GMT - NUSRAT MA’AM

IMPORTANT QUESTIONS
1. WHAT ARE DIFFERENT LEVELS OF MANAGEMENT ?

The term level of management refers to the line of division that exists between
various managerial positions in an organisation.As the size of the company and
workforce increases, the no. of levels in management increases with it and vice versa.
Levels of Management can be generally classified into three principal
categories, all of which direct managers to perform different functions.

TOP LEVEL MANAGEMENT

This level of management consists of an organization’s board of directors and
the chief executive or managing director. It is the ultimate source of power and
authority, since it oversees the goals, policies, and procedures of a company.
Their main priority is on the strategic planning and execution of the overall
business success.

The roles and responsibilities of the top level of management can be

summarized as follows:

 Laying down the objectives and broad policies of the business enterprise.
 Issuing necessary instructions for the preparation of department-specific
budgets, schedules, procedures, etc.
 Preparing strategic plans and policies for the organization.
 Appointing the executives for middle-level management, i.e. departmental
managers.
 Establishing controls of all organizational departments.
 Since it consists of the Board of Directors, the top management level is also
responsible for communicating with the outside world and is held
accountable towards an organization’s shareholders for the performance of
the enterprise.
 Providing overall guidance, direction, and encouraging harmony and
collaboration.

Executive or Middle Level of Management

The branch and departmental managers form this middle management level.
These people are directly accountable to top management for the functioning
of their respective departments, devoting more time to organizational and
directional functions. For smaller organizations, there is often only one layer of
middle management, but larger enterprises can see senior and
junior levels within this middle section.

The roles and responsibilities of the middle level of management can be

summarized as follows:
 Executing the plans of the organization in accordance with the policies and
directives laid out by the top management level.
 Forming plans for the sub-units of the organization that they supervise.
 Participating in the hiring and training processes of lower-level
management.
 Interpreting and explaining the policies from top-level management to
lower-level management.
 Sending reports and data to top management in a timely and efficient
manner.
 Evaluating the performance of junior managers.
 Inspiring lower level managers towards improving their performance

Supervisory, Operative, or Lower Level of Management

This level of management consists of supervisors, foremen, section officers,

superintendents, and all other executives whose work must do largely with HR
oversight and the direction of operative employees. Simply put, managers at
the lower level are primarily concerned with the execution and coordination of
day-to-day workflow that ensure completion of projects and that deliverables
are met.

The roles and responsibilities of the lower level of management can be

summarized as follows:

 Assigning jobs and tasks to various workers.

 Guiding and instructing workers in day-to-day activities.
 Overseeing both the quality and quantity of production.
 Maintaining good relations within lower levels of the organization.
 Acting as mediators by communicating the problems, suggestions, and
recommendatory appeals, etc. of workers to the higher level of
management, and in turn elucidating higher-level goals and objectives to
workers.
 Helping to address and resolve the grievances of workers.
 Supervising and guiding their subordinates.
 Taking part in the hiring and training processes of their workers.
 Arranging the necessary materials, machines, tools, and resources, etc.
necessary for accomplishing organizational tasks.
 Preparing periodical reports regarding the performance of the workers.
 Upholding discipline, decorum, and harmony within the workplace.
 Improving the enterprise’s image as a whole, due to their direct contact
with the workers.

2. DIFFERENCE BETWEEN EFFECTIVENESS AND EFFICIENCY?

Efficiency means whatever you produce or perform; it should be done in a perfect

way. Although, Effectiveness has a broader approach, which means the extent to
which the actual results have been achieved to fulfill the desired outcome i.e. doing
accurate things. These are the metric used to gauge the performance of an
employee in an organization.

Efficiency and Effectiveness are the two words which are most commonly used by
the people; they are used in place of each other, however they are different. While
efficiency is the state of attaining the maximum productivity, with least effort spent,
effectiveness is the extent to which something is successful in providing the desired
result.

Key Differences Between Efficiency and Effectiveness

The points, given below describe the substantial differences between efficiency and
effectiveness:

1. The ability to produce maximum output with limited resources is known as

Efficiency. The level of the nearness of the actual result with planned result
is Effectiveness.
2. Efficiency is ‘to do the things perfect’ while Effectiveness is ‘to do perfect
things’.
3. Efficiency has a short run perspective. Conversely, the long run is the point of
view of Effectiveness.
4. Efficiency is yield-oriented. Unlike Effectiveness, which is result oriented.
5. Efficiency is to be maintained at the time of strategy implementation, whereas
strategy formulation requires Effectiveness.
6. Efficiency is measured in operations of the organisation, but Effectiveness of
strategies is measured which are made by the organisation.
7. Efficiency is the outcome of actual output upon given the number of inputs.
On the other hand, Effectiveness has a relationship with means and ends.

EXAMPLE-

A car is a very effective form of transportation, able to move people across long
distances, to specific places, but a car may not transport people efficiently because
how it uses fuel.

3. EXPLAIN, WHAT IS MANAGEMENT IN ART, SCIENCE AND

PROFFESION ? GIVE EXAMPLES.

To decide whether management is science, art or profession, one has to

comprehend the characteristics and definitions of science, art and profession and
associate them with management definition and traits.

Management as an Art:
Art is the experienced and personal utilisation of subsisting information to accomplish
solicited outcomes. It can be procured via education, research and practice. As art is
involved with the personal utilisation of data some kind of inventiveness and creativity
is needed to follow the fundamental systems acquired. The essential characteristics
of art are as follows:

 The presence of theoretical knowledge: Art assumes the presence of

specific academic knowledge. Specialists in their particular fields have
obtained specific elementary postulates which are appropriate to a specific
sort of art. For instance, the literature on public speaking, acting or music,
dancing is publicly acknowledged.
 Personalised application: The application of this primary information differs
from person to person. Art, hence, is a highly personalised notion.
 Based on custom and creativity: Art is practical. Art includes the creative
practice of subsisting intellectual knowledge. We know that music is based on
 7 notes. However, what makes the style of a musician different or distinctive
is his performance of these notes in an artistic way that is uniquely his own
solution.

Management as a Science:
Science is an organised collection of knowledge that emphasises definite universal
truths or the action of comprehensive laws. The central characteristics of science are
as follows:

 The organised body of knowledge: Science is a precise entity of

knowledge. Its systems are based on a purpose and consequence
association.
 Universal validity: Scientific conventions have global genuineness and
application.
 Systems based on experimentation: Scientific conventions are originally
formed via research and then tested via repeated trial and error under the
regulated situations.

Management as a Profession:
The profession can be described as an occupation upheld by specific education and
practice, in which entry is limited. A profession has the following features:

 The well-defined theory of knowledge: All services are based on a well-

defined form of education that can be procured through education.
 Restricted entry: The entrance to a profession is defined through an
examination or through obtaining an educational degree. For instance, to
become a chartered accountant in India an aspirant has to clear a detailed
examination regulated by the Institute of Chartered Accountants of India
(ICAI).
 Professional community: All professions are affiliated to a professional
association which controls entry, presents a certificate of training and
expresses and supports a system of government. To be qualified to study in
India, lawyers have to become members of the Bar Council which monitors
and regulates their actions.

4. EXPLAIN THE DIFFERENT FUNCTIONS PLANNING, ORGANISING,

CONTROLLING AND LEADING?

Management is defined as the procedure of organising, directing, planning and

controlling the efforts of organisational members and of managing organisational
sources to accomplish particular goals.

 Planning is the purpose of ascertaining in advance what is supposed to be

done and who has to do it. This signifies establishing goals in advance and
promoting a way of delivering them effectively and efficiently. In an
establishment, the aim is the obtainment and sale of conventional Indian
handloom and workmanship articles. They trade furnishings, readymades,
household items and fabrics made out of classical Indian textiles.
  Organising is the administrative operation of specifying grouping tasks,
duties, authorising power and designating resources needed to carry out a
particular system. Once a definite plan has been set for the completion of an
organisational intent, the organising party reviews the actions and resources
expected to execute the program. It ascertains what actions and resources
are needed. It determines who will do a distinct job, where and when it will be
done.
 Leading is obtaining the best resources for the right job. A significant
perspective of management is to make certain that the appropriate people
with the apt skills are obtainable in the proper places and times to achieve the
goals of the company. This is also called the human resource operations and
it includes activities such as selection, placement, recruitment and coaching
of employees. And involves directing, leading and encouraging the
employees to complete the tasks allocated to them. This entails building an
environment that inspires employees to do their best. Motivation and
leadership are 2 chief elements of direction. Directing also includes
communicating efficiently as well as managing employees at the workplace.
Motivating workers means simply building an atmosphere that urges them to
want to work. Leadership is inspiring others to do what the manager wants
them to do.

 Controlling is the management operation of controlling organisational

achievement towards the accomplishment of organisational intentions. The
job of controlling comprises ascertaining criteria of performance, computing
the current performance, comparing this with organised rules and taking
remedial action where any divergence is observed. Here management should
ascertain what activities and outputs are important to progress, how and
where they can be regulated and who should have the power to take remedial
response.

5. EXPLAIN THE MINTZBERG MANAGERIAL ROLE.

A manager isn’t a magician. It’s only through experience and practical knowledge
that a manager can become an effective leader. But first, it’s important to recognize
the roles and responsibilities of a manager in different organizational structures.

Henry Mintzberg, a Canadian management expert and author, came up with the idea
of interweaving practical experience with business theory. In his 1990
book Mintzberg on Management: Inside our Strange World of Organizations, he
listed clearly-defined roles for managers to become effective team leaders.

Interpersonal Roles

These Roles are those whose purpose is to Interact, Motivate and Improve
Relationships between employees.

1. Figurehead: Managers tend to be Aspirational Figures.

 Somebody people admire, with Authority, Presence and Integrity.

2. Leader: Managers lead People, not just on Work-related matters.

 Managers know How to Lead and make People follow them.

3. Liaison: Managers must know How to Bond and establish Relationships.

 Establishing alliances with third parties and other internal departments.

Informational Roles

Managers know, or must know, How to Understand, Process and Transmit data, in
order to Allocate Resources properly.

4. Monitor: Managers Analyze and draw Accurate Conclusions from available data.

 They know what information is important and what is not.

5. Disseminator: Managers know How to Transmit data effectively.

 Highlighting what is important based on who will receive the Information.

6. Spokesperson: A Manager knows How to speak on behalf of the Company.

 No matter if he (or she) speaks with internal employees or third parties.

Decisional Roles

Managers tend to fill that position because they know how to make the best Decisions.

A right decision can make a company successful … And a bad one can doom it.

7. Entrepreneur: A Manager has to be able to take Innovative and Brave Decisions.

 Adapting to New Trends and Technologies.

8. Disturbance Handler: Managers must solve the Problems that the Company has.

 Internal and external Problems.

9. Resource Allocator: Managers must Properly Allocate Company Resources.

 By assigning the right tasks to the right employees, for example.

10. Negotiator: Managing implies to Negotiate with Employees, Suppliers, etc.

 A Manager is continuously Negotiating to make things move forward.

6. WHAT ARE THE SKILLS OF A MANAGER?
According to American social and organizational psychologist Robert Katz, the three
basic types of management skills include:

1. Technical Skills

Technical skills involve skills that give the managers the ability and the
knowledge to use a variety of techniques to achieve their objectives. These
skills not only involve operating machines and software, production tools, and
pieces of equipment but also the skills needed to boost sales, design different
types of products and services, and market the services and the products.

2. Conceptual Skills

These involve the skills managers present in terms of the knowledge and ability for
abstract thinking and formulating ideas. The manager is able to see an entire
concept, analyze and diagnose a problem, and find creative solutions. This helps the
manager to effectively predict hurdles their department or the business as a whole
may face.

3. Human or Interpersonal Skills

The human or the interpersonal skills are the skills that present the managers’ ability
to interact, work or relate effectively with people. These skills enable the managers to
make use of human potential in the company and motivate the employees for better
results.

Examples of Management Skills

There is a wide range of skills that management should possess to run an

organization effectively and efficiently. The following are six essential management
skills that any manager ought to possess for them to perform their duties:

1. Planning

Planning is a vital aspect within an organization. It refers to one’s ability to organize

activities in line with set guidelines while still remaining within the limits of the
available resources such as time, money, and labor. It is also the process of
formulating a set of actions or one or more strategies to pursue and achieve certain
goals or objectives with the available resources.

The planning process includes identifying and setting achievable goals, developing
necessary strategies, and outlining the tasks and schedules on how to achieve the
set goals. Without a good plan, little can be achieved.

2. Communication

Possessing great communication skills is crucial for a manager. It can determine how
well information is shared throughout a team, ensuring that the group acts as a
unified workforce. How well a manager communicates with the rest of his/her team
also determines how well outlined procedures can be followed, how well the tasks
and activities can be completed, and thus, how successful an organization will be.

Communication involves the flow of information within the organization, whether

formal or informal, verbal or written, vertical or horizontal, and it facilitates smooth
functioning of the organization. Clearly established communication channels in an
organization allow the manager to collaborate with the team, prevent conflicts, and
resolve issues as they arise. A manager with good communication skills can relate
well with the employees and thus, be able to achieve the company’s set goals and
objectives easily.

3. Decision-making

Another vital management skill is decision-making. Managers make numerous

decisions, whether knowingly or not, and making decisions is a key component in a
manager’s success. Making proper and right decisions results in the success of the
organization, while poor or bad decisions may lead to failure or poor performance.

For the organization to run effectively and smoothly, clear and right decisions should
be made. A manager must be accountable for every decision that they make and
also be willing to take responsibility for the results of their decisions. A good manager
needs to possess great decision-making skills, as it often dictates his/her success in
achieving organizational objectives.

4. Delegation

Delegation is another key management skill. Delegation is the act of passing on

work-related tasks and/or authorities to other employees or subordinates. It involves
the process of allowing your tasks or those of your employees to be reassigned or
reallocated to other employees depending on current workloads. A manager with
good delegation skills is able to effectively and efficiently reassign tasks and give
authority to the right employees. When delegation is carried out effectively, it helps
facilitate efficient task completion.

Delegation helps the manager to avoid wastage of time, optimizes productivity, and
ensures responsibility and accountability on the part of employees. Every manager
must have good delegation abilities to achieve optimal results and accomplish the
required productivity results.

5. Problem-solving

Problem-solving is another essential skill. A good manager must have the ability to
tackle and solve the frequent problems that can arise in a typical workday. Problem-
solving in management involves identifying a certain problem or situation and then
finding the best way to handle the problem and get the best solution. It is the ability to
sort things out even when the prevailing conditions are not right. When it is clear that
a manager has great problem-solving skills, it differentiates him/her from the rest of
the team and gives subordinates confidence in his/her managerial skills.

6. Motivating

The ability to motivate is another important skill in an organization. Motivation helps

bring forth a desired behavior or response from the employees or certain
stakeholders. There are numerous motivation tactics that managers can use, and
choosing the right ones can depend on characteristics such as company and team
culture, team personalities, and more. There are two primary types of motivation that
a manager can use. These are intrinsic and extrinsic motivation.

Bottom Line

Management skills are a collection of abilities that include things such as business
planning, decision-making, problem-solving, communication, delegation, and time
management. While different roles and organizations require the use of various skill
sets, management skills help a professional stand out and excel no matter what their
level. In top management, these skills are essential to run an organization well and
achieve desired business objectives.

7. WHAT IS CSR COMPANIES ACT, 2013?

Corporate Social Responsibility (CSR) Corporate Social Responsibility – Companies
Act 2013 Article discusses Corporate Social Responsibility Applicability/ CSR
Applicability, Mandatory Expenditure on CSR, Medium of Expenditure on CSR
Activity , Activities for CSR Expenditure, Responsibility of Board of Directors related
CSR Applicability, Clarification/Other provision w.r.t to expenditure on CSR and
Income Tax Deductibility for CSR Expenses. Corporate Social Responsibility With
the enac... Read More can be defined as a Company’s sense of responsibility
towards the community and environment (both ecological and social) in which it
operates. Companies can fulfil this responsibility through waste and pollution
reduction processes, by contributing educational and social programs, by being
environmentally friendly and by undertaking activities of similar nature. CSR is not
charity or mere donations. CSR is a way of conducting business, by which corporate
entities visibly contribute to the social good. Socially responsible companies do not
limit themselves to using resources to engage in activities that increase only their
profits. They use CSR to integrate economic, environmental and social objectives
with the company’s operations and growth. CSR is said to increase reputation of a
company’s brand among its customers and society.

The Companies Act, 2013 has formulated Section 135, Companies (Corporate
Social Responsibility) Rules, 2014 and Schedule VII which prescribes mandatory
provisions for Companies to fulfil their CSR. This article aims to analyse these
provisions (including all the amendments therein).

Applicability of CSR Provisions: On every Company including its holding or

subsidiary having: Net worth of Rs. 500 Crore or more, or Turnover of Rs. 1000 crore
or more, or Net Profit of Rs. 5 crore or more, during the immediately preceding
financial year. A foreign company having its branch office or project office in India,
which fulfills the criteria specified above However, if a company ceases to meet the
above criteria for 3 consecutive financial years then it is not required to comply with
CSR Provisions till such time it meets the specified criteria.

CSR Committee: Every Company on which CSR is applicable is required to

constitute a CSR Committee of the Board: Consisting of 3 or more directors, out of
which at least one director shall be an independent director. However, if a company
is not required to appoint an independent director, then it shall have in 2 or more
directors in the Committee. Consisting of 2 directors in case of a private company
having only two directors on its Board Consisting of at least 2 persons in case of a
foreign Company of which one person shall be its authorised person resident in India
and another nominated by the foreign company

Functions of CSR Committee: The CSR Committee shall— Formulate and

recommend to the Board, a CSR Policy which shall indicate the activities to be
undertaken by the Company Recommend the amount of expenditure to be incurred
on the activities referred to in clause (i) Monitor the CSR Policy of the company from
time to time Institute a transparent monitoring mechanism for implementation of the
CSR projects or programs or activities undertaken by the company.

Responsibility of Board of Directors (BoD): The BoD of every company on which

CSR is applicable shall: after considering the recommendations made by the CSR
Committee, approve the CSR Policy for the Company and disclose contents of such
Policy in Board report. ensure that the activities as are included in CSR Policy of the
company are undertaken by the Company shall disclose the composition of the CSR
Committee in Board Report ensure that the company spends, in every financial year,
at least 2% of the average net profits of the company made during the 3 immediately
preceding financial years, in pursuance of its CSR Policy. The CSR
projects/programs/activities undertaken in India only shall amount to CSR
Expenditure.

CSR Policy: The CSR Policy of the company shall, inter-alia, include the following
namely :- A list of CSR projects or programs which a company plans to
undertake specifying modalities of execution of such project or programs and
implementation schedules for the same Monitoring process of such projects or
programs A clause specifying that the surplus arising out of the CSR projects or
programs or activities shall not form part of the business profit of the company

CSR Activities: The CSR activities shall be undertaken by the company, as per its
CSR Policy, excluding activities undertaken in pursuance of its normal course of
business. The BoD may decide to undertake its CSR activities approved by the CSR
Committee, through a section 8 company or a registered trust or a registered society,
established by the company, either singly or alongwith any other company, or a
section 8 company or a registered trust or a registered society, established by the
Central Government or State Government or any entity established under an Act of
Parliament or a State legislature a section 8 company or a registered trust or a
registered society, other than those specified in clauses (a) and (b) above, having an
established track record of 3 years in undertaking similar programs or projects;
collaboration with other companies, for undertaking projects or programs or CSR
activities in such a manner that the CSR Committees of respective companies are in
a position to report separately on such projects or programs. The CSR projects or
programs or activities not to be considered as CSR Activities: Expenses for the
benefit of only the employees of the company and their families Contribution of any
amount directly or indirectly to any political party.

8. WHAT ARE THE VALUES OF A COMPANY AND ITS IMPORTANCE?

Company values are a set of principals that an organization creates in order to guide
it to success. They will help all the members of your organization to work together as
a team to achieve business goals and outcomes. They are often used to build team
culture as well as to influence the way the organization deals with the external world,
such as customer service, and are important for company growth.
Having company values that are communicated well to employees will help you to
ensure the team is working together towards the same goals. All decisions made by
both management and employees alike should align with the values of the company.
All aspects of the business should also align with values, from production and
delivery to relationships, marketing and customer service.

Examples of company values include:

 Integrity
 Honesty
 Trust
 Accountability
 Quality
 Teamwork
 Commitment
 Dedication
 Customer service
 Ownership.

How company values make a business successful

When you don’t have company values, its hard to know what your business stands
for or what it is trying to achieve. This is not a recipe for success, it is a recipe for
disaster.

Company values can make your organization successful in the following ways:

1. Guiding decision making

When employees have a good understanding of what the company stands for, it’s
easier for them to make decisions that align with this. In many ways, your company
values are your organization’s moral compass and can help employees to navigate
difficult decisions and situations.

2. Better internal communication

There are many ways the values of business will help to boost internal culture, and
improvements in internal communications are towards the top of the list. Values that
include openness, transparency, accountability and collaboration naturally lend
themselves to communicating well to achieve results. Without good internal
communication, people can be confused and make mistakes. They are also likely to
be less productive.

3. Increased employee engagement levels

A set of core company values can boost the levels of employee engagement and
motivation within your company. When people feel a connection with their employer
and are happy with the work they are doing, they’re more likely to have higher levels
of morale and go above and beyond to help the organization succeed.
4. Attract the right employees

When your company values are clear, you’ll be more likely to attract candidates who
align with those values, ensuring that you are able to recruit new team members who
are the right fit for the organization.

5. Improved customer and client relationships

Your firm values should be reflected in the dealings you have with clients, customers
and other stakeholders. It will help them to understand what they can expect from
your company and your brand, and can build trust and respect.

9. DEFINE PLANNING, ITS FUNCTIONS AND PROCESS?

Meaning of Planning
Planning is ascertaining prior to what to do and how to do. It is one of the primary
managerial duties. Before doing something, the manager must form an opinion on
how to work on a specific job. Hence, planning is firmly correlated with discovery and
creativity. But the manager would first have to set goals. Planning is an essential step
what managers at all levels take. It requires making decisions since it includes
selecting a choice from alternative ways of performance.

Planning Process
As planning is an activity, there are certain reasonable measures for every manager
to follow:
(1) Setting Objectives

 This is the primary step in the process of planning which specifies the
objective of an organisation, i.e. what an organisation wants to achieve.
 The planning process begins with the setting of objectives.
 Objectives are end results which the management wants to achieve by its
operations.
 Objectives are specific and are measurable in terms of units.
 Objectives are set for the organisation as a whole for all departments, and
then departments set their own objectives within the framework of
organisational objectives.
(2) Developing Planning Premises

 Planning is essentially focused on the future, and there are certain events
which are expected to affect the policy formation.
 Such events are external in nature and affect the planning adversely if
ignored.
 Their understanding and fair assessment are necessary for effective planning.
 Such events are the assumptions on the basis of which plans are drawn and
are known as planning premises.
(3) Identifying Alternative Courses of Action

 Once objectives are set, assumptions are made.

 Then the next step is to act upon them.
  There may be many ways to act and achieve objectives.
 All the alternative courses of action should be identified.
(4) Evaluating Alternative Course of Action

 In this step, the positive and negative aspects of each alternative need to be
evaluated in the light of objectives to be achieved.
 Every alternative is evaluated in terms of lower cost, lower risks, and higher
returns, within the planning premises and within the availability of capital.
(5) Selecting One Best Alternative

 The best plan, which is the most profitable plan and with minimum negative
effects, is adopted and implemented.
 In such cases, the manager’s experience and judgement play an important
role in selecting the best alternative.
(6) Implementing the Plan

 This is the step where other managerial functions come into the picture.
 This step is concerned with “DOING WHAT IS REQUIRED”.
 In this step, managers communicate the plan to the employees clearly to help
convert the plans into action.
 This step involves allocating the resources, organising for labour and
purchase of machinery.
(7) Follow Up Action

 Monitoring the plan constantly and taking feedback at regular intervals is

called follow-up.
 Monitoring of plans is very important to ensure that the plans are being
implemented according to the schedule.
 Regular checks and comparisons of the results with set standards are done to
ensure that objectives are achieved.

10. WHAT IS ORGANISING AND ORGANISING PROCESS OR

ELEMENTS?

Meaning of Organising:
Organising is a “process of defining the essential relationships among people, tasks
and activities in such a way that all the organisation’s resources are integrated and
coordinated to accomplish its objectives efficiently and effectively”. — Pearce and
Robinson

Organising is, thus:

(i) A Structure, and

(ii) A Process.

As a structure:
Organising is a set of relationships that defines vertical and horizontal relationships
amongst people who perform various tasks and duties. The organisational task is
divided into units, people in each unit (departments) are assigned specific tasks and
their relationship is defined in a way that maximises organisational welfare and
individual goals. The relationship amongst people is both vertical and horizontal

As vertical relationships, the authority-responsibility structure of people at different

levels in the same department is defined and as horizontal relationships, authority-
responsibility structure of people working in different departments at same levels is
defined.

Organisation structure specifies division of work and shows how different functions or
activities are linked; to some extent it also shows the level of specialisation of work
activities. It also indicates the organisation’s hierarchy and authority structure, and
shows its reporting relationships. — Robert H. Miles

Organising as a structure is a network of relationships (authority-responsibility

structure) amongst all those who are part of the organisation, working at any level in
any department. It defines relationships between jobs at various levels and people
working at those jobs. It emphasises more on positions than people.

As a process:

While the structure designs the system and its sub-systems, process defines the way
this structure is designed. Structure is the static concept that establishes
relationships amongst various components of the organisation. It first designs the
component and then establishes relationships amongst these components.

These relationships are by and large permanent. They do not change frequently
unless disturbed by external environmental forces. Process is the dynamic concept
that redefines the structure whenever required. It defines change in the system over
time.

While the structure defines how the work of the organisation will be divided into
various positions, groups and departments, process defines the sequence of which
the structure is designed. It defines relationships amongst people in such a way that
organisational goals are achieved efficiently.

Process of Organising:
The process of organising involves the following steps:

(i) Determination of Objectives:

Every organisation is established for some objective or goal. Various tasks are
determined to achieve this goal. For example, if the organisation is established to
export goods, it determines the nature and type of goods to be exported, sources
from where raw material will be obtained, countries where goods will be exported, co-
ordinate with foreign buyers etc. Determining the workload of the organisation is the
first step in the process of organising.

(ii) Division of Activities:

Since one person cannot manage all the activities, total task is broken into
smaller units and assigned to members. Work is assigned according to
qualification and ability of every person.
(iii) Grouping of Activities:
After the work is assigned to people, those performing similar activities are grouped
in one department. Various departments like sales, finance, accounting etc. are filled
with people having different skills and expertise but performing similar activities.
Grouping of activities into departments is called departmentalisation and every
department is governed by a set of rules, procedures and standards.

(iv) Define Authority and Responsibility:

Every department is headed by a person responsible for its effective functioning.
Departmental heads are appointed to carry out the activities of their respective
departments. It is ensured that competence of departmental head matches job
requirements of the department.

Every head has authority to get the work done from his departmental members. He
delegates responsibility and authority to members of his department. This creates a
structure of relationships where every individual knows his superiors and
subordinates and their reporting relationships.

(v) Co-Ordination of Activities:

When departments work for their objectives, there may develop inter-departmental
conflicts which can obstruct the achievement of organisational goals. For example,
finance department wants to cut the costs but the marketing department needs
additional funds to market its products; this conflict can be resolved through co-
ordination so that all departments share the common resources optimally. Work can
be coordinated by defining relationships amongst various departments and people
working at different positions.

(vi) Reviewing and Re-organising:

There is constant appraisal of the organising process so that changes in the structure
can be made consequent to changes in the environmental factors. Constant
appraisal and re-organisation is an integral part of the organising process.

Importance of Organising:
Organising is important for the following reasons:
(i) Facilitates Administration:
Top managers cannot perform all the organisational tasks as they will be
overburdened to concentrate on strategic matters. It is essential that part of the
workload is shared by middle and lower level managers. Top executives will be
relieved of managing routine affairs and concentrate on effective administration.

The basic elements of organising (division of work, grouping of activities, distribution

of authority and coordination) facilitate better administration by the top management.

(ii) Growth and Diversification:

A well-organised institution is adaptive to change and responsive to growth and
diversification. It can multiply its operations.

(iii) Creates Synergies:

Division of work provides the benefits of synergies, that is, total task achieved by a
group of people is more than the sum total of their individual achievements. People
coordinate their tasks in the same and different departments. This gives the benefit of
‘one plus one makes eleven.’

(iv) Establishes Accountability:

When every person knows his superiors and subordinates, the organisation can
function efficiently. Establishing limitations in the area of operations defines people’s
accountability to their immediate boss which gears the organisation towards its
broader goals.

(v) Optimum Use of Technology:

It is the age of technological developments. Organisations not having well-developed
technology will not be able to compete in the market. Well-organised structures
enable the organizations to optimally use and update their technology and remain
competitive in the dynamic market conditions.

(vi) Facilitates Communication:

Communication is the essence of organisation. Efficiency of organisation depends
upon how well organisational members communicate with each other. A well-
designed system of communication (vertical and horizontal) is facilitated through
effective organising efforts of top executives.

(vii) Facilitates Creativity:

Creativity means creating something new. It develops new ways of doing the things.
A sound organisation enables the top management to improve the ways of doing
things by delegating routine affairs to people down the scalar chain. It creates a
sense of achievement amongst managers that provides moral boost for further
creative thinking.
(viii) Improves Inter-personal Relationships:
A sound organisation structure ensures that workload is divided into well-defined jobs
and assigned to people according to their abilities and skills. Placing the right person
at the right job ensures job satisfaction and morale boost of employees. This
improves inter-personal relationships amongst people working in the organisation.

(ix) Facilitates Coordination:

Well-defined objectives and plans can fail if organisational activities are not
coordinated in a unified direction. A well designed organisation structure promotes
order and system in its activities. It coordinates work of people at different levels in
different departments.

11. WHAT IS STAFFING AND ITS IMPORTANCE?

Staffing is the process of hiring eligible candidates in the organization or company for
specific positions. In management, the meaning of staffing is an operation of recruiting
the employees by evaluating their skills, knowledge and then offering them specific job
roles accordingly.

Functions of Staffing

1. The first and foremost function of staffing is to obtain qualified personnel for
different jobs position in the organization.
2. In staffing, the right person is recruited for the right jobs, therefore it leads to
maximum productivity and higher performance.
3. It helps in promoting the optimum utilization of human resource through various
aspects.
4. Job satisfaction and morale of the workers increases through the recruitment of
the right person.
5. Staffing helps to ensure better utilization of human resources.
6. It ensures the continuity and growth of the organization, through development
managers.

Importance of Staffing

Efficient Performance of Other Functions

For the efficient performance of other functions of management, staffing is its key.
Since, if an organization does not have the competent personnel, then it cannot
perform the functions of management like planning, organizing and control functions
properly.

Optimum Utilization of Human Resources

The wage bill of big concerns is quite high. Also, a huge amount is spent on
recruitment, selection, training, and development of employees. To get the optimum
output, the staffing function should be performed in an efficient manner.

Development of Human Capital

Another function of staffing is concerned with human capital requirements. Since the
management is required to determine in advance the manpower requirements.
Therefore, it has also to train and develop the existing personnel for career
advancement. This will meet the requirements of the company in the future.

Building Higher Morale

The right type of climate should be created for the workers to contribute to the
achievement of the organizational objectives. Therefore, by performing the staffing
function effectively and efficiently, the management is able to describe the significance
and importance which it attaches to the personnel working in the enterprise.

12. DEFINE LEADERSHIP AND STYLES OF LEADERSHIP?

Definition
Leadership is defined as the action or an act of guidance of leading a group of
people or an organisation. For example,- what a pastor does in his state, a
commander does in the play area, the supervisor needs to do the same in his
association. Leaders in varying backgrounds possess certain essential
characteristics. Leaders ought to have the option to set up contact with their
equivalents, manage their subordinates and guide them, intervene in clashes,
resolve issues by weighing different other options, apportion scant assets
appropriately and face challenges and activities.

Styles of Leadership

Autocratic Style

The expression generally illustrative of an imperious authority style is "Do as I state."

Typically, a dictatorial pioneer accepts that the individual is the most astute individual
at the table and knows more than others. They settle on all the choices with little
contribution from colleagues. This order and control approach is regular with initiative
styles of the past, yet it doesn't hold a lot of importance with the present ability.
Saying this doesn't imply that that the technique may not be fitting in specific
circumstances. For instance, you can plunge into a totalitarian authority style when
choices of priority are undertaken on the spot, and you have the most information
about the circumstance, or when you're managing unpracticed and new colleagues.
There's no ideal opportunity to sit tight for colleagues to pick up experience with their
job.

Affiliative Style

An expression frequently used to portray this sort of administration is

is one where the leader gets very close with individuals. A pioneer rehearsing this
style focuses on and upholds the feelings of colleagues. The leaders endeavour to
open up a pipeline that associates the person in question to the group. In the
affiliative leadership style, the leader pays attention to the employees and supports
the emotional needs of the team members. It's especially helpful, for instance, in
smoothing clashes among colleagues or consoling individuals during seasons of
pressure.
Laissez-Faire Style

The laissez-faire leadership style is the exact opposite of the Autocratic style
of leadership. This leadership style involves the least amount of oversight,
where the leader lets the people swim with the current of their issues. On the
surface, the laissez-faire leader may appear to trust individuals but taken to the
extreme situation; an uninvolved leader is aloof. While it's beneficial for a
leader to give people opportunities to spread their wings, but with the lack of
direction, individuals may unwittingly drift away in the wrong direction, away
from the monthly or crucial yearly goals of the organisation.

The Laissez-Faire Style is best suitable for highly skilled and experienced employees
who happen to be motivated and self-starters. To be most effective with the laissez-
faire style, leaders should monitor team performance and provide them with regular
feedback.

Importance of Leadership

Leaders Provide Task Support:

Leaders uphold the supporters by gathering the authoritative assets and helping
them achieve their undertakings as per principles of execution.

Building the Team Spirit:

No individual can work alone. Leaders create cooperation among supporters to work,
aggregate and arrange their exercises with authoritative exercises and objectives a
leader functions as chief of the group.

Motivation:
Leaders spur the workers to take up occupations that they, in any case, may not be
eager to work out.

Provides Feedback:
At the point when individuals run after very much characterised targets, they need a
steady input of their presentation, which helps in accomplishing their objectives
adequately. Leaders give them this criticism.

Introducing Change:
Successful leaders can persuade individuals about the need and advantages of
authoritative change. The change cycle can, consequently, be easily completed.

Maintain Discipline:
Leadership is an incredible impact that upholds discipline in the association beyond
what formal principles and guidelines can. Individuals will be submitted and faithful to
rules and guidelines if their chiefs believe in them.
 Features of Leadership

A. Influence other people's behaviour: Leadership is the ability of a person to

persuade others to behave in a certain way to achieve a common objective or
goal, resulting in willing cooperation.
B. Group Interaction: This is a group interaction in which two or more people
are present and converse. A leader must have followers to be a leader.
C. Social interaction between the leader and those who follow. The interaction
between the leader and the followers determines the success of the
organisation's goals.
D. Achieving Shared Organisational Goals: A leader's role in an
organisation is to guide employees in achieving shared goals. The leader
brings people and their efforts together to achieve common goals.
E. Continuous Procedure: Leadership is a continuous process. A leader
must constantly oversee and supervise their team members to ensure that
everyone is working toward the same goals and not deviating from them.

13. DEFINE PERFORMANCE APPRAISAL?

Performance appraisal is defined as a process that systematically measures
an employees personality and performance usually by managers or
immediate supervisors against the predefined attributes like skillset,
knowledge about the role, technical know-how, attitude, punctuality and so on.

Performance appraisal has many names across organizations, some call

it performance evaluation, some prefer performance review, merit rating,
annual reviews, etc.

This process is carried out to identify the inherent qualities of an employee

and the abilities and level of competency of an employee for their future
growth and development and that of the organization they are associated
with. It aims at ascertaining the value of an employee and his/her offering to
the organization.

Performance appraisal helps managers and supervisors place the right

employee to do the right job, depending on the skill set they possess. Without
an ounce of doubt, every organization needs a robust performance appraisal
system.

There are various methods that are used by managers and supervisors to
evaluate employees based on objective and subjective factors, however, it
can get a bit tricky, but to effectively evaluate an employee both factors are
essential.

Objectives of performance appraisal

 Following are the objectives to conduct performance appraisal year after
year:

 This is an essential first step towards promoting an employee, based on the

subjective and objective factors- performance and competency.
 To identify the training and development needs of an employee.
 To provide confirmation to those employees who were recently hired and
are on their probation period.
 To take a concrete decision what should be the percentage of hike in the
salary of an employee based on the work done by them.
 To encourage a proper feedback system between the manager and
employees.
 To help employees understand where they stand in the current year and
what is the scope of improvement.

Performance appraisal process

Step 1: In most organizations, the performance appraisal process means

evaluating an employee every 6 months or one year for the period an
employee has continually worked with the organization. In modern times, the
Human Resources department sends out an employee survey for them to fill
out to collect data related to their engagement and satisfaction levels.

Step 2: The employee’s immediate manager or supervisor will then evaluate

the quality of the employee’s performance based on the work done in the
previous year and then meet face-to-face to discuss the facts and figures.

Step 3: The feedback received from the survey can be kept anonymous. This
feedback can be analyzed real-time by using
QuestionPro’s Workforce platform, that measures, analyzes and activates
data to get actionable insights.

For probationary employees, the probation period usually lasts between three
to six months. Their evaluation is based on whether they have come at pace
with the work and culture of the organization and if they are ready to take up
more responsibilities.

Performance appraisal methods

There are 5 performance appraisal methods. Using one of these methods for
performance appraisal can help organizations gain partial information.
However, combining one or more methods will lead to extracting better
information and accurate data. It is one thing to collect data and another to do
something actionable with it.

1) Self-evaluation: This is an important way to get insights from the

employees, evaluate themselves. You need to first get information about
how an employee evaluates himself/herself, after conducting this
 evaluation the management has an opportunity to fairly appraise an
employee based on their thoughts.
2) 360-degree appraisal system: 360-degree feedback, an employee is
evaluated by his/her supervisor/manager, peers, colleagues, subordinates
and even management. Inputs from different sources are considered
before talking to the employee face-to-face. In this process, each
employee is rated according to the job done based on the job descriptions
assigned to them.
3) Graphics rating scale: This is one of the most commonly used
methods by managers and supervisors. Numeric or text values
corresponding to values from excellent to poor can be used on this scale.
Members of the same team who have similar job descriptions can be
parallelly evaluated using this method. This scale should ideally be the
same for each employee.
4) Checklists: The evaluator is given a checklist of several behaviors,
traits, attributes or job description of the employee who needs to be
evaluated. The checklist can contain sentences or simply attributes and
the evaluator thus marks the employee based on what describes the job
performance of the employee. If the evaluator believes that the employee
has certain traits it is marked positive otherwise it is left blank.
5) Essay method: This is also known as “free form method”. As the
name suggests, it is a descriptive method which elaborates performance
criteria. A major drawback of this method is to keep biases away.

Advantages of performance appraisal

1) A systematic performance appraisal method helps the

managers/supervisors to correctly identify the performance of employees
and also highlight the areas they need improvement in.
2) It helps the management place the right employee for the right kind of job.
This is a win-win situation for both the employee and the organization.
3) Potential employees who have done some exceptional work are often
offered a promotion on the basis of the result of performance evaluation.
4) This process is also effective in determining the effectiveness of the
training programs conducted by the organization for the employees. It can
show managers how much an employee has improved after the training.
This will give actionable insights to the managers on how to improve the
programs.
5) It creates a competitive environment amongst the employees in a good
way. Employees try to improve their performance and get better scores
than their colleagues.
6) Managers use this as a platform to get first-hand feedback from
employees to talk about their grievances and how to handle them.
7) Keeping year on year record of appraisals gives managers a very good
idea what is the pattern of the growth rate of employees and which ones
have a declining rate and what actions need to be taken to improve it.

Disadvantages of performance appraisal

 If the attributes being used in this method are not correctly defined the
data collected won’t be useful.
 Sometimes biases can be an issue in this system.
 Some objective factors can be vague and difficult to pin down. There are
no known scientific methods to measure that.
 Managers sometimes are not qualified enough to assess the abilities of
the employees, thus be detrimental to the growth of an employee.

14. DEFINE THEORY OF MOTIVATION AND ITS IMPORTANCE. ALSO

TELL THE ROLE OF MANAGER IN IT.
Motivation is an action or word which influences others in terms of culture, work,
behaviour, etc. Motivation is derived from the word motive, which means a need with
required satisfaction. The role of motivation is very high in any organisation or
workplace. Motivation can benefit in different ways. This motivation is of two types.

If the motivation has been done or happened by another person or a third party, it is
known as extrinsic motivation. Because it happened with the help of outside forces.
On the other hand, if the motivation is done from the inside of the mind or soul and
one gets motivated by themselves, it is called intrinsic motivation. Let us discuss the
importance of motivation, its significance, and its benefits to the employees and the
organisation in detail.

Motivation and its Importance

The Significance of motivation can't be explained in a page or more because it
changes the complete environment of the organisation. For instance, if a small kid
was afraid to write 10 tables as homework, the mother tries to motivate the kid that
he is strong enough to write, etc. In the same way, motivation plays a vital role in the
organisation.

The importance of employee motivation may benefit the organisation in many ways.
Let see some of the advantages of employee motivation to the firm as given below-

i. Improves Performance Level:- The motivation provided in the

organisation gives a special spirit and energy to work more. Also, they get
satisfied with the proper appraisal of the work they have done. All these factors
will improve the performance level of an employee.
ii. Reduction in Resistance to Change:- even though the monetary
benefits are countable, if the company atmosphere and colleagues, recognition
is encourageable and gets motivated, no employee wants to change the
organisation. This leads to a reduction in resistance to change in the company.
iii. Healthy Corporate Image:- The importance of motivation can also be
measured in terms of corporate image. If the motivation and inspiration provided
in the organisation were proper personnel may create a healthy corporate image
in the market.
iv. Productive Utility of Resources:- another outcome that explains the
importance of motivation is the productive utilisation of resources. If the
motivation is good in the organisational environment, the relationship will be
smooth. Then everyone can share their strengths and weaknesses. This results
in making use of all the resources optimally.
v. Increased Efficiency and Output:- One of the best advantages of
employee motivation to the firm is the increase in the level of efficiency and
 output. As the resources are utilised optimally, the output may get increased
than before. As already all the employees are working in satisfying conditions,
they put their maximum efforts to give maximum efficiency.
vi. Achievement of Goals:- All the advantages of employee motivation
to the company are interrelated. If the efficiency and output were increased, this
is what achieves the goal of an organisation. The primary purpose of each
organisation is to provide an effective output that earns a high income in return.
vii. Development of Friendly Relationships:- The significance of
motivation results in the development of friendly relations between the
employees and a smooth rap between the superior and subordinates.
viii. Stability in WorkForce:- as the reduction in resistance to change
occurs due to the role of motivation, and it maintains stability in the workforce. As
the employees are loyal to the organization, they can produce continuous stable
work.
ix. Combines Ability with Willingness:- Work or a task can be
achieved in two ways. One is the ability, and the other one is the willingness to
do. If both qualities were merged due to the importance of inspiration, the
effectiveness of output would be infinite.
x. Easier Selection:- the selection process also becomes easier with
the help of the significance of importance.
xi. Development of Leaders:- If the management understands the
importance of motivation in education, every employee can try to upgrade his
qualification and skills which leads to the development of more and more leaders
or high-level employees.

Maslow’s Hierarchy of Needs Theory

Human behaviour is goal-oriented and motivation causes this behaviour. Motivation

helps a person to understand his needs and tackle his needs purposely. The need
hierarchy model is the best way to understand human motivation factors and the
influence of the same.

Abraham Maslow had proposed the hierarchy of needs theory in 1943 based on an
assumption that there is a hierarchy of five needs in human life. The urgency and
importance may vary from person to person.

The needs are classified into five categories as per the theory in an order to
understand their importance and relevance to humans.

Physiological Needs: The needs which are important for human survival and
maintenance are called Physiological needs. They are considered basic
needs or amenities such as shelter, food, clothes, water, air, etc.

Safety Needs: The needs which help a human feel protected and secured
are called the safety needs of a human. These needs could be physical
safety, emotional safety, environmental safety or even protection of life and
family.

Social Needs: Humans are called Social animals as they need love and
affection. There is always a need for care from family and friends.
 Esteem Needs: There are two factors to esteem needs. Esteem needs could
be internal or external. Internal esteem needs confidence, freedom, self-
respect, etc. External esteem needs attention, recognition, power, etc.

Self Actualization Needs: This need includes a certain urge to become what
you think you have the potential to become. This need is directed more
towards the growth and success of an individual. These types of needs are
insatiable needs. The more knowledge a person gains the more he believes
in his capabilities and in turn there would never be a feeling of saturation of
these types of needs.

As per the theory, Maslow believes that human needs are unsatisfactory but are the
base of motivation for humans. He has bifurcated these above needs into two
categories. The Higher-order needs and the lower-order needs. The Physiological
and safety needs are lower-order needs as they can be satisfied externally. The
other three needs are classified as higher-order needs - social, esteem and self-
actualization as they can be only satisfied internally. As an organisation or an
employer, it is important that the lower-order needs of the employees are satisfied to
promote motivation.

Implications of Maslow’s Hierarchy of Needs Theory

i. An employer needs to ensure the employees are paid enough to meet

their physiological needs and should be allotted meal times at intervals.
ii. An employer needs to ensure the employees feel they are safe,
secured and protected. For example, providing job security, insurance privileges,
retirement benefits, etc.
iii. An employer needs to ensure the employees are promoted to work as
a team and organise social events to give an opportunity to the employees to
know the team on a social level as well.
iv. An employer needs to ensure the employees are appreciated for their
contribution and good performance should receive recognition. There could be
an award ceremony held to appreciate and recognize the efforts of the
employees. A promotion or growth opportunities should be considered as well.
v. An employer needs to ensure the employees are given opportunities
to upskill and move up the ladder in the organisation by accepting more
responsibilities.

Limitations of Maslow’s Hierarchy of Needs Theory

i. The theory is based on an assumption that the needs of all individuals

are the same and that the motivation driving factors would be the same as well in
every individual. An individual is always driven by the most important and
powerful unsatisfied need, which could be different for every individual.
ii. The theory is not empirically supported, we cannot apply the same
theory for every employee in an organisation.
 iii. The theory is not applicable to all professions or professionals. Even if
an artist’s physiological needs are not met the artist would still strive for
recognition.
Benefits of Motivated Employees

Inspiration is a single word that has a lot in it. The importance of inspiration can be
understood only with experiences only. It can't be explained in a few lines. Along with
the organisation, their employees will also get several benefits with motivation. They
are,

i. Reduction of Employee Turnover and Absenteeism

ii. Better Industrial Relations
iii. Indifferent Attitudes can be Changed
iv. Facilities change
v. Job satisfaction is achieved.
vi. Comfortable working conditions
vii. Reduction of changing tendency.
viii. Gains qualitative experience. Etc.

15. WHAT IS CONTROLLING, ITS IMPORTANCE AND PROCESS? ALSO

ELABORATE DIFFERENT CONTROLLING TECHNIQUES.
Definition: Controlling is a primary goal-oriented function of management in an
organisation. It is a process of comparing actual performance with the organisation’s
established standards to ensure that activities are being carried out according to
plans and, when they are not, taking corrective action.

Each manager must monitor and evaluate the activities of their subordinates. This
helps the manager to take corrective action within the specified time frame to avoid
unforeseen events or losses to the company.

Control is performed at the lower, middle and upper levels of management.

Features of Controlling

1. An effective controlling system has the following characteristics:

2. It helps in achieving the company’s goals.
3. It enables optimal use of resources.
4. It evaluates the accuracy of the standard.
5. It also ensures discipline and order.
6. It motivates employees and boosts morale.
7. Ensures future planning by revising standards.
8. Improves the overall performance of an organization.
9. It also minimizes errors.
Controlling and planning are interrelated because controlling provides important input
for the next planning cycle. Controlling is a backwards-looking function that returns
the management cycle to planning. Planning is a forward-looking process because it
deals with forecasts of future conditions.
Process of Controlling

The control process includes the following steps,

 Setting standards: This means setting a goal that must be achieved in order to
meet the organisation’s objectives.
Standards specify the criteria for performance. Control standards are divided into
quantitative and qualitative standards. Quantitative standards are expressed in terms
of money. Qualitative standards, on the other hand, include intangible things.

 Measurement of actual performance: the actual performance of the employee

is measured against the targets. As management levels increase, measuring
performance becomes difficult.
 Comparing actual performance to standard: This involves comparing the
degree of variance between actual performance and the standard.
 Taking corrective action: They are initiated by the manager who corrects any
deficiencies in the actual performance.
The controlling process thus regulates the company’s activities to ensure that actual
performance is in line with the standard plan. An effective controlling system enables
managers to avoid circumstances that cause damage to the company.

Types of Controlling

There are three types of control, namely,

1. Feedback control: this process involves gathering information about a

completed task, evaluating that information, and improving the same type of task
in the future.
2. Concurrent control: it is also called real-time control. It examines each problem
and investigates it to take action before a loss occurs. Example: control chart.
3. Predictive/forward control: this type of control helps to anticipate problems
before they occur. Therefore, action can be taken before such a circumstance
occurs.
In a constantly changing and complex environment, controlling is an integral part
of the organization.
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Advantages of Controlling

 Saves time and energy

 Allows managers to focus on important tasks.
 Allows for better use of management resources.
 Helps managers take timely corrective action.
 Managers can delegate tasks so that routine tasks can be completed by
subordinates.

Techniques of Controlling

Technique # 1. Statistical Control Reports:

These types of reports are prepared and used in large organisations. Reports are prepared in
quantitative terms. Then, the variations from standards are easily measured. In this way,
control is exercised by the management. A periodical report of sales volume is an example of
statistical control reports.

Technique # 2. Personal Observation:

Using this technique, the manager personally observes the operations in the work place. The
manager corrects the operations whenever the need arises. This is the oldest method of
control. Employees work cautiously to get better performance. The reason is that they are
personally observed by their supervisor.

Personal observation is a time-consuming technique and the supervisor does not have
enough time to afford personal observation. Personal observation technique is disliked by the
honest and efficient employee. The observer may be biased in performance evaluation.

Technique # 3. Cost Accounting and Cost Control:

Profit of any business depends upon the cost incurred to run a business. Profit is maximised
by reducing the cost of operation or production, so, the business concern gives much
importance to the cost accounting and cost control. Management uses a number of systems
for determining the cost of products and services. The cost accounting procedures and
methods differ from one industry to another according to the nature of industry. They are used
for effective cost control and cost reduction.

Technique # 4. Break-Even Analysis:

It is otherwise called as – ‘cost volume profit analysis.’ It analyses relationship among cost of
production, volume of production, volume of sales and profits. Here, total costs are divided
into two i.e., fixed cost and variable cost. Fixed cost will never change according to the
changes in the volume of production. Variable cost varies according to the volume of
production. This analysis helps in determining the volume of production or sales and the total
cost which is equal to the revenue.

The excess of revenue over total cost is termed as profit. The point at which sales is equal to
the total cost is known as ‘Break Even Point’ (BEP). In other words, the break-even point is
the point at which there is no profit or loss.

Technique # 5. Special Control Reports:

This report may or may not contain statistical data. Using this technique, a particular
operation is investigated at a specified time for a particular purpose. This is done according to
the requirements of management but not in regular basis. The deviations from standards are
paid additional attention and corrective action is taken. Handling complaints of damage is an
example of this type of control technique.

Technique # 6. Management Audit:

Management audit is an independent process. It aims at pointing out the inefficiency in the
performance of management functions such as planning, organising, staffing, directing,
controlling and suggesting possible improvements. It helps the management to handle the
operations in an effective manner. Management audit is not a compulsory audit and not
enforced by law.

Technique # 7. Return on Investments:

Return on investment is also known as return on the capital employed. Using this technique,
the rate of profitability is identified by the management. The amount of profits earned by the
company is different from the rate of profitability of the company.

The difference between the cost and revenue is profit. The rate of profitability is the earning
capacity of the company. Return on investments is calculated by dividing the net profit with
the total investment or capital employed in the business organisation.

Technique # 8. Internal Audit:

Internal audit report is prepared at regular intervals, normally by months. It covers all the area
of operations. This report is sent to the top management. The management takes steps to
control the performance on the basis of the report. Internal audit report emphasises the
degree of deviations from the expectations. It is very useful to attain the objectives on timely
basis.

Technique #9. Responsibility Accounting:

The performance of various people is judged by assessing how far they have achieved pre-
determined objectives. The objectives are framed section-wise, department-wise and division-
wise and assessed similarly. Costs are allocated department-wise rather than product-wise.
Each department, section or division, is fixed as responsible centres. An individual is
responsible for his area of operation in a particular section, department or division.
Technique # 10. Managerial Statistics:

Using the managerial statistics technique, the manager compares the past results with current
results in order to know the causes for changes. These are very useful to the management in
planning and decision-making for the future. According to Kenit O. Hauson, “Managerial
statistics deal with data and methods which are useful to management executives in planning
and controlling of organisation activities.”

Technique # 11. Performance Evaluation and Review Technique (PERT):

This technique is used to solve the problem which crops up once or a few times. It is not
useful in tackling the problems which come up continuously. The PERT was developed by
Booz, Allen and Hamilton. They used this technique in Polaris Submarine Project under the
sponsorship of U.S. Navy. The PERT technique is very useful for construction projects,
publication of books etc.

Technique # 12. Critical Path Method (CPM):

This technique also follows the principle of PERT. The technique concentrates on cost rather
than duration. CPM assumes that duration of every activity is constant. Time estimate is
made for each activity. CPM technique was developed by a group of employees of DU de
Nemours Company.

Technique # 13. Production Control:

The production control technique is necessary for smooth functioning of an organisation.

Production control involves planning of production, determination of stock level of raw
materials, finished goods, selection of process, selection of tools in production, etc.

According to Spreigel, “Production control is the process of planning in advance of operations,

establishing the exact route of each individual item, part or assembly, setting, starting and
finishing dates for each important item, assembly and the finished product and releasing the
necessary orders as well as initiating the required follow up to effectuate the smooth
functioning of the enterprise.”

Technique # 14. External Audit Control:

External audit is a must to all the joint-stock companies under the purview of statutory control.
So, it is otherwise known as statutory audit control. This type of audit protects the interests of
the shareholders and creditors of the company.

The external auditor certifies that all the books of accounts are kept as per the requirements
of law and supplies all the necessary information for the purpose of audit and the balance
sheet presents a true and fair view. The external audit is conducted by the qualified auditor.
The qualifications of such type of auditor are fixed by the Central Government.
Technique # 15. Standing Orders:

Standing order covers rules and regulations, discipline, procedure and the like. Rules and
regulations are framed according to the requirements of administration. For example, no
employee should leave the office before office time without getting prior permission in writing.

Technique # 16. Budgetary Control:

The preparation of budget is also one of the control techniques followed by the management.

IMPORTANT THEORIES

I. HENRI FAYOL THEORY OF MANAGEMENT

Henri Fayol is widely regarded as the father of modern management. His management
theories, mostly developed and published in the early 1900s, were a major influence on the
development of industrial management practice throughout the twentieth century.

His ideas were developed independently of other popular management theories of the time,
such as Human Relations or Elton Mayo’s scientific management theories — although they
drew similar conclusions about the importance of worker wellbeing to productivity.

Fayol’s school of thought had a stronger emphasis on the role of management in an

organization, when compared with its contemporaries in the field of organizational
psychology. It’s associated with an “industrial” approach to business, including cog-like
repleaceable workers and a rigid hierarchy with strong top-level command.

Henri Fayol's 14 Principles of Management :

Henri Fayol believed that “the soundness and good working order of the body
corporate depend on a certain number of conditions termed...principles, laws, [or]
rules.” In turn, he produced 14 that are “flexible and capable of adaptation to every
need,” but require “intelligence, experience, decision, and proportion.” Given that
“without principles one is in darkness and chaos,” Fayol hoped that these principles
could be relied upon and/or used for future study.

Otherwise, it’s important to note that what Fayol offers are simply “some of the
principles of management which [he has] most frequently had to apply.” He states
that “there is no limit to the number of principles of management” and “every rule or
managerial procedure which strengthens the body corporate or facilitates its
functioning has a place among the principles.”
With the above in mind, the following describes each of the 14 components of Fayol’s
administrative principles approach.

1. Division of work:

 Specialization helps to “produce more and better work with the same effort” by
reducing “the number of objects to which attention and effort must be directed.”

2. Authority:

 “Authority is not to be conceived of apart from responsibility, that is apart from

sanction—reward or penalty—which goes with the exercise of power”; in other
words, having and exercising authority comes with responsibility and
consequences.
 “Useful actions [of personnel] have to be encouraged and their opposite
discouraged.” Any sanction delivered “must take into account the action itself,
the attendant circumstances, and potential repercussions” and requires “high
moral character, impartiality, and firmness.”

3. Discipline:

 “Obedience, application, energy, behavior, and [the respecting of agreements]…

is absolutely essential for the smooth running of business.” That being said, “the
state of discipline of any group of people depends essentially on the worthiness
of its leaders”; Fayol states that any problem with discipline “mostly results from
the ineptitude of the leaders.”
 Agreements between management and personnel should “be clear and, as far
as possible, afford satisfaction to both sides.”

4. Unity of command:

 “For any action whatsoever, an employee should receive orders from one
superior only… Should it be violated, authority is undermined, discipline is in
jeopardy, order disturbed, and stability threatened.”
 This principle is emphasized as being especially important.

5. Unity of direction:

 A group of activities with the same objective should have one plan and one
person in charge. This is “essential to unity of action, coordination of strength,
and focusing of effort.”

6. Subordination of individual interests to the general interests:

 Everyone should work in the combined best interests of everyone involved rather
than in their own best interests.
 Managers can influence positive behavior through: “firmness and good
example,” “agreements as fair as is possible,” and “constant supervision.”

7. Remuneration:

 Remuneration is dependent on a number of factors, but “it should be fair and, as

far as is possible, afford satisfaction both to the personnel and firm.”
 8. Centralization:

 “The question of centralization or decentralization…is a matter of finding the

optimum degree for the particular [decision/task]” and the capacity and/or
preferences of the manager.

9. Scalar chain (line of authority):

 Authority should move from the top down in order to maintain unity of command,
but lateral communication is possible if superiors are aware of and support it.
 The line of authority should be as short as possible.
 “It is an error to depart needlessly from the line of authority, but it is an even
greater one to keep to it when detriment to the business ensues.”

10. Order:

 Materials must have “a place appointed for each thing and each thing must be in
its appointed place.” Places should also be “suitably arranged” and “well
chosen.” This is to avoid “useless handling, lost time, [and] risk of mistakes.”

 In addition, there should be “an appointed place for every employee” and each
employee is suitable for their place.
 Charts or plans are recommended in order to organize materials and people.

11. Equity:

 Managers should “strive to instill [a] sense of equity” throughout their chain of
command and use “equity and equality of treatment” when dealing with
employees.

12. Stability of tenure of personnel:

 “Instability of tenure is at one and the same time cause and effect of bad
running.” In the case of personnel, they should be in a position long enough to
have time to “render worthwhile service”; if not, “the work will never be properly
done.” But, like all other principles, it’s “a question of proportion”; tenure can also
be too long.

13. Initiative:

 “It is essential to encourage and develop [initiative],” but to also ensure “respect
for authority and for discipline.” “Other things being equal…a manager able to
permit the exercise of initiative on the part of subordinates is infinitely superior to
one who cannot do so;” and

14. Esprit de corps:

 “Harmony, union among the personnel of a concern, is great strength in that

concern” and “effort…should be made to establish it.
 II. F.W. TAYLOR THEORY

The Scientific Management Theory is one of the earliest theories of workplace

management. It was named after Fredrick Winslow Taylor, an American
mechanical engineer who applied engineering principles to factories. He started
the scientific management movement with his associates to study how work was
performed and how it affected productivity. It eventually came to be known as
Taylorism, after the theorist himself.

During the early years of his career, Taylor studied the working patterns in
manufacturing industries. He found that there are several issues in industrial
management that previous management theories don’t address. In Taylor’s seminal
work The Principles of Scientific Management, he argued that making people work
hard wasn’t as effective as optimizing the way they worked. In other words, he
proposed that optimizing jobs would increase productivity. Taylor was later dubbed
the ‘Father of Scientific Management’.

The Meaning Of Scientific Management

Taylor’s Scientific Management analyzes and synthesizes workflows. He introduced
a scientific approach to productivity, which meant an increase in efficiency can lead
to higher productivity and profits. He also believed that there were universal laws that
governed efficiency and were independent of human judgment.

The Principles Of Scientific Management

Taylor’s Scientific Management Theory rejected the traditional philosophy related to

managing work and employees. Moving beyond the rule-of-thumb techniques of
managing the workforce, Taylor proposed his revolutionary ideas in the form of
several fundamental principles.

1. Emphasis On Science

Taylor believed that all industries should adopt scientific techniques for essential
management decisions instead of relying on outdated methods. Earlier, the rule-of-
thumb method, which developed as a result of experience and personal judgment
instead of proper technical research, dominated the workplace. Scientific management
solved the challenges posed by the conventional methods as it:

 Emphasized Data Collection, Analysis And Standardizing Procedures

 Used Facts And Scientific Ways To Address Challenges And Make Decisions
 Moved Away From Personal Judgment, Which Was Likely To Be Riddled With Biases.

2. System Of Selection And Training

A scientific system of selecting and tailoring an organization’s workforce can reduce

the chances of hiring underperforming employees. In other words, a business should
hire the right employees for the job, otherwise, it may lead to inefficiency. Therefore,
organizations must:

 Be Vocal About Requirements (Physical, Mental And Others) For Employees For
Each Job
 Select And Train Employees, And Help Them Meet Job Requirements
 Offer Opportunities To Improve Performance Levels, Efficiency And Prosperity.

3. Cooperation, Not Individualism

Cooperation between managers and employees is of great significance. Instead of internal

competition, businesses should make an effort toward collaboration. This change in
workplace dynamics can lead to increased profits as people will work together to maximize
efficiency. A few things to note are:

 Everyone Should Consider One Another To Be An Important Contributor In The

Organization
 Efforts Should Be Made To Reduce Any Friction Between Employees And Employers
 Management Should Understand Employee Requirements And Maintain Harmony In
Their Relationships

4. Mental Revolution

Taylor realized that there should be a complete change in outlook, both from
management and employee, to improve organizational efficiency. Change in attitude and
behavior towards each other is instrumental in rolling things out in a time-efficient
manner. Here’s how employees and employers can change things:

 Employees And Employers Need To Recognize Each Other’s Efforts And Should
Work Toward A Mutually Beneficial Relationship
 Managers Should Use Scientific Management Techniques To Improve The Working
Conditions Of Employees; They Should Increase Pay For Increased Output
 Employees Should Utilize Available Resources And Perform Their Jobs With
Attention And Dedication; Increased Remuneration Should Act As An Incentive To
Boost Productivity

5. Optimum Output

An organization’s effectiveness also relies on the personal interests, skills and abilities of
employees. Implementing, training and learning best practices will maximize output. In
addition to training, organizations should:

 Follow The Principle Of Maximum Output Instead Of Restricted Output And Focus On
Maximizing Prosperity For Both Managers And Employees
 Help Employees Utilize Available Resources To Gain Higher Profits And Wages
 Help Employees Attain The Highest Level Of Efficiency By Recognizing Their Strengths

Therefore, the Scientific Management Theory made several significant contributions

and revolutionized the development of management practice.