COURSE METERIALS

Principles of Management
“OVERVIEW OF MANAGEMENT”

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1
What Is Management?
 Managerial Concerns
 Efficiency

 “Doing things right”

 Getting the most

output for the least

inputs
 Effectiveness

 “Doing the right things”

 Attaining

organizational goals

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–2
 What Is Management?
 Management involves coordinating and overseeing the work
activities of others so that their activities are completed
efficiently and effectively.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–3
Exhibit 1–3 Effectiveness and Efficiency in
Management

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–4
 Who Are Managers?
 Manager
 Someone who coordinates and oversees the work
of other people so that organizational goals can be
accomplished.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–5
Classifying Managers
 First-line Managers
 Individuals who manage the work of non-managerial

employees.
 Middle Managers
 Individuals who manage the work of first-line

managers.
 Top Managers
 Individuals who are responsible for making

organization-wide decisions and establishing plans and

goals that affect the entire organization.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–6
Managerial Levels

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–7
 What Managers Do?
 Three Approaches
 Functions they perform.
 Roles they play.

 Skills they need.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–8
Functions of Management

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 9
 Planning

Defining goals,
establishing strategies to achieve
goals, developing plans to integrate
and coordinate activities.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 10
 Organizing
 Arranging and structuring
work to accomplish
organizational goals.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 11
Leading
Involves motivating
subordinates, influencing individuals
or teams as they work, selecting the
most effective communication
channels

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 12
 Controlling
Monitoring,
comparing, and
correcting work.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 13
 What Managers Do
(Mintzberg)
 Actions
 thoughtful
thinking
 practical doing

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–14
Management Roles
Interpersonal roles

Leader
Figurehead

Negotiator Managerial Monitor

Resource roles
Allocator
Disturbance
handler Spokesperson
Entrepreneur Informational
Decisional roles
roles
 Interpersonal Roles
 Roles that involve interacting with other
people inside and outside the organization

 Interpersonal roles:
 Figureheads: Greet visitors, Represent the company
at community events

 Leader: Influence, motivate, and direct others as

well as strategize, plan, organize, control, and
develop
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16
 Informational Roles

 Collecting, Processing
 Roles: Monitor, and
spokesperson

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 17
 Decisional Roles
 Whereas interpersonal roles deal with people and
informational roles deal with knowledge, decisional roles
deal with action

 Decisional roles:
 Entrepreneur: Managers must make sure their

organizations innovate, change, develop, and adopt

 Disturbance handler: Addressing unanticipated problems

as they arise and resolving them.

 Resource allocator: How best to allocate resources

 Negotiator: Negotiation is continual for managers

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 18
 interpersonal roles deal with
people

 informational roles deal with

knowledge,

 decisional roles deal with action

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–19
 AnWhat Is An
Organization Organization?
Defined
 A deliberate arrangement of people to accomplish
some specific purpose (that individuals
independently could not accomplish alone).
 Common Characteristics of Organizations
 Have a distinct purpose (goal)
 Composed of people
 Have a deliberate structure

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–20
Exhibit 1–9 Characteristics of Organizations

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–21
 What Managers Do?
 Skills Managers Need
 Technical skills

 Knowledge and proficiency in a specific field

 Human skills

 The ability to work well with other people

 Conceptual skills

 The ability to think and conceptualize about abstract

and complex situations concerning the organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–22
Skills Needed at Different Management Levels

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–23
How The Manager’s Job Is
Changing
 The Increasing Importance of Customers
 Customers: the reason that organizations exist

 Managing customer relationships is the responsibility

of all managers and employees.

 Consistent high quality customer service is essential for

survival.
 Innovation
 Doing things differently, and taking risks

 Managers should encourage employees to be aware of and

act on opportunities for innovation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–24
Why Study Management?
 The Value of Studying Management
 The universality of management
 Good management is needed in all organizations.
 The reality of work
 Employees either manage or are managed.
 Rewards and challenges of being a manager
 Management offers challenging, exciting and creative
opportunities for meaningful and fulfilling work.
 Successful managers receive significant monetary
rewards for their efforts.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–25
Universal Need for Management

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–26
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–27
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–28
Principles of Scientific Management

• Replacing Rule of Thumb with science

• Harmony, not discord
• Co-operation, not individualism
 Maximum output, in place of restricted

output
 The development of each man to his

greatest efficiency.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–29
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 30
as
or
???
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 31
Management as an Art
 Art refers to creative skills and talent
which people require to conduct certain
activities effectively.

 Art is an Inborn talent. However it can be

refined through Learning and Practice.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 32
Management is an Art due to the following
reasons:
1. Intelligence 2. Initiative

3. Innovative

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 33
4. Individual Approach

5. Application & Dedication

6. Result Oriented
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 34
 Comparison :
Management as

As An art As a Science

 Based on Practice and  Based on Experimentation.

creativity.
 It is a systematized body of
 It is a theoretical body of knowledge.
knowledge.
 Has Universal Application.
 Has Personalized
Application.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 35
II. Modern Operational Management
Theory
14 Principles of Henri Fayol
 DIVISION OF WORK OR SPECIALIZATION
 AUTHORITY AND RESPONSIBILITY
 DISCIPLINE
 UNITY OF COMMAND
 UNITY OF DIRECTION
 SUBORDINATION OF INDIVIDUAL TO GENERAL
 REMUNERATION
 CENTRALIZATION
 LINE OF COMMAND/SCALAR CHAIN
 ORDER
 EQUITY
 STABILITY OF TENURE
 INITIATIVE
KONGUNADU COLLEGE OF ENGINEERING AND
1–36  ESPRIT DE CORPS
TECHNOLOGY
 1. DIVISION OF WORK or SPECIALIZATION

Division of work makes a man specialist. The reason is

that division of work helps to specialize in an activity which
increases the output with perfection. It also avoids wastage of
time. Division can be applied to both technical and managerial
kind of work.

KONGUNADU COLLEGE OF ENGINEERING AND

1–37
TECHNOLOGY
  Authority & Responsibility.
1–38

 Managers must be able to give orders. Authority

gives them this right. Note that responsibility
arises wherever authority is exercised.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Discipline.
1–39

 Employees must obey and respect the rules that

govern the organization.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
 Unity of command.
1–40

 Every employee should receive orders from only one

superior.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Unity of direction.
1–41

 Each group of
organizational activities
that have the same
objective should be
directed by one
manager using one
plan.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
Subordination of individual
 The individual
should subordinate
self-interest to the
general good. It is
incumbent upon
management to
reduce conflict
between the
individual and the
general well being
wherever possible.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 42
  Remuneration
1–43

 Workers must be paid a fair

wage for their services.
 Means the wages and salaries paid
to employee. It should be fair &
must be paid on time.
 It satisfy both employee &
employer
 It should be decided on-Work
allotted.
 cost of living.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  CENTRALIZATION
1–44

 Fayol thought centralization of authority to be

desirable, at least for overall control. Certainly, both
formulation of policy and the generation of basic rules
and procedures ought to be centralized

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Scalar chain
1–45

 The line of authority from

top management to the
lowest ranks represents the
scalar chain.
Communications should
follow this chain.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Order
1–46

 People and materials

should be in the right
place at the right time.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Equity
1–47

 Managers should be kind

and fair to their
subordinates.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
 Stability of tenure of personnel
1–48

 High employee turnover is inefficient. Management

should provide orderly personnel planning and ensure that
replacements are available to fill vacancies.

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
  Initiative.
1–49

 The power of
thinking out,
proposing and
executing.
Management
should encourage
employees to
originate and
carry out plans.
KONGUNADU COLLEGE OF ENGINEERING AND
TECHNOLOGY
  Esprit de corps
1–50

 It means that create a team

spirit or union is strength.
 Developed an atmosphere
of mutual trust and
understanding.
 Create a sense of belonging
employees
 It bring a loyalty,
dedication and commitment
to the group.
KONGUNADU COLLEGE OF ENGINEERING AND
TECHNOLOGY
1–51

Behavioral theory

KONGUNADU COLLEGE OF ENGINEERING AND

TECHNOLOGY
Organizational Behavior
 Human behavior in organizations is
complex.
 The field of organizational behavior
draws from a broad, interdisciplinary
base of psychology, sociology,
anthropology, economics, and medicine.
 There are two theories on how
employees behave:
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 2 - 52
Behavioral Theory on How
Employees Behave Toward
Work
Theory X Assumptions:
 Employees dislike work.
 Employees are
irresponsible.
 Employees lack ambition.
 Employees resist change.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–53
Another Theory on How
Employees Behave

Theory Y Assumptions:
 Employees are willing to
work.
 Employees are self
directed.
 They accept
responsibility.
 Employees are creative.
 They are self-controlled.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–54
Difference between
Administration and
Management

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–55
 Objectives
Management
 Stated as broad Administration
strategic aims  Stated in general
terms and reviewed
or changed
infrequently

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 56
 Success Criteria
Management
 Performance mostly Administration
measurable  Mistake avoiding
 Performance difficult
to measure

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 57
 Ressource Use
Management
 Primary task Administration
 Secondary task

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 58
 Decision Making
Management
 Many decisions Administration
 Decisions affect few  Few decisions
 Decisions must be  Decisions affect
made quickly many
 Decisions take time
to be made

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 59
 BUSINESS
ORGANIZATION

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 60
 BUSINESS
 A business (also called a company,
enterprise or firm) is a legally
recognized organization designed to
provide goods and/or services to
consumers.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–61
 Forms of Business
Organization
 sole proprietorship or sole trader
 partnership
 corporation
 share of stock
 board of directors
 dividends

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY Slide 62
Sole Proprietorship/ sole trader
 It is a type of business entity which is
owned and run by one individual

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 63
Partnership
 a business owned by two or more
people

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 64
Disadvantages of a partnership:

 Responsibilities, profits, and losses are shared

 can be held liable for errors of partners

 unlimited liability for business expenses

 responsible for all money or services owned.

 business income is taxed as personal income

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 65
Advantages of a partnership :

 easy to establish
 multiple sources of capital

 risks are spread among partners

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY Slide 66
Corporation
 a business that has the legal rights of a
person but is independent of its owners

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 67
 Organization & the
environmental factors

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–68
External and Internal Environment

1–69
 The External Environment

KONGUNADU COLLEGE OF ENGINEERING AND TECHNOLOGY 3–70

 Internal & External Environment classification:
Internal Environment
1.Resources
2.Capabilities
3.Culture
External Environment:
1.specific environment
a. Customers b. Suppliers
c. Competitors d. Pressure Groups
2. General Environment
a. Economic conditions b. Political/Legal Conditions
c. Socio-cultural Conditions d. Demographic Conditions
e.KONGUNADU
Technological Conditions
COLLEGE OF ENGINEERING AND TECHNOLOGY f. Global conditions 3–71
 External environment
 External environment refers to force
and institutions outside organization
that potentially affect an organizations
performance

 General and Specific Environment

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 72
 External environment-
Specific Environment
 Specific Environment that is directly
relevant to achievement of an org’s goal
 Customers,competitors,suppliers,pressure
groups
 Economic conditions,political/legal
conditions,socio cultural conditions,
demographic conditions,technological
and Global conditions
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 73
Specific Environment
Customers

Customers:customers who absorbs

organizational outputs
They represent potential uncertainty to an
organization,Their taste can
change,they can become dissatisfied
with organization’s product or service

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 74
Specific Environment
Competitors:

 Competitors: Organizations cannot

afford to ignore its competitors.
Managers must be prepared to
respond to competitors policies
regarding pricing new
products,services offered and other
incentives it is giving to customers
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 75
 Specific Environment-
Suppliers
 Suppliers:Any party that provides input for
the business. E.g financial institutions are
provider of money, colleges are suppliers of
human resources
 Managers need to have steady and and
reliable flow of inputs to meet the goals

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 76
Specific Environment-
Pressure groups
 Pressure groups: Managers must
recognize the special interest groups
that attempt to influence organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 77
General Environment
Economic conditions:
 Economic conditions: It includes the
impact of economic factors like Interest
rates, changes in disposable income and
the stage of general business cycle
 e.g : when consumer’s incomes fall their
confidence about job security
declines,they will postpone
purchasing any thing that is not
necessary
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 78
General Environment
Political/legal conditions:
 Political/legal conditions:
Federal,state and local government
influence what org can and cannot do
 Managers must adapt their practices to
the changing expectations of the
society and their life style

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 79
General Environment
Demographic Conditions:
 Demographic Conditions: Trends in
the physical characteristics of
population such as gender,age,level of
education,income,geographical location
 Technological:It is changing the ways
the org are operating,so businesses
must address this issue and its impact
on performance of org.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 80
General Environment-
Socio-cultural Conditions
 Managers must adapt their practices
to the changing expectations of the
society in which they operate.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 81
General Environment-
Technological Conditions
 The whole area of technology is
radically changing the fundamental
ways that organizations are structured
and the way that managers manage.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 82
General Environment-
Global conditions
 Globalization is one of the major
factors affecting managers and
organizations

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 83
 TRENDS AND CHALLENGES
OF MANAGEMENT IN GLOBAL
SCENARIO

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 84
 Workforce diversity
 Changing employee expectation
 International environment
 Building organizational capabilities
 Job design & organizational structure
 Changing psycho-social system
 Technological advance
 Management of human relations
 Changes in legal environment
KONGUNADU COLLEGE OF
 Expanding globalisation
ENGINEERING AND
TECHNOLOGY 85
1.Workforce diversity
Changing the Way You Do Business
 It refers to the way in which people in a
workplace are similar & different from
one another. in addition to the
characteristics protected by law, other
similarities & differences commonly
cited include background, education,
language skills, personality & work role.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 86
Advantages of Workforce
diversity
 IMPROVE DECISION MAKING
 IMPROVE TEAM PERFORMANCE
 BETTER CONSUMER SERVICES
 ENHANCE COMMUNICATION SKILLS
 CREATIVITY & INNOVATION

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 87
2.Changing employee expectation

 The managers has then to redraw new

methods of motivation such as job
design.
 Ex: motivation of workers to deliver
their contribution towards the
accomplishment of organizational goals.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 88
 3.INTERNATIONAL ENVIRONMENT

The Environment which

includes all the factors
and forces which are
external to the Business
organization such as
economic, socio-cultural,
legal demographic etc.
are known as
International
environment.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 89
 In simple word International
Environment means the growth and
expansion of business to a larger
extent.
i.e. global all over the world.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 90
4. Building organizational
capabilities
 To acquire new skills, knowledge & to
evaluate environmental changes to
evaluate business strategies.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 91
5. Job design & organizational
structure
 Design with foreign concepts ex: quality
circle,TQM etc
i. Task Approach
ii. People Approach

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 92
6.Changing Psycho-Social
System
 Management designed to perform its
work function.
 But in future Human Participation will
be required.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 93
7.Technological Advance
 New jobs will be created and many old
jobs will become redundant

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 94
8.Management of human
relations
 New generation of workforce
comprising educated will ask for higher
degree of participation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 95
9.CHANGING IN LEGAL
ENVIRONMENT
 Increases changes in legal environment
necessary adjustments have to be
made.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 96
Strategies for
International
Business

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 97
International Management
 Focuses on the operations of
international firms in host countries.
 International businesses engage in
transactional across national
boundaries.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 98
Multinational Corporation (MNC)
 Multinational Corporations have their
headquarters in one country but
operate in many countries.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 99
Orientations
 Ethnocentric Orientation – The style of the foreign
operations is based on that of the parent company.
 Polycentric Orientation – The foreign subsidiaries are
given a great deal of managerial freedom.
 Regiocentric Orientation – The foreign operations are
staffed on a regional basis.
 Geocentric Orientation – The entire organization is
viewed as an interdependent system operating in many
countries.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 100
Strategies
 Multinational corporations must give
weightage to two important factors
 The need to make optimum
economic decisions on a global basis
 Responsive to host country
differences

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 101
In order to fulfil the above two criteria the
MNCs may opt for any of the four strategy
 Worldwide integration / Globalisation
Strategy
 National responsiveness strategy
 Regional responsiveness strategy
 Multifocal strategy

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 102
Forms of International
Business
 Exportation – Exportation of goods and services from parent
country to host country.
 Licensing agreement – Licensing agreement for producing
goods in another country.
 Management contracts – The company can engage in
management contracts for
operating in foreign companies.
 Joint Venture and Strategic Alliances
o One form of interaction is a joint venture with the firm in the
host country.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–103
Wholly Owned Subsidiaries
o A wholly owned subsidiary is an
operation on foreign soil that is totally
owned and controlled by a company
with headquarters outside the host
country.
o In wholly owned subsidiary, the
production facilities are totally owned
by one company.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–104
Challenges of Management in
Global Scenario
 Language barriers
 Selling and Marketing in foreign markets
 Attitudes of host governments
 Communication and coordination
between
subsidiaries

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 105
 UNIT

2
PLANNING

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–106
What is Planning?
 Deciding in advance what to do, how to do it ,
when to do it and who has to do it.
 Planning is the pre-selection of objectives
and outlines the action before starting any
business.
 Planning is decision making in advance.
 Choosing the alternatives and making the
decision is called planning.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 107
Nature of Planning
 Goal oriented: Every plan must contribute in some
positive way towards the accomplishment of objectives.
 Primacy of Planning: Planning is the first of the
managerial functions
 Efficiency, Economy and Accuracy
 Co-ordination
 Limiting Factors: money, manpower etc
 Flexibility
 Planning is an intellectual process: The quality
of planning will vary according to the quality of the mind of
the manager.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 108
Importance of Planning
 Provides direction
 Leads to economical utilization of
resources
 Reduces the risks
 Facilitates decision making
 Encourages Innovation & Creativity
 Improves morale
 Facilitates control
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 109
Planning Process
(or)
Steps in Planning

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–110
 Steps in planning
Being Aware of opportunities
Market, competition, Customers, Strengths Weakness

Establishing objectives
Where we want to be, what to achieve and when

Developing premises
In what environment ( I & E), scenarios

Determining alternative courses

How many and which are most promising

Evaluating alternative courses

In the light of objectives

Selecting a course

Formulating derivative plans

KONGUNADU COLLEGE OF
Quantifying plans by budgeting
ENGINEERING AND
TECHNOLOGY 111
1. Being aware of opportunities
 All managers should take look at future
opportunities and see them clearly and completely.
 They should know their strengths and weakness,

understand what problems they wish to solve and

why, and know what they expect to gain.
 Setting realistic objectives depends on
(i) About market
(ii) About expected competition
(iii) What customers wants

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 112
2. SETTING OBJECTIVES
 The second step in planning is to establish or
set objectives
 Objectives specify the expected results and

indicate the end points of

(i) What is to be done
(ii) Where the primary emphasis is to be
placed (iii) What is to be accomplished
by the strategies, policies, procedures,
rules, budgets and programs.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–113
3. DEVELOPING PREMISES
 It is important for all the managers
involved in planning to agree on the
premises.
 Forecasting is important in premising:
What kind of markets will be there?
What volume of sales? What prices?
What products? What technical
developments? What cost? Etc
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–114
4. INDENTIFYING ALTERNATIVE COURSES OF
ACTION
 to search and examined alternative
courses of actions.
 The planner must usually make
preliminary examination alternative
courses to accomplish the goal.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–115
5. EVALUATING ALTERNATIVE COURSES

 After determining alternative courses

and examining their strong and weak
points, the next step is to evaluate the
alternatives.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–116
6.SELECTING A COURSE
 Selecting an alternative is the real
point of decision making. This is the
point at which the plan is adopted.
 the manager has to decide one best
alternative or several alternative
courses of action.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–117
7.FORMULATING DERIVATIVE PLANS

 The seventh step in planning is

formulating derivative plans.
 When a decision is made next step
is to formulate a supporting plan,
such as to buy equipment,
materials, hire and train workers
and develop a new product.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–118
8. Quantifying Plans by Budgeting

 the final step in planning is to

quantify them by converting them into
budgets.
 The overall budgets of an enterprise
represent the sum total of income
and expenses with resulting profit.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–119
TYPES OF PLANS
 Long range Vs Short range
 Strategic Vs Operational

 Corporate Vs Functional

 Proactive Vs Reactive

 Standing Vs Single Use

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 120
 Long range Vs Short range
Long range plan Point of Short range plan
distinction
Covers many years & Meaning Covers less than one
affects many year and is more
departments of an specific & detail
organization
5 yrs or more Time Up to one year

Mission ,long term goals Deals Current operations of

and strategies with organization
Top management Prepared Lower level executives
by
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 121
 Strategic Vs Operational
Strategic Plan Point of Operational Plan
distinction
5 years or more Time Under one year
horizon
Adapt to external Purpose Implement internal goals
environment based on
internal strengths
Top management Level Middle & lower level
involved

Primarily judgmental Basis for Exact data & Standards

planning used

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 122
Corporate Vs Functional
 Corporate Plan:
 A comprehensive plan that outlines the broad
objectives of a company as a whole and
develops plans to achieve those objectives
 Focus on organizational performance

 Functional Plan:
 Is unit planning and deals with different
departments.
 Focus on departmental performance
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 123
Proactive Vs Reactive
 Proactive Planning:
 Managers challenge the future,

anticipating future contingencies

 Reactive Planning:
 Organizations react to events as and

when they arise

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 124
Standing Vs Single Use

 Standing Plans  Single Use plans

 Developed for  Developed to carry
activities that recur out a course of
regularly over a action that is not
period of time likely to be
repeated in future
 Ex:  Ex:
 Objectives, Policies,  Programmes,
Procedures, Methods,
Schedules, Projects,
Rules Budgets
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 125
Types of Plans – Key Point
 Strategic Plans
 Apply to the entire organization.
 Operational Plans
 Specify the details of how the
overall goals are to be achieved.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7–126
Types of Plans – Key Point
 Long-Term Plans
 Plans with time frames extending 5 years

 Short-Term Plans
 Plans with time frames of one year or less

 Specific Plans
 Plans that are clearly defined and leave no room for

interpretation
 Directional Plans
 Flexible plans that set out general guidelines and provide

focus,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7–127
Types of Plans – Key Point
 Single-Use Plan
 one-time plan specifically designed
to meet the need of a unique situation.
 Standing Plans
 Ongoing plans that provide guidance
for activities performed repeatedly.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7–128
TYPES OF PLANS/ Hierarchy of Plans
 Mission or purposes
 Objectives or goals
 Strategies
 Policies
 Procedures
 Rules
 Programs
 Budgets
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 129
Mission or purpose
The basic purpose or function
or tasks of an enterprise or
agency or any part of it

Objectives or goals
The end towards which
activity is aimed
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 130
Strategies
The determination of the basic long
term objectives of an enterprise and the
adoption of courses of action and allocation
of resources necessary to achieve these
goals

Policies
General statements or
understanding that guide or channel
thinking in decision making
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–131
Procedures
Plans that establish a
required method of handling
future activities

Rules
Rules spell out specific
required actions or non actions
allowing no discretion
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 132
Programs
A complex of goals, policies,
procedures, rules, task assignments,
steps to be taken, resources to be
employed, an other elements necessary
to carry out a given course of action

Budgets
A statement of expected results
expressed in numerical terms

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–133
Cascading of Objectives

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 134
Management by Objectives
(MBO)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–135
Management by Objectives
(MBO)
 Is a method whereby managers and employees
define goals for every department, project, and
person and use them to monitor subsequent
performance.

4 major activities:
1. Set goals
2. Develop action plans
3. Review progress
4. Appraise overall performance
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 136
Step 1: Set Goals Step 2: Develop Action Plans
• Corporate Strategic Action Plans
Goals
• Departmental Goals
• Individual Goals
Review
Progress
Step 3:
Review
Take Corrective Progress
Action
Appraise
Performance

Step 4: Appraise
Overall Performance
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 137
 Benefits of MBO Problems with MBO
1. Improvement of 1. Danger of inflexibility
management

2. Performance can be 2. An environment of poor

improved at all company employer-employee relations
levels. reduces MBO effectiveness.
3. Employees are motivated. 3. Strategic goals may be
displaced by operational goals.
4. Departmental and 4. Mechanistic organizations and
individual goals are values that discourage
aligned with company participation can harm the
goals. MBO process.
5. Too much paperwork saps
KONGUNADU COLLEGE OF
MBO energy.
ENGINEERING AND
TECHNOLOGY 138
Strategic Management
The set of managerial decisions
and actions that determines the
long-run performance of an
organization.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
139
Strategic management
process
a six-step process that
encompasses strategic planning,
implementation, and evaluation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–140
 FORMATION CONSIDERATIO
SWOT N OF
OF MISSION &
ANALYSIS STRATEGIC
OBJECTIVES
ALTERNATIVES

EVALUATION IMPLEMENTATIO CHOICE OF

AND CONTROL N STRATEGY

STRATEGIC MANAGEMENT PROCESS

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 141
1.Mission and Goals
 Mission
 a statement of the purpose of an
organization
 Major goals
 the foundation for further planning
 Secondary goals
 Are objectives to be attained that lead to
superior performance.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 142
 2.SWOT(Identifying Organizational
Opportunities)

Strengths Weaknesses

Opportunities Threats

a. External Analysis
b. Internal AnalysisKONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 143

a. External Analysis
Identify strategic opportunities and
threats in the operating environment.

Immediate (Industry)

Macroenvironment National

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1-144
b. Internal Analysis
 Identify strengths
 Quality and quantity of resources available
 Distinctive competencies
 Identify weaknesses
 Inadequate resources
 Managerial and
organizational deficiencies

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1-145
Step 4: Formulating strategies
 Develop and evaluate strategic alternatives
 Select appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
 Match organizational strengths to
environmental opportunities
 Correct weaknesses and guard against
threats

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–146
 Step 5: Implementing strategies
 Implementation: effectively fitting
organizational structure and activities to the
environment.
 The environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its
requirements.
 Step 6: Evaluating results
 How effective have strategies been?
 What adjustments, if any, are necessary?
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–147
Strategic Managers for All Levels

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1-148
 LEVELS OF STRATEGIC MANAGEMENT

 Corporate-Level Managers
 Oversee development of strategies for whole organization
 CEO is principle general manager who consults with other
senior executives

 Business-Level Managers
 Responsible for business unit that provides
product/service to particular market

 Functional-Managers
 Supervise particular function/operation (e.g. marketing,
operations, accounting, human resources)
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 149
Types of Organizational Strategies

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–150
 1.Corporate
 Corporate Strategies
Strategies
 Top management’s overall plan for the entire
organization and its strategic business units
 Types of Corporate Strategies
 Growth: expansion into new products and
markets
 Stability: maintenance of the status quo
 Renewal: examination of organizational
weaknesses thatKONGUNADU
are leading to performance
COLLEGE OF
declines ENGINEERING AND
TECHNOLOGY
8–151
a. Growth Strategy
 Seeking to increase the organization’s business by
expansion into new products and markets.
 Types of Growth Strategies
 Concentration
 Vertical integration
 Horizontal integration
 Diversification
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–152
a. i. Concentration
 Focusing on a primary line of business.

a. ii. Vertical Integration

attempting to gain control of inputs (become a
self-supplier).
attempting to gain control of output through
control of the distribution channel or provide
customer service activities (eliminating
intermediaries).
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–153
iii. Horizontal Integration
 Combining operations with another
competitor in the same industry to increase
competitive strengths and lower
competition among industry rivals.
iv. Diversification
 Expanding by combining with firms in
different, but related to field of operation
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–154
The BCG Matrix

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–155
 Renewal Strategies(re-establish)
 Developing strategies to counter
organization weaknesses that are leading
to performance declines.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–156
 2.Competitive Strategies
 Competitive Strategy
 A strategy focused on how an organization
will compete in each of its SBUs (strategic
business units).

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
8–157
DECISION MAKING
PROCESS

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–158
 Decisions and Decision Making

 Decision = choice made from available

alternatives

 Decision Making = process of

identifying problems and opportunities
and resolving them
KONGUNADU COLLEGE OF
159 ENGINEERING AND
TECHNOLOGY
 Six Steps in Decision Making

KONGUNADU COLLEGE OF
Figure 7.4 ENGINEERING AND
TECHNOLOGY
7-160
 Decision Making Steps
Step 1. Recognize Need for a Decision
 Managers must first realize that a decision must
be made.
Step 2. Generate Alternatives
 Managers must develop feasible alternative
courses of action.
 If good alternatives are missed, the resulting
decision is poor.
 It is hard to develop creative alternatives, so

managers need to look for new ideas.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7-161
Step 3. Evaluate Alternatives
 What are the advantages and disadvantages
of each alternative?
 Managers should specify criteria, then
evaluate.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7-162
Step 4. Choose Among Alternatives
 Rank the various alternatives and make a
decision

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7-163
Step 5. Implement Chosen Alternative
 Managers must now carry out the alternative.

Step 6. Learn From Feedback

 Managers should consider what went right and
wrong with the decision and learn for the future.
 Without feedback, managers do not learn
from experience and will repeat the same
mistake over.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
7-164
CASE Study: Which is Best
Cool Drink

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–165
Step 1: Identifying the
problem

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 166
Step 2: Identification of decision
criteria

1) Brand
2) Taste
3) Color
4) Packaging
5) Price

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 167
Step 3: Allocation of weights to
criteria
Criteria Abhi Bj Amit Too Total
Brand 9 10 10 8 37
Taste 10 8 10 10 38
Color 6 5 7 6 24
Packaging 9 8 6 5 28
Price 8 9 9 8 34

Criteria Weight
Taste 10
Brand 9
Price 8
Packaging KONGUNADU COLLEGE OF 6
ENGINEERING AND
Color TECHNOLOGY 4 168
Step 4: Development of
alternatives
 Coca Cola
 Sprite
 Pepsi
 Fanta (orange)
 Lipton (ice tea)
 Tipco (fruit juice)
 Ichitan (green tea)
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 169
 Step 5: Analyzing alternatives
Packagin
Drink Taste Brand Price g Color
Coca Cola 10 10 7 6 7
Sprite 8 9 8 7 6
Pepsi 9 10 6 8 6
Fanta (Orange) 6 7 8 8 10
Lipton (Ice Tea) 10 9 8 5 5
Tipco (Fuit
Juice) 10 9 7 8 8
Ichitan (Green
KONGUNADU COLLEGE OF
Tea) 10 8
ENGINEERING AND 8 6 5
TECHNOLOGY 170
 Step 6: Selecting an alternative
Criteria*Weight

Drink Taste Brand Price Packaging Color Total

Coca Cola 100 90 56 36 28 310
Sprite 80 81 64 42 24 291
Pepsi 90 90 48 48 24 300
Fanta
(Orange) 60 63 64 48 40 275
Lipton (Ice
Tea) 100 81 64 30 20 295
Tipco (Fuit
Juice) 100 81 56 48 32 317
Ichitan
(Green KONGUNADU COLLEGE OF
ENGINEERING AND
Tea) 100 72 64
TECHNOLOGY 36 20 292
171
Step 7: Implementing the
decision

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 172
Step 8: Evaluating the decision’s
effectiveness

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 173
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–174
Decision Making Process
A) Define the Problem

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 175
B) Consider Your Value:
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 176
C) List Your Options
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 177
D) Weigh the Consequences:
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 178
E) Decide and Act
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 179
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 180
It is also a powerful strategic planning tool used to evaluate
a project in business venture or in an organization or
individual requiring a decision in pursuit of an objective
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 181
CASE STUDY
 How to choose a education after +2

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 182
 FACTORS
 Marks
 Interest

 Economy

 Job opportunities

 Family Background

 No of years(3,4,5)
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 183
 THREE FRIENDS
 Palani, Mani and Arun studying in a same
school
 They are average students
 Let us take a decision on their future
education.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 184
PALANI
 Likes adventure and sports
 Hails from poor family
 He had two elder brother who works in
their home town

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 185
MANI
 Mother and Father are teachers
 They desire to make his son to acquire
higher degree
 Mani is interested in vehicles and machines

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 186
 ARUN
 Hails from an average family
 He is good in maths.
 He had a younger sister and it is his responsibility to
educate him.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 187
 DECIDE
 Take a decision on
all three friends by
considering the
factors and
situation given
above

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 188
CASE STUDY
 TRAIN TRACK AND CHILDREN

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 189
 WHAT TO DECIDE
 A group of children were playing near 2 railway
tracks, one still in use while the other disused. Only
one child played on the disused track, the rest on
the operation track

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 190
WHAT TO DECIDE
 The train came and you were just beside
the track interchange.
 It was not possible to stop the train but you
could make the train change its course to
the disused track and save most of the kids

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 191
WHAT TO DECIDE
However, that would also mean the
lone child playing in the disused
track would be sacrificed. Or would
you rather let the train go way.
Let us take a pause to think what kind
of decision we would make
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 192
 WHAT TO DECIDE
 Analyze the
situation
 Thick and reflect

 Decide

 Now go ahead

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 193
WHAT TO DECIDE
Most people might choose to divert the
course of the train, and sacrifice only
one child.
To save most of the children at the
expense of only one child was rational
decision most people would make
morally and emotionally
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 194
WHAT TO DECIDE
 But, have you ever thought that the child
choosing to play on the disused track had
in fact made the right decision to play at a
safe place.
 Nevertheless, he had to be sacrificed
because of his ignorant friends who choose
to play in the used track which is
dangerous.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 195
 WHAT TO DECIDE
 This kind of dilemma happens around us

everyday. In the office community, in politics

and especially in a democratic society the
minority is often sacrificed for the interest of
the majority. No matter how foolish or
ignorant the majority are and how farsighted
and knowledgeable the minority are.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 196
WHAT TO DECIDE
 The child who choose not to
play with the rest on the
operational track was side
lined. And in the case he was
sacrificed, no one would shed a
tear for him
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 197
 WHAT TO DECIDE
To make the proper decision is not try to change
the course of the train because the kids playing
on the operational track should have known
very well that track was still in use and that they
should have run away if they heard train sirens.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 198
WHAT TO DECIDE
 If the train was diverted, that lone
child would definitely die because
he never thought the train could
make over to that track.
 Notably that track was not in use

probably because it was not safe.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 199
WHAT TO DECIDE
 If the train was diverted to the unused
track, we would put the lives of all
passengers on board at stake. And in
your attempt to save a few kids by
sacrificing one child, you might end
up sacrificing hundreds of people to
save these few kids
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 200
WHAT TO DECIDE
 While we are all aware that life is full
of tough decisions that need to be made,
we may not realize that hasty decisions
may not always be the right one.
 Remember that What’s right is not
always popular and what’s popular
isn’t always right.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 201
CASE STUDY: Buying a CAR

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–202
BUYING A CAR
 Price
 Model
 Options
 Style
 Fuel Efficiency

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–203
CASE STUDY: Buy a MOBILE

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–204
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 205
LAPTOP

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–206
Criterion Weight
Memory and Storage 10
Battery life 8
Carrying Weight 6
Warranty 4
Display Quality 3

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
6–207
Evaluation of Laptop Alternatives Against Weighted Criteria

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
6–208
 Decision-Making
Process

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 209
Types of Decisions

Programmed decision:
 A decision that is fairly
structured or recurs (occur
again)with some frequency (or
both).
Non-programmed decision:
 A decision that is relatively
unstructured and occurs much
less often than a PROGRAMMED
DECISION. KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–210
Rational Decision Making(logical)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–211
1.Recognize the need for a decision
 Manager recognize the need for a
decision in the form of a problem or
opportunity.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–212

2.Definition of the problem
A problem is the gap between present
and the desired state of affairs on the
subject matter of the decision.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–213
3.Search and develop alternatives
 The alternative course of action can be
developed by collecting more information,
thinking creatively, consulting experts and
undertaking research.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–214
 4.Evaluate Alternatives
After identifying alternative courses of action,
they must be compared and evaluated. This
step determines the relative cost of each
alternative.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–215

5.Implement chose alternative
The decision taken by the management will not
serve the purpose if it is not executed properly.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–216
 6.Learn
Feedback from feedback
is important because decision making
is a continuous and never ending process
 Feedback information is very much useful in
taking the corrective measures and in taking
right decisions in the future

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–217
Decision-Making Conditions

The decision
maker faces
conditions of:

Certainty Risk Uncertainty

Level of ambiguity and chances of making a bad decision

Lower Moderate Higher

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 218
1.Certainty:
 A condition in which the
decision maker knows with
reasonable certainty what
the alternatives are and
what conditions are
associated with each
alternative.
2. Risk:
 A condition in which the
availability of each
alternative and its potential
payoffs and costs are all
associated withKONGUNADU
probability
COLLEGE OF
estimates. ENGINEERING AND
TECHNOLOGY 9 - 219
3.Uncertainty
 A condition in
which the decision
maker does not
know all the
alternatives, the
risks associated
with each, or the
likely
consequences of
each alternative.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 9 - 220
 UNIT-3
ORGANIZING

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–221
What Is Organizing?
 Deciding how best to
group organizational
activities and
resources.
 Organizing: the
process by which
managers establish
working relationships
among employees to
achieve goals.KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 11 - 222
For any person to work effectively in an
organization, the following two points are
very essential.

• In a team operation, the person should

know what role he is playing

• The person should know his role is related

to other roles in the organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–223
Organizing (Flow Diagram)
Identify various activities and group them
under separate Heads
(Ex: Production, Marketing, Finance, etc.,)

To each manager, one group of activity is assigned.

The manager is given the needful authority
to extract work from subordinates

Arrangement is made for both horizontal and

vertical coordination in the organization structure
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–224
Organization
 Organization is defined as the structure and process by
which a group of members,
- Allocate its activities among members
- Identify relationships and
- Integrates its activities to achieve common objectives
 Organization is also defined as the process of identifying
and grouping the work to be performed, defining and
delegating responsibilities and authority and establishing
relationship for the purpose of enabling people to work most
effectively together in accomplishing objectives.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–225
Organizing
 Koontz and O’Donnel define the organizing
as “the grouping of activities necessary to
attain objectives, the assignment of each
grouping to a manager with authority
necessary to supervise it and the provision
for the co-ordination horizontally and
vertically in the enterprise structure”.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–226
 NATURE OF organizing:

1. Group of Persons
2. Common Objectives
3. Division of Work 5. Communication
4. Co-ordination 6. Central Authority
7. Rules & Regulations
8. Environment

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 227
 Group of Persons: An organization is a group of
people working together for the achievement of
common objectives.

 Common Objectives: Every organization has a

common objectives. The common goal is the
basis of cooperation among the members.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 228
 Division of Work: total task is divided into the
members of the group. Division of work is
necessary not only because one individual cannot
do all the work but specialization results in
efficiency and effectiveness.

 Co-ordination: The members of an organization

are willing to help each other for the
achievement of desired goals.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 229
 Communication: People who form an
organization communicates with each other in
order to integrate or coordinate there efforts.
People can perform together efficiently.

 Central Authority: In an organization, there is a

central directing authority which controls the
concerted efforts of the group. The chain of
authority- responsibility relationships is known as
the chain of command.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 230
 Rules and Regulations: For the orderly and
systematic working of the members, rules and
regulations are laid down and enforced by the
central authority.

 Environment:
Economic,social,political and legal factors.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 231
(i) Itnature
The is a process
of organization is in two folds as follows.

(ii) It is a frame work of internal relationships

(i) It is a process:
• It coordinates the activities of employees in an
Orderly manner

It specifies how activities will be divided among departments

• in a
concern,
-Policies to be followed while accomplishing activities.

-Who is to do the activity?

-The scope and limits of responsibilities.

-The relationship of one job to another, and so on.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–232
(ii) Framework of internal relationship:
• It clearly defines the relationship between
- Person to person
- Position to position
- Job to job, and so on.
• It also clearly specifies the orderly channels of
communication between the various levels of
responsibilities
• It also defines the authority and responsibility in a
KONGUNADU COLLEGE OF
formal manner ENGINEERING AND
TECHNOLOGY
1–233
PROCESS:

2.

1. 3.

4.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 234
 Process of organizing:
1. Identification of Activities: First step is to determine the
tasks that must be performed to achieve the established
objectives. Activities and jobs are building blocks of any
organization. The activities to be performed depends
upon the objectives, nature & size of the enterprise.

2. Grouping of Activities: The various activities are the

grouped into departments or divisions according to
similarity and common purpose.
It may be grouped on various basis i.e. functions
products, territories, customers etc depending on
requirements. KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 235
3. Assignment of Duties: The assignments of activities
creates responsibility and ensures certainty of work
performance. The process should be carried down to the
lowest levels.

4. Delegation of Authority: Every individual is given the

authority required to carry out the responsibility assigned
to him. Every individual must know to who are his
subordinates.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 236
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 237
 PURPOSE / IMPORTANCE OF organizing (Organization):
 Facilitates Administration: Achievement of the objectives
of an enterprise by providing a framework of coordination
and control. Individual goals can be coordinated towards
group goals. A properly balanced organization facilitated
both management and operation of the enterprise.

 Encourages Growth & Diversification: It has enabled

organizations to grow and expand to giant sizes. It provides
flexibility for growth without losing control over various
activities.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 238
 Optimum Use of New Technology: Optimum use of
technology permits optimum utilisation of human
resources. Sound organization ensures that every
individual is placed on the job for which one is best suited.

 Stimulates Innovation & Creativity: It stimulates

creative thinking and initiative on the part of employees. It
provides recognition for the professional and the
specialist in terms of their achievement.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 239
 Encourages Good Human Relations: The assignment of
right jobs to right person improves job satisfaction and
inter-personal relations. Well-defined jobs and clear lines of
authority and responsibility ensure good human relations.

 Ensures Continuity of Enterprise: It provides scope for

the training and development of future management.

 Coordination: Division of labor, better utility of technology

and human talent helps to improve the efficiency and
quality of work.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 240
 Formal and Informal
Organizations
Formal structure is defined as the relationships
among organizational resources as outlined by management.
A formal organization is one that has a formalized intentional
Structure of roles or positions.

Informal structure is defined as the patterns of relationships

that develop because of the informal activities of
organization members.
An informal organization is one that does not have
KONGUNADU COLLEGE OF
ENGINEERING AND
intentional structure of roles or positions.
TECHNOLOGY 241 9
Formal Organization:
Characteristics:
• Are well planned and designed to have flexibility
• Focus in on results and not on individuals
• Everything (structure, relationship etc.,) are documented on a chart
and manual.

Advantages:
Reduces conflicts between people working in the organization
•

As every task is well defined,

• it creates
KONGUNADU a sense
COLLEGE OF of security
ENGINEERING AND
TECHNOLOGY 1–242
•
Informal Organization:
Characteristics:
• Organizations happen on their own
• Rules and regulations are not documented

• Members can belong to more than one informal organization

Advantages:
•It motivates people and gives great satisfaction
•It acts as a fast channel of communication

Disadvantages:
•In some cases, it acts againstKONGUNADU
organizational goals
COLLEGE OF
ENGINEERING AND
•It usually spreads unwanted rumors
TECHNOLOGY 1–243
Comparison of Formal and Informal Organizations:

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–244
It is a “diagrammatic representation of the frame-
work or structure of an organization”

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 245
(i) Top-down Chart (or) Vertical Chart:
 The lines of communication flow from top level to
bottom in vertical lines.
 In this chart, the highest position is placed at the top
the next highest follows the next highest one and so on.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 246
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 247
(ii) Horizontal Chart (or) Left-to-right Chart:
 The lines of commands are flowing horizontally instead
of vertical.
 In this chart, the highest position is shown at the extreme
left and the lowest position at the extreme right.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 248
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 249
(iii) Circular Chart (or) Concentric Chart:
 In this chart, the position of the top executive is shown
in the centre of the chart.
 The subordinates of these top executives are shown in all
directions outward from the centre.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 250
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 251
Organization Chart:
Advantages:
•Defining the organizational relationships
•Rationalizing (Justifying / Explaining) the organization

•The charts acts as a Blueprint (Plan / Design)

•Helpful in reference

Limitations:
•They are static in nature
•Human relationships cannot be protrayed (represented) on a chart

•Responsibilities cannot be clearly defined as shown on a organization

•Inflexibility
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–252
It is a framework within which an Organization
arranges it’s lines of authorities and
communications and allocates rights and duties.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 253
 Organization structure is the formal pattern
of interactions and coordination designed by
management to link the tasks of individuals and
groups in achieving the organizational goals.

 An organization structure should be designed

to clarify what task is to do, who is to do
KONGUNADU COLLEGE OF
and who is responsible for what results.
ENGINEERING AND
TECHNOLOGY 254
 Organization structure determines the location of
decision-making in the organization.
 A sound organization structure facilitates the
growth of enterprise by increasing its capacity to
handle the increased level of authority.
 Organization structure provides the pattern of
communication and coordination.
 It helps the member to know what his role is
KONGUNADU COLLEGE OF
and how it relates ENGINEERING
to otherAND roles.
TECHNOLOGY 255
Based on the power flow within the
organization, it may be classified into the
following categories:

(i) Bureaucratic (or) mechanistic structure

(ii) Organic (or) adaptive structure

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 256
Based on the formation of departments (or)
groups, organizations may be classified into the
following types:

(i)Functional Structure

(ii) Divisional Structure

(iii) Matrix Structure

(iv) Team Structure and

KONGUNADU COLLEGE OF
ENGINEERING AND
(v) Network Structure TECHNOLOGY 257
(i) Bureaucratic (or) Mechanistic Structure:
 A bureaucracy is a form of organization
based on logic order and the appropriate use
of formal authority.
 The mechanistic (or) bureaucratic
structure is a management system based on
a formal framework of authority which is
KONGUNADU COLLEGE OF
carefully outlined and precisely followed.
ENGINEERING AND
TECHNOLOGY 258
(i) Bureaucratic (or) Mechanistic Structure:

Features (or) Characteristics:

 Administrative class is responsible for the
coordination of members
 Clearly specified tasks using division of work principle.
 Clearly defined hierarchy (or) line and staff positions
with formal relationships between these two.
 Organization is governed by official rules and
KONGUNADU COLLEGE OF
ENGINEERING AND
regulations. TECHNOLOGY 259
(i) Bureaucratic (or) Mechanistic Structure:
Drawbacks:
 Only suitable for fairly stable external
environmental condition.
 Too rigid rules may make organizational objectives
secondary.
 Incompatible with the development of a mature
personality.
 Neglect informalKONGUNADU
organization
COLLEGE OFand interpersonal
ENGINEERING AND
difficulties. TECHNOLOGY 260
(ii) Organic (or) Adaptive Structure:
 This structure is opposite in nature to the
bureaucratic structure.
 An organic structure is a management system
founded on cooperation and knowledge-based
authority.
 It is much less formal and much more
flexible than a mechanistic organization due to
which it is amendable to COLLEGE
KONGUNADU change,
OF innovation and
ENGINEERING AND
development. TECHNOLOGY 261
(ii) Organic (or) Adaptive Structure:
Features (or) Characteristics:
 Rules that are not highly defined
 Little reliance on formal authority
 Decentralized control
 Fast decision-making
 Informal patterns of both delegation and
KONGUNADU COLLEGE OF
communication ENGINEERING AND
TECHNOLOGY 262
(iii) Functional Structure:
It is the most popular organizational structure in
the business world because it is basic and it makes sense.
Production, marketing, finance, R&D and human
resources are common groupings within a functional
structure.
Within the functional structure, people of similar skill
sets are grouped together and managed by
somebody who presumably knows a great deal about
these skill sets. KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 263
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 264
Advantages:
 Faster stability and efficiency
 It makes employees comfortable and simplifies
training

Disadvantages:
 Communication and collaboration between the
departments is difficult
KONGUNADU COLLEGE OF
 Authority is more centralized
ENGINEERING AND
TECHNOLOGY 265
(iv) Divisional Structure:
In divisional structure, the organization is divided
into several fairly autonomous divisions.
These divisions are divided according to their
organizational outputs.
The divisional structure is concerned with the
placing groups of people with similar activities
where they are needed all across
KONGUNADU the
COLLEGE
ENGINEERING AND
OF organization.

TECHNOLOGY 266
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 267
Advantages:
It improves the ability of a company to respond to
customer issues as responsibility of division lies with
only one person.
Organizational size can be increased without any
problem.
Disadvantages:
Competition among divisions may develop due to
limited resources.
KONGUNADU COLLEGE OF
A complex control system is required.
ENGINEERING AND
TECHNOLOGY 268
S.No Functional Structure Divisional Structure
.
It is most logical, scientific, It is not time proven and
1. time proven and natural natural method of structure
method of structure
It provides specialization of It does not provide
2. work which makes the specialization of work which
maximum utilization of makes the less utilization of
manpower and other manpower and other
resources resources
3. It ensures the performance It ensures a proper product
control control
KONGUNADU COLLEGE OF
It facilitates delegation of It
ENGINEERING AND does not facilitates
4. authority delegation of authority 269
TECHNOLOGY
(v) Matrix Structure:
Matrix structure is a hybrid organizational form
containing characteristics of both functional and
divisional structures
According to Stanley Davis and Paul Lawrence, the
matrix organization is, “any organization that
employs multiple command system that includes
not only multiple command structure , but also
related support mechanism and an associated
organizational culture and behavior pattern”.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 270
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 271
Advantages:
It is more flexible than the traditional functional organization.


It can adopt the changes and uncertain environment in a better

way.
Responsibility for the overall execution, management and profit


is with the project manager who acts as a chief executive.

It helps in employee developments.
Disadvantages:
The organizational relationship becomes very complex and


there is a great confusion among personnel.

Matrix structure may be expensive. The dual chain of command

KONGUNADU COLLEGE OF
may cause management costs to double.
ENGINEERING AND
TECHNOLOGY 272
(vi) Team Structure:
 Team Structure organizes the separate
functions into a group based on one overall
objective. These cross-functional teams are
composed of members to solve problems and
explore opportunities.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 273
Advantages:
 Decision-making and response time speeds up
 Employees are motivated
 Administrative costs are lowered

Disadvantages:
 Conflicting loyalties among team members
 Time-management issues
KONGUNADU COLLEGE OF
 Increased time spent in meetings
ENGINEERING AND
TECHNOLOGY 274
(vii) Network Structure:
The network structure relies on other organizations
to perform critical functions on a contractual basis.
In other words, managers can deal a specific
work to specialists.
For example, a core company may give contract to
specialized company for development of software &
website on their behalf.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 275
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 276
Advantages:
It provides the flexibility and reduces the overhead
because the size of staff and operations can be
reduced.
Levels of managers are eliminated
Administrative costs are lowered
Disadvantages:
It results the unpredictability of supply and lack of
control because managers are relying on contractual
KONGUNADU COLLEGE OF
ENGINEERING AND
workers to perform important.
TECHNOLOGY 277
Line Authority
• It is the right of the superior to give orders and the power to
extract work from a number of immediate subordinates
• An organizational structure in which authority originates at
the top and moves downward in a line
• It is the simplest organizational structure.
Advantages :
• It is a clear authority structure that promotes rapid
decision making.
Disadvantages :
• May force managers to perform too broad a range of
duties.
• May cause the organization to become too dependent on
key employees who are capable of performing multiple
duties. KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 278
Line Organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 279
 Staff Authority
• It is the right of a person to give advice to their line superiors that will
help the line superiors to work effectively in accomplishing
organizational objectives.
Advantages of Line and Staff organization:
• It is based on planned specialization
• Quality of product is better and Wastage is less
• Relief to the over burdened line executives and better coordination of
activities
Disadvantages :
• Frequent friction (disputes) between line and staff people
• Line officers may not give importance to the advice given by staff
people because of ego
• Overhead cost of product may rise because
KONGUNADU COLLEGE of
OF high salaried officials
ENGINEERING AND
TECHNOLOGY 1–280
 staff
authority

Line authority Staff authority

Gives the right to decide, order and Gives the right only to advice
get work done from subordinates respective line manager

Creates clear superior – subordinate Relationship is only to support line

relationship managers

Clear channel of communication is Channel of communication provided

provided is vague

Used to make concrete operating Used to provide ideas for

decisions decision-making

Person using this authority is Person using this authority is not

KONGUNADU COLLEGE OF
accountable for results obtained ENGINEERING
accountable
AND for results obtained
TECHNOLOGY 1–281
Line VS Staff

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–282
 DEPARTMENTATION
(Departmentalization)
The process of departmentation is as follows.
- A massive organization's activities are listed and
similar activities are grouped together
- Each group of similar activities are put under small
and flexible administrative units called departments
- Each department is headed by a manager under
whom there are a group of people with
specialization and expertise to deal with activities
KONGUNADU COLLEGE OF
of the department ENGINEERING AND
TECHNOLOGY 1–283
Departmentation by
Different Strategies

The basis by which jobs are grouped together.

Forms (or) Types
 Departmentation by Function
 Departmentation by Geography (territory)
 Departmentation by Customer Group
 Departmentation by Process
 Departmentation by Product
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–284
Functional/Divisional
Structures
 A division is a collection of functions working
together to produce a product.
 Product structure: divisions created according to
the type of product or service.
 Geographic structure: divisions based on the
area of a country or world served.
 Market structure: divisions based on the types of
customers served.KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 285
Departmentation by Function

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 286
 Geographic Organization
• Geographic Organization – The categorization of
organizational units by geography.

• Advantages :

 Allows for the use of local employees or salespeople.

• Disadvantages :

• Having multiple locations can be costly.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 287
Departmentation by Geography (Territory)
Geographic Structure
CEO
Corporation

Corporate
M anagers

Northern W estern Southern Eastern

Region Region Region Region
Departmentation by Product

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 289
 Product Structure
CEO
Corporation

Corporate
M anagers

W ashing M achine Lighting T elevision

Division Division Division
 Customer Organization
• Customer Organization – The categorization of
organizational units by customers served.

• Advantages :
 Allows employees to identify with a particular customer
type.

• Disadvantages :
KONGUNADU COLLEGE OF
• Possible duplication of facilities and equipment.
ENGINEERING AND
TECHNOLOGY 291
Departmentation by Customer

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 292
 Hybrid Organization
• Hybrid Organization – An organizational structure that uses
multiple types of departmentalization within the organization.

• A small organization may have no organization at first. As it grows, it

may organize first on one basis, then another, and then another.

• Hybrid organizations share the same advantages and disadvantages as

the organization types being used within it.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 293
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 294
Matrix Structure
(Matrix Departmentation (or) Organization)
• Matrix Structure – A hybrid organizational structure in which
individuals from different functional areas are assigned to work on a
specific project or task.

• Advantages :

• Employees are challenged constantly, interdepartmental

cooperation develops along with expanded managerial talent.

• Disadvantages:

• A role conflict can develop if the authority of the project manager

is not clearly delineated form that of a functional managers.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 295
Matrix Organization

Functional Control

Project A

Project-
based Project B
Control
Project C

KONGUNADU COLLEGE OF
ENGINEERING AND
Engineering Production Logistics Design
TECHNOLOGY 296
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 297
 Span of Control
• The number of subordinates a manager can efficiently and effectively
direct
• Span of control refers to the number of subordinates a superior can
effectively manage

Wide Span (More number of subordinates)

Wider spans (Flat span) of management increase organizational
efficiency

Narrow Span Drawbacks

(Less number of subordinates)
•Expense of additional layers of management
•Increased complexity of vertical communication
•Encouragement of overlyKONGUNADU
tight supervision
COLLEGE OF and discouragement of
employee autonomy ENGINEERING AND
TECHNOLOGY 298
 Factors that Determine an
Effective Span
 Capacity of supervisor
 Capacity of subordinates.
 Nature of Work
 Type of Technology
 Delegation of Authority
 Clarity of plans
 Communication Techniques
 Using of objective standards
 Geographical closeness of employees
KONGUNADU COLLEGE OF
ENGINEERING AND
 Direction and Coordination TECHNOLOGY 1–299
Organization
Decide on the overall
objectives of the organization

List the sub-objectives,

policies and plans

Identify and classify activities

and then group them

Assign duties and delegate

authority to carryout activities

KONGUNADU COLLEGE OF
Establish structure
ENGINEERING ANDrelationship
and communication
TECHNOLOGY channels 1–300
Delegation
of Authority
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–301
Delegation of Authority
(Distributing Authority)
 Authority:
 Power that has
been legitimized by
the organization.
 Delegation:
 The process by
which managers
assign a portion of
their total
workload to others.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 11 - 302
Delegation of Authority
 Delegation of authority is a process which
enables a person to assign works to others
and delegate them with adequate authorities
to do it.
 Mc.Farland, “ Delegation is a primary
formal mechanism by which the network of
authority relationship is established”.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–303
 DELEGATION
 Delegation has dual characteristics. A subordinate receives authority

from his superior but at the same time, his superior still retains all his

original authority.

 Authority once delegated can be enhanced, reduced (or) withdrawn

at any time depending upon the situation and requirement.

 A manager cannot delegate the authority which he himself does not

posses.

 Delegation may be different types such as specific (or) general,

KONGUNADU COLLEGE OF
ENGINEERING AND
written (or) implied, formal (or) informal.
TECHNOLOGY 304
 IMPORTANCE OF
DELEGATION
 Relief to top managers.
 Development of managers.
 Development of
subordinates.
 Better decision-making.
 Specialization.
KONGUNADU COLLEGE OF
 Job satisfaction. ENGINEERING AND
TECHNOLOGY 305
 DELEGATION
 Insecurity.

 Lack of confidence in subordinates.

 Fear of making mistakes.

 Lack of initiative.

 Absence of access to various resources.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 306
 WAYS TO OVERCOME
BARRIERS TO
DELEGATION
 Develop confidence
 Communication.
 Motivation.
 Choose the right person for the right job.
 Freedom to subordinates.
 Clarity of task.
 Matching the jobs with abilities of
subordinates.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 307
 TYPES OF DELEGATION
Over delegation: Some managers burden their

subordinates due to their insecure ability to perform a task

and poor time management for the task.

Under delegation: It occurs frequently with false

assumptions by managers due to lack of ability on their

part to complete the job correctly and due to lack of trust

KONGUNADU COLLEGE OF
ENGINEERING AND
in sub-ordinates. TECHNOLOGY 308
 PROCESS OF DELEGATION

Define
Determining the MOTIVATION to
RESPONSIBILITY
GOAL and AUTHORITY subordinates

Holding TRAINING to Establishing

ACCOUNTABILITY subordinates
KONGUNADU COLLEGE OF CONTROL
ENGINEERING AND
TECHNOLOGY 309
Centralization &
Decentralization
Centralization
The degree to which decision making is concentrated at a
single point in the organization.

Decentralization
The degree to which decision making is spread
throughout the organization.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 310
CENTRALIZATION

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–311
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–312
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–313
 Centralization

ADVANTAGES: DISADVANTAGES:
 Provide Power
 less motivated
• Minimal extensive controlling

procedures and practices  Neglected functions

• Minimize duplication of
for mid. Level
function

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–314
 Decentralization

ADVANTAGES: DISADVANTAGES:

 Quicker Decisions  Loss of Control

 Motivation of Local  Duplication of

Managers Services

 Reduces workload
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–315
 Comparison of
Delegation and Decentralization
Delegation Decentralization
It is the process of allocation of It is the end result achieved by
authority the delegation

It implies the relationship It implies the relationship

between a superior and a between top management and
subordinate various departments (or) sections
It is must for management It is optional

It is a technique of management It is both technique and

to get things done philosophy of management
It can take place without There cannot be decentralization
KONGUNADU COLLEGE OF
decentralization without
ENGINEERING ANDdelegation
TECHNOLOGY 1–316
 Job Design
• The job design is usually broad enough to
accommodate people’s needs and desires.

• People spent a great deal of time on the job and it is,

therefore, important to design jobs so that
individuals feel good about their work.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 317
 Job Design
• Two important goals of job design are as follows:
(i)To meet the organizational requirement such as
higher productivity, operational efficiency, quality
of product (or) service etc.

(ii) To satisfy the needs of the individual

employees such as interests, challenge, achievement
etc.,
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 318
 Job Design
• Guidelines for Job Designing:
(i)Mechanical and technical factors of the job and
simplifications of the mechanical factors
(ii)Providing social interactions, views and attitudes with
superiors, subordinates and peers.
(iii)Providing scope for identifying psychological needs
such as esteem, need for challenging work, etc., and
satisfying them.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 319
 Job Design
• Techniques for designing jobs:
The following techniques are used for designing jobs:
(i)Job Enlargement
(ii)Job Rotation
(iii)Job Enrichment

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 320
 Job Enlargement
 Job Enlargement is the horizontal expansion of a
job. It involves the addition of tasks at the same level
of skill and responsibility.
 Job enlargement is doing different tasks and not
just the same thing at all time. It is done to keep the
workers from getting bored.
 Job enlargement does not increase the depth of the
job.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 321
 Job Enlargement
Advantages:
Job Enlargement helps the organization to improve and
increase the skills of the employee
Improves earning capacity of the employee
Disadvantages:
Job Enlargement increases the work burden of the
employee
Create misunderstanding with
KONGUNADU the union
COLLEGE OF member
ENGINEERING AND
TECHNOLOGY 322
 Job Rotation
 Job Rotation refers the movement of an employee
from one job to another.

 An employee who works on a routine job is affected

from boredom and monotony.

 Job rotation improves employee’s skills. Thus, the

role of job rotation in motivating people is limited.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 323
 Job Rotation
Advantages:
Job rotation helps to avoid monotony of the job
Provides the opportunity to broaden one’s knowledge

Disadvantages:
Reduces uniformity in quality
Create misunderstanding with the union member

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 324
 Job Enrichment
 Job Enrichment is the addition to a job of tasks that
increase the amount of employee control (or)
responsibility.

 Job enrichment is an attempt to motivate employees

by giving them increased responsibility and variety of
their jobs.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 325
 Job Enrichment
Advantages:
Interesting and challenging job
Improves the decision making ability
Reduces work load of superiors
Disadvantages:
Job enrichment has negative implications if employees
are not comfortable with decision making task.
May cause problem if the employees do not have right
attitude KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 326
 HR Planning
• Human resource planning can be defined as the
process of identifying the number of people required
by an organization in terms of quantity and quality.

• HR planning is a process which determines how an

organization should move from its current manpower /
human resources position to its desired manpower /
human resources position.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 327
MANPOWER (HR) PLANNING

“ Manpower planning is the process by which an

organization ensures that it has the right number and the

kind of people, at the right place, at the right time, capable

of effectively and efficiently completing those tasks that

will help the organization achieve its overall objectives”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 328
Features (or) Characteristics of
Manpower (HR) Planning :
 HR planning focuses on optimum utilization of resources in
the organization

 It is the process of determining demand for and supply of

human resources in the organization

 It is an integral part of overall corporate plan of the

organization
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 329
Objectives of HR Planning :

 Ensure adequate supply of manpower as and when required

 Meet the requirements of the programme of expansion,
diversification etc.,
 Progress the knowledge, skill, standards, ability and
discipline etc.,
 Maintain the pleasant industrial relations by maintaining
optimum level and structure of human resources.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 330
Need (or) Importance (or) Significance of
Manpower (HR) Planning
 DEFINING FUTURE PERSONNEL NEED.
(Basis of recruiting and developing personnel)

 COPING WITH CHANGES.

(Future changes can be cope up with
effective planning)

 PROVIDING BASE FOR DEVELOPING TALENTS.

(Setting up the priorities before recruiting)

 INCREASING INVESTMENT IN HUMAN RESOURCES.

(Provides the way for effective utilization of
talents)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 331
HR Planning Process
 HR Planning assess the manpower requirement
required to perform organizational activities for future
period of time.

 HR planning is a continuous process which starts

with identification of HR objectives, move through
analysis of manpower resources and ends at appraisal
of HR planning.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 332
 HR Planning Process
Steps Involved in Human Resource Planning:
Assessing the current HR capacity

Forecasting HR requiremnets

Gap analysis

Developing HR strategies to support organizational

strategies KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 333
Recruitment
Process of locating,
identifying, and attracting
capable candidates

Can be for current or future

needs

Critical activity for some

corporations.
What sources do we use for
KONGUNADU COLLEGE OF
recruitment?
ENGINEERING AND
TECHNOLOGY 334
 Recruitment
• B.Flippo defined recruitment as “the process of

searching for prospective employees and stimulating

them to apply for jobs in the organization”

• The searching of suitable candidates and informing

them about the openings in the enterprise is the

most important aspect of recruitment process.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 335
Sources of Recruitment:

(i) Internal Sources

- Present employees (Promotions and transfers)

- Former employees

- Employee referrals (Existing employees refer their

family members, friends and relatives)

- Previous applicants (Organizations contact previous

KONGUNADU COLLEGE OF
ENGINEERING AND
applicants through mail (or) messenger)
TECHNOLOGY 336
 Internal Recruitment Sources
Merits:
Internal recruitment can be used as a technique of
motivation
Morale of the employee can be improved
Employees become loyal to the enterprise
Demerits:
Discourages competition by restricting opportunity to
external candidates
Conflicts and controversies surface among the internal
KONGUNADU COLLEGE OF
ENGINEERING AND
candidates, whether (or) not they deserve promotion.
TECHNOLOGY 337
Sources of Recruitment:

(ii) External Sources

- Educational and training institutes

- Private employment agencies

- Public employment exchange

- Data banks (Management can collect the bio-data of

the candidate from different sources)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 338
Sources of Recruitment:

(ii) External Sources

- Advertisements (Most widely used method for

generating many applications)

- Casual applicants (Candidates apply casually for jobs

through mail (or) in person)

- Trade unions (Unemployed persons approach trade

KONGUNADU COLLEGE OF
ENGINEERING AND
union leaders for getting a suitable employment)
TECHNOLOGY 339
 External Recruitment Sources
Advantages:
The suitable candidates with knowledge, talent, skill etc.,
are generally available
It helps create healthy competition and conductive work
environment in the organization
Disadvantages:
This method of recruitment is both expensive and time
consuming
Candidates are not familiar with the tasks, job nature and
KONGUNADU COLLEGE OF
ENGINEERING AND
the internal scenario of the organization
TECHNOLOGY 340
Selection

Selection is the process of differentiating between

applicants

in order to identify and hire those with a greater

likelihood of success in a job.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 341
 Selection
• Selection is the process which enables the enterprise to

pick up the candidates with the required qualifications,

training and skill for the job after careful screening and

rejecting the undesirables at each successive steps.

• There is no standard selection process to follow by all

companies. Companies may follow different selection

methods depending KONGUNADU

upon the size and nature of the
COLLEGE OF
ENGINEERING AND
TECHNOLOGY 342
Selection Process

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 343
 Selection Process
Types of Interview:
Informal interview
Formal interview
Planned interview
Depth interview
Patterned interview
Stress interview
Group interview
Panel interview KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 344
 Selection Process
Limitations:
Selection technique and instruments are not a sure way to
predict what people will do even though they may have the
ability to do it.
Selection process might be more expensive to an
enterprise
It is a time consuming process

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 345
 Selection Process
Orientation programme provides the following
information:
Organization structure
Types of departments and units
Rules and regulations of the organization
Safety measures to prevent accidents
Employee's facilities and sources
Grievance procedure
KONGUNADU COLLEGE OF
Personal department rules and practices
ENGINEERING AND
TECHNOLOGY 346
Difference : Recruitment & selection
RECRUITMENT SELECTION

 To attract maximum number To choose best out of the

of candidates. available candidates.

 It creates application pool It is a rejection process

as large as possible. where few are selected.

 Techniques are not very Highly specialized techniques

intensive. are required.

 Outcome is application Outcome

KONGUNADU COLLEGE OF is the candidate who
ENGINEERING AND
pool. TECHNOLOGY is offered job. 347
Recruitment
RECRUITMENT
& selection process
SELECTION
 Advertisement Screening of
applications
 Employment agencies Selection tests
 On campus recruitment Interview
 Deputation Checking of
references
 Employee recommendations Physical examination
 Labor unions Approval by authority
KONGUNADU COLLEGE OF
 Gate hiring ENGINEERING AND
TECHNOLOGY
Placement 348
 Training and Development
• Training: According to Edwin B.Flippo, “Training is

the act of increasing the knowledge and skills of an

employee for doing a particular job”.

• Development: “It means all round improvement on

the job performance, personality growth in

proficiency, advancement and progress in all other

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 349
 Training and Development
Need for Training:
Training is necessary to prepare existing employees for
higher-level jobs
Training is necessary when a person is shifted from one
job to another job
It is necessary to make employee mobile and versatile
It provides a sense of security and self confidence to
employees
Training develops new skills to the employees
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 350
 Training and Development
Importance of Training:
A trained worker can contribute towards increasing the
productivity of the organization
Training makes employees to become loyal to an
organization
Training enables employees to secure promotions easily.
Training provides organizational stability and flexibility
It reduces accidents thereby reducing the supervising time
as well as saving moneyKONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 351
Training Methods:  On-the-job training
(i) Job rotation (It involves the movement of
manager from one job to another)
(ii) Apprenticeship and coaching (Coaching is one
to one training)
(iii) Committee assignments (Trainee managers are
appointed as members of a committee)
(iv) Experience (or) understudy (Learning by
doing)
(v) Temporary promotions (Sometimes a manager
goes to a foreign trip KONGUNADU
(or) ill (or) vacation holiday. Senior
COLLEGE OF
ENGINEERING AND
TECHNOLOGY 352
Training Methods:  Off-the-job training
(i) Lecture
(ii) Conference and Seminars
(iii) Role-playing
(iv) Programmed instructions (It is a self
learning process)
(v) Business game (It is a form of simulation
which involves a sequential decision-making exercise)
(vi) Sensitivity training (The main objective of
sensitivity training is the development of awareness and
KONGUNADU COLLEGE OF
sensitivity to behavioral patterns of oneself
ENGINEERING AND and others )
TECHNOLOGY 353
Steps in Training Program:

(i) Identifying training needs

(ii) Establish specific objectives

(iii) Select appropriate methods

(iv) Acquire training resources and preparing

schedule

(v) Find a trainer

(vi) Implement programs

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 354
(vii) Evaluate programs
 Performance Management
• Performance Management is a process by which

managers and employees work together to plan, monitor

and review an employee’s work objectives and overall

contribution to the organization.

• Appraising the performance of individuals, groups

and organization is KONGUNADU

a common practice
COLLEGE
ENGINEERING AND
OF of all societies.
TECHNOLOGY 355
Performance Appraisal
 Major key to managing itself
 Basis of determining who is promotable to higher
position
 Determines strengths and weaknesses of a
manager
 Measures performance in accomplishing goals and
plans
 Integral part of organization
 Recognize legitimate desire of employees for
KONGUNADU COLLEGE OF
ENGINEERING AND
progress TECHNOLOGY 356
Objectives of Performance Appraisal
 To improve the management development

 To improve employees performance

 To find out individual potential identification

 To plan for the workforce

 To improve the effective communication

 To help the superiors to have a proper understanding about

their subordinates KONGUNADU COLLEGE OF

ENGINEERING AND
TECHNOLOGY 357
Appraisal Methods
 Graphic Rating Scale
 Critical Incidence method
 Self Appraisal
 180 Degree Appraisal
 360 Degree Appraisal
 Management by Objective
 Balance Score Card
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 358
Methods of Performance Appraisal:
(i)Trait-based appraisal
(ii)Appraisal by results
Trait-based appraisal:
Trait means qualities. Managers traditionally have been
evaluating standards of personal traits and work characteristics.
These traits are:
(a)Job knowledge
(b)Leadership skill
(c)Analytical competence
(d)Judgment ability KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 359
Methods of Trait-based Performance Appraisal:
(i)Graphical scale method (linear rating scale)
(ii)Ranking method (a person is ranked against others)
(iii)Grading (Excellent, Very good, Good, Average, Poor)
(iv)Forced distribution method (forced to appraise)
(v)Check list method (Is he regular in the job? Yes / No.)
(vi)Critical incident method (based on key incident: A stress is
given on the behavior of the worker on the job)
(vii)Group appraisal (In this method, the rating is not made by
a single rater but by a group of supervisors)
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 360
Appraisal by results (or) Appraisal against verifiable
objectives (or) Modern methods:
(a) Management By Objectives (MBO):
MBO is a process whereby the superior and subordinate
managers of an organization jointly identify its common goals.
 The developed MBO process directs employees to move in
desired directions and reach the expected level of achievement.
(b) Behaviorally Anchored Rating Scales (BARS):
It combines the elements of the traditional traits scales and
critical incident methods.
KONGUNADU COLLEGE OF
It is developed from critical incident statements.
ENGINEERING AND
TECHNOLOGY 361
Appraisal by results (or) Appraisal against verifiable objectives
(or) Modern methods:
(c) Assessment Centers:
Assessment centers were first used for selecting and promoting
lower level supervisors but they are now applied to middle level
managers as well.
Assessment centers are basically meant for evaluating the potential
of candidates to be considered for promotion,
training and development.
(i)Comprehensive review
(ii)Progress and periodic reviews
KONGUNADU COLLEGE OF
ENGINEERING AND
(iii)Continuous monitoring TECHNOLOGY 362
Performance Appraisal Process: (Nine step process)

(i) Performance standards are established based on job

(ii) The standards are informed to all employees and

appraisers

(iii) Employee performance can be measured by the

appraisers through observations, records and reports.

(iv) The measured performance may be adjusted according to

the influence of external and internal factors. It is the actual

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 363
performance.
Performance Appraisal Process: (Nine step process)

(v) Comparing the actual performance of other employees and

previous performance of the employee and others gives an idea

where the employee stands.

(vi)Comparing the actual performance with the standards and

finding out the deviations. Deviations may be positive (or)

negative.

(vii) Appraisers (or) managers discuss with the employees about

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 364
the reason for positive (or) negative deviations.
Performance Appraisal Process: (Nine step process)

(viii)Appraisers consider the internal and external factors and

suggest necessary changes in standards

(ix)Follow up the performance appraisal report. It is for guiding,

directing, coaching and training the employee.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 365
Features of Performance Appraisal
 Performance appraisal evaluates not only the performance

of worker but also his potential for development

 It is a continuous process

 Appraisals are arranged periodically according to a

definite plan

 Performance appraisal is the employee’s job relevant

strength and weaknesses.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 366
Career Planning and Management
Career and its Types:
Career is a series of jobs (or) positions held throughout
an individual’s working life time.

 Edwin B. Flippo defined a career as a sequence of

separate but related work activities that provide
continuity, order and meaning in a person’s life.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 367
Career Planning and Management
Two Types of Careers:
Individual Career:
An individual career is a sequence of work – related
experiences in which a person participates during the span
of work life.
Organization Career:
An organization career is a relatively standard set of
roles to be performed which interacts with the flow of
individuals within the organization.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 368
Career Planning and Management
Career Management:
It is a process for enabling employees to better
understand and develop their career skills and interests,
and to use these skills and interests most effectively both
within the company and after they leave the firm.

 Career Management = (Career Planning + Career

Development)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 369
Career Planning and Management
Career Planning:
It is the process by which one selects career goals and
path to those goals.
Career planning can be described as “the process by
which employees obtain the knowledge about themselves
(their values, personality, preferences, interests, abilities,
etc.,) and information about the working environment and
then making an effort to achieve a proper match”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 370
Differences: Organizational and Individual Career Planning
S.No. Organizational Individual
Career Planning Career Planning
1. Identify future Identify personal abilities
organizational staffing and interests
needs
2. Plan career leaders Plan life and work goals

3. Assess individual potential Assess alternative career

and training needs paths inside and outside
the organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 371
Career Planning and Management
Career Development:
It can be defined as an “ongoing process by which
individual progress through a series of stages each of
which is characterized by a relatively unique set of issues,
themes and tasks”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 372
Career Planning and Management
The career development program should:
(i)attempt to match individual abilities and aspirations with
the needs of the organization, and

(ii) develop people for the long-term needs of the

organization and address the dynamic changes which will
take place every time

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 373
Management
 Assures needed talent
 Develops promotable employees
 Lower employee turnover
 Taps employee potential
 Attracts and retains high talent personnel
 Reduces employee frustration
 Enhances cultural diversity
KONGUNADU COLLEGE OF
 Improves organizational goodwill
ENGINEERING AND
TECHNOLOGY 374
Career Stages (Career Development Cycle)

(i) Exploration stage

(ii) Establishment stage

(iii) Mid-career (or advancement) stage

(iv) Late-career (or maintenance) stage and

(v) Decline (or disengagement) stage

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 375
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 376
 Job Analysis
Human Resource
Planning
Tasks Responsibilities Duties
Recruitment
Selection
Training and
Job Development
Descriptions Performance Appraisal
Job
Analysis Compensation and
Job Benefits
Specifications
Safety and Health
Employee and Labor
Relations
Knowledge Skills Abilities Legal Considerations
KONGUNADU COLLEGE OF
ENGINEERING AND Job Analysis for
TECHNOLOGY
377
Teams
 "Staffing means filling
and keeping filled,
positions in the
organisation structure."

Harold KONGUNADU COLLEGE OF

Koontz ENGINEERING AND
TECHNOLOGY 378
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 379
STAFFING
 FILLING ORGANISATIONAL POSITIONS: Concerned with
filling of good systematic staffing.

 DEVELOPING COMPETENCIES:

Right job according to right person.

 RETAINING PERSONNEL:

Continuing them in the organization.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 380
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 381
ELEMENTS OF STAFFING

 Manpower planning

 Job analysis

 Recruitment and selection

 Training and Development

 Performance appraisal
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 382
SCOPE OF STAFFING

 Hiring

 Remuneration

 Motivation

 Employee maintenance

 Human relations
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 383
Job analysis

“Job analysis is the process of studying and collecting

information relating to the operations and

responsibilities of a specific job. The immediate

products of this analysis are job descriptions and job

specifications”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 384
Recruitment
Process of locating,
identifying, and attracting
capable candidates

Can be for current or future

needs

Critical activity for some

corporations.
What sources do we use for
KONGUNADU COLLEGE OF
recruitment
ENGINEERING AND
TECHNOLOGY 385
Selection

Selection is the process of differentiating between

applicants

in order to identify and hire those with a greater

likelihood of success in a job.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 386
Sources of Recruitment
School
Placement Employee
Referrals

Internal
Searches
Recruitment Voluntary
Sources Applicants

Employment
Agencies Advertisements
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 387
Difference : Recruitment & selection
RECRUITMENT SELECTION

 To attract maximum number To choose best out of the

of candidates. available candidates.

 It creates application pool It is a rejection process

as large as possible. where few are selected.

 Techniques are not very Highly specialized techniques

intensive. are required.

 Outcome is application Outcome

KONGUNADU COLLEGE OF is the candidate who
ENGINEERING AND
pool. TECHNOLOGY is offered job. 388
Recruitment
RECRUITMENT
& selection process
SELECTION
 Advertisement Screening of
applications
 Employment agencies Selection tests
 On campus recruitment Interview
 Deputation Checking of
references
 Employee recommendations Physical examination
 Labor unions Approval by authority
KONGUNADU COLLEGE OF
 Gate hiring ENGINEERING AND
TECHNOLOGY
Placement 389
Training & Development
 TRAINING :

“Training is a short term process utilizing a systematic and

organized procedure by which non managerial personnel learn
technical knowledge and skills for a definite purpose.

 DEVELOPMENT:

“Development is a long term educational process utilizing a

systematic and organized procedure by which managerial

personnel learn conceptual and theoretical knowledge for

general purpose”.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 390
Role of training & Development

 INCREASE IN EFFICIENCY

 INCREASE IN MORALE OF EMPLOYEES

 BETTER HUMAN RELATIONS

 REDUCED SUPERVISION

 INCREASED ORGANIZATIONAL VIABILITY & FLEXIBILITY

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 391
Performance Appraisal
 Major key to managing itself
 Basis of determining who is promotable to higher
position
 Determines strengths and weaknesses of a
manager
 Measures performance in accomplishing goals and
plans
 Integral part of organization
 Recognize legitimate desire of employees for
KONGUNADU COLLEGE OF
ENGINEERING AND
progress TECHNOLOGY 392
Appraisal Methods
 Graphic Rating Scale
 Critical Incidence method
 Self Appraisal
 180 Degree Appraisal
 360 Degree Appraisal
 Management by Objective
 Balance Score Card
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 393
Conclusion
Staffing is the most vital asset with an
organization, without which it cannot
move ahead in the competitive world. It
can be equated with HR management as
both have same sort of objectives.
Staffing is an open system approach. It
is carried out within the enterprise but
KONGUNADU COLLEGE OF
is also linked to external environment.
ENGINEERING AND
TECHNOLOGY 394
 UNI
T

4
DIRECTING
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–395
 Directing
 Directing is defined as the process of instructing,
guiding and inspiring human factors in the
organization to achieve organization objectives.
 Directing includes the following elements:

(i) Leadership

(ii) Motivation

(iii) Communication
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–396
Nature of Directing

Pervasive function


Continuous activity


Flow from top to bottom level



Creative Activity


KONGUNADU COLLEGE OF
Facilitates Co-ordination
 ENGINEERING AND
397
TECHNOLOGY
Scope of Directing
 Directing integrates the employee’s individual efforts to make it
effective to achieve the organization objectives, since each individual’s
performance affects the performance of others in the organization.

 Directing with its elements provides the stability in the organization and
maintains the balances in the different parts of the organization.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 398
Organizational Behaviour
 Organizational behaviour is concerned with
people’s thoughts, feelings, emotions and actions in
setting up a work.

 Organizational behaviour is defined as,

“The study of human behaviour in organizational
settings, the interface between human behaviour
and the organizational context, and the
KONGUNADU COLLEGE OF
ENGINEERING AND
organization itself”.TECHNOLOGY 399
Foundations of Individual Behaviour
 An individual makes a variety of contributions to an
organization in the form of efforts, skills, ability, time,
loyalty and so forth.

 These contributions presumably satisfy various needs

and requirements of the organization. In return for
contributions, the organization provides incentives such
KONGUNADU COLLEGE OF
a pay, promotion, and job security to the employee.
ENGINEERING AND
TECHNOLOGY 400
Foundations of Individual Behaviour

KONGUNADU COLLEGE OF
ENGINEERING AND
Factors of Individual behaviour in Organization
TECHNOLOGY 401
Definition, Need and Types of Group
 A group consists of a number of individuals
working together for a common objective.

 According to Marvin Shaw, “a group comprises,

of two (or) more persons who interact with one
another in such a manner that each person
influences and is influenced by each other person”.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 402
Need for a group
 An individual cannot perform each and every task.
Group efforts are required for its completion.
 Group has the ability to satisfy the needs of its members
 While accomplishing tasks, all members of a group together
use their creative and innovative ideas than a single individual.
 Group helps in making participative management more
effective.
 Group makes the environment at workplace more lively.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 403
Classification of group
(i) Functional (or) Formal Group:

This type of group is defined by the organization’s

structure with designated work assignments establishing tasks.
The behaviors are set and directed towards organizational goals.

(ii) Task Group:

This group is organizationally determined but it

represents those working together to complete a job
KONGUNADU COLLEGE OF

task. These groups are temporary in nature.

ENGINEERING AND
TECHNOLOGY 404
Classification of group
(iii) Command Group:

This group is dictated by the formal organization. Generally, the

organization chart determines a command group. It is composed of
direct reports to a given manager.

(iv) Informal Group:

These groups are formed for the purposes other than

the organizational goals. These are the groups formed by the
employees themselves at the workplace while working
KONGUNADU COLLEGE OF
ENGINEERING AND
together. TECHNOLOGY 405
Classification of group
(iv) Informal Group:

This type of group is neither formally-structured nor

organizationally determined.

Informal groups are of the following types:

An interest group
(a)

Friendship group
(b)

Membership group
(c)
KONGUNADU COLLEGE OF
ENGINEERING AND
Reference group
(d) TECHNOLOGY 406
Foundations of Group Behaviour
 In 1920, Elton Mayo and his associates conducted the
Hawthorne experiments and came to know that the group
behavior has great impact on productivity. The importance
of group behaviour has been realized from time to time.

 Group behaviour depends on many factors such as

organizational conditions, group member resources,
group structure, group status,COLLEGE
KONGUNADU groupOFdecision-making etc.,
ENGINEERING AND
TECHNOLOGY 407
Foundations of Group Behaviour
 Group formation and development

Groups can form when individuals with similar

goals and motives come, together. Groups are
formed voluntarily. The individuals of a group can
join and leave the group any time and they also
change their tasks.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 408
Foundations of Group Behaviour
There are certain motives because of which, the
individuals join in a group, which are as follows:

Organizational motives to join groups

(a)

Personal motives to join groups

(b)

(i) Interpersonal attraction

(ii) Interest in group activities

(iii) Support for group goals

KONGUNADU COLLEGE OF
ENGINEERING AND
(iv) Need for affiliation
TECHNOLOGY 409
Stages of Group Development
Members of new group are unfamiliar with one another’s
personalities and are hesitant in their interactions. The new group
must pass different stages of development.

Stage 1: Mutual acceptance

During this stage, the members of the group get familiar

with one another and check, which inter-personal behaviour is
acceptable and which is unacceptable by the other members of the
group.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 410
Stages of Group Development
Stage 2: Communication and decision-making

During this stage, group members share their opinions and

formulate the group’s goals. Through communication and
decision-making, the structure becomes clear and the group moves
to the third stage.

Stage 3: Motivation and productivity

This stage is characterized by a shared acceptance among

members of what the group is trying to do.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 411
Stages of Group Development
Stage 4: Control and organization

In this stage, the members perform the roles they have

accepted and direct their group efforts towards goal attainment.
 Characteristics of mature groups:

(a) Role structures

(b) Behavioral norms

(c) Cohesiveness (attractiveness of group members towards the group)

(d) Informal leadership (Each informal group has one (or) more
leaders. KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 412
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 413
Creativity - Defined

Creativity is the development of ideas about

products, practices, services, or procedures
that are novel and potentially useful to the
organization

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–414
What Is Creativity?
Creativity Needs:
 Skill: Learned capacity or talent to
carry out pre-determined results.

 Talent: Natural endowments of a

person.

 Personality: Patterns of relatively

enduring characteristics of human
behavior.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 415
Intellectual Skills:
Humans have intellectual skills that
allow them to have creativity . . .

 Choosing  Translating
 Predicting  Recalling
 Interpreting  Manipulating

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 416
 Choosing: To select from a
number of possibilities and pick
by preference.

 Predicting: To state, tell about,

or make something known in
advance, on the basis of special
knowledge.

 Interpreting: To explain and

KONGUNADU COLLEGE OF
understand theENGINEERING
meaning
TECHNOLOGY
AND of
417
 Translating: To transform
something from one state to
another.

 Recalling: To remember and

bring back to mind a previous
subject or situation.

 Manipulating: To handle,
manage, or use (sometimes
KONGUNADU COLLEGE OF
with skill) an object in
ENGINEERING
TECHNOLOGY
a
AND process 418
Use Your Own Process:
With these skills we are able to . . .
 select knowledge and use it toward a
specific goal.
 interpret communication and share it.
 remember previous knowledge and
use it skillfully.
Use 1 or more of the 6 intellectual
skills to come up with a creative idea

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 419
Creativity can come in different forms . . .

 Scientific: inventions or medical cures.

 Artistic/Musical: beautiful paintings,

sculptures, or songs.

 Creative Writing: novels, short stories,

and poems.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 420
 Innovation - Defined
Innovation is the implementation of new
ideas at the individual, group or
organizational level

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 421
 Motivation

Scott, “Motivation means a process of

stimulating people in action to accomplish

desired goals”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–422
Nature of Motivation
 Motivation is a behavioral concept that directs human
Behaviour towards certain goals.
 Motivation can be either positive (or) negative.
Positive motivation implies use of incentives, rewards etc., to
satisfy human needs while negative motivation emphasis
penalties, threatening etc.,
 Motivation is a psychological concept, which generated within
an individual. It is an inducement of inner feeling of an
individual and it cannotKONGUNADU
beENGINEERING
forcedCOLLEGE
upon
AND
from outside.
OF

TECHNOLOGY 423
Importance of Motivation
 A proper operation improves the efficiency of operation.
 Motivation helps to solve the labour problems and maintains
good labour relations.
 By providing the proper motivation, all the members will try to
be as efficient as possible and to improve upon their skill and
knowledge.
 A proper motivation scheme promotes a closer relationship
between enterprise and workers.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 424
Motivation Process
According to M.A.Jucius, the following steps can be adapted in
the motivation process:

Analysis of situation:
(i) The situation that needs motivational
inducements must be created so as to ascertain the motivational
needs.

(ii) Preparing, selecting and applying a set of appropriate

motivating tools: A list of all devices of motivation is drawn and a
selection made of such motivators that motivate different types of
people under different circumstances.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 425
Motivation Process
(iii) Follow up: It is important to know that the motivators
selected are indeed by providing the desired motivation. This can
be accomplished by getting and evaluating the feedback.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 426
Types / Techniques of Motivation
The following are some of the types of motivation:

Positive Motivation:
(i) It involves a proper recognition of
employee’s efforts and appreciation of employee contribution
towards the goal achievement.

(ii) Negative Motivation: It is based on force, fear and threats. The

fear of punishment (or) unfavorable consequences affects the
behavioral changes.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 427
Types / Techniques of Motivation
The following are some of the types of motivation:

(iii) Extrinsic Motivation: It is induced by external factors,

which are primarily financial in nature. These motivation includes
higher pay, retirement benefits, holidays, health and medical
insurance etc.,

(iv) Intrinsic Motivation (or) Power Motive: It is available at

the time of performance of work. It includes the praise,
recognition, responsibility, power etc.,
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 428
Motivational Theories
(i) Carrot and Stick Approaches of Motivation
(ii) Mc-Gregor’s Theory X and Theory Y

(iii) Dual Mode Theory (Miles Theory)

(iv) Maslow’s Hierarchy of Needs Theory

(v) Herzberg’s Theory – Hygiene Approach to Motivation

(vi) Vroom’s Expectancy Theory

(vii) Porter and Lawler Expectancy Theory

(viii) Equity Theory

KONGUNADU COLLEGE OF
ENGINEERING AND
(ix) Needs of McClelland’s Theory
TECHNOLOGY 429
Mc-Gregor’s Theory X and Theory Y
Prof. Douglas McGregor has developed a set of theories on the
basis of hypotheses relating to human behavior.

These theories are commonly known as “Theory X” and “Theory

Y”.

1. Theory-X:

According to McGregor, theory X is based on the following

assumptions of human nature and behavior:
 The average human dislikes to work. He will avoid work if it is
possible.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 430
 Therefore, people must be controlled, directed and threatened with
punishment to make them work.
 An average man is inherently self-centered and indifferent to organizational goals.
 He is resistance to change by nature.

2. Theory-Y:

According to theory Y, the following assumptions are made about the human
nature and behavior:
 Work is as natural as play (or) rest. The average human being has the
tendency to work.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 431
 People will be committed to the objectives, if they are
properly rewarded.
 Under proper conditions, the average human being accepts the
responsibility.
 A worker may exhibit his efficiency even for non-monetary
rewards such as participation in decision-making, increased
responsibility etc.,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 432
Comparison between Theory X and Theory Y
S.No. Theory X Theory Y
1. The average human dislike to Work is as natural as play
work (or) rest
2. They avoid the responsibility They accept the
responsibility under proper
conditions
3. People lack self-motivation People are self-motivated

4. They have less creativity and They have high degree of

resist to change imagination

5. It is pessimistic (doubtful – It is optimistic (Hopeful –

negative), static and rigid. COLLEGE
KONGUNADU positive),
OF dynamic and
ENGINEERING AND
TECHNOLOGYflexible. 433
Maslow’s Hierarchy of Needs Theory
It is one of the most popular theories of motivation in the
management. This theory was developed by an eminent American
Psychologist Dr. Abraham H.Maslow.

Some of the salient features of this theory are as follows:

Human likings are innumerable and never ending if one liking is
satisfied and another liking emerges in that place.

Satisfied needs do not motivate the workers. Only unsatisfied needs

induce the man to work hard.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 434
Maslow’s Hierarchy of Needs Theory
 Various levels of needs are inter-dependent and
overlapping.
 Higher level needs can be satisfied in many more ways than
the lower level needs.
 The urge to fulfill needs is a prime factor in motivation of
people at work. People seek growth.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 435
Maslow’s Hierarchy of Needs Theory

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 436
Herzberg’s Theory – Hygiene Approach to
Motivation
In the late 1950’s, Frederick Herzberg and his associate
have conducted a study on motivation.

They have developed a theory of work motivation which has

broad implications for the management and its efforts towards
effective utilization of human resources.

The theory developed out of these studies is known as

Herzberg Motivation maintenance theory (or)
Motivation Hygiene theory (or) Two-factor theory of motivation.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 437
Herzberg’s Two-factor Model

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 438
 Comparison between
Maslow and Herzberg Models

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 439
Comparison between Maslow’s and Herzberg’s
Theories:
S.No. Topic Maslow’s Herzberg’s
need hierarchy two-factor theory
1. Relevance All types of people in It is the most relevant
society and in to white-collar workers
retirement and professional
employees

2. Impact of All needs can motivate Only few intrinsic

needs on behaviour needs serve as
behaviour motivators
3. Role of Financial reward can Financial reward is not
financial motivate
KONGUNADU COLLEGE OF a key motivator
ENGINEERING AND
rewards TECHNOLOGY 440
Comparison between Maslow’s and Herzberg’s
Theories:
S.No. Topic Maslow’s Herzberg’s
need hierarchy two-factor theory
4. Type of Descriptive Perspective
Theory

5. Perspective It applies to kinds of It works centrally

people

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 441
Equity Theory
Equity theory of motivation was formulated by
J. Stacy Adam which is based on the social exchange process.

The theory points out that people are motivated to

maintain fair relationship between their performance and
reward in comparison to others.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 442
Equity Theory
It is based on two assumptions about human behaviour:

Assumption-1:
Individuals make contributions for which they expect certain rewards.
Inputs includes individuals past training and experience, special
knowledge, personal characteristics etc., Outcomes (or) rewards
include
pay, recognition, status, prestige etc.,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 443
Equity Theory
Assumption-2:
 Individual compares his input-outcome ratio with the
input-output ratio of other members of his level (or) status in the
organization.

If the individual feels that his ratio is equal to others and there is equity.
•

Therefore, he feels
happy and motivated.

If the ratio is significantly less than those of others

• (inequity), the individual
feels underpaid and frustrated.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 444
Equity Theory

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 445
Equity Theory
The result of inequality on the person is as follows:

Perceived inequality creates tension in the individual

1.

The amount of tension is proportional to the magnitude of the inequality.

2.

The tension created in the individual will motivate him to reduce it.
3.

The degree of demotivation is proportional to the perceived (observed)

4.

inequality.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 446
Equity Theory
Merits of Equity Theory:

This theory makes managers to realize that the equity motive

1.

tends to be one of the most important motives of the people in the

organization.

Equity theory is not precise enough to predict which actions are

2.

most probable.

Equity theory is not a complete theory of motivation but it deals

3.

only with one particular aspect (equity) of motivation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 447
Needs of McClelland’s Theory
David C. McClelland and his associates of
Harvard University proposed that the organization offers an
opportunity to satisfy at least three needs, namely,

The need for achievement (n Ach)

1.

The need for affiliation (n Aff)

2.

The need for power (n PWR)

3.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 448
Needs of McClelland’s Theory
1. Need for Power (n PWR):

It is the need to dominate, influence (or) control people. Power speaks



about the ability to control the activities of others to suit one’s own
purposes.

People with a high need for power look for position of leadership.


They like to set goals, make decisions and direct activities. In a way, the n


PWR helps in understanding managers.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 449
Needs of McClelland’s Theory
2. Need for Affiliation (n Aff):
The need for affiliation is a social need, for companionship and
support, and for developing meaningful relationships with people.
Persons who have a high speed for affiliation view the
organization as a chance to form new and satisfying relationships.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 450
Needs of McClelland’s Theory
3. Need for Achievement (n Ach):
It is the need for challenge, personnel accomplishment and success in
competitive situations.
McClelland has identified the four basic characteristics of high achievers.

1. They like to take personal responsibility for finding solution to problems.

2. They like to take calculated risks and set morale goals. High achievers
want to win.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 451
Needs of McClelland’s Theory
3. Need for Achievement (n Ach):

3. They want concrete feedback on their performance. High

achievers like to know how well they are

4. High achievers are not motivated by money but instead employ

money as a method of keeping score of their achievements.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 452
Needs of McClelland’s Theory
The achievement develoment course contained four important points.

(i) The individual should strive to attain concrete and frequent feedbacks.

(ii) The individual should seek models of achievement i.e., watch these
who have performed well and emulate.

(iii) The individual should imagine himself as one who needs success and
challenge and set carefully planned and realistic work goals.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 453
Needs of McClelland’s Theory
The achievement develoment course contained four important
points.

(iv) The individual must control day-dreaming by thinking and

talking to himself in positive terms.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 454
Limitations of McClelland’s Theory
(i) The use of projective technique is objectionable

(ii) The evidence in support this theory is doubtful.

(iii) Achievement motivation training through promising is

time-consuming and expensive process.

(iv) The theory does not fully address the question of the
process of motivation and how it really comes about.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 455
Job Satisfaction
The term ‘job satisfaction’ refers to an employee’s general happiness
with his (or) her job.

Locke described job satisfaction as “a pleasurable (or) positive

emotional state resulting from the appraisal of one’s job (or) job experiences”.

Importance of Job Satisfaction:

The importance of job satisfaction is that if the people are satisfied with
their work, then there is an improvement in both the quality and quantity of
production.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 456
Job Satisfaction
Markus Christen, Ganesh Iyer and David Soberman
provide a model of job satisfaction as shown below:

KONGUNADU COLLEGE OF
ENGINEERING AND
Christen, Iyer and Soberman model of job satisfaction
TECHNOLOGY 457
Factors relating to Job Satisfaction
Job satisfaction influences a series of factors such as
nature of work, salary, advancement opportunities, management,
work groups and work conditions.

1. Personal Factors:

These factors include the individual employee’s personality, age, sex,

educational level, intelligence etc.,

2. Job Factors:

These factors include the type of work to be performed, skill required for
work performance, occupational status etc.,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 458
Factors relating to Job Satisfaction
3. Organizational Factors:

These factors include security, wages and salaries,

opportunities for advancement, working conditions etc.,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 459
Theories of Antecedents of Job Satisfaction

Several theories concentrate towards causes of job satisfaction.

These factors can be broadly classified into three categories.

1. Situational theories which hypothesize that job satisfaction result

from the nature of one’s job (or) other aspects of the environment.

2. Dispositional approaches which assume that job satisfaction is

rooted in the personological makeup of the individual.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 460
Theories of Antecedents of Job Satisfaction
3. Interactive theories which propose that job satisfaction
results from the interplay of situational and personological factors.

Effects of Job Satisfaction:

Job satisfaction causes a series of influences on various

aspects of organizational life such as employee productivity,
loyalty and absenteeism are analysed.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 461
Job Enrichment
According to Robert N.Ford, Job enrichment is concerned
with designing jobs which include a variety of work content
require a higher level of knowledge and skill, give the worker
more autonomy and responsibility for planning, directing and
controlling his own performance and providing the
opportunity for personal growth and meaningful work
experience.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 462
Job Enrichment
Job enrichment is an extension of job enlargement technique.
In job enrichments, a job may be enriched by variety of the following
steps:

Giving workers more freedom in deciding about such things as work,

1.

sequence (or) the acceptance (or) rejection of materials.

Giving workers feeling of personal responsibility for their tasks.

2.

Encouraging participation of subordinates and interaction between

3.

workers.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 463
Job Enrichment
4. Taking steps to make sure that workers can see how their tasks
contribute to a finished product and the welfare of an enterprise.

Giving people feedback on their job performance, preferably

5.

before their superiors get it.

Involving workers in the analysis and change of physical aspects

6.

of the work environment such as layout of plant, temperature,

lighting and cleanliness.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 464
Job Enrichment
Advantages of Job Enrichment:
Increases the productivity
Reduces the absenteeism and turnover
Improves worker’s morale
Improves decision making ability
Reduces work load of superiors

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 465
Job Enrichment
Limitations of Job Enrichment:
Job enrichment has negative implications if employees are not
comfortable with decision making task
Some jobs cannot be enriched beyond a certain point
Most of the time job enrichment is imposed on people
Some people are internally dissatisfied with the organization. For
such people it cannot solve the problem

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 466
Leadership
 Leadership is an integral part of the management and plays a
vital role in managerial operation. Leadership exists in any type of
organization.

 Leader is one who makes his subordinates to do willingly

what he wants, The efforts of subordinates to do willingly what he
wants. The efforts of subordinates are to be channelized in the right
direction.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 467
Leadership
 Bernard Keys and Thomas Case have defined,
“Leadership is the process of influencing and supporting
others to work enthusiastically towards achieving
objectives”.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 468
Effective Leadership Qualities
1. Honesty

2. Confidence

3. Patience

4. Focus

5. Dedication

6. Consistency

7. Motivate others

8. Multiplicity of roles
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 469
Leadership Styles
 The behavior exhibited by a leader during supervision of
followers is known as “leadership style”.

 It can be classified into three types:

1. Autocratic (or) Dictatorial Leadership

2. Participative (or) Democratic Leadership

3. Laissez-faire (or) Free rein Leadership

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 470
Autocratic (or) Dictatorial Leadership
 In this type of leadership, the leader takes all
decisions by himself without consulting subordinates. Full
authority is held himself alone.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 471
Autocratic (or) Dictatorial Leadership
Advantages:
 It facilitates quick decision making
 Highest productivity
 It can yield the positive outcome under conditions of stress

Limitations:
 Employee morale will be low
 Dissatisfaction will develop among employees
 Absence of leader will affect the output heavily

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 472
Participative (or) Democratic Leadership
 In this type of leadership, the subordinates are
consulted and their feedback is taken into decision making
process. Decisions are taken after group discussions.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 473
Participative (or) Democratic Leadership
Advantages:
 Absence of leader does not affect the output
 The quality of decision is improved
 The leader multiplies his abilities through the contribution of his
followers

Limitations:
 It is time-consuming and may result in delays in decision-making.
If subordinates are lazy and avoid work, then controlling them is difficult.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 474
Laissez-faire (or) Free rein Leadership
 In this type of leadership, a complete freedom is given
to the subordinates so that they plan, motivate, control and
otherwise, be responsible for their own actions. The authority
is completely decentralized.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 475
Laissez-faire (or) Free rein Leadership
Advantages:
 Positive effect on job satisfaction and morale of subordinates
 Full utilization of the potential of subordinates

Limitations:
 Lack of discipline
Lowest productivity
No control and co-ordination. Hence, a tensed situation will be prevailed.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 476
Theories of Leadership
1. Trait Approaches to Leadership
 Physical qualities
 Intellectual qualities
 Morale qualities
 Social qualities

2. Behavioral theory of Leadership

3. Situational (or) Contingency Approaches to Leadership

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 477
Communication
 Communication is the process of passing of information from
one person to another person. It should always be clear and
understood by the person who receives the information.

 Leader is one who makes his subordinates to do willingly

what he wants, The efforts of subordinates to do willingly what he
wants. The efforts of subordinates are to be channelized in the right
direction.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 478
Need for Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 479
Process of Communication
The five important elements in the process of communication are as follows:
1. Sender

2. Communication channels

3. Symbols (It provides the basis for transferring information – words, sketches,
diagrams, figures, action and coding etc)

4. Receiver

5. Noise and feedback in Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 480
Communication Model

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 481
Communication Flow in the Organization
 Normally, communication flows in three directions:

1. Downward Communication

2. Upward Communication

3. Horizontal (or) Lateral Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 482
Downward Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 483
Upward Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 484
Horizontal (or) Lateral Communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 485
Methods of Communication

Types of Communication:
(i)Formal communication

(ii) Informal communication

Formal Communication:

It flows through a proper channel. It refers the way in which

the information is sent and it has a recognized position in
organizational structure.
KONGUNADU COLLEGE OF
Types: Written communication & Oral communication
ENGINEERING AND
TECHNOLOGY 486
Methods of Communication

Informal Communication:

People who know each other in the organization talk

together informally.

Types: Work related & People related

Characteristics of Informal Communication:

 It is mostly oral
 It reaches people faster
KONGUNADU COLLEGE OF
 Mostly, it is found to be accurate
ENGINEERING AND
487
TECHNOLOGY
Barriers to Effective Communication

The message sent by the sender to the receiver which may

not be effectively understood by the receiver in the same sense.
It is due to several reasons.

1. Physical barriers

2. Socio-psychological (or) personal barriers

3. Organizational barriers

4. Semantic barriers

5. Mechanical KONGUNADU
barriers COLLEGE OF
ENGINEERING AND
TECHNOLOGY 488
Rules for Effective Communication

 The information should be simple and clear

 The information should be in known language to the receiver
 In written communication, principle of line authority should
be followed
 The information should contain adequate information
 Communication should be sent and reached timely
 Communication should be checked through feedback
 Information communication should
KONGUNADU COLLEGE OF be sent judiciously
ENGINEERING AND
TECHNOLOGY 489
ELEMENTS OF DIRECTION

 Communication
 Leading
 Motivation
 Supervision
 Coordination

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 490
COMMUNICATION
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 491
 Communication and
Management
 Communication
 The sharing of information between two or
more individuals or groups to reach a
common understanding.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-492
 Communication and
Management
 Importance of Good
Communication
 Increased efficiency in new technologies
 Improved quality of products and services
 Increased responsiveness to customers
 More innovation through communication

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 493
The Communication Process
 Phases of the Communication
Process:
 Transmission phase in which information
is shared by two or more people.
 Feedback phase in which a common
understanding is assured.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-494
The Communication Process

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 495
Most Common Way to
Communicate

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 496
 The Communication Process
 Sender – person wishing to share
information with some other person
 Message – what information to
communicate
 Encoding – sender translates the
message into symbols or language
 Noise – refers to anything that hampers
any stage of the communication process
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 497
The Communication Process
 Receiver – person or group for which
the message is intended
 Medium – pathway through which an
encoded message is transmitted to a
receiver
 Decoding - critical point where the
receiver interprets and tries to make
sense of the message
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 498
 Verbal & Nonverbal
Communication
 Verbal Communication
 The encoding of messages into words,
either written or spoken
 Nonverbal
 The encoding of messages by means of
facial expressions, body language.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-499
Communication Media
 Face-to-Face
 Has highest
information
richness.
 Can take
advantage of
verbal and
nonverbal signals.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
16-500
 Communication Media
 Spoken Communication
Electronically Transmitted
 Has the second highest information
richness.
 Telephone conversations are information
rich with tone of voice, sender’s emphasis,
and quick feedback, but provide no visual
nonverbal cues.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-501
 Communication Media
 Personally Addressed Written
Communication
 Has a lower richness
 Personal addressing helps ensure receiver
actually reads the message—personal
letters and e-mail are common forms.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-502
 E-Mail Dos and Don’ts
 E-mail allows telecommuting employees to
work from home and keep in contact.

 Pay attention to spelling and treat the message like

a written letter.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-503
 Communication Media
 Impersonal Written Communication
 Has the lowest information richness.
 Good for messages to many receivers where
little or feedback is expected (e.g.,
newsletters, reports)

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-504
Communication Networks in
Groups and Teams
Type of Network
Wheel Network Information flows to and from one central
member.

Chain Network Members communicate only with the people next

to them in the sequence.

Wheel and chain networks provide little interaction.

Circle Network Members communicate with others close to them

in terms of expertise, experience, and location.

All-Channel Networks found in teams with high levels of

Network communications between each member and all
others.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-505
Communication
Networks in
Groups and
Teams

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-506
 Technological Advances in
Communication
 Internet
 Global system of computer networks that is
easy to join and is used by employees to
communicate inside and outside their
companies
 World Wide Web (WWW)
 “Business district” with multimedia
capabilities

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-507
 Technological Advances in
Communication
 Intranets
 A company-wide system of computer
networks for information sharing by
employees inside the firm.
 Advantages of intranets
 Can be used for a number of different
purposes by people who may have little
expertise in computer software and
programming

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-508
 Technological Advances in
Communication
 Groupware
 Computer software that enables members
of groups and teams to share information
with each other and improve
communication.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-509
New Technologies
for Communication

 Informational databases
 Electronic mail systems
 Voice mail systems
 Fax machine systems
 Cellular phone systems

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 510
Barriers to Effective Communication

 Messages that are unclear, incomplete, difficult

to understand
 Messages with no provision for feedback
 Messages that are misunderstood
 Messages delivered through automated systems
that lack the human element

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 16-511
Movie Example: The Terminal
Is there communication
between Viktor and
Frank?
Why or why not?

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
16-512
FOUR BASIC DIRECTIONS

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 513
Downward Communication

Travels from superior to subordinates.

 To give specific task directives about job

instruction

To give information about organization

procedures and practices
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 514
 To tell subordinates about their
performance

 To provide ideological-type information

to facilitate the goals

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 515
Upward Communication

Travels from subordinate to superior. The most

common purpose of this communication is to
provide feedback on how well things are going.
It provides also the middle level managers the
opportunity to represent their subordinates to
the upper level managers.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 516
Lateral Communication

Takes place between people in the

same level of the management
hierarchy. The most common reason for
this communication flow is to provide
coordination and teamwork

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 517
Diagonal Communication

Occurs between people who are

neither in the same department nor in
the same level of management hierarchy.
In this case, someone communicate
either downward or upward with
someone in another functional area.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 518
OVERCOMING BARRIERS TO
COMMUNICATION

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 519
 Use feedback to facilitate
understanding and increase the
potential for appropriate action

 Repeat message in order to provide

assurance that they are properly
received
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 520
 Use multiple channels so that the
accuracy of the information may be
enhanced

 Use simplified language that are

easily understandable and which
eliminates the possibility of people
getting mixed-up with meanings
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 521
MOTIVATION

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 522
“Motivation is the work a manager
performs to inspired, encourage,
people to take required action”

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 523
 Need Theory
People are motivated to obtain outcomes at
work to satisfy their needs.
1)Managers must determine what needs worker
wants satisfied.
2)Ensure that a person receives the outcomes
when performing well.
 Several needs theories exist.
 Maslow’s Hierarchy of Needs.
 Alderfer’s ERG.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 524
 Maslow’s Hierarchy of Needs
Need Level Description Examples

Lower level needs must be satisfied before higher needs are

addressed.
 Alderfer’s ERG

After lower level needs satisfied, person seeks higher needs. When
unable to satisfy higher needs, lower needs motivation is raised.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 526
Maslow’s Hierarchy of Needs
SA
Esteem
r e
rd
to
es
gh

Love (Social)
hi
o t
st
we
Lo

Safety & Security

Physiological
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 527
 Motivational Theories X & Y
SA Theory Y - a set of
assumptions of how to
Esteem manage individuals
motivated by higher
Love (Social) order needs
Theory X - a set of
Safety & Security assumptions of how to
manage individuals
Physiological motivated by lower
order
KONGUNADU COLLEGE
ENGINEERING AND
OF needs

TECHNOLOGY 528
Alderfer’s ERG Theory
SA Growth
Esteem

Love (Social)
Relatedness
Safety & Security
Existence
Physiological
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 529
Herzberg’s Two-Factor Theory
Hygiene Factor - work condition related to
dissatisfaction caused by discomfort or pain
 maintenance factor
 contributes to employee’s feeling not dissatisfied
 contributes to absence of complaints
Motivation Factor - work condition related to
the satisfaction of the need for psychological
growth
 job enrichment
 leads to superior performance & effort
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 530
Nature and Characteristics
Motivation

 Is an internal feeling
 Motivation is related to needs
 Motivation lead to goal oriented
behaviour
 Motivation can be positive or negative

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 531
Importance of Motivation

1.Puts human resources into action

Every concern requires physical,

financial and human resources to
accomplish the goals.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 532
2. Improves level of efficiency of
employees

The level of a subordinate or an

employee does not only depend upon his
qualifications and abilities.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 533
3. Leads to achievement of
organizational goals

The goals of an enterprise can be

achieved

4. Builds friendly relationship

Motivation is an important factor

which brings employees satisfaction.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 534
Organizational
Culture

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–535
 Definition
The general pattern of behaviour, shared
beliefs and values that organization
members have in
common.

KONGUNADU COLLEGE OF
ENGINEERING AND 1–
TECHNOLOGY 53
ELEMENTS
six elements are:

Stories: The past events and people

talked about inside and outside the
company.
Rituals and Routines: The daily
behavior and actions of people that signal
acceptable behavior.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–537
Symbols: The visual representations of
the company including logos
Organizational Structure: This includes
both the structure defined by the
organization chart, and the unwritten
lines of power.
Control Systems: The ways that the
organization is controlled.
Power Structures: involve one or two
key senior executives, a whole group of
executives, or even a department
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–538
MANAGING CULTURAL
DIVERSITY
 Setting a good example
 Communicate in writing
 Training programs
 Recognize individual differences
 Differences in cultural background
 Flexible work environment
 Continuous monitoring
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–539
LEADERSHIP
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 540
Leadership Is…

- Process of directing the behaviour of others

toward the accomplishments of objectives.

- Is one of the important parts of direction.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 541
 LEADING IN TIMES OF
CRISIS

 Stay calm
 Be visible
 Put people before business
 Tell the truth
 Know when to get back to business

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 542
Leadership
Theories

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 1–543
Behavioral Theories
(LEADERSHIP STYLES)
1.Autocratic Leadership

Under the autocratic leadership style, all

decision-making powers are centralized
in the leader, as with dictators.
The autocratic management has been
successful as it provides strong motivation to
the manager. It permits quick decision-
making.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 544
2.Participative Leadership

consists of the leader sharing the decision-

making abilities with group members by
promoting the interests of the group members
and by practicing social equality.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 545
3.Free- rein Leadership

A person may be in a leadership position

without providing leadership, leaving the
group to fend for itself. Subordinates
are given a free hand in deciding
their own policies and methods.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 546
4.Toxic leadership

A toxic leader is someone who has

responsibility over a group of people or
an organization.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 547
Importance of Leadership

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 548
 Initiates action- Leader is a person who
starts the work by communicating the policies
and plans to the subordinates from where the
work actually starts.

 Motivation- He motivates the employees

with economic and non-economic rewards and
thereby gets the work from the subordinates.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 549
 Providing guidance- Guidance here
means instructing the subordinates
the way they have to perform their
work effectively and efficiently.

 Creating confidence- Confidence is

an important factor which can be
achieved through expressing the work
efforts to the subordinates,

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 550
 Building morale- Morale denotes
willing co-operation of the employees
towards their work and getting them
into confidence and winning their
trust.

 Builds work environment- An

efficient work environment helps in
sound and stable growth. He should
treat employees on humanitarian
terms.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 551
 Co-ordination- This synchronization
can be achieved through proper and
effective co-ordination which should be
primary motive of a leader.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 552
 UNIT-5
CONTROLLING

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–553
Controlling
Process
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 554
 The Purpose of Control
Adapt to Limit the
environmental change accumulation of error

Control helps
the organization

Cope with organizational

Minimize costs
complexity

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
20 - 555
 Levels
Operational control: of Control
 Focuses on the processes used to transform
resources into products or services.
 Financial control:
 Concerned with financial resources.
 Structural control:
 How the elements of structure are serving the
intended purposes.
 Strategic control:
 How effective are the functional strategies helping
the organization meet its goals.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
20 - 556
Levels of Control

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
20 - 557
Who Is Responsible for
Control?

 Control rests with

all managers.
 Large corporations
have a controller.
 What does a
controller do?
 Helps line managers
with their control
activities.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 20 - 558
Process of
controlling
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–559
Steps in the Control Process
 Establish standards.
 Measure performance.
 Compare performance against standards.
 Determine need for corrective action.
 The sub-steps:
 Maintain status quo.
 Correct deviation.
 Change standards.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
20 - 560
Steps in the Control Process

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
20 - 561
 1. Establishing Standards
Measurable or tangible(Output Standards)
 Standards can be measured and expressed

quantitatively are called as measurable standards.

They can be in form of cost, output, expenditure,
time, profit, etc.
Non-measurable or intangible(Input Standards)
 There are standards which cannot be measured

quantitatively. For example- performance of a

manager, deviation of workers, their attitudes
towards a concern. These are called as intangible
standards.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 562
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 563
2. Measuring Actual
Performance
 Measurements must be accurate enough to spot
deviations or variances between what really
occurs and what is most desired.

 Without measurement, effective control is not

possible.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 564
3.Comparing Actual with Standard

 Deviation is as the gap between actual

•For example, if stationery
performance and the charges
planned increase
targets.
by a minor 5 to 10%, it can be called as a
minor deviation.
•On the other hand, if monthly production
decreases continuously, it is called as
major deviation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 565
Acceptable Range of Deviation

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 566
 4.Correction of Deviation
 Taking any action necessary to correct or
improve things.

 There are two types of exceptions:

 Problems - below standard
 Opportunities - above standard

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 567
Types of Control

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 568
BUDGETARY CONTROL

The establishment of budgets,

relating the responsibilities of
executives to the requirements of a
policy

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–569
Salient features:

a. Objectives: Determining the objectives

b. Activities: Determining the variety of
activities
c. Plans: Drawing up a plan
d. Performance Evaluation: Laying out a
system of comparison of actual performance
e. Control Action: Ensuring that when the plans
are not achieved, corrective actions are taken
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–570
CLASSIFICATION OF BUDGETS

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–571
 Long Term Budget: prepared for periods longer
than a year ex: R&D Budget
 Short Term Budget: less than year
ex:cash budget
 Basic Budget: remains unaltered
 Current Budget: related to the current conditions
 Fixed Budget: remain unchanged
 Flexible Budget: various budgets for different
levels of activity
 Functional Budget: the individual functions in an
organization
 Master Budget: Profit & Loss Account
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–572
BUDGETARY CONTROL
TECHNIQUES

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–573
1. Revenue and Expense Budgets:

 budgets spell out plans for revenues

and operating expenses in rupee terms.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–574
2.Time, Space, Material, and
Product Budgets:
 Many budgets are better expressed in
quantities rather than in
monetary(money) terms.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–575
3. Capital Expenditure Budgets

 capital expenditures for plant,

machinery, equipment, inventories, and
other items.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–576
4. Cash Budgets

 cash budget is simply a forecast of cash

receipts

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–577
5. Variable Budget
 analysis of expense items to determine
how individual costs should vary with
volume of output

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–578
6. Zero Based Budget
 By starting the budget of each package
from base zero, budgeters calculate
costs

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–579
NON-BUDGETARY CONTROL
TECHNIQUES
 many traditional control devices not
connected with budgets, although some
may be related to, and used with,
budgetary controls.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–580
i) Statistical data:
 Analysing the numerical data

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–581
 ii) Break- even point analysis

 chart depicts the relationship of sales and expenses

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–582
iii) Operational audit:
 internal audit

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–583
iv) Personal observation
 one should never overlook the importance of control
through personal observation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–584
v) PERT(Program (or Project)
Evaluation and Review Technique):

 one should never overlook the importance of control

through personal observation.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
1–585
vi) GANTT CHART:

 a type of bar chart that illustrates a

project schedule
 Gantt charts illustrate the start and
finish dates of the terminal elements
and summary elements of a project.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 586
 PRODUCTIVITY

 Productivity refers to the ratio between the

output from production processes to its input.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 587
Typical Productivity Calculations
a) Physical Productivity
This is a ratio of the amount of product to the
resources consumed.
b) Functional Productivity
This is a ratio of the amount of the functionality
delivered to the resources consumed
c) Economic Productivity
ratio of the value of the product produced to the
cost of the resources used to produce it.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 588
 COST
CONTROL
 Cost control is the measure taken by
management to assure that the cost objectives
set down in the planning stage are attained

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 589
Steps involved in designing
process of cost control system:
 Establishing norms: To exercise cost control
it is essential to establish norms, targets or
parameters
 Appraisal: The actual results are compared
with the set norms.
 Corrective measures: The variances are
reviewed and remedial measures or revision of
targets, norms, standards etc., as required are
taken.
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 590
Advantages of cost control
 Better utilization of resources
• To prepare for meeting a future
competitive position.
• Reasonable price for the customers
 Improves the image of company for long-

term benefits.
 Improve the rate of return on investment.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 591
 PURCHASE CONTROL
 Purchase control is an element of material
control.
 The advantages derived from a good and adequate system
of the purchase control are as follows:
a) Continuous availability of materials
b) Purchasing of right quantity
c) Economy in purchasing
d) Works as information centre
e) Development of business relationship
f) Finding of alternative source of supply
g) Fixing responsibilities
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 592
 MAINTENANCE CONTROL
 Maintenance department has to excercise effective cost
control, to carry out the maintenance functions in a
pre-specified budget
 First line supervisors must be apprised of the cost
information of the various materials
 A monthly review of the budget provisions and
expenditures actually incurred in respect of each
center/shop
 The total expenditure to be incurred can be uniformly
spread over the year
 The controllable elements of cost such as manpower
cost and material cost can be discussed
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 593
 QUALITY
CONTROL
 Quality control refers to the technical process
that gathers, examines, analyze & report the
progress of the project & conformance with
the performance requirements
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 594
steps involved in quality control process are

1) Determine what parameter is to be

controlled.
2) Establish its criticality
3) Establish a specification for the parameter
to be controlled
4) Produce plans for control
5) Organize resources to implement the
plans

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 595
Advantages and disadvantages

 Advantages include better products and

services
 Disadvantages include needing more
man power/operations to maintain
quality control

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 596
 PLANNING
OPERATIONS
 An operational planning is a subset of strategic
work plan. It describes short-term ways of
achieving milestones and explains how, or
what portion of, a strategic plan will be put
into operation during a given operational
period, in the case of commercial application
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 597
 Like a strategic plan, an operational
plan addresses four questions:
 Where are we now?
 Where do we want to be?
 How do we get there?
 How do we measure our progress?

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 598
Operational plans should contain:
• clear objectives
• activities to be delivered
• quality standards
• desired outcomes
• staffing and resource requirements
• implementation timetables
• a process for monitoring progress.

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 599
References
 www.slideshare.net
 www.docstoc.com
 www.slideworld.com
 www.nptel.ac.in
 www.scribd.com
 http://opencourses.emu.edu.tr/
 http://engineeringppt.blogspot.in/
 http://www.pptsearchengine.net/
 www.4shared.com
 www.eazynotes.com

KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY 600
Book References & PPT
materials
1. Stephen P. Robbins and Mary Coulter,
'Management', Prentice Hall of India.
2. Charles W L Hill, Steven L McShane,
'Principles of Management', Mcgraw Hill
Education
3.Hellriegel, Slocum & Jackson, '
Management - A Competency Based
Approach
KONGUNADU COLLEGE OF
ENGINEERING AND
TECHNOLOGY
601