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MANAGEMENT
BOOKLET
FOR

[Link] II

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CONTENTS

Motivation & its Theory 03

Characteristics of Self-Actualization 04
Herzberg theory 05
Theory X & Theory Y 06
Business Writing Principal or 9 Cs 07
Barriers to Communication 08
Process/Factors of Communication/2 way of Process 09
Philosophies of Communication 10
Rational Decision Making/Delphi Technique 11
Nominal Technique 12
Problem solving / prevent a problem 13
Decision Making Process 14
Steps of Controlling/Types/phases of Controlling 15
Characteristics of a Good Control System 16
Staffing/Process of Staffing 17
Group/Types of Group 18
Stages of Group 19
Why groups are formed 20
Management & its Functions/ Functions of Organization / Management Chain 21
Henry Fayol’s principal of Management 22
Fredrick Taylor’s Scientific Management / Services made by F.T/ 23
Planning & its Process 24
Span of Management/Span of Control 25
Factors determine Span of Control 26
Break Even Analysis / CVP 27
Budget & its types 28
MBO (Management by Objectives) 29
Leadership & its Theories 30
Difference between Leader & Manager 31
Centralization & Decentralization 32
Effective Policy Making Guidelines 33
Terms: Policy, Procedure, Rules, Departmentation 34
4 Classical Theory of Management 35
Formal and informal organization 36
Delegation of Authority 37
Sources of Authority 38

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MOTIVATION

Motivation is an internal drive that activates behavior and gives it direction. The term motivation
theory is connected with the process and describes why human behavior is directed.
For example: water is motivation for thirsty, books is motivation for knowledge seeker

Types of Motivation Theories

Content Theories Process Theories

1. Maslow Need Hierarchy 1. Vroom’s Expectancy Theory
2. Herzberg’s Theory 2. Adam’s Equity Theory
3. McClelland’s Needs Theory 3. Goal Setting Theory
4. Alderfer’s ERG Theory 4. Reinforcement Theory

MASLOW’S HIERARCHY
Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory of Human
Motivation" and his subsequent book Motivation and Personality. This hierarchy suggests that
people are motivated to fulfill basic needs moving on to advanced needs.

Physiological needs
These are biological requirements for human survival, e.g. air, food, drink, shelter, clothing, sleep. If
these needs are not satisfied the human body cannot function properly. Maslow considered
physiological needs the most important as compared to other needs.

Security and Safety Needs

The needs for security and safety become primary when people want control and order in their
lives. Some of the basic security and safety needs include: Financial security, Heath and wellness,
Safety against accidents and injury.

Love and belongingness needs

After physiological and safety needs have been satisfied, the third level of human needs is social
and feelings of belongingness. Social needs include the need for love, affection, care,
belongingness, and friendship.

Esteem needs
Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence,
achievement and freedom) and external esteem needs (recognition, power, status, attention and
admiration).

Self-actualization need
This need force to become what you are capable of becoming / what you have the potential to
become. It also includes desire for gaining more knowledge, social- service, creativity. Ex: Albert
Einstein, Abdul Sattar Edhi

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CHARACTERISTICS OF SELF ACTUALIZATION NEEDS

Peak Experiences
One characterization of self-actualization is having frequent peak experiences. According to
Maslow, a peak experience involves feelings of intense ecstasy, joy, and wonder. During such
experiences, people often lose track of time and acutely feel that what they are experiencing is
important, valuable, unique, and special.

Acceptance
Another key characteristic of self-actualization is the ability to accept themselves and others as they
are. They tend to lack inhibition and can enjoy themselves and their lives free of guilt

People Are Realistic

Another major characteristic of self-actualized people is a sense of realism. Rather than being
fearful of things that are different or unknown, the self-actualized individual can view life as it
unfolds logically and rationally.

Problem-Centered
Self-actualized individuals are often motivated by a strong sense of personal ethics and
responsibility. They enjoy applying their problem-solving skills to real-world situations, and they like
helping other people improve their own lives.

Independent
Self-actualized people also tend to be very independent. They don't conform to other people's ideas
of happiness or contentment. This original perspective allows the individual to live in the moment
and appreciate the beauty of each experience.

Sense of Appreciation
Self-actualization is also marked by the ability to maintain a fresh outlook on life. Instead of seeing
everyday experiences as stale, for example, self-actualized people continue to feel a sense of awe,
wonder, and joy. They maintain a sense of gratitude for the good things in life, no matter how often
they experience those things.

Sense of Humor
Self-actualized individuals generally have a thoughtful sense of humor. They're able to enjoy the
humor in situations and laugh at themselves, but they don't ridicule or joke at the expense of
another person's feelings.

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HERZBERG’S MOTIVATION THEORY

This theory of motivation is known as a two factor content theory.

 Hygiene factors
 Motivational factors
Hygiene factors
Hygiene factors are those job factors which are essential for existence of motivation at workplace.
These do not give positive satisfaction for long-term but if these factors are absent at workplace,
they lead to dissatisfaction. Hygiene factors include

Pay & Job Security: The pay or salary should be reasonable. It must be equal and competitive to
those in the same industry in the same domain. The organization must provide job security to the
employees.

Company Policies: The company policies should not be unclear. They should be fair and clear. It
should include flexible working hours, dress code, breaks, vacation, etc.

Benefits: The employees should be offered health care plans, benefits for the family members.

Physical Working conditions: The working conditions should be safe, clean and hygienic. The work
equipments should be updated and well-maintained.

Interpersonal relations: The relationship of the employees with his peers, superiors and
subordinates should be appropriate and acceptable. There should be no conflict

Motivational factors

The motivational factors produce positive satisfaction. These factors are attached to work. These
factors motivate the employees for a superior performance. These factors are called satisfiers.
Motivational factors include

Recognition: The employees should be praised for their goals accomplished by the managers.

Sense of achievement: The employees must have a sense of it. This depends on the job.

Growth and promotional opportunities: There must be growth and advancement opportunities in
an organization to motivate the employees to perform well.

Responsibility: The employees must hold themselves responsible for the work. The managers
should give them ownership of the work.

Meaningfulness of the work: The work itself should be meaningful, interesting and challenging for
the employee to perform and to get motivated.

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DOUGLAS MCGREGOR THEORY X & Y

Douglas McGregor formulated Theory X and Theory Y on 200 accountants and engineers and
suggested two aspects of human behavior at work, or in other words, two different views of
individuals (employees): one of which is negative, called as Theory X and the other is positive, so
called as Theory Y. According to McGregor, the perception of managers on the nature of individuals
is based on various assumptions.

Theory X

 An average employee basically does not like work and tries to escape it whenever possible.
 Since the employee does not want to work, he must be persuaded, compelled, or warned
with punishment so as to achieve organizational goal
 Many employees prefer job security first.
 Employees generally dislike responsibilities. They don’t have ambition.
 Employees resist change.
 An average employee needs formal direction.

Theory Y

Theory Y assumes that

 People are inherently happy to work, they are motivated to pursue objectives.
 There is no need for the system that involves rewards and punishments.
 People are prepared to take responsibility for everything they do.
 People want to use their creativity and they like to take a creative problem solving
approach.
 The employees have skills and capabilities. Their logical capabilities should be fully utilized.
 Employees may not require only threat, external control and coercion to work, but they can
use self-direction and self-control

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BUSINESS WRITING PRINCIPLES / 9 C’S

Completeness
The message should be complete to bring reader result. It should include everything that reader
wants. We should be able to know about the reader’s background, viewpoints and needs.

Conciseness (short)
Conciseness means message should be short because business managers are over busy. They don’t
have enough time to read lengthy messages. Lengthy messages lose the reader interest that’s why
message should be concise.

Concreteness (strong)
Business letter should be concrete in every aspect of facts and figures. It makes the message more
clear and specific. Common nouns and adjectives should not be used.

Correctness
A correct use of language should be used in business letter. In written business communication,
grammatical errors must be avoided. A correct use of language increases trust and the receiver feel
that they are taken seriously.

Clarity

Clarity demands clear sentence so that reader can get clear content of the message. Fuzzy language
should be avoided in every case.

Consideration
In order to communicate well, it is important to relate to the target group (consideration). By taking
the audience into account, the message can be given towards them. For example: We are here to
serve you.

Courtesy
Courtesy is a goodwill builder. It makes business relation more strong and prospective customer
into customer. Your company image make better. Courtesy is more important in writing than face
to face communication.

Confidence
Your document and presentation will be more successful if you show confidence in reader, in
message and in oneself. It gives a good impact on the reader.

Conversational tone
It is very important how you say a thing. Your letter should read as you are talking to the reader.
The tone should be neutral, comfortable. You should avoid technical terms.

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BARRIERS TO EFFECTIVE COMMUNICATION

PHYSICAL BARRIERS:
These include distance, background noise, poor equipment, bad hearing, and poor eyesight.

EMOTIONAL AND CULTURAL NOISE:

Emotions (anger, fear, sadness) and attitudes (having to be right all the time, believing oneself to
be superior or inferior to others) , as do the stereotypical assumptions that people talk about
each other based on cultural background.

LANGUAGE:
Speaking different languages, having strong accents, using slang or jargon can irritate
communication.

LACK OF EYE CONTACT:

Lack of eye contact looses the interest of speaker and listener and makes the communication
poor and weak.

INFORMATION OVERLOAD:
Too much information can confuse your audience and even make them wonder if you’re
overwhelming them with details to avoid telling them something else they would rather know.

NOT BEING PREPARED:

If you’re not prepared, if you lack the facts, if you rely on your Power Point presentation too
much, your listeners will notice and feel let down

LACK OF INTEREST:
If you don’t believe in your position, product, service, or whatever you’re trying to sell, they
won’t believe in it either.

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PROCESS/FACTORS OF COMMUNICATION

Q. Explain the process/factors of communication OR Communication is a two way process of

exchanging ideas or information between two human beings.

Communication simply means exchange of ideas & information between two persons. A person sends
a message to another person and gets the feedback.

Sender’s thoughts:
The very first step in the process of communication is generation of thought in the sender’s mind.
These thoughts may be about a request, order, inquiry or any other thing.

Encoding/Message:
Encoding is where the sender converts his thought into a message by language. For example, a
sender thinks about having a job. Now, he will put his thought on a paper. That is called job
application.

Medium:
Once a thought is converted into message, it should be sent to the receiver through a suitable
medium. This medium might be electronic media as TV, E-mail, radio or print media as newspaper,
magazines or letters.

Noise andBarriers:
While sending the information to the receiver, the sender faces lots of barriers. It takes place
during the process of encoding. Some of them because of distraction, typing mistakes, poor
language etc.

Decoding by Receiver:
After receiving the message, the receiver tries to understand and interpret the message. This
process of converting the language of message into thoughts is called as decoding.

Idea Received:
As soon as process of decoding is finished, the idea given by the sender is received by the receiver.
It means that thought of sender has been understood by receiver.

Feedback:
Process of communication is incomplete until the receiver responds the sender. This response may
be negative, positive or for further enquiry.

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PHILOSOPHIES OF COMMUNICATION

There are several philosophies or approaches to communication that shape how we understand
and engage in the process of exchanging information and meaning. Here are a few notable
philosophies of communication:

Transmission Model:
This philosophy views communication as a linear process where information is transmitted from a
sender to a receiver. It focuses on the effectiveness of the message and the clarity of its
transmission.

Interaction Model:
This philosophy recognizes that communication is a two-way process involving both sending and
receiving messages. It emphasizes the exchange of feedback and the role of context in shaping
meaning.

Transactional Model:
This philosophy sees communication as a dynamic and simultaneous transaction between
individuals. It highlights the reciprocal influence and co-construction of meaning between
communicators.

Symbolic Interactionism:
This philosophy emphasizes the role of symbols and language in communication. It focuses on how
individuals interpret and assign meaning to symbols, emphasizing the importance of shared
understanding and social interaction.

Social Constructionism:
This philosophy suggests that meaning is not inherent in messages but is socially constructed
through communication. It emphasizes the role of cultural, social, and historical contexts in shaping
and interpreting messages.

Critical Theory:
This philosophy explores how communication is influenced by power dynamics, social inequalities,
and dominant ideologies. It seeks to analyze and challenge oppressive structures and advocate for
social change through communication.

These philosophies provide different lenses through which communication can be understood and
studied, offering diverse perspectives on the nature and complexities of human interaction.

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DECISION MAKING

Decision making is the process of making choices by identifying a decision, gathering information,
and assessing alternative resolutions.
Using a step-by-step decision-making process can help you make more deliberate, thoughtful
decisions by organizing relevant information and defining alternatives. This approach increases the
chances that you will choose the most satisfying alternative possible.

Rational Decision Making

The rational decision-making process is a step-by-step thinking process to weigh the pros and cons
of choices. The process is used to take time to identify issues and compare other solutions to pick
the best solution.
 The model of rational decision making assumes that the decision maker has full or perfect
information about alternatives; it also assumes they have the time, cognitive ability, and
resources to evaluate each choice against the others.
 This model assumes that people will make choices that will maximize benefits for
themselves and minimize any cost

TECHNIQUES OF DECISION MAKING

DELPHI TECHNIQUE
The Delphi Technique uses a carefully designed list of questions that is developed in several rounds.
Sometimes, interviews are used. The experts answer the questionnaire anonymously and came face
to face with each other’s knowledge and views. They do not know each other and do not know who
else is in the panel of experts.

The following steps characterize the Delphi Technique.

Identify Your Experts
The Delphi technique relies on a panel of experts. This panel may be your project team, including
the customer, or other experts from within your organization or industry

Define the Problem

What is the problem or issue you are seeking to understand? The experts need to know what
problem they are commenting on.

Round One Questions

Ask general questions to gain a broad understanding of the experts view. The questions may go out
in the form of a questionnaire or survey.

Round Two Question

Based on the answers to the first questions, the next questions should develop deeper info into the
topic to clarify specific issues.

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Act on Your Findings

After this round of questions, your experts will have reached a conclusion. If not, the process is
repeated until consensus to reach.

NOMINAL TECHNIQUE
The nominal group technique is a group process involving problem identification, solution
generation, and decision making. It can be used in groups of many sizes, who want to make their
decision quickly by a vote.

Introduction and explanation

The facilitator welcomes the participants and explains them the purpose and procedure of the
meeting.
Silent generation of ideas
Working silently and independently, participants jot down their responses to a stimulus question.

Round-robin recording of ideas

When called upon, each participant contributes a single idea that is recorded on a large flip-chart.
Discussion of the ideas is not permitted.

Discussion of the list of ideas

The participants discuss each idea on the list so that they are clear about the meaning of the ideas.

Voting
The participants identify what each of them believes are the most important ideas, they rank-order
their preferences (optional), the votes are recorded on the flipchart, and the voting pattern is
discussed.

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PROBLEM SOLVING STEPS (BADA ICE)

This problem solving technique is commonly used by psychologists in the counseling process to
assist individuals in finding a solution and then use in a real scenario.

Identifying the Problem

Ask yourself what the problem is. There may be multiple issues within a single situation. Make a list
of these issues and define why each one is a problem to you.

Defining Goals
Try to define your goals specifically. An example of a poor or broad goal is "I want to be happy."
First, define what happiness means to you and what you can do to feel happier overall.

Brainstorming
Take time to brainstorm possible ways to resolve the problem. Do not be hurry. Write down all
ideas Try to find 6-8 different alternatives when resolving a particular problem.

Assessing Alternatives
Every alternative you have to check its positive and negative results that each solution would bring.

Choosing the Solution

Carefully weigh all solutions. Think about which solution can highlight the positive effects that
matter the most to you. It is important to create a timeline of when you intend to achieve your
ultimate goal.

Active Execution of the Chosen Solution

Don't worry about failure. In this phase, concentrate on the journey that will lead you to your goal,
don't worry yourself with potential problems.

Evaluation
It's time to evaluate your success. If you were successful, congratulations! If not, no worries. Maybe
you didn't choose the right solution or the situation changed. You have definitely learned
something. Take this newfound knowledge, return to the beginning steps, and try again!

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DECISION MAKING PROCESS (CIGRATE)

The following are the seven key steps of the decision making process

Identify the decision

To make a decision, you must first identify the problem you need to solve. Clearly define your
decision. If you can’t identify the problem then decision train could track off.

Gather information
Once you have identified your decision, it’s time to gather the information relevant to that choice.
Do an internal assessment, seeing where your organization has succeeded and failed in areas
related to your decision.

Alternatives
There is usually more than one option to consider when trying to meet a goal—for example, if your
company is trying to gain more engagement on social media, your alternatives could include paid
social advertisements,

Evidence
In this step, you’ll need to evaluate for feasibility, acceptability and desirability” to know which
alternative is best.

Choose among alternatives

When it’s time to make your decision, be sure that you understand the risks involved with your
chosen route

Take action
Once you’ve made your decision, act on it! Develop a plan to make your decision tangible and
achievable..

Review your decision

An often-ignored but important step in the decision making process is evaluating your decision. Ask
yourself what you did well and what can be improved next time.

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CONTROLLING

Control is a primary goal-oriented function of management in an organization. It is a process of

comparing the actual performance with the set standards of the company to ensure that activities
are performed according to the plans.

CONTROL PROCESS / ORGANIZATIONAL CONTROL PROCESS

The control process involves collecting information about a system, process, person, or group of
people in order to make necessary decisions. Managers set up control systems that consist of four
key steps:

Establishing standards:
This means setting up of the target which needs to be achieved to meet organizational goals.
Control standards are categorized as Quantitative (terms of money) and Qualitative (Intangible)
standards.

Measurement of actual performance:

The actual performance of the employee is measured against the target. With the increasing levels
of management, the measurement of performance becomes difficult.

Compare performance with the standards:

This step compares actual activities to performance standards. When managers read computer
reports or walk through their plants, they identify whether actual performance meets, exceeds, or
falls short of standards

Take corrective actions:

If manager finds any defect in the performance from standards so he takes quick action to correct
that defect in the timely manner.

PHASES/TYPES OF CONTROL

1) Pre-Control
Pre-control is also known as a feed-forward or preventive control. It is future-directed control. It
allows management to prevent problems rather than solving after occur.
It predicts problems that the management may face in the future and identifies the steps to be
taken to resolve them. It tries to anticipate deviation in advance and allows corrective action to be
taken before the problem arises.
It is a more appropriate approach to control as correction can be made before the system output is
affected. In this system, inputs and processes are observed and analyzed for the purpose of
adjusting them if necessary, before the output is obtained.
Organizational plans such as strategies, policies, and procedures are the pre-control types.

Concurrent Control

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Concurrent control is also known as real-time or steering control. It is the type of controlling the
activities in the process of functioning. In this system, supervisors direct the work of subordinates
so that they perform their work properly.
In the process of functioning, if any problem takes place, it is identified and analyzed and corrective
measures are taken before any major damage occurs.
It is a continuous process and necessary adjustments are made in activities to meet the desired
standard. Types of concurrent control are quality control charts in an industry, inventory control,
production control, etc.

Post Control
It is also known as post-action or feedback control. It takes place after the activity is
over. Managers can take corrective action after analyzing deviation from the planned results.
In other words, it is the process of adjusting future actions on the basis of information about past
performance.

Characteristics of Good Control System (SOFA PESM)

Simplicity: A good control system must be simple and easily understandable so that all the
managers can apply it effectively.

Promptness: The control system should provide information soon enough so that the managers can
detect and report the variance immediately and necessary corrective actions may be taken.

Economy: The control system must justify the expenses involved. In other words, expected earnings
from it should be greater than the expected costs in its working.

Flexibility: Internal goals and strategies must be responsive to the changes in the environment and
the control system should be flexible enough.

Accuracy: The control system should encourage accurate information in order to detect variance.

Suitability: Control must reflect the needs and nature of the activities of the organization. The
control system should focus on achieving the organizational goals.

Motivating: A good control system should pay due attention to the human factor, It should be
designed to secure positive action from the workers

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STAFFING

Staffing can be defined as one of the most important functions of management. It involves the
process of filling the vacant position of the right personnel at the right job, at right time. Hence,
everything will occur in the right manner.

Process of Staffing
Staffing process focuses on fulfilling the organisation with an exact number of people, and that too
at the right time and place, which will help the organisation to achieve its objectives effectively. The
staffing process involves a series of steps, discussed as under:

Manpower Planning: Popularly known as human resource planning, it is the process of forecasting
the firm’s demand and supply of competent workforce.

Recruitment: It involves seeking and obtaining, as many applications as possible from the eligible
and competent candidates.

Selection: It is the decisive step of the staffing process to identify and choose the candidate who
best fulfils the qualifications and requirements of the vacant position.

Placement: The allocation of rank and responsibility to selected candidate is known as Placement.

Orientation and Induction: After the placement, the next step is to provide the information to new
employee about job and process of organization
.
Training and Development: In this step, the new joinees undergo training to get specific skills,
designed by the organisation to ensure the growth of employees.

Performance Appraisal: A rational assessment and evaluation of employee’s performance against

standard benchmarks.

Compensation: The organization should have fair salary or wage structure and should give
incentives to those who deserve it.

Separation: It is the last step in the process of staffing. It means separating the employees from
their job. This takes place in four ways i.e. through retirement, termination, retrenchment or death.

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GROUP

The Group refers to two or more persons who share a common interest and come together to
achieve common goals and objectives.

Types of Groups
The groups can be classified on the basis of the structure of the organization. These are:

Formal & Informal Groups

The formal groups are formed deliberately to direct the efforts of group members, especially the
employees towards the accomplishment of organizational objectives.

The Informal groups are formed by the individuals to satisfy their social needs of relations and they
make groups on their own and not created by the management of the organization.

Primary and Secondary Groups:

The primary group refers to the small social group whose members are closely related to each other
and share relationship. Examples of these groups could be family members, friendship groups and
highly influential social groups.

The Secondary Groups are more formal groups whose members come together to perform certain
tasks. Here the group members are not emotionally associated with each other.

Membership and Reference Groups:

The membership group is the one to which an individual actually belongs to. The club membership
is the best example of membership groups.

The reference groups are the types of groups with which an individual identify himself and want to
become a member of that group.

Command and Task Groups:

The command group is comprised of superiors and subordinates who carry out orders on the basis
of their authority within the group. (An example could be a marketing manager having the group of
sales personnel under his department.)

The Task Group is a group of individuals who come together to accomplish a certain task or a job
assigned to them.

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STAGES OF GROUP

Forming

Forming is the first stage of the cycle as this is typically when a group is gathered. Everyone in the
group will have a feeling of wanting to be accepted and will try hard to not be involved in conflict.

Storming

This is the stage when the group starts to have conflict. This is needed at this early stage for the
group to progress, some of the group may see themselves as leaders and this can cause uncertainty
amongst the group at there may be a battle for places. Some people will take a back seat and
remain in the first stage as they are comfortable with their place in the group.

Norming

This is towards the back end of stage two, the roles in the group are now starting to take place.
They now begin to take note of each others skills and abilities, the group now understand that they
have to help each other in order to get their main goal.

Performing

If groups make this stage then they have good group bounding. At this stage everyone believes in
each others’ ability to get their individual jobs done, morale is usually high and everyone carries the
workload equally.

Adjourning

This is the final area of the Tuckman’s model. This involves the group disengaging after a successful
period together. Usually all the participants involved will feel a sense of pride and recall on what
they have achieved as a group before moving on.

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Why Groups are Formed

Groups can be defined as collections of individuals who come together for a shared purpose or goal,
interacting and collaborating to achieve common objectives through coordinated efforts and
mutual influence.

Synergy and Collaboration:

Groups allow individuals to pool their skills, knowledge, and expertise, leading to synergy and
enhanced problem-solving capabilities. When individuals work together in a group, they can
complement each other's strengths, share ideas, and generate innovative solutions.

Increased Efficiency:
By dividing work among group members, tasks can be completed more efficiently. Each member
can focus on their specialized area, leading to a more streamlined workflow and improved
productivity.

Diverse Perspectives:
Groups bring together individuals with different backgrounds, experiences, and perspectives. This
diversity can lead to a broader range of ideas and solutions. By considering multiple viewpoints,
groups can make better-informed decisions and develop more comprehensive strategies.

Social Support and Motivation:

Groups provide social support, encouragement, and a sense of belonging. Working in a supportive
and collaborative environment can increase job satisfaction, motivation, and engagement among
group members.

Information Sharing and Learning:

Groups facilitate the sharing of information, knowledge, and expertise. Through discussions,
brainstorming sessions, and sharing best practices, group members can learn from each other and
acquire new skills and knowledge.

Task Specialization:
Group formation allows for the division of labor based on individuals' skills and expertise. By
assigning specific tasks to members with relevant capabilities, organizations can optimize efficiency
and maximize output.

Decision-making and Accountability:

Groups can be involved in decision-making processes, allowing for diverse perspectives and input.
This involvement enhances the quality of decisions and increases accountability since multiple
individuals share responsibility for the outcomes.

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MANAGEMENT

Definition:

Management is the administration of an organization, whether it is a business, a not-for-profit

organization, or government body. The term "management" may also refer to those people who
manage an organization.

FUNCTIONS OF MANAGEMENT

Planning
Planning is a management process. It is the first step of management function. Planning is how to
do work, when to do work, who will do this work. Planning means the process of achieving goals,
development and establishment. Planning means deciding how best to achieve goals, profit and
applying best strategies.

Organizing
Organizing is the second function of management. It follows the planning. Organizing is a
management process that refers to the relationship between people, work and resources that is
used to achieve goals.
Staffing
After the organizing, the function of management is staffing. Employees are the most important
resource of any organization. Staffing is like a function or term that refers recruitment, selection,
acquiring, training, appraising employees.

Directing
Directing is a process in which the managers instruct, guide and overview the performance of the
workers of a company to achieve goals. Directing is a continuous process that runs its function at
top level and flows to the bottom with organizational hierarchy.

Co-ordination
In organization, different types of work are performed by various departments and no single
department or group cannot achieve the goals if they don’t work as a whole. Co-ordination ensures
the unity of action among individuals, department and groups in carrying out the different tasks.

Controlling
Controlling is the last step in the management functions process. This process is simply steps of
manager to determine whether organizational goals have been met. Controlling is a continuous and
forward looking process which is the standard of measurement of a company or organization.

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FAYOL'S 14 PRINCIPLES OF MANAGEMENT

Fayol's principles are listed below: DADI-S3OU2RCE2

Division of Work: When employees are specialized, output can increase because they become
skilled and efficient.

Authority – Managers must have the authority to give orders, but they must also keep in mind that
authority comes with responsibility.

Discipline – Discipline must be upheld in organizations, but methods for doing can vary.

Unity of Command – Employees should have only one direct supervisor.

Unity of Direction – Teams with the same objective should be working under the direction of one
manager, using one plan. This will ensure that action is properly coordinated.

Subordination of Individual Interests to the General Interest – The interests of one employee
should not be allowed to become more important than those of the group. This includes managers.

Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes
financial and non-financial compensation.

Centralization – This principle refers to how close employees are to the decision-making process. It
is important to aim for an appropriate balance.

Scalar Chain – Employees should be aware of where they stand in the organization's hierarchy, or
chain of command.

Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have
its place.

Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and
acting with kindness where appropriate.

Stability of Tenure of Personnel – Managers should strive to minimize employee turnover.

Personnel planning should be a priority.

Initiative – Employees should be given the necessary level of freedom to create and carry out plans.

Esprit de Corps: Esprit de corps means the spirit of loyalty and devotion, which unites the members
of a group or society.

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SCIENTIFIC MANAGEMENT

Scientific management means knowing exactly what you want men to do and seeing that they do it
in the best and the cheapest way.

Frederick W. Taylor

Taylor started his career as labour in a small machine shop in Philadelphia. Then he joined the
Midvale Steel as a machinist and later rose to the position of the chief engineer. He wrote five
books. In the later part of his career, he worked as management consultant of a steel company.

Principles of Scientific Management

Rule of Thumb
Science, not rule of thumb- According to this principle, scientific management is the development
of a true science for each element of man’s work to replace the old rule of thumb.

Trained & Skilled Labour

Harmony, not discord- According to this principle, workers should be selected and trained with due
care. Their skills and experiences should be matched with the requirements of the jobs they are to
perform.

Cooperation
Cooperation, not individualism- Scientific management puts great emphasis on the promotion of
harmony and cooperation between workers and the management so as to maximise efficiency.

Maximum Output
Maximum output, not restricted output- According to this principle, the aim of both workers and
the management should be to maximise output.

Development
Development of each man to his greatest efficiency and prosperity- Scientific management aims at
maximum prosperity of both employers and employees. For this purpose, workers and the
management should cooperate and maximise output instead of fighting on the division of surplus or
profits.

Administrative Theory Scientific Theory

Fayol was concerned with management and human and Taylor was concerned with task time and
behavioral factors in management. improving worker efficiency.
Fayol believed in a more top-down perspective that was
Taylor viewed management
focused on educating management on improving
improvements as happening from
processes first then moving to workers. He believed
bottom up or starting with the most basic
that by focusing on managerial practices organizations
units of activity and making individual
could minimize misunderstandings and increase
workers more efficient.
efficiency.
Fayol went one step ahead, along with the scientific Taylor gave a scientific base to
base; he insisted the need for management training. management.
Fayol gave importance to the activities like planning and Taylor laid emphasis on the work study
controlling. and time study of workers.

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PLANNING

The planning function of management is one of the most important. It involves setting the goals of the
company and then managing the resources to achieve such goals.

Planning Process/Steps

Recognizing Need for Action

An important part of the planning process is to explore business opportunities in the firm’s external
environment as well as within the firm by using SWOT analysis.
For example: the government plans on promoting cottage industries in semi-urban areas. A firm can
look to explore this opportunity.

Setting Objectives
This is the second step of the planning process. Here we set the objectives for the whole organization
and also individual departments. Organizational objectives provide a general direction, objectives of
departments will be more planned and detailed.

Developing Premises
Planning is always done keeping the future in mind. However, the future is always uncertain. So in the
function of management certain assumptions will have to be made. These assumptions are the
premises. Such assumptions are made in form of forecasts, existing plans, past policies etc.

Identifying Alternatives
The fourth step of the planning process is to identify the alternatives available to the managers. There
is no one way to achieve the objectives of the firm.

Examining Alternate Course of Action

The next step of the planning process is to evaluate the alternative plans. Every option will go through
an examination where all there pros and cons will be weighed.

Formulating Supporting Plan

Once you have chosen the plan to be implemented, managers will have to come up with one or more
supporting plans. For example plans to hire more people, train personnel, expand the office etc are
supporting plans for the main plan of launching a new product.

Implementation of the Plan

And finally, we come to the last step of the planning process, implementation of the plan. This is when
all the other functions of management come into action. The tools required for such implementation
involve the types of plans, procedures, policies, budgets, rules, standards etc.

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SPAN OF MANAGEMENT

The Span of Management refers to the number of subordinates who can be managed efficiently by a
superior. Simply, the manager having the group of subordinates who report him directly is called as the
span of management.

Depending on the number of employees that can be supervised or controlled by managers, there can
be two kinds of structures in the organisation:
 Tall structures
 Flat structures

Tall structures:

These structures are found in classical bureaucratic organisations. In this structure, a manager can
supervise less number of subordinates. He can, therefore, exercise tight control over their activities.
This creates large number of levels in the organization. This is also known as narrow span of control.

Merits of a Tall Structure:

1. Managers can closely supervise activities of the subordinates.

2. There can be better communication amongst superiors and subordinates.
3. It promotes personal relationships amongst superiors and subordinates.
4. Control on subordinates can be tightened in a narrow span.

Flat Structures:

These structures have a wide span of control. When superior supervises a larger number of
subordinates, flat structure is created with lesser number of hierarchical levels.

Merits of a Flat Structure:

1. There is low cost as less number of managers can supervise organizational activities.
2. The decision-making process is effective as superiors delegate authority to subordinates.
3. There is effective communication as the number of levels is less.
4. It promotes innovative abilities of the top management.

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FACTORS DETERMINE SPAN OF MANAGEMENT

The span of management can be determined on the basis of a number of relationships that a manager
can manage. These are

Capacity of Superior:
Here the capacity means the ability of a superior to solve the problems quickly and gel up with the staff
such that he gets respect from all. Also, the communication skills, decision-making ability, controlling
power, leadership skills are important determinants of supervisory capacity

Capacity of Subordinate:
If the subordinate is trained and efficient in discharging his functions without much help from the
superior, the organization can have a wide span. This means a superior can manage a large number of
subordinates as he will be required just to give the broad guidelines and devote less time on each.

Nature of Work:
If the subordinates are required to do a routine job, with which they are well versed, then the manager
can have a wider span. But, if the work is complex and the manager is required to give directions, then
the span has to be narrower.

Degree of Decentralization:
If the manager delegates authority to the subordinates then he is required to give less attention to
them. Thus, higher the degree of decentralization, the wider is the span of management.

Planning:
If the subordinates are well informed about their job roles, then they will do their work without
consulting the manager again and again. This is possible only because of the standing plans that they
follow in their repetitive decisions. Through a proper plan, the burden of a manager reduces manifold
and can have a wider span of management.

Staff Assistance:
The use of staff assistance can help the manager in reducing his workload by performing certain
managerial tasks such as collecting information, processing communications and issuing orders, on his
behalf. By doing so, the managers can save their time and the degree of span can be increased

Communication Techniques:
The mode of communication also determines the span of management. If in the manager is required to
do a face to face communication with each subordinate, then more time will be consumed. As a result,
the manager cannot have a wider span. But in case, the communication is in writing and is collected
through a staff personnel; the manager can save a lot of time and can have many subordinates under
him.

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BREAKEVEN ANALYSIS

Break Even Analysis in economics, business, and cost accounting refers to the point in which total cost
and total revenue are equal. A breakeven point analysis is used to determine the number of units or
revenue needed to cover total costs (fixed and variable costs).

Break even quantity = Fixed costs / (Sales price per unit – Variable cost per unit)
Where:
 Fixed costs are costs that do not change with varying output (i.e. salary, rent, building
machinery).
 Sales price per unit is the selling price (unit selling price) per unit.
 Variable cost per unit is the variable costs incurred to create a unit.

In the diagram above, the line OA represents the variation of income at varying levels of production
activity ("output"). OB represents the total fixed costs in the business. As output increases, variable
costs are incurred, meaning that total costs (fixed + variable) also increase. At low levels of output,
Costs are greater than Income. At the point of intersection, P, costs are exactly equal to income, and
hence neither profit nor loss is made.

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BUDGET

A budget is an estimation of revenue and expenses over a specified future period of time; it is compiled
and re-evaluated on a periodic basis. Budgets can be made for a person, a family, a group of people, a
business, a government, a country, a multinational organization or just about anything else that makes
and spends money.

Types Of Budget
There are various types budget are as follows.

Sales budget
It is an estimate of future sales, often broken down into both units. It is used to create company and
sales goals.

Production budget
It is an estimate of the number of units that must be manufactured to meet the sales goals. The
production budget also estimates the various costs involved with manufacturing those units, including
labour and material.

Capital budget
Capital budget is used to determine whether an organization's long-term investments such as new
machinery, new plants, new products, and research development projects are worth pursuing.

Cash budget
It is a prediction of future cash receipts and expenditures for a particular time period. The cash flow
budget helps the business to determine when income will be sufficient to cover expenses and when
the company will need to seek outside financing.

Conditional budgeting
Conditional is a budgeting approach designed for companies with fluctuating income, high fixed costs,
or income depending on sunk costs, as well as NPOs and NGOs.

Marketing budget
It is an estimate of the funds needed for promotion, advertising, and public relations in order to market
the product or service.

Overheads budget
It includes the estimated costs of indirect materials, indirect labour and indirect factory expenses
needed during the budget period for getting of budgeted production targets.

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MBO (MANAGEMENT BY OBJECTIVES)

Management by objectives (MBO) is a strategic management model that aims to improve the
performance of an organization by clearly defining objectives that are agreed to by both
management and employees.
STEPS
Define organizational objectives
The first course of action is to define your organizational objectives. As a project manager, your job
may be to co-create company objectives or translate company objectives to your team in an
understandable way. You can use a business goals template to structure your specific goals in this
stage.

Translate objectives into goals

After you’ve defined the company’s objectives, use a top-down approach to translate the company
objectives into individual goals for each team member. Make sure you’re using the SMART
goals framework to ensure your team members’ goals are measurable and achievable.

Monitor performance
As your team members work toward their specific objectives, you’ll need to monitor their
performance. You can monitor the performance of each team member by gathering success
metrics from your project management tool and assessing whether objectives and key results (OKRs)
are being met.

Reward accomplishments
The last step in the MBO system is rewarding the team for their achievements. This increases team
morale and keeps teammates motivated to work hard during the next MBO process.

Benefits of MBO

Performance improvement: MBO can greatly improve employee performance in the workplace.
Detailed planning and highlighting individual contributions can help increase employee morale and
increase performance and profits.

Sense of identity: MBO can give employees a greater sense of identity with the company by
highlighting their contributions. Employees may feel proud that they're involved in the goals of the
organization and become more productive employees.

Career growth: Employees have the opportunity to further their careers under an MBO management
style. Effective management takes an enormous interest in improving and enriching the skills of
employees and provides many opportunities for this type of training to happen, as they benefit the
entire company.

Career focus: MBO can also help create a focus on specific career paths, highlighting their importance
in the company. This may help employees better understand the role they play and how to contribute
more to the business over time.

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LEADERSHIP

Leadership provides direction for a company and its workers. Employees need to know the direction in
which the company is headed and who to follow to reach the destination. Leadership involves showing
workers how to effectively perform their responsibilities and regularly supervising the completion of
their tasks.

THEORIES/TYPES OF LEADERSHIP
Democratic Leadership
Democratic leadership is exactly what it sounds like — the leader makes decisions based on each team
member‘s input. Although a leader makes the final call, each employee has an equal say in a project’s
direction.

Autocratic leadership
Also called the “authoritarian style of leadership,” this type of leader is someone who's focused
primarily on results and team efficiency. Autocratic leaders often make decisions alone or with a small
and trusted group and expect employees to do exactly what they’re asked.

Laissez-faire leadership style

The laissez-faire style is the opposite of the autocratic leadership type, focusing mostly on delegating
many tasks to team members and providing little to no supervision. Because a laissez-faire leader
doesn't spend their time intensely managing employees, they often have more time for other projects.

The Trait:
The trait leadership theory believes that people are either born or are made with certain qualities that
will make them excel in leadership roles. Certain qualities such as intelligence, sense of responsibility,
creativity.

Behavioral Theories:
The behavioral theories are offering a new perspective, one that focuses on the behaviors of the
leaders as opposed to their mental, physical or social characteristics.

The Contingency:
The Contingency Leadership theory argues that there is no single way of leading and that every
leadership style should be based on certain situations.

Transactional theories:
Transactional theories, also known as exchange theories of leadership, are characterized by a
transaction made between the leader and the followers. In fact, the theory values a positive and
mutually beneficial relationship.

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DIFFERENCE BETWEEN LEADERS & MANAGERS

Leaders Managers

Leaders will focus on objectives which are Managers will develop business objectives
developed by managers. for the organization.

A leader interacts with the employees. A manager interacts with the leader.

A leader works with team. A manager gives instructions to groups.

Leaders implement the ideas of the

Managers invent the ideas.
managers.

They focus on employees They focus on resources.

Their main responsibility to inspire employees Their main function to develop plans

They motivate workers for the performance They instruct the subordinates perform
improvement. better.

Leaders can influence employees to give the Managers encourage the leaders to
best outcome. motivate the employees.

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POLICY MAKING GUIDELINE

The following steps summarize the key stages involved in developing policies:

Identify need
The organisation needs to constantly judge its activities, responsibilities and the external
environment in order to identify the need for policies and procedures.

Responsibility
Delegate responsibility to an individual, working group, sub-committee or staff members, according
to the expertise required.

Gather information
Do you have any legal responsibilities in this area? Is your understanding accurate and up to date?
Have other organisations tackled the same issue? Etc will help you in developing policy.

Draft policy
Ensure that the wording and length or complexities of the policy are suitable to those who will be
expected to implement it.

Consult with appropriate stakeholders

Depending on whether you are developing policies to govern the internal working of the
organisation or external policy positions, you may wish to consult, for example: Supporters, Staff
and volunteers

Finalise / approve policy

Bear in mind that, ultimately, the Management Committee is responsible for all policies and
procedures within the organisation.

Implement
How will the policy be communicated and to whom? Is training required to support the
implementation among staff and volunteers? Should the organisation produce a press release (for
external policy positions)?

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TERMS
Policies

A policy is a guiding principle used to set direction in an organization. It can be a course of action to
guide and influence decisions. It should be used as a guide to decision making under a given set of
circumstances within the framework of objectives, goals and management philosophies as
determined by senior management.

There are really two types of policies. The first are rules frequently used as employee policies. The
second are mini-mission statements frequently associated with procedures. A policy in a procedure
acts as a mini-mission statement containing the customer of the policy, it’s purpose, and a key.

Procedure

These systems are basically sequential actions that are designed to complete a task. In the business
world, all company operations can be broken down into categories called processes. These
processes are the building blocks for company procedures.
Procedures don’t typically change and are performed in the same order to provide standardized
and consistent end results. Guides, trainings, and tutorials are typical methods of communicating
processes to the employees of an organization, so they can implement the procedures to achieve
the company’s goals.
Accounts Receivable Procedure
 Send the first notice-invoice immediately (same day) as the sale.
 Produce a receivables aging report.

Rules

The rules are the standard set of instructions made for people, which explains that how things are
to be done. The rules should be followed by the public as they are made for the welfare of them.
Under the Constitution of India, there exists Law, which includes many Acts, after that comes
regulations and finally rules.
Non-compliance of any rule can cause a little effect. Rules tell us what to do and what not to do. It
can be set up for home, hospital, institution, college, office, school, etc.

Departmentation

Departmentation is the foundation of organisation structure, that is, organisation structure

depends upon departmentation. Departmentation means division of work into smaller units and
their re-grouping into bigger units (departments) on the basis of similarity of features. As the
organisation grows in size, the work is divided into units and sub-units. Departments are created
and activities of similar nature are grouped in one unit. Each department is headed by a person
known as departmental manager.

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CLASSICAL THEORY OF MANAGEMENT

The Classical Theory is the traditional theory, wherein more emphasis is on the organization rather
than the employees working therein. According to the classical theory, the organization is
considered as a machine and the human beings as different components/parts of that machine.

Scientific Management Theory (FW TAYLOR)

At the turn of the 20th century when the potential of science to improve productivity was becoming
clear, Frederick Taylor developed the scientific, or classical, management theory. This approach
uses data and measurements to make organizations more effective. The process of gathering data
led to standardization and a management strategy based on punishment and reward. This approach
worked for mechanized operations, but it did not do justice to the human element.

Bureaucratic Management Theory (MAX WEBER)

The seminal sociologist Max Weber built on Frederick Taylor's scientific management theory with
his theory of bureaucratic management. Bureaucratic management theory stresses clearly
designated roles for employees and management based on hierarchies that streamline authority
and make it clear who is in charge and who is not. He also wrote about the dangers inherent in
unchecked hierarchical bureaucracy and stressed the role of emotion in a business landscape
dominated by technology.

Human Relations Theories (ELTON MAYO)

Over the course of the 20th century, management systems became more human-centered, focusing
the capacities of individuals to act autonomously and creatively toward bringing out the potential of
the people they employ. Human relations management theories emphasize the importance of the
needs of the workers with the needs of the company.

Systems Theory

Systems theory looks for holistic patterns in scientific and metaphysical contexts, and the
management approach to systems theory aims for achieving an integrated and balanced whole in
business as well. Features include identifying the overall goal of the organization. This management
theory is especially effective for recognizing and leveraging the particular patterns that a company's
operations follow.

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FORMAL & INFORMAL ORGANIZATION

Formal Organization:
The formal organization refers to the structure of jobs and positions with clearly defined functions
and relationships as prescribed by the top management. This type of organization is built by the
management to realize objectives of an enterprise and is bound by rules, systems and procedures.

Informal organization
The Informal Organization refers to the relationship between people in the organization based on
personal attitudes, emotions, likes, dislikes etc. an informal organization is an organization which is
not established by any formal authority, but arises from the personal and social relations of the
people.

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DELEGATION OF AUTHORITY

The delegation of authority refers to the division of labor and decision-making responsibility to an
individual that reports to a leader or manager. It is the organizational process of a manager dividing
their own work among all their people.

FACTORS
Willingness of Subordinates:
The degree of delegation will depend upon the willingness of subordinates to accept responsibility.
If the subordinates are shy of bearing greater responsibility then executive will not be able to
delegate authority.

Manager’s Attitude:
The delegation not only depends upon the willingness of subordinates to share additional work but
will also be determined by the attitude of the manager. The manager should be ready to delegate
and the subordinate should be willing to accept it. If the attitude of the managers to concentrate all
powers in his hands only then he will not delegate his authority

Desire to Dominate:
Sometimes executives are in the habit of dominating others. They will not like to delegate authority
to others. They will keep every important work with them and take even minor decisions
themselves. Such executives will not encourage subordinates by giving them authority to work
independently. The desire to dominate resists executives from delegation of authority.

Quantum of Work:
The delegation of work also depends upon the quantum of work. If work is small then there will be
no need to delegate. When the work increases the need for delegation arises. More the quantum of
work greater will be the degree of delegation.

Confidence in Subordinates:
The delegation is also determined by the confidence which superior has in his subordinates. If the
subordinates are not considered worthy of taking decisions independently then there will be no
delegation. On the other hand, if superior has full confidence in the capacity of his subordinates
then he will delegate more and more authority and will utilize the subordinates to the maximum.

Fear of Subordinates:
A manager may not delegate adequate authority because of fears of subordinates. The fear of a
subordinate’s growth may be real. It can take two forms. First, the subordinate might show that he
can perform the superior’s work so well that he becomes entitled to his position, status, title, or
prestige.

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SOURCES OF AUTHORITY

A number of theories exist about the sources of authority:\

Some persons are of the view that it flows from upward to downward subordinates, others feel that
it goes from bottom to upward because of its acceptance by those on whom it is to be used, the
theories of authority are discussed as;

Legal/Formal Authority:
According to this theory authority is based upon the rank or position of the person and this
authority may be given by law or by social rules and regulations protected by law. A law may grant
authority to a policeman to arrest a person committing a crime. The president of a company may
take an action against an employee for not complying with rules because company rules has
bestowed this authority in him.

Traditional Authority:
Traditional authority has evolved from a social order and communal relationship in the form of
ruling lord and obedient subjects. The obedience results in traditional authority of the lord. The
traditional chief rules as per his own pleasure and makes his own decisions. Generally, these
decisions are based on considerations like ethnic equity and justice. The authority passes from the
father to the son.

Acceptance Theory:
The authority of the superior has no meaning unless it is accepted by the subordinates. Chester
Bernard was of the view that it is the acceptance of authority which is more important. If the
subordinates do not accept the orders of a superior there will be no use of exercising authority.

Competence Theory
There is also a feeling that authority is generated by personal competence of a person. A person
may get his orders accepted not due to formal authority but because of his personal qualities.
These qualities may be personal or technical. The advice of some persons may be accepted even if
they do not have a formal authority. They enjoy this authority by virtue of their intelligence,
knowledge, skill and experience.

Charismatic Authority:
The charismatic authority rests on the personal charisma of a leader who commands respect of his
followers. The personal traits such as good looks, intelligence, integrity influence others and people
follow the dictates of their leaders because of such traits. The followers become attached to the
leader because they feel that he will help them in achieving their goals. The charismatic leaders are
generally good orators and have hypnotic effect on their followers. The religious and political
leaders come under this category.

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