INTRODUCTION TO MANAGEMENT It is the ability to see the entire organization and the The degree of concentration of authority should
The degree of concentration of authority should be based upon
Management is getting things done through other people.
- The process by which managers create, direct, maintain and
operative purposive organization through systematic co-
operative co-ordinated human effort.
MANAGEMENT AS PROCESS
Management is the process of guiding directing and unifying
human effort and activities for the realization of definite result.
Management process comprises several elements that include:
- Planning
-Organizing and staffing
-Directing and controlling
CHARACTERISTIC OF MANAGEMENT
Management is universal: management applies in every
situation. The functions of management are required at all
levels of organization and in all areas of the organization.
Management is purposeful: management exists for the
achievement of specific objectives.
Management is an integrative force: The essence of
management lies in the co-ordination of individual efforts into
a team effort.
Management is a social process: Management is done by
people, through people and for people. It is concerned with
interpersonal relations
Management is multidisciplinary: Management deals with
human behavior under dynamic environment. Managers
should have wide knowledge derived from different discipline.
Management is continuous process: management is an on-
going process
LEVELS OF MANAGEMENT
The levels of management in an organization depend on its
size technology and diversity in its range of production. The
different range of management is classified into four
categories;
 Top management
 Intermediate management
 Middle management
 Operating management
1.Top management
 It consists of the board of directors and the chief
executives. Their main functions include the
following;
 Analyses evaluate and deal with the
environmental forces.
 Establish overall long term goals and the policies
of the company.
 Appointment of the departmental and other key
executive.
 Execute the overall review and control on the
company’s operations
 Coordinates activities of the organization
2.Intermediate management
It comprises the divisional or departmental heads. Each is
responsible for the efficient and coordinated functioning of his
own department. They are concerned with priorities and
specific results.
3.Middle level management
It consists of deputy head of departments and sectional heads.
They serve as a link between the top management and the
operating management. Their main functions include;
 Interpret and explain policies framed by top
management
 Compile and issue detailed instructions regarding
operations of the company.
 Motive the supervisory management.
 Develop and train the supervisory and operative
personnel.
4.Supervisory management
It is the lowest levels of management. It consist of supervisors
foremen and sales officers. Their functions include
 Plan day to day production
 Assign jobs to workers and to make arrangements
for their training and development
 Arrange materials and tools and to maintain
machinery.
 Advise and assists workers by explaining work
procedures.
 Maintain discipline and good relations among
workers.
 Report feedback information and workers
problem to the top management.
SKILLS OF MANAGEMENT
Technical skills
It is the ability and knowledge in using the equipment,
techniques and procedures involved in performing certain task.
Human skill
This is the ability to work effectively with other people.
Conceptual skills
interrelationship between parts, the ability to visualize the maximum utilization of resources and personnel.
entire picture. Scalar Chain
IMPORTANCE OF MANAGEMENT It refers to the chainof superiors ranging from the ultimate
authority to the lowest level in the organization. There should
Accomplish group goals
be a clear line of authority ranging from top to bottom of the
Management is concerned with the conversion of diverse
organization.
resources and time into a useful enterprise.
Order
Efficient running of the organization
The arrangement of things and placement of people should be
Efficiency of an organization will depend on how far its
well established. These require precise knowledge human
management has been successful in providing leadership to its
requirements and resources.
subordinate workers.
Equity
Sound organization structure
The employees should be treated with justice and kindness.
Management establishes a sound organization that is in
Managers should be fair and impartial in their dealings with
accordance with the desired objectives.
the subordinates.
FUNCTIONS OF MANAGEMENT
Stability of Tenure of Personnel
1. PLANNING
Employees cannot work efficiently unless the job security is
Planning involves determining of objectives and selecting a
guaranteed.
course of action to achieve them. It consists of:
Initiative
 Determining of objectives.
Employees at all levels should be given an opportunity to
 Forecasting and choice of course of action. exercise initiative and exercise judgment.
 Formulation of policies, programs and budgets. Espirit de Corps
 Lying down of procedures and standards of This refers to harmony and mutual understanding among
performance. members of the organization.
2. ORGANISING
Organizing is the process of establishing harmonious PLANNING
authority-responsibility relationships among members of an Definitions:
organization. The process involves: Planning is a management function of anticipating the future
Determining and defining the activities required for the and consciously determining the future course of action to
achievement of objectives achieve the desired objectives.
 Grouping the activities into logical units. NATURE OF PLANNING
 Assigning the duties and activities to specific Goal-oriented
positions and people.GG Planning has no meaning unless it contributes in some positive
 Delegating the authority to these positions and way to the achievement of desired goals. All plans emanates
people. from objectives.
 Defining and fixing responsibilities for Primary Function
performance. Planning is the basis of management process. All other
 Establishing horizontal and vertical authority functions of management are designed to attain the goal set
relationship throughout the organization. under planning.
3. STAFFING All pervasive
Staffing is the process of filling all positions in the Planning is the function of each and every manager
organization with adequate and qualified personnel. It involves irrespective of the level and area of her/his operation; it is the
selection, appraisal and development of personnel to fit the job of all managers in all types ‘of organization.
role designed in the structure. An intellectual process
4. DIRECTING Planning is amental process involving imagination, foresight
Directing is a function of guiding, supervising motivating and and sound judgment. It is not wishful thinking and guesswork.
leading people towards the attainment of planned targets of Continuous process
performance. It involves the following activities: Planning is an on-going and dynamic exercise. As assumptions
 Issuing orders and instructions. and the events on which plans are based change old plans have
 Supervising people at work. to be revised or new ones have to be prepared.
 Motivating of workers. Forward looking
 Influencing the behavior of employees. All planning is done with the eye on the future. Planning
5. CONTROLLING involves looking ahead and preparing for the future.
It is the process of ensuring that the organization is moving in Integrated process
the desired direction. The steps include: Planning does not just happen, it has to be initiated. Planning
is a structured process and different plans constitute a
 Establishing standards for measuring work
hierarchy. Different plans are interdependent and interrelated.
performance.
Directed towards efficiency
 Measuring the actual performance and comparing
Planning has no relevance if it does not facilitate the
it with the standards.
achievement of objectives economically and efficiently.
 Finding variance between the two. Need and importance of planning
 Taking corrective actions for the deviations so as Planning is of paramount importance both for an organization
to ensure attainment of objectives. and an economy. Sound plans are essentials to effective
PRINCIPLES OF MANAGEMENT(henry Fayol) management, because they serve as guides to all management
Division of labour functions.
The work of an individual should be limited as far as possible Focuses attention on objective and results
to the performance of a single task.
Every organization exists to achieve certain objectives.
Authority and Responsibility Planning concentrates attention on the dominant goals of the
There should be parity between authority and responsibility. organization. It forces the members of the organization not to
This will ease the task assigned to individual in the get lost in the maze of routine activities and lose sight of the
organization. broad objectives for which the organization was established.
Discipline Reduces uncertainty and risk
Discipline in respect for agreements which are directed Uncertainty and change are inevitable and planning cannot
towards achievement of obedience. It must prevail throughout eliminate them. But planning enables an organization to cope
the organization as it is essential for smooth running of the with uncertainty and change. With the help of planning an
organization. enterprise can predict future events and make due provision for
Unity of command them.
Every subordinate should receive orders and become Provides sense of direction
accountable to only one superior. Dual or multiple commands Planning saves an organization from drifting and avoids
is a perpetual source of conflict. aimless activities. It directs human efforts into endeavor that
Unity of Direction contribute to the accomplishment of goals. Planning makes
Each ground of activity having the same objective must have work more meaningful and activities more orderly.
one head and one plan. These will ensure unity of direction.
Encourages innovation and creativity
Subordination of Individual to General interest Planning is forward looking and it enables an enterprise to
Effort should be made to reconcile the individual interest with cope with technological and other developments. Planning
common interests. When there is conflict between the two then requires continuous monitoring of environment for new ideas
the organization interest should prevail. and developments.
Remuneration of personnel Helps in coordination
The amount and method of remuneration should be fair and Planning is the best stage for integration of diverse forces at
just and should provide maximum possible satisfaction to both work. Sound planning interrelate all the activities and
employer and employees. resources of an organization.
Centralization
Guides in decision making
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Planned targets serve as the criteria for evaluation of different
alternatives so that best course of action can be chosen by
predicting the future. Planning helps in taking future oriented
decisions.
Provides a basis for decentralization
Planning helps in the delegation of authority to lower levels of
management. Well established plans serve as guides to
subordinates and reduce the risk involved in delegation of
authority.
Provides efficiency in operations
Planning facilitates optimum utilization of resources. It makes
it possible for things to occur which would not otherwise
happen.
Facilitates control
Planning provides a basis for control. Plans serve as standards
for evaluation of performance. Sound planning enables
management to control the events rather than be controlled by
them.
Limitations of planning
 Planning is based on forecasting which is not hundred
percent accurate.
 Planning is time-consuming and expensive exercise.
Time effort and money are required in the collection and It involves appraising the external environment in relation to on result rather than work.
analysis of data and in the evaluation and revision of
data.
 Planning may result in internal inflexibilities and
procedural rigidities which curb initiatives and
individual freedom.
 Planning often requires changes in the existing setup;
unless the change is fourth coming planning may proof
to be ineffective.
 Planning creates a false sense of security in the
organization. A manager may feel that all problems will
be solved once the plans are put into operations.
 Powerful people and vested interest may exert pressure 
to ensure that the plans serve their own interest.
 The effectiveness of planning may be affected by
external forces which are beyond the control of those
responsible for preparing the plans.
PRINCIPLES OF PLANNING
The principles were developed by Koontz and O’Donnel. The 3. Functional planning
principles relate to the nature, purpose process and structure of They are prepared for various functional areas of organization,
planning. They include the following:
Contribution to objectives
Every major and derivative plan should contribute positively Based on use
towards the accomplishment of the organizational objectives.
Efficiency of plans
The efficiency of plan is measured by the amount it
contributes to objectives minus the cost and other undesirable
consequences
Primacy of planning
The manager cannot perform other managerial functions
without a roadmap of plans to guide him.
Planning premise
A coordinated structure of plans can be developed only when
the managers throughout the organization understand and
agree to utilize consistent planning premises.
Policy framework
A consistent and frameworkof an organization can be
developed if the basic policies that guide thinking in decision Strategies
are expressed clearly and are understood by the managers who Policies
prepare the plans.
Timing
When the plans are structured to provide an appropriately
timed intermeshed network of derivative and supporting
programs, the plans can contribute positively to the attainment programmes
of objectives.
Principle of alternatives
The best alternative will be that which will contribute most
efficiently and effectively to the accomplishment of the
desired goal.
Limiting factor
The planner should focus on the factors which are critical to
the attainment of objective
Commitment
Logical planningshould cover a time period necessary to
forecast the fulfillment of commitment involvement in a
decision.
Flexibility
It is the ability to change which is built into plans. The risk of organization. They serve as guidelines to the members of the
loss due to unexpected events can be reduced building
flexibility into plans
TYPES OF PLANS
Planning can be classified according to time nature and use of Objectives make jobs worthwhile and meaningful.
plans
Based on time
 Long term planning
 Short time planning
1. LONG TERM PLANNING Well-defined objectives are helpful in effective delegation of
authority. By providing targets, they reduce the need for
It normally covers a period of over five years. It involves
detailed guidance.
planning the future impact for today’s decisions. Such plans
Standards for control
may require changes in the organization structure and
Objectives serve as standards or benchmarks with the help of
activities.it is mainly the responsibility of top management.
which actual performance can be evaluated.
They are developed to guide the future efforts of the
Voluntary Coordination
organization.
Mutually agreed objectives enable people to coordinate their
2. Short term planning
efforts voluntarily while working in their respective areas of
It covers a period of one year to three years. The structure is discretion.
fixed and specific activities required to achieve the objectives Essentials of Valid Objectives
developed. It is more precise and less flexible. Short term plan
Objectives can provide the aforesaid benefits only when they
is developed by the lower level of management. It is mostly
possess the following characteristics
concerned with current operations and takes into account the
Objectives must be clear and specific, Objectives fail to
available resources.
guide and direct efforts if they are stated in vague and general
Based on the nature
terms
This type of planning includes: Objectives must be measurable, To serve as standards for
control, objectives must be measurable or verifiable.
 Strategic planning
Translation of major objectives tangible or visible operating
 Operation planning objectives helps to motivate individuals and performance can
 Functional planning be evaluated accurately.
1. Strategic planning Objective must be result-oriented, Objectives should focus
the organization and adopting the strategies that will enable the Objectives must be realistic, Objectives should not be set at
organization to survive in that environment. The process so high a level that they discourage the organization members.
involves. Objectives must be valid, Objectives should be constantly be
 It identifies the opportunities and threat which the reviewed and revised according to changing conditions.
organization is likely to face in the future. Objectives must be acceptable, Objectives should be
 Determinethe future direction of the organization compatible with individual goals of the people working for the
 Defines the manner in which the resources of the organization.
organization are to be deployed STRATEGY
 It lays down a systematic and logical procedure for
Strategy is a gamesmanship or an administrative course of
carrying out the operations of the organization.
action design to achieve success in the face of competition or
 It provides the basis for formulation of operational plan.
difficulties. It is a plan prepared to overcome competition.
Facilitates coordination between the different divisions. Strategy making process
2. Operation planning Environmental analysis
It is also termed as tactical planning that is concerned with The environment is analyzed to determine the opportunities
short term exercise designed to implement the strategies and threats for the organization.
formulated under strategic planning. Self-appraisal
The internal environment of the organization is examined to
know the weakness and strength.
Strategic alternatives
this includes production, marketing, financial and manpower Alternatives are developed to deal with the environmental
planning. forces.
Strategic choice
The most appropriate choice is made so as to capitalize on the
It includes the following; strength on the organization.
 Standing or multi- use planning Strategy implementation
 Single use or ad-hoc planning Detailed operational plans are developed and communicated to
4. Standing or multi-use planning employees so as to execute the chosen strategy.
They are recurring plans and are used repeatedly in situations Importance of policies
of similar nature. It is a standing guide to recurring problems A policy is a general guide to thinking and action rather than a
and is used again and again. specific course of action.
5. Single Use or Ad-hoc planning They facilitate quick and correct decisions by serving as
These plans are used once and discarded. It is designed to guides to thinking and action.
meet the demands of a specific situation and is scrapped when They save time and effort by pre-deciding problems.
the situation is over. They permit delegation of authority to managers at lower
Multi-Use plans levels.
Objectives They delimit the area within which decisions are to be made.
They facilitate uniformity of action and coordination of efforts.
Types of Policies
Procedures Policies may be classified into the following categories;
Rules 1. Organizational and functional policies
Single use plans
In terms of scope, policies may be classified as organizational
policies and departmental policies.
budgets Organizational policies are the overall policies of an
schedules organization and they are formulated by top management.
projects Departmental or functional policies are meant for specific
methods functions or department of business, e.g sales policy,
production policy etc.
OBJECTIVES 2. Appealed and imposed policies.
Objectives are the ends towards which the activities of the On the basis of origin, policies may be classified originated,
organization are directed. Objectives are established to guide appealed and imposed policies.
the efforts of an organization and each of its constituents. Originated policies are deliberately formulated by top
Importance of objectives managers on their own initiative in order to guide the action of
their subordinates. They are generally put in writing and
Sense of direction embodied in a policy manual. Appealed policies are
It provides direction to the individual effort and activities of an formulated on the appeal or request of subordinates.
Subordinates make an appeal to deal with a particular case
organization and eliminate haphazard action. which is not covered by earlier policies.
Unified planning 3. General and specific policies
Objectives are the key to sound planning. Plans have no
meaning unless they achieve well-defined objectives. As to the area of freedom, policies may be classified general
Provides motivation and specific. General policies are stated in broad terms to give
freedom to units of the organization. Specific policies are
Organizational objectives serve as the means to achieve intensively defined to restrict freedom of action.
personal goals.
Basis for decentralization
2
4. Written and implied policies - SWO MBO replaces trait based appraisals by performance based
T appraisal. Quantitative target for every individual enables him
Written policies are explicit declarations in writing. Implied
analys to evaluate his own performance.
policies are those inferred from the behavior or conduct of
is Organizational change and development
organizational members, particularly of top executives. Where
MBO provides a framework for planned changes. It enables
no written policy exists on a particular topic or the expressed  Establishing objectives.
 Developing premises managers to initiate and manage changes.
policy is not enforced subordinates interpret the actions of
their superiors and make decisions accordingly. o Planning premises are forecasts,
Characteristics of a sound policy [principles of policy applicable basic policies, and
existing company plans. Weakness of MBO
making] o They are assumptions about the
 A policy can be called sound when it contains the environment in which plan is to be  Failure to teach the philosophy of MBO
following characteristics; carried out.  Failure to give guidelines to goal setters
 Policies should be based on objectives and they should o Forecasting is important for premising.  Difficulty of setting goals
contribute towards the attainment of objectives. o Premises should be make practical what  Emphasis on short run goals
 A sound policy should be clear, unambiguous and volume of sales? What price?  Danger of Inflexibility
explicit. It should not leave scope for misinterpretation.  Determining alternative courses of action
 Should be expressed in writing, written policies tend to  Evaluating alternative course of action TOPIC 4
be more precise.  Operation Research – Decision tree ORGANIZATION
 Policies should be based on careful consideration of the  Selecting a course of action It is the study of structure, function andperformance of the
resources and environment of the organization.  Decision making organization and behavior of groups and individuals within
 Policies should be reviewed and revised regularly to  Formulating Derivative plans them.
keep them updated and relevant.  Supporting plans for basic plan Elements or Features of organization
 Policies should be in form of general guidelines  Numerating plans by budgeting Division of work
allowing scope for decision making at the lower levels.  Income and expenses An organization comes into existence only when total work is
Policy formulation divided into activities and functions.
MANAGEMENT STYLES Common objectives
Definition of policy area
OBJECTIVES Every organization exists to achieve some objectives for which
The area of policy-making should be decided keeping in view By the end of the topic, the trainee should be able to: it is established.
the objectives of the organization.  Define the term management styles Coordination and communication
Identification of policy alternatives  Describe management by objectives There must be co-operative relationships, both vertically and
 Describe management by crisis horizontally, between the different departments and divisions
Various alternatives are developed in light of data concerning
 Describe management by exception of the organization.
the internal and external environment.
 Describe management by wondering around Plurality of persons
Evaluation of alternatives
MANAGEMENT BY OBJECTIVES (MBO) An organization is a group of people working together for the
Each of the available policy alternatives is examined in the achievement of a common objective. Single person cannot
DEFINITIONS
light of its possible contribution to objectives. constitute an organization.
“MBO is a comprehensive managerial system that integrates
Choice of policy Chain of command
many key managerial activities in a systematic manner and
that is consciously directed towards the effective and efficient In every organization, there is a central authority from which is
After evaluation, the most appropriate policy is chosen.
achievement of Organization and individual Objectives.” a chain of authority relationships stretches throughout the
Communication of policy
CHARACTERISTICS OF MBO organization
The chosen policy is communicated and explained to all those Goal orientation The dynamic element
who are to implement it. An organization is not a mere mechanical structure but a living
MBO focuses on the determination of unit and individual goals
Procedures organism arising out of sentiments, attitudes and behavior of
in line with the organizational goals.
Participation people.
Procedure is a chronological sequence of steps to be
IMPORTANCE OF ORGANIZATION
undertaken to enforce a policy and attain an objective. It lays MBO is characterized by high degree of participation of the
concerned people in goals setting and performance appraisal Facilitates administration
down the specific manner in which a particular activity is
Key results areas Sound organization enables smooth operation of the enterprise
performed.
MBO is a performance improvement in the areas that are of by providing a frame work within which management can
Importance of procedures
critical importance to the organization as whole, by perform the functions of planning, directing and, controlling
 It simplifies work by eliminating unnecessary steps. identification of key results areas, MBO ensures that due to the Makes growth and diversification possible
 It avoids chaos or random activity by ensuring attention is given to the priority areas which have a significantIn an organization, systematicdivision of work and consistent
consistence in operations. impact on the performance and growth of the organization. delegation of authority facilitates changes necessary for taking
 It indicates a standard way of performing a work and System approach up new activities and new lines of business.
therefore ensures uniformity of action. MBO attempts to integrate the individual goals with the Permits optimum use of resources
 It eliminates the need for further decision making by organization and the organization with the environment. A sound organization helps in the optimum utilization of
laying down standard path to follow. Optimization of resources technological innovations and resources. It avoids duplication
 It facilitates coordination between various units of the MBO is meant to secure the optimum utilization of physical of work and overlapping of efforts.
organization. and human resources of the organization. It sets out an Encourages good human relations
 It provides standards for appraisal of employees. evaluative mechanism through which the contribution of each The assignment of right jobs to right persons improves job
Rules individual is measured. satisfaction and interpersonal relations.
Simplicity and dynamism Stimulates initiative and creativity
Rules are rigid and definite plans that specify what is to be Awell designed organization demands creative effort,
MBO is non-specialist technique and it can be used by all
done or not done in given situations. Rules provide no scope encourages innovation and permits extensive delegation and
types of managers.
for discretion and judgment. decentralization.
Operational
Programmes Facilitates coordination
MBO helps to translate concept into practice. It is made
A programme is a concrete scheme of action to accomplish a operational through periodic reviews of performance. Organization is a means of integrating and unifying individual
given task. It specifies the steps to be taken, resources to be Comprehensive efforts. It helps in putting balanced emphasis on different
used, time limit for each step and assignment of task. MBO attaches equal importance to the economic and human activities and establishing effective relationships between the
Programme therefore is a combination of objectives, policies, dimensions of an organization and provides the operational different departments or divisions of the organization.
budget, task assignment and procedures. It determines content details. ORGANIZATION THEORY
and scope of activities. Process of MBO Is the study of the study of the structure functioning and
Budgets performance of organization and the behavior of individuals
 Setting preliminary Objectives
A budget is a statement of expected result expressed in and groups within them.
 Clarifying Organizational roles
numerical terms for a definite period of time in the future. The theories include the following:
 Setting subordinates Objectives
They provide clarity, direction and purpose in the activities of  Classical
 Recycling Objectives
an organization by laying down verifiable and goals for  Neo-classical
BENEFITS OF MBO
specific period of time. It coordinates the activities of different Improved planning  Modern
departments. 1.Classical theory
MBO involves the participative decision making which makes
Schedule objectives explicit and plans more realistic. It focuses attention It deals mainly with anatomy of a formal organization and
A schedule specifies the time limits within which activities are on goals in key results areas. owes its origin to the scientific management movement
to be completed. It is essential for avoiding delays and Coordination pioneered by Taylor. The theory is woven into four main
ensuring the continuity of operations. MBO helps to clarify the structure and goals of the principles.
Project organization. Harmony of objectives enables individuals at  Division of labour
various levels to have common objectives.  Scalar and functional process
A project is a distinct cluster of function and facilities for a Motivation and commitment  Structure
definite purpose.it is designed and executed as a distinct plan. Participation of subordinates in goal setting and performance
It is integrated into a unit and is designed to achieve stated  Span of control
reviews tend to improve their commitment to performance. Division of labour
objectives. A project is defined in terms of capital investment, The corporate goals are converted into personal goals at all
specific objective and interdependence of tasks. The term is applied to specialization of processes where the
levels to integrate the individuals with theorganization. production of a commodity is divided into a number of
Steps in Planning: Accurate appraisal processes each of which is performed by a different person.
 Being aware of opportunities.
3
Scalar and functional processes
It refers to the superior-subordinate relationship existing in any
organization structure. A superior communicates instructions
down through the organization via various levels of
management {subordinates} and receive feedback relating to
operations performed at different levels of management.
Structure
It is the prescribed pattern of work related behavior which is
deliberately established for the achievement of the
organization objectives.it serve as an instrument for
introduction of logical and consistent relationship among the
various diverse functions which make up the organization.
Span of control
It relates to the number of subordinates whom a manager can
effectively supervise. Span refers to the number of persons,
themselves carrying managerial and supervisory
responsibilities for whom the senior manager retains his over-
embracing responsibility of direction and planning,
coordination, motivation and control.
The appropriatespan depends upon a number of
considerations;
-number of subordinates per manager
-amount of staff help
-centralization or decentralization of design-making
-competence of the manager and the subordinates
-level of motivation of personnel
-amount of automation
It is easy to supervise alarge number of subordinates doing
routine jobs and located in asingle room.
Bureaucracy
It refers to a condition where the organizational structures,
rules and procedures are strictly followed without any
deviation
AdvantagesIt is stable and enables unified focusing of
organizational resources and efforts toward achievement of
stated objectives.
DisadvantagesExcessive concern with the enforcement of
rules and regulationNever ending paper work
Decline in managerial effectiveness and alienation of the
work-force
Evaluation
It only deals with the anatomy of a formal organization; it does The organization should be free from complicated procedures
not cater for day to day administrative problems of the
organization arising from human interactions.
2.Neo-classical theory
The theory is associated with the human relations movement
led by Elton Mayo. It has adopted the four postulates of
classical theory that is division of labour, scalar and functional
processes structure and span of control, in addition to this it
emphasized the role of people who act interdependently to
influence the organization. It underscored the need for
motivation coordination and leadership to supplement the
principle of division of labour. The scalar and functional
principle has been modified to include the need for delegation
of authority and responsibility. In the structure principle there
is need to have a mechanism to try and address the potential
conflict that might arise within the organization through
effective communication.
3.Modern Theory
It has conceptual-analytical base and places greater emphasis
on empirical research data. It studies the organization as a
system. It is an integrative approach to the study of
organization; it recognizes that all the system within the
organization is related to one another. These functional
systems support one another in order to make a complete
integrated structure.
The process of organization
The process of organizing consists of the following:
Determination and division of work
The task required for accomplishment of the desired goal is
determined. Enumeration and definition of activities initiates
the organizing function. These functions include; technical,
commercial, financial, security and managerial.
Grouping activities
Various activities are identified and then classified into
appropriate departments and divisions according to similarities Quick decisions
and common purpose.
Assignment of duties
The individuals departments are then allocated to different
positions and individuals. The duties of every individual are
defined on the basis of his abilities and aptitude.
Delegation of authority
The individuals are then given authority necessary to carry out All factors affecting a department are under the control of one
the duties assigned to him. A chain of command is created
from top to bottom through successive delegation of authority. Fixed responsibility
PRINCIPLES OF ORGANIZATION
Unity of objectives
The organization should be directed towards achievement of
common objectives.
Efficiency
The organization should be able to achieve its goals and
objectives at minimum possible cost.
Division of work
The task should be divided in such a manner that the work of
every individual in the organizationis limited to the
performance of a single leading function.
Span of control
The executive’s supervisory functions should be limited to a
subordinate that is capable of handling.
Scalar principle
Authority and responsibility should be in a clear unbroken line
from the highest authority to the lowest. There must be clear
chain of command.
Delegation
Authority delegated to an individual manager should be
adequate to enable him to accomplish the result expected of
him.
Functional definition
The duties and authority-relationships of different individuals
must be clearly defined so that there is no confusion or
overlapping.
Absoluteness of responsibility
The responsibility of the subordinate to his superior is
absolute. No superior can escape the responsibility for the
organizational activities of his subordinate.
Unity of command
Each person should receive orders from only one superior and
be accountable to him. This helps to avoid conflicts in
instructions.
Unity of direction
There should be one head and one plan for a group of activities
directed towards the same objective.
Balance
The various parts of the organization should be kept in balance
and none of the functions should be given undue emphasis at
the cost of others.
Coordination
There should be orderly management arrangement of group
effort and unity of action in pursuit of common purpose.
Flexibility
and red tape.
TYPES OF ORGANISATION
The type of organization is determined by the nature and size
of the organization. They include the following:
 Line organization
 Functional organization
 Line and staff organization
 Project organization
 Matrix organization
 Committee organization
 Free-form organization
1. LINE ORGANIZATION
It refers to direct chain of command from top to the bottom.
The line organization is of two types
 Pure line organization
 Departmental line organization
a. Pure line organization
All individual perform the same type of work..
b. Departmental line organization
There is the chief executive at the top, under him there are a
number of departments each headed by a departmental
manager.
Advantages of line authority
Simplicity
It the simplest and oldest form of an organization. There is no
confusion or misunderstanding; everyone knows clearly his
position in the organization.
Flexibility
Executives have full authority and responsibility has can make
changes quite easily.
Managers can make quick and prompt decisions as no staff is
to be consulted.
Executive development
Doing functions and thinking are done by the managers; it
provides an opportunity for development.
Unified control
executive, making control effective.
Every person knows from whom he gets orders and to whom
he is accountable.
Unity of command avoids buck passing.
Effective discipline
Unity of command and unified control promotes discipline.
Employees react favorably to a single rather than multiple
centers of command
Disadvantages
Overburdening
The key executives are overloaded with administrative work.
Reflective thinking is absent as energies are consumed in
operating details.
Instability
The success and survival of the organization depends upon a
few individuals. There is little scope for expansion of the
organization beyond their capabilities. Loss of key executives
results to instability.
Lack of specialization
There is no scope for specialization as one individual cannot
be expert in all functions. Lack of specialization and
overdependence on the subordinates lower the efficiency of
operation.
Autocratic control
As each department is under the complete control of one
executive, there is danger of authoritarian rule.
Difficulty in staffing
Executives in line organization are required to have knowledge
of diverse functions. It is difficult to recruit such a person.
2. FUNCTIONAL ORGANIZATION
The organization is divided into functional departments every
functional department serve the rest of the organization.
Advantages
Specialization
There is complete specialization of work and every worker
gets the expert knowledge and guidance of several specialists.
Easier staffing
As the executive is required to have expertise of one function
only it is easier and economical to recruit and train staff.
Simplified control
It reduces the burden on top executives is reduced and control
becomes creative. Expert knowledge of the functional
managers facilitates effective supervision.
Better supervision
Each supervisor being an expert in his area of work, planning
and supervision is likely to be efficient.
Scope for expansion
The success and growth of the concern is not limited to the
capabilities of a few individuals.
Disadvantages
Poor discipline
There is lack of unity of command. Due to diffusion of
authority effective control becomes difficult.
Divided responsibility
Lack of unity of command and multiple command system
encourages buck passing.
Low morale
Workers find it difficult to satisfy several bosses. They get
frustrated and their morale goes down
Lack of executive development
Narrow specialization hampers development f generalists or
all-round executives. Succession of top management becomes
difficult.
Lack of coordination
Each specialist tries to magnify the importance of his function
and has a narrow outlook. He thinks only in terms of his
functional area rather than the whole organization.
Delayed decision
Decision involving more than one specialist cannot be taken
quickly as consultation of different bosses.
3. LINE AND STAFF ORGANIZATION
Line organization concentrates control too much while
functional organization divides it too much, line and staff is a
combination of both, and it seeks to combine the advantage of
division of work with unity of command.
Types of staff
Personal staff-consist of personal assistant or adviser attached
to the line executive at any level
Specialized staff- they have expert knowledge in specific
fields such as accounting, personnel management and public
relations.
General staff- it consist of experts but in general area. This
staff operates at high levels.
Advantages
Planned specialization
Line executives get expert advice from staff specialiston
various problems. They are relieved of the house keeping job
for which they lack time and expertise.
Discipline
Unity of command is maintained as staff is not given executive
authority.
Staffing and development
4
Separation of function facilitates selection and training. Due to Committee is usually appointed to deal with one or more Importance of Department
larger number of post opportunity for promotion is greater and specific problems. It cannot enter areas not specific assigned to
Specialization
a staff service is an excellent training ground for line it.
It enablesthe organization to take advantage of the
managers. Authority structure
specialist employed in the organization.
Balanced decisions It has the authority to go into the details of the problems
Expansion
The information and advice provided by staff specialist assigned to the committee.
Grouping of the activities and personnel together makes
enables executive to make accurate and sound decisions. Types of committee
it possible to expand an organization
Flexibility
Standing committee Autonomy
There is greater scope for expansion and growth as staff is
Is a permanent committee which is always present in the It results in the division of the organization into semi-
available to enable to cope with greater worker
organization it is assigned responsibilities in the same manner autonomous units with every manager given the
Disadvantages
as individuals and is routinely chaired by the incumbent of a freedom; this provides a lot of satisfaction to the
Conflicts specific position. departmental managers.
Staff may undermine the line authority while line may ignore Executive or advisory committee Fixation of responsibility
staff. This may lead to friction between them. It is charged with the responsibility of making and executing It enables each individual to know the specific part he
Lack of coordination its decisions. It only examines a specific in problem in all its supposed to play in the organization.
The allocation of responsibility between line and staff may not details. Appraisal
be very clear. Staff advice may be confused with line authority Line or staff committee Appraisal of managerial performance becomes easier
creating confusion and disorder. It is responsible for coordinating and controlling a specific when specific task are assigned to departmental
Ineffective staff business function having executive authority over the personnel.
Staff is not responsible for the result. They may not therefore subordinates within a formal chain of command. Management development
be careful in their work. Formal or informal committee It facilitates communication coordination and control. It
Expensive It is formally structured in the organization to accomplish the simplifies the training and development of executives by
Line and staff is expensive in terms of overheads as two stated objectives. Informal committee on the other hand is not allowing them to make independent decisions.
separate set of personnel are required. as per the policy and has no formal authority. Administrative control
4. PROJECT ORGANISATION Advantages Grouping of activities and personnel into manageable
units facilitates managerial control.
This is set up to overcome the weaknesses of the functional Group judgment
Basis for Departmentation
organization namely lack of unity of command delay in There is a superior quality decision making. Members of the
decision-making and lack of coordination. committee constitute the pool of a wide range of knowledge 1. Specialization
Advantages particularly so when there specialist in their respective fields. 2. Coordination
It also provides congenial atmosphere for interaction between 3. Control
 It establishes suitable relationship between environment, members. 4. Economy
strategy and structure. Improved motivation 5. Attention
 The grouping of activities on the basis of each project Promotes increased participation in decision making process, 6. Human Consideration
results in introduction of new authority patterns, greater when two or more persons influence one another in making
authority being given to project boards decision it will have a significant impact upon them. Basis of Departmentation
 It makes for meaningful control and fixation of
individual responsibility. 1. Functional Basis Grouping of activities in
Disadvantages accordance with the function of an enterprise.
Effective coordination
Each major function of the enterprise is grouped
 There is a lot of uncertainty due to diverse backgrounds Committee requires the sharing of information and an into a department.
of professionals deputed to the project. expression of diverse viewpoints and sentiments, thus a
 The absence of well-defined areas of responsibility, committee serve to perform an important coordinative Merits
lines of communication, and criteria to judge function.
performance, the project manager find it difficult to Diverse interest groups o It is a logical and time proven
motivate and control staff in the traditional way. It provides a forum for expression of diverse opinions thus method
 Decision making in a project organization is often under making decision after wide consultation. o It follows the principles of
pressure and a delay in it may result in dangerous Management development specialization
consequences. Membership of various committees exposes an individual to o Authority and responsibility can be
the art of Decision-making process. clearly defined and fixed
5. MATRIX ORGANIZATION o Since the top managers are
Disadvantages responsible for the end results
It is any organization that employs multiple command system Expensive control shall become effective
and the associated organizational culture and behavior pattern. The cost of committee meeting evaluated in terms of salaries Demerits
Advantages paid is quite expensive.  This type of departmentation shall develop
Dual benefit Time-consuming a loyalty towards the functions and not
It is a combination of functional departmentation and purpose The committee usually spends a long time on deliberations and towards the enterprise as whole.
departmentation. reaching decisions. Every feels compelled to give out his or  Co-ordination of different function shall
Better planning and control her opinions. become difficult
It focuses the organizational resources on the specified Compromise decisions  Only the departmental heads are held
projects, thus enabling better planning and control. The decisions made by the committee may not be based on
responsible for defective work
Environmental adaptability the merits of each case but on the compromise and political
It is the most appropriate structure to respond to external trade-offs. 2.Territorial basis A company may have separate
change ie to beat the action of the competitor. Tyranny of the minority
departments to serve the southern region, northern region etc.
Flexibility In an attempt to reach decision views of the minority may end
It has the advantage of the intimate knowledge of local
It is highly flexible as regards adherence to rules and up being ignored. conditions.
procedures. Lack of accountability
Merits
Better motivation If the committee makes a decisions and it misfire or does not
The concerned departments are geared towards deliver the expected results few people may be willing to take  It motivates each regional head to achieve high
accomplishment of objectives; therefore the employees are the blame. performance
highly motivated. Conditions for a successful committee  Provides each regional head an opportunity to adapt to
Disadvantages his local situation and customer need with speed and
 The task of the committee should be carefully chosen
accuracy.
Complex relationships and clearly defined.
The employees are often required to report to more than one  The number of members S.N Line Authority S t a f f A u t h o r i t y
superior, the result is more likely to be anarchy. should not be large. o
Power struggle  The composition of the 1 Right to decide and command Right to provide advice, assistance and information
The duality of functions triggers intensive power struggle committee should be
2 Contributes directly to the accomplishment of Organisational objectives Assist line in the effective accomplishment of Organisation objectives
between the project and functional department. determined keeping in mind
3 Relatively unlimited and general Relatively restricted to a particular function
Heterogeneity the functions of the
committee. 4 Flow downward from a superior to subordinate May flow in any direction depending upon the need of advice
It makes it difficult to coordinate and control the functioning 5 Creates superior and subordinate relation Extension of line and support lin e
of a heterogeneous group particularly in the absence of line  Members of the committee
should clearly understand the 6 Exercise control Investigates and report s
authority.
purpose and task of the 7 Makes operating decision Provides idea for decision
6. COMMITTEE ORGANIZATION committee 8 Bears final responsibility for results Does not bear final responsibilit y
 Every member should be 9 Doing functions T h i n k i n g f u n c t i o n
Is group of persons constituted to deal with specific issues or 10 Provides channel of communication No channel of communication is create d
allowed to air his view point.
problems of the organization.  It affords valuable top-management training and
Characteristics of a committee experience to middle level executives] enables the
Plurality of persons DEPARTMENTATION organization to take advantage of locational factors,
Committee implies a group of persons with minimum of two Is the process of grouping individual jobs into department, It such as availability of raw materials, labour, market, etc.
persons and without any limit as regards the maximum number involves grouping of activities and employees into  Enables the organization to compare regional
of persons departments so as to facilitate the accomplishment of performances and invest more resources in profitable
Limited scope organization Objectives. regions and withdraw resources from unprofitable ones.
5
Demerits  Reward effective and successful assumption of
authority
 May give rise to duplication of various activities. Types of Authority
Many routine and service functions performed by
1.Line authority – are those that have direct impact on the
all the regional units can be performed centrally b
accomplishment of the objectives of the enterprises TOPIC FIVE
the head office very economically Line relationship performs the following roles STAFFING
 Various regional units may become so engrossed in
a. as a chain of command Definitions
short run competition among them that they may b. as a carrier of accountability (subordinate is Koontz and O’Donnell “The managerial functions of staffing
forget the overall interest of the total organization. answerable to his superior) involve manning the Organizational structure through proper
c. as a channel of communication and effective selection, appraisal and development of
3. Process basis – is done on the basis of several discrete 2.Staff authority – Staff refers to those elements of the personnel to fill the roles designed into the structure.
stages in the process or technologies involved in the Organization which help the line to work most effectively in Functions of Staffing
manufacture of a product. A cotton textile mill has separate accomplishing the primary objectives of the enterprises
departments for ginning, spinning, weaving, dyeing and 1. Procurement
printing and packing and sales. Functional authority - is the right which an individual or  Job analysis
Merits department has delegated to it over specialized processes,  Man power planning
 Facilitates the use of heavy and costly practices, policies or other matters relating to activities  Recruitment
equipment in an efficient manner. undertaken by personnel in department other than its own.  Selection
 It follows the principle of specialization – Responsibility  Placement
each dept is engaged in doing a special type of 2. Development
It is the obligation of the subordinate to carry out the duties
work. This increases efficiency.  Performance appraisal
assigned to him. By accepting delegated authority a
 It is suitable for Organization which is  Training
subordinate incurs responsibility to use the authority as desired
engaged in the manufacture of those products by the delegator. Authority presupposes the existence of  Management Development
which involve a number of processes. responsibility. A person who has authority has a corresponding  Career Planning & Development
responsibility for the proper use of authority given to him.  Promotion
Demerits Accountability 3. Compensation
 Difficult to compare the performance of different  Job evaluation
Responsibility is the liability for proper discharge of the  Wage and Salary
process based departments assigned duties, accountability is a subordinate’s obligation to
4. Product basis – suited for a large organization administration
render an account or report to his superiors. It is the obligation
manufacturing a variety of products. For each major product a  Incentives
of an individual to report formally to his superiors on the
semi-autonomous department is created and is put under the  Fringe Benefits
discharge of his duties.
charge of a manager who may also be made responsible for DELEGATION OF AUTHORITY  Social security measures
producing a profit of a given magnitude. Def. Koontz and O’Donnel, “The entire process of delegation Human relations
Merits involves the determination of results expected, the assignment Is an area of management in integrating people into work
 Relieves top management of operating task of tasks, the delegation of authority for accomplishment of situation in a way that motivates them to work together
responsibility. It can therefore better concentrate on these tasks, and the exaction of responsibility for their productively, co-operatively and with economic, psychological
such centralized activities like finance, R& D and accomplishments. and social satisfaction?
control Features of delegation Purpose and Importance
 Enables the top management to compare the  Delegation occurs when the manager grants some rights  Increasing size of Organization
performance of different products and invest more to a subordinate  Advancement of technology
resources in profitable products and withdraw resources  A manager never delegates all his authority to the  Long range needs of manpower
from unprofitable ones. subordinates. He transfers only part of his authority.  High wage bill
 Those who work within a department derive greater  Delegation does not mean reduction in the status of a  Trade unionism
satisfaction from identification with a recognizable goal. manager. The manager retains the right to exercise Human relations movement
Demerits control over his subordinates. RECRUITMENT
 Results in duplication of staff and facilities  Delegation does not mean abdication of responsibility. “Recruitment is the process of searching for prospective
 Employment of large number of managerial personnel is No manager can avoid his responsibility by delegating employees and stimulating them to apply for jobs in the
required. authority to the subordinates. Organization.
 Equipment in each product department may not be fully Need for delegation Sources of Recruitment
used  Delegation enables the manager to distribute his 1. Internal sources – It includes personnel already on the
5. Customer basis – An enterprise may be divided into a workload among his subordinates payroll of an Organization, the present working force.
number of departments on the basis of the customers that it  Delegation pushes authority near the point of action Merits
services.  Delegation helps to improve motivation and morale of
Merits  Less expense
subordinates
 Builds loyalty
 It ensures full attention to major customer  Delegation is a means of training and developing
subordinates executives  Ensures stability
groups and helps the company to earn
Types of delegation  Sense of security
goodwill.
 Lower level to look forward to rising
 General or Specific to higher levels
Demerits
 Formal or Informal  Morale of the employees (Shows
 It may result in underutilization of resources  Written or oral more Enthusiasm)
and facilities in some department.  Downward and sideward Demerits
 There may be duplication of facilities Process of Delegation
 Promotion based on seniority, inefficient people may
 Determination of results expected also be promoted this will ultimately ruin the prospects
AUTHORITY
Def“Authority may be defined as legitimate right to give  Assignment of duties of the firm.
orders and to get orders obeyed. It denotes certain rights to  Granting of authority  There will not be any creativity
take decision and get them executed by the subordinates.  creating accountability for performance  Lack of Technical skills
Features of authority Principles of Delegation
2 External Sources obtaining personnel from outside the
 The position is legitimate right having legal or social  Delegation to conform to desired objectives organization; through advertising, professional magazine
sanctions.  Responsibility not delegatable employment agencies.
 Creates a relationship between the superior and  Authority to match duties Merits
subordinates.  Unity of command
 The purpose of authority is to influence the behavior and  Limits to authority to well-defined  Wide choice
performance. Merits  Selection from external source will enable the choice of
 The authority is bound by certain limits. personnel from among a large number of applicants.
 Basis of effective functioning  Fresh air and outlook
 The authority is exercised by making decisions that are  Reduction in managerial load
to be carried out by the subordinates.  In a world of intense competition an enterprise greatly
 Benefits of specialized service benefits from freshness of outlook and approach chosen
Power and Authority
 Efficient running of branches from external sources.
Authority is the right of a person to influence others while  Aid to employee development Demerits
power is the capacity of a person to influence others.  Aid to expansion and diversification of business
Authority is institutional is nature while power is personal in Effective Delegation  Brain drain –experienced personnel are poached away
nature from organization.
Authority is legitimate but power may have no legitimacy  Define assignments and delegate authority in the  Expensive- recruitment of staff members from outside
A manager may have little authority and more power or may light of results expected sources may be sometimes very expensive.
have little authority but more authority. Authority and power  Select the person in the light of the job  Orientations- the cost of initiating a new person into
do not always go together.  Maintain open lines communication the work-patterns of the enterprise is also at times
 Establish proper control costly.

6
 Danger of maladjustment-if a person chosen from an  Reducing startup costs Off the Job Method
external sources fails to adjust himself to the working in  Strengthening the relationships between new employee, o Special courses
the enterprise or proves to be a liability, the organization his superiors and peers o Conferences and Seminars
may be forced to spend more to hire afresh : o Case study
Techniques of Recruitment Details of Orientation o Selective Readings
 Direct Method–internal recruitment  The history of the Organization o Brain Storming
 Indirect Method – use advertisements for  Products and services of the Company o Simulation , role Playing and Management Games
recruitment in newspaper, journal,  Organization structure of the enterprise o Sensitivity Training
 Third Party method -Private Employment  Location of departments and Units TOPIC SIX
agencyPublic Employment agency  Personnel policies and practices DIRECTING
Head hunters (Professional Recruiting  Employees facilities and services Directing concerns the total manner in which a manager
agencies)  Rules and Regulations influences the actions of subordinates. It consists of the
Recruitment Policy  Grievance procedures following elements:
 Safety Measures  Issuing orders and instructions
 Identification of Recruitment needs TRAINING & DEVELOPMENT  Continuing guidance and supervision of subordinates
 Preferred sources of Recruitment 2. Training  Motivating subordinates to work hard for meeting the
 Criteria of selection and selection techniques expectation of management.
 Cost of Recruitment Training is an organized process for increasing the knowledge
 Maintaining discipline and rewarding those who
 Role, if any assigned to the union in the formulation and and skills of people for definite purpose. perform well
implementation of recruitment and selection policies. Need for Training arises on the account of
 Providing leadership to subordinates so that they work
SELECTION 1. New Environment with zeal and confidence
Process of discovering the most suitable and promising 2. Lack of Trained Personnel
candidates to fill up the vacancies 3. Advancement in Technology CHARACTERISTICS
Significance of selection 4. Faculty Methods Elements of Management
 The cost of induction and training has increased and it is 5. Prevention of accidents
6. Career Development. It includes all essential elements of management that include
very difficult to terminate the services of employee once planning organization and controlling
Need for Training
he is confirmed on the job. Continuing Function
 If the right persons are not selected the employer will  To improve job related skills Direction is a dynamic and continuing function. It is
have to suffer huge loss in terms of quantity and quality  To update Knowledge and skills management in action. A manager should always supervise
of work.  To prepare for higher responsibilities and task and guide his subordinates at all times to secure the desired
 Selection of must be done very carefully because  To develop proper job related attitudes results.
mistakes in selection may prove tobe very costly to the  To inject motivation and morale Pervasive Function
organization.  To mould personnel to adapt and adjust to Direction is performed by managers at all levels and in all
 Proper selection and placement of employees will go a Organizational change organization. Direction is a part and parcel of every manager’s
long way towards building up a stable working force Advantages of Training job.
and eventually reducing labour costs Creative Function
Steps in Selection  Increased productivity The managers should always be able to come out with new and
 Job Satisfaction innovative ways of doing things
A process of rejecting the unwanted applicant
 Reduction in accidents Linking function
 Receiving application Direction serves as a connecting and actuating link between
 Better use of Resources
 Preliminary screening / Interview planning organizing and controlling.
 Reduced Supervision
 Application blank Management of Human Factor
 Greater Flexibility
 Psychological test Direction involves relationships between people; it seeks to
 Management by Exception
 Interview create co-operation and harmony among members of a group.
 Stability and Growth
 Reference check Essentials of Training Programme
 Physical Examination SIGNIFICANCE OF DIRECTING
 Final Interview A good training programme must satisfy the following
conditions  Initiates action
Interview
 Clear Purpose  Ensures coordination
The Interview is a face to face conversation between an  Training Needs  Improves efficiency
applicant and the employer. The purpose of Interview is to  Relevance  Facilitates change
collect information on behaviour, attitudes, opinions, maturity,  Individual Differences  Assists stability and growth
emotional stability, enthusiasm, confidence, response and  Appropriate incentives PRINCIPLES OF DIRECTING
other commercial behaviour.  Management Support Harmony of objectives
Factors considered in Interview  Balance between theory and practice. Direction is effective to the extent to which individual
 Initiative Opinion Training Procedure objectives in a cooperative activity are harmonized with
 Response Confidence group objectives.
 Preparing the Instructor
 Behaviour Work Experience Maximum individual contribution
 know the job or subject he is attempting to teach Direction leads to the attainment of objectives at
 Attitude Enthusiasm  Have the aptitude and ability to teach maximum cost
 Maturity Emotional Stability  Have willingness towards the profession Unity of command
Types of Interview  Pleasing Personality and capacity for leadership A subordinate should be at all times accountable to only
1. Structured Interview – is also called as patterned  Knowledge of teaching Principles and methods one superior
interview. The interviewers are trained in the process to  Preparing the Trainee Appropriate techniques
be used. A list of questions on analysis of the job  Getting ready to teach Techniques of direction should be efficient and
specification is prepared.  Presenting the Operation appropriate to the people, the task and the situation.
2. Group or Discussion Interview – The interviewees are  Try out the Trainee’s performance Direct Supervision
given certain problems and are asked to reach a specific  Follow - up Effective direction requires direct personal contact with
decision within a particular time limit. Methods and Techniques of Training subordinates in addition to formal and objective
3. Panel or Board Interview – Candidate is interviewed methods of supervision.
by a number of interviewers. Questions may be asked in 1. On the Job Training Strategic use of Informal Organization
turn or asked in random order as they arise on any topic. a. Coaching The managers should accept and use the informal
4. Stress Interview – The Interview assumes a hostile role b. Understudy organization to supplement and support the formal
toward the applicant. He deliberately puts him on the c. Job Rotation channels of communication.
defensive by trying to any, embarrass or frustrate him. 2. Vestibule Training – ( Dummy Machine set up ) Managerial Communication
PLACEMENT 3. Apprenticeship Training The executive is the primary source. Two-way flow of
Placement may be defined as the determination of the job to 4. Classroom Training information is the most effective means of ensuring
which an accepted candidate is to be assigned to that job to be understanding and cooperation among members of the
satisfactory. 3. Executive Development / Management Development organization.
 Orientation “Developing a manager is a progressive process in the same Effective Leadership
 Training sense that educating a person it. Neither development nor Dynamic leadership is essential to effective direction.
 Executive Development Education should be thought of as something that can ever be An effective leader guides and counsels his
1. Orientation / Induction completed, for there are no known limits to the degree to subordinates.
Induction is a technique by which a new employee is which one may be developed or educated”
Methods of Executive Development TECHNIQUES OF DIRECTING
rehabilitated into the changed surroundings and introduced to
 Delegation
the practices, policies and purposes of the Organization. On the Job Method
Objects of Orientation  Supervision
 Coaching and Understudy  Orders and instructions
 Clarifying the job  Position rotation  Motivation
 Developing realistic expectation about the Organization  Special projects and task forces  Leadership
 Reducing the amount of stress of new employee  Committee assignments  Communication
 Multiple Management
7

SUPERVISION
Supervision implies exert overseeing of people at work in
order to ensure compliance with established plans and
procedures. Every executive has to supervise the work of his
subordinates.
RESPONSIBILITIES OF A SUPERVISOR
 To schedule work so as to ensure an even and
steady flow.
 To assign work to different individuals
 To provide proper working conditions
 To issue orders and instructions
 To prescribe work methods and procedures
 To guide, train and inspire workers in the efficient
performance of work.
QUALITIES OF A GOOD SUPERVISOR
 Knowledge of Work
 Knowledge of the Organization
 Communication Skill
 Human Relation of Skill
 Decisiveness
FUNCTIONS
 Planning the work
 Organizing the Resources
 Staffing the units
 Maintaining discipline
 Enforcing safety measures
 Handling Grievances
 Appraising performance
FUNDAMENTALS OF EFFECTIVE SUPERVISION
 Planning the work
 Time management and delegation
 Organizing the resources
 Staffing the Units
 Training and development of Employees
 Disciplining the Workers
 Appraising the performance of Employees
 Controlling the results
 Labour relations and Grievance procedures
LEADERSHIP
Definition
Leadership is defined as the art or process of influencing
people so that they will strive willingly and enthusiastically
toward the achievement of group goals.
SKILLS
 The ability to use power effectively and in a responsible
manner
 The ability to comprehend that human beings have
different motivation forces at different times and in
different situations
 The ability to inspire
 The ability to act in a manner that will develop a climate
conductive to responding to and arousing motivations.
 Fundamental understanding of People
 ability to inspire followers to apply their full capabilities
to a project
Characteristics of leadership
 Leadership is a process of influence exercised by the
leader on group members. It involves exercise of
interpersonal influence.
 Leadership is continuous process by with the
executiveguides, influence and directs the behavior of
his subordinates.
 Leadership is a quality of behavior and the people who
possess this quality are known as leaders.
 Leaderships is related to a particular situation at a given
point of time and under specific set of circumstance.
 Leadership involves reconciliation of organizational
goals with individual goals.
 Leadership is a function of interaction between the
leader, the followers and the situation.
Importance of Leadership
 Aid to authority MOTIVATION
Motivation is a complex of forces inspiring a person at work to Self-actualization needs
 Motive power to group efforts
willingly use his capabilities for the accomplishment of certain These are the needs for realizing one full potential. It refers to
 Basis for co operation
objectives.
 Integration of Formal and Informal Organization. NATURE OF MOTIVATION
Motivation is a psychological concept
It is concerned with intrinsic forces operating within an
individual which impel him to act or not to act in a particular
way.
LEADERSHIP STYLES Motivation is a dynamic and continuous
1. Autocratic Leader It deals with humans being which is an ever changing entity
modifying itself every moment.
Commands and expects compliance, is dogmatic and positive,
Motivation is a complex and difficult function
and leads by the ability to withhold or give rewards and
In order to motivate people a manager must understand and
punishment.
satisfy multiplicity of human of needs.
2. Democratic or Participative
Motivation is a circular process.
Consults with subordinates on proposed actions and decision The feeling of unsatisfied need causes tension and an
and encourage participation from them. He leads by consent of individual takes action to reduce this tension.
the group rather by use of the authority. Significance of motivation
3. Laissez-faire Leadership
High efficiency
Uses his or her power very little, giving a high degree of A good motivation system releases the immense untapped
Interdependent in the operations. reservoir of physical and mental capabilities.
4. Paternalistic Leadership Better image
A firm that provides opportunity for financial and personal
Serves as the head of the family and treats his followers like
advancement has a better image in the employment market.
his family members. He assumes a paternal or fatherly role to
Facilitates change
help, guide and protect the followers.
Effective motivation helps to overcome resistance to change
5. Bureaucratic leadership
and negative attitude to change on the part of employees.
He depends on rules and regulations developed by him. The Human relations
rules specify the functions and duties of every member of the Effective motivation creates job satisfaction which results to
organization. cordial relations between employees and employers
Functions of leadership Sound motivation system
 Goal Determination Productive
 Motivating Followers The system must induce the employees to work efficiently. It
 Direction should result into positive increase in productivity of labor.
 Coordination Competitive
 Representation The benefits of the system must be worth its cost.
Theories of leadership Comparable inputs should yield comparable profits.
Comprehensive
1. Trait Theory A sound motivation system must provide for satisfaction of all
A successful leader is one who possesses certain traits of individual.it should be capable of being adjusted easily.
qualities. These qualities can be deduced by analyzing the Flexible
personality of a successful leader in different walk of life. An effective system should be able to adjust to changing
circumstances and environment.
Limitations
 The theory does not consider the entire environment of Motivational process
leadership as personal traits are only one part of the Awareness of the needs
environment. It does not consider the situational factors. The needs or motives of persons are the starting point in the
 It is difficult to formulate a generally accepted list of motivational process.
traits of leadership. Different people have same trait in Search for action
different degree and it is difficult to measure this In order to relief his tension and satisfy his needs, the
qualities. individual looks for suitable action.
 It is not clear as to which of the traits are more Fulfillment of the need
important and which ones are least important In case an individual is successful in his attempt, his need is
Important trait for leaderships satisfied and he feels motivated.
o Intelligence Discovery of new need
o Initiative and creativity Once one need is fulfilled, some other need will emerge and
o Open mind the individual will set a new goal.
o Self confidence
o Vision and foresight THEORIES OF MOTIVATION
Maslow’s need hierarchy theory
o Maturity
o Sense of responsibility  Abraham Maslow an American psychologist developed
o Human relations a theory of motivation on the basis of human needs. The
2. Behavioral Theory main points included the following:
 Man is perpetually wanting animal and his needs are
It is based on the assumption that leadership depends upon
never fully satisfied. As soon as one need is satisfied
what the leader does. Leadership is a function of effective role
another need takes place.
behavior. The leader uses his skills to exercise influence and
 Human need differ in importance and can therefore be
modify the behavior of his subordinates.
arranged in series of levels
 An individual’s needs at a particular level on the
Situational leaders
Leadership is considered to be a function of the situation. The hierarchy emerge only when the lower- Level needs are
ultimate test of leadership lies in obtaining the right type of reasonably satisfied.
behavior on the type of followers in particular situation.  The lower order needs are more finite than the higher
level needs.
LeadershipQualities According to Maslow, human needs can be classified into
 Physical and mental vigor five categories;
 Emotional stability
Physiological needs:
 Sense of judgment
This includes food, drink, air, sex sleep clothing and shelter.
 Balance
These need essential for survival of human life. They are the
 Understanding and empathy most basic or fundamental needs that must be satisfied before
 Motivation all the other needs.
 Communication skills Safety needs
 Ability to guide It is basically the security needs, it consist of physical safety.
 Sociability Every person needs protection against danger or deprivation.
 Technical competence Social needs
Man is a social being, he has the need to belong, and to be
accepted by others that is love and affection, association with
and acceptance by various social groups, friendship.
Ego needs
It implies self- esteem that is self-respect, self-confidence,
feeling of self- worth and independence.
one becoming what is capable of becoming.
EVALUATION OF MASLOW’S THEORY
Merits
8
  . The human behavior is regulated by multiple Oral or Verbal communication offers the following Information is the guide to control
motives. advantages: .
 It helps to explain why people behave differently in  Economical Elements of control
the same situations.  Personal touch  Planning
 extends to all areas of human life and is not only  Speed  Information Feedback
limited to work situations only.  Flexibility  Delegation of Authority
 It is more a complete theory of motivation as it  Quick response  Remedial action
recognizes that an individual work to fulfill a Demerits
variety of needs. Oral Communication suffers from the following weaknesses- IMPORTANCE OF CONTROL
 It helps to explain motivation of various  Lack of record
professionals  Time Consuming Facilitates decision making.
 It shows that people are motivated by unsatisfied  Lengthy message Facilitates decentralization
needs and that satisfied needs have no motivational  Physical distance Stimulates action
power.  Misunderstanding Promotes efficiency of operations
 It postulates that as lower levels needs are fulfilled 2. WRITTEN COMMUNICATION Promotes coordination
higher levels needs replace and govern human Control promotes coordination between different units in the
behavior. Written Communication is transmitted through written words organisation.
Demerits in the form of letter, circular, memos, bulletins, instruction
 A person often seeks to satisfy several needs at thecards, manuals, handbooks, reports, returns, ESSENTIALS FOR CONTROL
same time. Merits
Suitability
 The need priority order cannot in all cases be  Effectiveness
A good control system must be tailor-made suit the nature and
generalizedas it depends on cultural values and  Lengthy messages
requirements of the activity controlled.
personality of an individual.  Economical Promptness
 Movement in the need hierarchy is not always  Repetition An ideal control system should be able to detect and report
upward.  Permanent record deviations as soon as possible.
 It same cases the need may cause different type of  Better response Forward looking
behavioreg money may satisfy physiological, Demerits It should enable the manager to think ahead and plan for the
safety and social needs. future.
 Time Consuming Control by exception
COMMUNICATION  Expensive . It should focus attentions on strategic points or key areas.
Communication means sharing ideas in common.  Inflexibility Objective
Characteristics of communication  Little secrecy They should be based on facts and participation so that control
 Lack of personal touch is acceptable and workable.
 The source of communication sender
 Misunderstanding Flexibility
 The content of communication Control system should be flexible enough to be adjusted
COMMUNICATION NETWORKS
 The process by which communication is produced according to changes in needs and circumstances.
 The method by which the communication is transmitted Simplicity
 Circle Network
 The procedure involved in receiving a communication A control system can be very effective when it is understood
 Chain Network
 The destination of communication by all.
 Wheel Network
 Understanding of the communication by the recipient
 All Channel Network
 Communication is a circular process. Every TOPIC SEVEN
communication leads to some reaction or feedback MATERIAL CONTROL
BARRIERS TO COMMUNICATION
which in turn generates future communication.  It is concerned with ensuring that the right
A. Organizational Barriers
COMMUNICATION PROCESS quantity and quality of materials are available
Communicator 1. Ambiguous policies, rules and procedures when and where required.
Message 2. Status patterns  It is the process involving acquisition, storage,
Encoding 3. Long chain of Command handling and use of all types of materials and how
expresses his idea into words symbols or sign or gestures to 4. Inadequate Facilities to effectively control them.
convey the message.  It is the art of making sure that the organization
Communication channel B. Mechanical Barriers has the right quantity at the right time and at the
Receiver right quality.
 Overloading
Decoding A good system of quality control should ensure that:
The receiver of the message decodes the message to derive  Semantic barriers
meaning from the message.  Noise  Centralization purchasing under a buyer
Feedback C. Personal Barriers  Departmental co-operation in purchasing,
Sound Communication provides the following o Lack of attention or interest inspecting receiving storing and issuing of
materials
ADVANTAGE o Failure to Communicate
 Simplifying and standardizing whenever possible
o Hasty Conclusion
 Improves Managerial Performance  Efficiency in storing in suitable accommodation,
o Distrust of communicator
 Facilitates Leadership with safeguards against stealing
o Improper state of mind.
 Increases job Satisfaction  Planning and scheduling material requirements
 Reduces time and efforts and preferably controlled by budget
EFFECTIVE COMMUNICATION
 Enhances coordination  Stock taking procedure to be efficient
 Help public relations  Sound Organization Structure Acquisition
CHANNELS OF COMMUNICATION  Clear messages Sources of purchase information
1. Formal Communication – follows the route formally  Two-way Communication These aredocuments that provide the purchasing department
laid down in the organization structure  Multiple Channels with information that aid in purchase decision making. They
 Downward Communication: flow of  Good Listening include the following written documents:
communicationfrom superior to subordinate  Effective Control Catalogue
 Upward Communication: flow of communication  Modern Instrument
A catalogue is published by the manufacturer informing the
from subordinate to superior  Human Relations attitude
buyers about the goods on sale. The documents contain details
 Horizontal Communication: transmission of ESSENTIALS OF COMMUNICATION
of goods for sale and the items there in. The items are
information among the positions at the same level
 Clarity of messages numbered so that they may be easily without giving rise to
of the Organization.
 Completeness of message mistakes. The record of catalogue of suppliers of materials and
 Consistency of message equipment likely to be used is invaluable and should be kept in
2. Informal Communication or Grapevine –
 Proper timing good conditions up to date and adequately indexed. The best
Communication among people through informal
 Credibility way to store catalogue is by box files and indexed numerically
contacts or relations.
 Empathy or alphabetically.
Tenders
METHODS OF COMMUNICATION  Follow-up
 Oral Communication  Economy A tender is a written order or quotation to supply certain goods
 Written Communication at a definite price. When accepted in form of notes or letter it
 Gestural Communication becomes a written contract by law, they should be kept in a
CONTROLLING simple way so that both parties understands their legal
1. ORAL COMMUNICATION It is the process of comparison and verification that ensures obligations to avoid legal disputes.
expected performance. Price list
Oral Communication involves exchange of messages through PURPOSE OF CONTROL
spoken words. It is a document written by the seller to the buyer informing
Control is an essential function of management him of the goods available and their respective prices for each.
Control is a continuous process It contains the prices of goods listed at the time it was
Merits Control is based on planning manufactured. It does not constitute a promise or commitment
Action is the essence of control to sale the goods at the stated price.
Key to control lies in delegation
9
 Delivery note Characteristics
Quotations Process of entering into simultaneous two contracts having
This is a document showing the list of goods without showing
two distinct
It is a document written by the supplier to the buyer indicating the prices, which is sent to the buyer. It is used for checking
the goods on offer and their respective prices. It also includes the goods without having to make use of the invoice. When the
TOPIC EIGHT
other details which includes goods are delivered to the buyer, he is supposed to retain one
STORES MANAGEMENT
 The period which the prices are valid copy and return the other to seller duly signed by him. It
is “to receive materials, to protect them while in storage from
 The rates of discount offered proves that the goods have already been received by the buyer.
damage & unauthorized removal, to issue the material in the
 Mode of delivery Packing note
right quantities, at the right time to the right place and to
 Terms of payments It shows the list of items packed in a particular box. provide these services promptly and at least cost”.
This document requires careful handling by the purchasing Consignment note Objectives of store
department.
Performa invoice This is a document provided by the carrier in which the sender Minimizing cost of production through minimizing cost on
fills the details of the goods to be dispatched i.e. the names and materials
It is a document similar to invoice but it does not make the addresses of the seller and the buyer. It indicates whether the Maintaining the value of materials
importer responsible to pay. It states a commitment from the freight is already paid for or whether the buyer has to pay for it Service to user departments
seller to sell the goods to the buyer at specific prices and at the destination. Establishing Co-ordination with other departments
terms. It is used to declare the value of the transaction. Invoice Advising materials Manager
PURCHASING PROCEDURE FUNCTIONS OF STORES
The procedure for purchasing department will depends on the It is a document that gives the quality, quantity, unit price;  Receipt
type of the organization, the size of the organization and the total value of goods dispatched, any discount allowed and total  Storage
nature of products. Normally the following procedure is charges. Small firms usually prepare only one carbon copy for  Retrieval
adopted in making a purchasing for the organization. their record. It is necessary that stores department should
 Issue
Indenting- inventory control or stores department places the enclose a certificate to the effect that materials have been
received in the ordered quantity and quality.  Records
purchase requisition with the purchase department.
Payment of the invoice  Housekeeping
 Inquiry from suppliers.
 Control
 Receiving quotations from suppliers. The passing of invoice for payment is usually an account
 Surplus management
 Preparing comparative statements. function. The process starts when the purchase department
sends copies of purchase order to the invoice section of the  Verification
 Approving the suppliers.
accounts where they are filed in the respective supplier file.  Interaction & coordination
 Placing an order with the supplier.
 Sending copies of purchase order to: When the invoice are received they are serially entered in the
in the invoice register. The price, discount, packing charges, Receipt
i) Indenting department
ii) Inventory control section freight or delivery charges must be verified from the purchase Any item of goods or material that enters the organization
iii) Accounts department order. The invoice is then sent to the payment section and always enters through the stores.
iv) Stores department payment is made according to the terms of payment. Storage
 Following-up the order. Once the unloaded material is approved by the quality control
 Receiving of supplies from the supplier by the PURCHASING SYSTEMS department, as per the quality plan in the quality system, it is
store department. Hand to mouth purchasing
moved to a specific place in the stores layout.
 Inspection at the section. A purchase manager is required to procure the materials is the Retrieval
 Receiving the inspection report. most economical quantity; he purchases only that quantity
 Requesting the accounts department to make the which may keep the production unit running. It is usually done Easy and quick retrievability of items that are demanded by
payments. when the manager is sure that the supply will never be the internal customers
Document used during purchase procedure interrupted. Issue
Advantages Fulfilling customer demand for the item in minimum time,
 Purchasing requisition
 If the prices are declining the purchase department may keeping quality high and cost minimum is issue.
 Purchase enquiry postpone larger purchases until either the price levels go Records
 Supplier’s quotation lower or stabilizes at a certain levels.
 Comparative statement Updating the stock levels as per movement of materials
 If the purchase department is able to forecast the price
 Purchase order Housekeeping
decline fairly accurately, he may end up saving
 Invoice additional cost involved in purchasing. Maintenance of spic and span cleanliness in the store and
Purchase requisition  If product or process is facing alterations in ensuring principle of Place for Everything and Everything in
It is a written list of materials for recoupment sent to the specifications and standards larger purchases may not be its place is fully implemented.
purchase department for procurement. It is submitted to the profitable. Control
head of the purchase department and is generally prepared in  There is no interruption is supply the purchase may end Taking measures to ensure material plan is being adhered to.
triplicate. One copy is send to the requisition department as a up being economical. Surplus management
copy for future reference. Disadvantages
Purchase inquiry  The price may increase or tend to increase and further Effective disposal system for unneeded material to reduce
burden the organization financially. inventory cost and proactive measures to eliminate
It is a letter sent by the purchase department to the supplier for deterioration and obsolescence
 The purchasing manager may be deprived of the much
quoting his prices for supply of materials detailed there in. The Verification
needed discount the helps the organization to save the
main purpose of this inquiry is to find out the prices and
cost of production. Stock verification is meant to eliminate gap between
quality of goods and materials which can be supplied by
 The manager is not given sufficient time and scope to information and physical stock.
different suppliers. The purchasing department can also make
survey the market and chose the best supplier because of Interaction & coordination
inquiry by putting an advertisement in the press or writing
the urgent requirement
letters of inquiry to different prospective suppliers. Very close interaction between Purchasing, production, quality
Supplier’s Quotation control and engineering functions is obviously needed in the
Forward Purchasing
On inquiry the supplier quotes his prices and the terms and discharge of the functions discussed so far.
It refers to purchasing for the future; by resorting to forward TYPES OF STORES
conditions of the supply of materials to the purchase
purchasing the manager commits the organization into the
department indicating the quantity, quality, time of delivery, 1. Centralized store
future. The manager makes a commitment to buy at a future
price discount and other concession.
date. Centralized stores concept is to store all items at a central
Comparative statement
Objectives place and control materials movement from this central place.
It is also known as the comparative schedule of quotations.  To guard against future interruptions in the supply due 2. Decentralized store
This is prepared after the receipt of the quotations from to one reason or the other.
suppliers with the view of comparing their prices terms and  Decentralization concept is moving the material to the
To facilitate uninterrupted operations of the organization
conditions. It is an important document which should be  respective consumer function or directly to the points of use.
To economize on purchase by ordering for large
carefully kept in record for future references and guidance. Features of centralized stores organization
quantity
The statement so prepared is submitted to the head of  To economize on the transport cost  Effective supervision and control.
purchasing department value and they conduct analysis.  To protect against shortage of materials  Issue at single point reduces cost of issue
Purchase order  Reduced personnel requirement
 To procure materials of the right quality at the time
Purchase order is a legal document for all purposes and is when they are available  Efficient layout for stores
prepared with great care and in all details so as to help the  To guard against future rise in the prices.  Better handling technology
supplier to supply the materials of the right quality in the right  To protect the organization against scarcity conditions
 Better inventory checks
quantity and at the right time.  Maintenance of optimum stores
Delivery of goods Speculative purchase  Elaborate documentation
After receiving the orders from the buyer the supplier makes It is carried out with an aim of profiting from the price Advantages of centralized store
arrangements to deliver the goods. The following documents changes. In a market where prices move according to the state
are involved in the process of delivery: of supply and demand it is possible to either gain or lose.  The variety of goods can be supplied to all users from
Hedging one small location.
It is a process of entering simultaneously into two contracts of
an opposite nature one in cash market, the other in market
 Less manpower will be required.
whose purpose is to protect operating profit margin.  Better control of materials is possible.
10

 Material handling will be easy.
 Wastage and deterioration of materials will be less.
Disadvantages of centralized store
 It may not be suitable for large manufacturing
concern.
 More staff will be required for shifting &
transportation of the materials to various
production units.
 Record keeping is difficult.
Features ofdecentralized stores organization
 Reduced handling
 Customer friendly
 Fewer production stoppages
 Visual management is easier
Advantages of decentralized stores
 Reduced material handling and associated cost.
 Less chances of bottlenecks and delays.
 Convenient for every department to draw
materials.
 Less transportation time.
Disadvantages of decentralized stores
 Coordination and control of all decentralized store
is a challenge to management.
Bought parts
These are finished parts or assemblies purchased from outside
suppliers to be used as raw materials or to be sold as spares or
accessories.
Tools
These are basically the maintenance, repair and operating
supplies which are consumed in the production process but do 
not become part of the final product e.g. lubrication oil.
What inventory management entails:
Inventory management entails all the unified management of
those internal activities associated with the acquisition,
storage, issue, use and internal distribution of inventory used
in production and service.It is the activity of determining the
rate and quantities and the procedures of materials to be
stocked in an organization and the regulation of receipts and
issues of those stocks.
Importance of Inventory Management
Provides both internal and external customers the required
service levels in terms of quantities and the order rate fill
(timing).
o Ascertains present and future requirements for all types
of inventory to avoid overstocking or under- stocking
o Keeps costs at the minimum by variety reduction,
economic lot sizes and analysis of costs incurred in
o
obtaining and keeping inventories.
Provides upstream and downstream inventory visibility CONDITIONS FOR GOOD INDUSTRIAL RELATIONS
or service in the supply chain
o In order to reap these benefits, inventory management
requires an effective organization and sound
communication among supervisors and managers.
 It helps in establishing and maintaining true industrial
democracy which is necessary for establishing of a
socialistic society
 It helps the management in the formulation of informed
labour relations policies and their translation into action.
 It encourages the collective bargaining as a means of
self-regulation
Industrial relations help the government in making laws
forbidding unfair practices of unions and employers
 It helps in reducing the number of disputes and
grievances and therefore boost the morale and discipline

of workers
helps in orderliness, effectiveness and efficiency of
economy
Objectives of industrial relations
 Safeguarding the interest of labour and management by
securing the highest level of mutual understanding
 Avoiding the industrial conflict and strife and
developing harmonious relations
 Raising productivity to a higher level by reducing
absenteeism and labour turnover
 Establishing and nursing the growth of industrial
democracy based on labour partnership
 eliminating possible strikes, lockouts and other forms of
industrial action
History of industrial relations
Economic satisfaction of workers
Social and psychological satisfaction
Enlightened labour unions

 Labor utilization may suffer due to low store INDUSRIAL RELATIONS

Public policy and legislation
activity level. Negotiation skills and attitudes of management and
Some other types of storage Industrial relations
Is a system or web of rules regulating employment and ways in workers
As per types of the materials stored which people behave at work.
Better education
 Raw Materials store Employee relations
CAUSES OF POOR INDUSTRIAL RELATIONS
This is the approaches and methods adopted by the employers
 Components store to deal with employees through the trade unions. Uninteresting nature of the job
 Work in process store Labour relations
Political nature of trade unions.
 Finished goods store
It is the relationship that exists between the employer and the
employee in an industrial undertaking.
Poor wages
 Semi-finished goods store Industrial court Occupational instability

 Tools store, die crib The court that was established under section 14, the trade Poor behavioural climate
dispute act, Cap 234
.
 Consumable materials store Redundancy
Methods of improving good industrial relations
Stores Layout Is the loss of employment, occupation, job or career by
Empathy
Physical arrangement of storage facilities for efficient receipt, involuntary means involving the termination of work.
storage and issue of materials is called as layout of stores. In a Strike Both the trade unions and management should develop
properly arranged store, the materials are properly maintained. constructive attitudes towards each other and work towards
The cessation of work by a body of person employed in a trade
It involves minimum of handling and optimum utilization of organizational objectives
or industry in an attempt to draw attention to their grievance
space Communication
Lock-out
Factors affecting stores layout All the basic policies and principles as well as procedures
The closing of a place of employment or the suspension of
relating to industrial relations should be properly
 Type of Stock work, or refusal by an employer to continue to employ any
communicated to both the management and employees.
number of persons employed by him in consequence of a
 Volume of stock dispute
Integrity
Trade dispute Thepersonnel manager should remove anykind of distrust by
 Availability of space convincing the trade union about the company’s integrity in
Difference between employers and employees with the terms
 Physical factors of employment or with conditions of labour
dealing with workers.
Store System Loyalty

Closed door system: the stored material is held under lock
and key. Entry into the store is restricted authorized persons
only.
Open stores system: In this system material is stored near
point of use and there is restriction on consumption. Control
passes on to the operations department
INVENTORY
It is the stock of any items or resources held in an organization
for sale or use.
Types of Inventory
Stock in-trade/finished goods
This is the stock carried by a merchandising firm (wholesale,
retail or other trading concern) to be sold at a profit.
Raw materials
These are basic materials or outputs from the primary sector
which undergo production transformation processes to
become finished products
Work in progress
Comprises incomplete items e.g. wine-making industry..
Piece parts
They are all small components manufactured from raw
materials e.g bolts, nuts.
Employment relations policies
Trade unions recognition: only one union for collective
bargaining and employment representational purpose.
Collective bargaining: the extent to which it should be
centralized or decentralized and the scope of areas to be
covered by collective bargaining.
Employee relations procedures: the nature and the scope of
procedures for redundancy, grievance handling and discipline
should be well articulated.
Employee relations: the extent to which terms and conditions
of employment should be governed by collective agreements
or based on individual contracts of employments.
Working arrangements: the degree to which managements
has the prerogative to determine working arrangements
without reference to trade unions or employees
Employment relations objective
 Improve the employee relations climate
 Decentralize collective bargaining agreement
 Introduce single table bargaining
 Derecognize trade unions
Significance of industrial relations
 It helps the economic progress of country.
The personnel manager should work with the union to gain
their loyalty. he should ensure that the workers remain loyal to
the management and the union.
Leadership
Management should encourage the right kind of union
leadership. Management should not discourage the existence
of trade unions
The parties involved included the:
 The government
 The employer (FKE)
 COTU
1. Government
 Ensure speedy settlement of disputes and a return to
work formula
 Have a joint consultation with COTU and FKE on
matters of employee policy and administration
 Promote industrial trade unionism as opposed to craft
trade unionism
 Ensure there is no overlap among the registered unions
through clear definition of each union

11
  To display the charter in the offices and ensure that
officers comply with it.
2. Employer (FKE)
 Accord recognition to unions as negotiating bodies, by
signing the recognition agreements
 To recognize the ILO convention No 98; the right to
bargain collectively and to organize freely
 To take action to settle grievance that may arise in the The court consists of two judges of the high court appointed by
organization.
 To implement all decisions in the CBA
3. COTU
 Discourage the breach of peace or civil commotion by parties. The award is final and there is no provision for appeal
union members
 Ensure the union representatives do not encourage
members to engage in union activities during
working hours.
 Promote a high degree of union membership so that
CBA covers a majority of workers.
FRAMEWORK OF INDUSTRIAL RELATIONS IN
KENYA
COTU. The objectives of COTU are to:
 Improve the economic and social conditions of all
workers in all parts of Kenya and render to them
assistance whether or not such workers
 Improve the economic and social conditions of all
workers in all parts of Kenya and to render them
assistance where necessary.
 Assists in the complete organization of all workers in
the trade union movement
 Organize the structure and spheres of influence and
amalgamation of trade unions affiliated to COTU
 Assists in selling of disputes between member of trade
unions and their employers
 Encourage the principle of development and
maintenance of good relations between the
employers and employees
 Secure adequate representation on government boards
and committees dealing with labour legislation on
matters affecting workers.
 Establish and maintain funds by means of membership
fees monthly contribution and donations
FUNCTIONSOF COTU
 Maintaining and advancing the terms and conditions of
employment as well as improve the physical working
conditions of all workers.
 Safeguarding and increasing employment opportunities
 Conducting industrial disputes and raising and
disbursing funds. it assists in settling disputes between
members of trade unions
 Setting up appropriate committees to provide benefits
and welfare activities such as education training, legal
aid and sickness benefit
 Increasing the participation of workers in the control of
industry
 Organizing the structure and spheres of influence and
amalgamation of trade unions affiliated to COTU.
 Maintaining adequate representation on government
boards and committees dealing with labour legislation
Assignment: briefly describe the structure of COTU
FEDERATION OF KENYAN EMPLOYERS FKE
Objectives
 Promote good industrial relations between employers
and employees through trade unions
 Encourage fair trade practices among the employers
 Collect, collate and circulate information and advice
members on their rights and obligations on
employment matters
 Initiate, promote and support legislative measures
which are likely to benefit employers or to
promote their interest.
 Represent, advocate and defend the interest of
employers generally.
THE INDUSTRIAL COURT
Functions of industrial court
 It adjudicates in trade disputes which have complex
questions and issues of economic social and
political nature.
 It is concerned with conditions of employment
 It accepts the collective agreements for registration for
it to be legally recognized and implemented
 It determines and verifies the desirability and legality
of collective agreements before they are
implemented. This is done through amendments
and further negotiations between the concerned
parties
 It oversees the award to be made after the settlements
in a trade dispute.
 It can investigates matters related to trade disputes
with the purpose of gathering relevant evidence
COMPOSITION
the judicial service commission for a term of five years. The
person must have served as an advocate of high court for a
period of seven years.
Thecourt is empowered to make awards to the aggrieved
hence the decision is binding. When making a decision the
court must involve the employer represented by the FKE, the
employer represented by a trade union and the industrial court
judge presiding assisted by members of the court.
INDUSTRIAL DISPUTE
It is any dispute or difference between the employer and
employees which is concerned with the termsof employment
or the conditions of labour.
COLLECTIVE BARGAINING
They are agreements between management and trade unions to
determine specified term and conditions of employment for a
group of employees. The process of collective bargaining
occurs only when a trade union is involved.
Nature of Collective Bargaining
 The negotiation is not done individually but collectively
through the trade union representatives
 It takes place where there is a trade union that is
recognized by the management
 The collective bargaining should aim to provide the
basis for maintaining a good employee relations climate
and harmonious relationships with trade unions and
employees generally.
 The collective bargaining agreements can only functions
only where there is:
Willingness by the workers and their trade unions to be
involved
The power to force the employer to accept negotiations
Willingness by the management to accept that decision
affecting workers must be agreed on between the two parties
before they are implemented.
Content of the collective bargaining
The collective bargaining results into a labour contract,
The contract may contain the following:
 Name of the parties involved in the agreement
 Duration to be covered by the agreement
 Working conditions like permissible breaks,
severance pay
 Union security, like check-off procedures and
recruitment of union members
 Job security, termination, promotions, demotion
and transfers
 Grievance and dispute procedures
 Management rights
TYPES OF AGREEMENTS
Substantive agreements
These lays down the terms and conditions of employment to
be reflected in each workers contract of employment. This
includes pay rates, working hours, holidays, pension schemes,
sick leave and retirement age.
Procedural agreements
These lays down the procedure to be followed in specific
situations, they cover the way in which a dispute can be
regulated, the timing and approach in making substantive
agreements. The purpose is to provide a laid down procedures
so that any conflict arising out of uncertainty can be avoided.
Distributive agreements
This is based on the assumption that one party’s gain is the
other’s loss; usually each party to any bargain tries to
minimize its losses and maximize its gains.
Integrative agreements
These arise when two parties negotiate without a loss to one
another. This happens when the workers agree to make
changes in practices, which may lead to more economic
operations and in return the employer agrees to increase to pay
and improve agreed upon terms.
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