INDUSTRIAL MANAGEMENT Module -1

Module 1
The Evolution of Management Thought
Objectives:

• Describe how the need to increase organizational efficiency and effectiveness has guided
the evolution of management theory
• Explain the principle of job specialization and division of labor, and tell why the study of
person-task relationships is central to the pursuit of increased efficiency
• Identify the principles of administration and organization that underlie effective
organizations
• Trace the change in theories about how managers should behave to motivate and control
employees
• Explain the contributions of management science to the efficient use of organizational
resources
• Explain why the study of the external environment and its impact on an organization has
become a central issue in management thought

The Evolution of Management Theory

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B.Tech, 7th Semester, Mechanical Engineering, VSSUT, Burla S.K. Sahu
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Scientific Management
The systematic study of the relationships between people and tasks for the purpose of
redesigning the work process to increase efficiency.

Four Principles of Scientific Management:

1) Study the way workers perform their tasks, gather all the informal job knowledge that workers
possess and experiment with ways of improving how tasks are performed

• Time-and-motion study

2) Codify the new methods of performing tasks into written rules and standard operating
procedures

3) Carefully select workers who possess skills and abilities that match the needs of the task, and
train them to perform the task according to the established rules and procedures

4) Establish a fair or acceptable level of performance for a task, and then develop a pay system
that provides a reward for performance above the acceptable level

Problems with Scientific Management

• Managers frequently implemented only the increased output side of Taylor’s plan.

– Workers did not share in the increased output.

• Specialized jobs became very boring, dull.

– Workers ended up distrusting the Scientific Management method.

• Workers could purposely “under-perform.”

– Management responded with increased use of machines and conveyors belts.

Advantages with Scientific Management

• Break up and analyze every individual action necessary to perform a particular task into
each of its component actions
• Find better ways to perform each component action
• Reorganize each of the component actions so that the action as a whole could be
performed more efficiently-at less cost in time and effort

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B.Tech, 7th Semester, Mechanical Engineering, VSSUT, Burla S.K. Sahu
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Organization
Organization is a process which integrates different type of activities to achieve organizational
goals and objectives, to achieve these goals there must be competent management providing
them all those factors to perform their job efficiently and effectively. Organization is nothing but
is a process of integrating and coordinating the efforts of men and material for the
accomplishment of set objectives.

There are several important aspects to consider about the goal of the business organization.
These features are explicit (deliberate and recognized) or implicit (operating unrecognized,
"behind the scenes"). Ideally, these features are carefully considered and established, usually
during the strategic planning process.

Vision

Members of the organization often have some image in their minds about how the organization
should be working, how it should appear when things are going well.

Mission

An organization operates according to an overall purpose, or mission.

Values

All organizations operate according to overall values, or priorities in the nature of how they carry
out their activities. These values are the personality, or culture, of the organization.

Strategic Goals

Organizational members often work to achieve several overall accomplishments, or goals, as

they work toward their mission.

Strategies

Organizations usually follow several overall general approaches to reach their goals.

Characteristics of Organization

Organization is an effective and necessary instrument for the attainment of predetermined goals.
The following are main characteristics of organization.

1. Organization is an instrument used by the management for the attainment of preplanned

objectives.
2. Management guides and directs the organization.
3. A set of rules and instrument are communicated to all connected with the organization.

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4. It prefers to a group of personnel whose positions, rights, responsibilities are well defined
and classified according to the nature of assignments.

Nature of Organization

A set of five processes in commonly accepted as five functions of organization which

represents nature of organization, they are
1. Subdivision of main work into small groups
2. Based on principles of equality division of different activities ties
3. Selection of suitable personnels and allocation of jobs according to suitability
4. Allotments of rights and authority to those who have been assigned the job so that may be
able to accomplish their job satisfactorily
5. Determination of positions at different levels

Importance of Organization

Any effective organization

1. Makes the management simple and efficient

2. Encourages specialization
3. Improves techniques
4. Encourages constructive thinking
5. Increase productivity and
6. Accelerates the progress

The management asks the organization to accomplish the tasks set-forth before it which an
effective organization is capable of achieving through its fruitful organizational framework. This
is why it is said that organization is a foundation upon which the whole structure of management
can be successfully built.

Organizations as Systems (of Systems of Systems)

Organization as a System
It helps to think of organizations as systems. Simply put, a system is an organized collection of
parts that are highly integrated in order to accomplish an overall goal. The system has various
inputs which are processed to produce certain outputs that together, accomplish the overall goal
desired by the organization. There is ongoing feedback among these various parts to ensure they
remain aligned to accomplish the overall goal of the organization. There are several classes of
systems, ranging from very simple frameworks all the way to social systems, which are the most
complex.

Systems have inputs, processes, outputs and outcomes. To explain, inputs to the system include
resources such as raw materials, money, technologies and people. These inputs go through
a process where they're aligned, moved along and carefully coordinated, ultimately to achieve
the goals set for the system. Outputs are tangible results produced by processes in the system,

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such as products or services for consumers. Another kind of result is outcomes, or benefits for
consumers, e.g., jobs for workers, enhanced quality of life for customers, etc. Systems can be the
entire organization, or its departments, groups, processes, etc.

Feedback comes from, e.g., employees who carry out processes in the organization,
customers/clients using the products and services, etc. Feedback also comes from the larger
environment of the organization, e.g., influences from government, society, economics, and
technologies.

Each organization has numerous subsystems, as well. Each subsystem has its own boundaries of
sorts, and includes various inputs, processes, outputs and outcomes geared to accomplish an
overall goal for the subsystem. Common examples of subsystems are departments, programs,
projects, teams, processes to produce products or services, etc. Organizations are made up of
people -- who are also systems of systems of systems -- and on it goes. Subsystems are organized
in an hierarchy needed to accomplish the overall goal of the overall system.

The organizational system is defined by, e.g., its legal documents (articles of incorporation, by
laws, roles of officers, etc.), mission, goals and strategies, policies and procedures, operating
manuals, etc. The organization is depicted by its organizational charts, job descriptions,
marketing materials, etc. The organizational system is also maintained or controlled by policies
and procedures, budgets, information management systems, quality management systems,
performance review systems, etc.

Functions of Management
Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given purposes.
It is a dynamic process consisting of various elements and activities. These activities are
different from operative functions like marketing, finance, purchase etc. Rather these activities
are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating and
controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for
Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting
& B for Budgeting. But the most widely accepted are functions of management given by
KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

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1. Planning

It is the basic function of management. It deals with chalking out a future course of action
& deciding in advance the most appropriate course of actions for achievement of pre-
determined goals. According to KOONTZ, “Planning is deciding in advance - what to do,
when to do & how to do. It bridges the gap from where we are & where we want to be”.
A plan is a future course of actions. It is an exercise in problem solving & decision
making. Planning is determination of courses of action to achieve desired goals. Thus,
planning is a systematic thinking about ways & means for accomplishment of pre-
determined goals. Planning is necessary to ensure proper utilization of human & non-
human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, “To organize a business is to provide it with everything
useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a
business involves determining & providing human and non-human resources to the
organizational structure. Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.

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3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing
has assumed greater importance in the recent years due to advancement of technology,
increase in size of business, complexity of human behavior etc. The main purpose of
staffing is to put right man on right job i.e. square pegs in square holes and round pegs in
round holes. According to Kootz & O’Donell, “Managerial function of staffing involves
manning the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed un the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
• Recruitment, Selection & Placement.
• Training & Development.
• Remuneration.
• Performance Appraisal.
• Promotions & Transfer.
4. Directing

It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel
aspect of management which deals directly with influencing, guiding, supervising,
motivating sub-ordinate for the achievement of organizational goals. Direction has
following elements:

• Supervision
• Motivation
• Leadership
• Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to

work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.

Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from

one person to another. It is a bridge of understanding.

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5. Controlling

It implies measurement of accomplishment against the standards and correction of

deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if necessary, to
correct any deviation”. According to Koontz & O’Donell “Controlling is the
measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being
accomplished”. Therefore controlling has following steps:

• Establishment of standard performance.

• Measurement of actual performance.
• Comparison of actual performance with the standards and finding out deviation if any.
• Corrective action.

PRINCIPLES OF MANAGEMENT
The management activities are known as principles of management which are as follows:

• Forecasting and Planning,

• Organizing,
• Commanding,
• Co-ordaining and
• Controlling

A) Forecasting and Planning

Planning means looking ahead or to foresee. To foresee means, “both to assess the future and
make provision for it. To plan means to foresee and provide means for future. The process of
planning includes:

1. The identification of organizational goals. The aim of any insurance company is to insure
life or property of the human being. The goal is to insure maximum number of person or the
property so that the risk can be spread on number of persons.

2. The line of action to be followed. Once aim is set to insurer human being or property then the
next step is how to insure human beings or property. The action will be to create a Marketing
Department for a company.

3. The various stages through which the action would pass: To sell the insurance product only
marketing department at one place i.e head office cannot achieve the results therefore various
offices at different location to be set up to sell the insurance products.

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4. The method to be used to achieve the desired goals: The next issue comes how to sell the
insurance products. Weather it should be through Agents or Corporate Agent or Broker.
Accordingly the action of the insurance company will start to recruit the manpower.

B) Organizing
To organize means building up the dual structure, material and human of the organization. To
organize means to provide the organization with everything useful to its functioning raw
material, tools, capital and personnel. An insurance company may not require the raw material
but it requires other material i.e. tool (computers), capital and personnel. A sound organization
should have the following to achieve the good relationship between material and human.

A single competent and energetic guiding authority:

There should be a single person to be overall in-charge of the organization who will report to the
Board of directors. Like Chief Executing Officer (CEO) or Managing Director is appointed in all
organization whether it is insurance or other type of organization. Irrespective of the size of the
organization.
Efficient selection of personnel: Any organization is run by the human beings therefore it is
always endeavor of the CEO /Managing Director to recruit the manpower weather technical or
finance or marketing the person should be intelligent and efficient. It saves the cost because the
efficient people understand the working of the organization and take the decisions quickly. In an
insurance industry the trained manpower is required because the insurance polices ate technical
in nature and requires lot of skill to make the understand to the customer

Clear definition of duties at all levels: The duties of each employee should be defined to get
the better results form the employees. If duties are not defined then the employees will be
confused what to do or not to do. In an insurance company the target should be given to the CEO
and being a marketing function, it should not be assigned to Finance Deptt. Moreover there will
be many employees in the department the target should be given to the Head of the Deptt and
then he will assign the targets to his juniors at different locations.

Initiative and responsibility: The management should ensure that employees take initiative to
complete the job assigned to them. The employees should be held responsible for not doing the
things. In an insurance company the marketing team should be very strong to sell the insurance
products. The team should take initiative to meet the number of persons to get the insurance
business. The team should not wait for the instruction of their superiors to meet the customers.

Minimum paper work: In the computer era the paper work can be reduced and the employees
of the organization should maximum use the computers to save paper work. In insurance the
marketing team should send the daily performance report through email which will reduce the
paper work.

Reward & efficiency: The good performers should be awarded cash or non cash award which
boost the moral and efficiency of the employees.

Unit of command: Every employee should report to one superior not to more than otherwise the
performance and controlling of the employees will be very difficult.

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Aim of Organizing
• Clear and precise decision making: Any decision taken by any employee should not be
ambiguous i.e double meaning because it creates confusion.
• Proper control
• Disincentives for faults and error: for any fault of any employee or non performer
should be penalized otherwise it will affect the working of the performers.
• Supremacy of general interest in relation to individual etc: Any individual interest
should not be clash with the organization interest. The organization interest should be
protected.

C) Commanding
It means setting the business going to get the desired optimum results from the subordinates. The
managers must possess the requisites personal qualities and knowledge to command effectively.
The managers must
• have a thorough knowledge of his personnel
• have capacity to spot the right and competent workers so as to eliminate the incompetent
• set a good example i.e leadership
• conduct periodic assessment or audit of performance
• be well versed in agreement binding the business and its employees
• have lively and constant touch with subordinates
• aim at making unity, energy imitative and loyalty prevail among personnel

D) Co-ordinating
It means the process developed by a manger to secure an orderly pattern of group effort among
his personnel through unity of action to pursue the common goals. The coordination should be
within the resources available in the organization.

E) Controlling
The controlling means to ensure that everything is done in accordance with the established rules
and instruction given to the workmen. The purpose of control is to point out weaknesses and
errors in order to rectify them and prevent their recurrence. The effective control must be
i) prompt,
ii) followed with sanctions and
iii) include measure to prevent recurrence of variances a or error

ADVANTAGE OF PRINCIPLES OF MANAGEMENT:

i) To increase Management efficiency: The principles of management have been developed

from experiences of various professional people. These principles provide guidelines as to how
mangers should function in different situations which in turn increase their efficiency.
ii) To develop the Science of Management: The principles of management make use of
scientific methods for observation. They have helped to develop the science of management. In
absence of principles of management it would be not have been possible to develop the
organized body of knowledge by management practitioners, thinker and philosophers.
iii) To train mangers: Management of principles is also needed to train managers. In the
absence of principles the training of mangers depends upon trial and error methods. Formalized

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methods of acquiring training are possible only when there exists a systemized body of
specialized knowledge, techniques or principles.
iv) To co-ordinate material and human resources: The principles of management help to
coordinate the material and human resources in order to achieve the desired goals or common
objectives. Without principles of management there would be a lot of wastage of resources. The
principles of management make optimum utilization of natural resources possible.
v) To improve researches: The principles of management have helped in inverse of knowledge
and carrying out of further research in the field of management. These have provided new ideas
imagination and visions to the organization.
vi) To attain social objectives: Development of management principles have helped to attain the
social goals by increasing efficiency in the use of scarce resources providing good quality
products and services at the lowest possible costs.

Decision making

A decision can be defined as a course of action purposely chosen from a set of alternatives to
achieve organizational or managerial objectives or goals. Decision making process is continuous
and indispensable component of managing any organization or business activities.

Decision-making is an integral part of modern management. Essentially, Rational or sound

decision making is taken as primary function of management. Every manager takes hundreds and
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hundreds of decisions subconsciously or consciously making it as the key component in the role
of a manager. Decisions play important roles as they determine both organizational and
managerial activities. A decision can be defined as a course of action purposely chosen from a
set of alternatives to achieve organizational or managerial objectives or goals. Decision making
process is continuous and indispensable component of managing any organization or business
activities. Decisions are made to sustain the activities of all business activities and organizational
functioning.

Decisions are made at every level of management to ensure organizational or business goals are
achieved. Further, the decisions make up one of core functional values that every organization
adopts and implements to ensure optimum growth and drivability in terms of services and or
products offered.

A lot of time is consumed while decisions are taken. In a management setting, decision cannot be
taken abruptly. It should follow the steps such as

1. Defining the problem

2. Gathering information and collecting data
3. Developing and weighing the options
4. Choosing best possible option
5. Plan and execute
6. Take follow up action

Since decision making process follows the above sequential steps, a lot of time is spent in this
process. This is the case with every decision taken to solve management and administrative
problems in a business setting. Though the whole process is time consuming, the result of such
process in a professional organization is magnanimous.

Delegation of Authority
Definition: The Delegation of Authority is an organizational process wherein, the manager
divides his work among the subordinates and gives them the responsibility to accomplish the
respective tasks. Along with the responsibility, he also shares the authority, i.e. the power to take
decisions with the subordinates, such that responsibilities can be completed efficiently.

In other words, a delegation of authority involves the sharing of authority downwards to the
subordinates and checking their efficiency by making them accountable for their doings. In an
organization, the manager has several responsibilities and work to do. So, in order to reduce his
burden, certain responsibility and authority are delegated to the lower level, i.e. to the
subordinates, to get the work done on the manager’s behalf.

Under the delegation of authority, the manager does not surrender his authority completely, but
only shares certain responsibility with the subordinate and delegates that much authority which is
necessary to complete that responsibility.

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Features of Delegation of Authority

1. Delegation means giving power to the subordinate to act independently but within the limits
prescribed by the superior. Also, he must comply with the provisions of the organizational
policy, rules, and regulations.
2. Delegation does not mean that manager give up his authority, but certainly he shares some
authority with the subordinate essential to complete the responsibility entrusted to him.
3. Authority once delegated can be further expanded, or withdrawn by the superior depending on
the situation.
4. The manager cannot delegate the authority which he himself does not possess. Also, he cannot
delegate his full authority to a subordinate.
5. The delegation of authority may be oral or written, and may be specific or general.
6. The delegation is an art and must comply with all the fundamental rules of an organization.

Elements of Delegation

Authority - in context of a business organization, authority can be defined as the power and
right of a person to use and allocate the resources efficiently, to take decisions and to give orders
so as to achieve the organizational objectives. Authority must be well- defined. All people who
have the authority should know what is the scope of their authority is and they shouldn’t
misutilise it. Authority is the right to give commands, orders and get the things done. The top
level management has greatest authority.

Authority always flows from top to bottom. It explains how a superior gets work done from his
subordinate by clearly explaining what is expected of him and how he should go about it.
Authority should be accompanied with an equal amount of responsibility. Delegating the

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authority to someone else doesn’t imply escaping from accountability. Accountability still rest
with the person having the utmost authority.

Responsibility - is the duty of the person to complete the task assigned to him. A person who is
given the responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks
for which he was held responsible are not completed, then he should not give explanations or
excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among
the person. Responsibility flows from bottom to top. The middle level and lower level
management holds more responsibility. The person held responsible for a job is answerable for
it. If he performs the tasks assigned as expected, he is bound for praises.

Accountability - means giving explanations for any variance in the actual performance from the
expectations set. Accountability cannot be delegated. For example, if ’A’ is given a task with
sufficient authority, and ’A’ delegates this task to B and asks him to ensure that task is done well,
responsibility rest with ’B’, but accountability still rest with ’A’. The top level management is
most accountable. Being accountable means being innovative as the person will think beyond his
scope of job. Accountability, in short, means being answerable for the end result. Accountability
can’t be escaped. It arises from responsibility.

For achieving delegation, a manager has to work in a system and has to perform following steps:

1. Assignment of tasks and duties

2. Granting of authority
3. Creating responsibility and accountability

Relationship between Authority and Responsibility

Authority is the legal right of person or superior to command his subordinates while
accountability is the obligation of individual to carry out his duties as per standards of
performance. Authority flows from the superiors to subordinates, in which orders and
instructions are given to subordinates to complete the task. It is only through authority, a
manager exercises control. In a way through exercising the control the superior is demanding
accountability from subordinates. If the marketing manager directs the sales supervisor for 50
units of sale to be undertaken in a month. If the above standards are not accomplished, it is the
marketing manager who will be accountable to the chief executive officer. Therefore, we can say
that authority flows from top to bottom and responsibility flows from bottom to top.
Accountability is a result of responsibility and responsibility is result of authority. Therefore, for
every authority an equal accountability is attached.

Differences between Authority and Responsibility

Authority Responsibility

It is the legal right of a person or a superior to It is the obligation of subordinate to perform

command his subordinates. the work assigned to him.

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Authority is attached to the position of a Responsibility arises out of superior

superior in concern. subordinate relationship in which subordinate
agrees to carry out duty given to him.

Authority can be delegated by a superior to a Responsibility cannot be shifted and is

subordinate. absolute.

It flows from top to bottom. It flows from bottom to top.

LINE AND STAFF FUCTION

Types of organization Structure

• Line organization
• Functional Organization
• Line and staff Organization

Staff and line are names given to different types of functions in organizations. A "line
function" is one that directly advances an organization in its core work. This always includes
production and sales, and sometimes also marketing. A "staff function" supports the
organization with specialized advisory and support functions.

MANAGING DIRECTOR

↓ ↓ ↓

Production Manager Marketing Manager Finance Manager

↓ ↓ ↓

Plant Supervisor Market Supervisor Chief Assistant

↓ ↓ ↓

Foreman Salesman Accountant

Features of Line and Staff Organization

1. There are two types of staff :
a. Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.
b. Staff Supervisor- Operation Control Manager, Quality Controller.
2. Line and Staff Organization is a compromise of line organization. It is more complex
than line concern.

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3. Division of work and specialization takes place in line and staff organization.
4. The whole organization is divided into different functional areas to which staff specialists
are attached.
5. Efficiency can be achieved through the features of specialization.
6. There are two lines of authority which flow at one time in a concern :
a. Line Authority
b. Staff Authority
7. Power of command remains with the line executive and staff serves only as counselors.

Advantages of Line and Staff Organization

1. Relief to line of executives- In a line and staff organization, the advice and counseling
which is provided to the line executives divides the work between the two. The line
executive can concentrate on the execution of plans and they get relieved of dividing their
attention to many areas.
2. Expert advice- The line and staff organization facilitates expert advice to the line
executive at the time of need. The planning and investigation which is related to different
matters can be done by the staff specialist and line officers can concentrate on execution
of plans.
3. Benefit of Specialization- Line and staff through division of whole concern into two
types of authority divides the enterprise into parts and functional areas. This way every
officer or official can concentrate in its own area.
4. Better co-ordination- Line and staff organization through specialization is able to
provide better decision making and concentration remains in few hands. This feature
helps in bringing co-ordination in work as every official is concentrating in their own
area.
5. Benefits of Research and Development- Through the advice of specialized staff, the
line executives and the line executives get time to execute plans by taking productive
decisions which are helpful for a concern. This gives a wide scope to the line executive to
bring innovations and go for research work in those areas. This is possible due to the
presence of staff specialists.
6. Training- Due to the presence of staff specialists and their expert advice serves as
ground for training to line officials. Line executives can give due concentration to their
decision making. This in itself is a training ground for them.
7. Balanced decisions- The factor of specialization which is achieved by line staff helps in
bringing co-ordination. This relationship automatically ends up the line official to take
better and balanced decision.
8. Unity of action- Unity of action is a result of unified control. Control and its effectivity
take place when co-ordination is present in the concern. In the line and staff authority all
the officials have got independence to make decisions. This serves as effective control in
the whole enterprise.

Disadvantages of Line and Staff Organization

1. Lack of understanding- In a line and staff organization, there are two authorities
flowing at one time. This results in the confusion between the two. As a result, the

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workers are not able to understand as to who is their commanding authority. Hence the
problem of understanding can be a hurdle in effective running.
2. Lack of sound advice- The line official get used to the expertise advice of the staff. At
times the staff specialist also provides wrong decisions which the line executive has to
consider. This can affect the efficient running of the enterprise.
3. Line and staff conflicts- Line and staff are two authorities which are flowing at the same
time. The factors of designations, status influence sentiments which are related to their
relation, can pose a distress on the minds of the employees. This leads to minimizing of
co-ordination which hampers a concern’s working.
4. Costly- In line and staff concern, the concerns have to maintain the high remuneration of
staff specialist. This proves to be costly for a concern with limited finance.
5. Assumption of authority- The power of concern is with the line official but the staff
dislikes it as they are the one more in mental work.
6. Staff steals the show- In a line and staff concern, the higher returns are considered to be
a product of staff advice and counseling. The line officials feel dissatisfied and a feeling
of distress enters a concern. The satisfaction of line officials is very important for
effective results.

LEADERSHIP
Leadership involves:

• establishing a clear vision,

• sharing that vision with others so that they will follow willingly,
• providing the information, knowledge and methods to realize that vision, and
• coordinating and balancing the conflicting interests of all members and stakeholders.

A leader steps up in times of crisis, and is able to think and act creatively in difficult situations.

We can define leadership based on common elements that we all agree on. Here are 10 ways to
define the art of leading:

1. Vision

Leading means having a vision and sharing it with others. Only when leader get
to inspire others, it is possible to share a common goal towards which to direct the efforts and
dedication of the entire team.

2. Motivation

The leader knows how to motivate better than anyone else; it is one of their main functions as
people managers. Through motivation, the leader channels the energy and professional potential
of their co-workers, in order to achieve the objectives.

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3. Serving

The leader is at the service of the team, and not the other way around. Group members must have
and feel the support of their leader, the tools needed to do their jobs properly must be available
to them; they must have recognition for their efforts and know that there is a person paying
attention in order to correct bad habits. That is all part of a leadership which serves the team, and
not the opposite.

4. Empathy

One of the basic qualities of any leader seeking success is precisely emotional intelligence, that
ability – often innate – that makes leaders put themselves in the place of others, understand their
concerns and solve problems. Leaders know the secrets of their businesses and therefore can
empathize with customers and members of their teams: that empathy gets to inspire and establish
links that will ultimately lead to success.

5. Creativity

The definition of leadership also has to do with creativity. Good leaders are able to create an
environment that will encourage all the members of their team to develop their skills
and imagination, so that they can contribute to the common project and vision of the company.
If leader want to lead successfully, respect the creativity of others and learn from the people
around you; their ideas will surely prove to be positive for leader.

6. Thoroughness

A good leader sets the bar high for their people, because they want to reach the goals and make
the best of their teams. Only a demanding leader will achieve great results. In addition to this
thoroughness, the leader must know how to listen, in order to know the needs of the people, and
then provide the necessary time and resources for them to do their job properly, and therefore
meet what is demanded of them.

7. Managing

The leader must be at the forefront to lead and guide their team throughout the whole process
until the goal is reached. But besides being that “torchbearer”, leaders also know when to step
back and make their team take the initiative. In this way, the team gets the chance to develop,
both personally and professionally. Pure management focuses on the tasks, real leadership
focuses on the people.

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8. Team building

True leadership is about working in a team to reach a common goal. People management is one
of the most difficult tasks faced by leaders. Thanks to the positive attitude, essential in good
leaders, and the trust in their workmates, people get better results. Team-aware leaders take
responsibility when something is wrong, and reward the group after a job well done.

9. Taking risks

The leader is the one responsible for taking the risks that others are not willing to take. They are
confident enough to make a decision, and if they make a mistake, the leader must have the
courage to rectify, assume their guilt and take the right path, without blaming it on the team.
Good leaders know how to get ahead of their time, they see opportunities where others can’t
and know how to spread the enthusiasm for their vision to try to make it real.

10. Improving

True leadership seeks continuous improvement. Leaders have the ability to turn the people in
their teams into stars, people who have improved and developed their skills through the influence
of their leader.

In short, the definition of leadership has nothing to do with the hierarchy or position of anyone in
the company; it has nothing to do with imposing views but with listening to those who know.
Leadership is the attitude assumed by those looking for something different, who are
committed to achieving a goal and whose conviction they manage to transmit to others through
enthusiasm and optimism to reach a common goal.

Importance of leadership

Success or failure of an organization depends very much on the leadership provided to it.
Leadership is still an art and there is no substitute alternative to it. We can present the following
points in support of its importance:

Leadership importance can be judged from the following points:

1. He directs the group activities to get the work done effectively.

2. Better utilization of manpower is possible under an effective leadership.

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3. Leadership is a source of motivation.

4. It develops good human relations.

5. Leadership helps promoting the spirit of co-ordination among workers.

6. Leadership helps fulfilling social responsibility, i.e., responsibility to different section of the
society such as consumers, producers, government and the investors.

Functions of leadership

A leader must perform the following functions:

1. Integration of the efforts of his followers.

2. Communication of organization policies, procedure, programmes, authority and responsibility

to subordinates.

3. Production emphasis.

4. Representation of organization, its policies and aims and his group.

5. Developing fraternity among subordinates.

6. Organization function.

7. Evaluating the performance of subordinates.

8. Initiative to introduce changes.

9. Domination over subordinates.

MOTIVATION
Motivation is the word derived from the word ’motive’ which means needs, desires, wants or
drives within the individuals. It is the process of stimulating people to actions to accomplish the
goals. In the work goal context the psychological factors stimulating the people’s behavior can
be -

• desire for money

• success
• recognition
• job-satisfaction
• team work, etc

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One of the most important functions of management is to create willingness amongst the
employees to perform in the best of their abilities. Therefore the role of a leader is to arouse
interest in performance of employees in their jobs. The process of motivation consists of three
stages:-

1. A felt need or drive

2. A stimulus in which needs have to be aroused
3. When needs are satisfied, the satisfaction or accomplishment of goals.

Therefore, we can say that motivation is a psychological phenomenon which means needs and
wants of the individuals have to be tackled by framing an incentive plan.

How to Motivate Employees

There are many ways to motivate employees. Managers who want to encourage productivity
should work to ensure that employees:

• Feel that the work they do has meaning or importance

• Believe that good work is rewarded
• Believe that they are treated fairly

COMMUNICATION
Communications management is the systematic planning, implementing, monitoring, and
revision of all the channels of communication within an organization, and between
organizations; it also includes the organization and dissemination of new communication
directives connected with an organization, network, or communications technology. Aspects of
communications management include developing corporate communication strategies, designing
internal and external communications directives, and managing the flow of information,
including online communication. Effective communication is important for the development of
an organization. It is something which helps the managers to perform the basic functions of
management- Planning, Organizing, Motivating and Controlling.

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The Five W's of Communication Management

The five W's in communication are crucial and need to be addressed for a project or
organizational function to be successful by means of an effective communication management.
Following are the five W's of communications management:
• What information is essential for the project?
• Who requires information and what type of information is needed?
• What is the duration of time required for the information?
• What type or format of information is required?
• Who are the person/s who will be responsible for transmitting the collated information?
The five W's in communication management are only the guidelines. Therefore, a management
does need to take other considerations into account, such as cost and access to information.

The Communication Process

The main objective of communication management is to ensure smooth flow of information
from either between two people or a group.
Let us examine the communication process with the use of a diagram.

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The communication process consists of three main divisions; sender transmits a message via a
channel to the receiver. As per the above diagram, the sender first develops an idea, which then
can be processed as a message.
This message is transmitted to the receiver. The receiver has to interpret the message to
understand its meaning.
When it comes to the interpretation, the context of the message should be used for deriving the
meaning. Furthermore, for this communication process model, management will also utilize
encoding and decoding.
Encoding refers to developing a message and decoding refers to interpreting or understanding
the message. You will also notice the feedback factor, which the sender and receiver both
involve.
Feedback is crucial for any communication process to be successful. Feedback allows
immediate managers or supervisors to analyze how well subordinates understand the
information provided and to know the performance of work.

Methods of Communication
Understanding the communication process alone will not guarantee success for managers or an
organization. Managers need to be aware of the methods used in the communication process.
The standard methods of communication that are widely used by managers and organizations
across the world are either written or oral methods.
Apart from these two mechanisms, non-verbal communication is another prominent method
used to assess communication within the organization.
Non-verbal communication refers to the use of body language as a method of communication.
This method will include gestures, actions, physical appearance as well as facial appearance and
attitude.
Although most of these methods are still in use for a larger part of the organization, the usage of
e-mail and other electronic mediums as a method of communication has lessened the need for
face-to-face communication.
This sometimes leads to situations where both parties involved do not trust or feel comfortable
with each other and also the messages can be easily misinterpreted.

Oral Communication Skills

A large proportion of oral communication is directly involved in communications management.
For example, if a manager does not converse or make it clear to a sales team, this may lead to
differences in objectives and achievements.

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There are two aspects of oral communication, active listening and constructive feedback.

Active Listening
This is where the person, who receives the message, pays attention to the information, interprets
and remembers.
As management would be aware, listening helps management to pay attention and following are
some points, which illustrate active listening.
• Making eye contact with the relevant party
• Making sure to clarify questions if it's not clear
• Avoiding using gestures, which are distracting or uncomfortable

Constructive Feedback
This is where managers fail most of the time. Feedback needs to be constructive and then it will
help the employees to shape up their performance instead of mere criticism.

Conclusion
Communication management is vital for any organization irrespective of its size. It contributes
to achieving the company's overall objectives as well as creates a positive and friendly
environment.
An effective communication process within the organization will lead to an increase in profits,
high employee satisfaction and brand recognition.

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