I

NTRODUCTI
ONTOMANAGEMENT

2021

1
Chapt
erOne:Fundament
alsofManagement

Def
ini
ti
onofManagement

Asf
arast
hedef
ini
ti
onofmanagementi
sconcer
ned,i
tisr
ichi
ndef
ini
ti
on.Hence,
t
her
eisnooneuni
ver
sal
lyaccept
eddef
ini
ti
onofmanagement
.Thi
sisbecause:
 Managementasadi
sci
pli
nei
srecenti
nor
igi
nandasaf
iel
dofst
udyi
tist
oo
y
oung.
 Managementi
ssobr
oadt
hati
tisdi
ff
icul
ttoencompassal
lofi
tsaspect
sina
si
ngl
edef
ini
ti
on.
 Ther
e ar
e di
ff
erentappr
oaches t
o management
,def
ini
ti
ons change as t
he
env
ironmentchanges.Theenv
ironmentofanor
gani
zat
ionchangesbecauseof
changesi
npol
it
ical
,economi
c,soci
al,
ethi
cal
,et
cenv
ironmentchanges.
Managementhasbeengi
venv
ari
ousbutmut
ual
lysuppor
ti
vedef
ini
ti
onsbydi
ff
erent
aut
hor
sandschol
ars.Someoft
hedef
ini
ti
onsgi
venbyt
heseaut
hor
sar
egi
venbel
ow:
 Accor
dingt
oF.
W.Tay
lor
,"Managementi
sthear
tofknowi
ngwhatyouwantt
o
doi
nthebestandcheapestway.
"
 Accor
dingt
oH.Koont
zandhi
sco-aut ,"
hor Managementi
sthepr
ocessof
desi
gni
ngandmai
ntai
ninganenvi
ronmenti
nwhi
chi
ndi
vidual
sar
ewor
king
t
oget
heri
n-gr
oupaccompl
ishef
fi
cient
lysel
ect
edai
ms.
"
 Accor
dingt
oTer
ryandFr
ankl
in,"
Managementi
sadi
sti
nctpr
ocessconsi
sti
ng
ofact
ivi
ti
esofpl
anni
ng,or
gani
zing,act
uat
ing,andcont
rol
li
ng,per
for
medt
o
det
ermi
neandaccompl
ishst
atedobj
ect
iveswi
tht
heuseofhumanbei
ngsand
ot
herr
esour
ces.
”
 Accor
dingt
oHenr
yFay
ol,"
Tomanagei
stof
orecastandpl
an,t
oor
gani
ze,t
o
command,t
ocoor
dinat
e,andt
ocont
rol
.”
 Accor
dingt
oMer
ryPar
kerFol
let
t;"
Managementi
sthear
tget
ti
ngt
hingsdone
t
hrought
heef
for
tsofot
herpeopl
e."
 Accor
dingt
oKi
nar
d,"
Managementi
sthepr
ocessofmaxi
mizi
ngt
hepot
ent
ialof
anor
gani
zat
ion'
speopl
eandcoor
dinat
ingt
hei
ref
for
tst
oat
tai
npr
edet
ermi
ned
2
 goal
s.”
 Managementi
sdef
inedast
hepr
ocessofpl
anni
ng,or
gani
zing,l
eadi
ngand
cont
rol
li
ng t
he ef
for
ts of or
gani
zat
ion member
s and of usi
ng al
lot
her
or
gani
zat
ionalr
esour
cest
oachi
evest
atedor
gani
zat
ionalgoal
s.
Fr
om t
he v
ari
ousdef
ini
ti
onsgi
ven on management
,we can der
ivet
he f
oll
owi
ng
i
mpor
tantpoi
ntsaboutt
hedi
sci
pli
ne:
 Managementr
efer
stot
hemanager
ialf
unct
ionsofpl
anni
ng,
organi
zing,
staf
fi
ng,
l
eadi
ngandcont
rol
li
ng.
 Managementcoor
dinat
esbot
hhumanandnon-humanr
esour
ces(
land,l
abor
,
capi
tal
)fort
heaccompl
ishmentofobj
ect
ives.
 Managementi
sappl
iedt
oal
lty
pesofor
gani
zat
ionsPr
ofi
tornotf
orpr
ofi
t,l
arge,
medi
um orsmal
lor
gani
zat
ion,
manuf
act
uri
ngorser
vicegi
ving.
 Managementdeal
swi
thcr
eat
ingacomf
ort
abl
eint
ernalenv
ironment
,wi
tha
gr
eatconsi
der
ati
onoft
heext
ernalenv
ironment
.

Fort
he sake ofconv
eni
ence we can def
ine managementas a di
sti
nctpr
ocess
consi
sti
ngofmanager
ialf
unct
ionsofpl
anni
ng,or
gani
zing,st
aff
ing,di
rect
ing,and
cont
rol
li
ngsoast
odesi
gnandmai
ntai
nconduci
veenv
ironmenti
nor
dert
oachi
eve
commongr
oupgoal
sandor
gani
zat
ionalobj
ect
ivesef
fi
cient
lyandef
fect
ivel
y.

TheNat
ureofManagement

Managementhasi
tsownbasi
cnot
ionsorf
undament
alsonwhi
cht
hedi
sci
pli
nebased
onandal
soi
thasi
tsownel
ement
sthati
dent
if
yitf
rom ot
herdi
sci
pli
nes.These
not
ionscanbepr
esent
edasf
oll
ow:

 Uni
ver
salappl
icat
ion:
-Managementi
sappl
iedi
nanyor
gani
zat
ion(
lar
ge,smal
lin
si
ze,orser
viceormanuf
act
uri
ngorf
or-pr
ofi
tornot
-for
-pr
ofi
t)andi
tsf
unct
ions
ar
epr
act
icedi
nanyl
evelofmanagement
.
 Goalor
ient
ed:-Anyor
gani
zat
ioni
sest
abl
ishedt
oachi
evecer
tai
nobj
ect
ives,and
managementi
simpor
tantf
oranyor
gani
zat
iont
oachi
evei
tspr
e-st
atedobj
ect
ives
ef
fi
cient
lyandef
fect
ivel
y.
 Gui
dance:- The mai
ntask ofmanagementi
s gui
dance i
nthe ut
il
izat
ion of
mat
eri
als and human r
esour
ces i
nthe bestpossi
ble manner
.Wi
thoutt
he

3
 i
nvol
vementofmanagement
,resour
cesmi
ghtbeunder
uti
li
zed,ov
erut
il
izedor
wast
ed.
 Di
vor
ced/
Separ
ated f
rom pr
opr
iet
orshi
p: - Management does not si
gni
fy
pr
opr
iet
orshi
porowner
shi
p.Manager
swor
kfort
heat
tai
nmentofor
gani
zat
ional
goal
sandobj
ect
ives.
 Managementi
sahumanact
ivi
ty:- Managementf
unct
ionsar
edi
schar
ged by
i
ndi
vidual
snotbymachi
nessuchascomput
ers.Howev
er,i
tcanbeai
dedbysuch
i
nst
rument
sascomput
ers.
 Managementsi
gni
fi
esaut
hor
it
y:- Si
ncet
hesi
gni
fi
canceofmanagementi
sto
di
rect
,togui
deandt
ocont
rol
,ithast
ohav
eaut
hor
it
y.Aut
hor
it
yist
hepowert
o
compelot
her
stowor
kandbehav
einpar
ti
cul
armanner
.
 Leader
shi
p:-Themanagerhast
oleadat
eam ofwor
ker
s.He/
shemustbecapabl
e
ofi
nspi
ri
ng,
mot
ivat
ingandwi
nni
ngt
hei
rconf
idence.
 Managementi
smul
ti
disci
pli
nar
y:-I
thasgr
ownasabodyofdi
sci
pli
net
aki
ngt
he
hel
pofsomanysoci
alsci
encesl
ikesoci
ology
,psy
chol
ogy
,economi
cs,
etc.

Si
gni
fi
canceofManagement

Managementi
soneoft
hemosti
mpor
tanthumanact
ivi
ti
es.Ev
ersi
ncepeopl
ebegan
f
ormi
ng gr
oups t
o accompl
ish act
ivi
ti
es t
hey coul
dn’
t achi
eve as i
ndi
vidual
s,
managementhasbeenessent
ialt
oensur
ethecoor
dinat
ionofi
ndi
vidualef
for
ts.As
soci
etyhascomet
orel
yincr
easi
ngl
yongr
oupef
for
ts,andasmanyor
gani
zedgr
oups
hav
ebecomel
arge,t
het
askofmanager
shasbeenr
isi
ngi
nimpor
tance.Basi
cal
ly,an
or
gani
zat
ioni
sagr
oupoft
woormor
eper
sonst
hatexi
stsandoper
atest
oachi
eve
cl
ear
lyst
ated,commonl
yhel
dobj
ect
ives.I
nanor
gani
zat
ion,i
tisqui
tepossi
blet
hat
each membermi
ghtdo par
ts ofj
obs t
hateach t
houghti
mpor
tantt
o meett
he
obj
ect
ives,whi
lei
nact
ual
it
ythemember
smi
ghtwor
kingi
nopposi
tedi
rect
ion.To
pr
eventf
rom occur
ri
ng and t
o ensur
e coor
dinat
ion ofwor
kto accompl
ish t
he
obj
ect
ives,
managementi
sneeded.

Managementi
s,t
her
efor
e,essent
ialwhenev
erandwher
everhumanef
for
tsar
etobe
undert
akencol
lect
ivel
ytoachi
evespeci
fi
cgoal
s.Nogr
oupact
ivi
tycansucceed
wi
thoutmanagement
.Moder
nent
erpr
isessucceedonl
ywhent
her
eisacompet
ent

4
l
eader
shi
pint
hef
orm ofmanagement
.A compet
entmanagerwoul
dtur
nal
osi
ng
concer
nwhi
lei
ncompet
entmanagercoul
donl
yhast
eni
tscl
osur
e.Accor
dingt
oPet
er
Dr
uckermanagementi
stheor
ganoft
hesoci
etyt
hati
schar
gedwi
thr
esponsi
bil
it
yof
maki
ngr
esour
cespr
oduct
ive.Ev
erysci
ent
if
icandt
echnol
ogi
caldev
elopmenti
sthe
r
esul
t of or
gani
zat
ion.The achi
evement
s of or
gani
zat
ions ar
e obv
iousl
y,t
he
achi
evement
soft
hei
rmanager
s.

AnOv
erv
iewofManager
ialFunct
ions

Regar
dlessoft
het
ype,si
zeandobj
ect
iveoft
hef
ir
m,al
lmanager
shav
ecer
tai
nbasi
c
f
unct
ions.Thesear
epl
anni
ng,
organi
zing,
staf
fi
ng,
leadi
ng,
andcont
rol
li
ng.Thenat
ure
andscopeoft
hesef
unct
ionsdi
ff
erf
rom managert
omanagerandf
rom f
ir
mtof
ir
m.

1)Pl
anni
ng
I
tisadeci
sionmaki
ngpr
ocesswhi
chi
nvol
vessel
ect
ionofmi
ssi
ons,obj
ect
ivesand
chooset
hebestcour
seofact
iont
oachi
evet
hem f
rom amongal
ter
nat
ives.I
tisan
i
ntel
lect
ualt
ask,whi
chbr
idgest
hegapbet
weent
hepr
esentandf
utur
econdi
ti
onsof
t
heor
gani
zat
ion(
From wher
ewear
etowher
ewewantt
obei
nadesi
redf
utur
e).
 Pl
anni
ngi
sadeci
sionmaki
ngpr
ocesst
hatdet
ermi
neswhatt
obedone,howi
t
i
stobedone,whyi
thast
obedone,wheni
tist
obedone,andbywhom i
tist
o
bedone.
 Thef
ir
stst
epi
npl
anni
ngi
sdet
ermi
nat
ionoft
heobj
ect
iveofanor
gani
zat
ion.
Andt
henobj
ect
ivesar
eest
abl
ishedf
ort
hesubuni
tsoft
heor
gani
zat
ionsuchas
depar
tment
sanddi
visi
ons.Oncet
heobj
ect
ivesar
edet
ermi
ned,pr
ogr
amsar
e
est
abl
ishedf
orachi
evi
ngt
hem i
nasy
stemat
icmanner
.
 Top l
evelmanager
s setpl
ans f
ort
he ent
ir
e company
;whi
lel
owerl
evel
manager
spr
epar
epl
ansf
ort
hei
rimmedi
atear
easofr
esponsi
bil
it
y.Pl
anni
ng
doesn'
toccuri
nav
acuum.I
tisdonei
nli
ghtofbudget
aryconst
rai
nts,
per
sonnel
r
equi
rement
s,compet
it
ion,
andot
herf
act
ors.

5
  Pl
anni
ng,asamanager
ialf
unct
ion,i
sthepr
ocessofi
ntegr
ati
ngt
hef
utur
e
act
ivi
ti
esofanor
gani
zat
ion,andr
equi
rest
heabi
li
tyt
ofor
esee,v
isual
ize,and
l
ookaheadpur
posef
ull
y.

2)Or
gani
zing
I
tisamanager
ialact
ivi
tyt
hati
nvol
vesest
abl
ishi
ngani
ntent
ionalst
ruct
ureofr
olesf
or
peopl
einanor
gani
zat
ion.I
not
herwor
ds,i
tist
hepr
ocessofcr
eat
inganenv
ironment
f
orhumanper
for
mancedependi
ngont
heobj
ect
ivesset
.Inshor
t,or
gani
zingi
sthe
pr
ocessofdet
ermi
ningt
her
olebywhi
chani
ndi
vidualpl
aysandt
hei
ndi
vidualr
oles
ar
erel
atedandi
ntegr
atedt
oachi
evet
hecommonor
gani
zat
ionalgoal
s.Or
gani
zing,
t
husi
nvol
ves:
 I
dent
if
yingact
ivi
ti
est
oachi
evet
hepr
edet
ermi
nedobj
ect
ive.
 Gr
oupi
ngt
heseact
ivi
ti
esi
ntowor
kinguni
ts.
 Assi
gnmentofr
esponsi
bil
it
ytoeachuni
twi
thcor
respondi
ngaut
hor
it
y.
 Thecr
eat
ionofor
gani
zat
ionalr
elat
ionshi
psoast
oenhancecoor
dinat
ion.

3)St
aff
ing
I
tist
hepr
ocessoff
il
li
ngandkeepi
ngf
il
ledt
heposi
ti
onsi
ntheor
gani
zat
ionst
ruct
ure.
Thi
sisdonebyi
dent
if
yingwor
kfor
cer
equi
rement
s,i
nvent
ory
ingt
hepeopl
eav
ail
abl
e,
r
ecr
uit
ing,sel
ect
ing,pl
aci
ng,pr
omot
ing,compensat
ing,t
rai
ninganddev
elopi
ngbot
h
candi
dat
esandcur
rentj
obhol
der
stoaccompl
isht
hei
rtasksef
fect
ivel
yandef
fi
cient
ly.

4)Leadi
ng
I
tisi
nfl
uenci
ng,mot
ivat
ing and di
rect
ing peopl
e so t
hatt
heywi
llcont
ri
but
eto
or
gani
zat
ionandgr
oupgoal
s;i
thast
odopr
edomi
nant
lywi
tht
hei
nter
per
sonalaspect
ofmanagi
ng.Tobeef
fect
ivel
eader
s/manager
sneedt
ounder
standi
ndi
vidualand
gr
oupbehav
ior
,techni
quesofmot
ivat
ion,andef
fect
ivest
ylesofl
eader
shi
p.Manger
s
must dev
elop r
elat
ionshi
ps t
hat ensur
e adequat
e communi
cat
ion wi
th t
hei
r
subor
dinat
es.Leadi
ngal
soi
ncl
udesmanagi
ngper
sonalconf
li
ct,hel
pingempl
oyees,
dealwi
thchangi
ngcondi
ti
ons,andi
nsomecasesdi
sci
pli
ningempl
oyees.Leader
shi
p
r
equi
resgoodi
nter
per
sonalski
ll
s.

5)Cont
rol
li
ng
I
tist
hepr
ocessofmeasur
ingandcor
rect
ingofact
ivi
ti
esofsubor
dinat
es,t
oensur
e
t
hatev
ent
sconf
ormt
opl
ans.I
tal
soi
nvol
vest
aki
ngcor
rect
ivemeasur
es(
act
ions)i
f
6
 negat
ivedev
iat
ionsexi
st.Thecont
rol
li
ngf
unct
ioni
nvol
vest
hef
oll
owi
ngst
eps:
 Est
abl
ishi
ngst
andar
dsofper
for
mance.
 Measur
ingact
ualper
for
manceandcompar
ingi
tagai
nstt
hepl
ant
hegoal/
the
est
abl
ishedst
andar
d.
 Taki
ngcor
rect
ivemeasur
esi
fther
ear
edev
oti
ons.
Act
ualr
esul
tsmaydi
ff
erf
rom desi
redr
esul
tsi
nanyar
ea,butt
het
hreei
mpor
tant
aspect
sthatr
equi
ret
hemostat
tent
ionar
epr
oductqual
it
y,wor
kerper
for
mance,and
costcont
rol
.

Pl
anni
ng Or
ganizi
n St
aff
ing Leadi
ng Cont
rol
li
ng
g
Cor
rect
iveact
ion

Fi
gur
e1.
1:Thepr
ocessofmanager
ialf
unct
ions

Lev
elsofManagementandTypeofManager
s
Manager
scanbecl
assi
fi
edi
ntwoway
s:
 Byt
hei
rlev
eli
ntheor
gani
zat
ion– t
hesocal
led f
ir
stl
ine,mi
ddl
eandt
opl
evel
manager
s
1)Fi
rstl
ineManager
s- Manager
swhoar
eresponsi
blef
ort
hewor
kofoper
ati
ng
empl
oyeesonl
yanddonotsuper
viseot
hermanager
s;t
heyar
ethef
ir
storl
owest
l
evel
sofmanager
sint
heor
gani
zat
ionalhi
erar
chy
.Thesepestpeopl
ear
emanager
sat
t
hef
ir
ingl
inewher
emostconcr
eteor
gani
zat
ionalt
asksar
eper
for
med.I
tincl
udes
of
fi
cemanager
s,super
int
endent
s,f
oreman,chi
efcl
erks,super
visor
s,et
c.Fi
rstl
evel
managementi
sof
tencal
led"
super
visor
s".Theyar
emai
nlyconcer
nedwi
th:
 Pl
anni
ngofdayt
odaywor
k. t
osuper
ior
s
 Assi
gnmentofj
obs.  Mai
ntai
ningcl
osecont
act
swi
th
 Keepi
ngawat
chonwor
ker
s wor
ker
sandev
aluat
ionoft
hei
r
per
for
mance. wor
k.
 Sendi
ngr
epor
tsandst
atement
s
2)Mi
ddl
elev
elManager
s:Thesear
emanager
swhodi
rectt
heact
ivi
ti
esofl
owerl
evel
7
manager
s and somet
imes ext
end t
o super
visi
on ofoper
ati
ng empl
oyees.Thei
r
pr
inci
palr
esponsi
bil
it
iesar
etodi
rectt
heact
ivi
ti
est
hati
mpl
ementt
hei
ror
gani
zat
ion'
s
pol
ici
esandt
obal
ancet
hedemandsoft
hei
rsuper
ior
swi
tht
hecapaci
ti
esoft
hei
r
subor
dinat
es.Thet
it
lesi
ncl
udedepar
tmentheads,deput
ydepar
tmentheads,br
anch
manager
s,wor
kmanager
s,et
c.Themaj
orf
unct
ionsofmi
ddl
elev
elmanagesar
e:
 Act
ingasi
nter
medi
arybet
weent
opandoper
ati
ngl
evelmanagement
.
 Tr
ansl
ati
ngl
ong-t
erm pl
ansoft
opl
evelmanager
sint
omedi
um r
angepl
ans.
 Dev
elopi
ngspeci
fi
ctar
get
sint
hei
rar
easofr
esponsi
bil
it
y.
 Dev
elopspeci
fi
cschedul
est
ogui
deact
ionsofoper
ati
ngl
evelmanagement
.

3)TopLev
elManager
s:Composedofacompar
ati
vel
ysmal
lgr
oupofexecut
ivesand
t
heyar
eresponsi
blef
ort
heov
eral
lmanagementan or
gani
zat
ion.Theyest
abl
ish
oper
ati
ngpol
ici
esandgui
det
heor
gani
zat
ion'
sint
eract
ionswi
thenv
ironment
.Ty
pical
t
it
lesi
ncl
udeCEO,pr
esi
dent
,seni
orv
icepr
esi
dent
,et
c.Commonf
unct
ionsoft
opl
evel
managementi
ncl
udes:
 Est
abl
ishi
ngbr
oadobj
ect
ives.
 Desi
gni
ngmaj
orst
rat
egi
es.
 Outl
ini
ngpr
inci
palpol
ici
es.
 Pr
ovi
dingef
fect
iveor
gani
zat
ionalst
ruct
uret
hati
nsur
esi
ntegr
ati
on.
 Pr
ovi
dingov
eral
lcont
roloft
heor
gani
zat
ion.
 Deal
ingwi
thext
ernalpar
ti
esbyr
epr
esent
ingt
heor
gani
zat
ion.
 Anal
yzi
ngt
hechangesi
ntheext
ernalenv
ironmentandr
espondt
oit
.

 Byt
her
angeofor
gani
zat
ionalact
ivi
ti
esf
orwhi
cht
heyar
eresponsi
ble–so
cal
ledFunct
ionalandgener
almanager
s.

1.Funct
ionalManager
s:- t
hesear
emanager
swho ar
eresponsi
blef
oronl
yone
or
gani
zat
ionalact
ivi
ty,suchaspr
oduct
ion,mar
ket
ing,sal
es,orf
inance.Thepeopl
e
andact
ivi
ti
esheadedbyaf
unct
ionalmanagerar
eengagedi
nacommonsetof
act
ivi
ti
es.
2.Gener
alManager
s:-t
hesemanager
s,ont
heot
herhand,ov
erseeacompl
exuni
t,
suchasacompany
,asubsi
diar
y,orani
ndependentoper
ati
ngdi
visi
on.He/
shei
s
r
esponsi
blef
oral
ltheact
ivi
ti
esoft
hatuni
t,suchasi
tspr
oduct
ion,mar
ket
ing,sal
es,
and f
inance.They ar
e manager
s who ar
eresponsi
blef
ormanagi
ng t
he ent
ir
e
oper
ati
onsofamor
ecompl
exuni
tordi
visi
onwhi
chmayhav
etwoormor
efunct
ional
uni
ts.

8
Manager
ialRol
esandSki
ll
s
Manager
ialRol
es
Manager
ialf
unct
ionsar
egener
aladmi
nist
rat
ivedut
iest
hatneedt
obecar
ri
edouti
nal
l
pr
oduct
ive or
gani
zat
ions. Manager
ial r
oles ar
e speci
fi
c cat
egor
ies of
behav
ior
/manager
ialbehav
ior
.Manager
ialf
unct
ionsi
nvol
vedesi
redoutcomes.These
out
comesar
eachi
evedt
hrought
heper
for
manceofmanager
ialr
oles(
act
ualbehav
ior
).
I
not
herwor
ds,Rol
esar
ethemeansandf
unct
ionsar
etheendsoft
hemanager
'sj
ob.
Henr
yMi
ntzber
gident
if
iedt
endi
ff
erentbuti
nter
rel
atedor
gani
zedset
sofbehav
ior
,or
r
oles.Theset
enr
olescanbesepar
atedi
ntot
hreecat
egor
ies.

1. I
nter
per
sonalr
oles:t
hreemanager
ialr
olesar
eenact
edwhent
hemanagerengages
i
nint
erper
sonalr
elat
ionshi
p.Theyar
e:
Fi
gur
eheadr
ole-t
hisr
olei
spl
ayedbymanager
swhoar
erequi
redt
oper
for
m dut
iesof
cer
emoni
alandsy
mbol
ici
nnat
uresuchassi
gni
ngdocument
s,r
ecei
vingv
isi
tor
s,et
c.
Leaderr
ole - manager
s pl
ay t
hisr
olet
hrough hi
ri
ng,t
rai
ning,mot
ivat
ing and
di
sci
pli
ningempl
oyeest
ogett
hej
obdonepr
oper
ly.
Li
aisonr
ole-manager
s’pl
ayt
hisr
olebycont
act
ingpeopl
eout
sidet
hegr
oup,by
ser
vingasal
inki
nahor
izont
al(
aswel
lasv
ert
ical
)chai
nofcommuni
cat
ion.

2.I
nfor
mat
ionalr
oles - Al
lmanager
s,t
o some degr
ee,wi
llr
ecei
ve and col
lect
i
nfor
mat
ionf
rom or
gani
zat
ionsandi
nst
it
uti
onsout
sidehi
sorherown.I
tincl
udes:
Moni
tor
/Ner
veCent
erRol
e-asamoni
tor/
ner
vecent
er,t
hemanagert
ri
est
okeep
i
nfor
medaboutwhati
shappeni
ngi
ntheor
gani
zat
ionorgr
oup.Manager
sser
veasa
f
ocalpoi
ntf
ornon-r
out
inei
nfor
mat
ion;t
heyr
ecei
veal
lty
pesofi
nfor
mat
ionf
rom
newsr
epor
ts,
tradepubl
icat
ions,
magazi
nes,
cli
ent
s,et
c.
Di
ssemi
nat
orr
ole-t
hei
nfor
mat
ionamanagergat
her
sasamoni
tormustbegl
eaned
andt
ransmi
tt
edt
oappr
opr
iat
emember
soft
heor
gani
zat
ion.Asadi
ssemi
nat
or,a
managersendsoutsi
dei
nfor
mat
ioni
ntot
heor
gani
zat
ionandi
nter
nali
nfor
mat
ion
f
rom onesubor
dinat
etoanot
her
.Tr
ansmi
tt
ingsel
ect
edi
nfor
mat
iont
osubor
dinat
es.
Spokesper
sonr
ole-i
tist
her
oleofamanageri
ntr
ansmi
tt
ingsel
ect
edi
nfor
mat
iont
o
out
sider
s.I
tispl
ayedbyamanagerwhenev
erhe/
sher
epr
esent
stheor
gani
zat
ionor
i
tsposi
ti
ont
oot
hergr
oups,i
ncl
udi
ngt
hegov
ernmentagenci
es,cust
omer
,andt
rade
or
gani
zat
ions.

3. Deci
sionalRol
es:- Bot
hint
erper
sonaland i
nfor
mat
ionalr
oles ar
ereal
ly
i
ncl
udest
othedeci
sionalr
ole.I
tinv
olv
esdeci
sion-maki
ng.Themanagerpl
ayst
his

9
r
oleas:
Ent
repr
eneur
-manager
sasanent
repr
eneuri
nit
iat
eandov
erseenewpr
oject
sthatwi
ll
i
mpr
ovet
hei
ror
gani
zat
ion'
s per
for
mance.Thi
sincl
udes desi
gni
ng and i
nit
iat
ing
changeswi
thi
ntheor
gani
zat
ion.
Di
stur
bancehandl
er-t
aki
ngcor
rect
iveact
ionsi
nnoner
out
inesi
tuat
ions/
themanager
deal
swi
thsi
tuat
ionsourwhi
chheorshehasl
it
tl
econt
rol
.Thesemayi
nvol
veconf
li
ct
bet
weenpeopl
eorgr
oupsorunexpect
edev
ent
sout
sidet
hecompanymayaf
fectt
he
f
ir
m'soper
ati
ons.
Resour
ceal
locat
or-manager
spl
ayt
hisr
olewhent
heyar
einaposi
ti
ont
odeci
de
exact
lywhoshoul
dgetwhatr
esour
ces.Theser
esour
cesi
ncl
udet
ime,
money
,peopl
e-
peopl
e,andphy
sicalr
esour
ces.
Negot
iat
or-par
ti
cipat
ingi
nnegot
iat
ingsessi
onswi
thot
herpar
ti
es(
e.g.v
endor
sand
uni
ons)t
o make sur
ethe or
gani
zat
ions i
nter
est
s ar
e adequat
elyr
epr
esent
ed.
Manager
sper
for
mthi
srol
e,i
nwhi
cht
heydi
scussandbar
gai
nwi
thot
heruni
tst
ogai
n
adv
ant
agesf
ort
hei
rownuni
t.

Ski
ll
sofManagement
Aski
lli
saper
son'
sorani
ndi
vidual
'
sabi
li
tyt
odoorper
for
m acer
tai
nthi
ngexper
tl
yor
i
ntel
lect
ual
ly.Si
mil
arl
y,manager
ialski
ll
sar
eski
ll
sofamanageabi
li
tyofamanagert
o
per
for
m hi
sdut
iesandr
esponsi
bil
it
iesexper
tl
y.Theseski
ll
shel
pmanager
stoper
for
m
t
hei
ract
ivi
tyi
nef
fi
cientandef
fect
iveway
/mannerf
ort
heachi
evementoft
heobj
ect
ive
oft
heor
gani
zat
ion.Thesemanager
ialski
ll
scanbecl
assi
fi
edas:
1)Techni
calski
ll
-Thi
sski
lli
stheabi
li
ti
esofamanagert
hatar
enecessar
ytocar
ry
outaspeci
fi
ctask.I
tinv
olv
est
heabi
li
tyt
ousespeci
ali
zedknowl
edgeandexper
ti
se
wi
thwor
krel
atedt
ool
s,pr
ocedur
es,andt
echni
ques.Techni
calknowl
edgei
sofgr
eat
i
mpor
tanceatl
owerl
evel
swher
etheor
gani
zat
ion'
sgoodsandser
vicesar
epr
oduced.
Techni
calski
ll
sar
eusual
lyobt
ainedt
hrought
rai
ningpr
ogr
amst
hatanor
gani
zat
ion
mayof
feri
tsmanager
s,orempl
oyees,
ormaybeobt
ainedbywayofacol
legedegr
ee.
2)HumanSki
ll
-theabi
li
tyt
owor
kwi
th,mot
ivat
e,di
recti
ndi
vidual
sorgr
oupsi
nthe
or
gani
zat
ionwhet
hert
heyar
esubor
dinat
es,pear
s,orsuper
ior
sandt
heabi
li
tyt
o
r
esol
veconf
li
ct.Because,
allt
asksi
nanor
gani
zat
ionar
edonewi
thpeopl
e,t
heseski
ll
s
ar
eequal
lyi
mpor
tantt
oal
llev
elsofmanagement
.Thi
sski
lli
ncl
udes:
-
 Ef
fect
ivecommuni
cat
ion set
ti
ng
 Cr
eat
ionofposi
ti
veat
ti
tude  Devel
opment of co-oper
ati
on
t
owar
dot
her
sandt
hewor
k amonggr
oupmember
s

10
  Mot
ivat
ionofsubor
dinat
es.
3)Concept
ualski
ll
-theabi
li
tyofamanagert
oseet
hebi
gpi
ctur
eoft
heor
gani
zat
ion
/
tov
iewt
heor
gani
zat
ionf
rom abr
oadper
spect
ive.I
tist
heabi
li
tyofamanagert
osee
t
heor
gani
zat
ionalsy
stem i
nit
stot
ali
ty,
howi
tsdi
ff
erentpar
tsar
eint
err
elat
edandhow
t
hey af
fecteach ot
her
.A manager needs concept
ualski
ll
stor
ecogni
ze t
he
i
nter
rel
ati
onshi
psofv
ari
oussi
tuat
ionalf
act
ors,and;t
her
efor
e,makedeci
sionst
hat
wi
llbei
nthebesti
nter
est
soft
heor
gani
zat
ion.Theyar
emosti
mpor
tanti
nst
rat
egi
c
(
longr
ange)pl
anni
ng;t
her
efor
e,i
tist
opl
evelmanager
s/execut
iveswhor
equi
remor
e
concept
ualski
llt
hanmi
ddl
elev
elmanager
sandsuper
visor
s.
4)Communi
cat
ionski
ll
:Ref
lectmanager
ialabi
li
tyt
osendandr
ecei
vei
nfor
mat
ion,t
hought
s,
f
eel
ingsandabi
li
ti
es.Communi
cat
ionski
lli
sver
ycr
uci
alt
oal
lmanager
s.Successofan
or
gani
zat
ion depends on t
he ef
fect
ive communi
cat
ion among manager
s. The basi
c
communi
cat
ionski
ll
sar
ewr
it
ingor
alandnon-v
erbal(
faci
alexpr
essi
on,
bodyl
anguage,
etc)
.

Topl
evel

Mi
ddl
e

Fi
rstl
evel

Communi
cati
o Techni
cal Human Concept
ua
nSki
ll Skil
l Ski
ll lSki
ll

Fi
ger
1.2.
Rel
ati
vei
mpor
tanceofmanager
ialski
ll
satdi
ff
erentl
evel
sofmanagement

Uni
ver
sal
it
yofManagement

Managementi
suni
ver
sali
nthesenset
hat
,basi
cappl
icat
ionsofmanagementi
nany
or
gani
zat
ionsar
ethesamewhet
heri
tissmal
lorcompl
ex,busi
nessornon-busi
ness.
Themanager
ialf
unct
ionsexi
sti
nev
eryor
gani
zat
ionr
egar
dlessoft
hesi
zeandt
he
t
ypeoft
heor
gani
zat
ion.Thi
sisbecauseanyor
gani
zat
ionhasanobj
ect
ivet
obe
achi
evedandgoalachi
evementr
equi
respl
anni
ng,or
gani
zing,st
aff
ingl
eadi
ngand
cont
rol
li
ng.(
Thear
mygener
al,t
hebi
shopoft
hechur
ch,t
hef
inanci
almanageruses
t
hesamemanagementpr
inci
plest
oachi
eveobj
ect
ives.
)

11
The conceptofuni
ver
sal
it
y ofmanagementi
s al
so appl
icabl
eto al
llev
els of
managementwi
thi
nanor
gani
zat
ion;i
tisnotconf
inedt
oapar
ti
cul
arl
evel
.Al
though
t
hescopeofaut
hor
it
yhel
d,r
esponsi
bil
it
yassi
gnedandt
het
ypesofpr
obl
emsdeal
t
v
aryf
rom onel
evelt
oanot
her
,asmanager
sal
lobt
ainr
esul
tsbyest
abl
ishi
ngan
env
ironmentf
oref
fect
ivegr
oupendeav
or.Manager
scanbet
ransf
err
edf
rom one
or
gani
zat
iont
oanot
herandt
hehi
ghert
hemanagementl
evelt
hel
esswi
llbet
he
oper
ati
ngnon-manager
ialj
obcomponent
sandt
hemor
e"pur
e"wi
llbet
hemanager
ial
j
obsandt
heeasi
ert
het
ransf
erabi
li
tyofmanager
s.

I
sManagementSci
enceorAr
t?

Sci
ence-I
tisanor
gani
zed/
syst
emat
izedbodyofknowl
edgeconst
it
uti
ngconcept
s,
t
heor
ies and pr
inci
ples concer
ning a par
ti
cul
arf
iel
d ofst
udy
.Especi
all
y,i
tis
knowl
edgeobt
ainedf
rom obser
vat
ion,t
estandexper
iment
ati
onoff
act
s;andi
tis
uni
ver
sal
lyt
rue;andappl
iedi
nanycount
ry,or
gani
zat
ion,et
c.Besi
des,i
texpl
oit
s
mat
hemat
icalmodel
s.Whenwesayi
tisasy
stemat
izedbodyofknowl
edge,
iti
sint
he
senset
hatr
elat
ionshi
pbet
weenv
ari
abl
esandt
hei
rli
mit
ati
onhav
ebeenascer
tai
ned
andunder
lyi
ngpr
inci
pleshav
ebeendi
scov
ered.Thesef
act
sar
eagai
nver
if
iedt
hrough
cont
inuousobser
vat
ion.Fi
nal
ly,cer
tai
nrel
ati
onshi
psandpr
inci
plesar
edev
eloped
whi
char
efundament
alt
rut
hst
hathel
ptor
efl
ectorexpl
ainr
eal
it
y.

Thepr
inci
plesdev
elopedaf
teradet
ail
edobser
vat
ionact
sasauni
ver
sal
lyappl
icabl
e
f
oundat
ion. As sci
ence,management i
s a sy
stemat
ized body of knowl
edge
r
epr
esent
ingacor
eofpr
inci
plesorf
undament
alt
rut
hst
hatt
endt
obet
ruei
nmost
manager
ialsi
tuat
ions.Thi
ssy
stemat
izedbodyofknowl
edgeofmanagementhel
pst
he
pr
act
ici
ngmanagert
omakedeci
sionsr
ati
onal
lyandobj
ect
ivel
yrat
hert
hanr
uleof
t
humb,hunch,ori
nst
it
uti
on,whatt
heydi
dint
hepar
t.Asan emer
ging sci
ence,
managementhascer
tai
n basi
cpr
inci
ples,whi
ch ar
euni
ver
sal
lyappl
icabl
ein any
or
gani
zat
ionr
egar
dlessofi
tssi
ze,mat
ureandobj
ect
ive.Ef
fect
ivemanager
suset
he
sci
ent
if
icappr
oachi
nmaki
ngdeci
sions.

Howev
er,
managementi
snotconsi
der
edasanexactsci
enceaschemi
str
y,phy
sicset
c.
I
tisanI
nexactSci
ence.Thi
sisbecause;i
tdeal
swi
thpeopl
e/humanbehav
iori
nwhi
ch
changei
sthef
ashi
onr
athert
hant
heexcept
ion.I
tist
osayt
hathumanbehav
iori
s

12
ev
enchangi
ngandunpr
edi
ctabl
e.
Toconcl
ude,
managementi
scat
egor
izedassci
encef
ort
hef
oll
owi
ngr
easons:
 I
tspr
inci
plesar
esy
stemat
izedbodyofknowl
edge
 I
tspr
inci
plesar
euni
ver
sal
lyappl
icabl
e
 Theyar
ebasedonsci
ent
if
ici
nqui
ry,
obser
vat
ion,
testandexper
iment
 They expl
aint
he cause and ef
fectr
elat
ionshi
ps among/
bet
ween v
ari
ous
v
ari
abl
es.
 Thei
rval
idi
tycanbev
eri
fi
abl
eandcanser
veasar
eli
abl
ebasi
sforpr
edi
cti
ng
f
utur
eev
ent
s.
Ar
t-Ar
tisaski
llorknow-how,whi
chcanbemodi
fi
edt
oaccompl
ishadesi
red
concr
eter
esul
t.I
tisdoi
ngt
hingsi
nli
ghtoft
hepr
evai
li
ngr
eal
it
iesofasi
tuat
ion.I
tis
concer
nedwi
tht
heappl
icat
ionofknow-howandski
llt
othespeci
fi
cti
me,pl
aceand
condi
ti
ont
act
ful
ly,
creat
ivel
yandwi
sel
y.
 Ar
tisaper
sonalcr
eat
ivepowerpl
usski
lli
nper
for
mance
 Ar
tisbasedonsubj
ect
ivej
udgment
,feel
ings,
int
uit
ion,
etc.
 Ar
thel
pst
ocr
eat
enewi
deasandef
fect
ivemet
hodst
ousef
rom t
heunder
lyi
ng
knowl
edgeandski
ll
.

Managementasanar
tisknow-howordoi
ngt
hingsi
nther
eal
it
iesoft
hesi
tuat
ion.Ar
t
i
n managementhas a gr
eatr
olei
n cr
eat
ing new i
dea,i
nnov
ati
on,i
nit
iat
ing and
i
mpl
ement
ingt
heski
ll
sorknow-how i
nrel
ati
onwi
tht
her
esour
cesandgoal
soft
he
or
gani
zat
ion.Cal
lsf
orsubj
ect
ivej
udgment
,int
uit
ionwher
eti
mepr
essur
esf
orcer
api
d
-f
ir
edeci
sions,
oft
enbasedoni
ncompl
eteandunv
eri
fi
abl
edat
a.

Toconcl
ude,
managementasacr
eat
ivear
t:
 I
trequi
redaski
llorapr
act
icalknow-how oft
hepr
inci
plesandt
echni
quesof
managementi
nor
dert
oper
for
m aspeci
fi
cjobef
fi
cient
lyandef
fect
ivel
y.
 I
tdependsont
heper
sonalski
llandef
fect
iveuseofone'
sknowl
edgeand
pr
ofi
ciencyt
oensur
emaxi
mum r
esul
tatmi
nimum cost
.
 I
tfol
lowsr
esul
tor
ient
edcour
seofact
ionordependsonspeci
fi
cobj
ect
ivet
obe
achi
eved.
 Managementcal
lsf
orcr
eat
iveabi
li
tyt
oint
roducenewi
deas,
newpr
oduct
s,new
t
echni
quest
oyi
eldhi
gherr
etur
nst
oanor
gani
zat
ion(
highersur
plus)

13
  Cont
inuouspr
act
iceofmanagementt
heor
iesandpr
inci
plesr
esul
tsi
nbet
ter
per
for
mance.

N.
B:Thesci
enceandar
tofmanagementpr
act
icear
enotmut
ual
lyexcl
usi
vebutar
e
compl
ement
ary
.Ifsci
encet
eachesonet
oknow,ar
tteachesonet
odo.Somanager
s
hav
etoknowanddot
hingst
oper
for
mthei
ract
ivi
ti
esef
fi
cient
lyandef
fect
ivel
ytobe
successf
ul.

ManagementasaPr
ofessi
on
Apr
ofessi
oni
sav
ocat
ionr
equi
ri
ngt
hef
oll
owi
ng:
-
1)Bodyofspeci
ali
zedknowl
edgeandTechni
calpr
ofi
ciency
I
fan or
gani
zat
ion needs t
o hav
erat
ionaland sci
ent
if
ic deci
sion maki
ng abi
li
ty,
manager
shav
etobespeci
ali
zedonasy
stemat
icbodyofmanagement
.Andal
so
managementr
equi
res t
echni
calpr
ofi
ciency i
s speci
alf
iel
ds such as pr
oduct
ion,
mar
ket
ing,f
inance,human r
esour
ce management
,et
c. To ensur
e al
lthese,
managementr
equi
resi
ntel
lect
ualpr
epar
ati
onorgr
aduat
est
udy
.
2)For
mal
/st
andar
dizedEducat
ionandTr
aini
ng
Acer
tai
nfi
eldofst
udyt
obeapr
ofessi
on,i
trequi
resf
ormalt
rai
ningandeducat
ion.
Thi
shol
dst
ruef
ormanagement
.Ther
ear
euni
ver
sit
ies,col
leges,andeducat
ional
i
nst
it
uti
ons speci
ali
zed t
hatpr
ovi
de f
ormalt
eachi
ng ofmanagementconcept
s,
t
heor
iesandpr
inci
ples.
3)Soci
alResponsi
bil
it
y
Anyor
gani
zat
ion has an obj
ect
ive whet
hert
o make sur
plus,orpr
ovi
de ef
fi
cient
ser
vicest
othe soci
ety
,and t
he l
ike.And al
so a managerofan or
gani
zat
ion i
s
r
esponsi
blet
oleadt
heor
gani
zat
ionandi
tsmember
s.Besi
des,manager
shav
etot
ake
i
ntoaccountt
heobl
igat
iont
oser
vet
hesoci
ety(
missi
on)andst
ri
ctadher
encet
othe
pr
escr
ibedmor
al,soci
al,andl
egalconduct
;becauset
hei
rexi
stencedependont
he
ser
vicet
heygi
vet
othesoci
etyi
ngener
al.
4)CodeofConduct
Anydi
sci
pli
net
obeapr
ofessi
on,i
tissubj
ect
edt
othef
ulf
il
lmentofst
ri
ctst
andar
ds,
r
ules and r
egul
ati
ons pr
ovi
ding t
he nor
m ofhonest
y,i
ntegr
it
y,and pr
ofessi
onal
mor
ali
tyt
obeadher
edbyt
hemember
s.

14
ManagementPr
inci
ples
F.
W.Tay
lor
’s
 Dev
elopi
ngasci
encef
oreachel
ement
sofaj
ob,t
hatr
epl
acest
heol
drul
eof
t
humbmet
hods.
 Hear
ti
lycooper
atewi
tht
hewor
ker
ssoast
oinsur
eal
loft
hewor
kbei
ngdonei
n
accor
dancewi
tht
hepr
inci
plesofsci
encewhi
chhasbeendev
eloped.
 Sci
ent
if
ical
lysel
ectandt
hent
rai
n,t
eachanddev
elopt
hewor
ker
s,wher
easi
n
t
hepastawor
kerchoosehi
s/herownandt
rai
nedt
hemsel
vesasbesthehe
coul
dfort
hei
rownandt
hecompany
’s–pr
osper
it
y.
 Ther
eisal
mostequaldi
visi
onofwor
kandr
esponsi
bil
it
ybet
weenmanagement
andwor
ker
s.Themanagementt
akesov
eral
lwor
kforwhi
cht
heyar
ebet
ter
f
it
tedt
hanwor
ker
s,whi
lei
nthepastal
mostal
loft
hewor
kandt
hegr
eat
erpar
t
oft
her
esponsi
bil
it
ywer
ethr
ownupont
hewor
ker
s.
Fr
ank&Li
ll
ianGi
lbr
eth

 Ti
meSt
udy

Ti
minghowl
ongi
ttakesgoodwor
ker
stocompl
eteeachpar
toft
hei
rjobs.

 Mot
ionSt
udy

Br
eaki
ngeacht
aski
ntoi
tssepar
atemot
ionsandt
henel
imi
nat
ingt
hoset
hatar
e
unnecessar
yorr
epet
it
ive.

Fay
ol’
s14pr
inci
plesofmanagement
:
a)Aut
hor
it
y&Responsi
bil
it
y-Ther
ightt
ogi
veor
der
s/i
ssuecommandsandt
he
powert
oext
ractobedi
ence.Responsi
bil
it
yist
heaccount
abi
li
tybecauseofhi
s/
heraut
hor
it
yhol
d.Ther
eshoul
dbeabal
ancedr
esponsi
bil
it
yfort
hisf
unct
ion.
b)Speci
ali
zat
ionorDi
visi
onofl
abour-Speci
ali
zat
ional
lowsi
ndi
vidual
stobui
ld
upexper
ienceandt
hecont
inuousi
mpr
ovementi
nski
ll
s.I
tgi
veswayt
ohi
gher
pr
oduct
ivi
tyandef
fi
ciency
c)Di
sci
pli
ne:Thewor
ker
sshoul
dbeobedi
entandr
espect
fuloft
heor
gani
zat
ion.
Themanagementshoul
dpr
ovi
degoodl
eader
shi
p.Ther
eshoul
dbenosl
acki
ng,
bendi
ngofr
ules
15
d)Uni
tyofcommand:Empl
oyeesshoul
drecei
veor
der
sfr
om onesuper
ior
.Ther
e
shoul
dnotbeanyconf
li
cti
ngl
inesofcommand.
e)Uni
tyofdi
rect
ion:Peopl
eengagedi
nthesameki
ndofact
ivi
ti
esmusthav
ethe
same obj
ect
ives i
n a si
ngl
e Pl
an.Thi
sis essent
ialt
o ensur
e uni
ty and
coor
dinat
ioni
ntheent
erpr
ise
f
) Subor
dinat
ionofI
ndi
vidualI
nter
est
stot
heor
gani
zat
ioni
nter
estorcommon
goal
.Atanyci
rcumst
anceorcondi
ti
ont
heor
gani
zat
ioni
nter
estshoul
dpr
ecede
t
hei
ndi
viduali
nter
est
.Whenatwor
k,onl
ythi
ngsr
elat
edt
owor
kshoul
dbe
pur
suedort
houghtabout
.
g)Remuner
ati
on:Thecompensat
ionoft
hecompanyf
ort
heempl
oyeesshoul
d
desi
gned byconsi
der
ing v
ari
ous f
act
ors such as t
he l
ivi
ng condi
ti
ons of
empl
oyees,busi
nesscondi
ti
ons,t
heov
eral
lper
for
manceoft
hef
ir
m andt
he
per
for
manceofempl
oyee.Empl
oyeesr
ecei
vef
airpay
mentf
orser
vices,not
whatt
hecompanycangetawaywi
th.
h) Cent
ral
izat
ion:I
tist
hedegr
eet
owhi
chdeci
sionsandmor
eaut
hor
it
iesar
e
r
etai
nedont
hehandsofupper
.
i
) Scal
arofchai
n(chai
nofcommand)
:ther
eshoul
dbeacl
earandunbr
okenl
ine
ofaut
hor
it
ythatr
unsf
rom t
het
opoft
heor
gani
zat
iont
othebot
tom orf
ootof
t
heor
gani
zat
ion-Ahi
erar
chyi
snecessar
yfort
heuni
tyofdi
rect
ion.I
tref
erst
o
t
hef
ormalchai
nofcommandr
unni
ngf
rom t
opt
obot
tom oft
heor
gani
zat
ion.
Buti
tshoul
dnotbeov
er-st
ret
chedorconsi
stoft
oomanyl
evel
s
j
) Or
der
:Ther
eshoul
dhav
eapl
acef
orev
ery
thi
ngev
ery
onei
nanor
gani
zat
ion’
s
set
ti
ng.Ther
eisa pr
escr
ibed pl
ace f
orhuman and ot
herr
esour
cesi
n an
or
gani
zat
ion.Soci
alaswel
lasmat
eri
alor
deri
snecessar
y.
k) Equi
ty:Managementshoul
dbef
air
ly,
fri
endl
yandki
ndl
ytr
eat
edempl
oyees.I
na
r
unni
ngbusi
nessacombi
nat
ionofki
ndl
inessandj
ust
icei
sneeded.Tr
eat
ing
empl
oyeeswel
lisi
mpor
tantt
oachi
eveequi
ty.
l
) St
abi
li
tyofTenur
eofPer
sonnel
:Empl
oyeeswor
kbet
teri
fjobsecur
it
yand
car
eerpr
ogr
essar
eassur
edt
othem.Ani
nsecur
etenur
eandahi
ghr
ateof
empl
oyeet
urnov
erwi
ll
aff
ectt
heor
gani
zat
ionadv
ersel
y.Hi
gherr
ateoft
urnov
er
ofempl
oyeesshoul
dber
educedbycr
eat
ingconduci
vewor
kingenv
ironment
andmot
ivat
ingempl
oyees(
prov
idi
ngi
ncent
ives)
.

16
 m)I
nit
iat
ive:Al
lowi
ngal
lper
sonalt
oshowt
hei
rini
ti
ati
vei
nsomewayi
sasour
ce
ofst
rengt
hfort
heor
gani
zat
ion.Theor
gani
zat
ionormanagershoul
dpr
ovi
dea
f
reedom ofoppor
tuni
tyt
oempl
oyeest
oexpr
esst
hei
ridea,f
eel
ings,andt
otel
l
suggest
ionsandf
eedbacks;andi
nventnewt
echni
quesi
.e.i
mpor
tantt
odot
hei
r
t
asks.
n)Espr
it de cor
ps: St
ates t
hat “
Uni
ty i
s st
rengt
h”.I
tis har
mony and
cohesi
on/
consi
stency
/commonal
it
yamongper
sonnelandi
tissenseof“
team
wor
k”.I
t'
sagr
eatsour
ceofst
rengt
hint
heor
gani
zat
ion.
Fay
olst
atedt
hatf
orpr
omot
ingespr
itdecor
ps,t
hepr
inci
pleofuni
tyofcommand
shoul
dbeobser
vedal
ongwi
tht
eamwor
k,av
oidi
ngt
hedanger
sofdi
videandr
ule.

17
Chapt
erTwo:Pl
anni
ng

Nat
ure&pur
poseofpl
anni
ng

Ev
eryhumanact
ivi
tyi
sunder
takenf
oll
owi
ngpl
ant
oachi
evesomet
hing.Si
ncemani
s
gi
ft
edwi
tht
hepowerofr
easoni
ng,her
arel
ydoesany
thi
ngwi
thoutwei
ghi
ngt
he
consequencesofhi
sact
ion.I
nthef
iel
dofbusi
ness,t
heneedf
orpl
anni
ngi
sal
lthe
gr
eat
er.Thi
sisbecauseofev
er-gr
owi
ngcompet
it
ion,
frequentf
luct
uat
ionsi
ndemand,
di
scov
eryofnew pr
oduct
s.Pl
anni
ngi
sanact
ivi
ty,whi
chi
sper
for
medbef
oreany
act
ioni
staken.Theact
ionwet
akei
sbasedont
hepl
an.

Pl
anni
ngal
lowsi
ntegr
ated,consi
stentandpur
posef
ulact
ion.Thus,i
tisant
ici
pat
ory
deci
sionmaki
ngapr
ocessandi
mpr
ovesper
for
mance.Pl
anni
ngal
lowsi
ntegr
ated,
consi
stentandpur
posef
ulact
ion.Pl
anni
ngi
sthepr
imar
yfunct
ionofmanagement
.
Thechi
eff
unct
ionofmanagementi
stoat
tai
ntheobj
ect
ivesoft
heent
erpr
ise.Fort
his,
i
tist
opl
annotonl
yint
hebegi
nni
ngbutt
hroughoutt
heoper
ati
ons.Pl
anni
ngi
nvol
ves
deci
dingabestcour
seofact
ionf
rom amonganumberofal
ter
nat
iveswhi
chwoul
d
hel
ptheent
erpr
iset
oachi
evei
tsobj
ect
ivesmostexpedi
ti
ousl
yandeconomi
cal
ly.

Whati
spl
anni
ng?
Pl
anni
ngi
sant
ici
pat
ingt
hef
utur
eev
ent
sanddet
ermi
ninghowt
omeett
hedemandsof
suchev
ent
.Pl
anni
nganswer
ssi
xbasi
cquest
ionsi
nregar
dtoanyi
ntendedact
ivi
ty-
what
,when,
wher
e,who,
how,
andhowmuch.
 What
-ref
erst
ogoalorobj
ect
ives
 When-r
efer
stoquest
ionoft
imi
ng
 Wher
e-r
efer
stopl
acewher
epl
anni
ngends?
 Who-r
efer
stospeci
fi
cpeopl
ewi
llper
for
mthepl
an
 How-r
efer
stomet
hodf
orr
eachi
ng
 Howmuch- r
efer
stot
heexpendi
tur
eofr
esour
ces
Pl
anni
ng encompassesdef
ini
ng t
heor
gani
zat
ion’
s obj
ect
ives orgoal
s,est
abl
ishi
ng
anov
eral
lst
rat
egy
,dev
elopment ofschedul
esanddev
elopi
ng acompr
ehensi
ve
18
hi
erar
chy ofact
ivi
ti
es t
oint
egr
ate andcoor
dinat
e.Pl
anni
ngi
dent
if
iest
hegoaland
al
ter
nat
ives,
itmapsoutcour
sesofact
iont
hatwi
llcommi
tindi
vidual
,depar
tment
sand
t
he ent
ir
e or
gani
zat
ion and al
so i
tmapsoutcour
sesofact
ion t
hatwi
llcommi
t
i
ndi
vidual
,theseendsaf
terset
ti
ngi
nmot
iont
hef
oll
owi
ngpr
ocesses.
 Det
ermi
nat
ionofwhatr
esour
ceswi
llbeneeded
 I
dent
if
icat
ionoft
henumbert
ypeofper
sonnelt
heor
gani
zat
ionwi
llneed
 Dev
elopmentoft
hef
oundat
ionf
ort
heor
gani
zat
ionalenv
ironmenti
nwhi
chwor
k
i
stobeaccompl
ished.
 Det
ermi
nat
ionofst
andar
d.
Pl
anni
ngi
nvol
vessel
ect
ingmi
ssi
onsandobj
ect
ivesandt
heact
ionst
oachi
evet
hem;
it
r
equi
res deci
sion maki
ng,i
.e.
,choosi
ng f
utur
e cour
se of act
ion f
rom among
al
ter
nat
ives.Pl
anni
ngi
sdet
ermi
ningi
nadv
ancewhati
stobeaccompl
ishedandhowi
t
i
sto be accompl
ished.Because pl
anni
ng pav
es t
he way f
oral
ldownst
ream
managementf
unct
ions,byser
vingasabr
idgebet
weent
hepr
esent&t
hef
utur
e,i
tis
r
egar
dedast
hepr
imar
yfunct
ionofmanagement
.

Char
act
eri
sti
csofPl
anni
ng

ThePr
imacyofpl
anni
ng
Thepr
imacyofpl
anni
ng meanst
hatt
hef
unct
ion ofpl
anni
ng pr
ecedesal
lot
her
manager
ialf
unct
ions.Si
nce t
he ot
hermanagementf
unct
ions ar
e per
for
med t
o
f
aci
li
tat
etheachi
evementofgoal
sthatar
eseti
nfaci
li
tat
etheachi
evementofgoal
s
t
hatar
eseti
npl
anni
ngpr
ocess,pl
anni
ngl
ogi
cal
lypr
ecedesal
lot
hermanager
ial
f
unct
ions.
Al
thoughi
npr
act
iceal
lthemanager
ialf
unct
ionsi
nter
-mat
chasasi
ngl
esy
stem of
act
ion,pl
anni
ngi
suni
quei
nthati
test
abl
ishest
heobj
ect
ivenecessar
yforal
lgr
oup
ef
for
t.And,
ofcour
se,
allt
heot
hermanager
ialf
unct
ionsmustbepl
annedi
ftheyar
eto
beef
fect
ive.Thati
s,t
hemanager
ialf
unct
ionsar
einsepar
abl
e;especi
all
y,pl
anni
ngand
cont
rol
li
ngar
eof
tenr
efer
redast
heSi
ameset
wins.Thi
sisbecause,cont
rol
li
ng,by
def
ini
ti
on,i
sthecompar
isonofact
ualper
for
mancewi
tht
hepl
anned.I
tist
hepl
anned
per
for
mance,
whi
chi
scont
rol
led.

19
Per
vasi
venessofpl
anni
ng
Pl
anni
ngi
sper
vasi
veoruni
ver
sali
nthesenset
hat
;iti
sthef
unct
ionofal
lmanager
s
r
egar
dlessoft
hel
evelt
heybel
ong,t
het
imespentonpl
anni
ngt
hesi
gni
fi
cance,t
he
char
act
eri
sti
c,et
c.Pl
anni
ngexi
stsi
nal
lor
gani
zat
ionsr
egar
dlessoft
hei
rty
peandsi
ze.

Cont
ri
but
iont
opur
poseandobj
ect
ive
Thi
simpl
iest
hatt
hepur
poseofanypl
anandal
lit
ssuppor
ti
ve&der
ivat
ivepl
ansi
sto
f
aci
li
tat
etheaccompl
ishmentandt
heachi
evementoft
hepur
posesandt
heobj
ect
ives
oft
heor
gani
zat
ion.Manager
ialpl
anni
ngseekst
oachi
eveaconsi
stent
,coor
dinat
ed
st
ruct
ureofoper
ati
onsf
ocusedondesi
redends.Wi
thoutpl
anni
ng,act
ionsmuch
becomemer
elyr
andom act
ivi
ty,
produci
ngnot
hingbutchaos.

Pl
anni
ngi
sdi
rect
edt
owar
dsef
fi
ciency
Theef
fi
ciencyofapl
ani
smeasur
edbyi
tscont
ri
but
iont
opur
poseandobj
ect
ives,
of
fsetbyt
hecost
sandot
herunsoughtf
act
orsr
equi
redt
ofor
mul
ateandoper
atei
t.
Pl
ansar
eef
fi
cienti
ftheyachi
evet
hei
rpur
poseatar
easonabl
ecost
,whencosti
s
measur
ednotonl
yint
ermsoft
ime,money
,orpr
oduct
ionbutal
soi
nthedegr
eeof
i
ndi
vidualandgr
oupsat
isf
act
ion.

I
tconcer
nsf
utur
eact
ivi
ty
Si
ncepl
anni
ng i
sdeci
ding cur
rent
lyaboutt
hef
utur
e,i
tinv
olv
esf
orecast
ing and
deci
sionmaki
ng.Theessenceofpl
anni
ngi
slooki
ngaheadandi
sconcer
nedwi
th
deci
dingi
nthepr
esentwhati
stobedonei
nthef
utur
e.

I
thasdynami
caspect
s(i
tisf
lexi
bleandcont
inuous)
Amanagerpl
ansont
hebasi
sofsomeassumpt
ions,whi
chmaynotcomet
ruei
nthe
f
utur
e.Ther
efor
e,hehadt
ogoonr
evi
sing,
modi
fyi
ngandadj
ust
ingpl
ansi
nthel
ightof
t
hepr
evai
li
ngr
eal
it
ies/
cir
cumst
ances.Thus,pl
anni
ngi
snotonl
ythepr
imar
yfunct
ion
ofmanagement
,buti
tisal
soacont
inuousf
unct
ionofmanagement
.Pl
anni
ngi
s
f
lexi
bleasi
tisbasedonf
utur
econdi
ti
onswhi
char
eal
way
sdy
nami
c.I
nsum,ev
ery
busi
nesspl
anmusthav
ethef
oll
owi
ngchar
act
eri
sti
cs:obj
ect
ivi
ty,f
utur
it
y,f
lexi
bil
it
y,
st
abi
li
ty,
compr
ehensi
veness,
clar
it
yandsi
mpl
ici
ty.

20
I
mpor
tance/
pur
poseofpl
anni
ng

Toof
fsetuncer
tai
nty
:-Fut
urei
sal
way
sful
lofuncer
tai
nti
esandchar
geswhi
chmake
pl
anni
nganecessi
tybecausepl
anni
ngf
oreseest
hef
utur
eandmakespr
ovi
sionsf
ori
t
t
her
ebygi
vinganaddedst
rengt
htot
heor
gani
zat
ionf
orcont
inuousgr
owt
handst
eady
pr
osper
it
y.

Tof
ocusat
tent
iononobj
ect
ives:
-Because,al
lpl
anni
ngef
for
tsar
edi
rect
edt
owar
ds
achi
evi
ngent
erpr
iseobj
ect
ives,t
hev
eryactofpl
anni
ngf
ocusesat
tent
ionont
hese
obj
ect
ives.Wel
lconsi
der
edov
eral
lpl
ansuni
fyi
nter
depar
tment
alact
ivi
ti
es.

Togai
neconomi
caloper
ati
on:
Planni
ngmi
nimi
zescost
sbecauseofi
tsemphasi
son
ef
fi
cient oper
ati
on and consi
stency
.It subst
it
utes j
oint di
rect
ed ef
for
tfor
uncoor
dinat
edpi
ecemealact
ivi
ty,ev
enf
low ofwor
kforunev
enf
low,anddel
iber
ate
deci
sionsf
orsnapj
udgment
s.

Tof
aci
li
tat
econt
rol
:-Pl
anni
ngandcont
rol
li
ngar
einsepar
abl
e,andcommonl
yref
err
ed
t
oast
heSi
ameset
wins.Thi
sisbecauseunpl
annedact
ioncannotbecont
rol
led,f
or
cont
roli
nvol
veskeepi
ngact
ivi
ti
esoncour
sebycor
rect
ingdev
iat
ionsf
rom pl
ans.Any
at
temptt
ocont
rolwi
thoutapl
anwoul
dbemeani
ngl
ess,si
ncet
her
eisnowayf
or
peopl
ewhet
hert
heyar
egoi
ngwher
etheywantt
ogo(
thet
askofcont
rol
),unl
esst
hey
f
ir
stknow wher
etheywantt
o go (
the t
askofpl
anni
ng)
,pl
anst
husf
urni
sh t
he
st
andar
dsofcont
rol
.Gener
all
y,acoor
dinat
edsenseofact
ion,manager
ialper
spect
ive,
i
mpr
oveddeci
sionmaki
ng,i
ncr
easedef
fi
ciency
,impr
ovecont
rolandper
for
mancear
e
al
sobenef
it
sofpl
anni
ng.

Ski
ll
sRequi
redI
nPl
anni
ng

Ski
ll
srequi
redi
npl
anni
ngar
e:
For
ecast
ingandDeci
sionMaki
ng
1.For
ecast
ing:
-ist
heat
temptt
opr
edi
ctout
comesandf
utur
etr
endst
hatcanser
veas
basi
sforpl
anni
ng,byi
nfer
encesf
rom knownf
act
s.Byr
elat
ingt
hepastandt
he
pr
esenti
nfor
mat
ionordat
a,managementshoul
dbeabl
eto ant
ici
pat
ethef
utur
e
21
env
ironment
.Ef
fect
ivepl
anni
ngi
smadewi
tht
hehel
poff
orecast
ingbecausepl
anni
ng
i
tsel
fisa f
utur
e or
ient
ed cour
se ofact
ion.Accor
dingl
y,we hav
eto assesst
he
dy
nami
sm ofbot
hthei
nter
nalandext
ernalenv
ironment
.

For
ecast
ingMet
hods
Wecanusebot
hqual
it
ati
veandquant
it
ati
vef
orecast
ingmet
hodst
opr
edi
ctf
utur
e
si
tuat
ions.
Qual
it
ati
veFor
ecast
ing:
-iti
saj
udgment
-basedf
orecast
ingt
echni
queusedwhen
har
ddat
aar
escar
ceordi
ff
icul
ttouse.I
tthusi
nvol
vest
heuseofsubj
ect
ivej
udgment
s
andr
ati
ngschemest
otr
ansf
orm qual
it
ati
vei
nfor
mat
ioni
ntoquant
it
ati
veest
imat
es.
Exampl
eincl
udest
hej
uryofexecut
iveopi
nion,mar
ketr
esear
chandt
hesur
veyof
exper
topi
nion.
Quant
it
ati
veFor
ecast
ing:-I
tisat
echni
queusedwhenenoughhar
ddat
aexi
stt
o
speci
fyr
elat
ionshi
psbet
weenv
ari
abl
es.I
tisusedwhent
her
eissuf
fi
cient"
har
d"or
st
ati
sti
cal dat
a t
o speci
fyr
elat
ionshi
ps bet
ween key v
ari
abl
es. Ext
rapol
ati
on
f
orecast
ing,suchast
ime-ser
iesanal
ysi
s,usespastorcur
rentt
rendst
opr
ojectf
utur
e
ev
ent
s.Sal
esr
ecor
dsoft
hepastsev
eraly
ear
s,f
orexampl
e,coul
dbeusedt
oext
end
t
hesal
espat
ter
nint
othecomi
ngy
ear
.

2.Deci
sionMaki
ng:i
sdef
inedast
hepr
ocessofsel
ect
ingorchoosi
ngbasedonsome
cr
it
eri
a,t
hebestcour
seofact
ionf
rom anumberal
ter
nat
ive.Becausemanager
sar
e
cont
inual
lyconf
ront
edwi
thoppor
tuni
ti
esandpr
obl
ems,t
heymustconst
ant
lyanal
yze
t
heef
fectofdi
ff
erentdeci
sionsont
hei
ror
gani
zat
ionsandsel
ectt
heal
ter
nat
ivet
hat
wi
llmov
ethef
ir
mtowar
dit
sst
atedobj
ect
ives.

Ty
pesofPl
ans

1)Dur
ati
on/
TimeDi
mensi
on/
Somepl
ansar
einef
fectf
orshor
tper
iods,wher
easot
her
sst
ret
chdecadesi
ntot
he
f
utur
e.Ani
mpor
tantcomponentofanypl
ani
sthepl
anni
nghor
izon:i
.e.
,thel
engt
hof
t
imet
hepl
an speci
fi
esf
oract
ivi
ti
est
o bei
mpl
ement
ed /t
het
imet
hatel
apses
bet
weent
hef
ormul
ati
onandt
heexecut
ionofapl
annedact
ivi
ty.Hence,
ther
ear
ethr
ee
pl
anni
nghor
izonst
hatcanbei
dent
if
iedf
orcl
assi
fyi
ngpl
ans.
a)Shor
tr ans:
angepl -apl
anf
oray
earorl
essoney
ear
.

22
Exampl
e:Annualpl
anofsal
es,
rev
enue,
oper
ati
ngexpensesbudget
.
b)I
nter
medi
ater ans:
angepl -pl
anbet
weenay
earandf
ivey
ear
s.
Exampl
e:Devel
opmentofnewpr
oduct
s,moder
nizat
ionoff
aci
li
ti
es.
c)Longr
angepl
ans:
-Pl
anf
orf
iveormor
eyear
s.
Exampl
e:Longt
erml
easesonpr
oduct
ionorwar
ehousef
aci
li
ti
es

2)ScopeDi
mensi
on
Pl
anni
ngcanbecl
assi
fi
edi
ntot
hreebasedont
hescopeorbr
eadt
hofact
ivi
ti
est
hey
r
epr
esent
:
a)St
rat
egi
cPl
ans:Thesepl
ansar
ecompr
ehensi
vei
nscopeandr
efl
ectl
ong-t
erm
needsanddi
rect
ionoft
heor
gani
zat
ion.St
rat
egi
cpl
ans/
topmanagementpl
ans
i
ncl
ude t
he dev
elopmentofov
eral
lcompany obj
ect
ives.They ar
e pr
imar
il
y
concer
ned wi
th sol
ving l
ong-t
erm pr
obl
ems associ
ated wi
th ext
ernal
,
env
ironment
ali
nfl
uences.Theyest
abl
isht
hemi
ssi
onoft
heor
gani
zat
ion.St
rat
egi
c
pl
anni
ngi
sapr
ocesst
hati
nvol
vest
heassessmentofmar
ketcondi
ti
ons,cust
omer
needs,compet
it
ivest
rengt
hsandweakness;soci
opol
it
ical
,legalandeconomi
c
condi
ti
ons;t
echnol
ogi
caldev
elopment
sandt
heav
ail
abi
li
tyofr
esour
cest
hatl
ead
t
othespeci
fi
coppor
tuni
ti
esort
hreat
sfaci
ngt
heor
gani
zat
ion.St
rat
egi
cpl
ans
i
ncl
ude:
-Mi
ssi
on/
pur
pose,
Obj
ect
ives,
andSt
rat
egi
es.
b)Tact
icalpl
ans:Thesear
epl
ansusedt
oimpl
ementst
rat
egi
cpl
ans.Thesepl
ansar
e
mor
eli
mit
ed i
n scopeand addr
esst
hoseact
ivi
ti
esand r
esour
cesr
equi
red t
o
i
mpl
ementst
rat
egi
cpl
ans.Theset
act
icalpl
ansdealmor
ewi
tht
heal
locat
ionof
r
esour
cesand schedul
ing ofact
ualwor
kact
ivi
ti
est
han wi
tht
he sel
ect
ion of
st
rat
egi
es.
c)Oper
ati
onalPl
ans:i
sthemostspeci
fi
canddet
ail
edpl
answhi
char
econcer
nedwi
th
t
he day
-to-day
,week-t
o-week act
ivi
ti
es oft
he or
gani
zat
ion.Fori
nst
ance;
pr
oduct
ionschedul
esandsal
espl
an.

3)UseDi
mensi
on
Basedont
hei
ruset
hesepl
anscanbecl
assi
fi
edasf
oll
ow:

a)St
andi
ngPl
ans:ar
eusedt
ogui
deact
ivi
ti
est
hatoccurov
eraper
iodoft
ime.These
ar
epl
anst
hatar
edesi
gnedt
obeusedagai
nandagai
n.St
andi
ngpl
ansexi
sti
nthe
f
orm of
:
23
Pol
ici
es: t
hese ar
e st
andi
ng pl
ans i
n t
hat t
hey ar
e gener
al st
atement
s or
under
standi
ngswhi
chgui
deorchannelt
hinki
ngi
ndeci
sionmaki
ng.Pol
ici
esdef
inean
ar
eawi
thi
nwhi
chadeci
sioni
stobemadeandensur
ethatt
hedeci
sionwi
llbe
consi
stentwi
th,
andcont
ri
but
eto,
anobj
ect
ive.
Pr
ocedur
es:ar
est
andi
ngpl
anst
hatest
abl
ishar
equi
redmet
hodofhandl
ingf
utur
e
act
ivi
ti
es.Theyar
egui
dest
oact
ionr
athert
hant
hinki
ng.I
tdescr
ibesaser
iesofact
ion
t
obet
akeni
nagi
vensi
tuat
ion.
Rul
esandRegul
ati
ons:
-ar
epl
anst
hatdescr
ibeexact
lyhowonepar
ti
cul
arsi
tuat
ioni
s
t
obehandl
ed.Theyar
est
atement
sofact
ionst
hatmustbet
akenornott
aken.They
ser
veasar
est
ri
cti
ngdev
ice.
Pur
posesormi
ssi
on:-i
dent
if
iest
hebasi
cfunct
ionoft
askofanor
gani
zat
ion.
Obj
ect
ivesorgoal
s:-i
stheendt
owar
dswhi
chact
ivi
tyi
sai
med.
St
rat
egi
es:
-ar
eway
s,sy
stem andmeanst
oachi
evet
heest
abl
ishedobj
ect
ives.I
tis
i
mpor
tantt
onot
icet
hatev
eryobj
ect
ivemusthav
eatl
eastonest
rat
egy
;
Met
hods:
-ismor
edet
ailpr
ocedur
es.I
ttel
lsex
act
lyhov
ethi
spar
ti
cul
arst
epi
stobe
Per
for
med.

b)Si
ngl
e Use Pl
ans:- si
ngl
e use pl
ansar
e pl
anst
hatar
e used once,and t
hen
di
scar
ded.Thi
sty
peofpl
ansi
sdesi
gnedt
omeett
heneedsofauni
queorsi
ngl
e
si
tuat
ion;suchasf
orspeci
alpr
ojectort
ask.Thesepl
ansar
efor
mul
atedt
oachi
evea
speci
fi
c goal& usual
ly wi
thi
n a shor
terper
iod oft
ime.Non- r
epet
it
ive uni
que
si
tuat
ionscal
lfort
hef
ormul
ati
onofsi
ngl
eusepl
ans.Theyar
eal
socal
ledone-t
ime
pl
ans.Undert
hesepl
ans,
wehav
e:-
Pr
ogr
am (
proj
ect
): ar
e a compl
ex of goal
s,pol
ici
es,pr
ocedur
es,r
ules,t
ask
assi
gnment
s,st
eps t
o be t
aken,r
esour
ces t
o be empl
oyed and ot
herel
ement
s
necessar
ytocar
ryoutagi
vencour
seofact
ion;t
heyar
eor
dinar
il
ysuppor
tedby
budget
s.I
tisacompr
ehensi
vepl
ant
hati
ncl
udesf
utur
euseofdi
ff
erentr
esour
cesi
n
ani
ntegr
atedpat
ter
nandest
abl
ishesasequenceofr
equi
redact
ions,t
imeschedul
es
f
oreachi
nor
dert
oachi
evest
atedobj
ect
ives.
Budget
:ar
e st
atement
s ofexpect
ed r
esul
ts orr
esour
ces setasi
de f
orspeci
fi
c
act
ivi
ti
esex
pressedi
nnumer
icalorquant
it
ati
vet
erms.Theyar
epr
imar
ydev
icest
o
cont
rolor
gani
zat
ionact
ivi
ti
esandar
ethusi
mpor
tantcomponent
sofpr
ogr
amsand
pr
oject
s.
24
4)Basedont
henat
ureoft
hepl
an
Var
iabl
epl
ans:
-Whi
chst
atef
igur
esi
nter
msofr
angest
oal
lowf
ort
heuncer
tai
ntyof
t
heenv
ironment
Al
ter
nat
ive pl
ans:
- pl
ans whi
ch ar
e si
mil
ar t
ovar
iabl
e pl
ans i
nrecogni
zing
env
ironment
aluncer
tai
nti
es,buti
nthi
scaset
hepl
annerset
supt
woormor
eent
ir
ely
separ
atepl
ans.
.
Suppl
ement
aryPl
ans:f
lexi
bil
it
ycanbeobt
ainedt
hroughsuppl
ement
arypl
ans.The
pl
anal
lowsf
ort
hemanager(
ther
esponsi
bleuni
t)t
orequestf
urt
herr
esour
ces.I
t
r
educest
heconst
rai
ningef
fectoft
heor
igi
nalpl
anbypr
ovi
dingapr
ear
rangedappeal
channel
.

ThePl
anni
ngPr
ocess

Thef
oll
owi
ngar
ethest
epst
hatser
veasagener
almodel
,whi
chcanbeappl
ied,wi
th
somemodi
fi
cat
ion,t
othepl
anni
ngpr
ocessesofanyor
gani
zat
ion(
Whet
heri
tisl
arge
orsmal
l,
prof
itmaki
ngornot
-for
-pr
ofi
t)
.

1.I
dent
if
yinganddef
ini
ngt
her
ealpr
obl
em
Anawar
enessofoppor
tuni
ti
esi
ntheext
ernalenv
ironmentaswel
laswi
thi
nthe
or
gani
zat
ioni
sther
ealst
art
ingpoi
ntf
orpl
anni
ng.Weshoul
dtakeapr
eli
minar
ylookat
possi
blef
utur
eoppor
tuni
ti
esandseet
hem cl
ear
lyandcompl
etel
y,know wher
ewe
st
andi
nthel
ightofourst
rengt
hsandweakness,under
standwhatpr
obl
emswewi
sh
t
osol
veandwhy
,andknowwhatweexpectt
ogai
n.Ourset
ti
ngofr
eal
ist
icobj
ect
ives
dependsont
hisawar
enesspl
anni
ngr
equi
resr
eal
ist
icdi
agnosi
soft
heoppor
tuni
ty
si
tuat
ion.

2.Est
abl
ishcl
ear
-cutobj
ect
ives
Thenextst
epi
nthepl
anni
ngpr
ocessi
stosetobj
ect
ivest
otheent
ir
eor
gani
zat
ionand
t
oeachwor
kuni
t,notonl
yforl
ong-t
erm butal
sof
ort
heshor
trange.
Obj
ect
ivesspeci
fyt
heexpect
edr
esul
tsandi
ndi
cat
etheendpoi
ntofwhati
stobedone,
wher
ethepr
imar
yemphasi
sist
obepl
aced,andwhati
stobeaccompl
ishedbyt
he
net
wor
kofst
rat
egi
es,
pol
ici
es,
procedur
es,
rul
es,
budget
s,andpr
ogr
ams.

25
3.Est
abl
ishi
ngt
hepl
anni
ngPr
emi
se
Pr
emi
sesar
eassumpt
ionspr
ovi
dingabackgr
oundagai
nstwhi
chest
imat
edev
ent
s
af
fect
ingt
hepl
anwi
llt
akepl
ace.Theyar
eassumpt
ionsaboutt
heenv
ironmenti
n
whi
cht
hepl
ani
stobecar
ri
edoutknowl
edgeoft
heor
gani
zat
ionsgoodsandexi
sti
ng
condi
ti
onpr
ovi
desaf
ramewor
kfordef
ini
ngwhi
chaspect
soft
heenv
ironmentwi
ll
hav
ethegr
eat
esti
nfl
uenceont
heor
gani
zat
ionsabi
li
tyt
oachi
evei
tsobj
ect
ives.
Thepur
poseofenv
ironment
alanal
ysi
sist
oident
if
yway
stor
espondt
ochangesi
n
economi
c,t
echnol
ogi
cal
,soci
al/
cul
tur
alandpol
it
ical
/andl
egalenv
ironment
shav
ing
i
ndi
recti
nfl
uencet
otheor
gani
zat
ionspl
ans,andf
orchangesdi
recti
nfl
uenceswhi
ch
hav
eext
endedont
heor
gani
zat
ionsmar
ket
,indust
ry,suppl
ier
s,compet
it
ors,orkey
r
esour
cesandski
ll
s.Her
e,gr
eatconsi
der
ati
onshoul
dbemadet
otheassumpt
ions
r
egar
dingt
hef
utur
e.Ther
efor
e,t
heassumpt
ionandt
heconst
rai
ntsunderwhi
chpl
ans
ar
etooper
ateshoul
dbecl
ear
lybr
oughtabout
/est
abl
ished.

4.I
dent
if
yAl
ter
nat
iveCour
sesofAct
ion
Thef
our
thst
epi
npl
anni
ngpr
ocessi
stof
indal
ter
nat
ivecour
seofact
ion.Wemay
hav
eanumberofal
ter
nat
ivesandf
indi
ngal
ter
nat
ivesi
snotcommonpr
obl
em,but
r
educi
ngt
henumberofal
ter
nat
ivessot
hatsel
ect
ingt
hemostpr
omi
singmaybe
anal
yzedwhi
chr
equi
rest
heassessmentoft
hei
rpr
obabl
econsequences.Thus,t
he
pl
annermustusual
lymake pr
eli
minar
yexami
nat
ion t
o di
scov
ert
he mostf
rui
tf
ul
possi
bil
it
ies.

5.Ev
aluat
ingAl
ter
nat
iveCour
ses
Af
teri
dent
if
yingt
heal
ter
nat
ives,t
henextl
ogi
calst
epi
stoev
aluat
eeachandev
ery
al
ter
nat
ivebywei
ghi
ngt
hem agai
nsti
nthel
ightoft
hepr
emi
sesandgoal
s.Onecour
se
mayappeart
obepr
ofi
tabl
ebutr
equi
real
argeeachoutl
aywi
thasl
ow payback;
anot
hermayl
ookl
esspr
ofi
tabl
ebuti
nvol
vesl
essr
isk;st
il
lanot
hermaybet
tersui
tthe
company
'sl
ongr
angeobj
ect
ivesbuti
tisdi
ff
icul
ttoadapti
t,et
c.Ther
efor
e,makean
adj
ust
mentf
ort
hef
orecastpl
ani
fany
;seei
fthecost
,speed,
andqual
it
yrequi
rement
s
ar
esat
isf
iedandi
fmechani
zat
ionexpedi
test
hewor
kfort
heachi
evementofdesi
red
obj
ect
ivesi
nter
msofeachpossi
blecour
seofact
ion.

6.Sel
ect
ingacour
seofact
ion/
bestAl
ter
nat
ive
Af
terev
aluat
ingeachal
ter
nat
ivebasedi
nthegoal
sandpr
emi
ses,t
henextst
epi
sto
26
deci
de orsel
ectt
he bestcour
se ofact
ion t
hatwi
llhel
p ef
fi
cient
lyachi
evet
he
or
gani
zat
ion obj
ect
ives.When we deci
de,we hav
eto make sur
ethatt
he pl
an
possesses f
lexi
bil
it
yto adj
ustt
ovar
ying condi
ti
ons,accept
ance oft
he pl
an by
oper
ati
ngper
sonnelaswel
last
heexi
sti
ngcapaci
tyoft
hef
ir
m andneedf
ornew
equi
pment
,spaceper
sonnel
,tr
aini
ngandsuper
visi
on.

7.For
mul
ati
ngDer
ivat
ivePl
ans
Anar
rangementofdet
ail
edsequenceandt
imi
ngshoul
dbemadef
ort
hepr
oposed
pl
an.Att
hepoi
ntwhenadeci
sioni
smade,pl
anni
ngi
ssel
dom compl
eteandcer
tai
n
ar
rangement
sshoul
dbemadet
hatsuppor
tthebasi
cpl
anofact
ionchosen,t
hati
s,
i
dent
if
icat
ionoft
heder
ivat
ivepl
anst
hatsuppor
tthemaj
orpl
anofact
ion.

8.Number
izi
ngPl
ansbyBudget
ing
Af
terdeci
sionsar
emadeandpl
ansar
eset
,thef
inalst
epi
stogi
vet
hem meani
ngt
hat
i
stonumber
izepl
ansbyconv
ert
ingt
hem t
obudget
s,t
hishel
pst
oest
abl
ishv
eri
fi
abl
e
t
arget
sofachi
evement
,tof
aci
li
tat
econt
rol
.

ORGANI
ZATI
ONALOBJECTI
VES

The set
ti
ng ofor
gani
zat
ionalobj
ect
ivesbegi
nswi
tht
he def
ini
ti
on ofmi
ssi
on.A
mi
ssi
oni
stheor
gani
zat
ion'
sreasonf
orexi
stence.I
tdescr
ibest
heor
gani
zat
ion'
s
v
alues,aspi
rat
ionsandr
easonf
orbei
ng.A wel
l-def
inedmi
ssi
oni
sthebasi
sfor
dev
elopmentofal
lsubsequentobj
ect
ivesandpl
ans.Ami
ssi
onst
atement-mi
ssi
oni
n
wr
it
ing-i
susedt
ogui
demanager
s,wor
kuni
ts,andi
ndi
vidualempl
oyeest
hroughout
t
heor
gani
zat
ion.Oncet
heor
gani
zat
ion'
smi
ssi
oni
sar
ti
cul
atedmanager
scanbegi
n
dev
elopi
ngspeci
fi
cmi
ssi
onr
elat
edobj
ect
ivesatev
erymanager
iall
evelt
oref
lectt
he
r
esponsi
bil
it
iesappl
icabl
etoeach.

Whati
sanObj
ect
ive?
Anobj
ect
ivei
sanendr
esul
tuponwhi
cht
heexi
stenceofanor
gani
zat
iondepends.I
tis
t
hedesi
redout
comeor
gani
zat
ionshopet
oat
tai
nev
ent
ual
ly.Anobj
ect
ivepr
ovi
desa
st
andar
dfort
hemeasur
ementofsuccess.Anobj
ect
ivehel
psdet
ermi
net
echnol
ogi
es
r
equi
redandsett
hebasi
sforspeci
ali
zat
ionofef
for
t,aut
hor
it
ypat
ter
n,communi
cat
ion
anddeci
sionnet
- wor
ksandot
herst
ruct
uralr
elat
ionshi
ps.Manager
sar
edi
rect
ly
concer
nedwi
thor
gani
zat
ionalobj
ect
ives.Topmanager
sgener
all
yest
abl
ishbr
oad
27
or
gani
zat
ionalobj
ect
ives t
hathel
p,r
elat
ethe or
gani
zat
ion t
oit
s env
ironment
.
Manager
s,t
hen,t
ransl
atet
hese br
oad obj
ect
ives i
nto oper
ati
onalobj
ect
ives and
pr
ovi
de meansofcont
rolt
o measur
ethe ex
tentofaccompl
ishment
.Theymust
cont
inual
lydealwi
thgoalconf
li
ctsandf
indameansofsat
isf
yingt
hei
nter
est
sof
manyi
nter
nalandext
ernali
ndi
vidual
sandgr
oups.

Cl
assi
fi
cat
ionofObj
ect
ives
Obj
ect
ives maybe cl
assi
fi
ed as st
rat
egi
c,t
act
icaland oper
ati
onalorl
ong-t
erm,
i
nter
medi
ateandshor
t-t
erm.Thesecl
assi
fi
cat
ionsar
emadebasedont
hel
evel
sof
deci
sionmaki
ngaut
hor
it
yandt
imet
heobj
ect
ivescov
er.
1)BasedonHi
erar
chy
St
rat
egi
cObj
ect
ives:St
rat
egi
cobj
ect
ivesar
ebr
oadst
atement
sdescr
ibi
ngwher
ethe
or
gani
zat
ionwant
stobei
nthef
utur
e.Theyper
tai
ntot
heor
gani
zat
ionasawhol
e
r
athert
hanaspeci
fi
cdepar
tmentordi
visi
on.Theyf
ocusonsuchi
ssuesaspr
ofi
tabi
li
ty,
mar
ketposi
ti
oni
ngandmanager
ialper
for
manceandat
ti
tudeandpubl
icr
esponsi
bil
it
y.
Exampl
e:-t
o achi
eve a 10% net pr
ofi
t. The t
op-l
evel management has t
he
r
esponsi
bil
it
yandaut
hor
it
ytomakest
rat
egi
cobj
ect
ives.
Tact
icalObj
ect
ives:Tact
icalobj
ect
ivesar
esetbyt
hemi
ddl
emanagementl
evel
.These
obj
ect
ivesdef
inet
heout
comest
hatmaj
ordepar
tment
sanddi
visi
onsmustachi
evei
n
or
derf
ort
heor
gani
zat
iont
oreachov
eral
lobj
ect
ives.Thi
stact
icalobj
ect
ivei
sonepar
t
ofachi
evi
ngt
hest
rat
egi
cobj
ect
iveandofcommuni
cat
ingef
fect
ivel
ywi
thcl
ient
sand
empl
oyees.
Oper
ati
onalObj
ect
ives:Oper
ati
onalobj
ect
ivesar
especi
fi
edandmeasur
abl
eresul
ts
expect
edf
rom depar
tment
s,f
ir
st-l
evelmanager
s,wor
kgr
oupsandi
ndi
vidual
swi
thi
n
anor
gani
zat
ion.Exampl
es:
-Set
ti
ngdai
ly,weekl
yandmont
hlysal
est
arget
sforeach
pr
oductcat
egor
y.

2)BasedonTi
meFr
ame
Ti
mef
rameobj
ect
ivesi
mpl
ythatanor
gani
zat
ion'
sact
ivi
ti
esar
egui
dedbydi
ff
erent
obj
ect
ivesdependi
ngont
hedur
ati
onoft
heact
ionbei
ngpl
anned.
Long-t
erm Obj
ect
ives:
- These obj
ect
ives ext
end up t
o5y
ear
s.They mustbe
accompl
ishedt
oensur
ethel
ong-t
erm sur
viv
aloft
heor
gani
zat
ion.
I
nter
medi
ateObj
ect
ives:
Theseobj
ect
ivescov
erat
imeper
iodbet
weent
heshor
t-t
erm

28
obj
ect
ivesandl
ong-t
erm obj
ect
ives-pr
obabl
y1-3y
ear
s.
Shor
t-t
erm Obj
ect
ives:Theseobj
ect
ivescanbeaccompl
ishedi
nlesst
hanay
ear
.

Char
act
eri
stcsofSoundObj
i ect
ives
Speci
fi
candMeasur
abl
e
Notal
lobj
ect
ivescanbeexpr
essedi
nnumer
ict
erms,butt
heyshoul
dbequant
if
ied
whenpossi
ble.Speci
fi
cout
comesar
eeasi
ert
ofocusont
hangener
alones,and
per
for
mancecan bemor
eeasi
lymeasur
abl
ewhen t
het
aski
sdef
ined.Exampl
e:
i
ncr
easi
ngpr
ofi
tby5%.
Chal
lengi
ngbutReal
ist
ic
Obj
ect
ivesshoul
dbechal
lengi
ngbutnotunr
easonabl
ydi
ff
icul
t,i
,e,obj
ect
ivesshoul
d
be chal
lengi
ng butat
tai
nabl
e,gi
ven t
he r
esour
cesand ski
ll
sav
ail
abl
e.The best
obj
ect
ivesr
equi
repeopl
etosear
cht
hei
rabi
li
ti
es.Ont
heot
herhand,whenobj
ect
ives
ar
eunr
eal
ist
ic,t
heysetempl
oyeesupf
orf
ail
ureandl
eadt
odecr
easi
ngempl
oyee
mor
alecausi
ngde-mot
ivat
ion.Howev
er,
ifobj
ect
ivesar
etooeasy
,empl
oyeesmaynot
f
eelmot
ivat
ed.

CoverKeyResul
tAr
eas

Obj
ect
ivescannotbesetf
orev
eryaspectofempl
oyeebehav
iororor
gani
zat
ional
per
for
mance;
ift
heywer
e,t
hei
rsheernumberwoul
drendert
hem meani
ngl
ess.I
nst
ead,
manager
sshoul
dident
if
yaf
ewkeyr
esul
tar
eas.Keyr
esul
tar
easar
ethoseact
ivi
ti
es
t
hatcont
ri
but
emostt
ocompanyper
f mance.Exampl
or e:f
ocusonkeyr
esul
ts-sal
es,
pr
ofi
ts,
product
ion,
orqual
it
y-t
hataf
fectov
eral
lper
for
mance.
Def
inedTi
mePer
iod
Obj
ect
ivesshoul
dspeci
fyt
het
imeper
iodov
erwhi
cht
heywi
llbeachi
eved.A t
ime
per
iod i
s a deadl
ine speci
fyi
ng t
he dat
e on whi
ch obj
ect
ive at
tai
nmentwi
llbe
measur
ed.Theper
iodshoul
dber
eal
ist
icandpr
oduct
ive.Shor
t-t
erm obj
ect
ivesshoul
d
compl
ementl
ong-t
erm obj
ect
ives.Forexampl
est
rat
egi
csal
esobj
ect
ivescoul
dbe
est
abl
ishedonat
hree-y
eart
imehor
izonwi
tha100,000t
arget
siny
earone,150,
000
i
nyeart
woand200,
000i
nyeart
hree.
Li
nkedt
oRewar
d
Theul
ti
mat
eimpactofobj
ect
ivesdependsont
heext
entt
owhi
chsal
aryi
ncr
eases,

29
pr
omot
ionsandawar
dsar
eonobj
ect
iveachi
evement
.Peopl
ewhoat
tai
ngoal
sshoul
d
ber
ewar
ded.Rewar
dsgi
venmeani
ngandsi
gni
fi
cancet
oobj
ect
ivesandhel
pcommi
t
empl
oyeest
oachi
eveobj
ect
ives.Howev
er,at
tai
nmentofobj
ect
ivesmayf
ailduet
o
v
ari
abl
esout
sideoft
hecont
roloft
heempl
oyees.St
il
lrewar
dmaybeappr
opr
iat
eift
he
empl
oyeepar
ti
all
yachi
evedobj
ect
ivesunderdi
ff
icul
tci
rcumst
ances.

Conf
li
ctsamongObj
ect
ives
Thepr
ocessofset
ti
ngobj
ect
ivesmusti
ncor
por
ateandi
ntegr
atet
hei
nter
estoft
he
f
orcesi
nthei
nter
nalandext
ernalenv
ironment
.Thef
orm andwei
ghtt
obegi
vent
oany
par
ti
cul
ari
nter
estgr
oupi
ll
ust
rat
espr
eci
sel
ythenat
ureofmanagement
’sdi
lemma.
Someoft
hemostcommonobj
ect
iveset
ti
ngt
rade-of
fsf
acedbymanager
sinbusi
ness
or
gani
zat
ionsar
e:
 Shor
t-t
erm pr
ofi
tsv
ersusl
ong-t
erm gr
owt
h.
 Pr
ofi
tmar
ginv
ersuscompet
it
iveposi
ti
on.
 Di
rectsal
esef
for
tver
susdev
elopmentef
for
t.
 Gr
eat
erpenet
rat
ionofpr
esentmar
ket
sver
susdev
elopi
ngnewmar
ket
s.
 Achi
evi
ngl
ong-t
erm gr
owt
hthr
oughr
elat
edbusi
nessesv
ersusachi
evi
ngi
t
t
hroughunr
elat
edbusi
nesses.
 Pr
ofi
tobj
ect
ivesv
ersusnonpr
ofi
tobj
ect
ives(
thati
s,soci
alr
esponsi
bil
it
ies)
.
 Gr
owt
hver
susst
abi
li
ty.
 Low-r
iskenv
ironmentv
ersushi
gh-r
iskenv
ironment
.

Managementmustconsi
dert
heexpect
ati
onsoft
hedi
ver
segr
oupsonwhi
cht
he
company
’sul
ti
mat
esuccessdepends.Theobj
ect
ivest
hatbusi
nessmanager
ssetf
or
t
hei
ror
gani
zat
ionsshoul
dal
soconf
ir
mthedi
ff
icul
tyofbal
anci
ngt
heconcer
nof
i
nter
estgr
oups.Thesat
isf
act
ionofhumanpar
ti
cipant
swi
thi
ncompani
esi
sanot
her
concer
nofmanager
s–i
nset
ti
ngcompanyobj
ect
ives.Wi
thoutmi
nimum degr
eeof
compat
ibi
li
tyofor
gani
zat
ionalandhumanpar
ti
cipantgoal
sor
gani
zat
ionscoul
dnot
exi
st.Butt
otalagr
eementi
simpossi
bleandconf
li
ctsdo exi
st.Theexi
stenceof
mul
ti
ple obj
ect
ivesdi
ff
erent
iat
ed byf
unct
ionsi
sal
so anot
hersour
ce ofconf
li
ct.
Maxi
mizi
ngt
heper
for
manceofonef
unct
ionaldepar
tmentmayl
eadt
oscar
if
yingt
he
goal
sofanot
herdepar
tment
.Ther
efor
e,manager
shav
etoi
mpl
ementt
heseobj
ect
ives
accor
dingt
othepr
ior
it
yoft
hei
rimpor
tance.

30
Pr
ior
it
yandMeasur
ementofObj
ect
ives

Pr
ior
it
yofObj
ect
ives
Thephr
asepr
ior
it
yofobj
ect
ivesi
mpl
iest
hatatagi
vent
ime,accompl
ishi
ngone
obj
ect
ivei
smor
eimpor
tantt
hanaccompl
ishi
ngot
her
s.I
tal
sor
efl
ect
sther
elat
ive
i
mpor
tanceofcer
tai
n obj
ect
ivesr
egar
dlessoft
ime.Forexampl
e,sur
viv
aloft
he
or
gani
zat
ioni
sanecessar
ycondi
ti
oni
nrel
ati
ont
oal
lot
herobj
ect
ives.

Measur
ementofObj
ect
ives
I
npr
act
ice,ef
fect
ivemanager
ialper
for
mancer
equi
resest
abl
ishi
ngobj
ect
ivesi
nev
ery
ar
eat
hatcont
ri
but
est
oov
eral
lor
gani
zat
ionalper
for
mance.Managementexper
tPet
er
Dr
uckerhasst
atedt
hatobj
ect
ivesshoul
dbeest
abl
ishedi
natl
eastei
ghtar
easof
or
gani
zat
ionalper
for
mance:
a)Mar
ketst
andi
ng f
) Managerper
for
manceand
r
esponsi
bil
it
y
b)I
nnov
ati
ons
g)Wor
ker per
for
mance and
c)Pr
oduct
ivi
ty
at
ti
tude
d)Phy
sicalandf
inanci
alr
esour
ces
h)Soci
alr
esponsi
bil
it
y
e)Pr
ofi
tabi
li
ty
Thi
scl
assi
fi
cat
ioni
nnowaydoesnoti
mpl
yrel
ati
vei
mpor
tance,nori
sitt
heonl
ycl
assi
fi
cat
ion
sy
stem av
ail
abl
e.Dr
uckerhasobser
vedt
hat"
ther
ealdi
ff
icul
tyl
iesi
ndeednoti
ndet
ermi
ningwhat
obj
ect
ivesweneed,buti
ndeci
dinghow t
osett
hem.
..
”Thi
sinv
olv
esdet
ermi
ningwhatshoul
dbe
measur
edi
neachar
eaandhowi
tshoul
dbemeasur
ed.Themor
eabst
ractt
heobj
ect
ive,t
hemor
e
di
ff
icul
titi
stomeasur
eper
for
mance.
Nev
ert
hel
ess,ef
fect
ivepl
anni
ngr
equi
resmeasur
ementofobj
ect
ives.Av
ari
etyofmeasur
ement
s
exi
stt
oquant
if
yobj
ect
ivesi
ntheei
ghtar
east
hatDr
uckersuggest
s:

Pr
ofi
tabi
li
tyObj
ect
ives:Thepur
posesofpr
ofi
tar
etomeasur
eef
fi
ciency
,recov
eronecostel
ement
ofbei
ngi
nbusi
ness(
ret
urnoni
nvest
edcapi
tal
),andpr
ovi
def
undsf
orf
utur
eexpansi
onand
i
nnov
ati
on.Themi
nimum pr
ofi
tabi
li
tyi
sthatwhi
chensur
est
hecont
inuousst
ream ofcapi
tali
ntot
he
or
gani
zat
ion,
giv
ent
hei
nher
entr
iskoft
hei
ndust
ryi
nwhi
cht
heor
gani
zat
ionoper
ates.

Mar
ket
ingObj
ect
ives:Mar
ket
ingobj
ect
ivesmeasur
eper
for
mancer
elat
ingt
opr
oduct
s,mar
ket
s,
di
str
ibut
ion,
andcust
omerser
viceobj
ect
ives.
Pr
oduct
ivi
tyObj
ect
ives:Pr
oduct
ivi
tyi
smeasur
edwi
thr
ati
osofout
putt
oinput
.Ot
herf
act
orsbei
ng
equal
,thehi
ghert
her
ati
o,t
hemor
eef
fi
cienti
stheuseofi
nput
s.
31
Thi
smeasur
eofpr
oduct
ivi
tyal
socoul
dbeusedf
orcompar
isonsamongt
hei
ndi
vidualdepar
tment
s
i
nthef
ir
m.

Phy
sicalandFi
nanci
alObj
ect
ives:Phy
sicalandf
inanci
alobj
ect
ivesr
efl
ectt
hef
ir
m'scapaci
tyt
o
acqui
rer
esour
cessuf
fi
cientt
oachi
evei
tsobj
ect
ives.
Ot
herObj
ect
ives:Obj
ect
ivesf
ori
nnov
ati
on,empl
oyee at
ti
tudes,managerbehav
ior
,and soci
al
r
esponsi
bil
it
yar
e,howev
er,notsoeasi
lyi
dent
if
iabl
eormeasur
abl
einconcr
etet
erms.Thi
sis
i
mpor
tantbecause,
wit
houtmeasur
ement
,anysubsequentev
aluat
ioni
sinconcl
usi
ve.

Tabl
e2.
1 Sel
ect
edMeasur
esofObj
ect
ives

Obj
ect
ives Possi
bleMeasur
es
Pr
ofi
tabi
li
ty 1.Rati
oofpr ofitt osal es
2.Rati
oofpr ofitt ot otalasset s.
3.Rati
oofpr ofitt ocapi tal.
Marketi
ng 1.Marketshar e
2.Sal
esv ol
ume.
3.Rateofnewpr oductdev elopment .
4.Numberofout l
et s.
Productivi
ty 1.Rat
ioofout puttol aborcost s.
2.Rati
oofout putt ocapi talcost s.
3.Rati
oofv alueaddedt osal es.
4.Rati
oofv alueaddedt opr ofit
.
PhysicalandFinanci
al 1.Cur rentratio
2.Worki ngcapi talt urnov er
3.Rati
oofdebtt oequi ty
4.Account srecei v ablet urnov er
5.I
nvent orytur nov er
Pl
anni
ngTechni
ques
 For
ecast
ing-Maki
ngassumpt
ionsaboutwhatwi
llhappeni
nthef
utur
e
 Qual
it
ati
vef
orecast
ingr
eli
esonexper
topi
nions

 Quant
it
ati
vef
orecast
ingusesmat
hemat
icalandst
ati
sti
calanal
ysi
s

 Cont
ingencypl
anni
ng
 Ident
if
y i
ngalt
ernat
ivecour
sesofact
iont
hatcanbei
mpl
ement
edt
omeett
heneedsof
changingci
rcumstances

 Cont
ingencypl
ansant
ici
pat
echangi
ngcondi
ti
ons

32
  Cont
ingencypl
anscont
aint
ri
ggerpoi
nts

 Scenar
iopl
anni
ng
 Al
ong-t
ermv
ersi
onofcont
ingencypl
anni
ng

 I
dent
if
yingal
ter
nat
ivef
utur
escenar
ios

 Pl
ansmadef
oreachf
utur
escenar
io

 I
ncr
easesor
gani
zat
ion’
sfl
exi
bil
it
yandpr
epar
ati
onf
orf
utur
eshocks

 Benchmar
king
– Useofexter
nalcompari
sonst
obet
terev
aluat
ecur
rentper
for
manceandi
dent
if
y
possi
bleact
ionsfort
hefut
ure

– Adopt
ingbestpr
act
icesofot
heror
gani
zat
ionst
hatachi
evesuper
iorper
for
mance

St
epsi
nBenchmar
king

 For
m abenchmar
kingpl
anni
ngt
eam

 Gat
heri
nter
nalandext
ernaldat
a

 Anal
yzedat
atoi
dent
if
yper
for
mancegaps.

 Pr
epar
eandi
mpl
ementact
ionpl
an

 Publ
icConsul
tat
ion
I
nvol
vepubl
icandst
akehol
der
siny
ourpl
anni
ngpr
ocess

• Achi
evepubl
icconsul
tat
iont
hrough

• I
nter
views

• Faci
li
tat
edmeet
ings

• Openhouses

• Websi
tedi
scussi
onpaper
s/sur
vey
s

 FocusGr
oups
• Prov
idesoppor
tuni
tyt
oaddr
essspeci
fi
cissues

• Pr
ovi
desoppor
tuni
tyf
ormaxi
mum par
ti
cipat
ion

• Pr
ovi
desmaxi
mum i
nfor
mat
ioni
nshor
tper
iodoft
ime

 Pl
anner
sandPar
ti
cipat
ion
St
affpl
anner
spr
ovi
deexper
ti
sei
nthepl
anni
ngpr
ocess

33
Par
ti
cipat
orypl
anni
ngi
mpr
ovest
hei
mpl
ement
ati
onpr
ocess

 Goalset
ti
ngal
ignspl
ansand

34
Chapt
erThr
ee:Deci
sionMaki
ng
Meani
ngofDeci
sionMaki
ng
Deci
sionMaki
ngi
sdef
inedast
hepr
ocessofsel
ect
ingorchoosi
ngbestcour
seofact
ionf
rom a
numberal
ter
nat
ivebasedonsomecr
it
eri
a.Becausemanager
sar
econt
inual
lyconf
ront
edwi
th
oppor
tuni
ti
esandpr
obl
ems,t
heymustconst
ant
lyanal
yzet
heef
fectofdi
ff
erentdeci
sionsont
hei
r
or
gani
zat
ionsandsel
ectt
heal
ter
nat
ivet
hatwi
llmov
ethef
ir
mtowar
dit
sst
atedobj
ect
ives.Deci
sion
maki
ngi
saski
llr
equi
redi
npl
anni
ngwhi
chi
smai
nlymaki
ngachoi
ceamongt
heal
ter
nat
ivecour
se
ofact
iont
obei
mpl
ement
edi
nfut
ure.
Deci
sionmaki
ngsi
tuat
ions
a)Deci
sionsundercer
tai
nty
:deci
sionsmadei
nwhi
cht
heext
ernalcondi
ti
onsar
eident
if
iedand
v
erypr
edi
ctabl
e/whenev
ert
her
eiscompl
etedat
a&i
nfor
mat
ion/
b)Deci
sionsunderr
isk:t
hosedeci
sionsi
nwhi
chpr
obabi
li
ti
escanbeassi
gnedt
otheexpect
ed
out
comesofeachal
ter
nat
ive.
c)Deci
sionsunderuncer
tai
nty
:iti
sacasewher
enei
thert
her
eiscompl
etedat
anotpr
obabi
li
ti
es
canbeassi
gnedt
othesur
roundi
ngcondi
ti
ons.Somecondi
ti
onst
hatar
euncont
rol
labl
eby
managementi
ncl
udecompet
it
ion,gov
ernmentr
egul
ati
ons,t
echnol
ogi
caladv
ances,t
heov
eral
l
economy
,andt
hesoci
alandcul
tur
alt
endenci
esofsoci
ety
.
 Rat
ionalDeci
sionMaki
ngpr
ocess
Thest
epsi
ndeci
sionmaki
ngpr
ocessi
ncl
udet
hef
oll
owi
ng:
1.Ascer
tai
ntheneedf
oradeci
sion/
Ident
if
ythepr
obl
em
The deci
sion maki
ng pr
ocess begi
ns by det
ermi
ning a pr
obl
em exi
sts;t
hati
s,t
her
eis an
unsat
isf
act
orycondi
ti
on.
2.Est
abl
ishdeci
sioncr
it
eri
a
Oncet
heneedf
oradeci
sionhasbeendet
ermi
ned,
ther
ecomesaneedt
oest
abl
ishdeci
sioncr
it
eri
a
whi
chr
equi
resi
dent
if
yingt
hosechar
act
eri
sti
cst
hatar
eimpor
tanti
nmaki
ngt
hedeci
sion.
3.Al
locat
ewei
ght
stocr
it
eri
a
Thei
dent
if
iedcr
it
eri
ashoul
dbewei
ght
edbasedont
hei
rimpor
tanceandar
rangedi
npr
ior
it
y.Thi
sis

35
becausesomear
eobv
iousl
ymor
eimpor
tantt
hanot
her
sandweneedt
owei
ghteachcr
it
eri
ont
o
r
efl
ecti
tsi
mpor
tancei
nthedeci
sion.
4.Dev
elopAl
ter
nat
ives
Thi
sinv
olv
esdev
elopi
ngal
istoft
heal
ter
nat
ivet
hatmaybev
iabl
eindeal
ingwi
tht
hest
ated
pr
obl
em.

5.Ev
aluat
eAl
ter
nat
ives
Oncet
heal
ter
nat
ivesar
eenumer
atedt
hedeci
sionmakermustcr
it
ical
lyev
aluat
eeachoneand
i
dent
if
ythest
rongandweakpoi
ntswhencompar
edagai
nstt
hecr
it
eri
aandt
hewei
ght
sest
abl
ished.
I
nev
aluat
ingeachal
ter
nat
ive,wenotonl
yconsi
dert
hingst
hatcanbemeasur
edi
nnumer
icalt
erms
suchast
imeandv
ari
oust
ypesoff
ixed&oper
ati
ngcost
s,butal
soconsi
deri
ntangi
bleorqual
it
ati
ve
f
act
orssuchast
hequal
it
yofl
aborr
elat
ions,t
her
iskoft
echnol
ogi
calchangeort
hei
nter
nat
ional
pol
it
icalcl
imat
e.
6.Sel
ectt
heBestAl
ter
nat
ive
Af
terweev
aluat
etheal
ter
nat
ives,t
henextl
ogi
calst
epi
stosel
ectt
hebestal
ter
nat
ivet
hatsui
tst
o
sol
veourdeci
sionpr
obl
em.I
nsel
ect
ingt
hebestal
ter
nat
ive,
fact
orssuchasr
isk,
economyofef
for
ts,
t
imi
ngandl
imi
ti
ngf
act
orsshoul
dbeconsi
der
edadequat
ely
.
7.Put
ti
ngDeci
sionI
ntoAct
ion
Af
tersel
ect
ingt
hebestal
ter
nat
ive,
wei
mpl
ementorputi
tint
oact
ion.Thi
srequi
rescommuni
cat
ion
ofdeci
sions t
o subor
dinat
es,get
ti
ng accept
ance oft
he deci
sions,and get
ti
ng suppor
tand
cooper
ati
onf
orconv
ert
ingt
hedeci
sioni
ntoef
fect
iveact
ion.Thedeci
sionshoul
dbeef
fect
iveat
pr
opert
imeandi
npr
operwayt
omaket
heact
ionef
fect
ivet
oachi
evedesi
redobj
ect
ives.
8.Fol
lowi
ngupDeci
sions
Hav
ingi
mpl
ement
edt
hedeci
sion,t
hemanagershoul
dcompar
ether
esul
tsoft
hatcour
seofact
ion
wi
tht
hedesi
redout
come,i
fnecessar
y,t
akecor
rect
iveact
ion.Si
ncedeci
sionsar
emadebasedon
f
orecast
saboutt
hef
utur
e,t
hebestdeci
siont
hatwesel
ectmaynotsui
tabsol
utel
ytoachi
eveour
obj
ect
ives.Ther
efor
e,manager
sshoul
dadj
ust
,modi
fyort
akeanyot
hercor
rect
ivesi
fnecessar
y.
 Ty
pesofDeci
sions
Severalauthorsbeli
evethatther
earetwot ypesofdecisions:programmedandnon-pr ogrammed
decisi
ons.
ProgrammedDeci si
ons:aredecisi
onthatmanager sf acet imeandagai n.Thesedecisi
onsare
programmabl ebecauseofaspeci f
icprocedurecanbewor kedouttor esolvethem basedon
experienceinsimil
arsi
tuati
ons.Onceastandardprocedurehasbeenest abli
shed,i
tcanbeusedto
tr
eatal lli
ke sit
uati
ons.They usuall
yi nvolv
e an or ganizat
ion'
s every day oper
ati
onaland
36
admi ni
strati
veact i
vit
ies.Theyar epr i
mar il
yfoundatt hemi ddleandl owerlevel
sofmanagement .
Dat ausedi nmaki ngapr ogrammeddeci sionusuallyar ecompl et
eandwel ldefi
ned.Par t
icipants
knowt hedet ail
sandagr eeonhowt or esolvetheproblem.
Non-pr ogrammed Deci si
ons:ar e used t o sol
ve nonr ecur ri
ng problems.No wel l-established
procedureexi stsforhandl i
ngt hem,pr i
mar il
ybecausemanager sdonothav eexperi
encet odr aw
upon.I n cont rast to pr ogrammed deci si
ons,av ai l
able dat a are usuallyincompl ete.Non
programmabl edecisi
onsar ecommonl yf oundatt hemi ddleandt opl evel
sofmanagementand
oftenarer el
atedt oanor ganizati
on'spolicy-makingact ivit
iessuchaswhet hertoaddapr oductt o
theexisti
ngpr oductline,t
or eorgani
zet hecompany ,ort oacqui reanotherfi
rm,areexamples.

CHAPTER4:ORGANI
ZING
CONCEPTOFORGANI
ZINGANDORGANI
ZATI
ON
Themanagementpr
ocessst
art
sfr
om pl
anni
ng;i
.e.
,inpl
anni
ng,obj
ect
ivest
hatar
e
goi
ngt
obeachi
evedar
eident
if
ied/est
abl
ishedandcour
sesofact
ionhav
ebeen
det
ermi
ned.Then,
themanagercont
inueshi
sact
ivi
ti
esbygi
vingpr
act
icalshapet
othe
act
ivi
ti
es/
wor
kst
obeper
for
medi
dent
if
yingt
her
oleswher
ebywor
ker
sar
esupposed
t
opl
ay,andmaki
ngknownt
othegr
oupwhatt
hei
rdut
iesandr
esponsi
bil
it
iesar
e
t
her
efor
e,t
odesi
gnandmai
ntai
nsuchsy
stemsofr
olesi
sthemanager
ialf
unct
ionof
or
gani
zing.
 Tobegi
nwi
tht
hedef
ini
ti
onofor
gani
zing,t
her
eisnouni
ver
sal
lyaccept
ed
def
ini
ti
on ofor
gani
zing.Di
ff
erentaut
hor
s gav
evar
ious butsuppl
ement
ary
def
ini
ti
ons.Amongot
her
sthef
oll
owi
ngar
eaf
ew:
 I
tist
heest
abl
ishi
ngofef
fect
ivebehav
ior
alr
elat
ionshi
psamongper
sonssot
hat
t
heymaywor
ktoget
heref
fi
cient
lyand gai
n per
sonalsat
isf
act
ion i
n doi
ng
sel
ect
ed t
asks undergi
ven env
ironment
alcondi
ti
ons f
ort
he pur
pose of
achi
evi
ngsomegoal
sandobj
ect
ives.
 I
tisoneoft
hef
unct
ionsofmanagement
,theoneconcer
nedwi
thchoosi
ngwhat
t
asksar
etobedone,
whoi
stodot
hem,
howt
het
asksar
etobegr
ouped,
whoi
s
t
orepor
ttowhom andwher
edeci
sionsar
etobemade.
 I
tist
hegr
oupi
ngofact
ivi
ti
esnecessar
ytoat
tai
nobj
ect
ives,t
heassi
gnmentof
eachgr
oupi
ngt
oamanagerwi
thaut
hor
it
ytosuper
visei
t,andt
hepr
ovi
sionof
37
 co-or
dinat
ionv
ert
ical
lyandhor
izont
all
yint
heent
erpr
isest
ruct
ure.
 I
tdef
inest
hepar
t,whi
cheachmemberofanent
erpr
isei
sexpect
edt
oper
for
m
and t
he r
elat
ion bet
ween such member
stot
he end t
hatt
hei
rconsor
ted
endeav
orshal
lbemostef
fect
ivet
othepur
poseoft
heent
erpr
ise.
 Or
gani
zingi
sthepar
tofmanagi
ngt
hati
nvol
vesest
abl
ishi
ngani
ntent
ional
st
ruct
ureofr
olesf
orpeopl
etof
il
linanor
gani
zat
ion.
Hence,i
tisaf
unct
ionofi
dent
if
ying,cl
assi
fyi
ng,gr
oupi
ng,andassi
gni
ngv
ari
ous
act
ivi
ti
esandpr
escr
ibi
ngaut
hor
it
yrel
ati
onshi
pst
ocr
eat
eanor
gani
sm orst
ruct
ure
capabl
eofaccompl
ishi
ngpr
edet
ermi
nedobj
ect
ives.
I
mpor
tance(
Adv
ant
age)ofOr
gani
zing
Ther
ear
emanyr
easonsf
ort
hei
mpor
tanceofor
gani
zing,
amongt
hev
italr
easons:
-
 I
mpr
ovesef
fi
ciencyandi
ncr
easesqual
it
yofwor
ks(
div
isi
onofwor
k).
 Est
abl
ishesaccount
abi
li
tyandr
esponsi
bil
it
y.
 Faci
li
tat
escommuni
cat
ion.
 Hel
pst
oachi
eveor
gani
zat
ionalobj
ect
ives.
Thus,
dif
fer
entor
gani
zat
ionsmustor
gani
zet
hei
ract
ivi
ti
es,
soast
oachi
evei
tsgoal
s.
Thef
ourdi
sti
nctact
ivi
ti
es(
steps)ofor
gani
zingar
e:-
 Det
ermi
ningwor
kact
ivi
ti
es
 Cl
assi
fyi
ngt
ypesofwor
ksneeded
 Assi
gni
ngwor
kst
oindi
vidual
s
 Est
abl
ishi
ngr
elat
ionshi
pbydesi
gni
nghi
erar
chy(
uni
ty)
 PRI
NCI
PLESOFORGANI
ZING
Ther
ear
emanypr
inci
plesofor
gani
zing,f
ort
hisuni
twear
egoi
ngt
oseet
he7
pr
inci
pleswhi
char
eident
if
iedbyPet
erDucker
:-
1.Cl
ari
ty:Ev
ery
onemustknow cl
ear
lyhi
sposi
ti
on,t
asks,r
esponsi
bil
it
iesand
cont
ri
but
ioni
nrel
ati
ont
oot
her
sforper
for
manceofcoor
dinat
edef
for
t.
2.Economy
:Or
gani
zingst
ruct
ureshoul
dencour
agepeopl
etot
akei
nit
iat
iveand
r
esponsi
bil
it
yandexer
cisej
udgmenti
nmaki
ngt
hei
rowndeci
sion.I
tleadst
o
mi
nimum costofcont
rolandsuper
visi
on.
3.Di
rect
ion ofVi
sion:Pat
ter
nsofi
nter
act
ion & communi
cat
ion shoul
d beso
desi
gnast
odi
rectt
heempl
oyeesv
isi
onnott
owar
dst
asksandact
ivi
ti
esbut

38
 t
owar
dsone’
sown goal
sandal
sot
owar
dst
hegoal
soft
heor
gani
zat
ionasa
whol
e.
4.Under
standi
ng one’
s own t
ask and t
he common t
ask:Or
gani
zat
ion t
hose
ef
fect
ivecommuni
cat
ionsy
stems,shoul
denabl
eeachempl
oyeet
ounder
stand
hi
staskaswel
last
hecommont
askoft
heOr
gani
zat
ion.
5.Deci
sionmaki
ng:Or
gani
zat
ionst
ruct
ureshoul
dmakei
tpossi
blet
hatev
ery
body
i
smaki
ngdeci
sionsatt
hei
rownl
evelanddeci
sionshol
dnotbepushedupor
downt
oot
herl
evel
s.
6.St
abi
li
tyandadapt
abi
li
ty:Or
gani
zat
ionst
ruct
ureshoul
dbest
abl
eandatt
he
samet
imeadapt
abl
etoenv
ironment
alchanges.
7.Per
pet
uat
ionandSel
f-r
enewal
:Inor
dert
oper
pet
uat
e,anor
gani
zat
ionshoul
d
be capabl
e ofr
enewi
ng i
tsel
fcont
inual
ly.I
tshoul
d pr
ovi
de mot
ivat
ion t
o
exi
sti
ngempl
oyeest
olear
n,dev
elopandt
out
il
izet
hei
rexi
sti
ngcapabi
li
ti
est
o
t
hef
ull
estext
ent
.A sel
f-r
enewi
ng or
gani
zat
ionshoul
dhav
ethequal
it
yof
openmi
ndednessandr
ecept
ivi
tyt
onewi
deas.
 BASI
CCONCEPTSOFORGANI
ZING
Di
visi
onofLabor
/Speci
ali
zat
ion/
:Insmal
lor
gani
zat
ions,j
usthav
ingt
hreeorf
our
empl
oyees,eachoft
hem doacer
tai
njobatdi
ff
erentt
ime;f
orexampl
eat
ear
oom
hav
inganownermanagerandt
wowai
ter
scanmaket
ea,wai
toncust
omer
s,t
reat
t
hem,
col
lectmoneyandper
for
m al
lot
herdut
iesr
equi
redi
nabusi
ness.Butast
hef
ir
m
gr
ows,peopl
emustbeassi
gnedspeci
fi
ctasksi
nwhi
cht
heyspeci
ali
ze.Thi
spr
ocess
i
scal
leddi
visi
onofl
abororspeci
ali
zat
ion.I
tinv
olv
esbr
eaki
ngdownofat
aski
ntoi
ts
mostbasi
cel
ement
s,t
rai
ningwor
ker
sinper
for
mingspeci
fi
cdut
ies,andsequenci
ng
act
ivi
ti
essot
hatoneper
son'
sef
for
tbui
ldonanot
her
's.
Advant
age
 I
tenabl
esaper
sonper
for
ming at
askt
o becomehi
ghl
ypr
ofi
cientati
tin
r
elat
ivel
yshor
tti
meandt
heser
esul
tsi
nincr
easi
ngef
fi
ciencyi
npr
oduct
ivi
ty.
 I
tsav
est
imet
hati
sal
way
slosti
nchangi
ngf
rom onej
obt
oanot
her
.
 Ther
eisl
esswast
eofmat
eri
alsi
nthel
ear
ningpr
ocesswhendi
visi
onofl
abori
s
used.
Di
sadvant
age

39
  Thebor
edom (
bor
ing)andf
ati
guecausedbymonot
onous,
repet
it
ivet
asks
 Thespeci
ali
stl
acksj
obenr
ichment
Coor
dinat
ion:
Iti
stheest
abl
ishmentofpr
operandadequat
erel
ati
onshi
psbet
weenan
empl
oyeeandhi
swor
k,oneempl
oyeet
oanot
herort
othegr
oup,andonedepar
tment
orsub-depar
tmentandanot
her
.Manager
s,t
opr
omot
eco-or
dinat
ion,i
naddi
ti
ont
o
ot
hermet
hods,
useMBOpr
ogr
am.Thi
shel
psmanager
sandsubor
dinat
est
oappr
oach
anddeci
dei
ncommonaboutt
heobj
ect
ivest
obeachi
evedandt
heact
ionst
obet
aken.
Fai
lur
etoest
abl
ishsuchr
elat
ionshi
psmayr
esul
tindi
ff
erentper
sons(
ordepar
tment
s)
pur
sui
ngdi
ff
erentpat
hs,
thusmaki
ngdi
ff
icul
tfort
heent
erpr
iset
oachi
evei
tsgoal
s.
Communi
cat
ion:
Iti
s t
he t
ransf
er of i
nfor
mat
ion among peopl
e t
o achi
eve
or
gani
zat
ionalgoal
s.Successf
ulcommuni
cat
ioni
sgoodf
orbusi
nessandf
orust
oo.
Ev
eryor
gani
zingf
unct
ionshoul
dbeabl
etocr
eat
eanor
gani
zat
ion,whi
chhasi
tsown
channel
s and met
hods ofcommuni
cat
ion.Si
nce managementi
s concer
ned wi
th
wor
kingwi
thpeopl
eandunl
esst
her
eiscommonunder
standi
ngbet
weenpeopl
e,goal
s
cannotbeachi
eved;ef
fect
ivecommuni
cat
ioni
svi
talf
ormanagement
.Channel
sof
communi
cat
ioncoul
dbef
ormal
,i
nfor
mal
,upwar
d,downwar
dorhor
izont
al.

 FORMALANDI
NFORMALORGANI
ZATI
ONS
Thedesi
gn(
framewor
k)ofanor
gani
zat
ioncanbedi
videdi
ntot
wocat
egor
ies:The
f
ormalandi
nfor
malor
gani
zat
ion.
For
malOr
gani
zat
ion:I
tis an or
gani
zat
ion,whi
ch i
s est
abl
ished wi
thi
ntent
ional
st
ruct
ureofr
olesi
naf
ormal
lyor
gani
zedent
erpr
ise.I
tisone,whi
chi
sdr
aft
edbyt
op
management
.Iti
stheor
gani
zat
ionst
ruct
ure,whi
chdef
inesev
ery
thi
ngcl
ear
ly,and
expl
ici
tl
y.I
tisconsci
ousl
y,del
iber
atel
y,andr
ati
onal
lydesi
gnedbymanagementt
o
achi
evepr
edet
ermi
nedobj
ect
ives.
Thus,f
ormalor
gani
zat
ionhast
hef
oll
owi
ngi
mpor
tantpoi
nts:
 I
tisconsci
ousl
ybr
oughti
ntoexi
stencef
ort
heachi
evementofpr
edet
ermi
ned
obj
ect
ives.
 Aut
hor
it
yandr
esponsi
bil
it
yar
ecl
ear
lydef
ined.
 Thel
ineofcommuni
cat
ioni
sal
sof
ormal
ized(
Iti
sshowni
nor
gani
zat
ionchar
ts)
 Ther
elat
ionshi
poft
hesuper
iorandt
hesubor
dinat
eisf
ixed.(
Iti
sdel
iber
atel
y

40
 i
mper
sonali
tisbur
eaucr
ati
cinnat
ureandoper
atedbyt
her
ules&r
egul
ati
ons;
per
sonali
ssuesar
enotent
ert
ained)
.
 I
texi
stsi
nawr
it
tenf
orm.
I
nfor
malOr
gani
zat
ion:I
tisanet
wor
kofper
sonalandsoci
alr
elat
ionsnotest
abl
ished
orr
equi
redbyt
hef
ormalor
gani
zat
ionbutar
isi
ngspont
aneousl
yaspeopl
eassoci
ate
wi
thoneanot
her
.Iti
sundocument
edandof
fi
cial
lyunr
ecogni
zedr
elat
ionshi
pbet
ween
member
sofanor
gani
zat
iont
hati
nev
itabl
yemer
gesoutoft
heper
sonal&gr
oupneeds
ofempl
oyees.I
tisanor
gani
zat
ion,whi
chconsi
stsofsmal
lsoci
algr
oupsandf
ri
endl
y
associ
ati
onswi
thi
nthe f
ormalor
gani
zat
ion.I
tisgenui
ne t
hatwhenev
erf
ormal
or
gani
zat
ionsar
efor
med,i
nfor
malsoci
algr
oupsar
ecr
eat
edwi
thi
nit
sfr
amewor
k.
Suchgr
oupsar
ecr
eat
edont
hebasi
sofsi
mil
ari
tyofst
atus,
int
erest
s,bel
ief
s,at
ti
tudes,
backgr
ounds,
etc.
Suchsmal
lgr
oupsar
eresul
tsoft
heneedofpeopl
eforsoci
ali
nter
act
ion,andf
or
f
ri
endl
yassoci
ati
ons.Theyaf
fectt
hef
ormalor
gani
zat
ionposi
ti
vel
yornegat
ivel
y,
howev
er,managementnei
thercr
eat
es norabol
ishes t
hem.Ther
efor
e,manager
s
shoul
dlear
nhow t
oli
vewi
thi
t,how t
oinf
luencei
t,andhow t
odi
recti
tsener
gyand
i
nit
iat
ivet
owar
dsconst
ruct
ivechannel
s.Manager
s,t
odealwi
thi
nfor
malor
gani
zat
ions
t
hef
oll
owi
nggener
alsuggest
ionsar
ehel
pful
:
 Manager
sacceptandunder
standt
hei
nfor
malor
gani
zat
ions
 Consi
derpossi
bleef
fect
soni
nfor
malor
gani
zat
ionswhent
heyt
akeanyact
ion.
 I
ntegr
ate,asf
araspossi
ble,t
hei
nter
est
sofi
nfor
malgr
oupswi
tht
hoseoft
he
f
ormalor
gani
zat
ion.
 ORGANI
ZATI
ONALSTRUCTUREANDCHARTS
Or
gani
zat
ionalSt
ruct
ure:
canbedef
inedast
hear
rangementandi
nter
rel
ati
onshi
pof
t
hecomponentpar
tsandposi
ti
onsofacompany
.Iti
stheest
abl
ishedpat
ter
nof
r
elat
ionshi
psamongdi
ff
erentcomponent
sorpar
tsoft
heor
gani
zat
ion.Ther
ear
e
di
ff
erentf
ormsofor
gani
zat
ionalst
ruct
ure:-l
ine/mi
li
tar
y,f
unct
ionalor
gani
zat
ionl
ine
andst
aff
.
Or
gani
zat
ionalChar
ts:ar
e di
agr
ams oft
he or
gani
zat
ionalst
ruct
ure,showi
ng t
he
f
unct
ions,
depar
tment
s,orposi
ti
onsoft
heor
gani
zat
ionandhowt
heyar
erel
ated.
Or
gani
zat
ionalManual
:ist
hedescr
ipt
ionoft
heor
gani
zat
ionalchar
t,andi
sdesi
gned

41
t
o pr
omot
e,under
standi
ng oft
he basi
c or
gani
zat
ionalst
ruct
ure by means of
descr
ipt
ionsoft
hev
ari
ousj
obst
hatmaybel
ist
edonl
ybyt
it
leont
hechar
ts.
 DEPARTMENTATI
ON
Depar
tment
ati
oni
sapar
toft
heor
gani
zingpr
ocess.I
nthecont
extofmanagement
,it
meansdi
vidi
ngandgr
oupi
ngt
heact
ivi
ti
esandempl
oyeesofanent
erpr
isei
ntov
ari
ous
depar
tment
s.Al
lor
gani
zat
ionsdi
videt
hei
rov
eral
loper
ati
onsi
ntosubact
ivi
ti
esand
combi
ne t
hese sub act
ivi
ti
es i
nto wor
king gr
oups.Thi
s gr
oupi
ng pr
ocess of
speci
ali
zedact
ivi
ti
esi
nal
ogi
calmanneri
scal
leddepar
tment
ati
on.I
timpl
iest
he
di
visi
onoft
het
otalwor
kofanent
erpr
isei
ntoi
ndi
vidualf
unct
ionsandsubf
unct
ions.
Then,ei
theront
hebasi
sofsi
mil
ari
tyofwor
k,oref
fi
ciency
,thesev
ari
ousf
unct
ionsor
sub-f
unct
ioni
sgr
oupedt
oget
heri
ntowor
kuni
ts.I
tresul
ts:
 I
ndi
visi
onofwor
k
 I
nor
gani
zat
ionaluni
tst
obemanageabl
esi
zeand
 Ut
il
izat
ionofmanager
ialabi
li
tybasedonspeci
ali
zat
iont
osecur
emax
imum
r
esul
ts.
The basi
cneed ofdepar
tment
ati
on ar
isesf
rom t
he l
imi
tat
ion on t
he numberof
subor
dinat
est
hatcanbedi
rect
lymanagedbyasuper
ior
.Ift
her
eisnodepar
tment
ati
on,
i
twoul
dser
iousl
yputl
imi
tat
ionsont
hesi
zeoft
heor
gani
zat
ion.Depar
tment
ati
on
makes or
gani
zat
ions t
o expand t
o an i
ndef
ini
te degr
ee.I
tal
so hel
ps i
ncr
easi
ng
ef
fi
ciencyofor
gani
zat
ioni
nthef
oll
owi
ngway
s:
 Speci
ali
zat
ion  Dev
elopmentofmanagement
 Fi
xat
ionofr
esponsi
bil
it
y  Faci
li
tyi
nappr
aisal
 Feel
ingofaut
onomy

TheBasesofDepar
tment
ati
on
Themostcommonbasesofdepar
tment
ati
onusedbyor
gani
zat
ionsar
e:
a)Funct
ionalDepar
tment
ati
on e)Pr
ocessDepar
tment
ati
on
b)Pr
oductDepar
tment
ati
on f
) Mat
ri
x/pr
oject
/ and t
ask
c)Geogr
aphi
c/Ter
ri
tor
ial f
orce
d)Cust
omerDepar
tment
ati
on
a)Funct
ionalDepar
tment
ati
on

42
Funct
ionsr
efert
othev
ari
ousr
esponsi
bil
it
yar
easofanor
gani
zat
ionalcomponent
.Iti
s
t
hepr
ocessofgr
oupi
ngt
heor
gani
zat
ion'
sact
ivi
ti
esi
ntouni
tsi
nlogi
calmanneront
he
basi
s of essent
ialf
unct
ions t
hatmustbe per
for
med t
o at
tai
n or
gani
zat
ional
obj
ect
ives/
goal
s. These f
unct
ions i
ncl
ude mar
ket
ing, f
inance, oper
ati
ons,
manuf
act
uri
ngper
sonnel
,engi
neer
inget
c.

General
Manager

Mar
ket
ing Fi
nance Manuf
act
uri
ng Per
sonnel

Adv
ant
ages
 I
tisl
ogi
cal
,sci
ent
if
icandt
ime-t
est
edmet
hodbecausei
tgr
oupsl
ikeorsi
mil
ar
act
ivi
ti
est
oget
herwhi
chf
aci
li
tat
esspeci
ali
zat
ion
 I
tmakessuper
visi
oneasi
er,
sinceeachmanageri
sanexper
tinonl
yanar
row
r
angeofski
ll
s
 Ti
ghtcont
rolofal
lfunct
ionaluni
tsi
sassur
ed,becauset
het
opmanager
sar
e
r
esponsi
blef
ort
heendr
esul
ts
 I
tsi
mpl
if
iest
rai
ning
Di
sadv
ant
age
 Peopl
einaf
unct
ionaldepar
tmentmayl
osesi
ghtoft
heov
eral
loper
ati
onsoft
he
busi
ness
 Wor
ker
s maydev
elop hi
ghl
yspeci
ali
zed ski
ll
s,butnotgener
almanager
ial
abi
li
ti
es.
 Somet
imesconf
li
ctdev
elopsamongdepar
tment
sov
err
esour
ces
 Thegeogr
aphi
car
easer
ved;
ort
het
ypeofpr
oductorpr
oductl
inepr
oducedmay
r
equi
readi
ff
erentt
ypeofdepar
tment
ati
on
 Responsi
bil
it
yforpr
ofi
tisatt
het
op

b)Pr
oductDepar
tment
ati
on
I
tist
hegr
oupi
ngofact
ivi
ti
esont
hebasi
sofpr
oductorpr
oductl
ine.I
tisadopt
edby
(
commonl
yusedby
)manuf
act
urer
swhopr
oduceandsel
lanumberofpr
oductl
ines

43
made up of sev
eraldi
ff
erenti
tems;such as dr
ug,f
ood,cl
othi
ng,machi
nes,
aut
omobi
leset
c.
Exampl
e:Pr
oductDepar
tment
ati
onofanaut
omobi
lemanagementent
erpr
ise

Gener
alManager

CarDi
visi
on Tr
uckDi
visi
on BusDi
visi
on

Pr
oduct
ion Mar
ket
ing

Fi
nance Per
sonnel

Adv
ant
age
 I
tenabl
est
heent
erpr
iset
ofocusat
tent
ionef
for
tonpr
oductl
ines.
 I
timpr
ovesco-or
dinat
ionbet
weenf
unct
ionsr
elat
ingt
oapar
ti
cul
arpr
oduct
.
 Fur
nishesmeasur
abl
etr
aini
nggr
oundf
orgener
almanager
s.
 Faci
li
tat
esuseofspeci
ali
zedcapi
tal
,faci
li
ti
es,
ski
ll
sandknowl
edge.
Di
sadv
ant
ages
 Requi
resmor
eper
sonswi
thgener
almanagerabi
li
ti
es.
 Ther
eisanev
er-pr
esentdangerofdupl
icat
ionofact
ivi
ti
es.
 I
tpr
esent
sincr
easedpr
obl
em oft
opmanagementcont
rol
.
c)Depar
tment
ati
onbyGeogr
aphi
calAr
ea/
Ter
ri
tor
y/
I
tisof
tenr
efer
redt
oasar
eaort
err
it
ori
aldepar
tment
ati
on,andi
tgr
oupsbusi
ness
act
ivi
ti
esont
hebasi
sofgeogr
aphi
cregi
onort
err
it
ory
,enabl
ingaf
ir
mtoadaptt
olocal
cust
omsandl
awsandt
osur
veycust
omermor
equi
ckl
y.I
tisespeci
all
yat
tract
ivet
o
l
arge-scal
efi
rmsorot
herent
erpr
iseswhoseact
ivi
ti
esar
ephy
sical
lyorgeogr
aphi
cal
ly
di
sper
sed.

44
 Pr
esi
dent

West
ern Souther
n Cent
ral East
ern Norther
n
Regi
on Region Regi
on Region Region

Engi
neer
ing Pr
oduct
ion Account
ing Sal
es

Adv
ant
ages
 Resul
tsi
ngr
eatsav
ingi
nti
meandmoney
.Theent
erpr
isecanbenef
itf
rom
l
owerf
rei
ght
,lowerr
ent
sandl
owerl
aborcost
s.Thus,i
ttakesadv
ant
agesof
economi
cs of l
ocaloper
ati
ons (
places emphasi
s on l
ocalmar
ket
s and
oper
ati
ons)
 Pl
acesr
esponsi
bil
it
yatl
owerl
evel(
Ther
ewi
llbequi
ckdeci
sion.
)
 Pl
acesmeasur
abl
etr
aini
nggr
oundf
orgener
almanager
s.
 Bet
terf
acet
ofacecommuni
cat
ionwi
thl
ocali
nter
est
s.
Di
sadv
ant
ages
 Requi
resmor
eper
sonswi
thgener
almanagerabi
li
ti
es/
iti
scost
lyt
oimpl
ement
.
 Dupl
icat
ionofef
for
t
 I
ncr
easepr
obl
em oft
opmanagementcont
rol
d)Cust
omerDepar
tment
ati
on
I
tist
hegr
oupi
ngofent
erpr
iseact
ivi
ti
esbasedoncust
omer
s'i
nter
est
s.Compani
es
t
hatmustpr
ovi
despeci
alser
vicest
odi
ff
erentgr
oupssetupdepar
tment
sbyt
ypesof
cust
omer
s,usi
ngcust
omerdepar
tment
ati
on.Forexampl
e,amanuf
act
urermayhav
e
bot
hani
ndust
ri
alpr
oduct
sdi
visi
onf
ori
tsi
ndust
ri
alcust
omer
sandconsumerpr
oduct
s
di
visi
onf
orot
herconsumer
s.Anai
rl
inescompanymaymakedepar
tment
sit
ssel
li
ng
depar
tment
sfort
rav
ell
ing agenci
es,gov
ernmentpassenger
s,t
our
ist
s and ot
her
cust
omer
s.Nor
mal
ly,set
ti
ngupdepar
tment
sbycust
omer
sisnotapr
imar
yfor
m of
depar
tment
ati
on.I
tisusedi
nst
eadwi
thi
nsomeot
herf
ramewor
k.

45
 General
Manager

Pr
oduct
ion Fi
nance Mar
ket
ing Per
sonnel

Whol
eSal
e Ret
ail I
nst
all
ment Expor
t

Adv
ant
ages
 Encour
agesconcent
rat
iononcust
omerneeds
 Gi
vingcust
omer
sfeel
ingt
hatt
heyhav
eanunder
standi
ngsuppl
ier
 Dev
elopsexper
ti
sei
ncust
omerar
ea.
Di
sadv
ant
age
 May be di
ff
icul
tto coor
dinat
e oper
ati
ons bet
ween compet
ing cust
omer
demands.
 Requi
resmanager
sandst
affexper
tincust
omer
'spr
obl
ems
 I
tmayr
esul
tinunder
uti
li
zat
ionofr
esour
cesi
nsomedepar
tment
s.
 Cust
omergr
oupsmaynotal
way
sbecl
ear
lydef
ined.
 Ther
emaybedupl
icat
ionofact
ivi
ti
es.
e)Pr
ocessorEqui
pmentDepar
tment
ati
on
I
tist
hegr
oupi
ngofent
erpr
iseact
ivi
ti
esaccor
dingt
othepr
oduct
s'manuf
act
uri
ng
pr
ocess.Thi
smet
hodofdepar
tment
ati
oni
slogi
calandusedwhent
hemachi
nesor
equi
pmentusedr
equi
respeci
alski
llf
oroper
ati
ngandar
eofl
argecapaci
tywhi
ch
el
imi
nat
eor
gani
zat
ionaldi
vingorhav
etechni
calf
aci
li
ti
eswhi
chst
rongl
ysuggesta
concent
rat
edl
ocat
ion.Fori
nst
ance,at
ext
il
efact
orymay
becl
assi
fi
edi
ntospi
nni
ng,
wal
li
ng,pr
ocessi
ng,et
c.Economi
candTechnol
ogi
calconsi
der
ati
onsar
ethef
oremost
r
easons f
oradopt
ing pr
ocess depar
tment
ati
on.I
tis most
lyf
ound i
n pr
oduct
ion
depar
tment
s.

46
 Pr
esi
dent

Product
ion
Manager

Spi
nni
ng Dy
eing Weav
ing Pr
ocessi
ng

Adv
ant
age
 Achi
eveseconomi
cadv
ant
age  Si
mpl
if
iest
rai
ning
 Usesspeci
ali
zedknowl
edge  Suesspeci
ali
zedt
echnol
ogy
Di
sadv
ant
age
 Coor
dinat
ionofdepar
tment
sisdi
ff
icul
t
 Responsi
bil
it
yforpr
ofi
tisatt
het
op
 I
tisunsui
tabl
efordev
elopi
nggener
almanager
s
f
) Mat
ri
xDepar
tment
ati
on
I
tisanor
gani
zat
ionalar
rangementt
hatdev
elopedbecauseoft
heneedf
orqui
ck
compl
eti
onofhi
ghl
ytechni
calpr
oject
sthatr
equi
redsi
gni
fi
cantcont
ri
but
ionsbyt
woor
mor
efunct
ionalgr
oups.I
tbegi
nswi
thf
unct
ionalst
ruct
ureandt
henanot
herst
ruct
ure
or
gani
zedbypr
oductorbycl
ient/
cust
omerorbypr
ojecti
sov
erl
aidupont
heor
igi
nal
st
ruct
ure.Ther
esul
tist
hatempl
oyeesar
eassi
gnedt
oabasi
cfunct
ionaldepar
tment
andatt
hesamet
ime,
theyar
eassi
gnedt
owor
konapar
ti
cul
arpr
oduct
/pr
ojectorf
ora
par
ti
cul
arcust
omer
/cl
ient
.The essence ofmat
ri
x or
gani
zat
ion nor
mal
lyi
sthe
combi
ning off
unct
ionaland pr
oductdepar
tment
ati
on i
nthe same or
gani
zat
ion
st
ruct
ure.Themostobv
iousst
ruct
uralchar
act
eri
sti
cist
hati
tbr
eakst
heuni
ty-of
-
commandconcept
.

47
 Pr
esi
dent

Product
ion
Manager

Proj
ect
Mar
ket
ing Pr
oduct
ion Engi
neer
ing
planni
ng

Proj
ect-A Market
ing Pr
oducti
on Engi
neerin
Manager Speci
ali
st Speci
ali
st g
-1 -1 Special
ist
-1

Pr
oject
-B Marketi
ng Pr oductio Engi
neer
in
Manager Special
ist n g
-2 Special
ist Speci
ali
st
-2
48
Adv
ant
age
 Si
ncet
her
ear
eanumberofmanager
s,t
her
ear
emor
echannel
sofi
nfor
mat
ion
 I
tisor
ient
edt
owar
dendr
esul
ts
 Pr
ofessi
onali
dent
if
icat
ioni
smai
ntai
ned
 Resour
cesar
eusedef
fi
cient
lybecausewor
ker
sar
eassi
gnedt
odi
ff
erentpr
oject
sas
neededandgr
oupsorpr
oject
scanshar
eequi
pment
Di
sadv
ant
age
 Conf
li
cti
nor
gani
zat
ionaut
hor
it
yexi
sts
 Possi
bil
it
yofdi
suni
tyofcommandexi
sts
 I
tal
sor
esul
tsi
nhi
gherov
erheadcost
sbecausemor
emanager
ialposi
ti
onsar
ecr
eat
ed
 Requi
resmanageref
fect
ivei
nhumanr
elat
ions
 SPANOFMANAGEMENT(
SPANOFCONTROL)
I
tref
erst
othenumberofsubor
dinat
est
hatasi
ngl
emanagercandi
rect
ly,
immedi
atel
y
andef
fect
ivel
ysuper
vise.I
tisr
elat
edt
othel
evel
s.Wecanhav
ewi
despan,whi
chi
s
associ
atedwi
thf
ew or
gani
zat
ionall
evel
s;andanar
row spanwhi
chr
esul
tsi
nmany
l
evel
s.
Or
gani
zat
ionswi
thwi
despan

Adv
ant
age
 Super
visor
sar
efor
cedt
odel
egat
e
 Cl
earpol
ici
esmustbemade
 Subor
dinat
esmustbecar
eful
lysel
ect
ed

49
 Di
sadv
ant
age
 Tendencyofov
erl
oadedsuper
ior
stobecomedeci
sionbot
tl
enecks.
 Danger
sofsuper
ior
'sl
osesofcont
rol
 Requi
resexcept
ionalqual
it
yofmanager
s.
Or
gani
zat
ionswi
thnar
rowspan

Adv
ant
ages
 Cl
osesuper
visi
on
 Cl
osecont
rol
 Fastcommuni
cat
ionbet
weensubor
dinat
esandsuper
ior
s
Di
sadv
ant
age
 Super
ior
stendt
ogett
oomuchi
nvol
vedi
nsubor
dinat
e'swor
k
 Manyl
evel
sofmanagement
 Hi
ghcost
sduet
omanyl
evel
s
 ORGANI
ZATI
ONALPOWER,AUTHORI
TYANDRESPONSI
BILI
TY
Power-Theabi
li
tyt
ocont
roland/
ori
nfl
uencepeopl
eandr
esour
ces
Manager
shavef
ivesour
cesofpower
 Legi
ti
mat
e power– the aut
hor
it
y gr
ant
ed by t
he or
gani
zat
ion t
othe f
ormal
managementposi
ti
onamanagerhol
ds.

 Rewar
dpower–st
emsf
rom t
heabi
li
tyt
obest
owr ds_pr
ewar omot
ion,
rai
se,
paton

50
 heback_t
t oot
herpeopl
e.
 Coer
civ
epower–t
heaut
hor
it
ytopuni
shorr
ecommendpuni
shment
.
 Exper
tpower–der
ivesf
rom aper
son’
shi
gherski
llorknowl
edgeaboutt
het
asks
bei
ngper
for
med.
 Ref
erentpower–der
ivesf
rom per
sonalchar
act
eri
sti
cssucht
hatpeopl
eadmi
re
t
hemanagerandwantt
obel
ikeori
dent
if
ywi
tht
hemanageroutofr
espectand
admi
rat
ion.
POWERVERSUSAUTHORI
TY
Power
ist
heabi
li
tyofoneper
sonordepar
tmenti
nanor
gani
zat
iont
oinf
luenceot
her
peopl
etobr
ingaboutdesi
redout
comes.
- I
tist
hepot
ent
ialt
oinf
luenceot
her
swi
thi
ntheor
gani
zat
ion,butwi
tht
he
goalofat
tai
ningdesi
redout
comesf
orpowerhol
der
s.
- Poweri
sani
ntangi
blef
orcei
nor
gani
zat
ions.I
tcannotbeseenbuti
ts
ef
fectcanbef
elt
.
●Powerexi
stsonl
yinar
elat
ionshi
pbet
weent
woormor
epeopl
e,andi
tcanbe
ex
erci
sedi
nei
therv
ert
icalorhor
izont
aldi
rect
ions.

● Thesour
ceofpowerof
tendr
ivesf
rom anexchanger
elat
ionshi
pinwhi
chone
posi
ti
on or depar
tment pr
ovi
des scar
ce or v
alued r
esour
ces t
o ot
her
depar
tment
s.

●Whenoneper
soni
sdependentonanot
herper
son,apowerr
elat
ionshi
pemer
ges
i
nwhi
cht
heper
sonwi
tht
her
esour
ceshasgr
eat
erpower
.

●Whenpowerexi
stsi
nar
elat
ionshi
p;t
hepowerhol
der
scanachi
evecompl
iance
wi
tht
hei
rrequest
s.

-For exampl
e,t
he f
oll
owi
ng out
comes ar
eindi
cat
ors of power i
n an
or
gani
zat
ion:
 Obt
ainal
argei
ncr
easei
nbudgett
hanot
herdepar
tment
s
 Obt
ainabov
eav
eragesal
aryi
ncr
easesf
orsubor
dinat
es
 Geti
temsont
heagendaatpol
icymeet
ings.
Aut
hor
it
yist
her
ightt
ocommandsubor
dinat
esact
ion.I
tisdef
inedast
hel
egi
ti
mat
e

51
poweramanagerpossessest
oactandmakedeci
sionsi
ncar
ingoutr
esponsi
bil
it
ies.
 Theconceptoff
ormalaut
hor
it
yisr
elat
edt
opowerbuti
snar
roweri
nscope.
 Aut
hor
it
yisal
soaf
orcef
orachi
evi
ngdesi
redout
comes,butonl
yaspr
escr
ibed
byt
hef
ormalhi
erar
chyandr
epor
ti
ngr
elat
ionshi
ps.
Thr
eepr
oper
ti
esi
dent
if
yaut
hor
it
y:

a)Authori
tyi
sv est
edinor gani
zati
onalpositons¬¬¬¬_Peopl
i ehaveauthorit
y
becauseoftheposit
ionstheyhold,
notbecauseofper sonalchar
acter
ist
ics.
b)Authori
tyi
sacceptedbysubor di
nates__Subor
dinat
escompl ybecausethey
bel
iev
eposi
ti
onhol
der
shav
elegi
ti
mat
eri
ghtt
oexer
ciseaut
hor
it
y.
c)Aut
hor
it
yfl
owsdownt
hev
ert
icalhi
er chy__Aut
ar hor
it
yexi
stsal
ongt
he
f
ormalchai
nofcommand,andposi
ti
onsatt
het
opoft
hehi
erar
chyar
e
v
est
edwi
thmor
efor
malaut
hor
it
ythanar
eposi
ti
onsatt
hebot
tom.
 Or
gani
zat
ionalpowercanbeexer
cisedupwar
d,downwar
d,andhor
izont
all
y
i
nor
gani
zat
ions.
 For
malaut
hor
it
yisexer
ciseddownwar
dal
ongt
hehi
erar
chyandi
sthesame
asv
ert
icalpowerandl
egi
ti
mat
epower
.
Responsi
bil
it
yist
heobl
igat
ionoft
hemanagert
ocar
ryoutassi
gneddut
ies.Thus,
t
heor
gani
zat
ionst
ruct
ure;t
her
esul
tofor
gani
zing,shoul
dconsi
stofv
ari
ousposi
ti
ons
ar
rangedi
nahi
erar
chywi
thacl
eardef
ini
ti
onofaut
hor
it
yandr
esponsi
bil
it
y.
SOURCESOFORGANI
ZATI
ONALPOWER

For
malPosi
ti
on

 Peopl
ethr
oughoutt
he or
gani
zat
ion acceptt
he l
egi
ti
mat
eri
ghtof t
op
manager
stosetgoal
s,makedeci
sionsanddi
rectact
ivi
ti
es.
Mostpeopl
ebel
iev
ethat“
thosei
naut
hor
it
yhav
ether
ightt
oexpectcompl
iance;
t
hosesubj
ect
stoaut
hor
it
yhav
ethedut
ytoobey
.”
Cont
rolov
erResour
ces

 Justasanor
gani
zat
ion’
spowergr
owsast
heor
gani
zat
ioncont
rol
smor
eand
mor
eresour
cesi
nit
senv
ironment
,powerwi
thi
nanor
gani
zat
ional
socomes
f
rom t
hecont
rolofr
esour
ces.

52
  Resour
ceal
locat
ioncr
eat
esadependencyr
elat
ionshi
p.
Cont
rolov
erI
nfor
mat
ion

 I
nfor
mat
ioncanbeav
eryi
mpor
tantandscar
ceor
gani
zat
ionalr
esour
ce.
 Accesst
ost
rat
egi
cinf
ormat
ionandt
hecont
roloft
hei
nfor
mat
ionf
lowt
o,f
rom,
andbet
weensubuni
tsar
esour
cesofconsi
der
abl
epoweri
nthedeci
sion–
maki
ngpr
ocess.
 I
tispossi
blet
oshapet
hev
iewsofot
her
sbycar
eful
lyt
ail
ori
ngt
hei
nfor
mat
ion
t
heyr
ecei
ve.
 Thepowerofdoct
orsi
nahospi
talormechani
csi
nagar
agest
emsf
rom t
hei
r
abi
li
tyt
ocont
rolspeci
fi
cknowl
edgeandi
nfor
mat
ion.
Non-subst
it
utabi
li
ty

 I
fnooneel
secanper
for
mthet
askst
hataper
sonorsubuni
tper
for
ms,t
hat
per
sonorsubuni
tisnon-subst
it
utabl
e.
-Onl
yitcanpr
ovi
der
esour
cest
hatanot
hersubmi
tsort
heor
gani
zat
ion
want
s.

-Forexampl
ethemai
ntenanceengi
neer
sinapl
antcanmaket
hemsel
ves-:
Onl
ytheycoul
dreduceoneoft
hemaj
oruncer
tai
nti
esf
aci
ng t
hepl
ant
_
machi
nebr
eakdown.

 Asar
esul
toft
hei
rnon-subst
it
utabi
li
tyt
heycanexer
tconsi
der
abl
e
power
.
Net
wor
kCent
ral
it
y

 Topmanager
scanl
ocat
ethemsel
vescent
ral
lyi
nanor
gani
zat
ion.
- Theycansur
roundt
hemsel
veswi
thanet
wor
kofl
oyalsubor
dinat
esanduse
t
hei
rnet
wor
kst
olear
naboutev
ent
sthr
oughoutt
heor
gani
zat
ion.
- Bypl
aci
ngmanager
swhom t
heyknow i
ncr
it
icalposi
ti
ons,t
opmanager
s
i
ncr
easet
hei
rpower
.
 Manager
scanuset
hei
rcent
ralposi
ti
onst
obui
ldal
li
ancesandl
oyal
it
y
and,hence,be i
n a posi
ti
on t
o wi
eld subst
ant
ialpoweri
nthe

53
 or
gani
zat
ion.
Cont
rolofDeci
sionPr
emi
ses

 Thi
smeanst
hatt
opmanager
spl
aceconst
rai
ntsondeci
sionsmadeatl
ower
l
evel
sbyspeci
fyi
ngadeci
sionf
rameofr
efer
enceandgui
del
ines.
- Forexampl
etopmanagementdeci
deswhi
chgoalanor
gani
zat
ionwi
llt
ry
t
oachi
eve,
suchasi
ncr
easedmar
ketshar
e.Lowerl
evelpar
ti
cipant
sthen
deci
dehowt
hegoali
stober
eached.
- Topmanageract
ionsanddeci
sionssuchast
hesepl
acel
imi
tsont
he
deci
sionsofl
owerl
evelmanager
sandt
her
ebyi
nfl
uencet
hei
rbehav
ior
.
 LI
NEANDSTAFFAUTHORI
TY
Theconceptofl
ineandst
affi
srel
atedt
oaut
hor
it
yandposi
ti
ons/
funct
ions.
Li
neandst
affaut
hor
it
y
Thi
sist
her
elat
ionshi
pbet
weendi
ff
erentt
ypesofaut
hor
it
yexer
cisedbymanager
sof
anor
gani
zat
ion.Theset
hreef
ormsofaut
hor
it
yar
ecal
ledl
inest
affandf
unct
ional
aut
hor
it
y.
Li
neaut
hor
it
y:t
heaut
hor
it
yoft
hosemanager
sdi
rect
lyr
esponsi
ble,t
hroughoutt
he
or
gani
zat
ion chai
n ofcommand,f
orachi
evi
ng or
gani
zat
ionalgoal
s.I
tenabl
es a
managert
otel
lsubor
dinat
eswhatt
odo.Thi
saut
hor
it
yisr
epr
esent
edbyt
hechai
nof
command,whi
ch l
inks super
ior
s and subor
dinat
es f
rom t
op t
o bot
tom i
n an
or
gani
zat
ion.Bot
hli
neandst
affmanager
shav
eli
neaut
hor
it
yov
ert
hei
rsubor
dinat
es.
St
affaut
hor
it
y:Theaut
hor
it
yoft
hosegr
oupsofi
ndi
vidual
swhopr
ovi
del
inemanager
s
wi
thadv
iceandser
vices.Peopl
einst
affposi
ti
onsassi
standadv
icel
inemanager
s.
Theyr
eli
evesomeoft
hel
inemanager
s'bur
densbygi
vingt
hem t
hei
nfor
mat
iont
hey
needt
omakeoper
ati
onaldeci
sions.Peopl
eint
heseposi
ti
onshav
etheaut
hor
it
yto
of
feradv
iceandmaker
ecommendat
ions;
theyhav
est
affaut
hor
it
y.
Funct
ionalAut
hor
it
y:The aut
hor
it
y ofst
affdepar
tmentmember
sto cont
rolt
he
act
ivi
ti
es of wor
ker
s of ot
her depar
tment
sthat ar
erel
ated t
o speci
fi
c st
aff
r
esponsi
bil
it
ies.Thi
s aut
hor
it
yis exer
cised ov
er peopl
e or act
ivi
ti
es i
n ot
her
depar
tment
s.Usual
lyl
imi
tedi
nscopeanddur
ati
on;i
tisexer
cisedonel
evelbel
owt
he
per
sonwhol
esi
t.

54
Li
neandst
affposi
ti
ons/
funct
ions:
Tocl
assi
fyaposi
ti
onasl
ineorst
aff
,iti
srel
atedt
othedegr
eet
owhi
cht
hef
unct
ioni
n
quest
ioncont
ri
but
est
othedi
rectachi
evementofor
gani
zat
ionalobj
ect
ives.Thel
ine
f
unct
ionscont
ri
but
edi
rect
lyt
oaccompl
ishi
ngt
ofi
rm'
sobj
ect
ives,
whi
lest
afff
unct
ions
f
aci
li
tat
etheaccompl
ishmentoft
hemaj
oror
gani
zat
ionalobj
ect
ives.
 Thel
inef
unct
ionsofanor
gani
zat
ionar
ethosef
unct
ionst
hatcont
ri
but
edi
rect
ly
t
othecr
eat
ionanddi
str
ibut
ionoft
hegoodsorser
vicesoft
heor
gani
zat
ion.
 Peopl
ewi
thl
ineposi
ti
onsar
eresponsi
blef
orphy
sical
lypr
oduci
ngt
hepr
oduct
orser
viceandf
orsel
li
ngi
t.
 St
aff
speopl
eadv
iceandassi
stl
inepeopl
e.Thati
stheonl
yreasont
hese
posi
ti
onsexi
st.
 Al
lst
affposi
ti
onsar
eadv
isor
y,st
affpeopl
emaymaker
ecommendat
ions,but
l
ine manager
sret
ainf
ormalaut
hor
it
yand deci
de whatt
o do wi
th a st
aff
per
son'
sadv
ice.

 Del
egat
ion,
Cent
ral
izat
ionandDecent
ral
izat
ion
Del
egat
ion
I
tist
heactofassi
gni
ngf
ormalaut
hor
it
yandr
esponsi
bil
it
yforcompl
eti
onofspeci
fi
c
act
ivi
ti
est
oasubor
dinat
e.Becauseofhumanl
imi
tat
ion,asi
ngl
eper
soncan'
tdoal
l
t
asksnecessar
yforaccompl
ishi
ngagr
ouppur
pose.Byt
hesamet
aken,
asent
erpr
ises
gr
ow,
iti
sdi
ff
icul
tforoneper
sont
oexer
ciseal
ltheaut
hor
it
yformaki
ngdeci
sions.To
sol
vet
hese pr
obl
ems manager
s shar
ethei
raut
hor
it
y and r
esponsi
bil
it
ytot
hei
r
subor
dinat
eswhi
chi
sdel
egat
ion.

55
Manager
s gett
hings done t
hrough ot
herpeopl
e.Si
nce t
op manager
s cannot
per
sonal
lyov
erseeal
ltheact
ivi
ti
esofanor
gani
zat
ion,t
heydel
egat
eaut
hor
it
ytot
hei
r
subor
dinat
e manager
s.I
tist
his del
egat
ion ofaut
hor
it
ythatgi
ves subor
dinat
e
manager
sthemeanswi
thwhi
cht
oact
.
 Del
egat
ioni
stheassi
gnmentt
oanot
herper
sonofaut
hor
it
yandr
esponsi
bil
it
y
t
ocar
ryoutspeci
fi
cact
ivi
ti
es.
 Del
egat
ion i
sthe pr
ocess ofal
locat
ing t
asks t
o subor
dinat
es gi
ving t
hem
adequat
eaut
hor
it
ytocar
ryoutt
hoseassi
gnment
sandmaki
ngobl
igat
edt
o
compl
etet
het
askssat
isf
act
ori
ly.
 Todel
egat
emeanst
oent
rustaut
hor
it
ytoadeput
ysoast
oenabl
ehi
mto
accompl
isht
het
asksassi
gnedt
ohi
m.

TheI
mpor
tanceofDel
egat
ion
 I
tfr
eesamanagerf
rom somet
ime-consumi
ngdut
iest
hatcanbeadequat
ely
handl
edbysubor
dinat
esandl
etst
hemanagerdev
otemor
eti
met
opr
obl
ems
r
equi
ri
nghi
s/herf
ullat
tent
ion.
 Deci
sionsmadebyl
owerl
evelmanager
sar
emor
eti
mel
ythant
hoset
hatgo
t
hroughscal
arl
ayer
sofmanagement
.
 Subor
dinat
emanager
scanr
eacht
hei
rful
lpot
ent
ialofandonl
yift
heyar
egi
ven
t
hechancet
omakedeci
sionsandt
oassumer
esponsi
bil
it
yfort
hem.
Pr
ocessofDel
egat
ion
1.Theal
locat
ionofdut
ies:Dut
iesar
ethet
asksandact
ivi
ti
est
hatasuper
visordesi
res
t
ohav
esomeoneel
sedo.Bef
oreaut
hor
it
ycanbedel
egat
ed,t
hedut
iesov
erwhi
ch
t
heaut
hor
it
yrest
smustbeal
locat
edt
oasubor
dinat
e.
2.Thedel
egat
ionofaut
hor
it
y:Theessenceoft
hedel
egat
ionpr
ocessi
sempower
ing
anot
herper
sont
oactf
ort
hemanager
.Thi
sisapassi
ngoff
ormalr
ight
stoacton
behal
fofanot
her
.
3.The assi
gnmentofr
esponsi
bil
it
y:When aut
hor
it
yisdel
egat
ed,we mustassi
gn
r
esponsi
bil
it
y.Thati
s,whenonei
sgi
ven"
ri
ght
s",onemustal
sobeassi
gneda

56
 cor
respondi
ng"
obl
igat
ion"t
oper
for
m.Toal
locat
eaut
hor
it
ywi
thoutr
esponsi
bil
it
y
cr
eat
esoppor
tuni
ti
esf
orabuse,andofcour
se,nooneshoul
dbehel
dresponsi
ble
f
orwhathe/
shehasnoaut
hor
it
y.
4.Thecr
eat
ionofaccount
abi
li
ty:
Tocompl
etet
hedel
egat
ionpr
ocess,t
hemanager
mustcr
eat
e account
abi
li
ty;t
hati
s,subor
dinat
es mustbe hel
d answer
abl
eto
pr
oper
lycar
ryoutt
hei
rdut
ies.Theymustacceptcr
edi
torbl
amef
ort
hei
ract
ion.So
whi
ler
esponsi
bil
it
yrepr
esent
s a subor
dinat
e's obl
igat
ion t
o car
ryoutwhati
s
assi
gned,account
abi
li
tyi
stheobl
igat
iont
ohi
sorhersuper
iort
ocar
ryoutt
he
assi
gnmenti
nasat
isf
act
orymanner
.
Obst
acl
est
oEf
fect
iveDel
egat
ion
I
ttakest
wopar
ti
esf
ordel
egat
iont
obeef
fect
ive,amanagerwi
ll
ingt
odel
egat
eanda
subor
dinat
ewi
ll
ingt
oacceptoper
ati
ngr
esponsi
bil
it
y.Ei
therpar
tycanbeanobst
acl
e
t
oef
fect
ivedel
egat
ion.
ManagementObst
acl
e
Ther
ear
e,nev
ert
hel
ess,sev
eralr
easonswhymanager
shesi
tat
etodel
egat
eaut
hor
it
y
t
osubor
dinat
es.
 Somemanager
sfeelt
heneedt
obei
ntot
alcont
rolofev
eryaspectoft
he
or
gani
zat
ion
 Ot
her
slackconf
idencei
nthei
rsubor
dinat
es
 Feart
heconsequencesofhav
ingsubor
dinat
esmakedeci
sions.
Subor
dinat
eObst
acl
es
I
nsomecases/i
nst
ances,subor
dinat
esar
erel
uct
antt
oassumeanequalamountof
r
esponsi
bil
it
ybecauseofei
theroft
hef
oll
owi
ngr
easons.
 Subor
dinat
esusual
lyf
eelt
hatmaki
ngdeci
sionsi
stheboss'
sjob.
 Subor
dinat
esf
earcr
it
ici
smsf
ormaki
ngbaddeci
sions
 Subor
dinat
edonothav
eenoughf
act
uali
nfor
mat
iononwhi
cht
obaseadeci
sion.
 Subor
dinat
esar
eal
readyov
erwor
ked
 Subor
dinat
esl
acksel
f-conf
idence.
 Ther
eisal
ackofi
ncent
iveorr
ewar
dforassumi
ngagr
eat
erwor
kload.
Cent
ral
izat
ionandDecent
ral
izat
ion

57
Cent
ral
izat
ioni
sthedegr
eet
owhi
chdeci
sionmaki
ngi
sconcent
rat
edatasi
ngl
epoi
nt
i
ntheor
gani
zat
ion.
Decent
ral
izat
ioni
sthet
endencyt
odi
sper
sedeci
sion-maki
ngaut
hor
it
yinanor
gani
zed
st
ruct
ure.I
tisaf
undament
alaspectofdel
egat
ion,i
.e.
,tot
heext
entaut
hor
it
yisnot
del
egat
ed,i
tiscent
ral
ized.I
n a cent
ral
ized setup,deci
sion maki
ng aut
hor
it
yis
concent
rat
edi
naf
ewhandsatt
het
op.Cont
rar
ytot
his,
isadecent
ral
izedor
gani
zat
ion,
t
her
eisdi
sper
salofdeci
sionmaki
ngaut
hor
it
y.
Reasonsf
orDecent
ral
izi
ng
 Onemaj
orr
easonf
ordecent
ral
izi
ngi
stot
apt
heknowl
edgeandexper
ti
seof
manager
s;i
tpr
ovi
dest
hebasi
sforgr
eat
eri
nnov
ati
on.I
tdoessobecausei
tal
lows
f
ort
heut
il
izat
ionofspeci
ali
zedknowl
edge.
 I
tpr
ovi
desgr
eat
erf
lexi
bil
it
yfort
heor
gani
zat
iont
orespondt
onewi
deas.
 Toenabl
etheor
gani
zat
iont
orespondt
oasoci
alenv
ironmentf
ast
er.
 Toenabl
enon-manager
ialempl
oyeest
opar
ti
cipat
eindeci
sionmaki
ngpr
ocess.
Adv
ant
ages
 Rel
ivest
opmanagementofsomebur
denofdeci
sionmaki
ng.
 Encour
agesdeci
sionmaki
ngandassumpt
ionofaut
hor
it
yandr
esponsi
bil
it
y.
 Gi
vesmanager
smor
efr
eedom andi
ndependencei
ndeci
sionmaki
ng.
 Makescompar
isonofper
for
manceofdi
ff
erentor
gani
zat
ionaluni
tspossi
ble.
 Pr
omot
esdev
elopmentofgener
almanager
s.
 Ai
dsi
nadapt
ati
ont
ofastchangi
ngenv
ironment
.
Li
mit
ati
onsofDecent
ral
izat
ion
 I
tincr
easest
hechancest
hatal
ower
-lev
elmanagerwi
llt
akeundesi
rabl
eact
ion.
 I
tdecr
easescont
rolandmoni
tor
ingofsubor
dinat
es'act
ivi
ti
esandal
somay
hi
nderco-or
dinat
ionbet
weendi
ver
seuni
ts.
 Makesi
tmor
edi
ff
icul
ttohav
eauni
for
m pol
icy
.
 Canbel
imi
tedbyt
heav
ail
abi
li
tyofqual
if
iedmanager
s.
 I
nvol
vesconsi
der
abl
eexpensesf
ort
rai
ningmanager
s.

58
CHAPTER5:STAFFI
NG
Themanager
ialf
unct
ionofst
aff
ingi
sdef
inedasf
il
li
ngandkeepi
ngf
il
ledposi
ti
onsi
n
t
heor
gani
zat
ionalst
ruct
uret
hroughi
dent
if
yingwor
k-f
orcer
equi
rement
,inv
ent
ory
ing
t
hepeopl
eav
ail
abl
erecr
uit
ing,
sel
ect
ing,
placi
ng,
promot
ing,
appr
aisi
ng,
compensat
ing
t
het
rai
ningand/
ordev
elopi
ngbot
hcandi
dat
esandcur
rentj
obhol
der
stoaccompl
ish
t
hei
rtasksef
fect
ivel
yandef
fi
cient
ly.
THEPROCUREMENTFUNCTI
ON
1)HumanResour
cePl
anni
ng/
Manpowerpl
anni
ng:
Iti
sthepr
ocessofdet
ermi
ningt
he
needoft
her
ightmanatt
her
ightt
imet
other
ightj
ob.I
tist
hepr
ocessofdet
ermi
ning
t
heneedoft
hepr
ovi
sionofadequat
ehumanr
esour
cest
othej
obi
ntheor
gani
zat
ion.I
t
i
sdesi
gnedt
oensur
ethatt
heper
sonnelneedoft
heor
gani
zat
ionwi
llbeconst
ant
ly
andappr
opr
iat
elymet
.Iti
saccompl
ishedt
hroughanal
ysi
sofi
nter
nalf
act
orssuchas

59
cur
rentand expect
ed ski
llneeds,v
acanci
es,and depar
tment
alexpansi
ons and
r
educt
ions;and ext
ernalenv
ironment
alf
act
ors such as t
he l
abormar
ket
,the
gov
ernmentr
egul
ati
on,t
hel
aboruni
on;et
c.Asar
esul
toft
hisanal
ysi
s,pl
ansar
e
dev
eloped f
orexecut
ing t
he ot
herst
eps i
nthe st
aff
ing pr
ocess.Thi
s hel
ps an
or
gani
zat
iont
odet
ermi
net
heneedofempl
oyeesf
orshor
tter
m orf
orl
ongt
erm.

Ther
ear
efourbasi
cst
epsi
nhumanr
esour
cepl
anni
ng
a)Pl
anni
ng f
or f
utur
e needs. How many peopl
e wi
th what abi
li
ti
es wi
llt
he
or
gani
zat
ionneedt
oremai
ninoper
ati
onf
ort
hef
oreseeabl
efut
ure?
b)Pl
anni
ngf
orf
utur
ebal
ance.Howmanypeopl
epr
esent
lyempl
oyedcanbeexpect
ed
t
ost
aywi
tht
heor
gani
zat
ion?Thedi
ff
erencebet
weent
hisnumberandt
henumber
t
heor
gani
zat
ionwi
llneedl
eadst
othenextst
ep.
c)Pl
anni
ngf
orr
ecr
uit
ingandsel
ect
ingorf
orl
ayof
f.Howcant
heor
gani
zat
ionat
tai
n
t
henumberofpeopl
eitwi
llneed?
d)Pl
anni
ngf
ordevel
opment
.How shoul
dthet
rai
ningandmov
ementofi
ndi
vidual
s
wi
thi
ntheor
gani
zat
ionbemanagedsot
hatt
heor
gani
zat
ionwi
llbeassur
edofa
cont
inui
ngsuppl
yofexper
iencedandcapabl
eper
sonnel
?
Theor
gani
zat
ionali
nter
nalenv
ironment(
suchasi
tsst
rat
egi
cpl
an)aswel
lasi
ts
ext
ernalenv
ironment
alwi
llbr
oadl
ydef
inef
ormanager
sthel
imi
tswi
thi
nwhi
cht
hei
r
humanr
esour
cepl
anmustoper
ate.Oncet
her
ebr
oadl
imi
tshav
ebeenest
abl
ished,
manager
scanbegi
ntocompar
ethei
rfut
ureper
sonnelneedsagai
nstt
heexi
sti
ng
per
sonnelsi
tuat
ioni
nor
dert
odet
ermi
newhatr
ecr
uit
ment
,tr
aini
nganddev
elopment
pr
ocedur
es t
hey wi
llneed t
ofol
low.The f
actt
hatt
he i
nter
naland ex
ter
nal
env
ironment
sofanor
gani
zat
ionchangemeanst
hatmanager
smustmoni
tort
hese
env
ironment
stokeept
hei
rhumanr
esour
cepl
anupt
odat
e.
Thecent
ralel
ement
sinhumanr
esour
cepl
anni
ngar
efor
ecast
ingandt
hehuman
r
esour
ceaudi
t.For
ecast
ing at
tempt
sto assesst
hef
utur
eper
sonnelneed oft
he
or
gani
zat
ion whi
let
he human r
esour
ce audi
tassesses t
he or
gani
zat
ions cur
rent
humanr
esour
ce.Theset
woel
ement
sgi
vemanager
sthei
nfor
mat
iont
heyneedt
opl
an
t
heot
herst
epsi
nthest
aff
ingpr
ocess,
suchasr
ecr
uit
ingandt
rai
ning.

2)Recr
uit
ment

60
I
tist
hepr
ocessofr
eachi
ngoutandat
tempt
ingt
oat
tractpot
ent
ialcandi
dat
eswhoar
e
capabl
e ofand i
nter
est
ed i
nfi
ll
ing av
ail
abl
e posi
ti
ons ofan or
gani
zat
ion.I
tis
concer
nedwi
thdev
elopi
ngapoolofj
obcandi
dat
es,i
nli
newi
tht
hehumanr
esour
ce
pl
an.I
tisani
nter
medi
aryact
ivi
tybet
weenmanpowerpl
anni
ngont
heonehand,and
sel
ect
ionofempl
oyeesont
heot
herhand.
Ani
mpor
tantpar
toft
her
ecr
uit
ingpr
ocessi
sdev
elopi
ngawr
it
tenst
atementoft
he
cont
entandt
hel
ocat
ion(
ont
heor
gani
zat
ionchar
t)ofeachj
ob.Thi
sst
atementi
s
cal
ledt
hej
obdescr
ipt
ionorposi
ti
ondescr
ipt
ion.Thi
sst
atementl
ist
sthet
it
le,dut
ies
andr
esponsi
bil
it
iesf
ort
hatposi
ti
on.Oncet
hisposi
ti
on/
jobdescr
ipt
ionhasbeen
est
abl
ished/
det
ermi
nedandaccompany
inghi
ri
ngorj
obspeci
fi
cat
ion,whi
chdef
ines
t
hebackgr
ound,exper
ience,andper
sonalchar
act
eri
sti
csani
ndi
vidualmusthav
ein
or
dert
oper
for
m ef
fect
ivel
yint
heposi
ti
on,
isdev
eloped.

Sour
cesofRecr
uit
ment
Sour
cesofsuppl
yar
ethepl
aces,agenci
es,andi
nst
it
uti
onst
owhi
chr
ecr
uit
ersgot
o
seekpot
ent
ialcandi
dat
est
hatwi
llf
il
lthev
acantposi
ti
onsort
hej
obneeded.These
sour
cesofsuppl
yar
egener
all
ycat
egor
izedi
ntot
wo.

I
nter
nalRecr
uit
ment
:thi
sinv
olv
esr
ecr
uit
mentwi
thi
ntheor
gani
zat
ion;i
tcoul
dbe
t
hroughpr
omot
ionl
ater
alt
ransf
er,
demot
ion.
Adv
ant
age:
 I
tisusual
lyl
essexpensi
vet
orecr
uitorpr
omot
efr
om wi
thi
nthant
ohi
ref
rom
out
sidet
heor
gani
zat
ion.
 I
tmayf
ast
erl
oyal
tyandi
nspi
resgr
eat
eref
for
tamongor
gani
zat
ionmember
s.
 I
ndi
vidual
swi
llal
readybeaccl
aimedt
otheor
gani
zat
ionandmayt
her
efor
eneed
l
essi
nit
ialt
rai
ningandor
ient
ati
on.

Di
sadv
ant
age
 I
tli
mit
sthepooloft
alentav
ail
abl
etot
heor
gani
zat
ion.

Ext
ernalr
ecr
uit
ment
:Iti
nvol
ves r
ecr
uit
mentout
side t
he or
gani
zat
ion.The maj
or
al
ter
nat
ivesour
cesar
e:
 Di
rectappl
icat
ion  Empl
oyee r
efer
ral
s /
wor
d of

61
 mout
h/ agency
 Adv
ert
isi
ng  Ot
her sour
ces such as
 Educat
ionali
nst
it
uti
ons pr
ofessi
onalassoci
ati
ons
 Pr
ivat
e/publ
ic empl
oyment
3)Sel
ect
ion
I
tcanbedef
inedast
hepr
ocessofdet
ermi
ningf
rom amongappl
icant
swhi
chonef
il
ls
bestf
ort
hej
obdescr
ipt
ionandspeci
fi
cat
ionwhi
chi
sof
fer
edt
othej
obwi
thi
nthe
or
gani
zat
ion.I
tinv
olv
esev
aluat
ingandchoosi
ngamongj
obcandi
dat
es.Ther
oleof
r
ecr
uit
ing i
stol
ocat
ejob candi
dat
es;t
he r
ole ofsel
ect
ion i
sto ev
aluat
e each
candi
dat
eandt
hepi
ckt
hebestonef
ort
heposi
ti
onav
ail
abl
e.Appl
icat
ionf
orms,
r
esumes,i
nter
views,empl
oyment& ski
llt
est
s,andr
efer
encechecksar
ethemost
commonl
yusedai
dsi
nthesel
ect
ionpr
ocess.
Sel
ect
ioni
sthemut
ualpr
ocesswher
ebyt
heor
gani
zat
iondeci
deswhet
herornott
o
makeaj
obof
ferandt
hecandi
dat
edeci
desont
heaccept
abi
li
tyoft
heof
fer
.

4)Or
ient
ati
onandsoci
ali
zat
ion/
induct
ion/
I
tisdesi
gnedt
opr
ovi
deanewempl
oyeewi
tht
hei
nfor
mat
ionhe/
sheneedsi
nor
dert
o
f
unct
ioncomf
ort
abl
yandef
fect
ivel
yint
heor
gani
zat
ion.Ty
pical
ly,soci
ali
zat
ionwi
ll
conv
eyt
hreet
ypesofi
nfor
mat
ion.
(
i)Gener
ali
nfor
mat
ionaboutt
hedai
lywor
krout
ine;
(
ii
)A r
evi
ew oft
heor
gani
zat
ionshi
stor
y,pur
pose,oper
ati
ons,andpr
oduct
sor
ser
vices,andhow t
heempl
oyee'
sjobcont
ri
but
est
otheor
gani
zat
ion’
sneeds,
and
(
ii
i)Adet
ail
edpr
esent
ati
on,per
hapsi
nabr
ochur
e,ofor
gani
zat
ionspol
ici
es,wor
k
r
ules,
andempl
oyeebenef
it
s.

TRAI
NINGANDDEVELOPMENTFUNCTI
ON

Or
gani
zing human r
esour
ces i
s a dy
nami
c act
ivi
ty.Job demands change,whi
ch
r
equi
resal
ter
ingandupdat
inganempl
oyee'
sski
ll
s.Ther
efor
e,manager
sar
einv
olv
ed
i
ndeci
dingwhent
hei
rsubor
dinat
esmaybei
nneedoft
rai
ning.Thus,t
rai
ningi
sa
pr
ocessdesi
gnedt
omai
ntai
nori
mpr
ovecur
rentj
obper
for
mance;dev
elopmenti
sa

62
pr
ocessdesi
gnedt
odev
elopski
ll
snecessar
yforf
utur
ewor
kact
ivi
ti
es.

Reasonsf
orTr
aini
ng:
 Toor
ientnew empl
oyees:whi
leschool
sandt
rai
ningi
nst
it
uti
onspr
ovi
degener
al
educat
ioni
nmanyski
ll
snew empl
oyeesr
equi
readdi
ti
onalt
rai
ningt
oacquai
nt
t
hem wi
thspeci
fi
csi
tuat
ionoft
heor
gani
zat
ionandt
hej
ob.
 Toi
mpr
oveper
for
mance:t
rai
ningwi
llhel
ptoi
mpr
oveper
for
mancebyi
ncr
easi
ng
pr
oduct
ivi
ty,
impr
ovi
ngqual
it
y,r
educi
ngt
urnov
er,
reduci
ngl
aborcost
,et
c.
 To mai
ntai
ncur
rentper
for
mance:somet
imesi
ndi
vidual
shol
ding aposi
ti
on or
doi
ngaj
obmaygetobsol
etesot
rai
ntheseempl
oyeeswi
llhel
ptomai
ntai
ncur
rent
per
for
mance.

Tr
aini
ngMet
hods
Ther
ear
etwodi
ff
erentt
ypesoft
rai
ningt
echni
ques.
(
i)On-t
he-j
obt
rai
ning
(
ii
)Of
f-t
he-j
obt
rai
ning

(
i)On-t
he-j
obt
rai
ning:i
nvol
vesl
ear
ningmet
hodsandt
echni
quesbyact
ual
lydoi
nga
j
ob(
per
for
mingt
hewor
k)andi
ncr
easi
ngt
hel
evel
sofski
ll
soft
heempl
oyee.The
empl
oyeeusual
lyl
ear
nsundert
hesuper
visi
onoft
hei
nmedi
atebossorco-wor
ker
whohasgr
eat
erknowl
edgeandski
ll
saboutt
hej
ob.I
tiswi
del
yused,becausei
tis
economi
candconv
eni
ent
;andnospeci
alf
aci
li
ti
es,equi
pmentandt
rai
ningpl
acesar
e
r
equi
redandt
heempl
oyeepr
oducesandcont
ri
but
est
otheor
gani
zat
ionalobj
ect
ive
andatt
hesamet
imehel
ear
nsj
obr
otat
ionandj
obi
nst
ruct
ionmet
hodsar
efewoft
he
t
echni
quesusedi
nont
hej
obt
rai
ning.I
tisconv
eni
entf
orsmal
lnumberoft
rai
nees.
Someofi
tsdi
sadv
ant
agesar
e:
 I
tcr
eat
esdi
sint
erestofempl
oyees,
empl
oyeeshav
edualr
esponsi
bil
it
y.
 I
tisnotconv
eni
entf
orl
argenumberofempl
oyees.
(
i)Of
i f-t
he-j
obt
rai
ning:Thi
stechni
quei
nvol
vespar
ti
cipat
ionofempl
oyeesi
naser
ies
ofev
ent
sremov
edf
rom t
heact
ualper
for
manceoft
heor
gani
zat
ionandt
hewor
k
si
tuat
ion.
Adv
ant
ages

63
  I
tcr
eat
esi
nter
estofempl
oyees:becauseempl
oyeesar
eremov
edf
rom t
hei
r
r
out
ineact
ivi
ti
esandar
emov
edt
onewenv
ironment
.
 I
tisconv
eni
entf
orl
argenumberofempl
oyees(
trai
nees)
.

Di
sadv
ant
ages
 I
tisexpensi
ve-t
her
ear
ecost
sfort
rai
ner
s,f
aci
li
ti
es,andal
sot
heempl
oyee
doesnotcont
ri
but
edur
ingt
het
rai
ning.
 Ther
eisapr
obl
em oft
ransf
erofknowl
edgef
rom t
het
rai
ningsi
tuat
iont
othe
act
ualsi
tuat
ionoft
hej
ob.
Vest
ibul
etr
aini
ng,cl
assr
oom i
nst
ruct
ion/l
ect
ures,f
il
msandsi
mul
ati
onexer
cisesar
e
t
hemor
epopul
art
echni
quesofof
f-t
he-j
obt
rai
ning.
MAI
NTENANCEANDUTI
LIZATI
ON

1.Per
for
manceAppr
aisal
:Iti
sthepr
ocessusedt
odet
ermi
newhet
heranempl
oyeei
s
per
for
mingaccor
dingt
owhati
sdesi
gnedori
ntended.I
thel
pst
ofor
mal
lyev
aluat
e
t
he adequacyofr
ecr
uit
mentand sel
ect
ion and suggest
s whet
herornott
he
empl
oyeewi
llneedt
ober
epl
aced,ort
rai
ned.Themanypur
posesofper
for
mance
appr
aisalcanbesummar
izedi
nthef
oll
owi
ngkeypoi
nts:
 Per
for
manceappr
aisalshoul
dleaddi
rect
lyt
oincr
easedpr
oduct
ivi
ty.
 I
thel
psi
nsal
aryadmi
nist
rat
ion
 I
tpl
aysav
italr
olei
ndet
ermi
ninganempl
oyeef
orpr
omot
ion.
 Appr
aisal
sar
eusedasav
ehi
clef
orbr
ingi
ngaboutempl
oyeedev
elopment
.
 Per
for
mance appr
aisalr
esul
tsar
e used ext
ensi
vel
yin human r
esour
ce
r
esear
ch.
2.Tr
ansf
er:
Iti
sashi
ftofaper
sonf
rom onej
ob,or
gani
zat
ionl
evel
,orl
ocat
iont
o
anot
her
.Thet
ransf
ermaybeapr
omot
ion,demot
ion,orashi
ftt
oanot
hersame
l
evelposi
ti
on /
lat
eralt
ransf
er/
.Lat
eralt
ransf
er:r
efer
stot
hemov
ementofan
empl
oyeef
rom onej
oborposi
ti
ont
oanot
herwi
thouti
nvol
vinganysi
gni
fi
cant
changei
ntheempl
oymentandst
atus.
3.Pr
omot
ion:r
efer
stoashi
ftf
oradv
ancementofanempl
oyeet
oahi
gherj
obwi
th
mor
e empl
oymentand pr
est
ige,hi
gherst
atus,and hi
gherr
esponsi
bil
it
y.The
possi
bil
it
y ofadv
ancementof
ten ser
ves as a maj
ori
ncent
ivef
orsuper
ior

64
 per
for
mance,and pr
omot
ionsar
ethemostsi
gni
fi
cantwayt
orecogni
zesuch
super
iorper
for
mance.Ther
efor
e,i
tisext
ernal
lyi
mpor
tantt
hatpr
omot
ionsbef
air
i
.e.
,basedonmer
itandf
reef
rom f
avor
it
ism.

4.Demot
ion:r
efer
stoashi
ftofanempl
oyeet
oal
owerposi
ti
oni
nthehi
erar
chyduet
o
i
nef
fi
ciency
,andi
ncompet
encet
oful
fi
llassi
gnedt
asks.

SEPARATI
ON

Thef
inaloper
ati
vef
unct
ionofhumanr
esour
cesmanagementi
ssepar
ati
onoft
he
empl
oyeef
rom t
heor
gani
zat
ioni
nor
dert
oret
urnhi
m/hert
osoci
ety
.Wi
tht
hef
ir
st
f
unct
ionofhumanr
esour
cesmanagementbei
ngt
hatofpr
ocur
ingempl
oyeesf
rom
soci
ety
,iti
slogi
calt
hatt
hef
inalf
unct
ionshoul
dbet
her
etur
noft
hoseempl
oyeest
o
t
hatsamesoci
ety
.Int
hissect
ion,weshal
lrev
iewt
hreepr
ocessesofsepar
ati
on:t
he
r
eti
rementofol
derempl
oyees;t
hel
ayof
forr
eleaseofqual
if
iedy
oungerempl
oyeesno
l
ongerneededbyt
heor
gani
zat
ion;andt
hedi
schar
geofempl
oyeeswhodonotmeett
he
or
gani
zat
ion’
sex
pect
ati
ons.

1)Ret
ir
ement
Ret
ir
ementhasbeenchar
act
eri
zedbysomeasa“
rol
elessr
ole.
”Wi
thasoci
etybui
lton
awor
ket
hic,t
hemov
efr
om apr
oduct
ivewor
krol
eononedayt
oar
olel
essr
oleont
he
nex
thasst
imul
atedt
hebel
ieft
hatr
eti
rementl
eadst
oment
alandphy
sicali
ll
nessand,
somet
imes,pr
emat
uredeat
h.Ot
herr
esear
cher
shav
egener
all
yconcl
udedt
hatheal
th
decl
inesar
eassoci
atedwi
thage,butnotr
eti
rement
.Whet
hercauseoref
fect
,iti
s
ev
identt
hatr
eti
rementi
samaj
orev
enti
none’
sli
fecy
cle,andt
heor
gani
zat
ionhasa
maj
orr
esponsi
bil
it
yinf
aci
li
tat
ingt
het
ransi
ti
onf
rom onest
aget
otheot
her
.Oneoft
he
keyi
ssuesofmoder
nti
mesi
swhet
hert
hedeci
siont
oret
ir
eshoul
dbemadebyt
he
or
gani
zat
ionorbel
eftt
otheempl
oyeeconcer
ned.I
nEt
hiopi
aret
ir
ementi
smandat
ory
.
I
tisf
ixedbyl
awatt
heageof60.

2) Lay
off
I
nthef
reeent
erpr
isesy
stem,t
her
ear
emanyoccasi
onswhenaqual
if
iedempl
oyeewi
ll
ber
eleasedf
rom empl
oyment(
lai
dof
f)becauset
heor
gani
zat
ionnol
ongerr
equi
res
hi
s/herser
vices.Lay
offcanbet
empor
aryast
hef
ir
m adj
ust
stov
ari
ati
onsi
nmar
ket

65
demandf
ori
tspr
oduct
s.I
tcanal
sobeper
manentast
hef
ir
m goesoutofbusi
nessor
t
ransf
erst
o a di
stantl
ocat
ion.Lay
offi
sa v
erydi
ff
icul
tpr
obl
em notonl
yfort
he
empl
oyeebutt
hecompanyandt
heuni
onaswel
l.Si
ncel
ayof
finv
olv
est
hel
ossof
i
ncome,t
heempl
oyeeandt
heuni
onar
epr
onet
orest
ri
ctt
hecompany
’sf
reedom of
deci
sion.Thecompanyt
ypi
cal
lywi
shest
otakeadv
ant
ageoft
hel
ayof
ftor
etai
nit
smost
abl
eempl
oyees,andl
ett
hemor
emar
ginalonesgo.Ont
heot
herhand,t
heempl
oyee
andt
heuni
ont
ryt
oregul
atel
ayof
fdeci
sionst
hroughseni
ori
tysy
stems.I
tisgener
all
y
f
oundi
npr
act
icet
hatseni
ori
tyi
sast
rongerf
act
ori
nlay
offt
hani
tisi
npr
omot
ion
deci
sions.

3)Di
schar
ge
Per
hapst
hemostst
ressf
ulanddi
stast
efulmet
hodofsepar
ati
oni
sthatofdi
schar
ge.
Theempl
oyeei
sdeemedt
obef
undament
all
yunsat
isf
act
oryi
nter
msofper
for
mance
and/
orat
ti
tude.Thel
aborf
orcei
nuni
oni
zedor
gani
zat
ionsi
spr
otect
edbyor
gani
zed
l
aboruni
onswhosecont
ract
sty
pical
lypr
ovi
def
orgr
iev
ancepr
ocessi
ng.I
naddi
ti
ont
o
uni
onr
est
ri
cti
onsont
her
ightofdi
schar
ge,t
her
ear
eot
hermaj
orsour
cest
hatr
educe
empl
oyerf
reedom t
o di
schar
ge.The empl
oyercannotbase a di
schar
ge on uni
on
member
shi
poract
ivi
ty,r
ace,r
eli
gion,nat
ional
it
y,age,sex
,andt
hel
ike.Thi
sisl
egal
ly
pr
ohi
bit
ed.Di
schar
ges because of di
sloy
alt
y,i
nsubor
dinat
ion,and t
he l
ike ar
e
consi
der
edl
egal
.

66
CHAPTER6:LEADI
NG

Meani
ngandt
heneedf
orl
eader
shi
p

Leadi
ngaccor
dingt
oKoot
handWei
hri
ch,i
sthepr
ocessofi
nfl
uenci
ngpeopl
esot
hat
t
heywi
llcont
ri
but
etoor
gani
zat
ionandgr
oupgoal
s.I
tisi
nfl
uenci
ngpeopl
esot
hat
t
heywi
llwor
kwi
ll
ingl
yandent
husi
ast
ical
lyt
owar
dtheachi
evementofor
gani
zat
ional
goal
s ul
ti
mat
e obj
ect
ives.When we say i
nfl
uenci
ng,i
t does not mean t
hat
coer
cing/
for
cing,i
mposi
ng,suct
ioni
ngorpushi
ngpeopl
ebehi
nd.I
tmeansr
ather
-
mot
ivat
ingpeopl
esot
hatt
heycont
ri
but
ethei
rmaxi
mum ef
for
tfort
heachi
evementof
or
gani
zat
ionalgoal
.

Leadi
ng/
Dir
ect
ingi
sthatpar
tofmanagementf
unct
ionwhi
chact
uat
est
heor
gani
zat
ion
member
sto wor
k ef
fi
cient
lyand ef
fect
ivel
yfort
he at
tai
nmentofor
gani
zat
ional
obj
ect
ives.Pl
anni
ng,or
gani
zing,andst
aff
ingar
emer
elypr
epar
ati
onsf
ordoi
ngt
he
wor
k,andt
hewor
kact
ual
lyst
art
swhenmanager
sst
artper
for
ming t
hedi
rect
ing
f
unct
ion.

Di
rect
ingi
sachal
lengi
ngf
unct
ionofmanagement
,becausei
tdeal
swi
tht
hehuman
el
ementoft
heor
gani
zat
ion,whi
chr
epr
esent
sacompl
exoff
orcesaboutwhom not
much i
s known.A per
son'
s bel
ief
s,hopes,ambi
ti
ons,behav
ior
,sat
isf
act
ion,and
i
nter
act
ionwi
thot
herper
sonsar
eal
linv
olv
edi
nthedi
rect
ingpr
ocess.
Conceptandmeani
ngsofLeader
shi
ptheor
ies
Leader
shi
pist
hepr
ocessofi
nfl
uenci
ngi
ndi
vidual
sandgr
oupst
osetandachi
eve
goal
s.I
tisanactofi
nfl
uenci
ngandmot
ivat
ingpeopl
etoper
for
m cer
tai
ntaskst
o
achi
eve or
gani
zat
ionalobj
ect
ives.Thus,an ef
fect
ivel
eaderi
s expect
ed t
o hav
e
adequat
eknowl
edgeofhumanbehav
ior
,incl
udi
ngt
heabi
li
tyt
oper
suadeandmot
ivat
e
peopl
eandcommuni
cat
ewi
tht
hem pr
oper
ly.
Def
ini
ti
on:
 "
Thear
torpr
ocessofi
nfl
uenci
ngpeopl
esot
hatt
heywi
llst
ri
vewi
ll
ingl
yand
ent
husi
ast
ical
lyt
owar
dst
heachi
evementofgr
oupgoal
s."
 "
Leader
shi
pist
heabi
li
tyt
osecur
edesi
rabl
eact
ionsf
rom agr
oupoff
oll
ower
s

67
 v
olunt
ari
lywi
thoutt
heuseofcoer
cion.
"
 "
Thepr
ocessofdi
rect
ingandi
nspi
ri
ngwor
ker
stoper
for
mthet
askr
elat
ed
act
ivi
ti
esoft
hegr
oup.
"
Peopl
e shoul
d be encour
aged t
o dev
elop notonl
ywi
ll
ingness t
o wor
k,butal
so
wi
ll
ingnesst
owor
kwi
thzealandconf
idence.I
nshor
tleader
shi
pinv
olv
es:
 I
nfl
uenci
ngandi
nter
act
ingwi
thpeopl
etoat
tai
ngoal
s.
 Rel
atedt
oapar
ti
cul
arsi
tuat
ionatagi
venpoi
ntoft
imeandaspeci
fi
csetof
ci
rcumst
ances.
 Byaccept
ingwi
ll
ingl
yfol
lower
swi
llmaket
hel
eader
shi
ppr
ocesspossi
ble.

Theor
iesofLeader
shi
p

1.TheTr
aitTheor
yofLeader
shi
p
Tr
ait
sar
einbor
nandi
nher
entper
sonalqual
it
iesofi
ndi
vidual
s.Thi
stheor
ybel
iev
es
l
eader
spossesscer
tai
nspeci
fi
cinbor
ntr
ait
s,whi
char
einher
it
edr
athert
hanacqui
red.
I
thasar
ootf
rom "
thegr
eatmant
heor
y"dat
ingbackt
otheanci
entGr
eeksand
Romanst
ime,hol
dst
hatl
eader
sar
ebor
nnotmade.Thet
rai
ttheor
yst
udi
esf
ocused
on t
he per
sonalt
rai
ts ofl
eader
s and at
tempt
ed t
oident
if
y a setofi
ndi
vidual
char
act
eri
sti
cst
hatdi
sti
ngui
shedl
eader
sfr
om f
oll
ower
s'andal
sosuccessf
ull
eader
s
f
rom unsuccessf
ulones.I
ngener
alt
het
rai
ttheor
yhasn'
tbeenaf
rui
tf
ulappr
oacht
o
expl
ainl
eader
shi
p.

2.TheBehav
ior
alTheor
yofLeader
shi
p
Thebehav
ior
alt
heor
yofl
eader
shi
pfocusedonwhatl
eader
sdor
athert
hant
hei
rtr
ait
s.
St
udi
esshowedt
hatonesetoft
rai
ts/
leader
shi
pst
ylemi
ghtnotbeequal
lyappr
opr
iat
e
i
nal
lsi
tuat
ions.Thi
stheor
ysuggest
edt
hatt
her
ewer
etwodi
sti
nctt
ypesofl
eader
shi
p
whi
ch ar
e known as t
ask-or
ient
ed /
product
ion cent
ered/and empl
oyee or
ient
ed
/
peopl
ecent
ered/
.

3.Thesi
tuat
ional/
cont
ingency
/theor
yofl
eader
shi
p
Accor
dingt
othi
stheor
y,l
eader
shi
pisst
rongl
yaf
fect
edbyasi
tuat
ionf
rom whi
cha
l
eaderemer
gesandi
nwhi
chhe/
shewor
ks.I
t'
saf
unct
ionoft
hel
eader
,thef
oll
ower
s
68
andt
hesi
tuat
ion.I
tat
tempt
stodi
scov
ert
hatt
heoneuni
quesetofl
eader
shi
ptr
ait
s
wer
elar
gel
yunsuccessf
ul.Moder
nmanagementt
heor
ist
sar
emor
epr
onet
othebel
ief
t
hatl
eader
shi
pismor
ecompl
ex;
thati
sitcan'
tber
epr
esent
edbyonesetoft
rai
tsorby
si
ngl
esetofbehav
ior
,thusef
fect
ivel
eader
shi
pbehav
iordependsont
heenv
ironment
ort
hesi
tuat
ion.
Conceptandmeani
ngofLeader
shi
pSt
yles
Manager
sinanor
gani
zat
ionshal
lrel
ati
vel
ybeconsi
stenti
nthewayt
heyt
ryt
o
i
nfl
uenceot
her
sbehav
ior
.Themanagerwhodomi
nat
essubor
dinat
esi
nonesi
tuat
ion
i
snotl
ikel
ytouseahi
ghdegr
eeofconsi
der
ati
onandpar
ti
cipat
ioni
nanot
her
.Thi
s
behav
ior
alpat
ter
nofl
eader
sisknownasl
eader
shi
pst
yle.I
tcanbedef
inedast
he
v
ari
ouspat
ter
nsofbehav
iorf
avor
edbyl
eader
sdur
ingt
hepr
ocessofdi
rect
ingand
i
nfl
uenci
ngwor
ker
s,whi
chi
sdet
ermi
nedbyl
eader
’sper
sonal
it
y,exper
ienceandv
alue
sy
stem,
nat
ureoff
oll
ower
sandenv
ironment
.

Ther
ear
ethr
eei
mpor
tantl
eader
shi
pst
yles:
a)Aut
ocr
ati
c
b)Democr
ati
c/par
ti
cipat
e/
c)Lai
ssez-f
air
e/f
reer
ein/

a.Aut
ocr
ati
cSt
yle"
I"Appr
oach,
I
tisal
eader
shi
pappr
oachi
nwhi
chamanagerdoesnotshar
edeci
sionmaki
ng
aut
hor
it
ywi
thsubor
dinat
es.Aut
ocr
ati
cmanager
smayaskf
orsubor
dinat
es'i
deas&
f
eedbackaboutt
hedeci
sion,
butt
hei
nputdoesnotusual
lychanget
hedeci
sionunl
ess
i
tindi
cat
est
hatsomet
hingv
italhasbeenov
erl
ooked.Undercer
tai
ncondi
ti
ons,t
he
aut
ocr
ati
cst
ylei
sappr
opr
iat
e.Exampl
e:Dur
ingcr
isi
sandwhensubor
dinat
esar
e
t
rai
neesandwhent
her
eisactofi
nsubor
dinat
ion.I
tisal
soef
fect
ivewhenmanager
s
f
ace i
ssues t
hat t
hey ar
e best equi
pped t
o sol
ve,cr
eat
e sol
uti
ons,whose
i
mpl
ement
ati
ondoesnotdependonot
her
s&desi
ret
ocommuni
cat
ethr
oughor
der
s
and i
nst
ruct
ions.Thi
sleader
shi
p st
ylei
s cl
osel
y associ
ated wi
tht
he cl
assi
cal
appr
oacht
omanagementandi
tischar
act
eri
zedbyt
hef
oll
owi
ngbehav
ior
alpat
ter
ns
ofl
eader
s.

69
  Thel
eaderdoesn'
tseekanyopi
nionsf
rom subor
dinat
es,hol
dsconf
li
ctsand
wi
thl
esscr
eat
ivi
ty.
 Exer
cisesr
igi
dcont
rolandcl
osesuper
visi
on,
rel
iesonpuni
shment
s.
 Subor
dinat
est
ypi
cal
lyr
eactbydoi
ngonl
ywhat
'sexpect
edandbysuppr
essi
ng
t
hei
rfr
ust
rat
ion.
 The aut
ocr
ati
c l
eader i
s t
ask-or
ient
ed, gi
ves l
it
tl
e v
alue on showi
ng
consi
der
ati
ont
osubor
dinat
es.
 Dependsononewaycommuni
cat
iondownwar
donl
y.

b.Par
ti
cipat
e(democr
ati
c)St
yle"
We"Appr
oach
I
tisal
eader
shi
pappr
oachi
nwhi
chamanagershar
esdeci
sionmaki
ngaut
hor
it
ywi
th
subor
dinat
es.I
tinv
olv
esot
her
sandl
etst
hem br
ingt
hei
runi
quev
iewpoi
nts,t
alent
s
andexper
iencest
obearonani
ssue.Bef
oresubor
dinat
esar
emadet
opar
ti
cipat
ein
t
hedeci
sionmaki
ngpr
ocess:
 Mut
ualt
rustandr
espectmustexi
stbet
weent
hem andmanager
s
 Subor
dinat
esmustbewi
ll
ingandt
rai
nedt
obecompet
entt
osol
vepr
obl
ems
 Manager
sshoul
dgi
vet
imeandbepat
ientt
omakesubor
dinat
espar
ti
cipat
e.

Howev
er,l
imi
tsonsubor
dinat
es'
par
ti
cipat
ionmustbecl
ear
lyspel
ledoutbef
orehand
t
her
eshoul
dbenomi
sunder
standi
ngaboutwhohol
dsaut
hor
it
ytodowhat
.Thi
s
l
eader
shi
pst
ylei
schar
act
eri
zedbyt
hef
oll
owi
ngbehav
ior
alpat
ter
nsoft
hel
eader
.
 Al
lowst
hegr
oupmember
stopar
ti
cipat
eindeci
sionmaki
ngpr
ocess,pr
oposed
act
ionsandencour
agespar
ti
cipat
ionatal
llev
els.
 Thel
eaderwi
lldev
elopt
wowaycommuni
cat
ionsandpr
omot
eteam spher
e.
 Thedemocr
ati
cleaderexpl
ainst
othegr
oupmember
sli
ker
easonsf
orper
sonal
deci
sionswhennecessar
yandobj
ect
ivel
ycommuni
cat
escr
it
ici
sm andpr
aiset
o
subor
dinat
es.

c.Fr
ee-r
einSt
yle"
They"Appr
oach
I
tempower
sindi
vidual
sorgr
oupst
ofunct
ionont
hei
rown,wi
thoutdi
recti
nvol
vement
f
rom t
hemanager
stowhom t
heyr
epor
t. Thest
yler
eli
esheav
ilyondel
egat
ionof
aut
hor
it
y,andwor
ksbestwhent
hepar
ti
eshav
eexper
tpower
,whenpar
ti
cipant
shav
e

70
andknowhowt
ouset
het
ool
sandt
echni
quesneededf
ort
hei
rtasks.

Fr
ee-r
ein l
eader
shi
p wor
ks par
ti
cul
arl
y wel
l wi
th manager
s and exper
ienced
pr
ofessi
onal
sinengi
neer
ing,desi
gn,r
esear
chandsal
es.Suchpeopl
egener
all
yresi
st
ot
herki
ndsofsuper
visi
on.I
nmostor
gani
zat
ionsmanager
smustbeabl
etouset
he
deci
sionmaki
ngst
ylet
hatci
rcumst
ancesdi
ctat
e,becausepeopl
eandci
rcumst
ance
const
ant
lychangeandbecausesubor
dinat
esmustbepr
epar
edt
othechange.The
ef
fect
ivemanagerswi
tchesf
rom onel
eader
shi
pst
ylet
oanot
herasappr
opr
iat
e.

Thef
oll
owi
ngar
ethebehav
ior
alpat
ter
nsofl
aissez-f
air
eleader
:
 Lai
ssez-f
air
eleader
smakeaf
ewat
tempt
stoi
ncr
easepr
oduct
ivi
ty,
todev
elopt
hei
r
at
tempt
sort
omeetsubor
dinat
espsy
chol
ogi
calneeds.
 Use t
hei
rpowerv
eryl
it
tl
e,i
fa t
all
,gi
ving subor
dinat
es a hi
gh degr
ee of
i
ndependencei
nthei
roper
ati
on.
 Thesel
eader
smai
ntai
nhandsof
fpol
icywher
eeachsubor
dinat
ewor
kiscl
ear
ly
def
ined.
 Suchl
eader
sdependonsubor
dinat
est
osett
hei
rowngoal
sandt
hemeansof
achi
evi
ngt
hem,andt
heyseet
hei
rrol
easoneofai
dingt
heoper
ati
onsoff
oll
ower
s
byf
urni
shi
ngt
hem i
nfor
mat
ionandact
ingpr
imar
il
yasacont
actwi
tht
hegr
oups
ext
ernalenv
ironment
.
 Thel
aissez-f
air
eleaderhasl
it
tl
eornosel
f-conf
idencei
nhi
s/herl
eader
shi
pabi
li
ty,
set
sandgoal
sfort
hegr
oupandmi
nimi
zescommuni
cat
ionandgr
oupi
nter
act
ion.
Mot
ivat
ion
Theconceptofmot
ivat
ion
Mot
ivat
ionr
efer
stot
hef
orcest
oaper
sont
hatar
ouseent
husi
asm andper
sist
encet
o
pur
sueacer
tai
ncour
seofact
ion.I
tmeansst
imul
ati
ngpeopl
etoact
iont
hrough
i
ncent
ivesori
nducement
s.Thest
udyofmot
ivat
ionhel
psmanager
sunder
standwhat
pr
ompt
s/st
imul
ipeopl
etoi
nit
iat
eact
ion,whati
nfl
uencest
hei
rchoi
ceofact
ion,and
whyt
heyper
sisti
nthatact
ionov
ert
ime.Peopl
ehav
ebasi
cneedssuchasf
orf
ood,
achi
evement
sormonet
arygai
nthatt
ransl
atei
ntoani
nter
nalt
ensi
ont
hatmot
ivat
es
speci
fi
cbehav
ior
swi
thwhi
cht
oful
fi
llt
heneed. Tot
heext
entt
hatt
hebehav
iori
s
successf
ul,t
heper
soni
srewar
dedi
nthesenset
hatt
heneedi
ssat
isf
ied.Ther
ewar
d

71
al
soi
nfor
mst
heper
sont
hatt
hebehav
iorwasappr
opr
iat
eandcanbeusedagai
nint
he
f
utur
e.Ther
ear
etwot
ypesofr
ewar
dsi
nmot
ivat
ion:

I
ntr
insi
crewar
d-t
hesat
isf
act
ionaper
sonr
ecei
vesi
nthepr
ocessofper
for
minga
par
ti
cul
aract
ion.Thecompl
eti
onofacompl
ext
askmaybest
owapl
easantf
eel
ingof
accompl
ishment
,orsol
ving apr
obl
em t
hatbenef
it
sot
her
smayf
ulf
il
laper
sonal
mi
ssi
on.
Ext
ri
nsi
crewar
ds - gi
ven byanot
herper
son,t
ypi
cal
lyt
he manager
,and i
ncl
ude
pr
omot
ionandpayi
ncr
eases.

Theor
iesofMot
ivat
ion
Thef
oll
owi
ngar
esomeoft
hebasi
ctheor
iesofmot
ivat
ion:

TheCar
rotandt
heSt
ickAppr
oach
Thecar
rotandt
hest
ickmet
aphorr
elat
est
otheuseofr
ewar
dsandpenal
ti
esi
nor
der
t
oinducedesi
redbehav
ior
.Itcomesf
rom t
heol
dst
oryt
hatt
omakeadonkeymov
e
onemustputacar
roti
nfr
ontofhi
m orj
abhi
m wi
thast
ickf
rom behi
nd.Car
rot
r
epr
esent
srewar
ds(
money
,bonus,sal
aryi
ncr
ease,empl
oyment
,pr
omot
ionet
c)whi
le
st
icki
mpl
iespenal
ty,puni
shment
,fearofl
ossofj
ob,demot
ionet
c.Despi
temanynew
t
heor
ies ofmot
ivat
ion,r
ewar
d and puni
shmentar
e st
il
lconsi
der
ed as st
rong
mot
ivat
ors.Forcent
uri
es,howev
er,t
heywer
etooof
tent
houghtofast
heonl
yfor
ces
t
hatmot
ivat
epeopl
e.Thepr
obl
em wi
tht
hist
heor
yist
hati
tisdi
ff
icul
ttomot
ivat
e
whi
tecol
larpeopl
ewi
thmat
eri
ali
ncent
iveandt
hest
icki
nthef
orm ofpenal
tyi
s
admi
tt
edl
ynott
hebestki
nd(
negat
ivemot
ivat
or)
.

Hi
erar
chyofNeedsTheor
y(Abr
ham Masl
ow)
I
tpr
oposest
hathumansar
emot
ivat
edbymul
ti
pleneedsandt
hatt
heseneedsexi
sti
n
hi
erar
chyor
der
:
1.Phy
siol
ogi
calneeds-t
heneedf
orf
ood,
wat
er,
air,
shel
ter
…
2.Saf
etyneeds-t
heneedf
orsecur
it
yandsaf
ety
3.Bel
ongi
ngness/
Soci
alneeds-t
heneedf
orf
ri
endshi
p,i
nter
act
ionandl
ove
4.Est
eem needs-t
heneedf
orr
espectandr
ecogni
ti
on
5.Sel
f-act
ual
izat
ionneeds-t
heabi
li
tyt
oreachone'
spot
ent
ial
s

72
 Fi
gur
e:6.
1TheAbr
ham Masl
owhi
erar
chi
esofneeds
Thi
stheor
yisbasedon-
 Onl
yanunsat
isf
iedneedcani
nfl
uencebehav
ior
;asat
isf
iedneedi
snota
mot
ivat
or.
 Aper
son'
sneedsar
ear
rangedi
napr
ior
it
yor
derofi
mpor
tance.Thehi
erar
chy
goesf
rom t
hemostbasi
cneedst
othebestcompl
ex.
 Aper
sonwi
llatl
eastmi
nimal
lysat
isf
yeachl
evelofneedbef
oref
eel
ingt
he
needatt
henextl
evel
.
 I
fneedsat
isf
act
ioni
snotmai
ntai
nedatanyl
evel
,theunsat
isf
iedneedwi
ll
becomeapr
ior
it
yonceagai
n. Forexampl
e,f
oraper
sonwhoi
spr
esent
ly
f
eel
ingsoci
alneeds,
saf
etywi
llbecomeapr
ior
it
yonceagai
nifheorshei
sfi
red.

Al
der
fer
’sERGTheor
y

ClayAlder
feragreeswithMasl
owt hati
ndi
vi
dual
shav eahi
erarchyofneeds.Buti
nst
eadof
thefi
vec ategor
iesofne edssuggest
edbyMa sl
ow,Alder
fer'
sERG Theor
yholdsthatthe
i
ndivi
dualhast hrees etsofbasicneeds:exi
stenc
e,rel
atedness,andgrowth.Al
derf
er
descr
ibesthemasf ol
l
ows :

 Exi
s t
enceneeds,ormateri
alneeds ,whi
c hares ati
sfi
edbyf ood,ai
r,wat
er,pay,fr
inge
benefi
ts,andwor
kingcondi
ti
ons .
 Relat
edness needs,or needs f or establi
shing and mai ntai
ning i
nterper
sonal
rel
ati
ons hi
pswi
thco-worker
s ,super
ior
s,subordi
nates,fr
iends,
andfamil
y.
 Growth needs,orneeds t hatar e expres
sed by an i ndiv
idual
'
s att
emptt ofind
opportunit
iesf
oruniqueper sonaldevelopmentbymaki ngcreati
veorpr o¬ducti
ve

73
 contributi
onsatwork.
Thearrangementoft hes
ec at
egori
esofneedsiss i
milartoMas l
ow'
s.Exist
ence(E)needs
ar
es i
mi l
artoMas l
ow'sphysi
ol
ogicalandsaf
etyneeds;rel
atednes
s(R)needsaresimil
arto
Maslow'saffi
li
ati
onneeds;andgrowth(G)needsaresimilartoMasl
ow'sesteemands el
f-
act
uali
zationneeds.

Howev er,thet wot heoriesdi ff

eri ntheirv
iewsofhowwaypeopl es at
isf
yt hediff
erents etsof
needs .Mas lows t
atesthatunf il
ledneedsar emotivatorsandthatthenex thigherlev elneed
is notact ivated unt i
lt he pr ecedi ng lowerl evelneed i s sati
sfied.Thusa per son
progressesupt heneedshi er archyaseachsetofl owerlevelneedsi ssat isfi
ed.I n
contrast ,ERGt heor ysuggest st hatinaddi t
iontot hisfulf
il
lment-progressionpr oc ess,a
fr
us t
rat i
on-r egressionpr oces si
satwor katthes amet ime.Thatis,i
faper sonisc ontinually
fr
us t
ratedi nat t
empt stos ati
sfygr owthneeds ,r
elatednessneedswi l
lre-emer geasamaj or
mot i
vatingf orce.Thei ndi v
idualwi llret
urnt osat i
sfyi
ngt hi
slowerl evelneedi nsteadof
att
empt ingt os at
isfygr owthneeds ,andf r
ustr
ationwi l
lleadtor egress i
on.Figurebel ow
i
ll
us t
rat est hes erelati
on¬s hips.

TheTwo-Fact
orTheor
y(Her
zber
g1975)

The f
indi
ngs oft
he t
wo f
act
ort
heor
y suggest
ed t
hatt
he wor
k char
act
eri
sti
cs
associ
atedwi
thdi
ssat
isf
act
ionar
equi
tedi
ff
erentf
rom t
hoseper
tai
ningt
osat
isf
act
ion
whi
chpr
ompt
edt
henot
iont
hatt
wof
act
orsi
nfl
uencewor
kmot
ivat
ion.Thesef
act
ors
ar
ehy
gienef
act
orsandmot
ivat
ionf
act
ors.

Hygi
enef
act
ors:(
sal
ary
,jobsecur
it
y,wor
kingcondi
ti
ons,st
atus;companypol
ici
es;
qual
it
yoft
echni
calsuper
visi
onandqual
it
yofi
nter
per
sonal
,rel
ati
onshi
psamongpeer
s,
super
visor
s,andsubor
dinat
es)ar
ethepr
imar
yel
ement
sinv
olv
edi
njobdi
ssat
isf
act
ion.

74
Whenpr
esenti
nsuf
fi
cientqual
it
y,t
heyhav
enoef
fect
;whenabsent
,theycanl
eadt
o
j
obdi
ssat
isf
act
ion.

Mot
ivat
ionf
act
ors:(
achi
evement
,recogni
ti
on,r
esponsi
bil
it
y,adv
ancement
,thewor
k
i
tsel
f,andpossi
bil
it
yofgr
owt
h–i
nter
nal
/i
ntr
insi
cfact
ors)ar
ethepr
imar
yel
ement
s
i
nvol
ved i
njob sat
isf
act
ion.When pr
esent
,they can st
imul
ate per
sonaland

psy
chol
ogi
calgr
owt
h.

Theor
yXandTheor
yY(
Dougl
asMcGr
egor1960)
Theor
yXi
saphi
losophyofmanagementwi
thnegat
iveper
cept
ionofsubor
dinat
e’s
pot
ent
ialf
orwor
kandat
ti
tudest
owar
dwor
k. I
tassumest
hatsubor
dinat
esdi
sli
ke
wor
k,ar
epoor
lymot
ivat
ed,andr
equi
recl
osesuper
visi
on. A managerwi
tht
hese
bel
ief
stendst
ocont
rolt
hegr
oup,usenegat
ivemot
ivat
ion,andr
efuset
odel
egat
e
deci
sion-maki
ng.

Theor
yYi
saphi
losophyofmanagementwi
thaposi
ti
veper
cept
ionofsubor
dinat
es'
pot
ent
ialf
orandat
ti
tudest
owar
dwor
k.I
tassumest
hatsubor
dinat
escanbesel
f-
di
rect
ing,
wil
lseekr
esponsi
bil
it
yandf
indwor
kasnat
uralaspl
ayorr
est
.Theout
come
oft
hisbel
iefi
samanagerwhoencour
agespeopl
etoseekr
esponsi
bil
it
y,i
nvol
ves
peopl
eindeci
sionmaki
ngandwor
kwi
thpeopl
etoachi
evet
hei
rgoal
s.

Thei
mpor
tantpoi
ntaboutt
heor
yXandt
heor
yYi
sthatamanagementphi
losophy
i
nfl
uencest
het
ypeofwor
kcl
imat
ethemanagerendeav
orst
ocr
eat
eandul
ti
mat
ely
,
how t
hemanagert
reat
speopl
e.Thef
oll
owi
ngar
ethecomponent
soft
heor
yXand

75
 t
heor
yY.
Theor
yX Theor
yY
 Peopl
ebasi
cal
lydi
sli
kewor
kandav
oidi
t  Mostpeopl
efi
ndwor
kasnat
uralaspl
ay
whenev
er,
possi
ble orr
estand dev
elop an at
ti
tude t
owar
d
 Becausemostpeopl
edi
sli
kewor
k,t
hey wor
kbasedont
hei
rexper
iencewi
thi
t.
hav
e t
o be cl
osel
y super
vised and  Peopl
edonotneedt
obet
hreat
enedwi
th
t
hreat
ened wi
th puni
shment t
o r
each puni
shment
;they wi
llwor
kvol
unt
ari
ly
obj
ect
ive t
owar
dor
gani
zat
ionalobj
ect
ivest
owhi
ch
 Mostpeopl
epr
efer
redt
obet
oldwhatt
o t
heyar
ecommi
tt
ed.
do,hav
eli
tt
le ambi
ti
on,wantt
o av
oid  The av
erage per
son wor
king i
n an
r
esponsi
bil
it
y,andwantsecur
it
yabov
eal
l env
ironmentwi
llgood human r
elat
ions
el
se. wi
llacceptandseekr
esponsi
bil
it
y.
 Mostpeopl
ehav
eli
tt
lecr
eat
ivi
ty. They  Mostpeopl
e possessa hi
gh degr
ee of
ar
e not capabl
e of sol
ving pr
obl
ems. i
magi
nat
ion,i
ngenui
ty,andcr
eat
ivi
tywi
th
Rat
her
,theymustbedi
rect
ed. whi
cht
osol
veor
gani
zat
ionalpr
obl
ems.
 Most peopl
e hav
e l
imi
ted i
ntel
lect
ual  Al
though peopl
e hav
e i
ntel
lect
ual
pot
ent
ial
. Cont
ri
but
ionsabov
ebasi
cjob pot
ent
ial
,moder
nindust
ri
all
if
e ut
il
izes
per
for
manceshoul
dnotbeexpect
ed. onl
ypar
tofi
t.

CHAPTER7:THECONTROLLI
NGFUNCTI
ON
MEANI
NGANDNEEDFORCONTROL
I
ntheser
iesofmanager
ialf
unct
ions,pl
anni
ngi
sthef
ir
stf
unct
ionandcont
rol
li
ngi
s
t
hel
ast
.Successi
nbusi
nessi
sver
yof
tenpr
opor
ti
onat
etot
heshar
pnessofi
ts
pl
anni
ngandt
heski
llwi
thwhi
chi
tiscont
rol
led.Pl
anscanbeef
fect
ivel
yachi
evedi
n
mostor
gani
zat
ionsonl
ywi
thgoodcont
rol
s,andpl
anni
ngi
sal
way
spr
e-r
equi
sit
efor
cont
rol
li
ng.Pl
anni
ngseekst
osetgoal
sandpr
ogr
amsandcont
rolseekt
osecur
e
per
for
mancei
naccor
dancewi
thpl
ans.
Def
ini
ti
on
Accor
ding t
o Koont
ze and O'
donnel
l,
,"The manager
ialf
unct
ion ofcont
roli
sthe
measur
ementandcor
rect
ionoft
heper
for
manceofact
ivi
ti
esofsubor
dinat
esi
nor
der
t
omakesur
ethatent
erpr
iseobj
ect
ivesandt
hepl
ansdev
isedt
oat
tai
nthem ar
ebei
ng

76
accompl
ished.I
t'
sthust
hef
unct
ionofev
erymanager
,fr
om t
hechi
efexecut
ivet
othe
For
man.
"
"
Cont
rol
li
ngi
sthepr
ocessbywhi
chmanagementseesi
fwhatdi
dhappenwaswhat
wassupposedt
ohappen.I
fnot
,necessar
yadj
ust
ment
sar
emade.
"Moor
e.
Ananal
ysi
soft
hef
oregoi
ngst
atement
sregar
dingcont
rolbr
ingsoutt
hecont
rol
li
ng
f
unct
ionofmanagement
.

Pl
anni
ngi
sthef
oundat
ionofcont
rol
:
Pl
anni
ngset
sthecour
se,cont
rolobser
vesdev
iat
ionsf
rom t
hecour
se,andt
akes
cor
rect
iveact
ion.

Act
ion'
stheessenceofcont
rol
:
Cont
rolt
ermi
nat
es i
ntaki
ng cor
rect
ive act
ion wher
ether
eis a dev
iat
ion i
n
per
for
mancef
rom t
hedesi
redgoal
s.

Del
egat
ioni
sthekeyt
ocont
rol
:
Cont
roli
sexer
cisedbyt
aki
ngact
ion,andact
ioncanbet
akenwi
thi
ntheaut
hor
it
y
del
egat
ed.Account
abi
li
tymustbewi
thi
ntheaut
hor
it
ygi
vent
othemanager
.

I
nfor
mat
ioni
sthegui
det
ocont
rol
:
Cont
rolexer
cisedbyamanageront
hebasi
soft
hei
nfor
mat
ionandr
epor
tsf
rom t
hose
act
ivel
ydoi
ngt
hej
ob.Suchr
epor
tsandi
nfor
mat
ionmaybedescr
ibedas"
feed-back"
f
rom subor
dinat
es.Feedback enabl
es t
he managert
o det
ermi
ne how f
art
he
oper
ati
ons.

THECONTROLPROCESS

I
ncont
rol
li
ngpr
ocesst
her
ear
ethr
eest
eps,
1.Set
ti
ngst
andar
ds
2.Measur
ementofper
for
mance
3.Taki
ngcor
rect
iveact
ion
1.Set
ti
ng St
andar
ds:
Standar
ds may be t
angi
ble ori
ntangi
ble.Gr
eat
eremphasi
s
shoul
dbel
aidont
angi
blest
andar
ds.Thest
andar
dsi
ntangi
blet
ermsmaybei
nter
ms
ofout
put
,cost
s,pr
ofi
t,t
ime per
sons av
ail
abl
efort
rai
ning et
c.i
ntangi
blet
erms

77
st
andar
dsmaybef
ort
her
esul
tst
obeexpect
edf
rom at
rai
ningpr
ogr
am,empl
oyee
mor
ale,adv
ert
isi
ngcampai
gn,et
c.Or
gani
zat
ionscr
eat
est
andar
dst
ohel
pmeasur
e
andmoni
torbot
hpr
oduct
ivi
tyandqual
it
yef
for
ts.Peopl
eandpr
ocessesar
egov
erned
byqual
it
ati
veandquant
it
ati
vest
andar
ds.Anor
gani
zat
ionusest
hesest
andar
dst
o
t
each,
trai
n,andev
aluat
eor
gani
zat
ionalper
for
mance.
2.Measur
ementofPer
for
manceandcompar
ingi
tagai
nstst
andar
ds:
Anor
gani
zat
ion
measur
es act
ualper
for
mance ofpeopl
e and pr
ocesses t
o ascer
tai
nift
hey ar
e
f
unct
ioni
ngaccor
dingt
opl
ansandexpect
ati
ons.Af
teri
thasbeenmeasur
edi
twi
llbe
compar
edagai
nstt
heest
abl
ishedst
andar
ds.
3.Taki
ngCor
rect
iveAct
ions:
Assoonast
hedev
iat
ionsar
erepor
ted,i
tist
hedut
yof
t
hemanagerconcer
nedt
otakest
epst
ocor
rectt
hepastact
ionoratl
eastt
obr
ing
si
mil
aract
ioncl
osert
othest
andar
dsi
nfut
ure.Whensi
gni
fi
cantdev
iat
ionsf
rom
est
abl
ishedst
andar
dsoccur
,theor
gani
zat
ionmustdet
ermi
net
hecausebyi
dent
if
ying
t
henat
ureandscopeoft
hepr
obl
em.

TYPESOFCONTROL

Cont
rol
li
ngcanbef
eedf
orwar
d,concur
rentorf
eedbackcont
rol
s.
1)Feedf
orwar
dcont
rol
s:ar
epr
event
ivei
nnat
ure.Theyar
ecr
eat
edt
oscr
eenout
possi
blecausesofpr
obl
ems.Pr
ocedur
esandt
rai
ningcanbepr
event
iveaswel
las
r
emedi
al.
2)Concur
rentcont
rol
s:moni
torongoi
ng oper
ati
ons as t
hey occuri
nrealt
ime,
al
lowi
ngf
ori
nst
antr
eact
ionsandt
hespot
ti
ngoft
rends.
3)Feedbackcont
rol
s:ar
eaf
teract
ioncont
rol
s.I
nspect
ingout
putaf
teranoper
ati
on
hasbeenper
for
medandsol
ici
ti
ngcust
omerf
eedbackar
eexampl
esofaf
ter
-act
ion
cont
rol
.
Al
lthet
hreet
ypesofcont
rol
sar
eimpor
tantt
omanager
sandt
hei
ror
gani
zat
ions.
Whendesi
gnedandusedpr
oper
ly,t
heycanpr
event
,ident
if
y,andcor
rectdev
iat
ions
f
rom est
abl
ishedst
andar
ds.

CONTROLLI
NGCHARACTERI
STI
CS

Cont
rolmayhav
emanydi
ff
erentchar
act
eri
sti
cs,
butt
hemosti
mpor
tantar
ethese:

78
Accept
ance by member
s oft
he or
gani
zat
ion:accept
ance by t
he or
gani
zat
ion’
s
member
siscr
uci
alt
oacont
rol
sef
fect
ivenessandef
fi
ciency
.Cont
rol
swi
llnotwor
k
unl
esspeopl
ewantt
hem t
o.
Focusoncr
it
icalpoi
nts:cr
it
icalcont
rolpoi
ntsf
ort
het
otalent
erpr
isewoul
dincl
ude
suchassal
es,
rev
enue,
expense,
inv
ent
oryl
evel
s,per
sonnelt
urnov
er,
saf
etyf
orpeopl
e
andot
herasset
s,andmor
e.
Economi
cfeasi
bil
it
y:t
hecostoft
hecont
roloracont
rolsy
stem mustbewei
ghed
agai
nstt
hebenef
it
sitcanr
etur
n.
Accur
acy:i
nfor
mat
ion mustbeaccur
atei
fiti
sto beusef
ul.Cont
rol
sthatof
fer
i
naccur
ateassessment
sfeeddeci
sionmaker
sthewr
ongi
nputwhi
cht
henr
esul
tsi
n
i
ncor
rectr
esponses.
Ti
mel
iness:t
imel
yinf
ormat
ion mustbe gi
ven t
othose i
n char
ge i
fmeani
ngf
ul
r
esponsesar
etof
oll
ow.
Easeofunder
standi
ng:t
hesi
mpl
ert
hecont
rol
,theeasi
eri
twi
llbet
ounder
standand
appl
y.

EFFECTI
VECONTROLSYSTEM

Cont
rol
sar
eef
fect
iveasl
ongast
hey
:
 Dowhatt
heyar
eint
endeddo- pr
eventdev
iat
ions,di
agnosedev
iat
ions,t
reat
dev
iat
ions,
orpr
ovi
dei
nfor
mat
ionf
orf
utur
epl
anni
ng.
 Donotcr
eat
eor
gani
zat
ionalpr
obl
emst
hatr
esul
tincost
sgr
eat
ert
hant
he
benef
it
soft
hecont
roldev
ices.

 Updat
ethecont
rol
s-cont
rol
sar
eef
fect
iveonl
yasl
ongast
heydowhatar
e
i
ntendedt
odo.Whent
hecont
roldev
icesar
edesi
gned,i
twaswi
thacer
tai
nset
ofexpect
ati
onsandspeci
fi
cat
ionandunderspeci
fi
cci
rcumst
ance.I
fthese
ci
rcumst
ancesandexpect
ati
onschangewi
thi
ntheor
gani
zat
ion,t
hecont
rol
dev
icesneedt
ober
evi
ewedandpossi
blyupdat
edorr
epl
aced.

79