.
MERITS OF MBO:

1) Improved Planning:

MBO involves participative decision-making which makes objectives explicit and plans more
realistic. It focuses attention on goals in key result areas. MBO forces managers to think in terms
of results rather than activities. It encourages people to set specific pleasurable goals instead of
depending on hunches or guesswork. An integrated hierarchy of objectives is created throughout
the organization. Precise performance objectives and measures indicating goal accomplishment
are laid down. There is a time bound programme.

2) Coordination:

MBO helps to clarify the structure and goals of the organization. Harmony of objectives enables
individuals at various levels to have a common direction. Every individual knows clearly his role
in the organization, his area of operation and the results expected of him. Interlinking of
corporate, unit and individual objectives helps in the decentralization of authority and fixation of
responsibility. MBO result in clarification of organizational roles and structure. It promotes and
integrated view of management and helps interdepartmental co-ordination.

3) Motivation and Commitment:

Participation of subordinates in goal setting and performance reviews tend to improve their
commitment to performance. The corporate goals are converted into personal goals at all levels
to integrate the individual with the organization Timely feedback on performance creates a
feeling of accomplishment Job enrichment and sense of achievement help to improve job
satisfaction and morale. Improved communication and sense of involvement provides
psychological satisfaction and stimulates them for hard work Conversion of organizational goals
into personal goals helps to integrate the individual with the organization. MBO ensures
performance by converting objective needs into personal goals and by providing freedom to
subordinates.

4. Accurate Appraisals:

MBO replaces trait based appraisal by performance based appraisal. Quantitative targets for
every individual enable him to evaluate his own performance. Performance under MBO is
innovative and future oriented. It is positive, more objective and participative. Emphasis is on
job requirements rather than on personality. MBO is not a scapegoat approach rather it involves
constructive criticism to assess why operations have failed or lagged behind and suggests
remedial actions like organizational restructuring, better communication systems, more effective
incentives to motivate executives, etc. MBO provides an objective criterion for evaluation of
actual performance. "Indeed one of the major contributions of MBO is that it enables us to
substitute management by self-control, for management by domination.” ‘Control becomes more
effective due to verifiable standards of performance. Subordinates know in advance how they
will be evaluated.
5. Executive Development:
The MBO strategy is a kind of self-discipline whereby shortcomings and development needs are
easily identified. It stresses upon a long term perspective and self-development. MBO releases
potential by providing opportunities for learning, innovation and creativity. It encourages
initiative and growth by stretching capabilities of executives. MBO makes possible a high degree
of self- control by individual managers and increases decentralization of authority.

6. Organizational change and Development:

MBO provides a frame work for planned changes. It enables managers to initiate and manage
change. It helps to identify short-comings in organizational structure and processes. In this way,
MBO improves the capacity of the organization to cope with its changing environment. When an
organization is managed by objectives, it becomes performance-oriented and socially-useful.

Originally MBO was developed for business organizations but now it is being used by social
welfare organizations also. But MBO might not be very successful in welfare organizations
because of the abstract nature of the values to be measured in specific and quantified terms,
general unwillingness on the part of personnel to subject their efforts to precise evaluations and
lack of measuring instruments which could generate valid and reliable data. MBO has special
significance in the areas of long range planning and performance appraisal.

LIMITATIONS OF MBO:
Management by objectives (MBO) has certain limitations and weakness. While some of these
limitations are inherent in MBO, some limitations arise at the time of introduction and
implementation of the process of MBO. Some of these limitations and problems associated with
MBO are as follows:–

1. Lack of Support from Top Management: As the authority is vested in the top management
in traditional organizations and it flow from top to bottom but in the process of MBO, the
subordinates are also given an equal opportunity of participation, which is sometimes not liked
by the top management. MBO cannot be successful without full support from management at the
top most level.
2. Resistance by Subordinates: The subordinates can also be resentful towards the system of
MBO. Sometimes, while setting the goals, they may be under pressure to get along with the
management and the objectives which are set may be unrealistically high or far too rigid. The
subordinates, generally, feel suspicious of the management and believe that MBO is another play
of the management to make them work harder and become more dedicated and involved.
3. Problems in enumerating goals and objectives: The MBO can be successful if the goals can
be established in proven terms. But if these are hard to enumerate and evaluate, it may not be
achievable to fathom the performance of the employees. Moreover, MBO does not have any
subjectivity in performance appraisal. It rewards only productivity without giving any
consideration to the creativity of the employees.
4. MBO is time consuming and costly process: MBO could be a time consuming and costly
process. A lot of paper work is required and a lot of meetings and reports need to be prepared,
which add to the responsibilities and burden of the managers. Because of these reasons managers
generally resist of the MBO.
5. Emphasis is on short term goals: Goals under MBO are set only for a short period ranging
from six months to one year. The reason could be that goals are quantitative in nature and thus it
could be difficult to go in for long range planning in MBO. Since the performance of the
subordinate is to be reviewed after every six months or one year, they tend to concentrate on
their immediate objectives without caring for the long range objectives of the organization. This
emphasis on short term goals goes against the organizational efficiency and effectiveness and is
not beneficial for the organization.
6. Lack of training and adequate skills: Most of managers lack adequate skills knowledge and
training required in interpersonal interaction which is required in the MBO. Many managers tend
to sit down with the subordinate, dictate the goals and targets with no input permitted from the
subordinates and then demand that goals be achieved in a specified time. Whether the goals are
realistic or not does not enter the picture. In this type of environment, there is a lack of two way
communication and objectives are imposed on the subordinates. This could have an adverse
impact on the morale, initiative and performance of the employees.
7. Poor Integration: Generally, there is poor integration of MBO with the other system such as
forecasting and budgeting. This lack of integration makes the overall functioning of the system
very poor.
8. Difficulty in Follow up: Under the system of MBO, the superior must get in touch with the
subordinate at the appropriate time and at that time, the subordinate will inform the boss exactly
what has been accomplished and how. If the superior delays the meeting, it will create hurdles in
the successful implementation of MBO as the subordinate will also start taking the program
casually.
9. Difficulty in Achievement of group Goals: When the achievement of the goals of one
department depend upon the goals of another department, cohesion is difficult to maintain. In
such cases, the achievement of goals will also become very difficult.
10. Inflexibility: MBO could result in a rigid organization structure. As the goals are set after
every six months or one year, the manager may not like to review the goals in between, even if
the need arises, due to fear of resistance from the subordinates. The managers must learn to
handle this situation, because sometimes revision of short term goals is necessary for the
achievement of long range objectives.
11. Limited Application: MBO is useful largely for the managerial and professional employees.
It is not appropriate for all levels and for everyone because of the heavy demands made by it. It
can be made applicable only when both the subordinates and manages feel comfortable with it
and are willing to participate in it.
12. Gestation Period: It takes a lot of time, sometimes 3-5 years to implement the MBO
program properly and fully and some research studies have shown that these programs can lose
their impact and potency as a motivating force over a long period of time.
 UNIT-3

Definition & Meaning of organizing

According to Koontz and O'Donnell, "Organization involves the grouping of activities necessary to
accomplish goals and plans, the assignment of these activities to appropriate departments and the
provision of authority, delegation and co-ordination." Organization involves division of work among
people whose efforts must be co-ordinated to achieve specific objectives and to implement pre-
determined strategies.

According to Chester Bernard, “Organization is a system of consciously coordinate activity of two or

more persons.”

Nature or Characteristics of Organizing

From the study of the various definitions given by different management experts we get the following
information about the characteristics or nature of organization,

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 .The work of every department is further subdivided into sub works. In this way each
individual has to do the saran work repeatedly which gradually makes that person an expert.

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.

Plurality of Persons: Organization is a group of many persons who assemble to fulfill a common
purpose. A single individual cannot create an organization.

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.

Organization is a Machine of Management: Organization is considered to be a machine of

management because the efficiency of all the functions depends on an effective organization. In the
absence of organization no function can be performed in a planned manner.

Organization is a Universal Process: Organization is needed both in business and non business
organizations. Not only this, organization will be needed where two or mom than two people work
jointly. Therefore, organization has the quality of universality.

OBJECTIVES OF ORGANISING

1. Effective management of the enterprise : Effective management largely depends upon effective
organization. It is the effective organization which ensures proper balance between authority and
responsibility. It achieves a clear line of communication, and defines the areas of work. It is the
organization which allows the top management to concentrate on overall planning and supervision,
leaving the routine work for the lower levels of administration. It saves the entire enterprise from
adhocism, over-lappings and inefficiency.
2. Maximum production at minimum cost : The activities are allotted according to the principle
of division of labour. The efficient system of organization encourages every employee to make his best
contribution in raising output. The increase in output and control of wasteful expenditure helps to
decrease the cost of production. The profitability of the concern will also go up.
3. Sustained growth and diversification : A business enterprise should be a growing organism.
With the passage of time, an enterprise must expand its activities. It should also aim at diversification of
products and markets. A static business soon grows stale and get out of run. It should grow from a small
scale concern to a medium scale one and from a medium scale concern to large scale one. Organization
plays an important role in this respect. Execution of policies in organized manner builds the necessary
capacity and confidence in undertaking bigger activities.

4. Cooperation of employees : The organizational structure will succeed only if employees

cooperate in the work. The employees learn working in closer cooperation of others. The management
introduces various incentive schemes and gives monetary and other benefits to the employees, so that
they work in a team spirit.

5. Discharging social responsibility : Maximizing of profits, no doubt, is the motive of every

business. Without profit, no business can exist. But business is a part and parcel of society at large. It
cannot survive long by exploiting consumers and society. It has to serve the society by providing it with
goods of good quality at reasonable prices. It has to ensure smooth supply of goods as per the needs to
consumers. The service motto cannot be realized without a well-knit organization structure. So, to
discharge social obligation is an important objective of building up sound organization.

Meaning of Organization Structure

March and Simon have stated that-"Organization structure consists simply of those aspects of pattern of
behaviour in the organization that are relatively stable and change only slowly."

TYPES OF ORGANIZATION STRUCTURE

Line organization: -

This is the oldest & simplest type of formal organization in which authority flows downward from highest
level to the lowest level of the management. In the business, general manager issues all instructions to
various departmental heads. They pass these instructions to supervisors & supervisors passed to the
,workers. Thus each member clearly knows from whom he has to receive orders and to whom he can give
orders. Joint Stock Company is the best example of line organization.
Structure:

Board of Director’s

General Manager

Head of Purchasing Store department

Head of Production department
Head of Selling department
Head of Accounting department Head of
Supervisor department Advantages :

1) It is very simple to understand & easy to follow up: -

Every one working in this type is well aware of his own position. He knows his relationship with his
supervisor as well as his subordinate. It helps in maintaining good discipline.

2) Quick decision & prompt actions: -

Since every one knows the extent & limit of his authority as well as his responsibility, it helps to take
decision in time.

3) Fixed responsibility: -

The area of responsibility is fixed with each individual. This makes a person to alert in performing his
responsibilities & help in higher efficiency.

4) Flexibility: -

Line organization can be easily expanded as per the changes in the external environment or internal
conditions. Line structure helps the management either to add or delete from the existing organization
staff.

.
Limitations of Line Organization: -

1) Lack of service function: -

Line organisation does not get any help from staff. Large organizations have to face complex problems. It
is necessary to have expert advises from staff which has no scope in line organisation.

2) Rigidity: -

There is no scope for any change in the organisation structure for expansion or contraction.
3) Heavy burden on line executives: -

There are no separation of authority and responsibility and therefore line executives have to perform all
kinds of activities. It makes heavy burden on line staff.

4) Lack of communication: -

When line organisation expands beyond level it will lead to lack of communication within the
organisation, inefficiency, lack of co-ordination & difficulties in attainment of plans & policies.

Functional organisation:-

In the functional organisation work is divided according to specific function. Every specialist has
authority to issue orders relating to specific functions of his department. Identical function of various
departments are grouped together & headed by specialist.

1) Routine Clerk: -

He is the person who determines the method of work. He is expert technician. He determines complete
lay out of work. E.g.: How raw material should be processed & in what stages.

2) Instruction Card Clerk: -

This person implements work according to the plan prepared by routine clerk instructions are prepaid in
writing in advance. These instructions are prepaid for each job. This person has close contacts with
workers.

3) Time & Cost Clerk: -

This clerk has contact with routine clerk & instruction card clerk. He determines the schedule for different
types of jobs. He determines requirement of material for each job.

4) Disciplinarian: -

This person is responsible for the maintenance of piece orders & discipline. His main job is to see that
workers attend.

Line & Staff Organisation: -

Line & staff organisation is combination of line organisation & staff organisation. In this type the term
line refers to ‘doors’. Staff refers to ‘thinkers’ these are parallel authorities. The line authority is required
to carry on day today function. The staff authority has advisory capacity. They are specialist who
undertake research & suggest the ways & means of improving the performance of line executive. It is
necessary to have co-operation & co-ordination between these personnel. Line personnel are related to
production & staff carries on research planning, establishment of standards, recording of performance,
legal advisor, etc. In this way not only everyday work can be smoothly perform but by side improvement
can also takes place. However line & staff organisation becomes expensive. It involves high
administrative cost. Therefore it should be ensured that benefits derived from such authority should be
more than cost involved

Characteristics of Line & Staff Organisation: -

When a business grows in size, it becomes necessary that the line officer should take the help of expert
for the investigation. It has following characteristics: -

1. Unity of command with specialization: -

Though these are expert line officer exercise, authority to bring on unity in decision and action is
essential.
2. Co-operation of line & staff officer: -

Staff officer helps line officer in making decision by providing help in the form of accurate information.
It will help in proper decision making to bring unity, coordination & effective control.

3. Expert services from administrator: -

In the modern complex world expert advice is essential which is not possible by line officer. Staff officer
help them in decision making. Line & staff meets the need of modern business.

Matrix Organisation –

Matrix organisation is hybrid structure. It is the combination of two structure i.e. functional department &
project structure. Project team is created for specific project with high degree of technical skill and
functional structure is permanent characteristic of matrix organisation. Matrix organisation has two
dimensional structures. It is the combination of project structure and traditional functional department.
The project manager is responsible for the success of particular project. He has authority over the
members of project staff. Such project has definite time duration. Matrix organisation is originated in
defense& aerospace industries in U.S.A.

Matrix organisation has been defined as ‘Any organisation that employees a multiple command system,
that include not only the multiple command structure & behaviour pattern. Sometimes matrix & project
structures are considered to be same. However there is difference between these two. In project
organisation the person who is the head of the project is completely responsible for that project. Matrix
organisation is applied when organisation has large number of small projects and resources are diverted to
other project. In matrix organization project manager is appointed to co-ordinate the activities of project
personnel.
Each functional staff has two bosses.
1) Administrative head 2) Project manager.

Committee organization:
A committee is a group of people who work collectively, discuss, decide and recommend solutions to the
problem (of a concern) which possibly can not be solved by an individual. A committee consists of a
group of men conversant with a subject, naturally their advice will be much superior to that of one man.

Principles :

1) The number of persons in a committee should depend upon the need and the optimum size is
about 5 to 10 person.
2) Responsibility, authority, objectives and duties of the committee should be clear defined.3)
Agenda of the committee should be prepared and communicated to the committee members at least a
week before they meet for discussion.
4) Problems, which can be taken care of by an individual, should not be included in the agenda of
committee.
5) Committee meetings should begin

Departmentalization Meaning :

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.

Process of departmentation:

1) Identification of task: -

When scope of function is determine division into different department is easy.

2) Analysis of task: -

It helps in assessment of responsibility.

3) Description of function: -

Under this process, the different functions are to be performed by different individuals and the groups.

4) To appoint head section: -

The head of the department is expert in the specific field. He supervises the work done by groups.

5) Responsibility and authority -

The ultimate responsibility for the performance of whole department is with the departmental head.

Span of Control Meaning :

Manager’s span of control is a statement or expression or the limitation of the number of subordinates or
activities that he can manage properly.
Factors influencing the span of control:

1. time devoted to supervision

2. variety and importance of activities
3. repetitiveness of activities
4. capacity and experience of manager
5. ability of subordinates
6. centralization

It is clear that there is a limit to the number of persons that can be supervised by one boss. The span of
control should be minimum as far as possible. The number of subordinates depends upon manager’s
ability, his job, the complexity of the duties.

DELEGATION OF AUTHORITY
Every manager in the organization has to perform certain activities/tasks which are assigned to
him. Managers require authority in order to perform the activities assigned to him by his
superiors. The superiors delegate the necessary authority to their subordinates. Most of the
managers fail to delegate because they fail to understand the meaning of delegation.
Meaning
Delegation is a process which enables a person to assign a work to others and delegate
them with adequate authority to do it.
Definition
Terry,” conferring authority from the executive or organizational unit to another in order
to accomplish particular assignments”.
Nature of Delegation
1. It gives direction to a manager in performing his duties
2. It can be modified even after the action is over
3. Manager cannot delegate authority which he does not posses.

4. It may be Specific or general

5. It is an art rather than a science.
PRINCIPLES OF DELEGATION
1. Delegation to go by results expected
The superior should clearly know what he expects from the subordinate before the
delegation of authority.

2. Non-Delegation of responsibility
A superior can delegate authority but not responsibility. The superior should be in touch with the
subordinates to know whether duties are performed and the authority is exercised properly.

3. Unity of command
The principle of unity of command insists that a subordinate should get instruction from
only one superior; it will create uncertainty and confusion in the organization.
4. Definition of limitations of authority

A person knows well that an authority alone can delegate the authority properly. There
should be written manuals which help a person to understand the authority in right direction.
Authority:
Meaning& Definition:
Authority is the formal rights to do work.
Definitions Of Authority

• "Authority is the right to give order and the power to exact obedience". – Henri Fayol

• "Authority is the power to command, to act or not to act in a manner deemed by the possessor of the
authority to further enterprise or departmental performance". – Koontz and O'Donnell.

USE OF AUTHORITY

For the successful use of authority following factors may be taken into consideration:

1. Favourable Atmosphere : For the implementation of authority, favourable atmosphere must be

created in the enterprise so that sweet human relations may be established in the enterprise.

2. Justified Behaviour : The second important use for successful, implementation of authority is
the justified behaviour of the officers towards their subordinates. They must feel and treat all the
employees on an equal ground. If they do not do so, the employees may not contribute their efforts
towards the attainment of objectives of enterprise.

3. Mutual Co-operation and Faith : There must be mutual cooperation and mutual trust between
officers and employees of the enterprise for the successful use of authority.

4. Interest in the work : A very important condition of the successful use of authority is that the
employees must have an interest in the work for which they are responsible. If they are not interested in
their work, it may be very difficult for the higher officers to implement their authority.
5. Respect to Superiors : There must be an atmosphere in the enterprise in which the employees
pay their best regards to their bosses. If they do not have a feeling of regard for them, they may not obey
their orders.
Types of Authority:

1. Legal Authority : The authority based on the rank of the person in the organization and such
authority may be given by law and social norms.
2. Traditional Authority: This Authority is based upon the belief in traditions and the legitimacy
of the status of people exercising authority through those traditions.
3. Charismatic Authority : The charismatic authority rests on personal charisma of a leader who
commands respects of his followers o the basis of his personalities and his personal traits such as
intelligence and integrity.
Differences between Authority and Responsibility

Authority Responsibility

It is the legal right of a person or It is the obligation of subordinate to perform

a superior to command his the work assigned to him.
subordinates.

Authority is attached to the Responsibility arises out of superior-subordinate

position of a superior in concern. relationship in which subordinate agrees to
carry out duty given to him.

Authority can be delegated by a Responsibility cannot be shifted and is absolute

superior to a subordinate

It flows from top to bottom. It flows from bottom to top.

Differences between Authority and Power

Basis for Comparison Power Authority

Meaning The ability of an
individual to influence
others and control their
actions.
What is it? It is personal traits.
The legal and formal right to
give orders and commands
and take decisions.
It is a formal right given to high
officials.

Source Knowledge and expertise Position and office

Hierarchy Power does not follow Authority follows hierarchy.
any hierarchy.
Resides with Person Designation

CENTRALISATION AND DECENTRALISATION

Centralisation is the systematic and consistent reservation of authority at the central
points with in the organization if a manager reserves work; he has to reserve the authority also.
 Everything which goes to reduce the importance of the subordinate’s role is centralization.

There are certain factors which necessitate centralization

viz, 1, To facilitate personal leadership
2. To provide integration and co-ordination
3 To promote uniform actions, and
4. To handle in an emergent situation.
ADVANTAGES

1. Personal leadership
Centralisation provides opportunity for personal leadership. Personal leadership is
important for the success of small firms and during the early stages of big firms.
This will result in quick decision and imaginative action which are essential for success in business.
2. Uniformity of Action

Centralization is essential when an enterprise wants all its operating units to do the same
thing in the same manner. Only the top management having central authority for decision-
making.
3. Flexibility
The utilization of existing personnel and facilities proper handling of fluctuations in the
volume of work.

4. Integration
Certain degree of centralization is essential for co-ordinates different operations of the
organization.
5. Utilisation of personnel
Centralized structure permit better utilization of highly qualified personnel in technical and
administrative areas.
DISADVANTAGES
1. Problem in decision-making
Most of the decisions are taken at higher levels. This may cause delays and cost in
making the decisions.

2. Overburdening
Centralisation of authority increases the burden on top managers.
3. Lack of executive development
Lower level executives get very little opportunity for developing decision-making skills.
4. Low morale
 Centralisation hampers the motivation and morale of employees as their freedom is
reduced.
DECENTRALISATION
Decentralisation refers to the systematic effort to delegate to the lowest levels all
authority except that which can only be exercised at central points
Decentralisation should not be confused with dispersion of physical facilities and
operations.
Example – the plants and branches of a company may be located at different places in the
country but authority may be centralized at the top level of organization.
The management has to take the following steps while decentralization authority,
1. Establishment of appropriate centralization of authority to the required level.

2. Development of managers in the areas of decision-making skills, interpersonal skills,

job knowledge, organization knowledge, technical knowledge etc.
ADVANTAGES
1. Relief to top executives
Decentralisation helps to reduce the workload of top executives.

2. Motivation of subordinates
Decentralisation helps to improve the job satisfaction and morale of lower level managers
by satisfying their needs for independence, participation and status.
3. Quick Decision
More accurate decisions

More accurate and faster decisions can be taken as the subordinates as well as aware of
the situation.
4. Growth and Diversification
Decentralisation facilitates the growth and diversification of the enterprise. Each product
division is given sufficient autonomy for innovations and creativity.
5. Executive Development
When authority is decentralized, subordinates get the opportunity of exercising their own
judgment. There is better utilization of lower level executives.
6. Effective communication
Communication system becomes more effective. Intimate relationship between superiors
and subordinates can be developed.
DISADVANTAGES
Decentralisation suffers from the following limitations,
1. Expensive
Decentralisation increases administrative expenses. A decentralized setup is better suited
to large enterprise.

2. Difficulty in co ordination
The co ordination among the departments becomes more difficult because each
department or division enjoys substantial autonomy.
3. Lack of uniformity
Each department may formulate its own policies and procedures, the department not
followed uniform procedures.
4. External constraints
Decentralisation may not be possible due to external factors like market uncertainties,
trade unions, government intervention etc.

UNIT-4

DIRECTING

INTRODUCTION

Direction is the process of instructing guiding counseling motivating and leading the
human resources to achieve organisational objectives. Direction is also called as activating
though infrequently by some. Direction is an important managerial function.
Direction has dual objectives, on the one hand it aims at getting things done by
subordinates and on the other to provide superiors opportunities for some more important work.
Which their subordinates cannot do.
DEFINITION:
“Direction consists of the process and techniques utilizing in issuing instruction and
making certain that operations are carried out us planned. “Haimann”.
IMPORTANCE OF DIRECTING:

The importance of direction in the organisation can be viewed by the fact that very action
is initiated through direction.
1. Direction Initiates Actions:
Organisation is the sum total of human and non-human resources without direction other
managerial activities like planning organizing and staffing become ineffective.

2. Direction integrates employee’s efforts:

For achieving organisational objectives individuals need not only be efficient but
effective also. Individual’s efforts need to be integrated so that organisation achieves its
objectives in the most efficient manner and this is possible through direction only.
3. Direction attempts to get maximum out of Individuals:

Every individual in the organisation has some potentiality and capability which in the
absence of proper motivation, leadership communication all elements of direction may not be
utilized fully. Direction provides the way to utilize these capabilities and also it helps in
increasing these capabilities.
4. Direction facilities change in the organisation:
Organisation exists in the society and any change in the society changes organizational
process to keep organisation ready to face environmental changes. To incorporate and implement
these changes management should motivate individuals affected by these changes which is an
essential part of direction.
5. Direction provides stability and balance in the organisation:
Effective leadership communication and motivation provide stability in the organisation
and maintain balances in different parts of the organisation. Organisation exists for a long period
and its parts work in a harmonious way.
LEADERSHIP
Introduction :
A leader is a person who guides and directs others called followers. He gives focus to the efforts
of his followers.

Definition

“Leadership is the ability of a manager to induce subordinates to worker with confidence and zeal"
-Koonty and o Donnelly
“A leader is one who guides and directs other people. He must give effective direction and
purpose. “Allen”.
The following are main types of leadership styles:

Autocratic Leadership Style

Democratic Leadership Style

Laissez-faire Leadership Style

LEADERSHIP STYLES [OR] TYPES OF LEADERS

(1) AUTOCRATIC LEADERSHIP STYLE

This style is also known as the leader-centered style. Under this style, the leader keeps all the
authority centered in his hands and the employees have to perform the work exactly as per
his orders. If any employee is careless in his work performance, he is punished.

The leader does not decentralize his authority for the fear of losing his importance.
Consequently, the responsibility of the success or failure of management remains with the
manager.

Characteristics
Following are the characteristics of the autocratic leadership style:

(i) Centralised Authority:

In this style, a manager is not prepared to share his authority and responsibility with others.
Consequently, all the authority of work performance remains centralized.

(ii) Single-man Decisions:

In this style of leadership, the manager himself takes all the decisions. He takes it for granted that
he does not need any other individual.

(iii) Wrong Belief regarding Employees:

The manager is a victim of the thinking that the employees do not work when motivated by love
and they require hard control. Impelled by this thought, managers take the help of the
centralized leadership style.

(iv) Only Downward Communication:

The thinking and suggestions of the employees are meaningless in this style of leadership.
Therefore, the communication is only downward which means that the managers only tell them
their ideas but do not listen to the employees’ ideas.

Advantages
The autocratic leadership style has the following advantages:

(i) Quick and Clear Decisions:

Because of the centralized authority all the decisions are taken by a single individual and hence
there is no unnecessary delay and the decisions are comparatively clear.

(ii) Satisfactory Work:

Since the work performance of the employees is under strict control, the quantity and quality of
the work happen to be satisfactory.
(iii) Necessary for Less Educated Employees:
This style is very useful for the less educated and persons of less understanding. They have
no capability of taking decisions because of little education. The employees of this category
can only work and not take decisions.
Disadvantages
This style has the following disadvantages:

(i) Lack of Motivation:

This style does motivate the managers but it lowers the morale of the employees. This is natural
because working in an environment of fear does lower their morale.

(ii) Agitation by Employees:

Since the employees are not given any participation in taking decisions, they are turned into
machines working like machines incapable of doing anything of their own. Similarly, managers
can make the employees do as they wish. The employees consider such a leadership style as
uninteresting and oppose it.

(iii) Possibility of Partiality:

Since all the authority is centralized in a single individual, he tries to please his favourites and
flatterers by giving them work of less laborious nature. Such a partiality creates a feeling of
bitterness and anger among the employees.

Evaluation
On the basis of the above-mentioned advantages and disadvantages, it can be asserted that this
style is not practical. The chief aim of leadership is to motivate the employees so as to make
them to follow the leader. This aim is not fulfilled in this case. Hence, this leadership style
cannot be called more useful.

(2) DEMOCRATIC LEADERSHIP STYLE

This style is also known as group-centered leadership style. These days this leadership style
is very much in vogue. Under this style, decisions regarding different works are not taken by
the manager alone but they are taken in consultation with the employees.

This leadership style is based on Decentralisation. The manager respects the suggestions made
by his subordinates, and also makes efforts to fulfill their necessities.

Characteristics
Following are the characteristics of democratic leadership style:

(i) Cooperative Relations:

The chief characteristic of this style is the existence of cooperative relations among the
managers and the employees. Participation in the management decisions gives the employees a
feeling of self-respect, as a result of which the employees are always ready to be cooperative in
every way.

(ii) Belief in Employees:

The managers inherently believe that the employees by nature want to work, do their work with
interest, accept their responsibility and try to perform their work in a good manner. This faith
of the managers in the employees increases their morale.

(iii) Open Communication:

This style encourages open communication among the managers and the employees. Open
communication means both ways communication, meaning thereby that apart from saying their
own thoughts the managers receive the suggestions of the employees with pleasure.
Advantages
Democratic leadership style has the following advantages:

(i) High Morale:

Under this style, the enthusiasm of the managers and the employees is sky-high. Both consider
each other their well-wishers.

(ii) Creation of More Efficiency and Productivity:

Since the employees are participants in the decision making, they give full cooperation in
implementing them. In this way their efficiency increases.

(iii) Availability of Sufficient Time for Constructive Work:

Under this leadership style, the workload of the managers gets decreased. By using their spare
time constructively they make the development and expansion of the enterprise possible.

Disadvantages
Following are the disadvantages of the democratic leadership style:

(i) Requirement of Educated Subordinates:

The chief characteristic of this leadership style is that the subordinates are made partners in
taking decisions, so much so that some little affairs are left to them. Such cooperation can
be expected only from the educated employees.

(ii) Delay in Decisions:

It is clear that while taking decisions the subordinates are always consulted. This makes it a long
process.

(iii) Lack of Responsibility in Managers:

Sometimes the managers try to evade responsibility by observing that the decisions were taken
by the subordinates because they were made partners in taking some important decisions. Thus,
they must be held responsible.

Evaluation
After having studied the merits and demerits of the democratic leadership style it can be said
that only this style is really a practical leadership style. If all the employees are fully acquainted
with this style after giving them training, this can be made more suitable.
(3) LAISSEZ-FAIRE OR FREE-REIN LEADERSHIP STYLE
This leadership style is also described as Individual- centered style. In this style, the manager
or the leader takes little interest in managerial functions and the subordinates are left on their
own. It refers to that leadership style in which the leader gives his subordinates complete
freedom to make decisions.

Overall objectives help the subordinates in determining their own objectives. Apart from
this, they provide resources for work performance and, if need be, they also advise the
employees. This style is absolutely different from the autocratic leadership style.

Characteristics
Following are the characteristics of the free-rein leadership style:
(i) Full Faith in Subordinates:
A prominent characteristic of this style is that the managers consider their subordinates capable,
active and responsible individuals and have full faith in them.

(ii) Independent Decision-making System:

In this style, the management-related decisions are taken by the subordinates instead of the
managers. They can, however, consult the managers.

(iii) Decentralisation of Authority:

This style is based on the principle of Decentralisation. It means that the managers widely
distribute their authority to enable every individual to determine his objective and make his plans
accordingly. The managers only perform the function of coordination, direction and general
control.

(iv) Self-directed, Supervisory and Controlled:

After having once explained the objectives, the only job of the manager is to interfere only in
adverse situations. The supervision and control is done by the employees themselves.

Advantages
Free-rein leadership style has the following advantages:

(i) Development of Self-confidence in Subordinates:

When all the authority in their work performance is given to the employees, they become
habituated in taking decisions which creates self-confidence in them. They start doing better
work in future.

(ii) High-level Motivation:

When the manager gives the subordinates all the authority by showing full confidence in them
they start considering themselves an important part of the concern.

In this way they start feeling that they are not a part of the enterprise but are the enterprise itself.
With the onset of this feeling there is nothing left in their motivation.
(iii) Helpful in Development and Extension of the Enterprise:
The development and extension of an enterprise where this leadership style is adopted is at
its climax.

The reason for this is the time available with the managers to find out the possibilities of
development and extension.

Disadvantages
This leadership style has the following disadvantages:

(i) Difficulty in Cooperation:

Since there is no close supervision and control by the managers everybody starts functioning
independently. Some employees with opposite point of view become a hurdle in the
attainment of objectives of other people.

Such people do not work themselves, nor can they see others work. It becomes difficult for the
manager to establish coordination among such employees.
(ii) Lack of Importance of Managerial Post:
In this leadership style, the post of a manager is rendered less important because he does not
make any plan, or take any decision or exercise any control.

(iii) Suitable only for Highly Educated Employees:

This style is useful only when every employee is fully educated so that the work can be
assigned to him with full confidence. This leadership style is not suitable for leading uneducated
or semi- educated people.

QUALITIES FOR EFFECTIVE LEADERSHIP

 Honesty & integrity

 Confidence

 Inspire others

 Commitment & passion

 Good communicator

 Decision making capabilities

 Accountability

 Delegation & empowerment

 Creativity & innovation

 Empathy
MOTIVATION
Introduction
The term motivation has been derived from the word motive. Motive is the urge, need, want or
desire that induces a person to work or desire a person to work. Motivation is an integral part of
the process of direction.
Definition
“Motivation is the process of attempting to influence others to do your will through the
possibility of gain or reward”. -Edwin B Flippo
“Motivation means a process of stimulating people to action to accomplish desired goals”. -
W.G.Scott
THEORIES OF MOTIVATION
1. Maslow’s need hierarchy theory
2. MC.Gregors X and Y theory

MASLOW’S NEED HIERARCHY THEORY :

Abraham Maslow’s a psychologist developed a theory called the need-hierarchy theory. He
classified human needs into five categories and arranged the same in a particular order.

Maslow regarded the first three as ‘lower needs’ and remaining as ‘higher order needs’.
1. Physiological need:
These are primary needs or basic needs of a person that must be fulfilled. It include food
clothing and shelter that are vital for the survival of mankind.
2. Safety need:
The safety or security needs emerge once the basic or physiological needs of ba persons
are fulfilled. Job security is one such need. People generally prefer secured jobs. Every
employee want provident fund. Insurance and such other schemes to protect his old age
when he can’t work and earn.

3. Social need:
A person wants friendship, association love and affection. These days people live in flats
and is common to find an association in every apartment.

4. Esteem need:
These needs arise in views of a person desire to have his ego satisfied. It gives a person
self respect , self-confident, independence, status, recognition & reputation. Some people
show preference for luxury cars, expensive jewels & so on.

5. Self actualization needs:

Who reaches a stage wants to achieve all that one is capable of achieving. A professor
may produce books. A singer compose music.
LIMITATIONS OF HIERARCHY OF NEEDS THEORY

Maslow's theory of motivation (Hierarchy of Needs Theory) is very popular all over the
world and provides guidelines to managers / managements for motivating employees.
However, Maslow's theory has many limitations.
Limitations of Maslow's Hierarchy of Needs Theory are noted below :-
1. Maslow's theory is over simplified and is based on human needs only. There is lack
of direct cause and effect relationship between need and behavior.
2. The theory has to refer to other motivating factors like expectations, experience
and perception.

3. Needs of all employees are not uniform. Many are satisfied only with physiological
needs and security of employment.
4. The pattern of hierarchy of needs as suggested by Maslow may not be
applicable uniformly to all categories of employees.
5. Maslow's assumption of 'need hierarchy' does not hold good in the present age as
each person has plenty of needs to be satisfied, which may not necessarily follow
Maslow's need hierarchy.
6. Maslow's theory is widely accepted but there is little empirical evidence to support it. It
is largely tentative and untested. His writings are more philosophical than scientific.

MC GRETGOR’S X AND Y THEORY

Positive and negative qualities of individuals.

X-THEORY
X- is negative or pessimistic in approach.

1. People in general, dislike work, basically they are lazy.

2. They don’t voluntarily accept any responsibility.
3. Most people lack creativity. They show no preference for learning anything new.
4. Satisfaction of physiological and safety needs alone is important for most people.
5. An employee need to be closely supervised and watched.
Y-THEORY
Y- is positive or optimistic in approach
1. People in general like their work given the proper working conditions the workers would
do their work with enthusiasm.
2. They come forward to accept any responsibility.
3. Workers do have the potentials to be creative encourage the workers to display their
creative ideas and skills.
4. Satisfaction of physiological and safety needs is important for most workers, want to
work to their maximum capabilities.
 5. An employee need not to be closely supervised and watched. They are good in what is
called self direction.

DISTINCTION BETWEEN X THEORY AND Y THEORY

X THEORY Y THEORY
dislike work like their work
don’t voluntarily accept any responsibility come forward to accept any responsibility.
lack creativity have the potentials to be creative encourage
the workers to display their creative ideas and
skills

Satisfaction of physiological and safety needs Display their potentials

alone

closely supervised and watched good in self direction.

HERZBERG’S TWO FACTOR THEORY
1. Hygiene factors.
2. Motivational factors.

HYGIENE FACTORS:
Hygiene factors do not actually motivate a person but their absence will lead to dis-
satisfaction. These factors are also know as extrinsic factors of maintenance factors.
1. Company policies and administration
2. Type of supervision
3. Working conditions
4. Interpersonal relationships
5. Salary
6. Job security and
7. Status

MOTIVATIONAL FACTORS
The motivational factors are also know as intrinsic factors. It will motivate the employees but
their absence will not lead to dissatisfaction.
1. Work itself
2. Achievement
3. Recognition
4. Advancement
5. Growth
6. Responsibility
COMMUNICATION

MEANING AND DEFINITION OF COMMUNICATION.

Communication is the process by which information is transmitted between individuals
and / or organizations, so that an understanding response results.
Communication is an exchange of facts, ideas, opinions, or emotions by two or more
persons.
DEFINITION
According to peter little, “communication is the process by which information is
transmitted between individuals and/or organizations so that an understanding response results.”

ELEMENTS OF COMMUNICATION
1. Sender (or) communicator:
Sender is a person who sends a message. He may be a writer, speaker or actor.
2. Receiver (or) communicator:
Receiver is a person who receives a message. The receiver may be a reader, listener or
observer.
3. Message:
Message is the subject matter of communication. It is in the form of a verbal or non
verbal language. Verbal language means spoken or written words or numbers. Non verbal
language can take the form of facial or body gestures or expressions.

4. Channels of communication:
Channel is the media by which the message is flown from the communicator to the
communicate. It acts as a connecting link between them.
5. Feedback:
The last stage in the communication process is feedback; the receiver makes it known to
the sender that he understood the message. Feedback is the response, reaction or reply made by
the communicate.

TYPES / CHANNELS OF COMMUNICATION

Types of communication can be classified into:

On the basis of organizational structure.

1. Formal communication
2. Informal communication.
1. According to Area of Operation:
(i) Internal Communication:
‘Internal Communication’ is a process of communication made within the organisation
between the superiors and subordinates or between peer persons or between two or more groups.
It may be formal or informal, oral or written. It may flow upward, downward or horizontal as
per requirement.
(ii) External Communication:
A business organisation needs to communicate with the external agencies like customers,
suppliers, investors, other business houses, banks, insurance companies, government offices, etc.
Such communication may be called ‘External Communication’ as its area of operation is with
the people outside the organisation.

International business organisations need to communicate with foreign individuals,

government agencies/organisations, etc. Oral external communication is made through face-to-
face discussion, meeting, conference, seminar, telephone, speech, etc. The written process
includes notice, letter, telegram, report, e-mail, advertisement, fax, press release, etc.

2. According to Relationship:
(i) Formal Communication:
‘Formal Communication’ is the transmission of information or direction in formal
organisation structure. Formal communication maintains superior-subordinate relationship.
When a manager directs his deputy manager to carry out some task, it is an instance of formal
communication. Formal communication directs the employees in a definite manner to know
what the managers intend them to do and is generally codified and expressed in writing in
manuals, handbooks, bulletins, annual reports, etc. So, it is rigid and thus lacks the quality of
flexibility.
(ii) Informal Communication:
‘Informal Communication’ is the communication between the members of a group or
more than one group—not on the basis of formal relationships in the organisational structure but
on the basis of informal relations and understanding among the people at the same or different
levels. It is referred to as the ‘grapevine’ which indicates informal means of circulating
information or gossip. It does not follow any structural route or process. It moves towards any
direction. It is direct, spontaneous, flexible, unplanned, and fast-flowing.

3. According to Direction:
(i) Vertical Communication:
Upward and downward flows of communication constitute ‘Vertical Communication’.
In such type of communication message or information is transmitted from the higher authority
to the subordinates, and vice versa.

(a) Downward Communication:

ADVERTISEMENTS:

Downward communication means the flow of information or understanding from the persons occupying higher p
communication which leads to high degree of its acceptance.

(b) Upward Communication:

Communication is said to be upward when it moves from the subordinates to the superior managers. Submission
favoured by the top managers due to its troublesome and perplexing nature.

ADVERTISEMENTS:

(ii) Horizontal Communication:

‘Horizontal or Sideways Communication’ takes place between two subordinates or
managers at the same level and under the same superior. It is specially important in large or
decentralized organisations. Staff people help to transmit information among the positions and
units at the same level.

(iii) Diagonal Communication:

Communication among the executives or employees of different departments is called
‘Diagonal Communication.’ No definite direction is followed—upward, downward and
horizontal communication takes place in it. Both oral and written means of communication are
used. It is mainly informal. A good relation between the subordinates and superiors is built up. It
is very useful in solving the problems and avoiding conflict, but the chances of spreading
rumors are high.

ADVERTISEMENTS:

4. According to Means:
(i) Verbal Communication:
‘Verbal or Oral Communication’ implies the transmission of orders, messages or suggestions through spoken wo
 Verbal communication may pass directly between one person and another or group
or indirectly through meetings and conferences. Whatever tool is used, it saves much time
and permits personal contact. This fosters a friendly and co-operative spirit, ensures quick
understanding and proper explanation, encourages questions and answers, and stimulates
interest.

(ii) Written Communication:

A ‘Written Communication’ means the sending of message, order or instruction in
writing through a letter, circular, manual, report, telegram, office memo, bulletin, etc. It is a
formal method of communication and is suitable for long distance communication and repetitive
standing orders. It creates the records of evidence and future reference, and can be sent to many
persons at a time.

(iii) Gestural Communication:

Communication can be made through movement of body, facial expression, smile,
modulation of voice, sign, handshake, rubbing of hands, eye- to-eye contact, style of walking,
etc. As communication is made through bodily gestures it is called ‘Gestural Communication.’

It should be kept in mind that, though the methods of communication are different, no one
method can be used exclusively. So, different methods may be used in combination to suit
the purpose of the communication.
BARRIERS OF COMMUNICATION

1. Semantic or Language Barriers:-

Language serves as the basis for the communication. Sender should select the words and
construct the sentences carefully otherwise leads to faulty communication.

2. Perception:-

An individual’s view of reality is known as perception. People differ greatly in the way
they perceive things and events. Even a single individual has different perceptual styles
depending on time and circumstances.

3. Perfunctory Attention:-

If receiver pays very little or no attention to the message, communication and

understanding will fail. Employee should be keep away his problem and listen to the message.

4. Resistance to change:-
Generally, people resist changes. Resistance to change will be strong when the proposed
change is great. One method of overcoming resistance is explaining the subordinates as to how
they will be benefited by such changes.
5. Status:-
Arises due to status difference that exists in every organization and there is no free flow
of communication. For example any communication received from the management is viewed as
troublesome by trade unions; any message from workers will be discounted by management etc.
6. Organizational Structure:-
If the organizational structure has several layers of management, it may result in delay
and distortion in communication, and message may be altered at every layers of management.

7. Premature Evaluation:-
Refers to a tendency of forming a judgment before listening to the message fully.
Premature evaluation misrepresents the message and acts as a barrier to effective
communication.

8. Failure to communicate:-
Failure arises due to laziness, embarrassment, status difference and assuming that it is
known to everybody.

9. Emotional attitude:-
Emotional attitude of the parties involved in the exchange of information is another
barrier to effective communication. When an individual is emotional, he may not able to know
the frame of mind of other person.

10. Distance and time:

Distance between the sender and the receiver of the message is more and is not clear than
communication fails. Delayed messages which is not sent in time creates confusion and
misunderstanding.
11. Lack of common knowledge:
Common knowledge is essential to communicate. Many people use words which
is not easily understandable by others as to impress others, due to this clear communication is not
possible.

Principles of Effective Communication (or)7 C’S of Communication:

1. Clarity
2.Completeness
3.Cociseness
4.Concreteness
5.Courtacy
6.Correctness
7.Consider
 UNIT-5

Controlling

Definition& Meaning of Control

According to Henri Fayol, “Control consists in verifying whether everything occurs in conformity with
the plan adopted, the instructions issued and principles established.”

According to Brech, “Control is checking current performance against predetermined standards contained
in the plans, with a view to ensure adequate progress and satisfactory performance, and also recording the
experience

IMPORTANCE OF CONTROLLING

1. Helps in achieving organisational goals:

When the plans are made in the organisation these are directed towards achievement of
organisational goal and the controlling function ensures that all the activities in the organisation
take place according to plan and if there is any deviation, timely action is taken to bring back
the activities on the path of planning. When all the activities are going according to plan then
automatically these will direct towards achievement of organisational goal.

2. Judging accuracy of standards:

Through strategic controlling we can easily judge whether the standard or target set are
accurate or not. An accurate control system revises standards from time to time to match them
with environmental changes.

3. Making efficient use of Resources:

Like traffic signal control guides the organisation and keeps it on the right track. Each activity
is performed according to predetermined standards. As a result there is most and effective use
of resources.

4. Improving employee motivation:

An effective control system communicates the goals and standards of appraisal for employees
to subordinates well in advance.

A good control system also guides employees to come out from their problems. This free
communication and care motivate the employees to give better performance.

5. Ensures order and discipline:

Control creates an atmosphere of order and discipline in the organisation. Effective
controlling system keeps the subordinates under check and makes sure they perform their
functions efficiently.

Sharp control can have a check over dishonesty and fraud of employees. Strict control
monitor, employees work on computer monitor which brings more order and discipline in
work environment.

6. Facilitate coordination in action:

Control helps to maintain equilibrium between means and ends. Controlling makes sure that
proper direction is taken and that various factors are maintained properly. All the departments
are controlled according to predetermined standards which are well coordinated with one
another. Control provides unity of direction.

7. Controlling helps in improving the performance of the employees:

Controlling insists on continuous check on the employees and control helps in creating an
atmosphere of order and discipline. Under controlling function it is made sure that employees
are aware of their duties and responsibilities very clearly.

8. Controlling helps in minimising the errors:

Small errors or small mistakes may not seriously affect the organisation. But if these errors
are repeated again and again it will become a serious matter and can bring disaster for the
organisation.
 An effective controlling system helps in minimising the errors by continuous monitoring and
check. The managers try to detect the error on time and take remedial steps to minimise the
effect of error.

STEPSIN THECONTROL PROCESS

The control process is the process for organizational control that arises from the goals and
strategic plans of the organization.
The basic control process involves the following steps:

1. Establishing standards and methods for measuring performance

2. Measuring the performance

3. Determining whether performance matches the standard

4. Taking corrective action

These Steps are described

below;

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.

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.

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

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.
CONTROL TECHNIQUES
1. BUDGETARY CONTROL TECHNIQUES
The various types of budgets are as follows

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 task of variable budgeting involves selecting some unit of measure that reflects volume;
inspecting the various categories of costs (usually by reference to the chart of accounts); and,
by statistical studies, methods of engineering analyses, and other means, determining how
these costs should vary with volume of output.
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.
2. NON-BUDGETARY CONTROL TECHNIQUES
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.
v) PERT:
The Program (or Project) 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.

CO-ORDINATION:

Definition & Meaning coordination

“According to Brech, Coordination is balancing and keeping together the team by ensuring suitable
allocation of tasks to the various members and seeing that the tasks are performed with the harmony
among the members themselves.”

NEEDS (OR) IMPORTANCE OF COORDINATION

The need and importance of coordination can be judged from these points:
1. Coordination encourages team spirit

There exists many conflicts and rivalries between individuals, departments, between a line
and staff, etc. Similarly, conflicts are also between individual objectives and organizational
objectives. Coordination arranges the work and the objectives in such a way that there are
minimum conflicts and rivalries. It encourages the employees to work as a team and achieve
the common objectives of the organization. This increases the team spirit of the employees.
2. Coordination gives proper direction
There are many departments in the organization. Each department performs different
activities. Coordination integrates (bring together) these activities for achieving the common
goals or objectives of the organization. Thus, coordination gives proper direction to all the
departments of the organization.
3. Coordination facilitates motivation
Coordination gives complete freedom to the employees. It encourages the employees to
show initiative. It also gives them many financial and non-financial incentives. Therefore,
the employees get job satisfaction, and they are motivated to perform better.
4. Coordination makes optimum utilization of resources
Coordination helps to bring together the human and material resources of the organization. It
helps to make optimum utilization of resources. These resources are used to achieve the
objectives of the organization. Coordination also minimizes the wastage of resources in the
organization.
5. Coordination helps to achieve objectives quickly
Coordination helps to minimize the conflicts, rivalries, wastages, delays and other
organizational problems. It ensures smooth working of the organization. Therefore, with the
help of coordination an organization can achieve its objectives easily and quickly.
6. Coordination improves relations in the organization
The Top Level Managers coordinates the activities of the Middle Level Managers and
develop good relations with them. Similarly, the Middle Level Managers coordinate the
activities of the Lower Level Managers and develop good relations with them. Also, the
Lower Level Managers coordinate the activities of the workers and develop good
relations with them. Thus, coordination, overall improves the relations in the
organization.
7. Coordination leads to higher efficiency
Efficiency is the relationship between Returns and Cost. There will be higher efficiency
when the returns are more and the cost is less. Since coordination leads to optimum
utilization of resources it results in more returns and low cost. Thus, coordination leads to
higher efficiency.
8. Coordination improves goodwill of the organization
Coordination helps an organization to sell high quality goods and services at lower prices.
This improves the goodwill of the organization and helps it earn a good name and image
 in the market and corporate world.
Techniques of co-ordination

CO-ordination Of Command
Managerial order is the first stage in co-ordination which is also regarded as an important method of co-
ordination the effort .

A manager keeps an eye over the work and conduct of his sub –ordinates .The work are conducted are
regulated ,directed ,guided and controlled through order either in the form of advice or in the dos and
don’ts or in any other suitable form acceptance to the operation staff.

CO –Ordination by Personal Leadership

Co-ordination expects a high class leadership .co-ordination is a human effort in which the character ,
temperament and morals of the manager are very important .
If this happen the self co-ordination attitude may develop among sub –ordinates limitation of span of
control however limits the utility of this technique of co-ordination.

CO-Ordination By Communication
Communication efforts if effective and properly channelized go along way in establishing a good system
of communication. What is required here is that communication should be complete proper channelized
and fully effectively.

Code of conduct ,rules and regulation ,bye laws area few for the communicative documents which are
adopted in co-ordination in efforts in an enterprise .

Co –ordination by Committees
Committees form of organization is on increase these days with the help of department head and
convened of committees and sub committees the chief co-ordinates . the activities of an enterprise.

It is easy for him to co-ordinates with help of committees .It less consuming and less efforts are involving
in co-ordination the activities according to this technique of co-ordination.

Co-ordination by Group Meeting

Where committees form of organization is not in existence ,co-ordination through group meeting is
advantageous .

Here also it is easy to coordinate .co-operation usually comes of its own from sub –ordinates who feel
elevated when attended a meeting called by the executive .

APPROACHES AND TECHNIQUES OF EFFECTIVE COORDINATION IN

MANAGEMENT

Approaches of Effective Coordination

Achievements of organization depend upon coordination. So, it should be very much

effective. Following are the approaches to achieve effective coordination.
 1. Using the basic management techniques

By the use of basic management technique effective coordination can be achieved. Coherence
of orders, rules and procedure helps to achieve effective coordination.
Coherence of order helps to exchange information. Rules and procedures help to use the
assigned rights freely. So, we can say that effective coordination can be achieved by the use
of basic management techniques.

2. Boundary spanning
Effective coordination depends upon effective communication and public relation. It is very
difficult to have effective coordination if there is more communication and public relation. In
such case boundary spanning is a suitable method. In this approach all the departments will
have permanent relation. Boundary spanning informs about the need and responsibility of
various departments which helps to have effective coordination.

3. Reducing the need for coordination

If coordination is vague and complex, then management boundaries and technology will be
ineffective. As a result, coordination is impossible. Under this approach organization reduces
the need for coordination. It is necessary to create independent unit for the reduction for
coordination.