Professional Documents
Culture Documents
(INDUSTRY INTEGRATED)
PRINCIPLES OF MANAGEMENT
Detailed Curriculum
definitions of management as there are authors in the field. However, the definition
given by James A.F. Stoner encompasses all the import6ant facets of management.
According to him.
Management is the process of planning organizing, leading and controlling the
efforts of organisation members and of using all other organisational resources to
achieve stated organisational goals. This definition suggests:
Managers use all the resources of the organisation, both physical as well as
human;
To achieve the objectives, every organisation uses certain inputs like materials,
machinery, money and the services of men.
EXHIBIT 1
INPUT OUTPUT MODEL
INPUTS
TRANSFORMATION PROCESS
OUTPUTS
EXTERNAL ENVIRONMENT
The output of the firm may be a physical product or service. Since a business
organisation is an economic entity, the justification for its existence lies in producing
goods and services that satisfy the needs of the people. Here arises the question of
effectiveness in transforming the inputs matter of concern for any society, given the
scarcity of resources. Effective management plays a crucial role in this context.
NATURE OF MANAGEMENT
Inspite of the growing importance of management as an academic discipline
immensely contributing to the quality of human life, the concept is still clouded by
certain misconceptions. No doubt, management as an academic body of knowledge has
come a long way in the last few years. It has grown in stature and gained acceptance
all over the world. Yet, it is a paradox that the term management continues to be the
most misunderstood and misused. Scare
Management as a Science
It is therefore relevant to examine the exact nature of management whether it is a
science or an art. Before arriving at a conclusion, let us understand the nature of
science as well as art. Any branch of knowledge to be considered as science, (like the
ones we have physics, chemistry, engineering, etc.) should fulfill the following
conditions.
management has emerged with its own principles. The application of these principles
helps any practicing manager to achieve the desired goals. However, while using the
principles, one should not lose sight of the variables in the situation, since situations
differ from one another.
subject in that it has drawn heavily from economics. Psychology, sociology, engineering
and mathematics, to mention a few. It is multi-disciplinary in nature. But a word of
caution. Though management, considering its subject matter and the practical utility
may be considered as Science for reasons discussed below, it cannot be viewed as an
exact science. In is a science, but an inexact science because:
Lastly, since a business organisation exists in an environment, it has a twoway interaction with the environment.
The organisation influences the
environment by its several decisions and in turn, is influenced by the various
elements of the environment. Important among these are technological,
economic, socio-cultural and political factors. The whole thing is so complex
that however effective the plans are one is prone to be taken unaware of
unexpected changes in the environment.
Unlike the pure or exact sciences where the results are accurate, in the Case of
Management, the various factors discussed above may force even the excellent plans
and strategies go haywire.
practice of the theoretical concepts (knowledge base) contributes for the formation of
skills. The skills can be acquired only through practice. In a way the attributes of
science and art are the two sides of a coin. Medicine, engineering, accountancy and
the like require skills on the practitioners and can only be acquired through practice.
Management is no exception.
necessarily turn out to be a good surgeon, graduate from the best of the institutes may
not be very effective in practice. In both the cases the application of the knowledge
acquired through formal education, requires ingenuity, correct understanding of the
variables in the situation, pragmatism and creativity in finding solutions to problems.
Effective practice of any art requires a thorough understanding of the science
understanding it.
complementary.
Thus science and art are not mutually exclusive, but are
Effectives
who
attempt
to
manage
without
the
conceptual
knowledge, they have a better chance to succeed. Therefore, it may be concluded that
management is both a science and an art.
Management as a profession
Another important dimension of the nature of management is whether it is a
profession. McFarland gives the following characteristics of a profession:
for the ethics and values of the system in which they function. Many a time, in their
obsession with profit, the societal interests are neglected. However, as in the case of
other professions, if is implied that managers are expected to set an example in doing
good to the society.
command, the expectation that managers should address themselves to the problems
of society is not unnatural.
Compared to other professions like engineering, medicine, accountancy, etc., the
entry to management positions is not restricted to individuals with a special degree. To
quote Peter Drucker, no greater damage could be done to an economy or to any society
than to attempt to professionalize management by licensing managers, for instance, or
by licensing managers, for instance, or by limiting access to management to people with
a special academic degree.
The question whether management is a profession often breathes life into the
widely debated issue whether managers are born or made.
founding fathers of the industry in India and elsewhere too, did not study management
in the formal way.
organizing the enterprises helped them earn name and fame. Huge industrial empires
were built with sheer business acumen. Business history of any nation is fully replete
with many rags-to-riches stories. The success achieved by the pioneers in these cases
amply demonstrates that success in business requires much more than the academic
degree.
The achievements of the pioneers of the industrial development need not, however,
shadow the importance of management as a profession. In arguing for and against, we
must not ignore the context of the business. There has been a sea change in the
environment of the business. Modern business has become more complex due to the
uncertainties arising mainly from:
The following factors seem to be mainly responsible for the growing demand for
professional managers:
The liberalization policies pursued by the government opened up new vistas for
the Indian organizations;
Private industrial houses which were indifferent before, have fully realized the
need for professional managers. While the promoters in many cases reserve the
policy formulation for themselves, the day-to-day managerial activities are
entrusted to the professional managers.
FUNCTIONS OF MANAGEMENT
Management is widely regarded as a process. A manager no matter what his level
is in the organisation performs a series of functions. Surprisingly, there is no
consensus among the management thinkers on the classification of management
functions. The number of functions as well as the terminology used to describe them is
not alike. Henry Fayol identifies five functions, viz., planning, organizing, commanding,
coordinating and controlling. For instance, Newman and Summer recognize only four
functions, namely organizing, planning, leading and controlling. Luther Gulics popular
catch word POSDCORB suggests seven functions, namely, planning; organizing,
staffing, directing, coordinating, reporting and budgeting, Koontz and ODonnell
classify the functions into planning, organizing, staffing, directing and controlling. For
the purpose of our study, we shall examine the following four functions of management
planning, organizing, leading and controlling.
Planning
Planning in simple is outlining a future curse of action. It is unique in that it
precedes all the other managerial functions. It attempts to
involves deciding the objectives and formulating the policies and procedures to achieve
them. Effective planning provides answers to questions like-what to do? How to do?
Who is to do> and when to do?
Planning is a function performed by managers at all levels. However, plan made by
top managers have a wider scope with a focus on the organisation as a whole and
normally cover a longer period. On the other hand. Plans developed by middle and
lower level managers relate to the divisions or departments and usually cover a short
period. Systematic planning helps in facing the uncertainties of future with less
embarrassment. It helps in making things happen in the expected way.
Organizing
Organizations achieve objectives by using physical and human resources. When
people work in groups, every one in the group should know what he is expected to
achieve and what reporting relationship he has with others. The managers task in
organizing aims at creating a structure that facilitates the achievement of goals.
Organizing involves:
determination of activities required to achieve goals; - grouping of these
activities into department:
assignment of such groups of activities to a manager;
delegation of authority to carry them out: and
Provision for coordination horizontally and vertically in the organisation.
It must be remembered that the structure varies with the task. A large
organisation with huge markets needs a different structure compared to a small
organisation. Similarly, structure of an organisation operating in a stable environment
may be different from the one operating in a dynamic environment. The way one goes
about in organizing the affairs of the organisation, is thus influenced by the size and
nature of the activities involved, the type of environment, and the overall business
strategy.
Leading
Once plans are finalized and the structure of the organisation is determined, the
next step is to help the people achieve the objectives. This involves directing or leading
the activities of the people. The manager directs the achieve of his subordinates by
explaining what they have to do and by helping them perform it to the best of their
ability. In leading the people, the manager performs the following three distinct tasks;
listening
Communication
Leadership
influences
the
work
of
his
subordinates; and
Motivation
If the
manager fails in leading the people towards better performance, any amount of
planning and organizing, however effective they are, may not help the organisation.
Controlling
While plans of the organisation spell out the objectives to be achieved, control as a
managerial function facilitates to know whether the actual performance is in
conformity with the planned one.
Unexpected changes in the environment may push the organisation off the track.
Thus, controlling implies measuring and correcting the activities to assure that events
conform to plans. It involves four main elements:
MANAGEMENT LEVELS
Though the term manager is used to mean anyone who gets the things done
through other people, we find the managers in any organisation with varying authority
and responsibilities. In any company the total management job requires many skills
and talents. Obviously, therefore, the job of manager is divided and subdivided. Such
an arrangement implies different levels of management. As a matter of custom and
convenience, we normally visualize a companys management as a pyramid as shown in
Exhibit. 2.
EXHIBIT - 2
LEVELS OF MANAGEMENT
The three levels of management that are commonly found in any organisation are
lower or front-line, middle and top managers.
Front-Line Managers
This is the entry level job in the management. Managers at this level direct the
operating employees (workers).
those objectives.
human and material resources. It requires resourcefulness and capacity for judgement
to handle complex situations.
complex at each higher level because of the increase in the scope of authority and
responsibility.
TOP MANAGEMENT
MIDDLE MANAGEMENT
LOW MANAGEMENT
TECHNICAL SKILL
HUMAN SKILL
CONCEPTUAL
& DESIGN
SKILL
Technical skill
Technical skill is the ability to use the procedures, techniques, and knowledge of a
specialised field. It is primarily concerned with the ways of doing the things. It implies
proficiency in a specific field of activity. Technical skill is most important for the lower
level managers because by nature their job involves supervision of the workers.
Effective supervision and coordination of the work of the subordinates, therefore,
depends on the technical skill possessed by the lower level manager. Any supervisor
without a sound knowledge of the job cannot make an effective supervisor.
supervisors are not respected by the subordinates at the shop floor.
Such
The relative
importance of the technical skill as compared to the other skills diminishes as one
move up to higher levels of management.
Human skill
Human skill is the ability of the manager to work effectively as a group member
and to build cooperative effort in the team he leads.
understand and motivate people. This skill is primarily concerned with persons, as
contrasted with things. When a man is highly skilled in employee relations, he is
aware of his own attitudes, assumptions, and beliefs and recognizes their limitations as
well as their usefulness.
viewpoints and feelings different from his own. He understands why people behave as
they do and is able to make his own behavior understandable to them. He can foresee
their reactions to possible courses of action and, is able to take their attitudes into
account. His skill in working with others is natural and continuous. He does not apply
it in random or in inconsistent fashion. It is a natural ingredient of his every action.
Conceptual skill angel
This skill is also called design and problem solving skill. It involves the ability
to understand how its various parts and functions mesh together; and
To foresee how changes in any one of these may affect all the others.
Managements of
companies like ITC, Larsen & Toubro, Asian Paints, Bajaj Auto in the private sector and
National Dairy Development Board in the public sector, to mention a few, have amply
demonstrated this skill in gaining a competitive edge over their competitors.
All the three types of skills discussed so far are not mutually exclusive. In other
words, management job always requires all the three skills but in different proportions
depending upon the level of management. There is a gradual shift in the emphasis
from the bottom to the top of the pyramid. Technical skill and human skill are always
in the top of the pyramid.
demand at the base of the pyramid, for it is there the productive processes and
operations are carried out. It is there where you and most of the people. It is there
where the action takes place. The need for conceptual skill is greatest at the peak of
the pyramid.
Obviously, the top managers are not often involved in the direct
application of specific methods, procedures and techniques than those at the lower
echelons of management.
Although, each of these skills is needed in some degree at every level of
management, there are successful executives who have no great amount of technical
skills. But they are able to compensate the lack of that skill through superior creative
ability and skill in selecting, planting and effectively motivating subordinates who are
strong in technical skill.
As you have understood by now, at every level, management job is different from
all other jobs in respect of the skills required. At the entry level into the management
job, that is, at the supervisory level, besides technical skills, you have to realise the
need to acquire human skill and the problem solving skills (conceptual). To climb up
the organisational ladder, you must not only be good at the skills required for the
present job, but also learn and acquaint yourself the skills required at the next level.
As a result, in the event of promotion to the next higher level, you would feel at home
and discharge the responsibilities with ease.
Organizations engaged in business or non-business use the inputs to produce the
output (may be products or service). The conversion of inputs into outputs depends on
the effectiveness of management. Management as a discipline has both the elements of
science and art. The theory with principles and techniques constitute the science and
art. The theory with principles and techniques constitute the science component, while
skills and talent required for the use of the principles constitute the art. Management
has, of late, emerged as highly respected profession. The process of management is
understood under the four basic functions, viz., planning, organizing, leading and
controlling. To execute the managerial job successfully, every manager requires three
types of skills technical, human and conceptual skills. The proportion in which these
skills are required varies from one level to the other. Technical skills are important at
the lower while human skills and conceptual skills are required in that order at higher
levels of management.
4. Revision points
o
6. Summary
Organizations engaged in business or non-business use the inputs to produce
the output (may be products or service). The conversion of inputs into outputs
depends on the effectiveness of management. Management as a discipline has
both the elements of science and art. The theory with principles and techniques
constitute the science and art.
constitute the science component, while skills and talent required for the use of
the principles constitute the art. Management has, of late, emerged as highly
respected profession. The process of management is understood under the four
basic functions, viz., planning, organizing, leading and controlling. To execute
the managerial job successfully, every manager requires three types of skills
technical, human and conceptual skills. The proportion in which these skills
are required varies from one level to the other. Technical skills are important at
the lower while human skills and conceptual skills are required in that order at
higher levels of management.
7. Terminal exercises
1.
2.
Chapter 2 : Planning
1. Introduction:
Most of us plan many things in our day to day lives. We plan to go on a holiday
trip, plan our careers, and plan our investment and so on.
Organizations are no
exception and lot of planning is done by managers at all levels. Thus individuals and
organizations both need to plan.
select our goals and determine the means to achieve them. Lot of information has to be
gathered and processed before a plan is formulated. In other words, a plan is like a
jigsaw puzzle. All the pieces have to be put together properly, so that they make sense.
Planning is necessarily forward looking. It is looking into the further. It bridges
the gap between where we are and where we want to go.
2. Objectives
After studying this lesson, you should be able to:
probability, end up in chaos. Organisations often fail not because of lack of resources,
but because of poor planning. The following factors further highlight the importance of
planning.
To achieve objectives
While developing a plan, you have to ask yourself a few questions:
These questions, obviously, force you to be clear about the objectives, the time
frame required to achieve them and the resources required. It forces you to visualize
the further in an organized manner.
The saying that when a man doesnt know what harbour he is making for, no
wind is the right wind is quite appropriate in the case of planning.
Systematic
planning, thus, starts with a clear statement of objectives. All the important inputs
necessary to achieve the objectives are carefully thought of including the uncertainties
of the future.
To make the things happen
Effective manager is rather pro-active. He takes the initiative to make the things
happen in the desired way. In any modern business, the interests of many people are
at stake. The shareholders, employees, creditors, consumers and the government are
the major interest groups in any organisation. Further, the interests and expectations
of all these groups are varied and at times are in conflict. If the management fails to
achieve, the interest of these groups are affected and the whole exercise results in
heart-burns. As a result, you will be forced to indulge in fire-fighting activity.
Therefore, your job, as a manager, is to fore see the future and predict the
consequences of actions. In other words, you have to look down the road into future
and prepare yourself to meet the uncertainties and the eventualities a head. A well
thought out plan solves many of the problems associated with the uncertain future.
To cope with change
Both human beings and organizations are products of environment. The ability to
deal with the environment enabled many an organisation to survive, despite other
weaknesses. Alert managements continually tune in to the environmental forces. On
the other hand, managements which fail to adapt would eventually fall on the way side.
Therefore, in the managerial job, you have to constantly analyse the impending changes
in the environment and assess their impact on your business.
For instance, business environment in 1990s totally different from that of 1970s
and 1980s.
management.
Certain changes will throw open new opportunities while certain others affect the
very survival.
Since
Necessary
flexibility is built in the plans to meet the unexpected changes. Effective planning thus
shows the preparedness of the organisation to manage the change.
It helps the
Thus, if you do not plan (no clear objectives), you do not know whether you are
reaching the goal or not.
Control assumes
significance in a dynamic environment as of today, where several forces push you away
from the desired path. Appropriate control devices help you to check the course from
time to time so that you will be able to keep yourself onto the track.
PRINCIPLES OF PLANNING
Effectiveness in planning depends on the understanding of the following
principles.
It specifies the
resources in a particular way. Therefore, if the plan is not conceived well, the resources
would be put to wrong use. It becomes a wasteful exercise resulting in frustration.
Hence utmost care has to be exercised in formulating the plans.
questions have to be asked.
Several probing
approach to planning.
On the other hand, proponents of bottom up approach argue that top
management needs information from lower level - that is, about the realities at the
ground level in terms of strengths and weaknesses. In this approach, the initiative for
planning comes from the lower levels in the organisation. This approach makes use of
the rich experience of the subordinates who are close to the action. It also helps to
motivate the people and elicit commitment from them.
depends on the size of the organisation, the organisational culture, the preferred
leadership style of the executive and the urgency of the plan.
Involve and communicate with all those concerned
Operations in modern business organizations
are
highly
interrelated.
Organisational plans affect many departments in the enterprise. For instance, a plan
to improve the quality of the products (Quality control plan) may require the
cooperation of the people in the production, finance, marketing departments and so on.
It is, therefore, desirable to involve the concerned people in these departments. Such
participation helps in instilling a sense of commitment among the people. They also in
turn gain a sense of pride for having been a party in deciding the plan.
involvement makes possible the process of sharing information.
Such an
communicated to all those affected by them, there may be unnecessary gaps in the
execution.
Plans must be flexible and dynamic
You would be very happy as a manager if there are no unexpected changes in the
environment. Day in and day out, you are confronted with too many problems. Most of
such problems are caused by unexpected events in the environment. A plan is rigid if
there is less scope for a change in its course. In a static environment, of course, there
may not be a problem with a rigid plan. But in a dynamic environment, to meet the
unexpected changes, adequate flexibility has to be built into a plan. Otherwise, the
plan itself becomes a limiting factor.
Evaluate and revise
Evaluation of the plan at regular intervals is necessary to make sure that it is
contributing to the objectives. Like a navigator, who in the high seas checks the course
to make sure that he is sailing in the right direction, the manager has to, from time to
time look back and evaluate the plan.
corrective measure at the right time before it is too late. This depends on the accuracy
of the information systems in the organisation through which information reaches the
management.
STEPS IN PLANNING
The process of planning may be understood as having the following steps:
Establish goals
Planning begins with decisions about what the organisation wants to achieve over
a period of time.
quantitative terms for all the key areas of the business like production, profit,
productivity, market share, employee relations, social responsibilities, etc. For instance,
instead of saying that the objective of business is to achieve a fair rate of return on the
investment, it may be given a quantitative expression, say, 10 or 15 percent return on
the investment. Specific goals enable the organizations to use the resources effectively.
Since goal setting is the essential first step in planning, managers who fail to set
meaningful goals will be unable to make effective plans. If Bajaj Auto is able to retain
its prominence in the two wheeler industry (Scooter segment), it is because all the
employees of the organisation know clearly that the primary objective is retaining the
leadership in the industry.
An awareness of the opportunities and their evaluation in the light of the
organisational strengths and weaknesses is essential to set the goals in a realistic way.
The mission of the organisation, the corporate values, experience, and policies of other
enterprises, observation and data secured from research and experiences provide
adequate guidance to the managers in goal setting.
Establish planning premises
Since plans operate in the future, it is imperative to make certain assumptions
about the future.
provide the basic framework in which plans operate. Appropriate assumptions have to
be made on various aspects of the environment both internal and external to the
organisation.
i. Internal premises
Important internal premises include sales forecasts, policies of the organisation,
skills, attitudes and beliefs of the people, the resources of the organisation.
ii. External premises
Important external premises relate to all those factors in the environment outside
the organisation.
people, certain of the sociological factors are intangible in that they cannot be
measured quantitatively.
Effective
premising
the
market
of
appropriate
assumptions
helps
the
departmental plans. Plans for the various operational units within the departments
also have to be formulated. The plans thus developed for the various levels down the
organisation are called derivative plans.
10,000 units of a product and thus achieving a return of 10 percent on the investment
may be the enterprises plan relevant for the whole organisation. Its effective execution
is possible only when specific plans are finalized for the various departments like
production, marketing, finance, personnel and so on with clear-cut objectives to be
pursued by these departments.
Review periodically
Success of the plan is measured by the results and the ease with which it is
implemented.
should be included in the planning work. To make sure that the plan is contributing
for the results, its review at regular intervals is essential. Such a review helps in taking
corrective action. If necessary, when the plan is in force.
It is an irony that at times even the best of the plans may flounder inspite of
careful analysis and mental commitment. So as to avoid the pitfalls in planning make
sure of the following:
Communicate the assumptions on which plans are formulated to all the people
and departments concerned;
alternatives; and
4. Revision points
Purpose of Planning
To achieve objectives
Principles of planning
Steps in planning
Establish goals
Review periodically
5. Intext questions
What are the characteristics of planning?
Describe the important steps in the formal planning process.
What are the features of good plan?
What are the benefits and limitations of planning?
6. Summary
Planning is the most fundamental responsibility of a manager. Planning is
deciding a future of action. It helps in setting the objectives, to make the
events happen, coping with the change and to control the events. Effective
planning is a process and involves a few logical steps. The process includes
goal setting, promising, identification of the alternative courses of action and
selection of a course of action after a vigorous analysis of the pros and cons.
However, successful implementation and achievement of results depend on
the degree of participation and commitment of the people of various levels in
the planning exercise, in the absence of which plans would remain as
wishful statements.
7. Terminal exercises
8. Supplementary material
Dale, Ernest. 1973.
Newyork.
Drucker, Peter F. 1974.
Management:
Newyork.
Drucker, Peter F. 1974.
Management:
The terms Corporate planning, long-range planning and strategic planning are
used synonymously by many authors.
organizations where such planning envisaged a variety of contingencies that may arise
when large forces move into operation.
Strategic
plans reflect the socio-economic purpose of the organisation and the values and
philosophy of the top management.
making decisions about the right things at the right time; and
In India,
Corporate sectors in 1990s. Strategic planning serves the following two functions:
Anticipates future opportunities and threats
Business environment is changing so fast these days that a deliberate corporate
effort is called for to keep a tab on the broad spectrum over which changes occur. The
changes that occur may be precursors of future threats and opportunities.
The
investment in a large business enterprise today runs into hundreds of crores of rupees.
During this period many things may change. Take for instance, the case of the Tata
power company. They proposed a 500 MW power station in 1972. The proposal kept
shuttling between officialdom for 5 years before it was approved in 1977, but not before
the change of government.
eventually commissioned in 1983, a full 11 years since it was mooted. In the meantime
cost had escalated to nearly 3 times the original estimate. This case demonstrates the
need for close monitoring of the potential threats in the environment.
Just as threats can be reasonably anticipated so too can the opportunities. For
instance, when the crude oil prices where hiked in 1973, by the OPEC countries it
created havoc on petro-based industries. Automobile companies as a result were forced
to change to small fuel efficient cars. In this case, the threat was converted into an
excellent opportunity. Small car thus has become the fashion of the day. Similarly ITC
in India, continuously hounded by excise levels and taxes on their main product,
cigarettes had to think of diversification into hotels, paper, agro products and acquaculture - which ultimately turned out to be a God sent opportunity.
Provide Clarity of Purpose and Direction
With the overall increase in the size of companies, the internal departments
(production, marketing, finance, personnel etc.) have also become quite large.
With
growing specialization in each of these areas, these departments are prone to become
watertight compartment giving rise to inter-departmental rifts.
It is not unusual, for instance, for marketing department to ask the production
department to shorten their production runs to cater to demands of various models
which is normally resisted by the latter. Similarly, the design department may often
specify certain change in the product which may raise the cost of production.
The
finance department may try to block any measure that increases the cost of
production.
In such a situation, corporate objectives spelt out clearly help in smoothening out
some of the interdepartmental conflicts.
The managers success lies in understanding the trends in the environment. The
trends contain signals and give clues about the potential opportunities and impending
threats. Many organizations have paid a heavy price for their failure to draw the right
whereas operational planning is concerned with the How of the things that is the
knitty gritty of achieving the things.
The focus in strategic planning is on long-term while it is short-term in operational
planning. Further, planning is less detailed in the former because it is not involved
with the day-to-day operations whereas it is more detailed in the latter.
Tactical
include:
products the operational aspects of the R & D departments work culture, and the
incentives systems to motivate the people need attention.
TYPES OF PLANS
Planning by definition involves deciding a future course of action. Different types
of plans are developed by an organisation, namely mission, strategies and policies,
Procedures, rules, programmes and budgets.
action. However, some variances in respect of the scope and operation are found in the
implementation.
Some are single-use plans while some others are standing plans.
conduct its business. It defines the basic intentions of the firm. A clear definition of
mission or purpose is necessary to formulate meaningful objectives.
Answers to two important questions are provided by the mission statement: what
is our business? And what should it be? These questions force the management to
define their customers and their needs.
The essence of corporate mission or purpose can be understood from the IBMs
philosophy, as enunciated by Thomas Watson, its founder way back in 1960s.
We want to give the best customer service of any company in the world;
and
We believe that an organisation should pursue all tasks with the idea
that they can be accomplished in a superior fashion.
It is interesting to note that almost 30 years after Watson stated these three basis
beliefs, IMBs present chairman stated: We have changed our technology, changed our
organisation, changed our marketing and manufacturing techniques many times, and
we expect to go on changing. But through all this change, those three basic beliefs
remain. We steer our course by those stars.
Policies: Koontz and O Donnel define policy as a general statement or
understanding which guides the thinking and action in decision-making. Policy is a
one time decision.
It
levels in the organisation. Some may be major company policies affecting the whole
organisation while others may be minor or derivative policies affecting the functioning
of departments or sections within the departments.
Policies may be very clear and explicit. Good policies are flexible, easy to interpret
and consistent with overall objectives of the organisation. Policies are laid down by the
management for all the important functional areas. As such, we hear about production
policies, financial policies, marketing policies and personnel policies, to mention a few.
For instance, in the personnel area, specific policies may be formulated for recruitment,
training, compensation, etc. Accordingly, whenever the need for recruitment arises, the
personnel manager consults the existing recruitment policy of the company and
initiates the steps necessary to fill the vacancies. Thus it is evident that the personnel
manager operates within the broad policy of the company in recruiting the people.
Thus policy is a one time standing decision that helps the manager in making day-today decisions in their operational areas.
Procedures: Another term that is frequently heard in any organisation in
procedures. The term sounds of some bureaucratic element where issues are finalized
only after they undergo a long drawn scrutiny.
would ensure order in the performance of operations. Though procedures exist at all
levels in an organisation, they are more detailed at the lower levels.
In common
promote people from within. But the operational part of the policy is specified by the
procedure the formalities to be fulfilled to effect the promotion are dictated by the
procedure.
Rules: A rule is also a plan, but the simplest type of plan. Rules are plans in that
they suggest the required actions. A rule requires that a definite action has to be taken
in a particular way with respect to a situation. Some definiteness is associated with
rules. For examples, no smoking is a rule. No deviation is normally allowed from the
rule. The essence of a rule is that it reflects a managerial decision that certain actions
be taken or not be taken.
Rules should not be confused with policies and procedures. Policies contain some
operational way or discretion while rules allow no discretion in their application.
Similarly, procedures though different from rules may contain rules.
For example,
The procedure may contain a rule that free service is available only for a period of two
years after the sale.
a programme
made for financing the programme. Programmes may be major or minor. For instance,
a company may embark upon modernization programme of the plant and machinery
and other manufacturing systems in a big way. By all means such an effort is a major
programme. Similarly a large organisation may start computerizing all its activities.
On the other hand, modernization of small equipment in some section of the factory
and computerization of a particular operation in a certain department may be
considered as minor programmes.
Budgets: Budgets are plans in that they contain statements of expected results in
numerical terms.
It specifies the
future course of action as laid down by a plan. In fact, budgeting is a planning device.
It is the fundamental planning instrument in many companies. Organisational budgets
vary in scope. Master budget which contains the consolidated plan of action of the
whole enterprise is in a way the translated version of the overall business plan of the
enterprise.
department. Again, capital expenditure budget, raw material budget, labour budget,
etc. are a few minor budgets in the production department.
One of the advantages of budgets is they facilitate the comparison of actual results
with the planned ones by providing yardsticks for measuring performance. Zero-based
budgeting, a recent innovation in budgeting practices makes planning more complete.
It emphasizes the need to examine every commitment afresh in terms of decision
packages.
4. Revision points
Strategic Planning
Operational Planning
Types of Plans
Missions or purpose
Policies
Rules
Programmes
Budgets
5. Intext questions:
How does this problem relate to modern management planning?
Develop a set of tactical plans for the Fairdeal Company.
What solutions do you offer to overcome the present implies?
6. Summary
Any plan is a future course of action. It facilitates the achievement of
goals.
Though all the plans, by whatever name they are called, involve a future
course of action, they differ in respect of the length of time, relative
importance and the level at which they are more relevant. Strategic plans
provide the direction to the organisation and concerned with the
achievement of organisational mission where as operational plans are
concerned with the day-to-day managerial activities. The various types of
plans namely, policies, procedures, rules, pogrammes and budgets plans
are also discussed.
7. Terminal exercises
How does this problem relate to modern management planning?
Develop a set of tactical plans for the Fairdeal Company.
What solutions do you offer to overcome the present implies?
8. Supplementary material
Briefly describe the following types of management plans :
a. Policies
b. Procedures
c. Programmes and
d.
Budget
Discuss elaborately various types of plans.
Distinguish between strategic planning and operational planning.
9. Assignment s
Present the business strategy of any organisation that you are familiar
with. Could you offer a better strategy?
The importance of strategic planning is now fully realized by the Indian
Corporate sector than before. Discuss.
Chopra, BSKS.
Research
coordination
horizontally
and
vertically
in
the
enterprise
2. Objectives
3. Content
Organisational Theories
There are three approaches to understand the organisational theory: Classical,
Neoclassical and Modern. The assumptions about human beings and other variables
that affect the organisational functioning vary from one approach to the other.
As discussed in lesson 2, the early management thinkers viewed the organisation
as a machine and human beings as different parts of that machine. Organisation was
viewed as a closed system. The influence of the external environment was ignored. The
emphasis was more on increasing the output, and human element in the process
received scant attention.
best way to design the organisation which would suit all the situations.
Division of labour, scalar principle and span of control are the important
principles on which enterprise activities were organized. Members of the organisation
were guided by a sense of duty to the organisation and by a set of rules and
regulations.
Organization was perceived as a closed system with little interaction with the
external environment;
The emphasis was on detection of errors and their correction after they have
happened;
Authority was centralized and the integration of the system was achieved
through exercise of authority and implementation of rules and regulations;
Organisations have been treated as closed systems with no environment and hence
no interaction with outside world. Classical thinkers assumed two things-there is no
impact of the environment on the organisation and human beings are inert elements
who can be manipulated. Once the structure is created, it was assumed that it would
run smoothly with the rules and regulations.
ii. Organisation as a Static Concept
Classicists held the view that an organisation is a static concept.
Once the
structure is created, it will work for ever. The need for change or structural adjustment
was not given due consideration. The emphasis was more on stability in operations.
iii. Excessive reliance on Principles
Principles like division of work, scalar chain, structural arrangement, order, and
span of control were taken as articles of faith. Too much reliance was placed on these
classical management principles. Coordination by hierarchy, unity of command, line
and staff relationships, discipline, unity of command-all resulted in the creation of
command and control structure.
Classical organisation theory has been criticized by many authors on the following
grounds:
It should not, however, be construed, from the foregoing analysis, that the
classical theory of organisation is completely irrelevant. The contributions of the early
thinkers which ensured proper systems and order in the organisational functioning can
not be undermined. Classical organisation theory has strengths as well as weaknesses.
For example, classical structure provides much task support. At the same time it is
weak in psychological support. What is needed is an organisational system that
provides both task and psychological support.
The classical thinkers with their obsession with economic effectiveness neglected
employee satisfaction. They failed to recognize the significance of the impact of human
element.
Neoclassical
theory,
on
the
otherhand,
which
revolves
around
the
Along with the formal organisation structure, there also exists an informal
organisation;
Human beings have diverse motivational patterns and try to fulfill different
types of needs;
The neoclassicists share the classical assumptions that there is one best way
to design an organization. They overlook environmental, technological, and
other variables that might affect an organizations design;
against
stable
environment
where
changes
are
infrequent,
dynamic
matches with the environment. Burns and Stalker on the basis of their extensive
research classified organisational systems into mechanistic and organic structures. In
a stable environment mechanistic structures would do well because the emphasis in
such systems is on achieving excellence in the routine tasks, whereas organic systems
are preferable in a dynamic or turbulent environment. Some combinations of the two
systems may also be used.
ii. Technology and Structure
Apart from the environment, technology also influences the structure. By
technology we mean the task related know-how used by the organisation. Management
researcher Woodward had studied about 100 British manufacturing firms and
established relationship between technology and structure. He classified technology
into: Unit production, batch or mass production and process production.
Unit production refers to the production of individual items tailored to customers
specifications. The technology used is not very complex and output is produced largely
by individual crafts people.
Mass production refers to the manufacture of large quantities of products, mostly
on an assembly line. Process production refers to the production of materials that are
sold by weight or volume such as chemicals, sugar, cement etc. The following are the
findings of the Woodwards study on the relationship between technology and
organisation structure.
The more complex the technology, the greater is the number of managers and
management levels. In other words, complex technologies require greater
degree of supervision and coordination:
The span of management increases from unit to mass production and then
decreases from mass to process production. Lower level employees in both unit
and process production firms tend to do highly skilled work. As a result,
narrow span becomes inevitable. In mass-production, on the other hand,
assembly line workers perform mostly routine tasks. Large number of such
workers can be supervised by one manager; and
The greater the technology complexity of the firms, the larger is the clerical and
administrative staff.
The foregoing analysis shows that all these variations in technology, with influence
the organisation structure which in turn will affect the performance. Successful firms
are those that design the structure in accordance with the technological requirements
of the firm.
iii. Aspirations of the People
Along with the environment and technology, the attitudes and aspirations of the
people need due consideration in the design of the structure. Unlike in the past, where
classical theorists assumptions about human beings held good, there has been a sea
change in the attitudes and aspirations of the people in the recent years. Peter Drucker
has rightly described the present day workers as knowledge workers. They want more
challenging jobs and participation in the decision-making process. They are selfmotivated and direct their activities themselves.
The
The inadequacy of the formal organisation to meet certain social and psychological
needs is the basic reason behind the emergence of informal organisation. Because the
formal organisation does not provide for all the social interactions, members try to find
out alternative ways of association. As the Hawthorne experiments revealed,
membership in informal groups give people psychological benefits in every respect as
important as the salary paid to them by the employer. The following are some of the
major reasons for the emergence of informal organisation.
i. The desire to socialize with others
Keith Davis observes that along with liens technical imperative, there is also a
social imperative to work together. Man is a social being. He wants to belong, to
associate with others rather to work in isolated loneliness. Out of this basic drive of
man, the informal organisation arises. It is, therefore, quite natural when people work
together in groups, they tend to socialize with fellow employees to satisfy their own
social and ego needs. These needs are not normally satisfied by the formal
organisation. Informal organisation, on the other hand, provides them opportunity to
interact with people of their liking based on so many personality factors. We can easily
observe in any formal organisation, like minded people coming together and forming
into groups.
ii. Disillusionment with the routine
Excessive specialisation these days in a way contributes for the employee
aloofness. People become bored with the routineness in tasks and feel psychological
fatigue. They dont get the pride or satisfaction, for what they perform constitutes only a
small portion in the total task. People try to overcome this boredom through
interactions with others. Such informal interactions which encompass a whole gamut
of issues both related to job and personal life help, in releasing the tension created on
the job. Informal organisation thus helps in filling up the psychological vacuum created
by dull, boring and monotonous jobs.
iii. Hierarchical command and control
Commands and controls characterize formal organisation.
Wherever there is
hierarchy, it goes without saying that things happen in a formal way. Reporting
relationships are clear, information flows along the formal lines of authority and
responsibility of the people. There exists a superior-subordinate relationship where
superiors tend to exercise control which may not be liked by subordinates. While the
subordinate cannot defy the superior, to compensate for the inner conflict, he tries to
find out an association where he does not face any such control. Thus informal
organisation provides him the necessary forum where he gets the psychological relief
and solace by sharing his agony with others.
iv. Protection of interests
Another evil effect of the informal organisation is the tendency to resist change.
Such an attitude often impedes the much needed innovation and adoption of changes
as demanded by the exigencies of the environment. However, such counterproductive
behaviour is often a reaction to the groups perception of how management is treating
them. Group members perceive that they are being treated unfairly and respond as any
individual would in such a situation.
ii. Benefits of Informal Organisation
Since group membership is contingent on working for the organisation, loyalty to
the group may translate into loyalty to the organisation. For instance, many people
refuse higher paying jobs with other companies because they are reluctant to give up
the solid ties developed at the present company. It is possible for groups objectives to
be compatible with those of the organisation. At times the performance norms of
informal organisation may be higher than those of the formal organisation. For
example, the intense team spirit characteristic of some organizations which results in a
strong drive to succeed is often an outgrowth of informal relationships. Similarly, the
grapevine
may
help
the
formal
organisation
by
supplementing
the
formal
communication network.
By failing to work effectively with them, or engaging in actions to deliberately
suppress informal organizations, manages often become unable to harness these
potential benefits. In any event, whether a particular informed organisation is harmful
or beneficial, one thing is certain that it exists and musty be dealt with.
Therefore, as a manager, you must learn to cope effectively with informal
organisation.
Managing the Normal Organisation
Management writers have fully realized the importance of handling informal
organizations to help the formal organisation attain its objectives. Scott and Davis offer
the following suggestions:
Recognize that the informal organisation exists, and nothing can destroy it
completely without also destroying
the formal
organisation.
Therefore,
management should accept it, work with it, and not threaten its existence;
4. Revision points
Organisational Theories
5. Intext questions
Discuss some of the problems and benefits of informal, Organisations.
Why should the environmental force to taken into account while
creating on organisation structure.
6. Summary
Different approaches have been developed over the years to explain
the process of organizations. The classical theory which emphasized
technical and other operational aspects of the job; the neo-classical
theory where the emphasis human element in the organizations with
due recognition to the existence of a social system along with the
technical system; and the modern approach where organisation
structure has to designed in tune with the environmental demands
have been discussed in this lesson. Besides, the distinction between
the formal and informal organizations and how informal organizations
come into being in the formal systems the reasons there of, the
problems and benefits have also been presented in detail.
7. Terminal exercises
Discuss
some
of
the
problems
and
benefits
of
informal,
Organisations.
Why should the environmental force to taken into account while
creating on organisation structure.
8. Supplementary material
Burns, Tom and Stalker, G.M, 1961. The management of Innovation,
Tavistock,
London.
London.
9. Assignments
What are the basic tenets of the classical organisation theory? Is
this theory relevant to the design of the present day organisation
structure? If it is so, give the details elaborately.
If so,
Chapter 5: Departmentation
1. Introduction
The managerial function organizing involves the creation of a structure most
appropriate for the organizations objectives and other internal and external
factors. The best structure is the one that enables the organization to interact
effectively with its environment, to efficiently channel the efforts of its people,
to make efficient use of its resources and thereby to meet the needs of its
customers and attain its objectives.
2. Objectives
After studying this lesson, you should be able to:
3. Content
Detailing all the work that must be done to attain the objectives:
Dividing the total work load into activities that can logically and comfortably be
performed by one person or by a group of persons;
It is important to remember that the resulting structure is not a static form, like
the structure of a building. Since structure is based on plans, a major revision of plans
may necessitate a corresponding modification of structure. As such, organizing and
reorganizing are ongoing processes. Successful organizations continuously assess the
appropriateness of their structure and change it in accordance with the dictates of the
environment. It is anybodys knowledge that these days every issue of leading business
magazines widely reports news relating to reorganization underway in some large
company or the other.
departmentation
Although organizations have much in common with one another, they also differ in
many ways. Some organizations are large, some are small and some operate in only one
product area like Tata Iron and Steel Company (TISCO0. Others like Larsen and Toubro
(L&T) and ITC operate in many diversified areas. Some operate in a small geographic
area, whereas others like Coca-cola, Procter and Gamble, and IBM, for instance, do
business in many countries of the world. To cope with these differences in objectives,
strategies and situations, managers use various systems of departmentation.
Departmentation is the process of dividing the organisation into manageable
subunits. The subunits are often referred to as departments, divisions, or sections. By
whatever name the units are called, the process is known as departmentation.
functional departmentation
This is perhaps the most logical and basic form of departmentation. Functional
departmentation is the process of dividing the organisation into units on the basis of
the firms major activities. It involves grouping employees according to broad tasks they
perform. Normally separate departments are created for all the key activities of the
business. For example, in a manufacturing company, the activities essential to the
existence of the company are production, marketing, and finance. However, in nonmanufacturing concerns these functions differ. IN a transport company, the key areas
may be operations, sales and finance. Thus, public utility concerns like electricity,
transport, banking, insurance and hospitals have their own distinct key functional
areas. In all these cases, under functional departmentation, major or primary
departments are created along the key functional areas of the respective businesses.
If the organisation or given department is large, or in other words, as the
organisation grows, major departments can be subdivided. These sub-divisions are
called derivative departments. The essential idea is to make increased use of
specialisation. A typical functional organisation with major functions and derivative
functions are shown in the following Exhibit-1.
exhibit - 1
functional departmentation
CHAIRMAN / MANAGING DIRECTOR
MANAGER
MARKETING
ADVERTISING
The
SELLING
following
MANAGER
FINANCE
MANAGER
PRODUCTION
are
the
advantages
and
disadvantages
departmentation.
Advantages
It is the most logical and simple form of departmentation;
TAXES
of
functional
It makes supervision easier, since each manager has to be an expert in only his
functional area of operation;
Disadvantages
Functional departmentation is often found to be inadequate to meet the
growing needs of the business, particularly as the organisation expands or
diversifies its activities;
Functional managers tend to develop narrow perspective and loose sight of the
bigger picture. Members of each department feel isolated from those in other
departments. For example, manufacturing department may be obsessed with
cost reduction and meeting the delivery dates neglecting the quality control. As
a result, marketing department may be flooded with complaints.
product/market departmentation
As the organisation grows, either by broadening its product line, or by expanding
geographically, some of the disadvantages of functional structure begin to be move
apparent. In such a case, management will create semi-autonomous divisions for each
product or market. Three patterns are adopted generally by organizations depending on
the specific requirements to overcome the limitations of functional structure. They are
product, territorial and customer departmentation.
i. Product Departmentation
One of the most common ways in which businesses grow is by increasing the
number of products they make and sell. If the organisation is successful, several
product lines may attain such high sales that they require a separate division. Large
organizations like Shaw Wallace. Kirloskar, Voltas, ITC, Hindustan Lever, have coped
with the expansion of their product lines by creating separate departments or divisions
for the various products they make. Under product departmentation, a single manager
often referred to as the brand or product manager is a delegated authority over all
activities required to produce and market that product. As against functions in the
functional departmentation, basis products or services become the primary or major
departments in the product departmentation, as shown in
exhibit - 2.
LAN TABLE
Advantages
Product departmentation places attention and effort on the basic products, the
success of which is critical to the survival of the organisation;
Since all revenues and costs are assigned to a particular product, cost centres
can be established, high profit areas can be encouraged and unprofitable
product lines can be dropped. Thus, responsibility for cost reduction and
profits can be established at the division level;
Proper coordination of all functional areas can be achieved as all the functional
managers work as a team under close supervision of the product manager.
Since the department or division is multifunctional, it often operates like a
complete company.
Disadvantages
Requires more persons with general management abilities as more and more
departments are created for the various products;
activities are grouped. For instance, commercial banks organize their activities around
customer groups to cater to their specific needs. As such, we find separate departments
or divisions for agricultural, industrial and merchant banking operation. Similarly, we
find Blue Star Company organizing its air-conditioning business around domestic and
industrial
air
conditioning
units;
Exhibit-3
illustrates
typical
customer
exhibit - 3
CHAIRMAN
GOVERNMENT
SALES
INDUSTRIAL
SALES
PRODUCTION
PRODUCTION
PRODUCTION
MARKETING
MARKETING
MARKETING
FINANCE
FINANCE
FINANCE
PERSONNEL
PERSONNEL
PERSONNEL
Advantages
Customer departmentation facilitates concentration on customer needs. This is
almost all in line with the customer orientation professed by many
organizations these days;
Customer makes the feels that they have an understanding supplier. For
example, the manufacturer may sell to wholesalers and industrial buyers.
Wholesaler requires a product of dependable quality with assured supplies.
The industrial buyer wants a product of high quality plus a service that
includes installation and repair of the product and the specific training of
employees.
Helps the organisation to get the correct feel of the market dynamics in terms
of preferences of the customers, competitors strategies, etc.
Disadvantages
Difficult to coordinate operations between competing customers demands
multinational
companies
organize
their
global
activities
with
MANAGER
PRODUCTION
MANAGER
MARKETING
MANAGER
FINANCE
MANAGER
PERSONNEL
MANAGER
MANAGER
MANAGER
WESTERN REGION NORTHERN REGION SOURTHERN REGION
regional
Advantages
Territorial departmentation makes possible concentration on markets and
marketing channels in different geographical areas;
Disadvantages
In this type of departmentation, there are problems in training people to think
in terms of markets rather than products;
It is
matrix structure have a dual responsibility. First, they are responsible to the head of
their functional department, the person who has assigned them to the project. The
functional department head is their line superior and will continue to be so. But the
project manager exercises what is called project authority over the project staff.
Exhibit 5 presents these dual responsibilities in a matrix form of organisation.
EXHIBIT - 5
Vice
Vice
President Research and Development
Project
President
Engineering
Vice President
Production/
Operations
Management
Production/
Operations
Group
Production/
Operations
Group
Production/
Operations
Group
Vice
President
Purchasing
Functional Authority
Project Authority
When the concepts of functional and project authority are brought together, the
result is an organisation structure that is both vertical and horizontal. The vertical
pattern is brought about by the typical line authority flowing down from superior to
subordinate. The horizontal authority flow is caused by the fact that both the scalar
principle and unity of command principle are violated.
Companies like Larsen & Toubro (L&T), Western India group, U.P. Construction
Corporation.
The
The people that work in the project are responsible to the project
manager as well as their functional head from whom they are drawn. Similarly, in the
multi-product consumer goods industries, as in the case of projects, responsibility for
different products may be placed on product managers as could be seen in the exhibit.
The matrix may be temporary or permanent. In construction and turnkey activities,
project is disbanded after the execution, where as it may take a permanent form in the
case of a consumer goods company.
Advantages of Matrix Organisation
David I. Cleland and William R. King identify the advantages as follows:
Responsibility for the overall execution, management and project is with the
project manager who acts like a chief executive;
Project people have a functional home when they are no longer needed on a
given project;
A better balance between time, cost and performance can be obtained through
the built-in checks and balances and the continuous negotiations carried on
between the project and the functional organisation.
Disadvantages
Many of the drawbacks mentioned below of the matrix structure can not be
avoided. Managers have to learn to deal effectively with them.
The major disadvantage relates to power struggles. Since use of the matrix
means use of dual command, managers often end up in conflicts;
Matrix entails wide use of group decision making because group cooperation is
required for success.
decision making;
If the organisation has too many projects, the result may be severe layering of
matrixes.
Matrix structure may be expensive. The dual chain of command may cause
management costs to double.
When there is an economic crunch and the organisation has to cut back, matrix
structures are the first to go. Despite the drawbacks, these of matrix structure have
spread too many industries. In addition to construction and engineering, consumer
goods, banking, insurance and computer companies are now using it. Variations of
matrix are also used by hospitals and other professional organisation.
contingency organisation design
The contingency approach to organisational design suggests using whatever
approach is most effective. Accordingly, so many flexible structures are adopted these
days to meet the specific needs of the organizations.
When low cost and efficiency are the keys to successful goal achievement,
organizations should use functional departmentation.
The greater the intensity of competition, the greater will be the degree of
decentralization.
The greater the volatility of the environment, the more decentralized and
flexible the organisation has to be; and
4. Revision points
Introduction
Steps in Designing Organisation Structure
Departmentation
Product/Market Departmentation
Product Departmentation
Customer Departmentation
Territorial Departmentation
Product Organisation
The Matrix Structure
Continentals Organisation Design
5. Intext questions
What are the five types of power?
suitable examples.
Explain the process of delegation of authority in an organization.
Discuss the factors that in an organization. Discuss the factors that
encourage it and those that discourage it.
6. Summary
The managerial function organizing is the process of identifying the important
activities to be performed to achieve the objective, grouping of related activities,
assigning such groups of activities of people and providing for coordination by
establishing authority-responsibility relationships among people. Creation of
departments within the organization the process known as departmentation,
resulting in the design of a structure is an important task in organizing.
Different patterns of departmentation are used by organizations depending on
their specific requirements. Important among them are functional, product,
customer, and territorial departmentation.
environment and the needs of the organizational members are some of the
factors that influence the design of the structure.
7. Terminal exercises
Considering the changes that are taking place in the Indian economic
environment in the post liberalization era, do you believe there will be a trend
towards centralization or decentralization over the next few years? Give
reasons.
8. Supplementary material
Chester A. Barnard, 1938.
University
Press, Cambridge.
1. Introduction:
Effective functioning of the formal organisation depends on the authorityresponsibility relationships among people working in groups to achieve the
objectives.
organisation structure. We will, in this lesson, understand the line and staff
authority relationships.
Perhaps no other area of management has created as much confusion as the
line and staff authority.
management literature for many years, they still remain to be clouded with
regard to the line and staff relationships. Let us, therefore, first understand
what the line and staff authority mean.
2. Objectives
After studying this lesson, you should be able to:
Describe the major reasons for the conflicts between line and staff managers;
Suggest ways and means to achieve proper harmony between the two; and
3. Content
LINE AND STAFF CONCETPS
There are two approaches, to understand line and staff concepts. One approach
lays emphasis on the basic functions of the business.
Accordingly, functions of an
Line
functions are those which have direct responsibility for accomplishing the objectives of
the enterprise and staff refers to those elements of the organisation that help the line
to work most effectively in accomplishing the primary objectives of the enterprise.
Thus, organisational objectives are the basic determinant of line and staff
functions and with the change in the objectives, line and staff functions may change. A
line function in one organisation may be staff function in another.
For example,
Further, within a
department, there may be line and staff function, for example, in marketing
department, selling may be line function whereas market research is a staff function.
The other approach lays emphasis on the authority and views that line and staff
are two kinds of authority. According to this approach, line authority is defined as a
direct authority which a superior exercise over his subordinates to carry out orders and
instruction.
advisory. The function of people in a pure staff capacity is to investigate, research, and
give advice to line managers to whom they report.
It is common that in actual practice, some variations may exist. The variations
are more pronounced in the case of staff authority.
As presented in exhibit-1,
Staff
authority
(Advice)
Functional
authority
Concurring
authority
Compulsory
Staff consultation
The distinction between line and staff is important because staff must be provided
if the growing organisation is to accomplish its goals. Line and staff relationships are
established to guide people in the way they work together. But, for practical purposes
it should never be looked upon as an inflexible barrier. The differentiation between line
and staff is necessary for the following reasons:
LINE AUTHORITY
Line authority exists between superior and his subordinate.
In the organizing
The
individuals, in turn, assign some of the activities to persons working below them in the
hierarchy and delegate them authority.
superior and his subordinate is created through the enforcement on line relationship.
Such a relationship works as follows:
As a Chain of Command: A command relationship exists between each superior
and subordinate. Line authority is the heart of this relationship because it entitles a
superior to direct the work of his subordinate.
As a Channel of Communication: Line authority can be treated as a channel of
communication between members of the organisation. Communication up and down in
the organisation flows through the line relationship. Barnard has emphasized the role
of line relationship as a channel of communication by suggesting that line
communication should be established and every member of the organisation should be
tied into the system of communication by having someone to report to and others to
report him. Such a line can be maintained easily through the chain of command.
As a Carrier of Responsibility: The line relationship carries ultimate responsibility
for the work assigned. Though the process of assigning activities goes on till the level
where actual work is performed by operatives, each individual in the line is accountable
for the proper performance of the activities assigned to him.
STAFF AUTHORITY
The relationship between a staff manager and the line manager with whom he
works depends in part on the staff duties.
checks on performance will have relationship with line manager that are different from
those of a man who has concurring authority. Such variations between line and staff
relationships as discussed earlier, run along a continuum with only advice at one
extreme point and functional authority at other extreme point. In between, two more
situations represent compulsory staff consultation and concurring authority. (See
exhibit-1) The different shades of staff authority are discussed below:
Advisory Staff Authority
This is the type of staff relationship popularly associated with the term staff
authority. An advisory staff manager provides advice, assistance, and information and
it depends on the line manager whether these are put into action or not. Thus, a staff
man relies largely on persuasion to get his ideas put into effect.
In the absence of
Therefore a staff
Compulsory
consultation supplements more general requirements for successful staff work, the
requirements that a staff would have access to any information that relates to his field
of interest.
Concurring Authority
At times, a staff man may be granted authority so that no action can be taken
until he agrees to it. For example, quality control inspector must pass on raw material
or semi finished products before they move to the next stage of production, or
agreement with employees over the matter of wages should be entered only after the
personnel manager has agreed to it. The idea of concurring authority is that the staff
viewpoint is incorporated into operating decisions. It is a better arrangement because
of which line manager can not take needless action. These considerations suggest that
concurring authority is granted only when the viewpoint represented by a staff man is
particularly important when possible delay in action will not be serious. For example,
it may be prescribed that a finance manager can not withhold capital expenditure
simply because of his disapproval of capital expenditure plan, but he can withhold it
because funds are not available of funds can not be arranged.
In government
between line and staff in the organizations, resulting in friction and loss of time. The
various factors leading to line-staff conflict can be grouped into three categories:
Lack of responsibility
makes them complacent and they do not care far the ultimate objectives of the
organisation. On top of all this, line managers contend that they will be criticized if
things go wrong; while the staff will get the rewards if things go well. This disparity
between authority and responsibility and also between contributions and rewards is a
source of jealousy between line and staff.
ii. Encroachment of Line Authority: Line managers perceive that staff people
encroach upon their authority by advising on matters which fall within their
jurisdiction.
context of their own speciality, and thus lack practical implication. Second, as staff
people are away from the actual operational scene, they are not able to fully appreciate
the actual dimensions of the problems and their recommendations may not be
practicable.
APPREHENSIONS OF STAFF MANAGERS
Similar to the contention of line managers, staff people have their own arguments
and try to find fault with the line managers. The focus of the staff arguments centres
normally around the following:
i. Lack of Proper Use of Staff: Staff people feel that the line managers do not make
proper use of their services and decisions are made without inputs from staff. They are
informed after the action has been taken. By virtue of his position, a line manager can
accept, amend, or reject the advice of staff irrespective of its quality and practicability.
Further, when something goes wrong in the area of his operation, staff person from
concerned field in made the scapegoat.
ii. Resistance to New ideas: Line managers often resist new ideas because new
ideas mean that there is something wrong with their present way of working. Thus new
ideas are treated as fault-finding device in their operation. As against this, staff people
are more innovative in the areas of their speciality. Because line people are reluctant to
new ideas, many of the efforts of staff people go waste.
iii. Lack of proper Authority: Staff people feel that they contribute to the
realization of organisational objectives without really enjoying any authority.
managers clearly hold most of the cards and enjoy enormous authority.
Line
It is not
necessary to consult staff before arriving at a decision. Even when staff is consulted, it
is not necessary that staff advice is put into practice. As a result staff specialists feel
that if they have the best solution to a problem, they should have authority over line
managers to force the solution.
Nature of Line-Staff Relationship
In addition to the factors discussed so far, following inherent characteristics of line
and staff relationship also contribute to conflicts and tensions.
In such cases, there is a possibility for overlap and gap in authority and
Line people have the ultimate responsibility for the successful operation of
the organisation. Therefore, they should have authority for making operating decisions.
2.
In some situation,
they may be granted functional authority through which they can ensure that their
recommendations are put in operation.
3.
4.
time, staff people also have a responsibility to let line people know now
they can contribute for the better performance of line activities.
2.
In order to make proper use of staff, they should not be kept busy in
unimportant work because it does not serve any meaningful purpose.
Instead, they should be assigned critical work in the area of their
speciality.
3.
4.
If the people have taken some actions directly affecting staff activities
without consulting staff people.
about
such
actions.
The
will
help
in
removing
5.
Revision points
Line Authority
Staff Authority
6.
Intext questions
following adages: Staff should be on tap, not top, and Staff should sell,
not tell.
What are the important sources of conflict between line and staff
managers? How do you resolve the conflicts? State some real situations?
7.
Summary
Line positions may be defined as those directly responsible for achieving
the organizations goals. Staff positions provide expert advice and service
to the line. Staff authority ranges from being limited to advising on
request, to compulsory consultation, to concurrent authority, to functional
authority. Because of the differences in the nature of authority between
the two, it is not uncommon to hear about the conflicts between the line
and staff managers. Each look at the other with suspicion. As a result, in
fighting and always trying for one gunmanship are quite natural in
organizations. The concepts of the line and staff authority, reasons for the
conflicts and the ways and means of achieving harmony have been
discussed in this lesson.
8.
Terminal exercises
9.
Assignments
What are the important sources of conflict between line and staff
managers? How do you resolve the conflicts? State some real situations?
10.
Suggested readings
Hill, Tokyo.
11.
Learning activities
What are the important sources of conflict between line and staff
managers? How do you resolve the conflicts? State some real situations?
12.
Key words
2. Objectives
After studying this lesson, you should be able to
3. Content
The available evidence on the practices in the corporate sector shows that the
use of committees sin all types of organizations is on the increase. As the
emphasis on the group decision-making and participation increases, so also
the use of committees in the companys affairs. If adequate care is exercised in
respect of the following factors, the benefits far outweigh the disadvantages.
i. Authority and scope must be specified:
committee and the authority of it have to be clearly defined. That is, whether
the committee has the authority to make decisions, or its job is just to make
recommendations. If the scope and authority of the committee are not clearly
defined, quite often, members may end up in deliberating issues that are not
referred to the committee at all.
ii. Size of the committee: Though there is no exact number regarding the size of
the committee, the complexity of interrelationships naturally increases with
the size of the group. If the group is too large, it may be difficult for the
members to communicate effectively, on the other hand, if it is too small, the
purpose behind the use of committee may be lost. As a general rule, a
committee should be large enough to promote deliberations and to provide an
opportunity for the consolidation of wisdom and expertise of many members;
Research indicates that the ideal committee size is five, when all the five
members possess adequate skills and knowledge to goal with the subject
assigned to the committee.
However, if the committee is to have all interested groups participate in its
deliberations, the number may be large. If all the interested groups are not
represented, the committees work may be criticized. In such a situation where
the need for representation of the interested parties, makes the committee too
large, one option could be to constitute sub-committees by breaking down the
problems to be studied.
iii. Selection of Members: For the committee to be successful, the members on
the committee must be good at understanding the problems and analysing
them. They must also be good at performing well in a group. Every member
must have the right temperament, verbal and analytical ability and capacity for
working with others. Selection of members requires judgement about the
personal characteristics of members, their functional background and level in
the organisation. The basic objective is decisions. Committees are likely to
function better if members are friendly, known to each other and respect each
other. Committees which include members drawn from different levels are
unlikely to function effectively because there from the lower levels may not very
Intext question s
What are committees?
6.
Summary
In the second half of the lesson committee form of organisation and the
major issues related to committee such as types of committees, reasons for
the use of committees, disadvantages of committees and the measures for
making committees more effective, have been dealt with.
7.
Terminal excercises
Inspite of the serious drawbacks in the functioning of committees, they
cannot be dispensed with? Why? give reasons...
8.
Supplementary materials
Clark, P.A. 1952. Organisational Design: Theory and Practice, American
Harper
9.
Assignments
What measures do you suggest to make a committee function more
effectively?
10.
Suggested readings
AITBS, Delhi.
Cawsey, T.F. 1980 Why Line Managers Dont Listen to Their Personnel
Departments, Personnel, Jan-Feb.
11. Learning activities
Unit II
Chapter 1. Staffing and directing function Leadership
1. Introduction
INTRODUCTION
While planning, organizing and staffing can be considered as preparatory
managerial functions, controlling is intended for checking the things in a way as we
desire. The connecting link between these functions is directing. It is the live link that
establishes meaningful interaction among superiors and subordinates through proper
directions and guidelines.
environment that facilitates efficient discharge of duties by the human beings. Thus it
It indicates scalar chain. It means that the top management directs the
middle management which in turn influences the operations people.
2.
3.
4.
5.
Hence,
Direction function makes the executives to think in terms of 9a) issuing instructions (b)
proper supervision (c) motivation (d) leadership and (e) communication.
It is a well
known fact that without paying proper attention to the above points, no manager can
succeed in obtaining the goals.
2. Objectives
LEARNING OBJECTIVES
To discuss the meaning and nature of direction function.
3. Content
PRINCIPLES OF DIRECTION
1. There must be harmony among several objectives of the corporation.
2. Conflicting attitudes must be reconciled.
3. Inefficient workers should be removed.
4. Appropriate policies and guidelines should be framed from time to time in
order to secure efficient operations through the co-ordination of all the efforts.
TECHNIQUES OF DIRECTION
Usually three kinds of techniques are used for carrying out the direction function,
such as;
a. delegation of authority
b. communication and
c. leadership
Leadership is one of the most important functions of the Direction function. It
encourages efficient use of all resources in an optimum manner for the benefit of the
organization. The following pages centre on the significance of the various facets of the
Direction function.
LEADERSHIP
Management and Leadership are often confused as the same. No doubt, leading is
an essential function of management. But, that does not mean that management is
just leading. It involves many things like planning, organizing, staffing and controlling
people. All these managerial functions become stale if managers do not know how to
lead people. Particularly in modern organisation, somebody should show the way to
others for attaining the goals. This characteristics feature is termed as leadership. It is
neither mere direction nor motivation. It is a live wire between plan and action. Ability
to lead effectively is one of the keys for successful management.
basically and clearly understand the attitudes, the values the flow of authority and the
purpose of organisation.
people so that they will strive willingly and enthusiastically towards the achievement of
group goals.
FUNCTIONS OF LEADERSHIP
1.
Every leader, as a superior, has to delegate a part of his authority to the
subordinates.
2.
Once authority is delegated, the leader must try to motivate the people to
better levels of performance.
3.
The leader must try to create good climate for achieving maximum
operational efficiency.
4.
5.
A leader must always try to develop his own people from within.
Hence leadership is not bossing. The functions of a leader includes, apart from
ordering, teaching, inspiring, guiding, interacting, initiating and solving problems. It
is an endless personal process. This personal ability to lead effectively is one of the
keys to become a successful manager.
Motivation and leadership are closely related with each other as the
leader tries to understand the reasons for why people act as they do.
INGREDIENTS OF LEADERSHIP
(i)
Power
(ii)
Understanding people
needs,
subordinates
feelings,
and
beliefs,
different
values
of
motivational
forces.
(iii)
Inspiring followers
(iv)
Style of leadership
chapter. However a brief attempt is made to identify some major theories which form
the base for different leadership styles.
TRAIT THEORY
This theory derives this belief from the philosophy of ancient Greeks and Romans
that leaders are born and not made.
Hitler, Lincoln, Caesar, Kennedy, Mahatma Gandhi, and Martin Luther King have no
uniform intellectual, social, physical and psychological characteristics.
To prove the
concept of trait theory as valid, one has to identify specific characteristics that all
leaders possess.
follows:
a. Physical traits (appearance, energy, height etc.)
b. Intelligence traits (understanding, comprehending, decision making etc.)
c. Personality traits (adjustability, aggressiveness, enthusiasm, will power,
self confidence etc.)
d. Task related traits (initiative, perseverance, achievement, etc.)
e. Social traits (co-operation, Interpersonal relationship, group cohesion
etc.)
In addition to the above traits some more characteristics like ambition, honesty,
creativity and charisma have been identified as key traits. It is true that all leaders
need not possess all the traits. And sometimes even non-leaders may possess either
most or all of them.
following limitations.
1. It neglects the needs of the followers.
2. It fails to recognize the relative importance of various trait under changing
conditions.
3. It does not separate the cause and the effect (whether leader invariably
possess self-confidence or success makes the leaders to build confidence).
Different authors have propounded different theories explaining the leadership
behaviour and styles. The following section details the various styles of leadership.
STYLES OF LEADERSHIP
For the purpose of easy understanding, leadership styles may be conveniently
studied as follows:
a. Styles based on the use of authority
b. Styles based on behaviour
c. Other miscellaneous styles
Each of these styles is explained below:
(A) Styles based on the use of authority
Depending upon how a leader uses his authority one can identify three basic
styles. (i) autocratic, (ii) democratic / participative, and (iii) free-rein type.
(i)
He consults
manager may be autocratic at one instance (enforcing the rule regarding safety devices)
and democratic at the other (consulting the followers regarding change of time at work
schedule).
(B) Styles based on behaviour
Circumstances change constantly creating new situations and challenges.
The
behaviour of the leader is mould by the changing patterns of group attitudes and
experiences. Different dimensions of a leaders behaviour have been thoroughly probed
through Ohio studies.
consideration are two distinct features, existence of one does not mean the absence of
the other. Actual behaviour of a leader in a given situation may consist of combination
of these two aspects. The following diagram (IV. 1. a) gives the gist of the findings of the
Ohio state studies on leadership:
The above four quadrants have been representing various combination of task and
relationship behaviour that a leader can exhibit at a particular point of time. Actual
behaviour varies among these four alternative combinations depending upon the
situation.
(ii) Managerial Grid
Robert R. Black and James S. Mouton have developed five different styles of
leadership through this concept of Managerial Grid. This concept has been exclusively
used for training the managers through enabling them by identifying the various skills
of leadership styles. This concept has been mainly based upon two important factors
(a) concern for production (Task orientation) and (b) concern for people (Relationship
orientation). The essence of this theory is presented in the following diagram No. (IV. 1.
b).
In the above diagram, concern for production is shown on the horizontal axis and
concern for people is identified on the vertical axis. The scale recorded varies from 1-9.
It indicates that the concern for production/people becomes more important to the
leader as his ranking advances from 1-9 gradually. The five styles of leadership are
briefly explained in the following lines.
(a) Impoverished (1-1):
As the rating indicates, this styles involves little concern for both people and
production.
Leaders under this style have minimum involvement in their jobs and
LOW
CONSIDERATION (RELATIONSHIP BEHAVIOUR
LOW
DIAGRAM: IV I B
HIGH
MANAGERIAL GRID
1-9
COUNTRY CLUB
9
8
7
6
5
4
3
2
1
9-9
TEAM
55
MIDDLE ROAD
IMPOVERISHED
1-1
1
TASK
9-1
5
(c) Task
It is another extreme style of leadership commonly referred to as Autocratic style.
Here leaders are concerned only with developing efficient operations by arranging a
tight structure and conditions of work. They have title or no concern for people.
(d) Team
It is also an extreme style of leadership. Here, the leaders display a rare quality or
ability inter-woven with the production needs of the enterprise with the needs of the
individuals.
In other words, these leaders believe that the highest concern for
objectives at moderate levels considering the feelings of the people. Adequate level of
production and satisfaction can be reaped through this style.
The Managerial Grid is a useful tool for identifying different leadership styles. The
answer to the question what kind of leader he is depends upon the personality,
characteristics, enterprising ability, environment and other situations.
(iii) Tri-dimensional leadership style
While the managerial grid and Ohio State studies have based upon two factors
Task oriented and relationship oriented for explaining the styles of leadership, Prof.
W.J. Reddin has suggested effectiveness as the third factor in deciding the style of
Effective styles
Ineffective styles
a.
Dedicated
Benevolent Autocrat
Autocrat
b.
Integrated
Executive
Compromiser
c.
Related
Developer
Missionary
d.
Separated
Bureaucrat
Deserter
He has to adopt
leaders not only by virtue of their personality attributes put also by virtue of various
situational factors including leaders ability to interact with group members.
This
theory holds that three major situational factors determine the success or otherwise of
a given leader. They are:
a) Position power
This indicates the degree of power of a position which permits a leader to secure
group members compliance with his direction. In other words, a leader with clear
position in power can obtain goods followership more easily.
b) Task-structure
Here, the leaders success depends upon how clearly he spells and sells assigned
task through his people so that subordinates are made more responsible and
accountable for their performance.
c) Leader-members relationship
This is the most important dimension.
Well
subordinates are frustrated. They look forward for directions from the leader. The key
to this approach is that the leader can influence the paths via behaviour in goals.
(3) Leadership Continuum
Real time leadership styles vary between the two extreme varieties Authoritarian
and Democratic. Evolving different styles suitable to different situations has been well
explained by Robert Tannenbaum and Warren H. Schmidt through Leadership
Continuum Model.
a)
b)
c)
d)
e)
Some of the
4. REVISION POINTS
5. INTEXT QUESTIONS
IMPORTANT QUESTIONS
1.
What is Direction? Explain the scope and role of the direction function in
modern organisation?
6. Summary
Summary: There is no one best way of leading the people. Various theories
propounded by eminent authors have only suggested the varieties of ways that
are available for leaders in different situations.
knowledge to understand the total theory on the subject. Every leader has to
adopt his own style depending upon the situation. How the leader influences
the people is not important.
- Harold Koontz.
- Arthus Elkins
- Harold Koontz.
2) Management Structures
- Arthus Elkins
12.
Chapter 2. Motivation
Organisations are successful when all the members contribute their performance
in an optimum manner in a desired way. This performance of a group directly depends
upon the ability and willingness of its members together with the technology used. The
term ability refers to the individuals capability of handling the job at a certain time in
a given way. While willingness depends upon the level of motivation, technology is
influenced by the level of research. Thus, symbolically,
Performance = Ability x Motivation x Technology
Modern Organisations are recruiting hundreds of people. Some of them may be
good doers and some of them may be bad/poor performers. The Management cannot
take the chance of removing poor performers. The only alternative left before it is to
encourage and stimulate the poor doers in such a way that they are persuaded to
contribute to the organisational objectives. Hence, the problem before the Management
is how to motivate people.
The concept Motivation though looks simple, connotes different meanings in
different situations. For the purpose of our study, it always indicates work motivation.
2. Objectives
To define the concept Motivation and enable the student to understand the
process of motivation;
To identify the primary and secondary motives;
To discuss the theories of motivation propounded by Mc Gregor & Maslow,
Vroom, Aalderfer and Mc Celland;
To explain the importance of financial and no-financial incentives.
3. Content
The word motivation has been derived from the Latin word movere. It means
to move with. The task of the Manager is to guide the peoples action in a
desired way. Motivation is a general term. It includes drives, desires, needs,
wants, wishes and similar forces.
WANTS
TENSION
ACTION
SATISFACTION
fulfilling the same. Some people may get confused with the relationship between
motivation and satisfaction. Motivation refers to the drive and effort to satisfy a
given want. Satisfaction refers to the contentment and feeling experienced by the
individual when his want is satisfied. While motivation implies the drive force
for an outcome, satisfaction refers to the outcome itself. Motivation is important
to Management due to many reasons.
(a) Higher Performance
A good motivational system brings out the latent and potent abilities of the
employees for the accomplishment of organisational goals. It encourages them to
contribute enthusiastically for better performance. Poorly motivated people may
hinder the goals.
(b) Low absenteeism Turnover
Motivated employees are highly committed and loyal to the organisation. They
come punctually and stay longer hours because they are satisfied individuals. It
reduces labour unrest, absenteeism and turnover.
(c) Facilitates change
Motivated employees are receptive and co-operative. Hence, motivation helps in
eliminating the negative attitude of employees in overcoming the resistance.
(d) Team Spirit
A high level of motivation results in harmonious relations between Management and
Workers. It encourages high level of morale and discipline.
(e) Image of the Enterprise
A Company that provides satisfaction through motivation can project better
image in the eyes of the public. It enables the Company either in retaining or
attracting talented work force. It fulfils the creative desires of the people. That is
why Rensis Likert has commented that motivation is the core of Management.
TYPES OF MOTIVES
A motivate is a personal and internal feeling. It is concerned with the intrinsic
forces operating within an individual which impel him to act or not to act in a
given way. Motives are different types. They are grouped into three categories for
the purpose of understanding in an easy way.
i) Primary motives
They are also termed as biological, physiological and unlearned motives. Primary
motives always take precedence over the secondary motives. Primary motives
include hunger, thirst, sleep, avoidance of pain etc., Since all people are human
and their biological system is common, the make up of the primary needs is
essentially the same among all the individuals. That is why they are called as
biological and unlearned motives.
ii) As the society has been transforming, human needs have become complex.
Primary motives are playing less prominent role and learned behaviour is
While
theory X deals with the negative aspect, theory Y dealing with positive aspect of the
human behaviour. Theory
X involves traditional approach and based upon the following four assumptions
held by the managers about the workers.
a) Workers dislike work and are lazy.
b) Since workers dislike work, they must be controlled with punishment to
achieve the goals.
c) They dont want to take up responsibilities for themselves and seek
formal direction from the boss whenever possible.
d) Workers place security of their job above all other factors associated
with work and display little ambition.
As against these negative views about the human behaviour and its nature.
McGregor listed out four different assumptions under theory Y They are:
a)
Workers can view the work as natural as rest or play; b) Workers can
exercise self-direction and self-control, given the proper environment;
b)
c)
Frankly speaking, the above two theories have nothing to do with motivation.
They explain about the nature of human behaviour under two sets of different
assumptions.
The assumption under theory X that workers must be coerced and regulated for
accomplishing objectives is akin to the characteristic policy which has become obsolete
method in managing people. However, these theories enable us to understand how the
manager should mould his behaviour under two sets of situations for getting things
done.
i)
ii)
Safety and Security needs (e.g. security of job, protection from harm etc.):
iii)
iv)
v)
The above needs can be depicted in the following Diagram No. (IV.2.B):
DIAGRAM NO. (IV. 2. B)
HIERARCHY OF NEEDS
SELF AUTUALISATION
NEEDS
ESTEEM NEEDS
LOVE NEEDS
SAFETY NEEDS
BASIC NEEDS
According to Maslow, if lower need is satisfied, the person moves up the ladder to
the next higher order need. It means that if basic needs are satisfied, workers can be
motivated by fulfilling the next higher order needs fulfilling unsatisfied needs rather
than by satisfied need. Maslow separated the five needs into low (basic and safety
needs) and higher (love, status and satisfied externally, higher order needs are satisfied
internally. This theory has received wide recognition among the practicing managers
because of its logical link. This does not mean that this theory is free from criticism.
The first criticism is that this theory has not specifically mentioned about work related
needs.
Secondly, the strength of each need varies from individual to individual. Hence,
strict ordering of human needs in the above hierarchy could not be proved empirically.
Thirdly it is criticized that it only deals with the content of motivation rather than the
process of motivation.
Two-Factor Theory
Frederik Herzberg and has associates conducted a research study and have
identified two sets of factors. According to this study, motivation depends upon
satisfaction. The two sets of factors affect satisfaction or dissatisfaction of workers. The
first set of factors are termed as maintenance factors. They are salary, job security,
working conditions, quality of supervision, interpersonal a relationships, companys
policy and administration. These factors are related to job environment. Presence of
these factors is necessary to avoid dissatisfaction among workers. These factors ought
to be maintained as a matter of compulsion in every work situation.
The second set of factors are related to the content of the job. They include growth,
advancement,
recognition,
achievement,
accepting
increased
responsibility
etc.
According to Herzberg, these factors are motivational factors which stimulate the
worker to better levels of families. Hence, these factors are termed as satisfiers. To sum
up, while the first set of factors have to be maintained as a matter of compulsion in
order to remove dissatisfaction the second set of factors alone are responsible for
motivating people.
This theory is also not free from criticism. Firstly, there is too much botheration
about satisfaction, dissatisfaction and the point of no satisfaction. There is no
guarantee that satisfaction leads to productivity in all cases. Secondly, the concept of
satisfaction is influenced by a good number of the job and on the job factors. Thirdly,
the impact of situational variables have been ignored in this theory. Fourthly, like Need
hierarchy theory, it is also concerned with the content of motivation and not with the
process of motivation.
Vrooms Expectancy theory: Victor Vroom proposed this theory as an alternative to
the content models explained in the earlier paragraphs. It is the most widely known
theory of motivation for the purpose of understanding the process of motivation.
According to this theory, a persons desire to work at any time can be conditioned by
two factors.
a) existence of one or more personal goals on the part of the employee; and
b) his expectation as to the relative worth of his performance for the attainment
of such goals. When the worker believes that his performance will lead to the
fulfillment of personal goals, he tends to become a high producing worker and
vice-versa.
It has been stated by Vroom as given below;
Force (Motivation) = Valence x Expectancy
Here the term Valence stands for the strength of an individuals preference for an
outcome and expectancy to the probability that a particular action will lead to a desired
outcome. This theory establishes four important links in the process of motivation.
Efforts Performance Rewards/Awards Goals.
This theory has three important implications to managers. Firstly, it is necessary
to provide appropriate rewards to satisfy the individual needs. Secondly, managers are
required to establish a close link between efforts and performance between
performance and rewards and finally between rewards and personal goals. Thirdly, this
theory recognizes the fact that there is no universally acceptable method for motivating
people because of the influence of contingency factors from time to time.
Achievement Theory
David Mc Clelland has identified three basic motivating needs such as need for
power, need for affiliation, and need for achievement. Though all these three needs are
important to management in understanding the process of motivation, to Mc Clelland
need for achievement is of paramount importance. It is concerned with predicting the
behaviour of workers who have either high or low needs for achievement.
Need for power has a great concern for exercising control and influence. People
with this need tend to be forceful, outspoken and demanding in obtaining the work.
People with need for affiliation are likely to be concerned with maintaining pleasant
relationships People with a high need for achievement have a strong desire for success.
They love challenges.
Achievement motivated people are blessed with some special characteristics. They
are not gamblers and they dislike succeeding by chance. They like job situations. They
like moderately challenging goals. They can influence their efforts through continuous
feedback of their performance. They tend to become task-oriented people since they are
vitally concerned with their personal achievements.
The findings of this theory proved that achievement motivated people mainly come
from middle-class families. This study further reveals that the need for achievement
would be stimulated through class-room instructions and training programmes. This
theory urges people to act on the basis of internally driven stimulus to improve their
performance. This theory has received wide recognition.
E R G THEORY
It is an improved model over Maslows and Herzbergs theory on motivation.
Clayton Aalderfer identified three groups of basic needs Existence, Relatedness and
Growth. The existence needs are concerned with physical well being and survival (food,
clothing, shelter, good working environment etc) The relatedness needs emphasise the
importance of interpersonal and group relationships. The growth needs are concerned
does not see the needs as a hierarchy as stated by Maslow. It does not contend that a
lower-level need has to be fulfilled before satisfying a higher level need. Under this
theory, a persons background may dictate that the relatedness needs will take
precedence over unfulfilled existence needs. It further assumes that the more the
growth needs are satisfied, the more they will increase their intensity. In other words,
this theory suggests that one class of needs might remain strong irrespective of the fact
whether the other class of needs has been satisfied or not.
Having discussed some of the important theories of motivation, a brief attempt is
made to discuss the Management techniques that can be tried to increase motivation in
work situations. Management generally uses financial and non-financial techniques to
motivate employees.
Financial Motivators
The commonly accepted belief is that Motivation is directly or indirectly connected
with money. It is true that money acts as a vehicle through which most of the higher
order needs can be fulfilled. This is the reason why most of the organizations use
money incentive as a means of offering satisfaction among staff. Productivity linked
wages, bonus, profit-sharing, leave with pay, medical reimbursement, leave travel
concession are included under this type of motivation. Experience proved that money is
a most reliable motivator. Money as a reward for accomplishment is now accepted as a
base for designing compensation methods.
Besides money, there are some other motivators which deal either with personal
development or with the environment of the employees. Dale Yoder has identified that
workers who set their own goals are capable of dynamic. Understanding all these
theories is important for effective management of human resource. It is the primary
responsibility of every manager to create favourable climate either by offering financial
or non-financial incentives for motivating the work force in a desired way.
5. Revision points
o motivation
o theories of motivation
6. Summary
Motivation is the motive strength to meet (or) satisfy felt needs. Motives are
reasons for behaviour. They direct us towards goals. Economic approach tries to
offer need satisfaction on the job. Managerial approach attempt to secure
coincidence of peoples with the needs of the organisation.
7. Terminal exercises
The desire to satisfy needs is the basic motivation for human behaviour. Need
satisfaction stimulates productive behaviour and psychological growth. The
failure to satisfy need results in frustration, and it is negatively affects our
ability to perform a job well. Comment on the statement and give detailed
explanation.
8. supplementary material
1) Principles of Personnel Management
Edwin Flippo.
Keth Davis
9. Assignments s
1)
C.B. Memoria
5) Management
Koontz
&
Weihrich.
11.
12.
Learning activities
What do you mean by motivation? Explain the simple process of
motivation.
Chapter- 3. Communication
LEARING OBJECTIVES
After reading this lesson, you should be able to:
to
maintain
effective
communication
in
an
INTRODUCTION
The word communication has been derived from the Latin word Communis
which implies common. Therefore, the term Communication refers to the
process of transferring information from sender to receiver with the sole purpose
of creating common understanding among the parties concerned. It is only the
means by which one person can influence another. That is why it deals primarily
with people. It is a basic need of the modern Management. The desire for
communication is as strong as the desire for food. It touches every facet of the
managerial activity. Some people view it as a life line of the modern
organization. It includes telling, advising, directing, ordering and commanding.
To conclude, Louis. A Allen opines that Communication is the sum total of all
the things that one person does when he wants to create understanding in the
mind of another. That is why Chester I. Barnard said, the first executive
function of any leader is to develop and maintain a good system of
communication. Because good communication serves as a linking process by
which all parts of an organizational system are tied up closely.
DIAGRAM IV III A
PROCESS OF COMMUNICATION
FEEDBACK
SENDER
MESSAGE
RECEIVER
BARRIERS
U
N
D
E
R
S
T
A
N
D
I
N
G
Sender, the Message, the Receiver, and the purpose of communication. Every
communication begins with the sender. The information to be transmitted by the
sender is known as the Message. It may be oral or written. What kind of mode
of message is the best depends upon the situation. The message should reach
the receiver in a proper way and that too in proper time. The receiver should
also think in equal wave length for the purpose of understanding the real
meaning of the message. Communication is not complete unless it creates
understanding among the parties concerned. People with closed minds, weak
channels (or, channels with loopholes) and technical barriers will create problems
in communication. Effective steps must be taken from time to time to remove
the bottlenecks that come in the way of creating understanding among people.
For which purpose, proper feed back is a must. It refers to the response given by
the receiver for the purpose of facilitating further communication and greater
clarity in understanding. Good feedback enables the sender to know whether or
not the message has been properly received and interpreted.
Types of communication
Depending upon the channel, communication may be broadly studied under two
DIAGRAM (IV. 3. B)
TYPES AND FLOW OF COMMUNICATION
HORIZONTAL
GRAPEVINE
UPWARD
meetings,
conferences,
letters,
DIAGRAM (IV. 3. C)
METHODS OF COMMUNICATION
METHODS OF COMMUNICATION
USING LANGUAGE
WITHOUT USING
LANGUAGE
VERBAL
ORAL
NON - VERBAL
WRITTEN
VISUAL
Basically, there are two forms of communication verbal and non-verbal. Verbal
communication may take the form of oral or written communication. In oral
communication, parties exchange their ideas through spoken words. That is why
it is also referred to as face-to-face communication. It takes less time and the
feedback is quick. It gives ample scope for adjustment and correction of the
original message. But, its effectiveness is nullified due to lack of documentary
evidence regarding such conversation.
A written communication is always put in the form of written words. All official
letters, circulars, memos, statements and reports are the best examples of
written communication. It provides a permanent record for future reference. It is
suitable for lengthy messages. It offers more authentic information. Despite
these advantages, it is time consuming, and less flexible. Quite often, it is
proved to be expensive and tedious.
Non-verbal communication does not use words. It is a language beyond verbal
communication. Transmitting the message through charts, graphs, maps, sign
boards etc., is now increasingly tried by the organizations. By seeing these
visual aids, information can be easily grasped or understood. One need not
explain now the bar diagram gives clear clues regarding the performance of an
organisation. Meaning can be quickly received through the visual-aids. Nonverbal communication includes body language. It helps in understanding the
warmth of feelings and emotions. It may take the form of gestures, facial
expressions, feeling of touch etc. The following gestures exhibit the real feelings
as stated opposite to them.
Gesture
ALL
CHANNELS
CIRCLE
Feeling
Y
1.WHEEL
Shrugging
of shoulders
CHAIN
Fear,
anxiety
2. Raising legs
Enthusiasm
3. Shake-hand
Friendliness
4. Patting
5. Shaking-head
Rejection of an idea
6. Raising eye-brows
Surprise
Shoes are required to eat here. This sentence is written at the entrance of a
Cafeteria of a University. A student wrongly interpreting the message has written
with a piece of chalk like this: Socks may be eaten outside the Cafeteria.
The above example illustrates how the intended meaning is misinterpreted
through semantic barrier.
(iii) Poor Vocabulary
Poor vocabulary on the part of the manager does not allow him either to write or
speak effectively. Similarly, poor vocabulary does not allow the receiver to
understand the message clearly and completely.
(B) ORGANISATINOAL BARRIERS
(i) Hierarchical Barriers
Modern organizations are characterized by the existence of people belonging to
various levels of hierarchy. For e.g.: Workers, Supervisors, and Shop Floor
Managers etc. It is quite common that equal status people talk to each other
without inhibitions. A lower level employee may find it difficult to communicate
freely about his problems with his superior. Similarly, subordinates are afraid of
unpleasant and critical comments from their superiors. A gap in understanding
always exists because of the differences in their respective positions held in the
same organisation.
(ii) Too much specialization at work spot
Situation
Right Medium
Wrong
Medium
1. Smuggler
2. Traffic Policemen
3. Business Executive
Flashing torch
Hand gestures
Telephone
Oral instruction
Oral instruction
Oral instruction
On confidential work
(v) Sex
Usually, men are considered to be more aggressive, self-confident, assertive and
acquisitive than women. By virtue of this fact, they turned to be good
communications. In contrast to this, women are brought up under the
philosophy that the quality of assertiveness is unfeminine. Women with feminine
ideas and closed brought up try to avoid eye-to-eye contact with superiors and
speak inaudible. Hence, they turned to be poor communications.
(D) PSYCHOLOGICAL BARRIERS
More than fifty percent of the communication problems are attributable to
psychological barriers. Psychological aspects like attitudes, perception, interest,
belief, prejudices etc., may come in the way of proper understanding of a
message between the sender and the receiver.
(i) Attitudes and Values
Our thinking is influenced by our attitudes and values. They tend to be different
from one person to the other. Hence, they create barriers. A message which
runs contrary to the beliefs is not easily acceptable. Emotional attitudes are so
strong that they distort understanding among the people.
(ii) Perceptions
Communication barrier arises as a result of different perception of the same
message / object by two people. There is nothing wrong if two friends express
different opinions about a given movie. Similarly, a fifty paisa coin appears to be
a big money to a poor man and a small one to a rich man. That all depends upon
how one perceives the idea. Differences in judgments inhibit communication.
(iii) Lack of Interest
Interest creates understanding. Effective Communication requires proper
interest among the parties concerned. It enables them to pay adequate
attention to the message. Lack of interest leads to mistrust which hampers
effective communication. There may be many talkers but few listeners. Lack of
interest leads to poor listening. Hence, effective communication demands
interest among the parties concerned.
(iv) Poor Retention
One of the weaknesses of the human being is his inability to retain total quantum
of information received. Poor retention acts as a barrier in effective
communication. At each level from top to the bottom if some information in
retained, then, communication becomes ineffective.
(v) Filtering
Filtering refers to the process of manipulation of information by the sender so
that it will reach the receiver either in a favourable or unfavourable way. A
superior may withhold information thinking that subordinates do not need it.
Filtering of information increases with the levels of hierarchy. If a supervisor
comments that your work can be improved, the subordinate may filter the
meaning and receives the message that your work is no good.
(iv) Fear
The feeling of fear undermines communication. People with fear, whether real or
imagine disort information. Fear is a psychological inhibition that prevents them
from exchange of ideas freely and kills the initiation. Fears are of different types.
a.
b.
c.
i.
ii.
iii.
iv.
v.
vi.
SUMMARY
Organisation does not exist in vacuum. They are in the midst of people.
Problems are more with, people than the world of things. Communication which
is a dynamic and interpersonal process is bound to have some problems. These
problems should be removed in order to minimize bottlenecks and maximize the
effectiveness of communication process.
INTEXT QUESTIONS
1. What are the reasons for Mr. Ramanas disappointment?
1)
Charles A. Brown
Keth Davis
3) Management
4) Personnel Management
C.B. Memoria
5) Dynamics of Personnel
Monappa
Administration
Learning activities
1)
2) The question of decision-making comes into picture only when there are
alternatives,
3) A decision-making process must always be rational and purposeful.
4) Decision-making is an intellectual process supported by good reasoning
and sound judgement.
5) Decision-making is an intellectual process supported by good reasoning
and sound judgement.
6) Decision-making is always related to future only.
Types of Decisions
Managerial decisions may be broadly classified under two categories-the first
category includes the typical, routine and unimportant decisions and the second
category covers most important, vital and strategic decisions. Apart from this
classification, decisions are taken at different levels for meeting different
problems. The following paragraphs present a birds eye view of different type of
decisions taken by the executives from time to time.
Policies act as guidelines for future action. Hence, decisions pertaining to policies
are usually taken by the top management. They are considered to be very
important since they affect the total organisation. While operating decisions are
administrative in character, they help in translating policies into action. For
instance, decision relating to a new incentive scheme may be termed as a policy
decision. Decisions relating to the methodology of implementation of such
incentive scheme are termed as operating decisions.
(iv) Programmed Vs Non-programmed Decisions
Programmed decisions usually deal with routine and repetitive problems. For
dealing such problems, systematic policies, procedures and rules are established.
Programmed decisions can be taken with little case as everything goes according
to some set of rules. As against this, non-programmed decisions cover mainly
unexpected events and challenges. Each of such problems is a special one. In
other words, each problem is unique in nature. For dealing with such special
problems, executives usually refer them to the top management. For tackling
such situations, the manager needs expertise, intuition and creative thinking.
(v) Individual Vs Group Decisions
Decisions taken by the individual in his personal capacity are known as individual
decisions. Organisations which are small in size can accommodate this type of
decision-making process. When organizations grow in size and stature, complex
problems do come into picture. Group decisions are considered to be the best
under such situations. Group decisions represent the thinking of more than one
executive. The commonly held belief is that two brains can certainly think in a
better way than one.
EVALUATION OF ALTERNATIVES
FEED
BACK
pertaining to various factors that surmount the decision. Every situation may
have some advantages and limitations. Necessary emphasis should be laid on
locating the limitations and obstacles in achieving a desired result. Necessary
care should be exercised in avoiding personalized bias in judging certain factors.
Analysis of crucial factors provides a sound basis for making effective decisions.
Step (3) Developing alternatives
The analyse of the problem becomes complete once it throws light on several
of their cause, time, impact, objectives etc. Many a time, either marginal cost or
cost-benefit analysis is used to bring out the tangible benefits of each of such
alternatives. Each alternative solution may have its own merits and de-merits.
They should be compared with other alternatives for the purpose of appraising
the real impact. Peter F Drucker has identified risk, economy, time and
limitations as important criteria for evaluating the consequences of different
alternatives.
Step (5) Selecting the best possible solution
Selection usually involves choice making. It is the last step in decision-making
process. The manager has to select such an alternative course of action which
RAMAIAH INSTITUTE OF MANAGEMENT SCIENCES
can make the maximum contribution to the goal. It is not always possible to
select the best alternative for a given problem. That is why the manager has to
rely upon such course of action which can yield good results under a given set of
circumstances and limitations.
Step (6) Implementing the decision
Once the best alternative is selected, it must be implemented. This step mainly
deals with the execution of the decision taken. It involves development of step
by step plans, selling the idea to subordinates and seeking co-operation from the
needy people. At this stage, the decision is converted into action. The decision
must be implemented in the right time and that too in a proper way.
Step (7) Evaluation of Decisions
The final step in decision-making process is evaluation. The actual results of the
decision should be compared with the expected results in order to locate the
reasons for deviations. This review is a continuous process and it generates
information for necessary feedback for further improving the decision-making
process in future.
Rationality in decision-making
The term rationality refers to objective and intelligent action. A decision is said
Since decisions are related to future. Managers cannot foresee all the
consequences accurately. Moreover, lack of complete knowledge about
the problem also makes it impossible to choose a good decision.
b.
Because of time and cost constraints, all complex variables that have a
bearing on decision cannot be examined fully. Hence, the decisionmaker is forced to strike a balance between complete rationality and
hard realities on the ground. The impact of all the variables cannot be
ascertained because some of them may be intangible.
c.
d.
Every manager is vitally concerned with the above limitations in his approach to
rational decision-making. He has to collect all the relevant information and try to
overcome the above limits on rationality and choose the most rational decision
for solving any given problem.
Barriers to effective Decision-making
Apart from the above limitations, decision-making process remains to be
The tendency of a human-being to evaluate a given problem with preconceived notions, acts as a stumbling block in understanding the real
situation.
ii.
iii.
Many managers fall to demarcate the symptoms from the main problem.
iv.
v.
The above problems are mainly responsible for either indecision or for halfdecisions in the modern organizations. Knowledge of the above problems will
surely help the managers in arriving at pragmatic decisions. The following
suggestions can be offered to overcome the above barriers so as to make the
managers more effective in decision-making process.
1. Avoid premature evaluation.
2. Initiate impartial probing by avoiding personal biases on the outcome.
RAMAIAH INSTITUTE OF MANAGEMENT SCIENCES
TECHNIQUES OF DECISION-MAKING
1. Brainstorming
Brainstorming is the oldest and widely followed technique for encouraging
creative thinking. It was originally developed by A.F. Osborn. It involves the use
of a group. This is an approach to improve problem discovery and solving by
encouraging subordinates to give their ideas and solutions in a free environment.
It starts on the premise that when people interact in free environment, they will
generate creative ideas. Continuous interaction through free discussions may
result in spontaneous and creative thinking. The larger the numbers of solutions,
the fairer are the chances in locating an acceptable solution. Established
research proves that one hour brainstorming systems is likely to generate 50-150
ideas. It is interesting to note that while most of them are proved to be
impracticable, at least, some of the merit serious consideration. This group
process is not without limitations. It consumes lot of time and therefore, is an
expensive exercise. Secondly, it emphasizes only quantity of solution which
more often than not proved to be superficial. By overcoming the above
limitations, a modern manager can use this as an effective tool.
2. Synectics
When compared to Brainstorming, Synectics is a new concept developed by
William J.J. Gordon. The term Synectics is derived from a Greek word which
refers to Fitting together of diverse elements. It starts on the premise that this
concept encourages novel thinking for the development of alternatives through
putting together different ideas which are distinct from each other. A given
problem is presented to a group of people with different backgrounds are varied
experiences.
It is the responsibility of the group leader to present the problem and lead the
discussion in order to stimulate creative solutions. This approach ensures on the
spot evaluation of members suggestions. The leader who is a technical expert is
always assisting the group in evaluating the feasibility of their ideas. Experience
shows that Synectics has been less widely used than Brainstorming. When the
problem is real tough and challenging, this approach is used for effective
decision-making. Like Brainstorming it also suffers from the same range of
limitations.
3. Operations Research
Thee origin and development of operations research is attributed to military
operations and applications in IInd World War. The war put tremendous pressure
on the use of available scarce resources for various strategic and tactical
operations. The success of operations research in developing options of effective
and efficient nature was instrumental in making this approach rather dependable
in decision-making process. Now-a-days, greater emphasis has been laid on the
use of mathematical models to reflect different options and constraints in a
situation and their effect on a selected goal. This quantitative approach to
decision-making is usually referred as Operations Research. Of late, it has
become an invaluable tool in the kit of a decision-maker. Operations Research
employs optimizing models like Linear Programming, Project Management,
Inventory Control, Decision Theory and Waiting Line Theory.
Operations Research is the systematic method of studying the basic structure,
function and relationships of an organisation as an open system. It always
adopts a systems approach to management in getting things done. It is
constantly interested in developing optimal solution with limited resources in a
given situation. It covers six steps in its approach to problem solving. They are:
(a) identification of a problem; (b) construction of a mathematical model to
investigate the problem; (b) construction of a mathematical model to investigate
the problem; (c) developing a good solution; (d) testing of the model in the light
the data available; (e) Identifying and setting up of control points; (f)
implementation of the option as a solution to a critical problem (putting a
solution to work). In essence, Operations Research attempts to develop the best
solution that will contribute to organizational goals.
Limitations of Operation Research
(i) Operations Research technique is not a panacea to all the problems of
modern management. In other words, it is not the end. (ii) Since Operations
Research does not take intangible aspects into consideration, subjective
judgment becomes difficult under this model. (iii) As the operations Research
technique directly depends upon the use of mathematical and statistical tools, it
is increasingly becoming complex and costly exercise. (iv) Since decision making
is a human process, it cannot be predicted properly. At the same time, the
impact of such factors cannot be measurable.
4. Delphi Technique
It is a technique normally used for forecasting future events. It is a group
decision making technique. Under this method, independent opinions are sought
from the members repeatedly so as to develop a best solution to a given
ASSIGNMENT QUESTIONS
1. Discuss the various decision situations that can be dealt with by
managers while performing decision-making function. What are the
different approaches which can be applied in each condition?
2. A lot of decision making in modern industrial organisation is quantitative.
Bring out the implications of this statement.
Enumerate major
quantitative methods that are used in decision making.
INTEXT QUESTIONS
1. Define decision making. Describe the different types of decisions.
2. Describe the plan end (or) step approach in decision making process.
3. How operations research is helpful in decision-making? Identify the
limitations of operations research?
4. What are the techniques can be tried by the management in making
effective decisions?
SUGGESTED READINGS AND REFERENCE BOOKS
1. Essentials of Management
Harold Koontz & others
3. Management
A.G. Bedian.
CHAPTER 2 CO-ORDINATION
LEARNING OBJECTIVES
To define the concept of coordination;
INTRODUCTION
Harmonious relationships between the various divisions and departments of an
organisation are a must for its smooth functioning. The activities of the various
divisions have to be blended and unified so as to give them a commonness of
the purpose. Hitherto, the concept coordination was viewed as one of the
functions of management. Now, it is regarded as the essence of the
management process. It helps in achieving harmony among individual efforts
towards the accomplishment of groups goals. Group goals can not be achieved
automatically. Individual efforts must be integrated and synchronized in order to
attain common objectives. It is a dynamic concept. It implies an orderly
arrangement of group efforts to ensure unity of action. According to Henry Fayol,
to co-ordinate is to harmonize all the activities of a concern so as to facilitate its
functioning on the path of success. Probably in smaller organizations, there is no
need for coordinations where all activities are performed by one person. With
the increasing growth the complexity of modern organizations, the need for
coordination becomes inevitable. Lack of proper coordination results in
inefficient operations, delays, frustrated feelings and waste to time.
MEANING
According to E.F.L. Brech, Coordination is balancing and keeping together the
team by ensuring suitable allocation of task to the various members and seeing
that tasks are performed with due harmony among the members themselves.
i.
ii.
iii.
iv.
v.
vi.
The importance of coordination need not be over emphasized. The primary task
of management is to coordinate effectively all the activities. It is the end result
of managerial process. It is a creative force through which members of the
organisation are encouraged to contribute to group goals voluntarily, willingly
and enthusiastically. It emphasizes systems approach to management. The
various functions of management can not be viewed in isolation, but has to be
viewed in totality. Coordination allows personal satisfaction on one hand and
social satisfaction on the other hand. It, thus, promotes efficiency and tones up
the general level of employee morale.
Types of Coordination
Depending upon the nature and coverage, coordination may be studied under
different types. On the basis of its coverage, coordination may be divided into
two types, such as, internal and external. Another type of classification is
possible on the basis of its flow under two headings, mainly, vertical and
horizontal coordination.
Internal and External Coordination
Coordination between units of the same organisation is termed as internal
coordination. It summarizes the activities of different units so as to make the
organisation more effective. Organisations are not free from the influence of
external environment. Hence, establishing a close link between organisation and
external environment is a must either to survive or surpass the growing
competition. External environment includes technology, competition, market
forces, customers, government policy etc., External co-ordination tries to
coordinate all these forces upto the advantage of an organisation.
Vertical and Horizontal Coordination
Coordination between different levels of hierarchy down the line is termed as
vertical coordination. It ensures that all levels of people, form top to the
bottom, work in harmony. It is greatly facilitated by a technique like delegation
of authority to the lower levels of hierarchy. Coordination between people of the
same cadre and between different departments at the same level is termed as
Horizontal Coordination.
a. Pooled interdependence
b. Sequential interdependence and
c. Reciprocal interdependence
(i) Pooled Interdependence
When departments/ unit/ divisions are not directly dependent on each other, but
indirectly responsible for over all performance of the enterprise, it is termed as
Pooled interdependence. It represents a situation where failure of one unit /
division leads to the failure of the entire enterprise. Each unit / department
makes its own contribution and supports the main systems in its own way.
(ii) Sequential interdependence
It refers to a situation where the output of one department becomes the input of
the other. This type of interdependence usually exists in process industry.
(iii) Reciprocal Interdependence
It refers to two way interdependence. Here, the output of one becomes input of
the other and vice a versa.
Approaches for Achieving Effective Coordination
Different organizations adopt different mechanisms for achieving effective
coordination. There is no single method of coordinating the managerial activities
that can be universally acceptable. J.D. Thomson has identified three important
categories of approaches for achieving effective coordination. All of them are
integrative mechanisms. Each one of them is explained below.
1.
2.
3.
2.
3.
2.
3.
4.
5.
Van de Venn and others proposed three approaches as basis for coordination.
They are summarized below:
a. Impersonal mode
This model envisages designing of rules, procedure and programmes suitable for
smooth functioning of the organisation.
b. Personal mode
Here, human beings are encouraged to find out how things are going on and to
discriminate what to do and what not to do through effective feed back. Personal
involvement surely contributes to effective coordination.
c. Group mode
When operations are large, a single individual cannot coordinate properly. This
model suggests establishment of committees, task forces, meeting etc. The
logic behind this approach is that two brains can think better than one brain.
Co-ordination Vs Co-operation
The term co-operation refers to collective efforts of people who associate
themselves voluntarily to achieve some predetermined objective. It indicates
about the willingness of individual to help each other. It is the result of voluntary
attitudes of people in organisation. However it cannot be a substitute for
coordination. While co-operation facilitates coordination, coordination is all
inclusive including cooperation. Coordination involves deliberate effort on the
part of management to bring together the activities of various individuals /
divisions/ units in order to provide unit of action. Coordination does not arise
automatically. It requires conscious efforts, whereas cooperation is the results of
voluntary efforts put by the people. Thus this scope of coordination is wider than
cooperation.
SUMMARY
The term coordination refers to orderly arrangement of group efforts for the
purpose of accomplishment of objectives. It is the basic responsibility of every
manager. It is a continuous process. Unlike previously it is not viewed as a
distinct activity but considered as the quint essence of management. The
problem of coordination comes into picture when management is dealing with
group efforts but not with individual efforts. The term coordination should not be
confused with cooperation. The significance of coordination results in efficiency,
morale and optimum use of resources. On the basis of scope and coverage,
coordination may be divided into different types. Namely internal Vs external,
vertical Vs. horizontal, procedural Vs. substantive. Different techniques are
available for achieving higher degree of coordination. Similarly different
management deals the problem of coordination through different approaches.
Whatever the approach, it has to clarify the role of manager regarding this
authority and responsibility for the purpose of attaining optimum use of
resources to the common cause of the organization
ASSIGNMENT QUESTIONS
1.
Explain the role of coordination and communication
management of differences and conflicts in an organisation.
in
the
2.
3.
c. Approaches to coordination
SUGGESTED READINGS AND REFERENCE BOOKS
1. Essentials of Management
Harold Koontz & others
2. Management
Wankle
INTRODUCTION
Controlling is an important element of management process. It is mainly
concerned with measurement and correction of performance in order to attain
pre-determined goals. Planning and controlling are closely inter-connected with
each other. Plans can not be carried out automatically. The managers have to
regulate the activities, review the progress and steer the operations to conform
to plan. Hence, control is concerned with the attainment of organisational
objectives through regulating individual performance. It is not an exaggeration
to state that the success or failure of any organisation depends upon the control
process. It touches every facet of the managerial activity.
There is a close relationship between planning and control. These two are
supplement to each other. While planning is looking ahead, control makes use of
standards for improving future on the basis of the past experience.
BASIC CONTROL PROCESS
The basic control process involves three steps: (i) Establishing standards;
Measuring performance and (iii) Compare the results with standards and
correcting deviations. The details of these three steps are given below.
(ii)
STANDARDS
ACTUALS
OPERATIONS
CORRECTIVE ACTION
FEEDBACK
Once basic control process is shown in figure V.3.A. It illustrates that the desired
performance in the form of standards are laid down from plans. Actual
performance is the result of management operations like Organizing, Staffing &
Directing. Measurement and comparison of actual is performance gives rise to
identification of deviations. Corrective action is initiated on the basis of analysis
of causes for the occurrence of deviations. All appropriate measures must be
launched to correct deviations which form the basis of future desired
performance.
That is why effective control system should try to overcome the weaknesses of
traditional feedback system of getting communication to be modified as feed
forward system. The main difference between these two systems lies with the
flow of information, while information is the end product of feedback; it is the
input of the control system in feed forward tie. It is an innovative way of
monitoring real time information to adopt the functioning of the organisation to
suit the dynamic conditions.
Feedback Control
The term Feedback refers to the process of adjusting future actions on the basis
delegate authority for the purpose of getting things done through his
subordinates. Control enables the manager to check whether or not the
delegated authority is being properly used by the subordinates.
3. Basis for Future Action
Through the evaluation of final results control helps in spotting mistakes and
weaknesses in the process of implementation of plans. Control supplies useful
information for future planning and organizing. A good control system enables
the manager to correct the shortcomings in order to pave a smooth route for
future activities. Such a system of control guides and directs action towards the
organisational objectives.
6. Basic tells the managers what to do and what not to do for the purpose of
establishing harmony among various divisions. Control provides unity of direction
and tries to establish equilibrium between means and ends. Thus control
promotes co-ordination between different units of the organisation.
7. Exerts Psychological Pressures
Control influences the behaviour of the employees in a positive way. Workers
become cautions in their duties because their performance is subject to
evaluation and control. A good control system brings necessary pressure on the
employees to become good doers. Not only that control pressure on the
employees to become good doers. Not only has that control made the people to
act promptly for minimizing the wastages and losses.
Establishing a control system itself is not a panacea for all the ills of organisation.
A control system may have the following limitations.
1. Absence of Proper Standards
The success of an organisation depends upon both tangible and intangible
factors. While tangible factors are easily controllable, intangible aspects like
quality of supervision, inter-personal relationships, public relations, brand loyalty
etc., cannot be quantified for establishing standards.
2. Limitations of Corrective Actions
Operating condition of a business are highly dynamic and volatile. It is not
possible to take corrective actions all the time. No business enterprise would
have incurred losses had the corrective action been proved to be corrective or
productive. It means that there are several limitations in taking corrective
actions.
3. Human Reactions
Controls invite opposition from the subordinates because they interfere in their
freedom. Controls will not work unless people accept them. People oppose
controls when they are biased, unreliable and subjective.
4. Cost of Control
Establishing a good control system is not so easy. It needs elaborate effort, time
and money. In modern organizations where man-machine systems go hand in
hand, establishing a control system is a complicated process. This may result in
excessive cost than the benefits of control.
Pre-requisites of Control
An effective and adequate system of controlling must fulfill the following
requisites.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Acceptable: Controls will not work unless people accept the same.
They should be acceptable to those to whom they are applicable.
Since control is for people, it must be acceptable to the people.
2. Fayol, Henry
Unit- IV :
Management creativity
1.
Introduction
For some time now, innovation has been the fashionable thing to talk about. It is
very much easier to talk about than to act upon. Almost all major corporations
claim to be innovative. Almost all of them claim that without innovation the
company would die. Almost all of them do very little about innovation.
As a term, 'innovation' is preferred to creativity. Innovation implies action and
things that work. Creativity implies fanciful and wacky ideas. Yet innovation is the
easier part. Without ideas there is nothing to innovate. You can borrow ideas
from elsewhere - and that can be valuable - but somewhere, some time the idea
has to start.
2.
Objectives
To know creativity and civilization the creative personality, the creative problem
solving process- the creative manager- techniques of creativity- effective terms.
Forms of management creativity- traits of highly creative people- climate for
organizational creativity, creativity, intelligence and innovation characteristics
of creative organizations- group techniques to improve creativity- brain storming,
management games, role plays, and case study
3.
Content
THINKING AHEAD
A man jumps off the top of a skyscraper. As he passes the fourth floor window, he
is heard to mutter 'So far, so good'.
The argument that without innovation a corporation will eventually die (or be
killed) is not very powerful. While many senior executives accept the validity of
this 'in the longer term', they know that they will have moved on or retired by
then. Quietly keeping the organisation going, day to day, is more important than
the long term.
tangible rewards which others can see and also try to obtain. The name of a
person, or team, is attached to the idea.
The disadvantages are not so obvious. The reward implies that creativity is not
part of the normal job, but something 'extra' which has to be rewarded.
Creativity ceases to be an expectation and becomes an extra task. Many will not
wish to undertake this extra task.
Then, the rewards are usually given to big and successful ideas. Many people do
not see themselves as having these 'big ideas', so they do not bother. What is
the use of having a 'small idea'? Those who win the rewards tend to cluster into
an elite 'creative group'. Others quickly assume that it is the business of this
special group to be creative, and there is no need for anyone else to try.
There also arises competitiveness amongst ideas: 'my idea is greater than
yours'. Some people do not want to compete and stay away from creativity.
DANGER IN REWARDS
Clearly there is value in rewards, but there is also danger. An in-between position
might be to give the reward of recognition and hero status, but no financial
reward. Creativity is promulgated as being 'part of the job'. There should also be
an effort to reward small ideas as well as big ideas. Any person doing a job well
should be recognised and praised. In the same way, active creativity should be
recognised and praised.
Sometimes there is also a need to reward 'creative effort'. If people bother to put
forward suggestions, they should be recognised for this effort - even if the ideas
are not very valuable. If everyone gets into the habit of making a creative effort,
then, from time to time, there will be valuable ideas.
Creativity in practice is not just the production of wonderful ideas - it is the
motivation and effort to produce new ideas. Some of these may prove to be
wonderful.
QUALITY OF IDEAS
As people get better and better at creativity, through practice, the quality of
ideas will improve. But if you only acknowledge wonderful ideas, then people will
not make the effort, will not get the practice and will not produce wonderful
ideas.
Creativity is a mix of motivation, time, effort and skill. Included under the skill
element are the formal and systematic techniques of lateral thinking.
The advantage of the formal techniques of lateral thinking is that they allow
everyone to get going. It is no longer a matter of sitting and waiting for
inspiration. There is something to be done. A person using the techniques quickly
sees results. These results give that person confidence and the motivation to try
to be creative. Exhortation is quite useless by itself and wears off after about a
week. The techniques continue because people become more and more skilled at
using them.
I believe it is at least as important to motivate people who do not see themselves
as creative to become creative, as it is just to choose already creative people.
4.
Revision points
the creative personality, the creative problem solving process- the
creative manager- techniques of creativity- effective terms.
Forms of management creativity- traits of highly creative people- climate
for organizational creativity, creativity, intelligence and innovation
characteristics of creative organizations- group techniques to improve
6.
Summary
Businesses, whether for-profit and nonprofit, are facing change like never
before. Numerous driving forces to this change included a rapidly
expanding marketplace (globalization), and increasing competition,
diversity among consumers, and availability to new forms of technology.
Creativity and innovation are often key to the success of a business,
particularly when strategizing during strategic planning, and when
designing new products and services.
Introduction
The aim of this work is to establish the need for the Controller to carry out
functions similar to those of Management, ,focusing on the area of information,
exercising link a role between the different levels of responsibility in the decisionmaking process. We test our theoretical proposals 011. the basis of an empirical
study of companies operating in the automobile manufacturing sector, using the
case methodology by way of interviews with members of management who
exercise functions similar to those of the Controller. Likewise, we find sufficient
confirmation of the importance of the Controller as coordinator of the new
information technologies and, similarly, that the person who exercises these
functions must have academic training in economics, business studies and
accounting and have sufficient practical experience in that particular firm.
Furthermore, it is corroborated that one of the basic tasks always carried out by
these individuals is that of budgetary co-ordination.
2.
Objectives
Content
organization
and
the
individuals,
groups
and
other
organizations,
government and the society as a whole. These are set of written and unwritten
rules and assumptions in a corporate manner. Such obligations discuss behaviour
patterns among various elements of society.
The obligation to individual includes equitable wages, salaries and
remuneration packages and suitable working conditions
In return of these obligations, the duties and responsibilities must be carried-out
by the employees. The obligations to groups and other organizations require the
company to compete within acceptable means. In effect, the competition must
be carried-out with respect to mutual rights and obligations of trading partners
and other businesses and companies. The most notable feature of governmental
obligations of organizations is the existence of mutually beneficial exchange
evident through tax payments and implementation of health and safety
standards.
Societal
obligations
deals
with
law-abiding
activities
of
the
However, other organizations are concern with the greater specificity, usefulness
and consistency of ethics (, 2003, ).
Ethical behaviour deals with the morally-acceptable and commonly-held
values which are consistent to personal perception of values. In an organization,
many would question the rightfulness of different acts such as: Is it ethical to do
personal business on company time? Is it unethical to ask someone to do a
certain job that might not be good for their career progress? (, 2003).
Thus, we can define business ethics as perception of right or wrong in the
behaviour and practices of the business. It is divided into two as normative
business ethics and descriptive business ethics. A growing misconception is the
difference of the two.
In business context and practices, the normative business ethics deal
with establishing ethical from unethical. It concerns with what ought to be and
what ought not to be. Descriptive business ethics, in contrast, is the
comparison and contrasts of different moral codes, systems, beliefs, practices
and values. It is learning about real occurrences in business organizations,
managers, and specific industries regarding behaviour, actions, decisions,
policies and practices (, 2003).
The distinction between the two perspectives must be clarified once and
for all. So that the prevalence of a particular practice of a certain organization
that is perceived to be true and acceptable by other organizations wont be
justified rather be corrected. Aside from this, questionable deeds of organizations
will
be
addressed
on
individual,
organizational,
industry,
societal
and
with large total of shares has a power that must be restrained; 3) the
commitment of time and resources of investors in monitoring the affairs of the
organization; and 4) the reliability and accuracy of information-needs by the
investors/shareholders (as cited in , 2004, ).
The power and position of both parties must be guarded to avoid abuse
and taking unfair advantages over one another. The primary goal of the
organization as a whole is somewhat overlooked the more as the location of
authority is becoming more blurry.
The three elements that contribute to the efficiency and inefficiency of
the corporate governance is the existence of strong public sector governance
including a network of corporate law and securities legislation, strong internal
governance practices and independent auditors who are neutral and objectivedriven (, 2002).
The corporate governance deals with the role of financial performance,
chief executive, top management, shareholders and board of directors. Herewith,
the management threat is the responsiveness taken by each. A more balanced
and responsive corporate governance system will eventually be the challenge.
Since in a competitive environment, the authorities must intervene according to
their position and power if the management failed to respond to economic
changes and challenges ( and , 1998, ).
Another aspect to explore regarding corporate governance is the
implications of globalization. The scale and scope of international business
activities have significant effects on the international scene. Usually, corporate
governance is practiced within individual companies and its focus is normally
internal (, 2002). The readiness of such companies to engage in international
economy might alter the prevalent cultures and practices of the company. points
out that the critical aspect is the increasing potential damage once the company
involved itself in the international economy (2002).
4) Quality of Work Life and Quality Circles
The quality of work life (QWL) is essential for continuous attraction of
future
employees
and
retention
of
current
employees.
The
QWL
is
employee
satisfaction,
strengthening
of
workplace
learning
and
helping
second
dimension
involves
the
potential
and
encountered
6) Transparency
Generally,
transparency
is
critical
in
corporate
accounting
and
statements. The companies must practice publicizing in order to gain and regain
the confidence of shareholders and consumers in all aspects of business. The
benefit of the people around and within the company is the avoidance of
misleading informations and false announcements (, 2001).
The management, as policymakers, must clearly provide the people
truthfulness regarding their operations and activities. In effect, the credibility of
the corporate governance will be respected by the employees and the
consumers.
The continuum of economic growth includes a transparent corporate
governance structure. The interaction, without this, can lead to financial
deficiency. In this regard, the financial transparency and the corporate
governance system are the key factors to encourage investors and to create a
sustainable business (, 2007).
According to (2005), transparency scares business. The switch to a more
open accounting can be daunting said , vice-president of Delta Private Equity
Partners.
The
management
struggles
at
the
significant
cost
in
paying
consultations regarding elimination of shady schemes. The profits will be cut and
may erode business competitiveness. Not all entrepreneurs, in addition, are
interested in legalizing their financials.