@ EAST WEST -¢-) Management and Organizational Behavior (20MBAI1) MODULE -01 INTRODUCTION:- MANAGEMENT Introduction: Management: Introduction, Meaning, Nature, Objectives, Importance, Difference between Administration and Management, Levels of management and types of managers. Managerial roles, Skills for managers, Managerial Competencies, Scope of management, Evolution of management thought, Fayol’s fourteen principles of management, recent trends in management. INTRODUCTION: One of the most important activities in a business is the management of 4M’s ~ men, machines, material, and money. The term ‘management can be interpreted directly in different contexts. Hence, it is difficult to define. In one context, it may comprise the activities of executives and administrative personnel in an organization, while in another, it may refer to a system of getting things done. In a broad perspective, management can be considered as the proper utilization of people and other sources in an organization to accomplish desired objectives. With increasing global competition, changes in the world of technology, changing business practices and increasing social responsibility of organizations, the role of managers has become all the more significant. Organizations have a variety of goals. They usually direct their energies and resources to achieve these goals. A profit-oriented business firm, for example, return-on- investment goal; a hospital would have goal centred on patient care; and an educational institution would establish goals for teaching, research, and social service. Organization process human as well as non-human resources (plant, equipment, land, money, etc.) that are put to you in the service of specific goals. Management is the force that unifies human as well as non-human resources in the service of organizational goals. It is a process of getting results with and through people. Management is needed whenever people work together in an organization the managerial functions must be performed by anyone who manages organized efforts, whether | Institutions- such a business enterprise, religious organization, military outfit for a soci Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 2Management and Organizational Behavior (20MBAI1) as planning, organizing, directing and controlling. These functions are performed at all levels in an organization, regardless of its type or size. The services of Management are essential in all cooperative endeavors. MEANING OF MANAGEMENT: Management is an important factor in the success of any organized activity. Today ‘management basically concerns with changes and challenges, and itis difficult to manage. Management is the art of getting things done through others. Management is to plan, organize, direct and control the resources of the organization for obtaining common objectives or goals. It is related to resources like material, money, machinery, methods, manufacturing, and marketing, DEFINITION OF MANAGEMENT: Peter F. Drucker defines, "Management is an organ; organs can be described and defined only through their functions". According to Terry, "Management is not people; it is an activity like walking, reading, swimming or running. People who perform Management can be designated as members, members of Management or executive leaders". Koontz, and O'Donnel, “Management is the creation and maintenance of an internal environment in an enterprise where individuals, working in groups, can perform efficiently and effectively toward the attainment of group goals. It is the art of getting the work done through and with people in formally organized groups”. William Spiegel, "Management is that function of an enterprise which concerns itself with direction and control of the various activities to attain business objectives. Management i essentially an executive function; it deals with the active direction of the human effort." Henry Fayol, "To manage is to forecast and plan, to organize, to compound, to co-ordinate and to control." Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 3 EAST WESTManagement and Organizational Behavior (20MBAI1) Harold Koontz says, "Management is the art of getting things done through and within a formally organized group." IN. Schulze, "Management is the force which leads guides and directs an organization in the accomplishment of a pre-determined object. Charles Reynold, "Management is the process of getting things done through the agency of a community. The functions of management are the handling of community with a view of fulfilling the purposes for which it exists." NATURE OF MANAGEMENT: An analysis of the various definitions of management indicates that management has certain characteristics. The following are the salient characteristics of management. 1. Management aims at reaping rich results in economic terms: Manager’s primary task is to secure productive performance through planning, direction, and control. It is expected of the management to bring into being the desired results. The rational utilization of available resources to maximize profit is the economic function of a manager. A professional manager can prove his administrative talent only by economizing the resources and enhancing profit. According to Kimball, “management is the art of applying the economic principles that underlie the control of men and materials in the enterprise under consideration”. 2. Management also implies skill and experience in getting things done through people: Management involves doing the job through people. The economic function of earning profitable returns cannot be performed without enlisting co-operation and securing positive response from “people”. Getting a suitable type of person to execute the operations is a significant aspect of management. In the words of Koontz and O'Donnell, “Management is the art of getting things done through people in formally organized groups” Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 4 EAST WESTManagement and Organizational Behavior (20MBAI1) 3. Management is a process: Management is a process, function or activity. This process continues until the objectives set by administration are actually achieved. “Management is a social process involving coordination of human and material resources through the functions of planning, organizing, staffing, leading and controlling in order to accomplish stated objectives”. 4, Management is a universal activity: Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required. 5, Management is a science as well as an art: Management is an art because there are definite principles of management. It is also a science because by the application of these principles predetermined objectives can be achieved. 6. Management is a profession: Management is gradually becoming a profession because there are established principles of management which are being applied in practice, and it involves specialized training and is governed by ethical code arising out of its social obligations. 7, Management is an endeavor to achieve pre-determined objectives: Management is concerned with directing and controlling of the various activities of the organization to attain the pre-determined objectives. Every managerial activity has certain objectives. In fact, management deals particularly with the actual directing of human efforts. 8 Management is a group activity: Management comes into existence only when there is a group activity towards a common objective. Management is always concemed with group efforts and not individual efforts. To achieve the goals of an organization management plans organizes, coordinates, directs and controls the group effort. 9, Management is a system of authority: Authority means power to make others act in a predetermined manner. Management formalizes a standard set of rules and procedures to be followed by the subordinates and ensures their compliance with the Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 5 @ EAST WESTManagement and Organizational Behavior (20MBAI1) rules and regulations. Since management is a process of directing men to perform a task, the authority to extract the work from others is implied in the very concept of management. 10. Management involves decision-making: Management implies making decisions regarding the organization and operation of the business in its different dimensions. ‘The success or failure of an organization can be judged by the quality of decisions taken by the managers. Therefore, decisions are the key to the performance of a manager. 11, Management implies good leadership: A manager must have the ability to lead and get the desired course of action from the subordinates. According to R. C. Davis, “management is the function of executive leadership everywhere”. Management of the high order implies the capacity of managers to influence the behavior of their subordinates. 12. Management is dynamic and not static: The principles of management are dynamic and not static. It has to adapt itself according to social changes. 13. Management draws ideas and concepts from various disciplines: Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology, etc. 14, Management is goal-oriented: Management is a purposeful activity. It is concerned with the achievement of the pre-determined objectives of an organization. 15. Different levels of management: Management is needed at different levels of an organization namely top level, middle level, and lower level. 16. Management need not be owners: It is not necessary that managers are owners of the enterprise. In joint-stock companies, management and owners (capital) are different entities. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 6 EAST WESTManagement and Organizational Behavior (20MBAI1) 17. Management is intangible: It cannot be seen with the eyes. It is evidenced only by the quality of the organization and the results, i.e., profits increased productivity, ete. IS MANAGEMENT A SCIENCE OR AN ART? A question often arises whether management is a science or art. It is said that “management is the oldest of arts and the youngest of sciences”. This explains the changing nature of management but does not exactly answer what management is? To have an exact answer to the question it is necessary to know the meanings of the terms “Science” and “Art”. What is “Science”? Science may be described, “as a systematic body of knowledge pertaining to an area of study and contains some general truths explaining past events or phenomena”. ‘The above definition contains three important characteristies of science. They are: 1. It is a systematized body of knowledge and uses scientific methods for observation, 2. Its principles are evolved on the basis of continued observation and experiment, and 3. Its principles are exact and have universal applicability without any limitation. Judging from the above characteristics of science, it may be observed tha 1. Management is a systematized body of knowledge and its principles have evolved on the basis of observation, 2. The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element. 3. In management, it is not possible to define, analyze and measure phenomena by repeating the same conditions over and over again to obtain proof. The above observation puts a limitation on management as a science. Management like other social sciences can be called as “inexact science”, What is “Art”? Art’ refers to “the way of doing specific things; it indicates how an objective is to be achieved.” Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 7 EAST WESTManagement and Organizational Behavior (20MBAI1) EAST WEST Management like any other operational ity has to be an art. Most of the managerial a have to be cultivated as arts of attaining mastery to secure action and results. The above definition contains three important characteristics of art. They are: 1. Artis the application of science. It is putting principles into practice. 2. After knowing a particular art, practice is needed to reach the level of perfection. 3. It is undertaken for accomplishing an end through deliberate efforts. Judging from the above characteristics of art, it may be observed that: 1. Management while performing the activities of getting things done by others is required to apply the knowledge of certain underlying principles that are necessary for every art. 2. Management gets perfection in the art of managing only through continuous practice. 3. Management implies the capacity to apply accurately the knowledge to solve the problems, to face the situation and to realize the objectives fully and timely. ‘The above observation makes management art and that to a fine art. Management is both a Science as well as an Art: Management is both a science as well as an art. The science of management provides certain general principles that can guide the managers in their professional effort. The art of management consists of tackling every situation in an effective manner. As a matter of fact, neither science should not be over-emphasized nor should be the art discounted; the science and the art of management go together and are both mutually interdependent and complementary. Management is thus a science as well as an art. It can be said that-” the art of management is as old human history, but the science of management is an event of the recent past.” SCOPE OF MANAGEMENT: The operational aspects of business management, called the branches of management, are as follows: 1. Production Management 2. Marketing Management Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 8Management and Organizational Behavior (20MBAI1) 3. Financial Management. 4, Personnel Management and 5. Office Management, 1. Production Management: Production means creation of utilities. This creation of utilities takes place when raw materials are converted into finished products. Production management, then, is that branch of management ‘which by scientific planning and regulation sets into motion that part of enterprise to which has been entrusted the task of actual translation of raw material into finished product.’ It is a very important field of management ,’for every production activity which has not been hammered on the anvil of effective planning and regulation will not reach the goal, it will not meet the customers and ultimately will force a business enterprise to close its doors of acti ities which will give birth to so many social evils” Plant location and layout, production policy, type of production, plant facilities, material handling, production planning and control, repair and maintenance, research and development, simplification and standardization, quality control and value analysis, etc., are the main problems involved in production management. 2. Marketing Management: Marketing is a sum total of physical activities which are involved in the transfer of goods and services and which provide for their physical distribution. Marketing management refers to the planning, organizing, directing and controlling the activities of the persons working in the market division of a business enterprise with the aim of achieving the organization objectives. I can be regarded as a process of identifying and assessing the consumer needs with a view to first converting them into products or services and then involving the same to the final consumer or user so as to satisfy their wants with a stress on profitability that ensures the optimum use of the resources available to the enterprise. Market analysis, marketing policy, brand name, pricing, channels of distribution, sales promotion, sale-mix, after sales service, market research, ete. are the problems of marketing management. 3. Finanei: Management: Finance is viewed as one of the most important factors in every enterprise. Financial management is concemed with the managerial activities pertaining to the procurement and utilization of funds or finance for business purposes. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 9 @ EAST WESTManagement and Organizational Behavior (20MBAI1) ‘The main functions of financial management include: (i) Estimation of capital requirements; (i) Ensuring a fair return to investors; (iii) Determining the suitable sources of funds; (iv) Laying down the optimum and suitable capital 4, Personnel Management: Personnel Management is that phase of management which deals with the effective control and use of manpower. Effective management of human resources is one of the most crucial factors associated with the success of an enterprise, 5. Office Management: The concept of management when applied to office is called ‘office management’. Office ‘management is the technique of planning, coordinating and controlling office activities with a view to achieve common business objectives. One of the functions of management is to organize the office work in such a way that it helps the management in attaining its goals. It works as a service department for other departments. ‘The success of a business depends upon the efficiency of its administration. The efficiency of the administration depends upon the information supplied to it by the office. The volume of paper work in office has increased manifold in these days due to industrial revolution, population explosion, increased interference by government and complexities of taxation and other laws. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 10 @ EAST WESTManagement and Organizational Behavior (20MBAI1) @ EAST WEST Difference between Administration & Management Basis of difference Administration Management Nature of _ | Determination of objectives & broad policies | Implementation of plans & policies work (thinking) (doing) It takes major decisions and is a wider term than | It takes the decision within the Scope management framework of administration. Level of | Ttis atop management function Ttis a lower-level management function Authority It consists of managerial personnel with Status It consists of the owners of an enterprise specialized knowledge who may be the employees. Nature of _ | Generally, itis used in relation to government, | Itis used mainly in business firms which organization | military, educational and religious organization _| have economic motives. Tis decisions are generally influenced by external | Tis decisions are influenced by internal Influence | factors such as social, political, legal, etc. factors such as values, beliefs, and opinions. IMPORTANCE OF MANAGEMENT: 1, Management is goal-oriented:- Management is a concern with achievement of specific goals. It is always directed towards achievement of objectives. The success of management is measured by the extent to which objectives are achieved. 2, Management is associated with group efforts:-The business comes into existence with certain objectives that are to be achieved by a group and not by one person alone. Management gets things done by, with and through the efforts of group members. It coordinates the activities and actions of its members towards a common goal. 3. Management is intangible:- It is an unseen force, its presence can be evidenced by the result of its efforts up to date order but they generally remain unnoticed, whereas mismanagement is quickly noticed. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 11-¢-) Management and Organizational Behavior (20MBAI1) EAST WEST 4. Management is an activity and not a person or group of person:- Management is not people or not a certain class but it is the activity, it is the process of planning, organizing, directing and controlling to achieve the objectives of the organization. ‘Management is situational:- Management does not advise the best way of doing things. Effective management is always situational. A manager has to apply principles, approaches, and techniques of management after taking into consideration the existing situations. 6. Management is universal:- Most of the principles and techniques of management are universal in nature. They can be applied to government organizations, military, educational institutes, religious institutes, etc. They provide working guidelines that can be adapted according to situations. 7. Management is a concern with people:- Since management involves getting things done through others only human being performed this activity with the help of planning and control. The element man cannot be separated from the management. 8 Management is the combination of art, science, and profession: - Management makes use of science as well as art, Itis science because it collects knowledge with the methods and data, analyzes and measures it and decision is taken with the help of experiment. It is a systematic body of knowledge. Art means application of knowledge for solving various problems. In modern times there is separation of ‘ownership and management, so professional experts are appointed. FUNCTIONS OF MANAGEMENT > Planning: Planning is the process of making decisions about the future. It is the process of determining enterprise objectives and selecting future courses of action necessary for their accomplishment. It is the process of deciding in advance what is to be done, when and where it is to be done, how it is to be done and by whom, Planning provides direction to enterprise activities. It helps managers cope with change. It enables managers to measure progress toward the objectives so that corrective action can be taken if progress is not satisfactory. Planning is a fundamental function of Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 12Management and Organizational Behavior (20MBAI1) v management and all other functions of management are influenced by the planning process. Organizing: Organizing is concerned with the arrangement of an organization’s resources ~ people, materials, technology, and finance in order to achieve enterprise objectives. It involves decisions about the division of work, allocation of authority and responsibility and the coordination of tasks. The funetion increases in importance as a firm grows. A structure is created to cope with problems created by growth. sified, Through this formal structure, the various work activities are defined, cla arranged and coordinated. Thus, organizing refers to certain dynamic aspects: What tasks are to be done? Who is to do them? How the tasks are to be grouped? Who is to report to whom? Where the decisions have to be made? Staffing: Staffing is the function of employing suitable persons for the enterprise. It may be defined as an activity where people are recruited, selected, trained, developed, motivated and compensated for manning various positions. It includes not only the movement of individuals into an organization but also their movement through (promotion, job rotation, transfer) and out (termination, retirement) of the organization. Staffing involves selection of the right man for the right job. It has four important elements Directing: The function of guiding and supervising. the activities of the subordinates is known as directing. Acquiring physical and human assets and suitably placing them ‘on jobs does not suffice; what is more important is that people must be directed towards organizational goals. This work involves four important elements: (a) Leadership: Leadership is the process of influencing the actions of a person or a group to attain desired objectives. A manager has to get the work done with and through people. The success of an organization depends upon the quality of leadership shown by its managers. (b) Motivation: Motivation is the work a manager performs to inspire, encourage and Impel people to take the required action. It is the process of stimulating people to take desired courses of action. In order to motivate employees, manager must provide a congenial working atmosphere coupled with attractive incentives. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 13 @ EAST WESTManagement and Organizational Behavior (20MBAI1) of all of them simultaneously to solve the problems facing their companii (©) Communication: Communication is the transfer of information and understanding from one person to another. It is a way of reaching others with ideas, facts, and thoughts. Significantly, communication always involves two people: a sender and a receiver. Effective communication is important in organizations because managers can accomplish very little without it. (d) Supervision: In getting the work done it is not enough for managers to tell the subordinates what they are required to do. They have also to watch and control the activities of the subordinates. Supervision is seeing that subordinates do their work and do it as directed. It involves overseeing employees at work Controlling: The objective of control is to ensure that actions contribute to goal accomplishment, It helps in keeping the organizational activities on the right path and aligned with plans and goals. In controlling, performances are observed, measured and compared with what had been planned. If the measured performance is found ms. If the wanting, the manager must find reasons and take comective a performance is not found wanting, some planning decisions must be made, altering the original plans. If the controlling function is to be effective, it must be preceded by proper planning. Thus, controlling includes four things: (a) Setting standards of performance, (b) Measuring actual performance, (©) Comparing actual performance against the standard and (d) Taking corrective actions to ensure goal accomplishment. Successful management involves active participation by managers in the above basic managerial functions. These functions are interrelated and most managers use a combination Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 14 @ EAST WESTManagement and Organizational Behavior (20MBAI1) Levels of Management & Types of Managers > Top-Level Management: It consists of Chairman, Board of Directors, Managing Director, General Manager, President, Vice President, Chief Executive Officer (C.E.O.), Chief Financial Officer (C.F.O.) and Chief Operating Officer, etc. It includes group of crucial persons essential for leading and directing the efforts of other people. The managers working at this level have maximum authority. Main functions of top-level management a1 (a) Determining the objectives of the enterprise. The top-level managers formulate the main objectives of the organization. They form long term as well as short term objectives. (b) Framing of plans and policies. The top-level managers also frame the plans and policies to achieve the set objectives. (©) Organizing activities to be performed by persons working at middle level. The top- level management assigns jobs to different individuals working at middle level. (@) Assembling all the resources such as finance, fixed assets, etc. The top-level management arranges all the finance required to carry on day to day activities. They buy fixed assets to carry on activities in the organization. (e) Responsible for the welfare and survival of the organization—Top level is responsible for the survival and growth of the organization, They make plan to run the organization smoothly and successfully Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 15 @ EAST WESTManagement and Organizational Behavior (20MBAI1) y (f) Liaison with the outside world, for example, meeting Government officials, etc. ‘The top-level management remains in contact with government, competitors, suppliers, media, etc. Jobs of top-level are complex and stressful demanding long hours of commitment towards organisation (g) Welfare and survival of the organization, Middle-Level Management: This level of management consists of departmental heads such as purchase department head, sales department head, finance manager, marketing manager, executive officer, plant superintendent, etc. People of this group are responsible for executing the plans and policies made by top level. They act as a linking pin between the top and lower-level management. They also exercise the functions of top-level for their department as they make plans and policies for their department, organize and collect the resources, etc. Main functions of middle-level management are: (a) Interpretation of policies framed by top management to lower level. Middle-level management act as linking pin between top-level and lower-level management. They only explain the main plans and policies framed by top-level management to lower levels, (b) Organizing the activities of their department for executing the plans and poli Generally middle-level managers are the head of some departments. So they organize all the resources and activities of their department, (©) Finding out or recruiting/selecting and appointing the required employees for their department. The middle-level management selects and appoints employees of th department. (a) Motivating the persons to perform to their best ability. The middle-level managers offer various incentives to employees so that they get motivated and perform to their best ability (c) Controlling and instructing the employees, preparing their performance reports, etc. The middle-level managers keep a watch on the activities of low-level managers. ‘They prepare their performance appraisal reports. (f) Cooperate with other departments for smooth functioning. (g) Implementing the plans framed by the top level. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 16 @ EAST WESTManagement and Organizational Behavior (20MBAI1) > Supervisory Level/Operational Level: This level consist of supervisors, superintendent, foreman, sub-department executives; clerk, etc. Managers of thi ‘group actually carry on the work or perform the activities according to the plans of top and middle-level management, Their authority is limited, The quality and quantity of output depend upon the efficiency of this level of managers. They pass on the instruction to workers and report to middle-level management. They are also responsible for maintaining discipline among the workers. Funct ns of lower-level management are: (a) Representing the problems or grievances of workers before the middle-level management. The supervisory level managers are directly linked with subordinates so they are the right persons to understand the problems and grievances of subordinates. They pass these problems to middle-level management. (b) Maintaining good working conditions and developing healthy relations between superior and subordinate. The supervisory managers provide good working conditions and create a supportive work environment that improves relations between supervisors and subordinates. (©) Looking at the safety of workers. Supervisory level managers provide safe and secure work environment for workers. (d) Helping the middle-level management in recruiting, selecting and appointing the workers, The supervisory level managers guide and help the middle-level managers when they select and appoint employees. (©) Communicating with workers and welcoming of their suggestions, The supervisory level managers encourage the workers to take initiative. They welcome their suggestions and reward them for good suggestions. (f) They try to maintain a precise standard of quality and ensure steady flow of output. The supervisory level managers make sure that quality standards are maintained by the workers. (g) They are responsible for boosting the morale of the workers and developing the team spirit in them. They motivate ‘the employees and boost their morale. (h) Minimizing the wastage of materials. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 17 @ EAST WESTManagement and Organizational Behavior (20MBAI1) MANAGERIAL ROLES: To achieve results, they shift gears and restructure and reorganize things continually. ‘The diverse roles played by managers in discharging their duties have been summarized by Henry Mintzberg in the late 1960s, under three broad headings: interpersonal roles, informational roles, and decisional roles. Let us understand them one by one. 1. Interpersonal roles: ‘Three interpersonal roles help the manager keep the organization running smoothly. Managers play the figurehead role when they perform duties that are ceremonial and symbolic in nature. These include greeting the visitors, attending social functions involving their subordinates (like weddings, funerals), handing out merit certificates to workers showing promise, etc. The leadership role includes hiring, training, motivating and disciplining employees. Managers play the liaison role when they serve as a connecting link between their organization and others or between their units and other organizational units. Mintzberg described this activity as contacting outsiders who provide the manager with information. Such Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 18 @ EAST WESTManagement and Organizational Behavior (20MBAI1) activities like acknowledgments of mail, external board work, ete., are included in this category. 2, Informational roles: Mintzberg mentioned that receiving and communicating information are perhaps the most important aspects of a manager’s job. In order to make the right decisions, managers need information from various sources. Typically, this activity is done through reading magazines and talking with others to learn about changes in the customers” tastes, competitors’ moves and the like. Mintzberg called this the monitor role. In the disseminator role, the manager distributes important information to subordinates that would otherwise be inaccessible to them. Managers also perform the spokesperson role when they represent the organization to outsiders. 3. Decis inal roles: There are four decision roles that the manager adopts. In the role of entrepreneur, the manager tries to improve the unit. He initiates planned changes to adapt to environmental challenges. As disturbance handlers, managers respond to situations that are beyond their control such as strikes, shortages of materials, complaints, grievances, etc. In the role of a resource allocator, managers. are responsible for allocating human, physical and monetary resources. As negotiators, managers not only mediate in internal conflicts but also carry out negotiations with other units to gain advantages for their own unit. Management Skills _ by Robert L. Katz Tor. MANAGEMENT MIDDLE (MANAGEMENT FIRST-LINE MANAGEMENT SKILLS FOR MANAGERS: Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 19 & EAST WESTManagement and Organizational Behavior (20MBAI1) 1. oy 3. 1. Conceptual Skills: Conceptual skills are the ability to think about the creative terms understand and visualize the future, organize and translate observation into ideas & concepts. Conceptual skills are essential to identify and diagnose the problems. This will help in determining the goals. Analytical Skills: (Decision making] Analytical skills mean the ability to work out a complex problem or situation into component. Analytical skills are required for solving problems and decision making. This is also helpful for evaluation of performance and arriving at judgment. Human relation Si Human relation skills represent the ability to understand the ion to behavior of people, their problems, their needs, working conditions and moti people. These skills are essential in directing the people and for better coordination. Administrative Skills: It involves the implementation of the plan and use of available resources to get the desired output that is profit and to regularize a performance in orderly manner. It is also helpful in the coordination of activities. ‘Technical Skills: These skills are essential for first-line managers. He requires knowledge of a job, ability to apply the methods and techniques of job. He is responsible for providing technical guidance and instructions to subordinates. Computer Skills: Computer knowledge is essential for today’s manager ie knowledge of hardware & software, Hardware is a technical term & software is ability to adapt the system in an organization to attempt goals. In modem days computer is widely used in organization, Hence today’s’ manager should possess the knowledge of computer. This is helpful in decision making. It also helps to increase productivity in the organization. ‘Communication Skills: Communication is a systematic process of telling, lis ing, and understanding. This skill requires the ability to listen and speak in an effective manner. The manager is responsible for getting things done by others. He should be expert in oral and written communication. Communication skill is essential for getting success. It depends upon the manager who achieves the results with efforts of others. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 20 @ EAST WESTManagement and Organizational Behavior (20MBAI1) Co-ordination can be attained with the help of proper communication. S depends upon proper communication. Managerial Competencies Managerial competencies are the skills, motives and attitudes necessary to a job, and include such characteristics as communication skills, problem solving, customer focus and the ability to work within a team. Management competencies are the skills, habits, motives, knowledge and attitudes necessary to successfully manage people. When developed, management competencies promote better leadership and contribute to business success. Management competencies are categorized as human capital which is broadly defined as the knowledge and skills that contribute to workplace productivity. The human assets needed for managerial competency are necessary for a productive workforce. 1. Interpersonal communication This skill involves the ability to identify, understand, and anticipate the emotions, concerns and thoughts of others. It requires the ability to empathize and communicate effectively. Interpersonal awareness allows you to read other people’s feelings based on their nonverbal behavior, tone of voice and choice of words. 2. Motivating others Good leaders are effective at rallying people together to achieve common goals. Using interpersonal skills, they can understand what motivates people and use that to encourage productivity. 3. Written communication ‘Written communication is the ability to effectively communicate with the written word. It can involve the use of proper grammar, spelling and punctuation. Additionally, excellent written communicators write in a way that is understandable and clear too many people. 4, Honesty/integrity Good managers display behavior that is ethical, honest, and humane. They serve as a role model for others and perform actions that demonstrate their values. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 21 EAST WESTManagement and Organizational Behavior (20MBAI1) 5. Problem Solving All leaders have to solve problems eventually. Good problem solvers take proactive approaches to address issues and avert conflict whenever it emerges. They empower employees to seek information that improves their ability to develop and assess a variety of potential solutions. When problems arise, good problem solvers are quick to prevent escalation of conflict between employees. 6. Developing others Being able to see the potential in others is an important quality of a great leader. Natural born leaders wish to help people grow and develop their skills. Every employee has different experiences, beliefs, goals and values. Great leaders treat every person with unique care. iB Having a vision i 7. Vision/plam the ability to outline a clear and vivid plan to accomplish shared objectives. Effective leaders form a long-term view and share their vision with others. They encourage others to take actions that get the team closer to accomplishing their goals. By doing this, they catalyze organizational change. 8. Creativity/innovation Creatives are open to new ideas and innovation, They are willing to question the status quo approaches and implement new processes when necessary. Creative people can see problems from new perspectives and generate helpful insights into problems. 9. Conflict resolution At some point, conflict is bound to arise between employees. It is a leaders duty to find resolutions that satisfy everyone involved in a conflict. Unresolved conflicts can harm relations and impact the organizational culture, so it is important for leaders to develop this capacity. 10. Delegation Effective leaders understand that they can’t do all the work alone. They know that they need other people to accomplish goals. By capitalizing on the expertise of others, they are rapidly able to accomplish goals because they know who is the best fit for each task, They distribute tasks effectively by recognizing the strengths of others. EVOLUTION OF MANAGEMENT THOUGHT: The origin of Evolution management can be traced back to the days when man started living in groups. History reveals that strong men organized the masses into groups according to Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 22 @ EAST WESTManagement and Organizational Behavior (20MBAI1) their intelligence, physical and mental capabilities. Evidence of the use of the well- recognized principles of management is to be found in the organization of public life in ancient Greece, the organization of the Roman Catholic Church and the organization of military forces. Thus management in some form or the other has been practiced in the various parts of the world since the dawn of civilization, With the onset of the Industrial Revolution, however, the position underwent a radical change. The structure of industry became extremely complex. At this stage, the development of a formal theory of management became absolutely necessary. It was against this background that the pioneers of modern management thought laid the foundations of modern management theory and practice. ‘The formal study of management is largely a twentieth-century phenomenon, and to some degree, the relatively large number of management approaches reflects a lack of consensus among management scholars about basic questions of theory and practice. EVOLUTION OF MANAGEMENT THOUGHT PRE-SCIENTIFIC (CLASSICAL THEORY ‘NEO. ‘MODERN MANAGEMENT © Scientific CLASSICAL THEORY PERIOD ‘Management THEORY © Systems Contributions made by © Adoinistative Hawthrone Approach © Roman ‘Management + Experiment | | * Contingency Catholic ‘Theory Approach ‘Church © Bureaveratic * Military Model (Organizations © Writers like Charles Babbage, James Watt ec > THE CLASSICAL APPROACH: The classical approach is the oldest formal approach to management thought. Its roots predate the twentieth century. The classical approach of thought generally concerns ways to manage work and organizations more efficiently. Three areas of study that can be grouped under the classical approach are scientific management, administrative management, and bureaucratic management. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 23 & EAST WESTS -¢-) Management and Organizational Behavior (20MBAI1) SS EAST WEST Scientific Management: Frederick Winslow Taylor is known as the father of sciemtific management. Scientific management (also called Taylorism or the Taylor system) is a theory of management that analyzes and synthesizes workflows, with the objective of improving labor productivity. In other words, Tra jonal rules of thumb are replaced by precise procedures developed after careful study of an individual at work. * Administrative Management: Administrative management focuses on the management process and principles of management. In contrast to scientific management, which deals largely with jobs and works at the individual level of analysis, administrative management provides a more general theory of management. Henri Fayol is the major contributor to this approach of management thought, + Bureaueratie Management: Bureaucratic management focuses on the ideal form of organization, Max Weber was the major contributor to bureaucratic management. Based on observation, Weber concluded that many early organizations were inefficiently managed, with decisions based on personal relationships and loyalty. He proposed that a form of organization, called a bureaucracy, characterized by division of labor, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead t0 more efficient management. Weber also contended that managers’ authority in an organization should be based not on tradition or charisma but on the position held by managers in the organizational hierarchy. > THE BEHAVIORAL APPROACH: The behavioral approach of management thought developed, in part, because of perceived weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency, process, and principles. Some felt that this emphasis disregarded important aspects of organizational life, particularly as it related to human behavior. Thus, the behavioral approach focused on tying to understand the factors that affect human behavior at work. ++ Human Relations: The Hawthorne Experiments began in 1924 and continued through the early 1930s. A variety of researchers participated in the studies Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 24Management and Organizational Behavior (20MBAI1) including Elton Mayo. One of the major conclusions of the Hawthorne studies was that workers’ attitudes are associated with productivity. Another was that the workplace is a social system and informal group influence could exert a powerful effect on individual behavior. A third was that the style of supervision is an important factor in increasing workers’ job satisfaction. Behavioral Science: Behayioral science and the study of organizational behavior emerged in the 1950s and 1960s. The behavioral science approach was a natural progression of the human relations movement. It focused on applying conceptual and analytical tools to the problem of understanding and predicting behavior in the workplace. The behavioral science approach has contributed to the study of management through its focus on personality, attitudes, values, motivation, group behavior, leadership, communication, and conflict, among other issues. > THE QUANTITATIVE APPROACH: The quantitative approach focuses on improving decision making via the application of quantitative techniques. Its roots can be traced back to scientific management. ‘+ Management Science (Operations Research): Management science (also called operations research) uses mathematical and statistical approaches to solve management problems. It developed during World War Il as strategists tried to apply scientific knowledge and methods to the complex problems of war, The industry began to apply management science after the war. The advent of the computer made many management science tools and concepts ‘more practical for industry. ‘© Production And Operations Management: This approach focuses on. the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an identifiable area of management study after World War II. It uses many of the tools of management science. Operations management emphasizes the productivity and quality of both manufacturing and service organizations. W. Edwards Deming exerted a ‘tremendous influence in shaping modem ideas about improving productivity and quality. Major areas of study within operations management include Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 25 @ EAST WESTManagement and Organizational Behavior (20MBAI1) capacity planning, facilities location, facilities layout, materials requirement planning, scheduling, purchasing, and inventory control, quality control, computer integrated manufacturing, just-in-time inventory systems, and flexible manufacturing systems. > SYSTEMS APPROACH: The simplified block diagram of the systems approach is given below. ‘The systems approach focuses on understanding the organization as an open system that transforms inputs into outputs. The systems approach began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems approach focuses on the organization as a whole, its interaction with the environment, and its need to achieve equilibrium, > =— = eT a Cl Tde CONTINGENCY APPROACH: The contingency approach focuses on applying management principles and processes as dictated by the unique characteristics of each v situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organizational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize the classical approach for its emphasis on the universality of management principles; however, most classical writers recognized the need to consider aspects of the situation when applying management principles, Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 26 @ EAST WEST@ EAST WEST -¢-) Management and Organizational Behavior (2OMBAI1) CONTRIBUTION OF HENRY FAYOL FW. Taylor and Henry Fayol are generally regarded as the founders of scientific management and administrative management and both provided the bases for science and art of management. FAYOL’S FOURTEEN PRINCIPLES OF MANAGEMENT: 1) Division of Work (specialization):- A business activity carried out by small scale may be managed & controlled by proprietor. As business expands, activities grow & need more people to control those activities. The organization is jointly managed by a group of people. Fayol has advocated division of work to take advantage of specialization. 2) Authority & Responsibility: his position in the organization. It may be for taking decision, spending money or in Authority represents a power enjoyed by a person of many other ways. Responsibility is obligation created upon a person for the use of authority, which is entrusted to him. These two terms are co-related. Fayol suggested that there must be balance between authority & responsibility. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 27Management and Organizational Behavior (20MBAI1) 3) Discipline:- All the personnel serving in an organization must follow discipline. Discipline is obedience, application of behavior & energy shown by an employee. Discipline may be self -employed or command discipline. Discipline can be obtained lower remuneration, dismissal, demotion of position. While applying such circumstances proper proof should be taken into account, 4) Unity of Command:-Each employee should receive order from single superior. In the organization structure it should be clearly stated that who is responsible to whom? & who should receive order from whom? 5) Unity of Directio According to this principle each group of activity with some objective must have one head. There is a difference between unity of command & unity of direction. The direction is concerned with planning & unity of command is concermed with reporting. 6) Subordination of in idual interest to general interest:- In an organization individual interest should not be given any importance. The manager should always keep organizational interest before him & should determine such policies which will be beneficial to entire group & not just few personnel. It is responsibility to management to create common understanding between all. 7) Remuneratior -Every employee must be paid an adequate remuneration for his services. Remuneration should be fair & should provide maximum satisfaction to person who is working in the organization, Personal factors such as demand for labor, position of the labor & competition as well as cost of living index should be taken into account. General Economic Conditions should be considered while deciding the remuneration of an employee. In any case exploitation of the worker should be avoided. 8) Order:- Fayol has suggested that at one position one person should be appointed. Each person must have an appropriated position in organization. 9) Centralit hands of top-level management. It may be centralized or decentralized. There are ttion:- It means the extent to which authority should be concentrated in the Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 28 @ EAST WESTManagement and Organizational Behavior (20MBAI1) limitations of complete centralization & complete decentralization. Therefore, there should be a proper balance between these two. 10) Scalar Chain:- from highest level to lower level for communication. The scalar chain is the extract of (Straight line & Command) It shows the straight line of authority organization chart & shows the responsibility or position of everybody in an organization. 11) Stability of Tenu so that the labor tumover can be low by keeping check on administrative cost of Effort must be made to keep the employee stuck to organization organization. Care must be taken to satisfy the staff otherwise there will be bad effect & loss of labor. 12) Equity:-Equity is combination of justice & kindness; equity in treatment & behavior s liked by everyone & it brings loyalty in the organization. 13) Initiative:- Within the limits of authority & discipline managers should encourage their employees for taking initiative. Initiative is concern with thinking. Thinking leads to execution of plan. The initiative increases energy on the part of human beings. 14) Esprit De Corp: who is responsible to maintain high morale between all workers. It may be possible -This is a French term, It means manager is like a captain of a team through effective communication among all persons in organization. His understanding & differences in opinions should not be harmful. The best way of taking such situation is to establish dialogue between parties. The participation of workers in the process of decision making is important. RECENT TRENDS IN MANAGEMENT: Recent trends in management refer to the latest managerial practices that managers use to effectively manage their employees. As the market situation evolves, the managerial trends also evolve and change, These changes are subject to the market conditions of that time period. The most popular recent trends in management are Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 29 EAST WESTManagement and Organizational Behavior (20MBAI1) Flattening organization structures The days of the “hero” leader, or “the smartest person in the room” who must know everything and micromanage his or her direct reports will be a thing of the past. Organizations are moving towards flatter structures and they will need leaders who can thrive in a collaborative and cross-functional environment. ‘Flatter’ organizations tend to benefit from improved communication between employees, increased morale, less bureaucracy, and the ability to make decisions and changes faster. Typically, employees’ responsibility levels tend to be much higher in flatter organizations, thus improving job satisfaction and reducing the need for excess levels of management. As we move through 2021 and towards next year, we will begin to see a shift in the hierarchy structure of many companies, particularly those in creative industries, and start ups. 2. Increasing need to develop self & others To keep on top of the rapidly changing technological environment, leaders can no longer sit back and say “I know everything I need to know” as what they do know today will be outdated tomorrow. There is now a greater need to develop their self and their teams When comparing job culture to that of 10 years ago, there is less loyalty amongst employees to their employers, meaning employers need to do everything they can to keep the employees in the company as long as possible to improve staff turnover. A popular method is through offering additional development and training alongside the role. 3. Approaching the “Talent Cliff” Firms must prepare as the largest workforce in history moves into retirement. Mentoring, coaching, and job shadowing are examples of how organizations can manage the transition of the millennial leader. Many companies teetering on the edge of the talent cliff take the approach of hiring apprentice and enrolling in apprenticeship programmes, to allow those interested in the industry to gain hands on experience, and for companies to be able to increase their workforce in a way that inexpensively gives back to the community, but also positively impacts the business. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 30 @ EAST WESTManagement and Organizational Behavior (20MBAI1) 4. Striving for gender balance Strong women’s representation in leadership teams has been proven to bring organizations better results. A successful leadership development program thus needs to tap into an often woefully underutilized resource - its female managers. Achieving gender equality is important for workplaces not only because it is “fair” and ‘the right thing to do,” but because it is also directly linked to a country’s overall economic performance and therefore growth. Workplace gender equality is associated with: * Improved national productivity and economic growth * Increased organizational performance © Enhanced ability of companies to attract talent and retain employees © Enhanced organizational reputation. Many workplaces are actively striving to reach equality but also complete diversity amongst their workforce, a movement pushed forward largely by generation Z and millennials, 5. Shifting focus to development on soft skills As the role of a leader migrates towards managing teams of diverse members who have different technical skills and areas of expertise, there will be greater emphasis on the need for leaders to develop their “soft skills”. Whilst the focus in the past has been on ‘hard skills’ these types of skills include emotional intelligence, creativity, adaptability and time management. Employees can be taught “hard skills” such as the specific skills needed to carry out their role, however soft skills are learnt over time, and an employee failing in areas like time management could be detrimental to the business. Investing in the development of employees” soft skills training courses will result in an increase of leadership potent 1, satisfaction in the workplace, and work performance. 6. Adopting a blended approach to leadership and management development Leadership and management learning journeys. will also need to evolve and use a wide variety of modalities to prepare the modern leader with the skills they need to thrive. Using a blended approach to leadership development allows leaders to break up their courses into more manageable sessions of one to one/class tutoring, with some transportable materials such as online webinars, and on the go tutorials that leaders can easily fit into their day with Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 31 @ EAST WESTManagement and Organizational Behavior (20MBAI1) little disruption. The flexibility of blended learning makes it much easier to keep up as your business scales and grows, particularly nowadays when working from home and remote working is much more common, 7. Remote and flexible working It’s quite likely that at least one member of your team works remotely, whether they're a contractor or just somebody who needs to due to factors such as child care. Hamessing the power of the latest technology, social media and communication platforms early on, will allow your company to transition smoothly into remote working, should the time come. Remote working offers better flexibility, and better work life balance to your employees, it also opens up the ability to employ people from different backgrounds, and even counties, making the talent pool you're fishing from much richer, which in turn will help to grow your business. 8. Training Millennials Developing training strategies now to ensure millennials are well prepared for leadership is an important way to ensure smooth transitions once the next generations of employees (Gen Z) enter the workforce. It’s important to note that leadership styles have evolved with the ways of working and culture in many environments, and therefore the leadership styles that are taught should be aligned to this, It is often beneficial to seek training from sources outside an organization, to allow employees to bring fresh knowledge into a business, and put a different spin on habits that may have been used for years. 9. Outside Consultants Once a leader accepts that they don’t know, or need to know everything about their specialism, and may not have all the answers ,it opens up the opportunity to bring in external consultants to share their knowledge and experiences. Consultants are often hired to improve communication skills, collaboration and organizational skills, as well as skills specific to the job. 10. Artifici intelligence AL is gradually being developed and implemented to both augment and replace human customer service agents to save costs and reduce the needs for human customer service staff. Whilst these bots are able to answer basic questions, there is still a need for Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 32 EAST WESTManagement and Organizational Behavior (20MBAI1) of a customer services team in order to keep customers happy. Using bots to take away need to answer repetitive and simple questions will free up your team to put more focus on the more difficult questions, and ultimately keep your customers happy. yn Bank 1. Define Management. Discuss the functions of Management. Briefly explain nature, importance, scope and objectives of Management. What are the difference between Administration and Management? Explain the levels of Management with neat diagram. Write a short note on Managerial Competency. Discuss Henry Fayol”s Principles of Management. What are the skills set required to be a Manager? een awe wn Briefly explain the roles of a Manager. 10. Explain the recent trends in Management. 11, Write a short note on Evolution of Management Thought. Prof. Santhosh Kumar V, Assistant Professor, East West Institute of Technology, Bangalore Page 33Management and Organizational Behaviour (20MBA11) MODULE -2 FUNCTIONS OF MANAGEMENT Planning- Definition, Features, Nature, Importance, Types, Steps in Planning, Planning Tools and Techniques, Essentials of a Good Plan. Organi - Definitions, Importance, Principles, Types of Organisation Structures, Span of Control, Centralisation and Decentralisation of Authority. Directing- Definitions, Importance, Elements of Directing, Principles of Directing, Characteristics of Directing; Controlling- Definitions, Need of Controlling, Characteristics of Control, Steps in the Controlling Process, Resistance to Control, Design of Effective Control System, Types of Control, Control Techniques. Decision-making- Concepts, Types, Models, Difficulties in Decision-making, Decision- making for Organisational Effectiveness, Decision-making Styles. PLANNING INTRODUCTION A plan is a forecast for accomplishment. It is a predetermined course of action. It is today’s projection for tomorrow’s activity. In other words, to plan is to produce a scheme for future action, to bring about specified results at a specified cost, in a specified period of time. Management thinkers have defined the term, basically, in two ways: 1. Based on futurity: “Planning is a trap laid down to capture the future” (Allen). “Planning is deciding in advance what is to be done in future” (Koontz). “Planning is informed anticipation of future” (Haimann). “Planning is ‘anticipatory’ decision-making” (R.L. Ackofl). 2. As a thinking function: “Planning a thinking process, an organised foresight, a vision based on fact and experience that is required for intelligent action” (Alford and Beatty) “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.” (Koontz and O"Donnell) It is deciding in the present, what is to be done in future. It is the process of thinking before doing. A plan is a specific, documented intention consisting of an objective and an action statement. The objective portion is the end, and the action statement represents the means to that end. Stated another way, objectives give management targets to shoot at, whereas action statements provide the arrows for hitting the targets. Properly conceived plans tell what, where and how something is to be done. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 1 @ EAST WESTManagement and Organizational Behaviour (20MBA11) DEFINITIONS According to ‘Koontz and O’Donell’:- “Planning is an intellectual process, the conscious determinatory of courses of action, the basing of decisions on purpose, facts 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.” According to ‘George Terry’:-"The selection & relating of facts & the making & using of assumptions regarding the future in the visualization & formulation of proposed activities believed necessary to achieve the desired results.” FEATURES/ CHARACTERISTICS OF PLANNING 1. Planning is goal-oriented. Planning is made to achieve desired objective of business. The goals established should general acceptance otherwise individual efforts & energies will go misguided and misdirected. Planning identifies the action that would lead to desired goals quickly & economically. It provides sense of direction to various activities. 2. Planning is looking ahead. Planning is done for future. It requires peeping in future, analyzing it and predicting it. ‘Thus planning is based on forecasting. A plan is a synthesis of forecast. It is a mental predisposition for things to happen in future. Planning is an intellectual process. Planning is a mental exercise involving creative thinking, sound judgement and imagination, It is not a mere guesswork but a rotational thinking. A manager can prepare sound plans only if he has sound judgement, foresight and imagination. Planning is always based on goals, facts and considered estimates. 4, Planning involves choice & decision making. Planning essentially involves choice among various alternatives. Therefore, if there is only one possible course of action, there is no need planning because there is no choice. Thus, decision making is an integral part of planning. A manager is surrounded by no. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 2 @ EAST WESTManagement and Organizational Behaviour (20MBA11) of alternatives. He has to pick the best depending upon requirements & resources of the enterprises. Planning is the primary function of management Planning lays foundation for other functions of management. It serves as a guide for organizing, staffing, directing and controlling. All the functions of management are performed within the framework of plans laid out. Therefore, planning is the basic or fundamental function of management. Planning is a Continuous Process. Planning is a never ending function due to the dynamic business environment. Plans are also prepared for specific period f time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions. Planning never comes into end till the enterprise exists issues, problems may keep cropping up and they have to be tackled by planning effectively. Planning is all Pervasiv Itis required at all levels of management and in all departments of enterprise. Of course, the scope of planning may differ from one level to another. The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same Planning is designed for efficiency. Planning leads to accomplishment of objectives at the mi num possible cost. It avoids ‘wastage of resources and ensures adequate and optimum utilization of resources. A plan is worthless or useless if it does not value the cost incurred on it. Therefore, planning must lead to saving of time, effort and money. Planning leads to proper utilization of men, money, materials, methods and machines. Planning is Flexible. Planning is done for the future. Since future is unpredictable, planning must provide enough room to cope with the changes in customer’s demand, competition, govt. policies etc. Under changed circumstances, the original plan of action must be revised and updated to make it more practical. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 3 @ EAST WESTManagement and Organizational Behaviour (20MBA11) IMPORTANCE OF PLANNING 2. Planning provides directions: Planning assures that the objectives are certainly asserted so that they serve as a model for determining what action should be taken and in which direction. If objects are well established, employees are informed of what the company has to do and what they need do to accomplish those purposes. Planning decreases the chances of risk: Planning is an activity which permits a manager to look forward and predict changes. By determining in prior the tasks to be completed, planning notes the way to deal with changes and unpredictable effects. Planning decreases overlapping and wasteful activities Planning works as the foundation of organising the activities and purposes of distinct branches, departments, and people. It assists in avoiding chaos and confusion. Since planning guarantees precision in understanding and action, work is conducted on easily without delays, Planning encourages innovative ideas: Since it is the primary function of management, new approaches can take the form of actual plans. It is the most challenging project for the management as it leads all planned actions pointing to growth and of the business. Planning aids decision making: It encourages the manager to look into the future and make a decision from amongst several alternative plans of action, The manager has to assess each option and pick the most viable plan. Planning Set standards for controlling: Planning provides standards against which actual performance is measured. Without standards, the actual performance of each individual, department, and division cannot be measured. With the help of standards, deviations in the performance are found and such deviations become the basis of effective planning for future planning. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 4 @ EAST WEST— Management and Organizational Behaviour (20MBA11) TYPES OF PLANNING Strategic Planning: Tactical Planning: — The setti The identification of setting of broad, long- if range goals by top tives by | managers. 2 ; Strategic A strategic plan is the company’s big picture. It defines the company’s goals for a set period of time, whether that’s one year or ten, and ensures that those goals align with the company’s. mission, vision, and values. Strategic planning usually involves top managers, although some smaller companies choose to bring all of their employees along when defining their mission, vision, and values. Tactical ‘The tactical strategy describes how a company will implement its strategic plan. A tactical plan is composed of several short-term goals, typically carried out within one year, that support the strategic plan. Generally, it’s the responsibility of middle managers to set and oversee tactical strategies, like planning and executing a marketing campaign. Operational Operational plans encompass what needs to happen continually, on a day-to-day basis, in order to execute tactical plans. Operational plans could include work schedules, policies, rules, or regulations that set standards for employees, as well as specific task assignments that relate to Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 5 & EAST WESTManagement and Organizational Behaviour (20MBA11) goals within the tactical strategy, such as a protocol for documenting and addressing work absences. Contingency Contingency plans wait in the wings in case of a crisis or unforeseen event. Contingency plans, cover a range of possible scenarios and appropriate responses for issues varying from personnel planning to advanced preparation for outside occurrences that could negatively impact the business. Companies may have contingency plans for things like how to respond to a natural disaster, malfunctioning software, or the sudden departure of a C-level executive. STEPS IN PLANNING Identification Poee Temi Establishing Oa raven Objectives Sentisy pcr ener (substitute) en nN ees ran STN Cay rola) 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 & extemal 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 Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 6 EAST WESTManagement and Organizational Behaviour (20MBA11) 6. process. Once the objectives are fixed it is necessary to ize objectives for various department. * Ex. 1. Increase sales by 30% or 40%. * Provide better working conditions to workers. ‘* Reduction in cost of production by 25%. 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. Determining Alternative Cou In this step various possible course of action or plans are developed to achieve a particular object. 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. 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 eachsection or division of the enterprise. 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. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 7 EAST WEST@ Management and Organizational Behaviour (20MBA11) ESSENTIALS OF A GOOD PLAN 1. Itshould define objectiv Objectives are the ultimate goals towards which all activities are directed. A statement which lays down objectives should be clear and definite and everyone in the organisation should understand it in the same sense. It should be simple: If plan is expressed in a language which is not understandable by the personnel of the concern or it is complicated, it may create problems for those who are to actually put it into action. 3. It should be clear: A good plan must not contain anything that is ambiguous or indefinite. 4, It should be comprehensive: A good plan should contain all that is necessary for the attainment of the objectives of the enterprise. If a master plan is prepared for the whole organisation it will be more useful as it can be seen that nothing is left from it, 5. It should be fle: A flexible plan adjusts the changes in the plans without any delay. Hence a plan must not be rigid. A plan should be broad enough to meet the future challenges and uncertainties. 6. It should be economical: A plan should be. =—smade_~—keeping = in. mind the resources available with the concern and making optimum utilisation of the available resources. In other words, a plan must recover its cost and should result in the least operating cost. 7. Itshould establish standards: A plan must lay down the standards to be achieved. The actual performance is compared with these standards and deviations if any are noted. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 8& @® Management and Organizational Behaviour (20MBA11) cA eer 8. It should be balanced: Itis necessary ensure that there is a proper coordination between different types of plans such as short-term and long term plans, “plans of different departments etc. A business enterprise usually has a number of department's viz., production, marketing, finance etc, Each department frames its own plans. Itis for the management to see that all these plans are well balanced. It should be practicable: A plan is worth only if itis practically workable and realistic. It should be formulated keeping in view the limitations of planning. If a plan is good in theory but bad in practice, it is of no use, Similarly, if the desired results are not achieved by a plan, it leads to frustration at all levels in the organisation. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 9Management and Organizational Behaviour (20MBA11) ORGANISATION INTRODUCTION Organizing is a process of co-coordinating employee's activities in an orderly manner. It is a managerial job. It specifies how work or duties shall be divided among the departments in the company, the policies to be followed while accomplishing the objectives, the scope and limits of responsibilities and the relationship of one job to another etc Organization defines the relationship between person to person, position to position, job to job and so on. It specifies orderly communication between various levels of responsibilities. It defines their authority and responsibility in a formal manner. DEFINITIONS Koontz and O’Donnell, ‘The establishment of authority relationships with provision for co- ordination between them, both vertically and horizontally in the enterprise structure.” Louis Allen, “Organization is the process of identifying and grouping work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives.” L.H. Haney, “Organization is a harmonious adjustment of specialized parts for accomplishment of some common purpose or purposes.” Chester Bernard, “Organization is a system of consciously coordinate activity of two or more persons.” IMPORTANCE 1. Efficient Administration- It brings together various departments by grouping similar and related jobs under a single specialization. This establishes coordination between different departments, which leads to unification of effort and harmony in work. It governs the working of the various departments by defining activities and their authority relationships in the organizational structure. It creates the mechanism for management to direct and control the various activities in the enterprise. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 10 @ EAST WESTManagement and Organizational Behaviour (20MBA11) job-fit for every employee in the organization. It helps in avoiding confusion and delays, as well as duplication of work and overlapping of effort. \d sub-divide the 3. Benefits Specialization- It is the process of organizing groups various ctivi and jobs based on the concept of division of labor. This helps in the completion of maximum work in minimum time ensuring the benefit of specialization, 4, Promotes Effective Communication Organizing is an important means of creating coordination and communication among the various departments of the organization. Different jobs and positions are interrelated by structural relationship. It specifies the channel and mode of communication among different members. 5. Creates Transparency- The jobs and activities performed by the employees are clearly defined on the written document called job description which details out what exactly has to be done in every job. Organizing fixes the authority-responsibility among employees. This brings in clarity and transparency in the organization. 6. Expansion and Growth- When resources are optimally utilized and there exists a proper division of work among departments and employees, management can multiply its strength and undertake more activities. Organizations can easily meet the challenges and can expand their activities in a planned manner. 7. Adaptation to Change- Organizing process makes the organization capable of adapting to any change connected with the post of the employees. This becomes possible only because of the fact that there is a clear scalar chain of authority for the manager's right from the top to the lower level. 8. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every manager is clear. Co-ordination is possible. Therefore, clarity of powers helps automatically in increasing mental s: isfaction and thereby a sense of security. This is very important for job- satisfaction, 9. Clarifies authority - Organizational structure helps in clarifying the role positions to every manager. This can be done by clarifying the powers to every manager and the way he has to exercise those powers should be clarified so that misuse of powers do not take place. Well defined jobs and responsibilities attached helps in bringing efficiency into managers working. This helps in increasing productivity. 10. Well defined jobs Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 11 @ EAST WEST@ Management and Organizational Behaviour (20MBAI1) EAST WEST ‘qualifications, skill and experience. This is helping in defining the jobs properly which clarifies the role of every person. PRINCIPLES 1. Work Specialization- Also called division of labor, work specialization is the degree to which org: tional tasks are divided into separate jobs. Each employee is trained to perform specific tasks related to their specialized function, The groups are structured based on similar skills. Activities or jobs tend to be small, but workers can perform, them efficiently as they are specialized in it, Authority- Authority is the legitimate power assigned to a manager to make decisions, issue orders, and allocate resources on behalf of the organization to achieve organizational objectives. Authority follows a top-down hierarchy. Roles or positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom. 3. Chain of Command- The chain of command is an important concept to build a robust organization structure. It is the unbroken line of authority that ultimately links each individual with the top organizational position through a managerial position at each successive layer in between, A chain of command enforces responsibility and Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 12@® Management and Organizational Behaviour (20MBAI1) EAST WEST accountability. It is based on the two pi ciples of Unity of command and Scalar Principle. 4, Delegation- Another important concept closely related to authority is delegation. It is, the practice of turing over work-related tasks and/or authority to employees or subordinates. Authority is said to be delegated when discretion is vested in a subordinate by a superior. Delegation is the downward transfer of authority from a manager to a subordinate. 5. Span of Control- Span of control (also referred to as Span of Management) refers to the number of employees who report to one manager. Itis the number of direct reportees that a manager has and whose results he is accountable for. The span may be wide or narrow. A wide span of control exists when a manager has a large number of employees reporting to him. Such a structure provides more autonomy. A narrow span of control exists when the number of direct reportees that a manager has is small. Narrow spans allow managers to have more time with direct reports, and they tend to spark professional growth and advancement, TYPES OF ORGANISATION STRUCTURES Hierarchical structure Functional structure Horizontal or flat structure Divisional organizational structures i, Product-Based Divisional Structure ii, Market-Based Divisional Structure |. Geographical Divisional Structure 5. Process-Based Structure 6. Project based structure 7.. Matrix Structure 8. Circular structure 9, Team-based organizational structure 10. Network Structure 11, Virtual organization 12. Boundary less organization eee Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 13& @ Management and Organizational Behaviour (20MBA11) eases HIERARCHICAL STRUCTURE eS Ea Ea = ‘The pyramid-shaped organizational structure is known as a hierarchical organizational structure. It’s the most common type of organizational structure—the chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and low-level employees) and each employee has a supervisor. ADVANTAGES, + Better defines levels of authority and responsibility + Shows who each person reports to or who to talk to about specific projects + Motivates employees with clear career paths and chances for promotion * Gives each employee a specialty + Creates camaraderie between employees within the same department DISADVANTAGES + Can slow down innovation or important changes due to increased bureaucracy + Can cause employees to act in interest of the department instead of the company as a whole + Can make lower-level employees feel like they have less ownership and can’t express their ideas for the company Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 14& Management and Organizational Behaviour (20MBA11) & pp FUNCTIONAL STRUCTURE Functional CEO = One of the most common types of organizational structures, the functional structure Marketing departmentalizes an organization based on common job functions. An organization with a functional org structure, for instance, would group all of the marketers together in one department, group all of the salespeople together in a separate department, and group all of the customer service people together in a third department. The functional structure allows for a high degree of specialization for employees. Also this structure is mechanistic in nature which has the potential to inhibit an employee's growth putting staff in skill-based departments can still allow them to delve deep into their field and find out what they're good at. ADVANTAGES, + Allows employees to focus on their role + Encourages specialization + Help teams and departments feel self-determined + Is easily scalable in any sized company DISADVANTAGES + Can create silos within an organization + Hampers interdepartmental communication + Obscures processes and strategies for different markets or products in a company Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 15& @ Management and Organizational Behaviour (20MBA11) EAST WEST HORIZONTAL OR FLAT STRUCTURE Employee Employee Employee © Employee Employee Employee Employee A horizontal or flat organizational structure fits companies with few levels between upper management and staff-level employees. Many start-up businesses use a horizontal structure before they grow large enough to build out different departments, but some organizations maintain this structure since it encourages less supervision and more involvement from all employees. ADVANTAGES + Gives employees more responsibility + Fosters more open commu ation + Improves coordination and speed of implementing new ideas DISADVANTAGES + Can create confusion since employees do not have a clear supervisor to report to + Can produce employees with more generalized skills and knowledge + Can be difficult to maintain once the company grows beyond start-up status DIVISIONAL ORGANIZATIONAL STRUCTURES In divisional organizational structures, a company’s divisions have control over their own resources, essentially operating like their own company within the larger organization. Each division can have its own marketing team, sales team, IT team, etc. This structure works well for large companies as it empowers the various divisions to make decisions without everyone having to report to just a few executives Depending on the organization’s focus, there are a few variations: Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 16& Management and Organizational Behaviour (20MBAI1) EAST WEST PRODUCT-BASED DIVISIONAL STRUCTURE, tui laaesleastr se] tronics Home Goods | [Yummy Snacks Division Division Division In this case - a product-based divisional structure -- each division within the organization is dedicated to a particular product line. This type of structure is ideal for organizations with multiple products and can help shorten product development cycles. This allows small businesses to go to market with new offerings fast. MARKET-BASED DIVISIONAL STRUCTURE. Mou aE oss) CEO ‘Commercial ‘Dwsion Another variety of the divisional organizational structure is the market-based structure, wherein the divisions of an organization are based around markets, industries, or customer types. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 17Management and Organizational Behaviour (20MBA11) ‘The market-based structure is ideal for an organization that has products or services that are unique to specific market segments, and is particularly effective if that organization has advanced knowledge of those segments. This organizational structure also keeps the business constantly aware of demand changes among its different audience segments. GEOGRAPHICAL DIVISIONAL STRUCTURE CEO The geographical organizational structure establishes its divisions based on geography. More specifically, the divisions of a geographical structure can include territories, regions, or districts. This type of structure is best-suited to organizations that need to be near sources of supply and/or customers (¢.g. for deliveries or for on-site support). It also brings together many forms of business expertise, allowing each geographical division to make decisions from more diverse points of view. ADVANTAGES OF DIVISIONAL STRUCTURE + Helps large companies stay flexible + Allows for a quicker response to industry changes or customer needs + Promotes independence, autonomy, and a customized approach DISADVANTAGES OF DIVISIONAL STRUCTURE + Can easily lead to duplicate resources Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 18 EAST WEST© & Management and Organizational Behaviour (20MBA11) eerer + Can mean muddled or insufficient communication between the headquarters and its divisions + Can result in a company competing with itself PROCESS-BASED STRUCTURE CEO Research & Customer Order Development Acquisition Fulfilment Process-based organizational structures are designed around the end-to-end flow of different processes, such as “Research & Development,” "Customer Acquisition,” and "Order Fulfillment." Unlike a strictly functional structure, a process-based structure considers not only the activities employees perform, but also how those different activities interact with one another. The customer acquisition process can't start until you have a fully developed product to sell By the same token, the order fulfillment process can't start until customers have been acquired and there are product orders to fill Process-based organizational structure is ideal for improving the speed and efficiency of a business, and is best-suited for those in rapidly changing industries, as itis easily adaptable. ADVANTAGES. ‘+ Itis ideal for improving the speed and efficiency of a business * _best-suited for those in rapidly changing industries © easily adaptable. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 19Management and Organizational Behaviour (20MBA11) & EAST WEST DISADVANTAGES * can erect barriers between the different process groups. * leads to problems communicating and handing off work to other teams and employees. PROJECT BASED STRUCTURE Director Manager Manager Manager Project A Project B Project C Analysts F Anatyets Anatsts tet fies Ate a — ene Tee L tee Tete Highly dynamic and creative Project Coordination companies ~ such as software developers, architecture firms, special industrial equipment installation projects and event organization companies — typically use this structure. It’s characterized by a series of specialized employees, ready to compose a work team as needed. In each project, these collaborators report to a different leader. Once they complete the project, a manager assigns them a new project and leader. ADVANTAGES: Numerous advantages are associated with project-based organization: + Opportunity: Due to the close interactions between project tasks and strategies of the organization, its products and services are improved, which in tu increases the business value and thus, opportunities for innovations and improvements are also enhanced. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 20Management and Organizational Behaviour (20MBA11) Tact: The dynamic nature of a project allows its members to be exposed to different knowledge and skills. They get expertise in dealing with new and emerging challenges. Knowledge Management: An uninhibited flow of knowledge transfer is encouraged in project-based organizations. They create ‘lessons learned’ repositories in which they share and carry forward their experiences and knowledge to successive projects, thus improving the overall standard and quality of project performance. Effectiveness: The structural flexibility of PBOs facilitates the allocation of physical and human resources to endeavors that are of most benefit to the organization. Equality: The chances of internal politics and favoritism reduce to a great extent. Appraisals: Since the manager pays individual attention to each member of his team appraisals, and dedication of team members increases. Flexi The response time and flexibility improves because the manager has direct authority over project operations, DISADVANTAGES. A project team is meant for delivering results, preferably without anyone’s help. Isolation from other teams could prove to be a drawback. With less communication between teams, knowledge transfer might be a problem. When personnel keep shifting from one project to another, career continuity and professional growth of employees suffer. MATRIX STRUCTURE Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 21Management and Organizational Behaviour (20MBA11) Unlike the other structures we've looked at so far, a matri organizational structure doesn’ follow the traditional, hierarchical model. Instead, all employees (represented by the green boxes) have dual reporting relationships. Typically, there is a functional reporting line (shown in blue) as well as a product- based reporting line (shown in yellow). When looking at a matrix structure org chart, solid lines represent strong, direct-reporting relationships, whereas dotted lines indicate that the relationship is secondary, or not as strong, In our example below, it's clear that functional reporting takes precedence over product-based reporting. ‘The main appeal of the matrix structure is that it can provide both flexibility and more balanced dei ision-making (as there are two chains of command instead of just one). Having a single project overseen by more than one business line also creates opportunities for these business lines to share resources and communicate more openly with each other , things they might not otherwise be able to do regularly. ADVANTAGES + Allows supervisors to easily choose individuals by the needs of a project + Gives a more dynamic view of the organization + Encourages employees to use their skills in various cities aside from their original roles DISADVANTAGES + Presents a conflict between department managers and project managers + Can change more frequently than other organizational chart types Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 22 @ EAST WESTManagement and Organizational Behaviour (20MBA11) CIRCULAR STRUCTURE Circular Zo While it might appear drastically different from the other organizational structures, the circular structure still relies on hierarchy, with higher-level employees occupying the inner rings of the circle and lower-level employees occupying the outer rings. The leaders or executives in a circular organization aren't seen as sitting atop the organization, sending directives down the chain of command. Instead, they're at the center of the organization, spreading their vision outward. A circular structure is meant to promote communication and the free flow of information between different parts of the organization. The circular structure depicts all divisions as being part of the same whole. ADVANTAGES. © acircular structure is meant to promote communication and the free flow of information between different parts of the organization, © the circular structure depicts all divisions as being part of the same whole. DISADVANTAGES The circular structure can be confusing, especially for new employees. Unlike with a more traditional, top-down structure, a circular structure can make it difficult for employees to figure out who they report to and how they're meant to fit into the organization. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 23 @ EAST WEST& @ Management and Organizational Behaviour (20MBA11) EAST WEST TEAM-BASED STRUCTURE, Team-Based Organi Team-based organizational structures are made of teams working towards a common goal while working on their individual tasks. They are less hierarchical and they have flexible structures that reinforce problem-solving, decision-making and teamwork. A team organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem solving, cooperation, and giving employees more control. ADVANTAGES * Increases productivity, performance, and transparency by breaking down silos + Promotes a growth mindset + Changes the traditional career models by getting people to move laterally © Values experience rather than seniority + Requires minimal management + Fits well with agile companies with scrum or tiger teams DISADVANTAGES + Goes against many companies’ natural inclination of a purely hierarchical structure + Might make promotional paths less clear for employees Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 24& & Management and Organizational Behaviour (20MBAI1) wanteer NETWORK STRUCTURE. A network structure is often created when one company works with another to share resources or if your company has multiple locations with different functions and leadership. You might also use this structure to explain your company workflows if much of your staffing or services is outsourced to freelancers or multiple other businesses. ‘The structure looks nearly the same as the Divisional Structure. However, instead of offices, it might list outsourced services or satellite locations outside of the office. For example, if an employee needs help from a web developer for a blogging project and the ‘company's web developers are outsourced, they could look at this type of chart and know which office or which person to contact outside of their own work location. ADVANTAGES + Visualizes the complex web of onsite and offsite relationships in companies + Allows companies to be more flexible and agile * Give more power to all employees to collaborate, take initiative, and make decisions + Helps employees and stakeholders understand workflows and processes Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 25Management and Organizational Behaviour (20MBA11) DISADVANTAGES * Can quickly become overly complex when dealing with lots of offsite processes * Can make it more difficult for employees to know who has final s VIRTUAL ORGANIZATION A firm that contracts out almost all functions. The only function retained by the organization is the name and the coordination among the parties. A virtual organization might not even have permanent office. Virtual Corporation is a temporary network of independent companies—supplies, customers, even erstwhile rivals—linked by information technology to share skills, costs, and access to one another’s markets. It has neither central office nor organization chart; it has no hierarchy, no vertical Integration.” ‘Thus, virtual organization is a temporary alliance between two or more organizations that band together to undertake a specified venture. Recently, in telecommunication sector in India, many virtual organizations have been created to provide different services. BOUNDARY LESS ORGANIZATION Boundary less organization refers to an organization that eliminates traditional barriers between departments as well as barriers between the organization and the external environment. One form is the modular organization, in which all nonessential functions are outsourced. An example of a company that does this is Toyota. Strategic alliances constitute another form of boundary less design. In this form, similar to a joint venture, two or more companies find an area of collaboration and combine their efforts to create a partnership that is beneficial for both parties. Starbucks formed a highly successful partnership with PepsiCo to market its Frappuccino cold drinks. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 26 EAST WESTManagement and Organizational Behaviour (20MBA11) FORMAL AND INFORMAL ORGANISATION The fc ‘al organisation refers to the structure of jobs and positions with clearly defined functions and relationships as prescribed by the top management. This type of organisation is built by the management to realise objectives of an enterprise and is bound by rules, systems and procedures. Everybody is assigned a certain responsibility for the performance of the given task and given the required amount of authority for carrying it out. Informal organisation, which does not appear on the organisation chart, supplements the formal organisation in achieving organisational goals effectively and efficiently. The working of informal groups and leaders is not as simple as it may appear to be. Therefore, it is obligatory for every manager to study thoroughly the working pattern of informal relationships in the organisation and to use them for achieving organisational objectives. FORMAL ORGANISATION: When the managers are carrying on organising process then as a result of organising process an organisational structure is created (0 achieve system: ion of working and efficient util resources. This type of structure is known as formal organisational structure. Formal organisational structure clearly spells out the job to be performed by each individual, the authority, responsibility assigned to every individual, the superior- subordinate relationship, and the designation of every individual in the organisation. This structure is created intentionally by the managers for achievement of organisational goal, Features of Formal organisation: 1. The formal organisational structure is created intentionally by the process of organising. 2. ‘The purpose of formal organisation structure is achievement of organisational goal. 3. In formal organisational structure each individual is assigned a specific job. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 27@ Management and Organizational Behaviour (20MBA11) 4. In formal organisation every individual is assigned a fixed authority or decision: making power. 5. Formal organisational structure results in creation of superior-subordinate relations. 6. Formal organisational structure creates a scalar chain of communication in the organisation. Advantages of Formal Organisation: and smooth 1. Systematic Working: Formal organisation structure results in. systemati functioning of an organisation. 2. Achievement of Organisational Objectives: Formal organisational structure is established to achieve organisational objectives. 3. No Overlapping of Work: In formal organisation structure work is systematically divided among various departments and employees. So there is no chance of duplication or overlapping of work. 4, Co-ordination: Formal organisational structure results in coordinating the activities of various departments. 5. Creation of Chain of Command: Formal organisational structure clearly defines superior subordinate relationship, i.e., who reports to whom. 6. More Emphasis on Work: Formal organisational structure lays more emphasis on work than interpersonal relations. Disadvantages of Formal Organisation: 1. Delay in Action: While following scalar chain and chain of command actions get delayed in formal structure. 2, Ignores Social Needs of Employees: Formal organisational structure does not give importance to psychological and social need of employees which may lead to demotivation of employees, 3. Empha: on Work Only: Formal organisational structure gives importance to work only; it ignores human relations, creativity, talents, ete, Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 28 @ EAST WESTManagement and Organizational Behaviour (20MBA11) 'ORMAL ORGANI TION: In the formal organisational structure individuals are assigned various job positions. While working at those job positions, the individuals interact with each other and develop some social and friendly groups in the organis: mn, This network of social and friendly groups forms another structure in the organisation which is called informal organisational structure. The informal organisational structure gets created automatically and the main purpose of such structure is getting psychological satisfaction. The existence of informal structure depends upon the formal structure because people working at different job positions interact with each other to form informal structure and the job positions are created in formal structure. So, if there is no formal structure, there will be no job position, there will be no people working at job positions and there will be no informal structure. Features of informal organisation: (1) Informal organisational structure gets created automatically without any intended efforts of managers. (2) Informal organisational structure is formed by the employees to get psychological satisfaction. (3) Informal organisational structure does not follow any fixed path of flow of authority or communication. (4) Source of information cannot be known under informal structure as any person can communicate with anyone in the organisation, (5) The existence of informal organisational structure depends on the formal organisation structure. Advantages of Informal Organisation: 1. Fast Communicat informal structure does not follow scalar chain so there can be on: faster spread of communication. 2. Fulfills Social Needs: Informal communication gives due importance to psychological and social need of employees which motivate the employees. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 29 EAST WEST@ Management and Organizational Behaviour (20MBAI1) EAST WEST formal structure the top level managers can know the real feedback of employees on various policies and plans. 4, Strategic Use of Informal Organisation: Informal organisation can be used to get benefits in the formal organisation in the following way: * The knowledge of informal group can be used to gather support of employees and improve their performance. * Through grapevine important information can be transmitted quickly. By cooperating with the informal groups the managers can skillfully take the advantage of both formal and informal organisations. Disadvantages of Informal organisation: Spread Rumours: According to a survey 70% of information spread through informal organisational structure are rumors which may mislead the employees. 2. No Systematic Working: Informal structure does not form a structure for smooth working of an organisation, 3. May Bring Negative Results: If informal organisation opposes the policies and changes of management, then it becomes very difficult to implement them in organisation, 4, More Emphasis to Individual Interest : Informal structure gives more importance to satisfaction of individual interest as compared to organisational interest. Prof. CUDAYALAKSHMI, Assistant Professor, East West Institute of Technology, Bangalore Page 30S Management and Organizational Behaviour (20MBA11) & EAST WEST DIFFERENCE BETWEEN FORMAL AND INFORMAL ORGANISATION BASIS FOR COMPARISON Meaning Creation Purpose Nature Communication Control mechanism Focus on Authority Size FORMAL ORGANIZATION ‘An organization type in which the job of each member is clearly defined, whose authority, responsibility and accountability are fixed is formal organization. Deliberately by top management. To fulfill, the ultimate objective of the organization. Stable, it continues for a long time. Official communication Rules and Regulations Work performance Members are bound by hierarchical structure. Large INFORMAL ORGANIZATION An organization formed within the formal organization as a network of interpersonal relationship, when people interact with each other, is known as informal communication. Spontaneously by members. To satisfy their social and psychological needs. Not stable Grapevine Norms, values and beliefs Interpersonal relationship All members are equal. Small int Professor, East West Institute of Technology, Bangalore Page 31