Pom Final 12

BA6111- PRINCIPLES OF MANAGEMENT
PRINCIPLES OF MANAGEMENT UNIT 1: Definition of Management: Manage = Man (human)+ Age( experience) Management: It is a wide term. It is variously described as an activity, a process, and a group of people vested with the authority to make decision.
Some important definitions: 1. Allen Louis : Management is What a manager does. Comments: a) A person performing a managerial job in any group-Endeavour might be called by a variety of names e.g. the head, the president, the secretary the CEO, the manager ,the administrator etc. All these are managers performing of certain managerial jobs in different context and condition. b) The managerial job, in general, could be analyzed in terms of certain managerial function. 1. Planning 2. Organizing 3. Staffing 4. Directing 5. Controlling Including co-ordination as the essence of manager ship.
2. Management is the art of getting work done out of others,
working in a group- Harold Koontz Management is an art of making people work in an effective and efficient manner. Effectiveness: it is the ability to choose appropriate goals and achieve them. ( doing the right things) Efficiency: it is the ability to make the best use of the available resources in the process of achieving goals.( doing things right) G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

3. Management is art of directing and inspiring people.- James moony: 4. To manage is to forecast and plan, to organize to command, to co-ordinate, to control.-Henry Fayol Summing up: Management refers to all those activities which are concerned with: Formulation of objectives, plan and policies of the collective enterprise. Assembling men, money, material, machine and methods of their accomplishment. Directing and motivating the men at work Coordinating the physical and human resources Supervising and controlling performance; and Securing maximum satisfaction for both employer and employee and providing the public with the best possible services. Nature and Characteristics or features of management: 1. Management as an activity ( or a process): A manager performs a managerial activity. The managerial activity is, in fact the managerial job i.e. the task performed by a manager or the group of managers is an enterprises.
INPUT 5m goals Men Money Machine Materials& Materials
PROCESS Planning Organizing Staffing Directing Controlling
OUTPUT Achievement of Profit/loss Performance of the firm
i. ii. G.Alex Rajesh, A.P, COLLEGE
The managerial process is a continuous one. The managerial process is, in the present-day-times, regard as a social process. SUDHARSAN ENGINEERING

The management process is an integrating process. It integrates 5Ms for carrying out of the operations of an enterprise and for achieving and stated objectives. That way the management might be able to extract maximum output from a minimum of inputs. iv. The management process is communication. 2. Management is a universal process: the process of management can be noticed in all spheres of life. The basic characteristics of management activity are the same in all type of organization. The management activity is basically the same everywhere. 3. Management is factor of production: management is regard as factors of production. Just as land, labour. Capital and organization. 4. Management is goal-oriented: the most important goals of all management activity is to accomplish the objectives of a enterprise. These objectives may be economic, socio-economic, social and human. Management at different levels seeks to achieve these in different ways. 5. Management is intangible: management has been called the unseen force, its presence in evidenced by the result of its efforts. Thus feeling of management is results-management. 6. Management is purposeful: management deals with the achievement of something. Commonly, managerial success is measured by the extent to which the objectives an are achieved. 7. Decision-making: management process involves decision-making, that is it involves the evaluation and selection of alternatives. iii.
Evolution of management. 1. Pre- scientific management -1880 AD 2. Scientific management (1880- 1920) 3. Human Relation period (1920-1950) 4. Modern management period (1950- present) I.PRE-SCIENTIFIC MANAGEMENT- 1880 AD
1. ROMAN CATHOLIC CHURCH:
G.Alex Rajesh, A.P, COLLEGE
SUDHARSAN ENGINEERING

The Roman Catholic Church was one the most effective formal organization in the history of the western civilization. The church had a set of well-defined objectives and effective and efficient organizational set-up to achieve them. Division work based on specialization and employment of staff officers to aid and advises the line managers were some of the striking features of the management of the Roman Catholic Church.
2.. ROBERT OWENS (1771-1858) -Robert owens, a successful textile mill manager and social reformer, was for treating the workers in a fair way. -According to him, workers ought to be provided with incentives and motivations by way of improved working conditions, fair wages, and a sense of security so as to ensure co-operation and maximum production.
3.CHARLES BABBAGE (1792-1871) -Charles Babbage, a scientist mainly interested in mathematics, contribution to the management theory by developing the principles of cost accounting and the nature of relationship between various disciplines. -He concentrated on production problems and stressed the importance of a) division and assignment of work on the basis of skill and b) the means of determining the feasibility of replacing a replacing manual operations with automatic machinery.
II. SCIENTIFIC MANAGEMENT (1880-1920)
1.HENRY FAYOL (1841-1925) -He was a French mining engineer who turned a leading industrialist and successful manager and rose to the position the chief management director. -In his famous work, General and industrial administration, Fayol has listed 14 principles of administration. -He evolved and general theory of administration to be applied in any field of organized activity, particularly at the top level of management. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

-He is father of management
2.F.W TAYLOR (1856-1915) -He has earned for himself an important place in the management thought. -He is called the father of scientific management movement which seeks to apply scientific method to the problem of management. -Taylor published the following articles: -i.A Piece Rate System, ii. Shop Management iii. On the Art of Cutting Metals and The Principles of Scientific Management which was published in 1911. 3. FRANK GILBERTH (1868-1924) -Frank bunker Gilberth and Lillian Moller Gilberth were a husband and wife team. They made significant contributions to motion study, fatigue study and work simplification. -He analysis of the ob convinced him that many of the body movements could be eliminated or combined to simplify the job and to increase productivity. -He found the most efficient and economical motions for each task. This increased the workers moral and productivity and reduced his fatigue. 4. HENRY L. GANTT (1861-1919) -He was an associate of Taylor at Midvale and Bethlehem steel works. -He developed the techniques of work scheduling and control. -His significant contribution was the famous Gantt chart which is still used for scheduling and control of work. -He also developed the Task and Bonus Plan under which a minimum wage is guaranteed to all workers irrespective of output. -He believed that is all problems of management, the human element is the most important.
III. HUMAN RELATIONS PERIOD (1920-1950)
1. GEORGE ELTON MAYO (1880-1949) -He was a professor of industrial psychology at the Harvard Business School. He published several books and papers, e.g i. Human Problem of an Industrial Civilization, Management and Morale, The Social Problem of an Industrial Organization, Training for Human Relation etc. -He served as the leader of the team which carried out the famous Hawthorne Experiments, these experiments were conducted in the Hawthorne plant of West Electric Company in Chicago (USA) from 1927 to 1932. -Hawthorne Experiments may be classified into four stages: i. Illumination experimentsdesigned to Asses the effects of illumination on employee efficiency. ii. Team room experimentdesigned to judge the influence of working conditions (duration of rest periods, length of the work week, wage incentives, etc) on worker performance. These were experimental in nature. iii. Interviewing studies- undertaken to improve employee attitudes. These were psychological in nature. iv. Observational studies carried out to understand the factors influencing informal organization of work groups. These were sociological in nature. IV. MODERN MANAGEMENT PERIOD 1950 at present 1. DOUGLAS MCGREGOR (1906-1964) -He was a professor of management at the MIT(USA). -He is known for the development of motivation theory. He developed Theory X and Theory Y. -He advocated motivation by participation and job enrichment. 2. PETER F. DRUCKER (1909-TILL DATE) -Drucker is now a professor of social sciences at Claremont graduate school, California. -His most popular book is The Practice of Management published in 1954 -He introduced the concept of MBO (Management By Objectives) and selfcontrol in early fifties. -He has emphasized creative and innovative management and he is against bureaucratic management G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

-He has identified three important phases in organizing activity analysis, decision analysis and relation analysis. SCHOOLS OF MANAGEMENT THOUGHT (OR) DIFFERENT APPROACHES TO MANAGEMENT.
Management thoughts have been termed as pattern approaches, or schools of management. Each of these employs certain beliefs, views, and formats. 1.Empirical Approach: it bases its methods on a close study of past managerial experiences and management cases. Studies experience through cases. Identifies successes and failures. Main contributors to this approach are Earnest Dale, Moony and Rellay, Urwick and many other management practioners.
2. Human Behaviour Approach: a) this approach draws heavily its concepts from psychology and sociology. b) Emphasis is placed on getting greater productivity through motivation and good human relations. c) Motivation, leadership, communication, participative management and group dynamics are the core of this approach. Beginning from the famous Hawthorne Experiments, contributions have come from many psychologists and sociologist notably from Maslow, Hers berg. McGregor etc . 3. Social System Approach: The organization is essentially a cultural system composed of people who work in co-operation. a) Relationships exist among the external and internal environment of the organization. b) Cooperation among the group members is necessary for the achievement of organizational objectives. The real pioneer of social systems approach is Chester Barnard.

4. Decision Theory Approach: It concentrates on rational decisions and it is real job of every manager in the organization. Decision of what to achieve and how to achieve it are the vital characteristics and challenges of every manager. Major contributors are Simon, Forrester Cyert etc. 5.Mathematical approach: This school visualizes management as a logically entity. The action can be expressed in terms of mathematical symbols, relationships and measurable data. The major contributors included in this school are Newman, Russel Ackoff etc. 6.Social Technical system approach: This approach views an organization as two systems a) a social system and b) technical system, which necessarily interact. By Trist and Bamforth.
7.Systems approach: the system approach of management is of recent origin, having developed in late 1950. The system approach has made a significant contribution on management discipline and practices. Systems have boundaries, but they also interact with the external environment; i.e., organizations are open system.
8.Group Behaviour approach: emphasis on behavior of the people in groups. Based on sociology and social psychology. The study of large groups is often called organization Behaviour . 9.Mckinseys framework: the seven S are 1. Strategy, 2.structure, 3.systems, 4.style, 5.staff, 6.shared values, 7. skills
Management VS administration There has been a controversy on the use of the two termsmanagement and administration. Administration is different from management: Administration is a higher-level activity while management is a lower level management. Administration is a determinative function concerned with the determination of objectives and policies while management is an executive function involving the implementation of polices.
Administration
Management
1. Legislative and determinative 1.executive function function. 2.Implementation of policies 2. Determination of objectives 3.provides the entire body and policies 4.influenced mainly 3. Provides a sketch of the administrative decisions enterprise. 4. Influenced mainly by public opinion and other outside 5.mainly a lower level function forces. 6.involves doing and acting 5. Mainly a top level function 6. Involves planning thinking and
by
BOD Administration MD
Managem ent Supervisor
Production manager Plant superintendent
LEVELS OF MANAGEMENT: The different levels of management may be classified into three categories Levels of management: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Board of directors
Managing director
Production Manager
Finance Manager manager
marketing HR manager manag
Plant Superintend
chief account
branch manager training officer
financial officer
Foremen
sales officer
clerks Workers salesmen
Management /industrial management has got the following activity levels. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

1.Top-level management: -Top level management includes a) Board of Directors b) Managing Director, c) Chief executive, d) General manger, e) Owners, f) Shareholders. Setting basic goals and objectives. Expanding or contracting activities Establishing policies Monitoring performance Designing/Redesigning organization system Shouldering financial responsibilities etc. 2. Upper Middle Management -Upper Middle Management includes a) sales executive (manager), production executive, financial executive, R&D executives, Accounts executive - Establishment of the organization. Selection of staff for lower levels of management Installing different departments Designing operating policies and routines Assigning duties to their subordinates etc. 3.Middle Management It includes a) Superintends, Branch manager, General foreman, etc. To cooperate to run organization smoothly To understand interlocking of departments in major policies To achieve coordination between different parts of the organization - To conduct training for employee development - To build an efficient company team spirit 4. Lower Management It includes a) Foremen, superintendent, inspectors, etc. Supervisors, or charge-hands, office
Direct supervision of workers and their work Developing and improving work methods and operations Inspection function Imparting instruction to workers To give finishing touch to the plans and policies of top management To act as a link between top management and the operating force (i.e workers) SUDHARSAN ENGINEERING

- To communicate the feeling of workers to the top management. 5. Operating Force It includes a) Workers, rank and file workman, skilled, semi-killed and unskilled. To do work on machines or manually, using tools, etc To work independently (in case of skilled worker) or under the guidance of supervisor.
MANAGEMENT SKILLS: By managerial skills, we mean the skills or qualities desired in managers, the possession of which would enable them to act better as practicing managers. 1. Technical skill: - Technical skill might be termed as technical expertise. - It is an imperative sill for managers at the lower level management. Because it is actually these people who guide and supervise work of operators under their subordination. - Accordingly, it may range from knowledge regarding operation and repair of a machinery, storage of materials, to training of subordinates. 2.Human skill: - By human skill we mean the ability to tactfully deal with human beings and mould their behavior at work in the desired manner to help attain the common objectives of the enterprise-most effectively and efficiently. A manager has to provide effective supervision, motivation and leadership that part of his subordinates. - A human skill is equally needed by all manages- from highest to the lowest authority in the management hierarchy. - Application of human knowledge and skill may involve motivating the sales force to achieve revised targets, or persuading the subordinates to effect economies, and so on. 3. Conceptual skill - It is concerned with concepts or ideas. - It is imperative for top management level, necessary for the middle management level and desirable for the lower level management -

Application of conceptual knowledge and skills may involve formulation of a plan to introduce a new product, to explore new markets, or trying out new methods of production.
Skills and Management Level Top ----------------------------------------
---------------------------
Middle ---------------------------
Lower
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MANAGERIAL ROLES:
Many managers, especially at the top and middle management levels, perform some such functions, as could not, properly, be called management functions. I. Interpersonal roles:

a) Figurehead: i. Attending the wedding ceremony of an employee of the organization. ii. Entertaining VIP visitors and taking them to lunch or dinner. iii. In this role the manager performs duties of a legal or ceremonial nature, such as welcoming visitors, giving testimonials to employees. b) Leader: In this role the manager provides the dynamic force and direction to his subordinates by means of guidance and motivation. c) Liaison: Dealing with public grievances and complaints for betterment of public relations. ii. The manager maintains or helps to maintain a link of the enterprise with outside parties; which is necessary for collecting useful information for the enterprise and developing good relations of the enterprise with important sectors of society. iii. Liaison helps the manager to establish mutually helpful horizontal relationship II. Informational roles: a) Monitor: In this role the manager receives and analyses information form the outside world and from within the organization, for transmission to appropriate people. b) Disseminator: The information received from outside and from within the organization is analyzed from the point of view of its relevance. The relevant information is then passed on to the appropriate persons both within and outside the organization. ii. Manager performs the role of a disseminator in the sense that he shares the information and experience with others. c) Spokesman: i. ii. The manager acts as a representative of the organization to transmit information to the outside world. When he negotiates with the trade unions or talks to the press person, he acts as a spokesman of the organization. i. i. i.
III. Decisional roles: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

a) Entrepreneur: A manager assumes the role of an entrepreneur when he initiates any change in technology or work methods. ii. Example: manager makes a decision to acquire new machine or modify work methods. b) Disturbance handler: In this role the manager is a troubleshooter, rushing in to provide speedy solution to a crisis. Breakdown of a machine, dispute between subordinates, strike call by labour union, withdrawal of credit facility by suppliers of material, loss of a valued customer. c) Resource allocator: The manager has to determine the distribution of organizational resources such as 5Ms. ii. Accordingly, setting of a time schedule for the completion of a job, or approval of expenditure on a particular project is the functions which the manager performs in the role of a resource allocator. d) Negotiator: i. ii. The managers role as a negotiator consists in settlement of terms and conditions with various parties-particularly outside the enterprise. A role could be-Settlement about wage, working conditions, bonus, workers participation in management etc. with labour union. -Settlement about price, delivery of goods, after-sales service and other issue with major customers. -Bargaining with suppliers of raw materials or goods. i. i. i.
HENTRY FAYOLS CONTRIBUTION TO MANAGEMENT: a) Introduction to fayol and his work Henry Fayol (1841-1925) was a French mining who turned a leading industrialist and successful manager. He was a mining engineer in a French mining and rose to the position of the chief Managing Director. Fayols classification of business functions:
Technical activities (relating to production)

Commercial
activities
(relating
to
buying,
selling
or
exchange)
Financial activities (relating to search for and optimum use
of capital i.e., finances)
and personnel of the enterprise) Accounting activities(( relating to a systematic recording of business transactions, including statistics also) General principles of management: Fayol advocated fourteen principles of management.
1. Division of Work: division of work leading to specialization result in
Security activities (relating to protection of the properties
increased human efficiency; as through the application of this principle, much more production is possible with the same amount of human efforts. It results in efficient use of resources and increases productivity. This is applicable to both managerial and technical functions. 2. Authority and responsibility: it is the power inherent in a managerial position which enables a manager to command subordinates to work towards the attainment of enterprise objectives. Responsibility, is the reverse of authority; whose essence is an obligation owed by a subordinate to the superior for the proper performance of the job for which authority is granted to the former. 3. Discipline: discipline is absolutely necessary for the smooth running of an organization. Discipline means following rules, regulations, policies and procedures by all employees of organization. 4. Unity of command: an employee should receive orders from one supervisor only to avoid possible confusion and conflict. This principle is useful in the clarification of authority responsibility relationships. 5. Unity of direction: all the activities must be aimed at one common objective. It implies that for each group of activities having the same objective. There must be one head and one plan. 6. Subordination of individual interest to general interest: the interest of one employee or group should not be given importance over the interest and goals of organization.

7. Remuneration of personnel: remuneration of personnel is the price paid or payable to people managers and workers- for their service rendered towards the attainment of the enterprise objectives. 8. Centralization authority: it refers to a reservation of decision-making authority at top levels of management. Decentralization, on the other hand, means a dispersal of authority from the central (top-level) points to middle, and specially lower level of management. 9. Scalar chain Management may be regarded as a chain of superiors. There should be an unbroken line of authority and command through all levels from the highest ( i.e., general manager)to the lowest ranks (employee). 10. Order: this promotes the idea that everything (e.g. materials) and everyone (human being) has his place in the organization. Materials and human beings should be arranged such that right material (think)/ person is in the right place.
11. Equity of treatment: - Managers should have fairness in treatment for all his subordinates -Manger should deal with his subordinates with kindness and justice. -This will make management. 12. Stability -Stable and secure work force is an asset to the enterprise, because unnecessary labour turnovers are costly. -An average employee who stays with the concern is much better than outstanding employees who merely come and go. -Instability is the result of bad management. 13. Initiative: -Mangers should sacrifice their personal vanity in order to permit their subordinates to exercise their own initiative. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING employees more loyal and devoted towards the

-A manager should encourage his subordinates to take initiative. 14. Esprit de corps -This principle of management emphasizes the need for teamwork (harmony, and proper understanding) among the employees and shows the importance of communications in obtaining such teamwork. - It is unity of strength
Contribution of F.W.Taylor He is called that father of scientific management. Taylors scientific management is popularly called as Taylorism. Scientific management involves the application of a scientific approach to management decision-making; and discarding at the same time, all unscientific approach as like-rule of the thumb, a hit or miss approach and a trial and error approach. Definition of scientific management: Scientific management consists in knowing what you (i.e management) want men to do exactly; and seeing to it that they do it in the best and the cheapest manner. Principle of scientific management: 1. Science, not the rule of thumb. The basic principle of scientific management is the adoption of a scientific approach to managerial decision making; and a complete discard of all unscientific approaches, hitherto practiced by management. 2. Harmony, not discord Harmony refers to the unity of action; while discords refer to differences in approach. 3. Co-operation, not individualism Co-operation refers to working, on the part of people, towards the attainment of group objectives; while regarding their individual objectives as subordinate to the general interest. 4. Maximum production, in place of restricted production. His view the most dangerous evil of the industrial system was a deliberate restriction of output. 5. Development of each person to the greatest of his capabilities. Management must endeavor to develop people to the greatest of their capabilities to ensure maximum prosperity for both employees and employers. 6. A more equal division of responsibility between management and workers. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

This principle of scientific management recommends a separation of planning from execution. 7. Mental revolution on the part of management and workers. It involves a complete mental revolution on the part of both sides to industry viz workers and management. AN OUTLINE STRUCTURE OF TAYLORS SCIENTIFIC MANAGEMENT 1. Separation of planning and doing. Before Taylor scientific management, worker himself used to decide how he had to work and what instruments were necessary. Taylor has emphasized that planning function should be separated from actual performance and should be given to specialists. 2. Job analysis: There is one best way of doing a job which requires least movement, consequently less time and cost. In very industry, this way should be determined which involves time, motion and fatigue study. i. Time study: Time study involves the determination of time a movement takes to complete. The movement, which takes minimum time, is the best. ii. Motion study: it involves the study of movements in parts which are involved in doing a job and thereby eliminating the wasteful movements and performing only necessary movements. iii. Fatigue study: this indicates that the workers feel fatigued after putting in work for a certain period and they are not able to do the work at their full capacity. Thus, they should be provided appropriate rest at appropriated intervals. The fatigue study shows the time and frequency of rest. 3. Standardization of raw materials, tools and working conditions: i) Raw materials, tools, machines and other facilities of work must be of a reasonable good quality so that the quality of production is reasonable. ii) Another variety of standardization which Taylor refers to is uniformity in providing work facilities and work conditions to all workers, doing a similar type of job. 4. Scientific selection and training of workers. Selection of workers should be on scientific basis. A worker should be given worker which he physically and technically most suitable. Training should be provided to workers to make them more efficient 5. Diiferential piece-rate system: In order to motivate worker-positively as also negatively to product the standard output. The inherent features of this scheme are: i. A standard output for each worker is determined in advance through scientific work-studies. ii. Two rate of wage-payment are established. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

a) A higher rate per unit of output b) A lower rate per unit of output. 6. Financial incentives: Worker can be motivated by financial incentives. Taylor himself applied differential piece rate system which is of a highly motivating nature. The wage should be based on individual performance and o the position which he occupies. 7. Economy: While applying scientific management, not only scientific and technical aspect should be considered but adequate consideration should be given to profit and economy. 8. Function foremanship: The scheme of functional foremanship recommended by taylor, is, in fact, an introduction managerial specialization at the shop level. In this system eight persons are involved to direct the activities of the workers. Planning function executive function speed boss boss
Route clerk instruction time & shop gang repair inspector Card clerk cost clerk disciplinarian boss
WORKERS TYPES OF ORGANISATION:
The nature of authority-responsibility relationships found in an organisation makes for a particular pattern of the organizational structure. Types: I. Line Organisation. This is the oldest type of organisation. Under it, the persons having the greater decision-making authority are placed at the top and those having the least decision-making authority at the bottom. It consists of direct vertical relationships. SUDHARSAN ENGINEERING

It does not make provision for staff specialists. Operation of this system is simple Existence of superior-subordinated relationship The boss gives instructions directly to his subordinates. Superior at each level makes decisions within the scope of him authority. Shareholders Authority Flow Directors
M.D
Production Manager
Finance Manager
Marketing
Personnel Manager
Manager
Works Manager
accounting officer
advertising Training section section
Workers
clerk
salesman
HR executive
Line Authority
Types of Line Organisation:

1. Pure line organization:

The activities at any one level are the same and all the individuals perform the same type of work and the divisions or departments are made for the sake of control and direction. Example, at the lowest levels of an organisation all the workers may be engage in a similar activity, but for better control and supervision. Works manager
Foreman Dept.No.1
Foreman Dept.No.2
Foreman
Foreman Dept.No.4
Dept.No.3
workers
workers
workers
workers
2. Departmental Line Organisation: The whole unit is divided into different departments that are convenient for control purposes. All the departmental managers enjoy equal status and work independently. For example, in the production, there may be a number of foremen each in charge of a sub-department and controlling a certain number of workers.
Factory superintended
Foreman Shearing Dept. Dept
Foreman Press Dept.
Foreman Welding Dept
Foreman Finishing

Workers workers workers workers
Advantages of line organisation 1. Simplicity: It is the simplest and the oldest type of organisation. It is easy to establish and operate. It is also easy to explain the workers. 2. Flexibility As each executive has full authority and responsibility for his job, required changes can be made quickly and easily. The adjustments in the organization can be easily made to suit the changing conditions. 3. Quick decision: Managers can take decisions quickly and act promptly as no staff officers are to be consulted and there is adequate authority at every level. 4. Unified control: There is unity of command and control according to which an employee can be given orders by one superior only. All activities affecting a department are under the control of one executive. 5. Fixed responsibility: Every person knows from whom he gets orders and to whom he is accountable. Every executive can be held fully responsible for the actions of his subordinates. 6. Effective discipline: Singleness of responsibility and control ensures strong discipline among the employees. 7. Economy: It less expensive in terms of overhead costs, as there are no staff specialists.
8. Speed action: Because of a clear division of authority and responsibility, as also unity of command and control, decisions can be made and executed promptly.
Limitation of line organization: 1. Overburdening: Key executives are overloaded with administrative work. Top executives have to be superman to effectively control diverse activities. As the business grows in size, executives find it impossible to cope with their duties in the absence of staff assistance. 2. Instability: The success and survival of the enterprise depends upon a few individuals. There is little scope for expansion of business beyond their capabilities. Loss of key executives may put the future of the concern in jeopardy. 3. Lack of specialization: There is no scope for specialization as one individual cannot be expert in all function. Lack of specialization and over dependence on subordinates lower efficiency of operation. 4. Autocratic control: As each department is under the complete control of one executive, there is danger of authoritarian. There is possibility of favouritism. 5. Delayed communication: Subordinates hesitate to offer suggestions and to criticize a wrong decision taken by the superior.
II. LINE AND STAFF ORGANISATION:
Line authority:

Responsibility for proper performance of work is not delegated. But authority can be delegated and the term line is used to indicate the line of authority. Staff authority: Staff is a stick carried in the hand for support. Staff authority means authority to support the line authority. Staff authority denotes a non-executive relationship where personnel with expertise provide assistance to the line management, but only in an advisory capacity. STAFF STAFF
L I N E
Body of Members
Board of Director
Personnel manager
Private Secretary
Taxation expert
Chief Executives
PRO

Labour expert Account Officer
Production manager
finance manager
marketing Manager
Subordinates
subordinates
subordinates
LINE STAFF
Advantages of Line and Staff Organisation: 1. Discipline: Unity of command is maintained, as staff is not given executive authority. 2. Expert advice: Line executives, and through them the enterprise as a whole, benefit a great deal from the expert advice and guidance provided by the staff officers. 3. Balance decisions: With information and advice provided by staff specialists, line executes can take better and more sound decisions. 4. Relief to line executives: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

The staff officers look after the detailed analysis of each important managerial activity which is a big relief to the line officers.
Disadvantages of line and staff organisaiton: 1.Conflicts: Staff may undermine line authority while line may ignore staff. This may lead to friction between them. 2. Advice ignored: As the staff officers lack authority to put their recommendation into practice, the line executives may ignore their advice. 3. Expensive: It is expensive in terms of overheads as two separate sets of personnel are required. 4. Conflict between line and staff: The allocation of responsibility between line and staff may not be very clear. Staff advice may be confused with line authority creating confusion and disorder.
Line and Staff authority: Line authority 1.It refers to those positions and elements of the organisation, which have the responsibility and authority, and are accountable for accomplishment of primary objectives Staff authority 1. It refers to those elements which have responsibility and authority for providing for providing advice and service to line in attainment of objectives.
2. Staff elements facilities the decision process by 2.line elements provide bringing expert and decision authority and a specialized knowledge.. central means for the flow G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

of communication through scalar chain of authority.
3.staff officials advise and 3.line managers make the counsel. salient decisions by exercising command authority.
Example: production manager in an industrial concern is a line manager, since he is directly responsible for achieving certain production targets. But an industrial engineer is a staff man as he gives advice to all production methods and quality control techniques.
CONFLICT BETWEEN LINE AND STAFF. The major source of line and staff conflict is the difference in their viewpoints and perception. Conflicts arise when any of them fails to appreciate the view of the other. When a conflict between line and staff arises both the parties try to explain the causes of conflict in terms behaviour of the other.
The viewpoints of both line and staff on this conflict are given below.
a) The line viewpoint: the line managers have the following to say about the staff people. 1. Staff authority undermines line authority and interferes in the work of line managers. 2. Staff authorities are not acquainted with the practical problems of the enterprise, as they are only academics. 3. As staff officers are specialists only in a specific area, they cannot see the whole picture objectively. 4. Advice given by the staff is not always sound. Advice is only theoretical and unrealistic. 5. Staffs take credit if the programme (as per the advice of the staff) is successful and blame the line if it is not successful. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

b) The staff viewpoint: staff authorities have the following complaints against line officers: 1. 2. 3. 4. Line officers do not make proper use of advice given by itself. Line officers reject the advice without giving reasons. Line officers are slow to accept new ideas and they resist change. Staff authorities feel that they do not have authority to get their ideas implemented.
Improving Line and Staff Relationship: 1. The limits of authority of both line and staff should be prescribed clearly. 2. Staff authority should be restricted to a purely advisory role. 3. Line officers should give due consideration to staff advice. They should state reasons in case they cannot accept the advice. 4. Line should value the special skills of staff and similarly the staff should try to appreciate the difficulties in implementing new ideas. 5. The advice of staff should be realistic and practicable. 6. Both line and staff should try to understand can others responsibilities and difficulties and try to co-operate with each other for the achievement of enterprise objectives. III. COMMITTEE ORGANISATION
A committee is a group of people who meet by plan to discuss or make a decision for a particular subject. A committee means a group of persons formed for a stated purpose. It may be a standing committee, or convened for a special purpose. There may be executive committee, finance committee, audit committee, bonus committee, grievance committee, etc.
Characteristics: 1. A committee is a group of person. There should be at least two persons and no limitation on the maximum. 2. A committee is charge with dealing specific problems and it cannot go in for actions in all spheres of activities. 3. A committee may be constituted at any level of organisation.

4. Members of committee have authority to go into details of the problems. Types of Committee: 1. Standing or Ad Hoc committee: Standing: it exists continuously for indefinite period. Ad hoc committee: it is constituted for a specific purpose or to solve a specific problem. 2. Decision-making committee.

It is one which is charged with the responsibility of making and executing its decisions. 3. Line and staff committee. Line committee: it is responsible for controlling coordinating a specific business function having executive authority over the subordinates within a formal chain of command. Staff committee: only acts in an advisory capacity, having no authority to impalement its decisions. 4. Formal and informal committee:

Formal: it is duly constituted by organizational rules, regulations with specific authority. Informal: it is not as per any policies or rules of the organisation, and it has no formal authority as such.
Advantages of committee organisation: 1. Pooling of knowledge and experience. 2. Facility of coordination 3. Motivation through participation 4. Easy communication 5. A tool of management development 6. Consolidation of authority. Disadvantages of committee organisation:

1. 2. 3. 4. High cost Slowness in decisions Dividend responsibility Misuse of committee.
IV. MATRIX ORGANISATION: When an enterprise undertakes a large number of small projects; a matrix organisaiton is more suitable. A matrix organisation is characterized by two major features: i. It undertakes a large number of small projects; ii. There is a dual line of command, in a matrix organisation. Matrix organisation = Dual line of command + matrix culture + matrix behaviour. Matrix organisation represents a combination of functional departmental organisation and project organisation. Different project managers share resources and authority with functional heads. When one project is over; its personnel and resources are diverted to some new project. General Manager
Production personnel Manager manager
Finance Manager
Marketing Manager
Project Mgr 1
Project G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Mgr 2
Project Mgr 3
Project Mgr 4 -- Authority of project manager head. Advantages: 1. It is oriented toward end results 2. Professional identification is maintained 3. Pinpoints product-profit responsibility Disadvantages: 1. Conflict in organisation authority exists 2. Possibility of disunity of command exists 3. Requires manager effective in human relations. V. STRATEGIC BUSINESS UNIT (SBUs)
---
Authority
of
functional
Companies have been using an organizational device generally referred to as a strategic business unit (SBU). SBUs are distinct little businesses set up as units in a larger company to ensure that a certain product or product line is promoted and handled as though it were an independent business. In some cases companies have also used the device for a major product line. Occidental Chemical Company, for example, used it for such products as phosphates, alkalies, and resins. Generally a business unit must meet specific criteria. An SBU, for example must: 1. Have its own mission, distinct from the mission of other SBUs, 2. Have definable groups of competitors, 3. Prepare its own integrative plans, fairly distinct from those of others SBUs, 4. Manage it resources in key areas, and 5. Have a proper size- neither too large nor too small. SUDHARSAN ENGINEERING

General manager
business manager
Production Manager development
accounting Manager
Marketing Manager
sales
product
Manager
Works man works Manager Altanta manager
works manager dallas
Chicago
Regional manager
Regional
Regional manager
manager
new york chicago
los angeles
Product
product
product SUDHARSAN ENGINEERING

Manager A manager B manager C
Key process:
elements
of
organisation
Organis ation Process
1. Departmentation. 2. Delegation 3. Decentralization.
1. DEPARTMENTATION:

Departmentation may be defined as the process of grouping individual jobs into departments. It involves grouping of activities and employees into departments so as to facilitate the accomplishment of organizational objectives. Once the total work of an enterprise is divided into individual functions and sub-functions, these functions are grouped together into work units on a particular basis. Need and importance of Departmentation:
1. Specializations: When every department looks after one major function of business, division of work becomes possible. It enables an enterprise to avail of the advantages of managerial specialization. 2. Expansion: Grouping of activities and personnel into departments makes it possible to expand an organisation to an indefinite degree. 3. Autonomy: The feeling of autonomy provides job satisfaction and motivation which in turn lead to higher efficiency of operation. 4. Fixation of responsibility: It enables each person to know the specific part he is to play in the total orgnisation. The responsibility for results can be defined more precisely and an individual can be held accountable for performance. 5. Appraisal: Appraisal of managerial performance becomes easier when specific tasks are assigned to departmental personnel. The sources of information, the skills and competence required for total managerial decisions can be located.
6. Decentralization facilitates: Many departmental heads may be granted full powers to run their departments efficiently through systematic departmentation. 7. Managerial development: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

It simplifies the training and development of executives by providing them opportunity to take independent decisions and to exercise initiative. 8. Administrative control: Standards of performance for each and every department can be precisely determined.
Bases or Types of Departmentation:
1.DEPARTMENTATION BY FUNCTIONS: This is a very popular method of departmentation. It refers to grouping of activities of the enterprise into major functional departments like production, marketing, accounts, personnel etc. The process of the functional differentiation may take place through successive levels in the hierarchy. The process can continue as long as there exists a sound basis for further differentiation. M.D
General Managers
Production
Finance
Marketing
Personnel
Production Planning
financial planning
marketing recruitment research section
Engineering G.Alex Rajesh, A.P, COLLEGE
budgeting
market
training

Planning Accounting Tool & Equipment Costing sales management wage administration officer
General Production
data collection advertising processing welfare
employee sales promotion
Advantages of Functional Departmentaion:
1. It follows the principles of specialization. It can employ experts in the various functional areas and thus can achieve specialization easily. 2. It facilitates delegation of authority 3. It permits effective control over performance 4. It eliminates costly duplication of effort. 5. It is economical, simple and easy to understand. 6. It represents a very natural and logical way of grouping activities. 7. It facilitates co-ordination both within the functions and at the interdependently level. Disadvantages of Functional Departmentation:
1. It results in excessive work and responsibility for the departmental heads. 2. It hampers coordination between different functions. 3. It carries specialization a bit too and thus a functional manager becomes an expert in handling problems of that particular function alone. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

4. This method does not facilitate proper and satisfactory handling of diversified product lines. 2. DEPARTMENTAION BY PRODUCT: Each department looks after the production, sales and finance of one product. It is useful when product expansion and diversification, manufacturing and marketing characteristics of the product are of the primary significance. This structural design is popular in multi-line large-scale enterprise; whose major objectives is production expansion and development.
M.D
General Managers
Production
Finance
Marketing
Personnel
Motor division
scooter division
spare parts division

Engineering accounting engineering accounting accounting engineering
Production
production
production
Advantages: 1. The salesman has deeper product knowledge and this may lead to better customer service. 2. This method facilitates in ascertaining the performance of each product line and , therefore, an unprofitable line can be dropped. 3. It facilitates effective coordination. 4. T performance of each product division and its contributions to overall results can be easily evaluated. Disadvantages: 1. 2. 3. 4. It necessitates employment of a number of managerial personnel. It makes the control work difficult There may be a duplication of activities. There is the extra cost of maintaining a sales force for each product line.
3.DEPARTMENATION BY TERRITORIAL: It is very useful to a large-scale enterprise whose activities are geographically spread. Banks, insurance, railways are examples of such enterprise. Under this activities are divided into zones, divisions, and branches. BOD
MD

Northern southern western central region eastern region region
Region region
Branch I
branch II III
branch branch IV
Advantages: 1. It facilities the expansion of business to various regions. 2. It facilities effective span of control 3. It enable the enterprise to gain intimate knowledge about customers in the local markets 4. Since accounting results of each territorial regions can be compared with each other, control and competitors. Disadvantages: 1. 2. 3. 4. It requires employment of a numbers of managerial personnel. It dilutes control from headquarters It may lead to duplication of activities. It is a costly system and hence small business concerns cannot afford it.
4.DEPARTMENTATION BY CUSTOMERS:
It takes into account the needs of customers. Examples: i.)a large cloth store may be divided into wholesale, retail and export divisions. A commercial bank may be divided into a number of departments, each specializing in loan to farmers, traders, industrialists, professionals etc.
M.D
General Managers
Production
Finance
Marketing
Personnel
Wholesale
exports
retail
Advantages: 1. This system facilitates the company in meeting the widely varied needs of customers. 2. It promotes specialization among the staff of the enterprise. 3. The enterprise gains intimate knowledge of the needs of each category of customers. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

4. Special attention can be given to the particular tastes and preferences of each class of customers. Customers satisfaction enhances the goodwill and sales of the enterprise. Disadvantages: 1. There may be duplication of activities. 2. There may be difficulty in co-ordination. 3. There may be under-utilization of facilities and manpower, particularly during periods of low demand. 5.DEPARTMENTAION BY PROCESS Manufacturing enterprise often group activities around a process or type it equipment and bring together people and materials at one place to carry out a particular operation. For example, Textile mills. Board of Directors
Chief Executive
Ginning Dept
Spinning dept
Weaving
Dyeing
finishing dept dept
dept
Advantages: 1. This method facilitates the use of costlier equipment in an efficient manner. 2. The maintenance of departments is facilitated. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

3. There may be economy in operation. 4. It enables effective performance control Disadvantages: 1. This method requires more space and investment. 2. This method is costly and hence small organizations cannot afford it. 3. A breakdown is one process department may bring the entire production system to a halt. 6.COMPOSITE OR COMBINED DEPARTMENTATION:
Each basis of departmentation has its own merits and demerits. Therefore, the relative advantages and limitations of various types of departmentation should be analyzed in the light of the needs and circumstances of the particular enterprise. That basis of departmentation is the best which facilitates the achievement of organizational objectives most economically and efficiently. Managing Director
Works Manager
marketing manager
finance manager --------- Functional
Consumer product Division G.Alex Rajesh, A.P, COLLEGE
industrial supplies -------------- product SUDHARSAN ENGINEERING
division
Domestic sales Manager
export sales manager --------------territorial
Private buyers
Govt agencies
--------------customers
PLANNING: UNIT II Planning is said to be the first and foremost functions of management The role played by planning is very vital in todays competitive scenario Planning is decision making Planning is thinking in advance what to do, when to do, how to do, where to do and it is to be done by whom Planning reflects authority and decision making All levels of management play a vital role in contributing to the successful implementation of planning process. Planning is the management function anticipating the future and conscious determination of a future course of action to achieve the desired results. Planning consists of both problems solving and decision-making.
Major components parts of planning:

1. Initial
(or basic) planning: determination of the objectives.
Which
is
concerned
with
the

2. Subsequent (or route) planning: which is concerned with best
alternative course of action.

3. Final (or operational) planning: wherein, the planner would analyze
the technical, financial, personnel and other aspects involved in implementing the pre-selected course of planning. Meaning of planning: Planning is a method or technique of looking ahead. It is a deliberate conscious search used to formulate the design and orderly sequence of actions through which it is expected to reach the objectives.
Nature of planning:
I. Constitutional features: 1. Planning is goal-oriented: Planning has no meaning unless it contributes in some positive way to the achievement of desired goals. All plans emanate from objectives. The goals may be implicit or explicit but well-defined goals are essential for efficient planning. 2. Planning is reference in future: In fact, it is matter of common sense to understand that all planning is done for future; and in the context of future conditions. While planning, the planner has to do a forecasting of the relevant economic, social, political and technological condition; within framework of which the plan will have to operate. Forecasting is the heart of planning. 3. Planning is primary function: All other functions of management are designed to attain the goals set under planning. Planning provides the basis for efficient organizing, staffing, directing and controlling, 4. Planning involves choice: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Planning is basically a problem of decision-making or choosing among alternative course of action. Planning are decisions made after evaluation of alternative course of action. Planning is intellectual process:
5.
Planning is a mental process involving imagination, foresight and sound judgment. It requires a mental disposition of thinking before doing and acting in the light of facts, rather than guesses II. Operational Features:
6. Planning is all pervasive: Planning is the function of each and every manager irrespective of the level and area of his/her operation. Planning is an essential ingredient in management at all executive levels. Managers at the top level prepare long-term plan for the company as whole, middle level managers formulate departmental and functional plans for medium term. At the lowest level, managers prepare operating and short-term plans. 7. Planning is both- long-range and short-range Long-range planning usually covers a period ranging from 3 to 5 or 7 years, while plans for a period of upto 1 year (or even 2 years) are regarded as short-range plans. 8. Planning is continuous: Planning is an on-going and dynamic exercise. As the assumptions and events on which plans are based change, old plans have to be revised or new ones have to be prepared.
III. Desirable features:
9. Planning is actionable: An ideal requirement of planning is that is must be actionable.

A plan is not just a paper-plan which either is not capable of implementation or is never put into practice, for any reasons whatsoever. 10. Planning is flexible: A plan is capable of modification, revision or readjustment, future; when some of those future environmental factors change on which the plan is based. 11. Planning is an integrated system: Ie. Various departmental plans, the plans of superiors and subordinates and the long-range and short-range plans- all must be harmonized and fitted into an integrated structure of planning. 12. Planning is efficient: The usual commercial cost-benefit formula is employed in the context of planning also-for judging how far and to what extent, is a plan efficient or otherwise.
IMPORTANCE OF PLANNING:
1. Planning offsets future uncertainty and change: A business concern has to work in an environment which is uncertain and ever-changing. Planning helps the manager in carving out the future course of action and this brings a higher degree of certainty.
2. It tackles increasing complexity in modern business: To run a modern business undertaking, there is need for large number of people with different specialization and complex machines. 3. It helps in co-ordination: Planning is the best stage for the integration of diverse forces at work. Sound planning interrelate all the activities and resources of an organization. The activities and efforts of various departments and division can be harmonized with the help of an overall plan. 4. Encourage innovation and creativity

Innovation and creativity are prerequisites to continuous growth and steady prosperity of business. Planning is forward looking and it enables an enterprise to cope with technological and other developments. Planning requires continuous monitoring of environment for new ideas and developments. 5. It facilities unity of action. Under planning, policies, procedure and programmes are predetermined and every decision and action should within the framework of predetermined policies and procedures. 6. It helps in avoiding business failure: As planning involves the selection of vest objectives, unity of action, co-ordination of activities, economy in operation and offsetting of futures uncertainty and change, there is a great possibility of avoiding business failures.
7. Gudies decision-making: Planned targets serve as the criteria for the evaluation of different alternatives so that the best course of action may be chosen. By predicting future, planning helps in taking future-oriented decisions. In the absence of plans there is no sound basis for making futureoriented decisions. 8. Improves competitive strength: The enterprises which adopt planning will have a competitive edge over other enterprises which do not have planning. Planning enables the enterprise to discovers new opportunities and thereby shape its own future 9. Facilitates control Planning provides the basis for control. Plans serve as standards for the evaluation of performance. Sound planning enables management to control the events rather than be controlled by them.
STEPS IN PLANNING (OR PROCESS OR HOW TO MAKE A PLAN?)

Plans are made in all types of enterprises- business and non- business. Plans are made at all levels of management from the highest to the lowest.
1. Being watchful: It could be referred to as a pre-step in planning or a desirable precondition for making a successful plan. The management must, accordingly, initiate the planning process at the most opportune moments expecting gains through the adage wellbegun is half done.
2. Awareness of opportunities and problems: The first step in planning is the awareness of the unexploited business opportunities or the problem to be provided for in future.
3. Collecting and analyzing information: The next step is to gather adequate information and data relating to the planning to be made and analyze it to find out the cause-effect relationship between the various factors.
4. Setting objectives: Analysis and interpretation of data facilitate in determining the enterprise objectives. Objectives must be specific and clear and should indicate the end result of planning activity.
5. Determining planning premises and constraints: Before plans are prepared the assumptions and condition underlying them must be clearly defined. These assumptions are called planning premises and they can be identified through accurate forecasting of likely future events. Three types of planning premises: i. Controllable premises: These are under the control of management ( eg. Policies, objectives, and resources of the enterprise). ii. Semi-Controllable premises: these are partially under the management control (e.g. trade union) iii. Non-Controllable premises: it refers to the external forces (e.g govt policy, political situation etc.). SUDHARSAN ENGINEERING
6. Finding out the alternative course of action: After establishing the objectives and the planning premises, the alternative plans are developed. For every plan there are a number of alternative and hence, all possible alternatives to work out a plan for achieving the desired objectives should be found out for their evaluation. Cost, risk and resources associated with different alternatives should also be considered. Imagination and foresight are required to generate and evaluated policy alternatives. 7. Evaluation of alternatives and selection: A critical evaluation of alternatives involves going into the plus and minus points of each alternative; and to find out the net worth of each alternative-in terms of its contribution to the objectives of the plan. It is to evaluate all possible alternatives with reference to cost, speed, quality, etc., and select the best course of action.
8. Selection of the best alternatives: The management while selecting the best alternative might base decision on one or more of the following bases: a) Experience: the management might base its final selection of the best alternative, on its experience. In fact, experienced manager knows what types of alternatives he adopted in the past; and with what implications and consequences. b) Experimentation: in terms, of experiments with the best alternative; and analyses the outcome of the experiment, before finalizing the decision.
9. Formulation of derivative plans: A major plan, usually calls for a number of derivative plans; plans derived from the main plan. Derivative plans might also be called supporting or minor or secondary plans. A plan e.g relating to the installation of a new plant for manufacturing a new product might call for the following derivative plans:i. a plan for design and manufacturing of the new product. ii. Plans of recruitment, selection and training of personnel for operating the plant. iii. A plan for the repairs and maintenance of the plant. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

iv. A plan for advertising the product to be produced by the plant, etc.
9. Implementation of the plan: The step, which gives a finishing touch to the planning process, is concerned with the implementation of the plan, which implies putting the plan into action.
10. Follow-up action: Though the planning process comes to a close with the implementation of the plan; yet a desirable step, which yet remains to be taken, relates to the follow-up action on the implementation of the plan. Follow-up action implies watching the consequences (both good and bad)- economic, social psychological etc.
PLANNING LEVELS
TOP MANAGEMENT
STRATEGIC PLANS -------------------------Objective Long range plans Policies long-range plans
MIDDLE MANAGEMENT
ADMINISTRATIVE PLANS -----------------------------------Organization Motivation
mediumrange plans

Managerial control
LOW MANAGEMENT
OPERATIONAL PLANS ----------------------------------Rules Method Procedure
shortrange plan
TOP LEVEL MANAGEMENT: It is concerned with the strategic of courses of action, programme, policies, procedures and standards that will determine the procurement, use and disposition of these resources. MIDDLE LEVEL MANAGEMENT: Examples: Research and Development, Marketing, Manufacturing, finance etc. LOWER LEVEL MANAGEMENT Example: plans for finished goods inventories to meet current market demands, plans to accelerate research projects which are behind schedule. TYPES OF PLANNING:
In the process of planning several specific plans are prepared which may broadly be classified into two categories: Standing and Single -Use plans . PLANS STANDING PLAN PLAN SINGLE USE PLANS

Mission Programmes
Objectives
Project
Policies
Schedules
Strategies Methods Procedure Rules
Budgets
Standards
I. STANDING PLAN: Standing plan or multi-use plans are the recurring plans and they are used repeatedly in situation of a similar nature. A standing plan is a standing guide to recurring problem and it is used again and again. It is also called long- term plans. 1. Mission: The mission as a type of plan explains the most fundamental purpose of an enterprise. For example i. The mission of the government of a country might be eradication of poverty. ii. The mission of a manufacturing enterprise might be producing high quality goods for the common men of society at the most affordable price and so on.

2. Objectives: Objectives provide a sense of direction to the thinking process of the planner; and to the action process of the operators of the plan Objectives must be formulated keeping in viewi. The mission of the enterprise, and ii. The resources and limitation of the enterprise. Objectives are known by different names, e.g goals, aims, purpose, mission, targets, etc. Kinds of objectives: 1. Market standing 2. Innovation 3. Productivity 4. Physical and financial resources 5. Profitability 6. Manager performance and development 7. Worker performance and attitude and 8. Public responsibility MANAGEMENT BY OBJECTIVES: (MBO)
The philosophy of management by objectives (MBO) was highlighted in 1954 by Peter F. Drucker who stressed upon the need for management by objectives and self-control. MBO may be defined as a process in which a manager and his subordinates jointly decide the targets and results to be achieved keeping in view the overall objectives of the organization, jointly identify the Key Results Areas (KRA) periodically evaluate the actual results in terms of results agreed upon in advance.

Steps in MBO process: MBO is also known as Management By Results because results are to be evaluated in terms of objectives. 1. Preliminary setting of objectives at the top management level. Top management usually gives a start to launching of scheme of MBO; by identifying the fundamental objectives of the enterprise as a guide to superiors and subordinates throughout the organization for setting their own objectives. They constitute the basic and long-term ends towards which the activities of all departments and individuals are directed. The objectives that are set also indicate the measures for achieving the objectives. 2. Unit sub-goals Once the corporate objectives are formulated, the short-terms goals for each organizational unit e.g., division, department or branch are established. Such unit goals reflect what is expected of each unit. 3. Individual targets. After the corporate and unit goals are set up the next step is to fix performance targets for each individual manager at various level of the organization. Superiors and subordinates throughout the enterprise determine their individual objectives-through a process of mutual consultation. Such setting of individual objectives is the core aspects of MBO. 4. Matching goals with resources. To make MBO scheme realistic, goals of individuals are compared to the resources available for their implementation. This helps the organization in allocating the resources in an economical way. 5. Recycling objectives. Recycling objectives under MBO is done to take care of the interconnection among related objectives. Every manager calls periodical meetings of his subordinates to discuss their performance and to jointly identify the steps to betaken for improvements in future. 6. Performance of appraisal At the end of the year, a detailed discussion between a manager and this subordinate takes place in which results of the unit are evaluated and the targets reviewed. Merits and demerits of MBO: Merits: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

1. Better managing.
MBO helps in better managing the organization. If forces management to think of planning for results. Objectives also force managers to think how these can be achieved and what resources would require. 2. Clarity in organization. MBO tends to force clarification in organization roles and structures. 3. Commitment MBO elicits commitment performance. If the objectives are set by people who are responsible for achieving them, they have a sense of feeling that they are achieving their own objectives. 4. Helps in Appraisal MBO provides the measurement criteria to judge where one stands. So that corrective actions. If required, can be taken well in time. Demerits:
1. Failure to teach the philosophy.
2. 3. 4. 5.
MBO seems to be easy on its face, but there is much to be understood and appreciated by managers. Problem of goal setting Truly verifiable goals are difficult to set MBO requires verifiable goals. For example, quantified goal setting for staff people is quite difficult. Emphasis on short-run goals: In most of the organizations practicing MBO, there is a tendency to emphasis short-run goals. Inflexibility: Sometimes MBO presents the danger of inflexibility in the organization. Wastage of time: MBO involves a wastage of a lot of valuable time of managers in joint consultations; and they left with little time for efficiently discharging their
STRATEGIES The concept of strategy in business has been borrowed from military organization. Strategy is the complex plan for bringing the organization from a given posture to a desired position in a future period of time.

For example, if the management anticipates price-cut by competitors, it may decide upon a strategy of launching an advertising campaign to educate the customers and to convince them of the superiority of its products. Strategy making process:
1. Environment analysis:
First of all the external environment of the enterprise is analyzed to determine the opportunities and threats for the enterprise. 2. Self-appraisal The internal environment of the enterprise (resources, capabilities, etc) is examined to know the strengths and weaknesses of the firm. 3. Strategic alternatives Alternative strategies are developed to deal with the environmental forces. 4. Strategic implementation Detailed operational plans are developed and employees so as to execute the chosen strategy. communicated to
I. SWOT Analysis:
SWOT analysis is a key concept in the world of corporate planning, strategy formulation and other practical spheres of management.
SWOT is also called TOWS by same management people. In fact, TOWS is SWOT; just written backwards. Concept and purpose a SWOT analysis:
Strengths Internal environment

W Weaknesses
Opportunities External environment
Threats
1. The purpose of SWOT analysis is: To capitalize (i.e. to take best advantage) on the strengths of the company. To overcome the weaknesses of the company To exploit fully the opportunities available in the external environment To manage successfully the threats posed by the external environment 2. A brief account of environmental analysis: i. Internal environmental analysis ii. External environmental analysis I. Internal environmental analysis All that environment which is found within the business enterprise itself, may be termed as the internal environment of business. a) Philosophical environment, consisting of the mission, values, beliefs and long-term goals of the enterprise and organizational culture. b) Managerial environment, consisting of the management hierarchy, quality of management talents and the process of managerial development. c) Structural environments, consisting of - rules, policies and procedures of the organization - communication network - controlling techniques etc. d) Production environment, consisting of- raw material availability and utilizations system - quality control system - technology available to the organization e) Marketing environment, consisting of - marketing research system and procedures - advertising and other sales promotion techniques - training and compensation of salesmen. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

f) Personnel environment, consisting of- quantity and quality of manpower - type and nature of manpower planning g) Financial environment, consisting of - working capital management - capital budgeting-techniques and procedures h) Human relations environment, consisting of- line-staff harmony and conflicts - public relations etc - management labour relations
II. External Environmental analysis: It would be the fitness of things, to first identify the salient features of external environment It is quite difficult to identity specific factors comprised in this environment. a) Legal factors: Legal factors constitute the existing legal framework; as applicable to business enterprise - commercial laws, - industrial laws, - import-export laws - taxation laws b) Political factors: political stability taxation attitude towards business policies of liberalization ideology of the government towards business reflected in its economic and business policies c) social-religious-cultural factors: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

- population growth and trends - level of education in society - craze for a higher standard of living - consumer awareness - changing social and cultural value etc. d) Competitive factors: - Their patronage of business products (services) buying capacity, likes, dislikes, preference etc. vitally ensure profitability for the business enterprise. e) Technological factors: -if they plan to adhere to the new technology, they may be -problem of resource chrunch -re-organizational problems -resistance to organizational changes by workers f) Financial factors - policies of banks and financial institutions - stock market environment - structure of interest rates - foreign capital etc - control of central bank g) Natural environment factors - natural resources - climate - geographical features whether the area is hilly or plain etc. TOWS MATRIX: 1. The WT strategy aims to minimize both weakness and threats and may be called the mini-mini strategy. For example, form a joint venture, retrench or even liquidate 2. the WO strategy attempts to minimize the weaknesses and maximize the opportunities.(mini-maxi) 3. the ST strategy is based on the organizations strengths to deal with threats in the environment. The aim is to maximize the former while minimizing the latter.( maximini)

4.
The most desirable situation is on in which a company can use its strengths to take advantage of opportunities (the SO strategy). maxi-maxi
Internal factors
Internal strength (S)
Internal weaknesses (W)
e.g strength in e.g weaknesses in management, areas shown in the operations, R&D box strengths.
External factors
Decision-making: The Nature and Purpose of Organizing Basic Departmentation- Line/Staff Authority and DecentralizationEffective Organizing and Organizing Culture. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING
Decision-making: Decisions have to be made in determining specific objectives out of a whole lot of alternatives, in choosing the methods of work, in designing organization structure, in selecting the mode of directing people and in adopting the technique of coordination and control. Concept of decision-making: Decision-making is an integrated part of the human life In business orgnisation manager have always to decide. The manager is a decision maker. He decide what specific actions are necessary to achieve the enterprise objectives Decision-making is the process of selecting the best alternative course of action; from among a number of alternatives given to management or developed by is after carefully and critically examining each alternative.
Definition: 1.Decision-making is the selecting of an alternative, from two or more alternatives, to determine an opinion or a course of action. Beorge R.Terry. 2.Whatever a manager does, he does through making decisions. -Peter F.Drucker.
Features of decision-making: 1. Decision-making is goal-oriented 2. Decision is the choice of the best course among alternatives. 3. Decision-making is a mental process because the final selection is made after thoughtful considerations. 4. Decision is the end process preceded by deliberation and reasoning. 5. Decision involves rationally because through decision an endeavour is made to better ones happiness. 6. Decision is aimed at achieving the objectives of the organization 7. It also involves the evaluation of the available alternatives because only through critical appeal one can know the best alternatives. 8. It may also be negative and may just be a decision not to decide. 9. Decision relates the means to the end.

10. Decision-making involves a certain commitment. This commitment may be for short run depending upon the type of decision. A major classification of the types of decisions:
1. personal and organization decisions:

Personal decisions are those which are taken by managers concerning their personal life matters. Organizational decisions are those which are taken by managers, in the context of organization and for furthering the objectives of the organization.
2. Casual and routine decisions:
Casual decisions are those which are taken only on some special issues concerning organizational life. E.g. a decision to install a new piece of machinery. It significant nature is taken at upper levels of management. Routine decisions are taken in the context of day-to-day operation of the organization. Mostly they are of repetitive type and related with the general functioning. E.g. sending samples of a product to the Govt investigation center
3. Strategic and tactical decisions: Decision relating to designing of strategies are strategic decisions i.e, decisions of utmost significance for the organization. Such decisions are taken at uppermost levels of management. E. g major capital expenditure decision. For implementation purposes, strategies are translated into operational plans or tactical decisions. Such tactical decisions are taken at middle and lower levels of management.
4. Policy and operative decision:

A policy decision is a decision-in the nature of guidance and instruction. Naturally, policies are decided by superiors for the guidance of subordinates. Decisions of subordinates taken within the prescribed limits and guidance of policies are, in management terminology, called operative decisions.
5.Programmed and non-programmed decisions: Programmed decisions are normally of repetitive nature are taken within the broad policy structure. These decisions have short-run impact and are taken by lower level managers, such as, granting leave to an employer, purchase of materials in normal routine, etc. Non-programmed decisions are of non-repetitive. Their need arises because of some specific circumstances, such as opening of a new branch, introducing a new product in the market etc. They involve judgment, intuition, and creativity. (if a large number of employees suddenly started absenting themselves without information it would constitute a problem involving this decisions.
5. Major and Minor decisions: Major decision: if it relates to the purchase of a big machine worth, say a lakh of rupees, it is a, major decision. Minor decision: purchase of fountain pen ink a few reams are minor matters and may be decided by the Office Superintendent.
6. Individual and collective decisions: An individual (not personal) decision is taken by a manager is his individual capacity, without being consultation with any other person. (Autocratic) Collective decisions are those which are jointly taken by a group of managers forum. (Democratic)
PROCESS OF DECISION MAKING: I. Background steps: 1. Definition of the decision making problem: It is essential for the decision maker to find and define the problem the problem before he takes any decision. He manager should take care of many factors in defining the problem. Sufficient time should be spent on defining the problem. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

2. Collection of data: A decision as good as the adequacy and quality of data are on which it is based. Accordingly management should proceed to collect necessary data for decision-making purposes. Service of MIS in this regard may prove to be highly useful and valuable. II. Technical Steps: 3. Development of alternatives: This step usually guided by SWOT analysis. Accordingly, management must develop those alternative; which-Capitalize on the strengths of the company -Overcome its weaknesses/limitation -Lead to best exploitation of environment opportunities. -Manage threats successfully.
4. Evaluation of alternatives: After development of alternative is critically evaluated in terms of its merits and limitations- to get at the net worth of each alternative. The following criteria for evaluation-Risk and resource implication associated with each alternative. -Cost-benefit analysis for each alternative. i. Quantitative and qualitative factors: Quantitative factors: these are factors that can be measured in numerical terms, such as time or various fixed and operating costs. (Tangible) Qualitative factors: factors are those that are difficult to measure numerically, such as the quality of labour relations, the risk of technological change, or the international political climate. ii. Marginal Analysis: Evaluating alternatives may involve utilizing the techniques of marginal analysis to compare additional revenues arising from additional costs. If the additional revenues of a larger quantity are greater than its additional costs, more profits can be made by producing more. SUDHARSAN ENGINEERING

Marginal analysis can be used in comparing factors other than costs and revenues.
iii. Cost effectiveness analysis: An improvement on, or variation of, traditional marginal analysis is cost effectives, or cost benefit, analysis. It seeks the best ratio of benefits and costs, this means, for example, finding the least costly way of reaching an objective or getting the greatest value for given expenditure. 5. Selection of the best alternative: In making a selection of the best alternative, management may base its decision on any of the following two bases: - Experience (experience managers take better decision) - Experimentation. (A sample of decision may be put to implementation on a trial basis) III. Practical Steps: 6. Implementation of the decision: A decision remains only a paper-decision; unless and until it is put into practice. The following managerial aspects, to be taken care of: - Communication of decision to those who are to implement it - Making all resources and facilities available to the operators of the decisions - Motivating people to implement the decision with enthusiasm. - Exercising general supervision over the implementation of the decision. 7. Follow-up or feedback action: The implementation of decision leaves certain information for the decision-making process. The result of decision-execution can imply two sets of information. i. That the decision-making process was right and should be continued. ii. that the decision-making was wrong and or should be enriched with new ways and techniques. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING
Objective
X Problem Fact finding Alternative Z Y Evaluation of
alternatives
Test
Selection of best Alternatives
Implementation Feed back action
Decision-making process
Techniques of decision-making 1.Brainstorming:

It is a process of generating many creative solutions with evaluating their merit. It is a frequently used mechanism to provide the maximum number of ideas in a short period of time. A group comes together, is given a specific problem. In such sessionsat least at the early stages-criticism is minimized so as not to inhibit expression. Once all the ideas are on the table, the group considers the positive and negative aspects of each proposal. Through a process of continual refinement, the best possible solution under the circumstance.
2.Normal Group Technique (NGT) It referred to as NGT, consists of 4 phases in-group decision making. First, individual members meet as a group, but they begin by sitting silently and independently generating their ideas on a problem in writing. Second, the silent period is followed by a round-robin procedure in which each group member presents an idea to the group. No discuss of the idea is allowed at this time. Third, the ideas are summarized and recorded. After all individuals have presented their ideas each idea is discussed to clarify and evaluate it. Finally, group members conclude the meeting by silently and independently ranking the various ideas or solutions to the problem. The final decision is determined by the pooled outcome of the members votes on the issue. A chief advantage of this procedure is that everyone independently considers the problem without influence from other group members.
3.Delphi Technique In contrast to NGT, the Delphi technique never allows decision participants to meet face to face. Instead a problem is identified and members are asked through a series of carefully designed questionnaires to provide potential solutions. These questionnaires are completed independently. Results of the first questionnaires are then circulated to all group members. After viewing the feedback, members are again asked their opinions. This process may continue through several interactions until group members opinions begin to show consensus.
UNIT
III
ORGANIZATION Meaning of organization. The word organization originates from the work organism which means a structure with its parts so integrated that their relation to each other is governed by their relation to be whole.
The two important ingredients are:

1. The parts consist of human and physical resources. E.g., 5M and 2. As for relationships, these mean relationships
i. ii. iii. iv.
Between one individual and another Between an individual and his group Between one group and another Between individual and the physical resources to be used by them to perform their work or activities.
Important Definition: Mcfarland has characterized organisaiton as an identifiable group of people contributing their efforts toward the attainment of goals. Koontz and ODonnell. Organization involves the grouping of activities necessary to accomplish goals and plans, the assignment of these activities to appropriate departments and the provision for authority delegation and co-ordination. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Mooney and Railey Organisation is the form of every human association for the attainment of a common purpose.
As a function of management, organizing is a process; broadly consisting of the following steps:
1.Determination of the total workload and division of work: The very first step in the process of organizing is to make a determination of all the activities of all the activities which are necessary to be undertaken for the attainment of the enterprise objectives. Fayol divided business activities into technical, commercial, financial, , security, accounting and managerial. 2.Grouping and Departmentation. sub-grouping of activities i.e creation of
The various activities identified under the first step are then classified into appropriate Departmentation and divisions according to similarities and common purpose. Such grouping of activities is known as Departmentation. Each department may be further divided into section to create a logical structure.
3. Assignment of duties. The individual departments are then allotted to different positions and individuals. The duties of every individual are defined on the basis of his ability and aptitude. Every individual is made responsible for the specific job assigned to him. In this way, duties are assigned to specific individuals.
4.Delegation of authority:

Once the duties and responsibilities of every individual have been fixed, he must be given the authority necessary to carry out the duties assigned to him. A chain of command is created from top to bottom through successive delegations of authority.
Key elements of Organization Process: on the basis of the preceding discussion, the organisation process may be said consist of the following three key elements: 1. DEPARTMENTATION 2. DELEGATION, and 3. DECENTRALIZATION PRINCIPLE OF ORGANISATION OR FEATURES OR ORGANISATION:
1.Unity of objective: an organisation and every part of it should be directed towards the accomplishment of common objectives. It implies the existence of formulated and understood objectives. 2. Efficiency: an organisation is efficient if is able to accomplish predetermined objective at minimum possible cost. 3. Division of work: the activities of the enterprise should be so divided and grouped that there is the most efficient breakdown of tasks. 4. Span of control: no executive should be required to supervise more subordinates than he can effectively manage. The number of employees a manager can directly supervise. 5. Scalar principle: Authority and responsibility should be in a clear unbroken line from the highest executive to the lowest executive. 6. Delegation: authority should be delegated to the lowest possible level, consistent with necessary control so that coordination and decision-making can take place as close as possible to the point of action. 7. Functional definition: the duties and authority-relationships of different individual must be clearly defined so that there is, no confusion or overlapping.

8. Correspondence: authority and must be coterminous and co-extensive. 9. Unity of command: each person should receive orders from only on superior and be accountable him. 10.Unity of direction: there must be one head and one plan for a group of activities towards the same objectives. 11. Balance: the various parts of an organisation should be kept in balance and none of the functions should be given undue emphasis at the cost of others. 12. Exception principles: every manager should take all decisions within the scope of his authority and only matters beyond the scope of his authority should be referred to higher levels of management. 13. Coordination: the purpose of organizing is to secure unity of effort. 14. Flexibility: the organisation must be free from complicated procedures and red tape. 15. Continuity: the organisation should be so structured as to have continuity of operations. Arrangements must be made to enable people to gain experience in positions of increasing diversity and responsibility.
Concept of Formal and Informal organization:
Formal Organisation: The formal organisation is a system of well-defined jobs, each bearing a definite measures of authority, responsibility and accountability. - louis A.Allen G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

It is a deliberately designed structure of roles; which is built by management through assigning a matching role to each one of the groups for facilitating individuals- to best attain the objectives of the enterprise.
Informal Organisation: Informal organisation is a social group of individuals which comes into existence automatically as a result of the operation, and interaction of certain socio-psychological factors, among persons who are working in various capacities within the four wall of the formal organisation. Informal organisation is the network of personal and social relationships not established or required by formal organisation. - Keith Davis One most outstanding and popular example of informal organisation is a labour union.
ADVANTAGES AND LIMITATIONS OF INFORMAL ORGANISATION: Advantages:
I. Advantages from the viewpoint of management 1. More productivity and production: By winning the co-operation of informal groups and their leaders, management is assured of more productivity on the part of workers leading to higher production. 2. Communication feedback Through the forum of informal organizations, management could get the reaction of the employees of the organisation i.e. the communication feedback, on the communications transmitted by it. 3. Innovative and creativity encouraged. Informal groups and their leaders might often come out with suggestions or recommendations for the betterment of organizational functioning. If, even some of such suggestions are accepted and implemented by the management; the same acts as a spur to innovation and creativity on the part of the members of informal groups. SUDHARSAN ENGINEERING

4. A more humanistic formal organisation The emergence, activities and growth of informal organizations lead to the development of human-touch which makes the formal organizations more humanistic or prevents dehumanization of the personnel.
II. Advantages from the viewpoint of the members 1. Solution to work-problem: Informal groups provide a forum for discussion wherein members can discuss their work-related problems with senior and expert members of the group. 2. Management made alert and responsible The fact of the existence of informal organizations and the fear of their likely actions makes management more alert and responsible- while designing its plans, policies and actions.
3.Bulwark against management Informal groups, especially labour unions, act as a bulwark of employees-against the undesirable practices and actions of management. 4. Doing away emotional tensions Informal groups, by providing a forum of entertainment, gossips etc. help members do away with their emotional tensions- caused by personal affairs and family circumstances.
Limitations:
I. Limitations from the viewpoint of management 1. Spread of rumours The grapevine communication carries with itself, a natural possibility of spreading rumours which might injure the interests and intentions of management. 2. Less than optimum production. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Actions and activities of informal organizations lead to a wastage of the productive time of members. There is also some amount of time wasted in gossips indulged in by the members. 3. Problem of indiscipline Informal organizations my-a-times invite and encourage rash and reckless behaviour on the part of members. This creates long-run problems of indiscipline for the organisation and management.
II. Limitation from the viewpoint of members 1. Political domination of informal groups They mould the functioning of informal organizations to serve their own petty selfish political interests injuring the interests of members badly. 2. Loss of self-entity A vast majority of the members of informal groups-specially less educated, unskilled and semi-skilled-seek pleasure in being blind followers of the leaders of these groups. Informal organisation
Formal organisation 1. Origin It is a deliberate or intentional creation by management done for purpose of achieving the objectives of the enterprise. 2. Objectives
It is a self-generating process. It comes into existence; due to the operation of certain sociopsychological factors.
Its different departments have It does not have any specific specific objectives which are objectives evolved through developed through definite planning etc. planning and decision-making process. 3. Functioning There is no such rules and To pre-planned rules, polices, procedure of functioning. procedures and programmes.

4.Authority-responsibility relationships There are clear-cut and properly defined, authority and responsibility relationship which are usually shown through organizational chart. 5. Leadership Every group manager, is a leader; by virtue of, his official status and authority.
There are no such specific authority and responsibility relationships. It represents a natural-social structure-never depicted on a chart.
Leaders are those who are popularly accepted by all or a majority of the group-to act as leaders of the group. -Personal power.
6. Communication system
It is of a grapevine nature i.e it There is well planned system might spread from any person of communication routed to any person, in any manner through the scalar-chain. and in any direction. 7. Stability It is most stable 8. Political domination At least on the face of it, is In a large number of cases are away form political politically dominated. domination. It is least stable.
Tips about organisation: Organisation charts and manual Organisation charts and manuals are the important tools for providing information on organizational relationships and activities. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Organisation charts: 1.A organisation chart is a diagrammatic representation of the framework or structure of an organisation. 2. An organisation chart portrays managerial positions and relationships in a company or department unit. 3. An organisation chart is a graphic means of showing organisation data.
Contents: Ranks, names, titles and the lines of command, various authorities from top to bottom of the organisation. Authority and responsibility of various authorities. Relationships between different authorities Kinds of relationships prevailing in the organisation. Types 1. Circular
2. From top to down,, and
3. From left to right
Organisation Manuals:

It is a small book containing information such as the details of various positions, their authority and responsibilities, job description, salaries, relationships, activities, duties and functions of each position and organisaiton procedures and methods. It is an authentic guide to the companys overall organisation and its sub-parts. DELEGATION OF AUTHORITY AUTHORITY: Authority may be defined as the right to give orders and to enforce them. Applied to the managerial job, authority is the power to command others, to act or not to act in a manner deemed by the possessor of the authority to further enterprise or departmental purpose. The power to make decisions which guides the actions of another. It is relationship between two individuals- one superior, the other subordinate. Salient features of the concept of authority: 1. Authority lies in managerial positions 2. Authority is the key to a managers job. 3. Authority is hierarchical in nature 4. Authority is exercised by making decisions that are to be carried out by the subordinates. POWER: Powers refers to the ability of a person to influence others. Persons power may be measured in terms of his capacity to i. Give rewards, ii. Punish individuals, etc.
Difference between authority and power: Authority Power
1.It is the right of a person 1.It is the capacity of a to influence others person to influence others 2. It is institutional in character (sum up= power +authority) 3. It is legitimate. G.Alex Rajesh, A.P, COLLEGE 2. It is personal in nature. 3. It may have no legitimacy 4. Power, being a personalized attribute cannot SUDHARSAN ENGINEERING

4. It can be delegated. 5. It is hierarchical in nature. be delegated. 5. It does not have any system.
TYPES OF AUTHORITY: 1.Formal or Traditional or Top-Down Authority: Authority flows downwards in an organisation, through the delegation process. It is always from top or bottom Examples, in case of a limited company, shareholders possess the ultimate authority to manage the affairs of the company. The board of director delegates authority to the chief executive and chief executive in turn to the departmental managers and so on. 2.Acceptance or Bottom-up Theory: It states that authority is the power that is accepted by others. The subordinates accept the authority only if the advantages to be derive by its acceptance exceeds the disadvantages resulting form its refusal. Authority flows from bottom to top. A manager has authority if he gets obedience from the subordinates.
3.Competence of Personal Authority Theory: Authority flows from the personal qualities or technical competence of a person. A manager enjoys it by virtue of his intelligence, knowledge, skill and experience. Many persons derive informal authority because of their competence. RESPONSIBILITY: It is the obligation of a subordinate to carryout the duties assigned to him. By accepting delegated authority, a subordinated incurs a responsibility to use the authority as desired by the delegator. SUDHARSAN ENGINEERING

Responsibility is a duty or obligation owned by a subordinate to the superior, from whom the former derives authority-for the proper discharge of the assigned job. It proceeds in an anti-hierarchical manner from subordinates to superior.
ACCOUNTABILITY: It is a subordinates obligation to render an account or report of his activities to his superior. It is the obligation of an individual to report formally to his superior on the discharge of his responsibility. To be accountable is to be answerable for ones conduct in respect to obligation fulfilled or unfulfilled.
DELEGATES OF AUTHORITY:
To delegate means to entrust authority to a deputy so as to enable him to accomplish he task assigned to him. Authority is said to be delegated when a superior assigns a part of his rights to a subordinate. It is a process which involves sharing of either managerial work or operating work between a manager and his subordinates.
Main features of delegation: 1. It occurs when a manager grants some rights to a subordinate. 2. A manager cannot delegate authority unless he himself possesses the authority. 3. A manager never delegates all his authority to subordinates. He transfers only a part of his authority. 4. Delegation does not imply reduction in the status of manager. A manager can reduce, enhance or take back the delegated authority. 5. No manager can avoid his responsibility by delegating authority to subordinates.
ELEMENTS (PROCESS) OF DELEGATION:
1. Determinination of the results expected of the subordinate. While planning to delegate authority, first of all, the superior has to make a determination of what results i.e how much performance and of what quality, could be expected of the subordinate who is to be delegated authority. 2. Assignment of Duties: A manager defines the duties or tasks to be performed by his subordinates. Before assigning duties to subordinates, an executive subdivides his job and allocates a part of it to each subordinate. 3. Granting authority: Authority is the right granted to an individual to make possible the performance of work assigned. An executed then confers on his subordinates the rights necessary to perform the duties assigned to them. 4. Fixation of responsibility on the subordinate: Exaction of responsibility implies creating an obligation and to hold the subordinates accountable for results. Principle of delegation: 1. Principle 2. Principle 3. Principle 4. Principle 5. Principle Advantages: of of of of of non-delegation of personalized matters delegation by the results expected. unity of command scalar chain. absolute responsibility.
1. Basis of organisation 2. Reduction in the work load of managers 3. Training of subordinates 4. Motivation and morals of subordinates 5. Organisation growth and expansion facilitated. Disadvantages: 1. Lack of receptiveness 2. Lack of ability to direct 3. Lack of willingness to let go 4. Lack of control 5. Lack of willingness to trust subordinates.

CENTRALIZATION AND DECENTRALIZATION Centralization: It means centralization of power of decision making at one point or in a few hands. Centralization is the systematic and consistent reservation or authority at central points in the organisation. All the important decisions and actions at the lower levels are subject to the approval of top management.
Decentralization: Decentralization is the opposite of centralization. In centralized set-up, decision-making, authority is concentrated in a few hands at the top. As against this, in a decentralized organisation, there is dispersal of decision-making authority. Form of i. Departmentalization or Divisionalisation, ii. Arrangement of activities in terms of places or, iii. Dispersal of decision-making powers among executives at various levels.
Factors determining Degree of Decentralization:
1. Size and complexity: a very large and diversified firm finds it hard to practice centralization. Decentralized to a greater extent than a small organisation with limited operation. 2. History of the enterprise: firms that have been built under the personal leadership of owners are likely to minimize decentralization. 3. Availability of qualified executives: dispersal of decision-making is possible when the lower level staff is of high caliber. Decentralization itself is essential for the development of good managers.

4. Location of operation: authorities tend to be decentralized when performance is decentralized. Geographical dispersion activities make communication difficult under centralized decision-making. 5. Uniformity of action: greater is the need for uniformity of policy or action, greater is likely to be the degree of centralization. That is why pricing, wage fixation and public relations are more centralized than production and sales. 6. Control techniques: decentralization is greater when techniques available for controlling subordinates action are effective. 7. Number of decisions: the greater the number of decisions made lower down the management hierarchy the greater of decentralization. 8. Effects of decisions: in decentralized authority structure the decisions affecting more function are made at lower levels.
A COMPARATIVE ACCOUNT OF THE MERITS AND LIMITATION OF CENTRALIZATION AND DECENTRALIZATION
Advantages of centralization /limitation of decentralization: 1.Consistency/ lack of consistency in decision-making. Centralization- leads to consistency in decision-making Decentralization lack of consistency in decision-making 2. Strong /weak top management Centralization- strengthens top management Decentralization weak top management 3. Lower /higher cost of administration. Centralization- cost of administration is lesser Decentralization cost of administration is higher. SUDHARSAN ENGINEERING

4. Broad/narrow approach to a managing Centralization- the top management has a broad outlook Decentralization a narrow outlook to managing
5. Discourage /encourage inter-departmental conflicts: Centralization- discourage inter-departmental conflicts Decentralization encourage inter-departmental conflicts. 6. Mature/risky decision-making Centralization- mature decisions carry the chance of being least risky Decentralization less mature and high risky decision
7. Retention /loss of control by top management. Centralization- top management retains tight control over the whole organisation, because of its vast powers. Decentralization top managements control over the organisation is. Loosened 8. Efficient /inefficient handling of emergencies. Centralization- there is an efficient handling of emergency by top management Decentralization- lower level management may be frightened by emergencies.
9. Suitable/ unsuitable in the present-day environmental scenario. Centralization- small firms (suitable) Decentralization large firms
Limitation of centralization /advantages of decentralization:
1. Heavy burden/light burden on top management. Centralization- there is heavy burden of management work on top management Decentralization there is light burden on top management. 2. Lower/higher status of lower level management. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Centralization- decrease the status of lower level management Decentralization adds to the status of lower level management. 3. Autocratic/democratic management Centralization- it may lead to autocratic Decentralization it leads to democratic features in organizational functioning. 4. Initiative discouraged/encouraged. Centralization- it discourages the exercise of initiative on the part of the lower level management Decentralization it encourage the exercise of initiative on the part of lower level Management 5. Delayed/quick decision-making: Centralization- delayed decision-making Decentralization quick decision-making 6. Inferior/superior decision-making Centralization- there is inferior decision-making by top management Decentralization it is superior. 7. Egoistic/rational planning Centralization- sometimes, may indulge in egoistic planning for ambitious purposes; Decentralization rational planning is done by lower level managers.
A centralized enterprise:
President

Vice president Sales Vice president vice president Production Finance
Purchasing
Cost
Standards Research
Engineering
Public Relations
Manager Plant 1 Dept
manager
manager
manager plant 3 dept plant 4
plant2 dept dept
A decentralization enterprise: President
Vice president Sales
Vice president Production
vice president Finance

Manager Plant 1 manager manager manager plant 3 plant 4
plant2
Standard
Standard
Standard Standard
Cost
Cost
Cost
Cost
Purchasing Purchasing Purchasing
Purchasing
Research
Research
Research
Research
Engineering
Engineering
Engineering
Engineering
Dept
dept
dept
dept
DISTINCTION BETWEEN DELEGATION OF AUTHORITY AND DECENTRALIZATION.
Basis 1. Nature
Delegation of Decentralization authority It is an act, or a It is the end-result of process delegation of dispersal of authority at various It is the primary or levels. basic concept It is the secondary concept.
2. Relationshi p
It refers to relationship between two individuals, i.e a superior and his immediate subordinates.
It refers to a relationship between the top management and various departments and divisions in the enterprise. It is way of growing of expanding organizational life. Some minimum, it becomes a must.
3.requirem ent
It is a way of organizational life i.e without delegation, organizational functioning is not possible It is vital to management process.
It is optional
4.choice
5.control
Control over a subordinates performance is exercised by his superior
Even the power to control may delegated to be departments concerned.

Meaning of Personnel Management: Management or Human Resource
The planning, organizing, directing, and controlling of the procurement, development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals. The above definition indicates that staffing is that part of the management process, which is concerned, with the management of the human resources of an organisation. Personnel management is the science of human engineering.
Nature of staffing: 1. Personal department created to help line management, inthe best discharge of the staffing function. 2. Staffing concerned with acquisition, utilization and maintenance of the human factor. 3. Crux of staffing: right man, at the right job, at the right time, i.e. 3Rs of staffing. 4. Provides finishing touch to organizing. 5. Key to directing and controlling. 6. Staffing of managers occupies prominent place. 7. Continuous exercise. 8. Crucial for successful functioning of the enterprise. 9. Affected by external factors also Function of HRM(Human Resources Management) The HRM activities play a key role in any organisation. The important functions of HRM are discussed below: 1. Formulating HRM strategy 2. Restructuring of organisation 3. Training and development 4. Resourcing 5. Human resource planning HR Planning 6. Compensation and Reward
compensation& -HR analysis -HR Strategy -Assessments reward -wage/salary
HRM Activit y
ROLES OF THE PERSONNEL MANAGER: 1.Figurehead Role: All the managerial and operational activities of this department are carried out under the able leadership, guidance and control of the personnel manager. 2. Liaison Role: The personnel manager plays the role of the liaison officer; in maintaining links with labour organizations, government labour department, labour contractors, labour welfare organisation etc. 3. Organisation Role:

He plays an advisory role regarding personnel matters. He suggests best personnel plans, policies, and programmes, to the top management, for the timely procurement and the best utilization of the personnel. 4. Legal advisory Role: The industrial and commercial enterprises are subject to a number of labour legislations concerning various labour issues- like hours of work, payment of wages and bonus, workmen compensation, settlement of industrial disputes etc.
5. Welfare Role (or a well-wishers role): Maintaining congenial work-environment. Adequate and timely payment of remuneration, bonus, profit-share etc. Ensuring opportunities for advancement or promotions to employees. Planning for job-security Fair dealing with employees, with a sense of justice. Implementing industrial safety measures. 6. Reconciliatory role: Settlement of terms with labour union leaders on the issues of wage and bonus payments. Settlement of industrial disputes. Securing co-operation on introduction of organizational changes. Recruitment of workers based on the recommendations of labour unions, etc. 7. Researchers Role: Developing new and better sources of recruitment Suggesting improvements in selection procedures for various categories of personnel Discovering better motivational techniques Thinking over more effective measures towards assuring better labour relations etc. 8. Societary Role He must be primarily concerned with generation of maximum employment opportunities and ensuring social-peace through maintaining excellent industrial relations to the benefit of the society and also to the benefit of the organisation. SUDHARSAN ENGINEERING
Functions of the Personnel management (personnel manager):
Personnel Manager
a) Managerial Function i. Planning ii. Organizing iii. Staffing iv. Directing v. Controlling functions
b)Operational function i. Technical functions ii. Efficiency functions iii. Motivational functions iv. Welfare functions v. Procedural (legal) vi. Social functions vii. Research functions
a) Managerial Function: 1. Planning: the type of planning done by the personnel manager relates to determination of the objectives of the personnel department. 2. Organizing: the processing of organizing followed by the personnel department is the same as is required for developing the overall enterprise organizational structure i.e. allocation of duties to various individuals. 3. Staffing: the personnel has to first care for its own staffing. There must be a perfect matching of jobs and individuals. 4. Directing: the major components of the directing function i.e supervision, motivation, leadership and communication are as much applicable to the personnel department as to the enterprise, as a whole. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

5. Controlling: the controlling processes are also enforced to
regulate the functioning of people working in the personnel department. b) Operational functions: 1. Technical functions: i. Recruitment, ii. Selection. 2. Efficiency functions: i. Placement, ii. Training and development, iii. Promotions, iv. Maintaining congenial workenvironment. 3. Motivational functions: i. Development of a suitable system of compensation, ii. Profit sharing, iii. Incentives plan of wage payment. 4. Welfare functions: i. Job-security, ii. Industrial safety, iii. Retirement benefits, iv. Leave benefit, v. amicable settlement of industrial disputes, vi. Other facilities. 5. Procedural functions: i. keeping personnel records, ii. Designing schemes and methods for performance appraisal and job analysis, iii. Maintaining crucial records of absenteeism, labour turnover, industrial accidents etc., iv. Keeping legal records. 6. Societal functions: I. Generation of maximum employment opportunities, ii. Maintaining excellent industrial relations, iii. Ensuring Maximum labour productivity. 7. Research functions: i. Developing new and better sources of recruitment, ii. Developing better motivational techniques, iii. Researching into better techniques of job-analysis and jobevaluations etc., iv. Designing and implementing ever-improving selection procedures, v. designing better and more acceptable methods of performance appraisal. UNIT IV
Significance of the human factor: Among all factors of production, the human factor is the only active factor of production. To what extent and in what manner, the physical facilities of production( i.e the passive factors of production) like rawmaterials, machines, technology etc. would be utilized would very much depend on the motivation and morale of the human factor i.e the human factor can make a good or bad utilization of the passive factors of production; depending exclusive on its mood of work. Meaning: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

The managerial function of staffing involves manning the organisation structure through proper and effective selection, appraisal, and development of personnel of fill the roles designed into structure. The essence of staffing is the placement of the right man on the right job and at the right time.
Right Job
Right Time
Right Man
Sometimes, a distinction is made between personnel management and staffing. Personnel management is said to be concerned with plans, policies, and procedure relating to operatives or rank and file workers while the plan, policies and procedure concerning executive or managers are called staffing
Concept of directing:
Directing function of management involves guiding, inspiring, overseeing and leading people for the accomplishment of predetermined objectives. Directing constitutes the all-important actuating link between the other managerial functions, namely, planning, organizing, staffing, coordinating and controlling. SUDHARSAN ENGINEERING

Directing implies moving into action. Directing involves issuing orders and instructions and taking steps to get them carried out properly. Definition: 1. Directing consists of the process and techniques utilized in issuing instructions and making certain that operations are carried out as originally planned. 2. Direction is the interpersonal aspect of managing by which subordinates are led to understand and contribute effectively to the attainment of enterprise objectives. Process of Directing I. Issuing orders and instructions to subordinates II. Continuous guidance and supervision of employees to ensure that they carry out their assignments in the proper manner III. Motivating subordinates to work efficiently for the achievement of organizational objectives IV. Communicating with employees to understand their needs, aspirations, problems and suggestions V. Maintaining discipline and rewarding those who perform efficiently and VI. Providing leadership to the subordinates so that they work with real and confidence. Planning Directing as a bridge Performance
Principles of Directing
1. Harmony of objectives The management should bring about co-ordination of individual objectives of the subordinates working in the organisation with those the enterprise. 2. Maximum individual contribution

It should be in a position to inspire the employees to contribute their maximum for the achievement of the enterprise objectives. 3. Unity of command A subordinate should at a time receive orders from and be accountable to only one superior. 4. Direct supervision Personal supervision improves the motivation and morale subordinates and improves their loyalty to the organisation. of
5. Flow of information Effective direction is largely dependent upon the flow of information and the efficiency with which it is disseminated among the subordinates. 6. Appropriate Techniques The techniques of direction should be efficient and appropriate to the people, the tasks and the situation. 7. Comprehension The manager should take action to ensure that orders and instructions are well understood and properly carried out by the subordinates. 8. Strategic use of informal organisation Managers should accept and use the informal organisation to supplement and support the formal channels of communication 9. Effectove Leadership An effective leader guides and counsels his subordinates on work problems as well as on their personal problems. A good leader can win the trust and confidence of subordinates to make direction effective.
ELEMENTS OF DIRECTING The directing function includes the following,
Supervision Motivation
motivation
Leadership Communication.
supervision directing
leadership
Communication
SUPERVISION
SPAN OF SUPERVISION OR SPAN OF CONTROL OR SPAN OF AUTHORITY
It refers to the number of subordinates a manager can effectively manage. If the number of subordinates is too large, effective control may become difficult control over them. The concept of span of a management has a significant influence on the overall performance of an enterprise and hence modern management experts have recognized its importance.
Graicunas Theory of Span of Management V.A Graicunas, a French Management consultant, has made an important contribution to the span of management theory. He has identified three types of subordinate-superior relationship. I. Direct single relationships G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Direct single relationships are created when an executive is directly and individually related to his immediate subordinates. A ---- Superior
Y ---- Subordinates
1.Relationship between A and X -----1 2.Relationship between A and Y----- 1 2 meetings
Depending on the needs of a situation, A might consult with X or Y II. Direct group relationships If an executive speaks to each possible combination of subordinates under him, it is called direct group relationship. A ---- Superior
X (XY)
Y ---- Subordinates (YX)
1.Relationship between A and XY -----1 2.Relationship between A and YX----- 1 2 meetings
A might consult with X, while Y is in attendance. Or, he might consult with Y, with X in attendance. III. Cross relationships. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

It comes into existence when subordinates find it necessary to consult with one another. In the example given above, two cross relationships can take place between X and Y viz., Y with X and X and Y. A ---- Superior
X (XY)
Y ---- Subordinates (YX)
1.Relationship between A and XY -----1 2.Relationship between A and YX----- 1 2 meetings
I+II+III = 2+2+2= 6 Meetings
The formula: Graicunas has prescribed the following formula to ascertain the number of subordinate-superior relationships. 2n Number of relationships = n 2 + n - 1 n = number of subordinates
graicunass formula showing the number of Relationships Corresponding to the Number of Subordinates. No.of G.Alex Rajesh, A.P, COLLEGE No.of SUDHARSAN ENGINEERING

subordinates 1 2 3 4 5 6 7 8 9 10 Relationships 1 6 18 44 100 222 490 1080 2376 5210
For example If we take a superior supervises 5 subordinates. N =5 25 Number of relationships = 5 2 + 5 - 1 n = number of subordinates
Number of relationships = 5
16 + 4
, = 5 x20
= 100 Relationships
Factors determining Span of Management 1. Capacity of supervision 2. Time for supervision G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

3. Nature of work 4. Nature of planning 5. Capacity of subordinates 6. Degree of decentralization 7. Staff assistance 8. Controlling Techniques 9. Communication Technique
MOTIVATION 1. The basic objective of a manager is to secure from his subordinates an optimum performance toward accomplishment of the predetermined objectives. Performance = Ability x Effort x Opportunity. Motives may be defined as drives or impulses without an individual. It implies something within a person which prompts him into action. Motivation is a general term applying to the entire class of drives, desires, needs, wishes and similar forces that induce an individual or a group of people to work. koontz and ODonnell. Motivation means a process of stimulating people to action to accomplish goals. William G.Scott SUDHARSAN ENGINEERING

Process of Motivation Individual needs (or) Unfulfilled needs incentives (or) environment incentives And disincentives action (or) wants (Tension)
Best attainment Of common Objectives
Motivation (or) Fulfillment of Unfulfilled needs
(Or )
----------------------------- Discovery of new need
Awareness Of Needs
search of action
fulfillment of need
non-fulfillment of need
-------------- Revaluation and new action -----------------------------G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING
Elements of Motivation Individual Characteristics
The individual The job The work situation
Job Characteristics Work Situation Characteristics
Employees Motivation
Nature / characteristics of Motivation 1.Psychological concept Even workers with extraordinary abilities will not be able to perform as desired until they are effectively motivated. Effective performance on the part of workers can be said to be the result of their abilities backed by proper motivation. Performance = abilities x opportunity x Motivation 2. Motivational is total, not piecemeal A worker cannot be motivated in parts. For successful motivation, he should be treated as an indivisible unit, taking into account all his urges and aspirations.
3. Motivation is determined by human needs Human needs are of various kinds and may be classified in many ways. SUDHARSAN ENGINEERING

Basic, Primary or Physiological Needs: it needs food, water, and shelter, which are vital to its existence. o Secondary, Social, Psychological or Acquired Needs: Besides basis needs. Secondary needs are often vague because they are the needs of the mind and spirit, rather than of the body. 4.Motivation may be financial or non-financial
o
Financial motivation seeks to satisfy physiological and security needs. It is by way of wages, allowance, bonus, etc. Non-financial motivation which seeks to satisfy social, recognition needs may be by way of appreciation for the work done, higher status etc. INCENTIVES
FINANCIAL INCENTIVES NON-FINANCIAL INCENTIVES
A) INDIVIDUAL B) COLLECTIVE
B) COLLECTIVE C) INSTITUTIONAL
A) INDIVIDUAL
1.Various Premium 1.equal wage rates importance 1.human Relation 2.plan by Taylor,
1.Status
1.social
2.wage increased based 2.promotion 2.team spirit 2.participation 3.responsbility 3.communication SUDHARSAN ENGINEERING
halsey, rowan, etc on ability 3.competition G.Alex Rajesh, A.P, COLLEGE

3.pension plan 4.informal groups 4.production bonus 5.discipline 5.profit-sharing 5.recongnition of work 6.co-partnership 6.Job security 4.plesent&interesting 4.building morale Job
I. Individual Incentives: These incentives motivate people on an individual basis, i.e., only certain individuals may get them e.g., giving promotion to certain individual. ii. Collective Incentives: Employees perform their duties in groups and the management tries to motivate them in groups e.g. encouraging team spirit among employees. ii. Institutional Incentives These incentives relate to conducive and congenial atmosphere of the organisation. It includes better human relations in industry, workers participation in management. 5. Motivation is constant process Human needs are infinite. Man is a wanting animal as soon as one of his needs is satisfied, another appears in its place.
THEORIES OF MOTIVATION
An overview of major theories of motivation Maslows Need Hierarchy Theories Herzberg,s motivation Hygiene Theories McGregors X and Y Theories SUDHARSAN ENGINEERING

V.H. Vroom Expectancy Theory
1.Maslows Need Hierarchy Theories A.H.Maslow, an eminent American psychologist, has advanced a comprehensive structure of human needs known as Maslows Need hierarchy. Maslows theory which is based on the needs of the people states that an individual is motivated to satisfy certain unsatisfied needs. His theory is based on certain assumptions. They are: 1. Physiological (or basic or survival) needs Security (or safety) needs Social (or affiliation) needs Ego (or esteem) needs Self-realization (or self-actualization) needs
Following is a brief account of the above-mentioned human needs
SELF ACTUALIZ-
----------------------------------5
ATION NEEDS -----------------------4 ESTEEM (EGO) NEEDS
SOCIAL NEEDS
-----------------3
SAFETY NEEDS
-----------2

PHYSIOLOGICAL NEEDS ------1
1.Physiological Needs: 1. Physiological needs include, needs for food, drink, clothing, shelter, rest and other similar basic requirements. 2. Once an individual is satisfied reasonably well these needs, he thinks in terms of higher level needs 2. Safety needs These are the needs for protection against danger, threat, deprivation and the need for job security. Economic security needs: a man wants economic security i.e fulfillment of basic needs. Physical security needs: these needs include protection against- fire, accidents and other types of physical dangers. Social security needs: these include a need for state of illness or permanent incapacity to work caused by some disablement. 3. Social (or affiliation) needs These needs include those of belonging, association, acceptance, friendship and love. Social needs become important for all those who live in societies and work in the company of others. 4. Ego (or esteem) needs These needs include those of self-confidence, independence, achievement, status and recognition. These needs dominate only when an individual is reasonably satisfied with the first three needs. 5. Self-Actualization (self-fulfillment) Needs 1. In simple words, these needs reflect a desire to become what one is capable of becoming 2. These needs are concerned with the need to realize ones capacities and potentialities by achieving specific goals. 3. He accepts such work which is challenging and creative and also provides opportunities for self-development Merits and Demerits of Maslows theory

Merits:
1. Comprehensive It possibly covers all human needs from birth till
demise. 2. Logical this system arranges human needs into a hierarchical manner which is quite logical. 3. Guide to management- for launching motivational schemes. 4. Simple to comprehend- not only students but also a layman, this is quite understandable. Demerits:

It is not universal it is not universally applicable to all individual i.e labour, professionals etc. Not comprehensive excludes several important human needs such as need for mental peace, need for happiness in life, personal needs like for piety (devotion to God) Global differences the same human needs have different implication for different people in various countries (poor or rich). An element of overlapping human needs cannot be placed in watertight compartments things maslow has done. Simultaneous operation of needs- this theory does not recognize the simultaneous emergence of two or more needs, at the same time.
2. Herzbergs Two-Factor Theory of Motivation
Frederick Herzbergs two factor theory motivation is based on his research conducted among 200 accountants and engineers of Pittsburgh area, U.S.A who were asked the following questions: o What is about your job that you like? o What is about your job that you dislike? Accordingly, he put the responses into two categories 1. Factors that present dissatisfaction, known as Hygiene factor 2. Factors that have positive effect on job satisfaction, known as motivators.
a) Hygiene factors (or Maintenance factors or dissatisfiers) Hygiene (medical term) it means taking steps to maintain ones health but not necessarily improve it. SUDHARSAN ENGINEERING

For example: brushing teeth regularly helps prevent dental diseases but not improve the condition of teeth. Herzberg mentions the following factors as hygiene factors; Salary Job security Working conditions Company policy and administration Technical supervision Interpersonal relationship with peers Interpersonal relationship with supervisors, subordinates. Status Personal life b) Motivational Factors or Satisfiers An increase in these factors will motivate people while a decrease in these factors will have no effect on motivation. Herzberg mentions the following factors as motivators: Achievement Recognition Responsibility Advancement Opportunities for growth Work itself Merits of Herzbergs Theory: Money is not a motivator. It is rather a hygiene factor Dissatisfiers are an eye opener to management Management must provide for motivators within the job-contents. Demerits
This Theory is based on a small sample There is an element of overlapping. factors
Motivational
Self-actualization -Work itself Esteem -achievements -Growth prospects

Social responsibility -Recognition Safety With Physiological -Working -Pay -job security Subordinates, Peers. superiors, -relations -status -advancement -
Conditions
Maintenance factors 3.McGregors Theory X and Theory Y Apparently, Theory X contains a set of negative assumptions about human behaviour and Theory Y contains a set of positive assumptions about human behaviour. Theory Y can be said to be positive and optimistic whereas Theory X is negative and pessimistic.
A comparative account of assumptions contained in Theory X and Theory Y Theory X 1.People have a dislike for work and like to avoid work, if they can do so. Theory Y 1. People like work, in fact, expenditure of physical and mental efforts involved in work is as natural as involved in play or rest.
2. People wish responsibility
to
2. People like not only to avoid accept responsibility but also seek responsibility 3. People prefer to lead and exercise self-direction

3. People prefer to directed by or led others. be and self control by 4. People possess creativity and imagination 4.People lack creativity (creativity is widely and imagination.(in fact, distributed among creativity is narrowly population) distributed among population) 5. Commitment to 5. Commitment to objectives objectives is a function of a is a function of rewards associated with punishments associated with their achievement their non-achievement 6. People are not much 6. People are self-centred self-centred and are and indifferent to interested in organizational organizational goals. goals. 7. People have unlimited potential of capabilities. 7. People have limited Under modern industrial potential of capabilities. conditions, potential of men is only partially utilized.
Theory Z The Z theory, proposed by William Ouchi, is an integrated motivational model, based on the Japanese management practices. It provides an example of how management can transform the organizational environment and bring about close, co-operative and trusting relationships between workers, managers and other groups.
Features of Z theory: o o o o o Life-time employment Restricted promotion (horizontal mobility possible) Greater workers involvements (short-term motivational device) Participative decision-making Informal control system SUDHARSAN ENGINEERING

o Stable and cohesive work environment 4.V.H.Vrooms Expectancy Theory: People must believe that by working, they will receive rewards that are important to them. Peoples actions are based on their expectations as well as their needs. Unless there is positive expectation of a reward that will satisfy a need, an individual will not take action.
Assumption: The Individuals make conscious decisions in a work-situation to behave in certain ways and not any others. Outcomes desired by different individuals are determined by their value-system. Different individuals have different expectations as regards the amount of effort which is required to achieve particular outcomes. There are also different expectations among them as regards the probability of success in achieving outcomes. key elements:
Effort: 1. A person will be motivated to expend effort if he believes that there is a reasonable likelihood that his effort will produce the desired outcome, and that such outcome will result in extrinsic or intrinsic rewards to satisfy his felt need. Performance: 2. In a situation where only improved team work can accomplish a task, even extraordinary effort on the part of a lone individual may not be of any avail and it is more likely to go unrewarded. Outcome: 3. It signifies the desired result of ones effort. 4. It may lead to extrinsic rewards such as wages, appreciation and recognition by others, or intrinsic rewards, such as, increased responsibility, more enjoyable and /or challenging work. Importance of Motivation: 1. For performing any job, two important things are necessary, viz., will to work and ability to work. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

2. The importance of motivations lies in converting this ability to work into the will to work. Without willingness, ability to work is of no use. 3. Performance depends on ability and willingness and in turn, willingness depends on motivation. 4. Performance = Ability x Motivation 1. Maximum utilization of factors of production 1. Motivation makes workers work sincerely for completing the task assigned to them. 2. Effective utilization of the enterprise resources, viz., human, physical and financial, to the maximum. 2. Reduced employee turnover and absenteeism 1. Attractive motivational schemes bring about satisfaction to employees and by this, their commitment organisation increases and they are not easily tempted by offers from competitors. 3. Increase in efficiency and output 2. As motivation brings about satisfaction to employees, they work wholeheartedly. Because of this, there will be an increase in their efficiency and output. 4. Sense of belonging 3. A proper system of motivational schemes promotes closer identification between enterprise and workers. 4. This results in better relations between management and workers. 5. Easy availability of right personnel Because of the proper motivational schemes, the enterprise is in a position to attract highly talented and competent persons from external sources to serve in its organisation. 6. Best attainment of common objectives Motivated employees put in their best efforts towards the attainment of common objectives of the enterprise. 7. Stability of work force Motivation, directly and indirectly, results in the stability of work force, necessitating only minimum inevitable labour-turnover. 8. Minimum resistance to change Motivated employees better appreciate the management viewpoint as to the introduction of organizational changes.

LEADERSHIP Concept: A manager for directing the people working under him has to be a leader. When a manager is a leader, he is in a position to lead his subordinates and also inspire them to accomplish the objectives of the enterprise. A leader may or may not be a manager but a manager must be a leader. Definition: 1. Leadership is the ability of a manager to induce subordinates (followers) to work with confidence and zeal. - Koontz and ODonnell 2. A leader is one who guides and directs other people. A leader gives the efforts of his followers a direction and purpose by influencing their behaviour. - Louis A. Allen. Importance of (or function) of leadership: a) Primary significance of leadership: 1. The primary significance of leadership lies in leading people to give their superb performance towards the attainment of common objectives- through zeal, enthusiasm and dedication.
Performance inspired by Leadership (35% to 40%) Performance caused Out of Org. and other Pressures (60% to65%)
b) Others points of significance Leading people to give their superb performance towards the attainment of common objectives. Achieving co-operation through team-work Emphasizing on unity of objectives Arousing self-confidence through direction of followers talents. Encouraging initiative Best utilization of manpower through motivation Developing good human relations SUDHARSAN ENGINEERING

Building and raising morale Overcoming resistance to changes
Point of Distinction 1. Concept
Managership
Leadership
2. Applicability
BA6111- wider Leadership is a Managership is a PRINCIPLES OF MANAGEMENT concept includes narrow concept as leadership i.e every every leader may or manager is leader. may not be a manager. E.g Gandhiji was a leader but not a manager. Managership is Leadership is found applicable to only in both formal and formal groups. informal groups.
A manager operates on the basis of his formal A leader operates basically, by virtue authority. of, his power possessed through his chairman and personal qualities Leadership is Managership is more specially required in significant to business politically organization. concern.
3. Authority Vs power
4. Context
5. Appeal A leader makes an emotional appeal to A manager makes a followers. formal appeal to A leader is a friend subordinates. and a puller of his followers
6. Approach
A manager is a boss A 7. leader deals and pusher of people Organisation primarily with A manager deals with human organization. an organisation which is both-technical and human G.Alex Rajesh, A.P, 8. Role COLLEGE SUDHARSAN ENGINEERING A leader is concerned with A manager is primarily inspiring followers concerned with through creating
AN OVERVIEW OF LEADERSHIP STYLES Or TYPES OF LEADERS Depending on the attitude of a leader towards his followers and their work, the following major styles of leadership could be identified. 1. 2. 3. 4. Autocratic leadership style Democratic leadership style Laissez-faire or free-rein leadership style Paternalistic leadership style
1. Autocratic leadership style: 2. An autocratic leader is one who takes all the decisions himself without consulting his subordinates. 3. He decides policies for the group without consulting the group and also asks the group to take steps as per policies determined by him 4. An autocratic leader may be of two types. a. Strict Autocrat: a strict autocrat is one who relies on negative influences and gives order which must be obeyed by the subordinates without question. (Imposing penalty, criticizing subordinates) b. Benevolent autocrat: a benevolent autocrat is one who uses a positive motivation style. He disperses rewards to his group. ( higher productivity). Merits: 1. 2. 3. 4. This style leads to quick-decision making. It suitable at lower levels in an organization It is suitable in emergency situation It may provide strong leadership to the group SUDHARSAN ENGINEERING

Demerits It leads to development of frustration in subordinates Subordinates shirk work and avoid responsibility This phenomenon retards human development It may yield fruit but only in the short-run. 2.Democratic or Participative Leadership Style. 1. A democratic leader is one who takes decisions in consultation with his subordinates. 2. Decentralization of authority, participative planning, two-way communication, etc., is the main features of democratic leadership. 3. This style of leadership is usually adopted by the chief executive of a business enterprise while discussing major organizational objective, strategies and policies with departmental managers. Merits: 1. It invites commitment to decisions on the part of subordinates. 2. Potential of subordinates is utilize under this style. 3. It helps to increase-motivation, morale and job-satisfaction for subordinates. 4. It leads to the emergence of good human relation, in the enterprise. Demerits: There is usually delayed decision-making It may disclose as a sign of managerial incompetence In the long run, it leads to loss of leaders control over the subordinates. There is usually witnessed, the phenomenon of passing the buck.
3. Laissez faire or free-rein style: The leader leaves it to the subordinates to decide and control themselves believing that they are competent and motivated. He does not interfere in the activities of his subordinates. He believes that people will perform better if they are left free to make and enforce their own decisions. Using Fields: sports, educational institution Merits: It leads to a highest sense of job-satisfaction for subordinates It encourages the fullest exploitation of potential of subordinates. It is a way or technique of training and developing subordinates for higher managerial position. G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Demerits: It minimizes the role of the leader Performance of subordinates is rather poor loss of control of leader Subordinates may work at cross-purpose It is not suitable when subordinates are uneducated.
4. Paternalistic leadership style: A paternalistic leadership is characterized primarily by loyalty of followers in a warm and cohesive setting. The leader is much concerned with the well being of his followers and comes to their rescue ever so often. The leader plays a father-like role towards his followers and takes care of their problems, the way a father does for his family. He believes in the philosophy work hard and I will take care of you. It is one of the fundamental characteristics of the Japanese management system. Merits: Subordinates are loyal to the leader and the organisation both (because of a father-like) There are good human relations in the organisation It implies a balanced leadership approach. Demerits: Subordinates might take undue advantage of the leniency of the leader Leader might be more involved in personal problems of subordinates than organizational issues. It is unsuitable when there is a lack of mutual trust between the leader and the followers.
THEORIES OF LEADERSHIP o Personality theories o Behavioral theories o Situational theories 1.Personality theories of leadership:
Some important theories of leadership under this category are: i. Great man theory ii. Trait theory iii. Role theory
i. Great man theory: Some people believe that leaders are born and not made. It assumes that leadership qualities are in-born or god-given Example: great leaders like Mahatma Gandhi, Churchill, and Nelson Mandela. (Ambani brothers) It was presumed that he had inherited the qualities of his father i.e leadership qualities were carried in the genes. ii. Trait Theory According to this theory, successful leadership depends on certain traits or qualities possessed by a leader some of such traits are inborn and some traits could be acquired by a person by education, training and experience. Various leadership traits: General qualities, technical qualities, managerial qualities and psychological qualities. iii. Role Theory: Role theory is a refinement of trait theory. According to role theory, a leaders traits are reflected in his roles A leader stimulates followers superb performance, by inspiring them through his charisma and outstanding personal traits. Example:M.G.R++++ i. Stimulate ii. Representative- outside world iii. Integrator personal objective with organizational objectives iv. Co-coordinator- like music director v. Fatherly-figure as a friend and guider vi. examplar outstanding devotion, courage and integrity G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

vii. Expert the techniques of work performance viii. Philosopher- acts as an ideologist for his followers.
2. Behaviour theories: i. Rensis Likerts 4- system management ii. Managerial grid or leadership grid
i. Rensis Likerts 4- system management Likert has postulated four systems of management.
System 1: Exploitative-authoritative It is highly autocratic Decision-making is centralized in the hands of the leader. There is downward communication system only i.e from the leader to the subordinates. System 2: Benevolent authoritative The leader is a bit lenient autocrat. He solicits some ideas and opinions from subordinates. He motivates subordinates with some rewards and some fears and punishments. He permits some upward communication also ie from subordinates to the leader. System 3: consultive He makes constructive use of subordinates ideas and opinions. The system of motivation consists of rewards with occasional punishment. Communication system is two-way i.e downwards and upwards. System 4: participative-group or democratic: He has complete confidence and trust in subordinates, in all matters. He always gets ideas of subordinates and constructively uses them. There is much emphasis on communication downwards and upwards The leader always encourages group approach to decision making, throughout the organisation. In likerts view, system 4 is the best; system 1, is the poorest.
ii. Managerial grid / Leadership style: Intensive research studies undertaken regarding the behavior of leaders, at the Ohio-State University and the University of Michigan (U.S.A) revealed that there were two broad dimensions of leadership behaviour viz. o Initiating structure or task oriented behaviour: the leader closely supervises subordinates to ensure that the task is performed in a satisfactory manner and behaves like and autocratic leader. o Consideration or employee-oriented behaviour: the leader adopts an attitude of friendship and trust towards subordinates and behaves like a democratic leader. Theory of leadership is Managerial grid concept developed by Robert Blake and Jane Mouton. It identifies various alternative combinations of both basic styles i.e., concern for production and concern for people. These combinations are put in the horizontal and vertical dimensions of the grid, have a scale from 1 to 9. Thus the grid has 81 possible combinations.

(1,9) (9,9) 9
Con- 8
7 cern 6 for (5,5) 5
Peo
3 ple
1 (1,1) 3 4 5 6 7 8 9 (9,1) 1 2
Concern for production
Note: in this gird, concern for production is shown on horizontal axis, and concern for people on vertical axis. Five major leadership behaviour styles: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

a) Impoverished leadership style (1,1): Managers have very little concern for either people or production They act as messengers- communicating information from subordinate to subordinate. This style of leadership behaviour is also called laissez-fair style as everything is left to situation. b) Team leadership style (9,9) The leader has highest dedication to both people and production. The leader tries mesh production needs with needs of individual. Research found that experienced managers preferred, (9,9) style of leadership, regardless of variations in situations. c) Middle of the road leadership style (5,5) The leader has little concern for production and maximum concern for people. The philosophy behind this style is that thoughtful attention to the needs of people leads a friendly and comfortable organizational atmosphere and work tempo. d) Task leadership style (9,1) The leader is concerned only with development of efficient production operations with little or no concern for people. The leader behaves as an autocrat. The philosophy behind this approach is that efficiency results from arranging work in such a way that human elements have little effect.
3. Situational (or contingency) theories of leadership There are 4 factors which affect leadership style and also determine leaders effectiveness o Leader his traits o Followers their knowledge, experience and involvement in work o Organisation task and technology forces o Situation i.e., internal and external environmental factors. Under the situational theories, we basically consider the following three theories: a) Leader continuum theory It is situational and contingent nature. It suggests a variety of 7 leadership styles, ranging from the one which is highly boss centred to the one which is lightly subordinate centered.
Freedom area for the leader
Freedom area for followers
Leadership continuum 1. Manager makes decisions (this is fully boss-centred or autocratic style) 2. Manager sells the decisions transferring the decisions to subordinates 3. Manager takes decisions and just responds to question from subordinates or followers. 4. Manager takes a tentative decision subject to change- feedback from subordinates 5. Manager presents problem gets suggestion of subordinates and then take a decisions. 6. Manager defines limits within which followers take decisions 7. Manager and followers jointly make decisions.
Point: No one style is the best. It all depends on the situation as to which style will yield best overall results for the organisation. b) Fielders contingency theory: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

By combining the trait and situational approach. There is nothing extra-ordinary in Fielders contingency approach. Experience managers themselves realize that style of leadership depends on the situation.
c) Path-Goal theory The central idea behind path-goal theory is that most effective leaders are those who help subordinates to achieve both-enterprise goals and their personal goals by defining task roles clearly and by removing obstacles to performance. This is especially valid for upper level positions, where the behaviour of leaders can have considerable influence on designing an environment for performance. Leadership Roles:
Group task roles Initiatorcontributor Information seeker Opinion seeker Information giver Opinion giver Elaborator Coordinator Orienter Evaluator-critic Energizer Procedural technician
Group building and Individual maintenance roles roles. Encourager Harmoniser Compromiser Gate keeper expediter and Aggressor Blocker Recognition seeker Self-confessor
Standard setter and Playboy ego ideal Dominator Group observer/ Help seeker commentator Follower Special pleader interest

Recorder
Function of a leader:
Leadership functions
a) Primary 1.executive 2.planner 3.policy maker responsibility 4.expert 5.external group representative 6.controller of internal relations
b) Accessory 1.expemplar 2.symbol of the group 3.substitute for individual 4.ideologist 5.father figure 6.scapegoat
7.purveyor of rewards and punishments 8.arbitrator and mediator
Job enrichment is an attempt to motivate employees by giving them the opportunity to use the range of their abilities. It is an idea that was developed by the American psychologistFrederick Hertzberg in the 1950s. It can be contrasted to job enlargement which simply increases the number of tasks without changing the challenge. As such job enrichment has been G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

described as 'vertical loading' of a job, while job enlargement is 'horizontal loading'. An enriched job should ideally contain: A range of tasks and challenges of varying difficulties (Physical or Mental)

A complete unit of work - a meaningful task Feedback, encouragement and communication
Techniques Job enrichment, as a managerial activity includes a three steps technique: 1. Turn employees' effort into performance: Ensuring that objectives are well-defined and understood by everyone. The overall corporate mission statement should be communicated to all. Individual's goals should also be clear. Each employee should know exactly how he/she fits into the overall process and be aware of how important their contributions are to the organization and its customers.
Providing adequate resources for each employee to perform well. This includes support functions like information technology, communication technology, and personnel training and development.
Creating a supportive corporate culture. This includes peer support networks, supportive management, and removing elements that foster mistrust and politicking.

Free flow of information. Eliminate secrecy.
Provide enough freedom to facilitate job excellence. Encourage and reward employee initiative. Flextime or compressed hours could be offered.

Provide adequate recognition, appreciation, and other motivators.
Provide skill improvement opportunities. This could include paid education at universities or on the job training. Provide job variety. This can be done by job sharing or job rotation programmes.

It may be necessary to re-engineer the job process. This could involve redesigning the physical facility, redesign processes, change technologies, simplification of procedures, elimination of repetitiveness, redesigning authority structures.
2. Link employees performance directly to reward:

Clear definition of the reward is a must Explanation of the link between performance and reward is important Make sure the employee gets the right reward if performs well If reward is not given, explanation is needed
3. Make sure the employee wants the reward. How to find out?

Ask them Use surveys( checklist, listing, questions)
UNIT V
CONTROLLING The System and Process of Controlling, Control Techniques and Information Technology- Productivity and Operations Management-Overall and Preventive Control-Towards a Unified, Global Management Theory.
Control is the last phase in the management process. o Once the plans are formulated, o The organisation structure designed, o Competent personnel (staffing) secured, o Management in action (directing), ie implementing of plans and controlling of performance, communications begin to flow, efforts co-ordinate, leading and motivating get things done through others.

o
Controlling objectives.
assures
the
accomplishment
of
goals
and
Twins of management:
1. In the planning stage, managers decide how the resources would be
utilized to achieve organizational objectives 2. At the controlling stage, managers try to visualize whether resources are utilized in the same way as planned. Control completes the whole sequence of management process. Control: o Setting standards o Measuring performance against these standards and o Correcting or adjusting for deviation from the standards. Controlling In terms of process of control. The managerial function of controlling involves the measurement of actual performance, comparing it with the planned standards and correcting deviations to ensure attainment of predetermined objectives. Controlling is determining what is being accomplished, that is evaluating performance and, if necessary, applying corrective measures so that the performance take place according to plan, that is, in conformity with the standard.
The process of control -------------------- 1. Objectives
2.Standard No normal Corrected Performance G.Alex Rajesh, A.P, COLLEGE deviation comparison SUDHARSAN ENGINEERING

3.Performance
5.Corrective action 4.Measurement If necessary
-------------------------------------
Determination of standards: Standards
Tangible standards
Intangible standards (not measured)
Physical (mhr, color of goods) duty) Cost (direct& indirect) sales service) Revenue (average sales per customer) Capital (rate of return) goods) Programme (improving the cost control)
Employee morale(absence from Consumer satisfaction (afterCorporate image(goodwill) Product leadership (quality of
Benchmarking: Benchmarking is a concept that is now widely accepted in the U.S.A It is an approach for setting goals and productivity measures based on best industry practice. Example: a company needs six days to fill a customers order and the competitor in the same industry needs only five days, then five days SUDHARSAN ENGINEERING

does not become the standard if a firm in an unrelated industry can fill the orders in four days. The four-day criterion becomes the benchmark even when at first this seems to be an unachievable goal. The process involved in filling the order is then carefully analyzed and creative ways are encouraged to achieve the benchmark. Three types of benchmark: Strategic benchmark: it compares various strategies and identifies the key strategic elements of success. Operational benchmark: it compares relative costs or possibilities for product differentiation. Management benchmark: it focuses on support functions such as market planning and information systems, logistics, human resources management, and so on. Characteristics/features/nature of controlling or control:
1. Controlling makes for a bridge: Controlling makes for a bridge between the standards of performance and their realistic attainment. controlling as a bridge Attainment of standards
Standards
2. Planning is the basis of controlling The standards of performance (which are starting point of the controlling process) are laid down in plans. 3. Controlling is pervasive managerial exercise All managers, at different levels in the management hierarch, perform this function, in relation to the work done by subordinates under their inchargeship. It could be generalized that delegation is the key to controlling.
4. Control is a continuous process It involves continuous review of performance and revision of standards of operations. Control is a process of regular measurement, comparison and verification. 5. Action is the essence of control

An effective control system facilitates timely action to adjust performance to predetermined standards so that there is minimum wastage of resources. Action also includes modification or improvement of existing plans. 6. Controlling is based on information feedback 1. On the reports on actual performance done by operators. 2. Information or feedback enables the manager to determine how far the actual operations is proceeding according to plans or standards and where remedial actions are needed. 7. Control aims at future Control involves a post-mortem of what has happened and is in that sense looking back. But the control action seeks to regulate events in future as past is uncontrollable. Control is thus both backward-looking and forward-looking. Past is the basis for regulating action in future. It is looking at future through the eyes of past. Control mechanism: Control falls, plan also fail and plans succeed, control also succeeds. Four elements: Setting of standards of performance at strategic points Leading, motivating and supervising employees Measurement of actual performance and its comparison with the stated standards of performance- monitoring and reviewing activities of the supervisor. Corrective action, when necessary. So, control standards are derived directly from the objectives, specifications, and other goals established in the process of planning. o Standard is a rule of measuring.
Effective control of operation function
Quantity i. Quantity of output G.Alex Rajesh, A.P, COLLEGE
quality
time use
cost i. direct cost:
i. quality control i.Gantt chart

ii. Quantity of sale over raw materials iii. Quantity of Inventory finished goods ii. Quality control Over non-physical Goods and services Of an organisation e.g customer service Morale, leadership etc. ii.PERT/CPM (these are tools of materials labour expenses
time use control and Save money)
ii. Indirect cost: O.H BEP
Managerial control:
Manager
Information for aiming And planning Managing Information for controlling
Aiming and plan 1.Establishing standards by setting Objectives approving plans 2.Stating policy. 3.delegatingh authority 4.approving procedures etc. G.Alex Rajesh, A.P, COLLEGE
controlling 1.supervision 2.measurement 3.comparasion 4.evaluation 5.corrective action to SUDHARSAN ENGINEERING

Adjust performance to Standards
Framework of management
Information evaluating adequacy Of standards
information comparing performance with standards
Steps in controlling or control process 1. Desired 6.analysis of Performance 8.implementation of correction plan 7.corrective causes of Deviations action
2. Actual 5.identification of G.Alex Rajesh, A.P, COLLEGE
3.measurement
4. Comparison of

Performance of performance deviation actual and standard
1. Establishment of standards The process of controlling commences with the determination of standards of performance, for all phases of the organizational activity. o Standards may be stated in physical terms such as units of output, man-hours worked, etc., or in monetary terms such as sales, costs, profits, etc. o Standards may also be of a qualitative nature e.g company image. o Time standards: machine hours, man-hours o Capital standards: current ratio o Monetary standards: income, sales, profits, costs etc. o Quantitative standards: units of production, unit of sales o Intangible standards: morale of employees, competence of managers etc. Requirements of ideal standards: o Standard must be practical Standards must be scientific Standards must be simple to understand Standards must be expressed in numerical terms Standards must concentrated on results Standards must be flexible 2. Measurement of actual performance The results of operation are measured and evaluated in comparison with the standards. Ideally, measurement should be such that deviations may be detected in advance of occurrence and avoided by appropriate action. Effective methods of observation, inspection and reporting are required. Measurement must be: i. Clear, simple and rational ii. Relevant G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

iii. Direct attention and efforts and iv. Reliable, self-announcing complicated interpretation. and understandable without
3. Comparison of actual performance against standard and locating deviation It involves two steps i. Finding out the extent of deviations and ii. Identifying the causes of such deviations Management may have information relating to work performance, data, charts, graphs and written reports, besides personal observation to keep itself informed about performance in different segments of the organisation. When the standards are achieved, no further managerial action is necessary and control process is complete. 4. Analysis of variances Comparison of actual performance with standards will reveal deviations. Critical deviations are analyzed to diagnose their cause and their impact on the organization Remedial action can be possible only when the causes of the trouble spots have been identified. Find causes of deviations: i. External environment factors ii. Internal environment factors iii. Organizational defects iv. Imperfections in planning v. Staffing defects vi. Flaws in directing techniques 5. Corrective of deviations

This is the last steps in the control process which required that actions should be taken to maintain the desired of control in the system or operation. Control action may be i. Review of plans and goals and change therein on the basis of such review. ii. Change in the assignment task iii. Change in existing techniques of direction and iv. Change in organisation structure provisions for new facilities.
Types of control:
Control
Based on elements
Based on stages
Strategic control
Operational control
Feedback Control
Feed forward Control Control
Concurrent

I. Based on elements: 1. Strategic control It is the process of taking into account the changing planning premises, both external and internal to the organisation on which the strategy is based continuously evaluating the strategy as it is being implemented, taking corrective action to adjust the strategy to the new requirements. Aim: proactive continuous questioning of the basic direction of the strategy. Basic question: are we moving in right direction Focus: external environment Time horizon: long-term Main techniques: environmental scanning, information gathering questioning and review. 2. Operational control It is concerned with action or performance and is aimed at evaluating the performance of the organisation as the whole or its different components- strategic business units, deviations and departments. It can be exercised at different stages of work performance Basic question: how are we performing Aim: internal environment Time horizon: short term Main techniques: budgets, schedules and MBO.
II. Based on stages:
Feed forward Control
Concurrent Control
Inputs
Processing
Outputs
Feedback -------------------------------------------------------------- Control
Flow of information ---Corrective action
a) Feed forward (predictive) control 1. Control monitors critical inputs and suggests preventive measures in the form of corrective action 2. Correcting inputs budgets b) Feedback control Feedback monitors or evaluates output variables and suggests remedial or corrective action. Correcting inputs morale of employees, reducing cost etc c) Concurrent control
It measures enable us to take timely action before larger damage take place. Example: quality control used in production operations enable us to take immediate corrective action before additional products are produced.
Control areas:

Control over polices formulating policy Control over organisation structure organisation chart and manuals are used Control over personnel morale, synergy Control over cost actual cost > standard cost =unfavorable, vice versa Control over wages and salary programme of job evaluation Control over method and manpower individual performance, working time Control over line of product rationalize the line of products SUDHARSAN ENGINEERING

Control over capital expenditure capital budgeting Control over R &D technical, monetary, personnel Control over external relation these are regulated by public relations department Over all control control over each segment of the organisation.
Essential of effective control system: 1. Suitability A good control system must be tailor-made to suit the nature and requirements of the activity controlled. The system of control should be geared to the objectives of the organisation and must be consistent with the companys total operating system 2. Promptness An ideal control system should detect and report deviations as soon as, if not before, they occur. Timely corrective action is possible only through prompt reporting of deviations and their causes. 3. Forward looking A good control system should take into account the possibilities of the recurrence of deviations. Example: the need for cash may be forecast in advance to avoid shortage of cash at the time of payment. 4. Control by exception 1. It should focus attention on the strategic points or key areas where control action is most urgent. 5. Objectivity 2. Standards and measurement of performance should as far as possible be objective, verifiable and specific. 3. Control should not be influenced unduly by the personality of the superior and the subordinates. 6. Flexibility 1. The system of control should be flexible enough to be adjusted according to changes in needs and circumstances.

2. Flexible control can be possible through flexible plans. Flexible budgets, for example, keep the control system elastic and responsive to changes. 7. Organizational pattern Organisation structure is a means of control. Control system should reflect the efficiency and effectiveness of the organisation. 8. Economy. The cost of installation and maintenance of the control system should be justified by its benefits.
9. Simplicity It should be simple to administer. A control system can work effectively when it is understood by all 10.Suggestive A good system should suggest the necessary remedial action.
Objectives of controlling: To bring actual operational performance on the right track Locating deviations Analyzing deviations Undertaking remedial action Preventing occurrence of deviations Cost control and profit maximization Helping achieve co-coordinated action Maintaining discipline.
Controlling techniques: (control tools or control aids)
Control techniques
Operational control techniques (It is exercised at the level of various G.Alex Rajesh, A.P, COLLEGE
Overall control techniques (it is exercised by top level SUDHARSAN ENGINEERING

Operating units by the concerned Operating manager) management)
Financial control control (Budgetary control) I. BUDGETARY CONTROL:
Operating (Non-budgetary control)
Definition: budgetary control involves the use of budgets and budgetary reports throughout the period to coordinate, evaluate and control day to day operations in accordance with the goals specified in the budget It is the process of defining desired performance through the preparation of budgets, measuring and comparing actual results with the corresponding budget data and taking of appropriate action to correct deviations, if any. A budget is a recorded plan of action expressed in quantities terms A budget is prepared to act as a means of controlling operations Budgetary control naturally involves preparation of budgets and later comparison of actual with planned expenditure or comparison of actual performance with the budget and taking corrective actions, if necessary.
A) Budgets
Master budget: it is the budget for the enterprise as a whole. It is a coordinated summary of departmental budgets. Production budget: it lays down the quantity of goods to be produced during the budget period. It lays down the production programme and schedule for enterprise. o Man-hours o Machine-hours SUDHARSAN ENGINEERING
Labour budget: it lays down the estimates of direct and indirect labour requirements for a given period of time. It is based on production and sales budget. Material budget: it lays down the quantity and quality of raw materials required for achieving the desired output during the budget period. Cash budget: it contains detailed estimates of cash receipts and cash payments for the budget for the budget period. Capital expenditure budget: it consists of the estimates of capital investment in plant, machinery, furniture and other fixed assets. Overhead budget: it contains estimates of overhead costs. o Factory overheads o Administration overheads o Distribution overheads Sales budget: it is a forecast of the total volume of sales and also its breakup product wise and area wise. Fixed and flexible budget: i. A fixed budget is based on a specified level of operations and it does not show changes in expenditures according to changes in the scale of operations. ii. Flexible budget shows changes in costs according to varying levels of operations. Zero-Base Budget: o ZBB is based on a system where each function, irrespective of the fact whether it old or new, must be justified in its entirety each time a new budget is formulated. o It requires each manager to justify his entire budget in detail from scratch that is zero bases. o Each manager states why he should spend any money at all. The process of ZBB involves the four basic steps: Identification of decision units, that is, clusters of activities or assignments within a managers operations for which he is accountable. Analysis of each decision unit in the context of total decision package. Evaluation and ranking of all decision units to develop the budget request and Allocation of resources to each unit based upon ranking

B) Control through costing Standard costing a method of ascertain cost. Standard cost- pre-determined cost (material cost, labor cost, and over heads cost) Variance = standard > actual - favourable Variance = standard < actual unfavourable Standard costs are predetermined costs which are used as standards for measuring actual performance. It distinguishes between controllable and uncontrollable costs. Standard costing and marginal costing are useful means of cost reduction and cost control. Cost, Volume and Profit analysis (CVP) It discloses the relationship between cost, volume and profit. Break Even Point: the point where is intersect the total sales curve and the total cost curve i.e No Profit and No Loss.
C) Responsibility Accounting A management accounting system consists of two principal parts: one is called product cost accounting; the other is called responsibility accounting. It focuses attention on MBO rather than MBD(domination) It cost are assigned to responsibility center rather than to products. A responsibility center is an organisation unit, such as division, department or section, head by responsible person. Head is made responsible for the controllable cost. It is a system of controlling, whereby the performance of managers is judged by assessing how for they have achieved the targets set for their departments or sections for whose performance they are responsible. There are three types of responsibility centers: In the Cost centers, the control system measures only the costs incurred by responsibility centers; no attempt is made to measure the value of their outputs. Thus, most individual departments and staff departments are cost centers. In profit centers, the targets are fixed in terms of profit, which is measured, by the amount of input and output. In the investment centers, managers are held responsible for the effective use of assets as well as for revenue and costs.

D) Internal Audit It is an effective tool of managerial control Internal audit is carried out by managers themselves or by special staff appointed for this purpose. It is appraises policies, procedure, quality of management, effectiveness of method etc. Internal audit is vouching and verification of accounting by a staff of internal auditors and is also concerned with examining the overall operational efficiency of the enterprise. Scope: appraisal of financial controls, compliance with polices and procedures, efficiency in utilizing resources and appraising quality of management performance etc. Advantages of the Budgetary Control System: 1. Expression of planning in definite terms Since budgets are a numerical expression of business plan the budgetary control system-built around the concept of budgeting expresses plans in definite terms. 2. Comprehensive managerial technique Planning and controlling are two extremes of budgetary control and other managerial function viz. organizing, staffing, direction naturally fit into the budgetary control structure at their appropriate places 3. Communication of jobs (or duties) though budgets The budgetary control system is the mouthpiece of management as budgets convey to people what jobs are assigned to them or what role they are supposed to play, in the organizational life. 4. Instrument of co-ordinations Through budgets, the functioning of functional departments, management level and actions of individuals throughout the enterprises are all endeavoured to be co-coordinated. 5. Profit-maximization attempted through cost-control The budgetary control system helps management to strive for the profit-maximization goals in a legitimate manner 6. Fixation of responsibility facilitated Responsibility for weaknesses or shortfalls in performance can be easily fixed through the budgetary control system.

Limitation of budgetary control system 1. Difficulty in setting rational standards Despite the adoption of the best scientific approaches to setting rational standards: prejudices, bias and personal opinions of manger enter the budgetary control system, through the back door. 2. Danger of over-budgeting Regulating the organizational operational life through the budgetary control system might carry a danger of over-budgeting. 3. Lack of department co-operation and co-ordination There might be a lack of departmental co-operation and co-ordinations, while designing and implementing the budgetary control system 4. Umbrella for inefficiency It may become an umbrella for hiding organizational inefficiency as many people might act within budgets though remaining highly inefficient otherwise.
II. NON-BUDGETARY CONTROL 1. Quality control Quality is sense of appreciation that something is better than something else. The concept of quality is fitness for use and the methodology adopted is defect prevention rather than inspection and rejection. Quality of an item refers to the ability of a product to satisfy its intended purpose in relationship to the price. The function of quality control is an integral part of management control. Quality control, if it is effectively done, results in many benefits. They are: i.it minimizes waste, ii. Reduces costs, iii. Builds up goodwill of the product in the market, iv. Facilitates advertising and v. increases sales 2. Total quality management (TQM) There is very high emphasis on quality both for products and service. Create customers and retain customers 3. Quality control through Quality Circle. QC Japanese- JIT, KANPAN, KAIZEN, SIX SIGMA etc,

QC is a group of employees that meet regularly to solve problem affecting its working area. This group carries on continuously as a part of organisation-wide control activities, self-development and mutual development and control and improvement within the workplace utilizing control with all members participating. Generally six to twelve volunteers from same work area make up the circle. 4. Inventory control Inventory consists of raw material, work-in-progress and finished goods. Inventory is kept at a particular level. i. ABC Analysis o Technique for classifying different items o This technique use the values of different types of inventory for their classification o A A group consists of those items which have high value though their number may be low o B B group items fall in between with average value and number. o C- C group items have very low value but their number may be more.
Inventory classification Group (%) A B C 15 30 55 70 20 10 no: of items (%) value of inventory
100
100

ii. Economic Order Quantity (EOQ) o EOQ is a mathematical formula employed in the determination of base stock o It guides efficient inventory management o It explains how to maintain the stock economically. 4. Time Even Network Analysis This is undertaken to ensure that the programme or project is completed within the stipulated time i. Gantt Chart Henry Gantt identified the relationship among different activities required to complete a programme. A- task B-task
C- task
ii. PERT/CPM PERT (Programme Evaluation Review Technique) uncertainty in the duration of activities is allowed and is measured by three parameters. o Most optimistic duration o More likely duration o Most pessimistic duration. CPM (Critical Path Method) assumes the duration of every activity to be constant therefore, every activity is either critical or not Uses: i. Minimize total time for a given cost, ii. Minimize total cost for a given total time.
II. OVERALL CONTROL TECHNIQUES (PREVENTIVE CONTROL) o Financial Ratio Analysis Control through Return On Investment G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Management Audit Social Audit o Human Resource Accounting o Management Information System 1. Financial Ratio Analysis The relationship between two financial variables in order to derive meaningful conclusion about their behaviour. Financial statement analysis helps in diagnosing the health of a business concern. Analysis of profitability, liquidity and solvency ratios an important of control of overall performance. Ratio analysis helps in making inter-firm and intra-firm comparison.
i. Return on Investment (ROI) ROI or rate of return is the ratio total profit and total investment. It can be used to appraise the overall profit performance of company and of its various segments. It may be used for both planning and control purposes. The rate of return criterion is most useful in long-term investment decisions. ROI can also be used to compare the relative contributions of different products to overall profitability of the firm. ROI
TURNOVER-----------------Multiplied by---------------------------- EARNINGS AS % OF SALES
SALES --divided by-----
TOTAL
INVESTMENT
EARNINGS ---divided by----
SALES
WORKING + CAPITAL
PERMANENT INVESTMENT SALES ----mins------- COST OF SALES
INVENTORY + ACCOUNT RECEIVABLES
CASH
FACTORY COST 2. Management Audit
OFFICE COST
SELLING COST
Management audit is an evaluating of management as a whole It examines the total management process of planning, organizing, staffing, directing and controlling. A periodically done critical analysis of various components of organizations as a whole; its end-results; deviation and degree of impact of various factors resulting in deviations in the principles and practices of managerial functions at different levels in the organisation may be called MA. It is a periodic evaluation of the past and present managerial practices to identify the adjustments necessary to make the organisation more effective. Areas: o An appraisal of managers o Economic functioning of the enterprise o Fulfillment of major social responsibilities o Functioning of the Board of Directors o Soundness of organizational structure. SUDHARSAN ENGINEERING

o Emphasis of research and development etc. 3. Social Audit Social audit is concerned with the measurement of social performance of an organisation in contrast to its economic performance. The application of the concept of social may be attributed to an increasing awareness of social responsibility by business enterprise. It is designed to measure the value of productivity capability of organizations human resources and value of the various parties external to the organisation but interacting with the organisation. 4. Human Resources Accounting ( HRA) 1. To measure the performance in the use of human resources, Likert has developed the technique of HRA. HRA is accounting for people as an organizational resource. It involves measuring the cost incurred by business firms and other organisation to recruit, select, and hire, train and development human assets. It also involves measuring the economic value of the people to the organisation. Its basic purpose is to facilitate the effective management of human resource by providing information to acquire, develop, retain, utilize, and evaluate human resource. 5.Management Information System Though MIS is not a control technique it is quite helpful in planning, controlling and other organizational processes. The flow of information is made regular by information by system. MIS the system of providing needed information to each manager at the right time, in right form, and relevant one which aids his understanding and stimulates his action. MIS is an assemblage of personnel and facilities organized into an integrated system by which-relevant, adequate and timely information is supplied to executives. MIS consists of following steps: Assembly collection of data Processing editing of data, their classification, and summation Storage and retrieval indexing, coding, filing of information and getting back information. Evaluation- determination of accuracy and relevance of data Dissemination supplying the relevant information in the proper form and at the right time. SUDHARSAN ENGINEERING

1. MIS a blue print 2. Information with increasing use of electronic devices computer.
Principle of preventive control system: 1. The principle of preventive control, thus, is that the higher the quality and caliber of managers; the lesser will be the need for direct controls.
Assumptions underlying preventive control system Assumption that qualified manager makes a minimum of errors. Assumption that management fundamental can be used to measured performance Assumption that the application of management fundamentals can be evaluated.
Advantages of Preventive Control A basic for managerial training/development Encouragement to self-concept Managerial burden lightened Better superior-subordinate relationships. Developing excellent managers- the key to preventive control 1. Willingness to learn 2. Planning for innovations and inventions 3. Tailoring information 4. Acceleration of management development programme 5. Measuring managerial performance and rewarding it 6. Need for management research and development 7. Need for intellectual leadership
GLOBAL MANAGEMENT THEORY
Proverb = Merchant has no Nation
International Management is the process of planning, organizing, leading and controlling in organizations engaged in international business. A Multinational Corporation (MNC) is an organisation that is engaged in production or services through its own association in several countries, manages and control the overall activities from a global perspective Multinational companies are large in size and are engaged in substantial amount of business throughout the world The shift towards a more integrated and interdependent world economy. Globalization has two main components the globalization of markets and the globalization of production. charles Interdependency and integration of individual countries of the world may be called the globalization.
Features of globalization: Operating and planning to expand business throughout the world. There must be a global approach to market, a free market or a competitive market. Products, process and methods must fit in with the global quality standards. Management must have a global perspective. There must be a global acceptability of products and policies Erasing the difference between domestic market and foreign market Sourcing of factors of production and inputs like raw material, machinery, finance, technology, human resource, managerial skills from the entire global. Global orientation in strategies, organizational structure, organizational culture, managerial expertise. Example:
Mazdas sports car MX 5 Maita, G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

Designed California Prototype England Assembled-Michigan and Mexico Using electronic components New jersey Fabricated Japan Sources of Finance Tokyo and New York Marketed - world wide
Components of Globalisation Globalization is tending toward a more integrated global economic system. Components of Globalisation
Globalisation of Globalization Markets
Globalization
Globalization
Production
Investment
Technology
Globalisation of markets: Global acceptance: Coca-Cola, Pepsi, McDonalds burgers, Indian Masla Dosa Globalization Production Labour cost: china low, India low, USA high, German high. Globalization investment Foreign Direct Investment, Coca-Cola acquired a number of bottling companies throughout India by investing the capital directly. Globalization of Technology B2B, B2C, Joint Venture
Advantages: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

o o o o o o o o Free flow of capital Free flow of technology Increasing in industrialization Balanced development of world economy Increase in production and consumption Increase employment and income Higher standard of living Culture exchange
Disadvantages: Kill domestic business Leads to unemployment and under employment Decline in demand for domestic products (home country) Widening gap between Rich and Poor Transfer of Natural Resources Leads to commercial and political colonialism

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BA6111- PRINCIPLES OF MANAGEMENT

BA6111- PRINCIPLES OF MANAGEMENT

INPUT 5m goals Men Money Machine Materials& Materials

PROCESS Planning Organizing Staffing Directing Controlling

OUTPUT Achievement of Profit/loss Performance of the firm

i. ii. G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

1. ROMAN CATHOLIC CHURCH:

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

II. SCIENTIFIC MANAGEMENT (1880-1920)

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

III. HUMAN RELATIONS PERIOD (1920-1950)

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

Managem ent Supervisor

Production manager Plant superintendent

BA6111- PRINCIPLES OF MANAGEMENT

Finance Manager manager

marketing HR manager manag

branch manager training officer

clerks Workers salesmen

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

Skills and Management Level Top ----------------------------------------

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

III. Decisional roles: G.Alex Rajesh, A.P, COLLEGE SUDHARSAN ENGINEERING

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

Financial activities (relating to search for and optimum use

of capital i.e., finances)

Security activities (relating to protection of the properties

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

BA6111- PRINCIPLES OF MANAGEMENT

BA6111- PRINCIPLES OF MANAGEMENT

BA6111- PRINCIPLES OF MANAGEMENT

WORKERS TYPES OF ORGANISATION:

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

advertising Training section section

Types of Line Organisation:

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

Foreman Shearing Dept. Dept

Foreman Press Dept.

Foreman Welding Dept

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

G.Alex Rajesh, A.P, COLLEGE

BA6111- PRINCIPLES OF MANAGEMENT

II. LINE AND STAFF ORGANISATION: