Notes by Dr.

Dini Menon Unit VII: Authority and Responsibility Introduction

L. A. Allen defines an organisation as the process of identifying and grouping the work to be performed defining and delegating responsibility and authority and establishing relationships for the purpose of enabling the people to work most effectively together in accomplishing objective. The relationships that exist in an organization may be formal and informal. The manager describes organizational relationships in a written and graphic manner. Manager tells the employees to do certain things in a specified manner, to obey orders from designated individuals, and to work co-operatively with others. Formal organization is built on the relationships of authority responsibility, accountability, span of management, delegation, centralization and decentralization. Authority Authority is the right or power assigned to an executive or a manager in order to achieve certain organizational objectives. A manager will not be able to function efficiently without proper authority. Authority is the genesis of organizational framework. It is an essential accompaniment of the job of management. Without authority, a manager ceases to be a manager, because he cannot get his policies carried out through others. Authority is one of the founding stones of formal and informal organisations. An Organisation cannot survive without authority. It indicates the right and power of making decisions, giving orders and instructions to subordinates. Authority is delegated from above but must be accepted from below i.e. by the subordinates. In other words, authority flows downwards. According to Henri Fayol, "Authority is the right to give orders and the power to exact obedience." According to Mooney and Reily, "Authority is the principle at the root of Organisation and so important, that it is impossible to conceive of an organisation at all unless some person or persons are in a position to require action of others."

Responsibility
Responsibility indicates the duty assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility. The term responsibility is often referred to as an obligation to perform a particular task assigned to a subordinate. In an organisation, responsibility is the duty as per the guidelines issued.

According to Davis, "Responsibility is an obligation of individual to perform assigned duties to the best of his ability under the direction of his executive leader." In the words of Theo Haimann, "Responsibility is the obligation of a subordinate to perform the duty as required by his superior". McFarland defines responsibility as "the duties and activities assigned to a position or an executive".

Accountability
Every employee/manager is accountable for the job assigned to him. He is supposed to complete the job as per the expectations and inform his superior accordingly. Accountability is the liability created for the use of authority. It is the answerability for performance of the assigned duties. According, to McFarland, "accountability is the obligation of an individual to report formally to his superior about the work he has done to discharge the responsibility." When authority is delegated to a subordinate, the person is accountable to the superior for performance in relation to assigned duties. If the subordinate does a poor job, the superior cannot evade the responsibility by stating that poor performance is the fault of the subordinate. A superior is normally responsible for all actions of groups under his supervision even if there are several layers down in the hierarchy. Simply stated, accountability means that the subordinate should explain the factors responsible for non-performance or lack of performance. They need proper consideration while introducing delegation of authority within an Organisation. In the process of delegation, the superior transfers his duties/responsibilities to his subordinate and also give necessary authority for performing the responsibilities assigned. At the same time, the superior is accountable for the performance of his subordinate.

Delegation of Authority
A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should delegate authority. Delegation of Authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.

Meaning and Definition

Delegation is a process of sharing work and authority between a manager and his subordinates. It helps in completing the work in time, reduces the workload of managers, and motivates and develops subordinates. According to Louis A Allen, Delegation is the dynamics of management. It is the process a manager follows in dividing the work assigned to him so that he performs that part which only be can perform effectively, and so that he can get others to help him with what remains.

According to Theo Haimann, Delegation means the granting of authority subordinates to operate within the prescribed limits.

Features of Delegations of Authority

1. Delegation is authorization to a manager to act in a certain manner. The degree of delegation

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prescribes the limits within which a manager has to decide the things. Since formal authority originates at the top level, it is distributed throughout the organization through delegation and redelegation. Delegation has dual characteristics. As a result of delegation, the subordinate receives authority from his superior, but at the same time, his superior still retains all his original authority. Terry comments on this phenomenon like this. It is something like imparing knowledge. You share with others who then possess the knowledge, but you still retain the knowledge too. Authority once delegated can be enhanced, reduced, or withdrawn depending on the situation and requirement. For example, change in organization structure, policy, procedure, methods, etc. may require change in the degree of delegation of authority. A manager delegates authority out of the authority vesting in him. He cannot delegate which he himself does not possess. Moreover, he does not delegate his full authority because if he delegates all his authority, he cannot work. Delegation of authority may be specific or general. Delegation of authority is specific when courses of action for particular objectives are specified. It is general when these are not specified, though objectives may be specified.

Process of Delegation of Authority

Delegation process involves four distinct stages. The process of delegation moves through these stages. The following figure shows the stages in the process of delegation of authority.

Principles of Effective Delegation of Authority

1. Knowledge of Objectives: Before delegating authority, the subordinates should be made

to understand their duties and responsibilities. In addition, knowledge of objectives and policies of the enterprise should be provided to them. This will enable them to discharge their roles purposefully in the process of delegation.
2. Parity of Authority and Responsibility: This principle of delegation suggests that when

authority is delegated, it should be commensurate with the responsibility of the subordinate. In fact, the authority and responsibility should be made clear to the subordinate so that he will know what he is expected to do within the powers assigned to them. There should be proper balance/parity or co-existence between the authority and responsibility. A subordinate will not function efficiently, if authority given to him is inadequate. On the other hand, if the excess authority is given, he may misuse the same. For avoiding this, the subordinates who are assigned duties should be given necessary/ adequate authority enables them to carry out their duties.
3. Unity of Command: This principle of delegation suggests that everyone should have only

one boss. A subordinate should get orders and instructions from one superior and should be made accountable to one superior only. This means 'no subordinate should be held accountable to more than one superior'. When a subordinate is asked to report to more than one boss, it leads to confusion and conflict. Unity of command also removes overlapping and duplication of work. In the absence of unity of command, there will be confusion and difficulty in fixing accountability.
4. The Scalar Principle: The scalar principle of delegation maintains that there should be

clear and direct lines of authority in the Organisation, running from the top to the bottom. The subordinate should know who delegates authority to him and to whom he should contact for matters beyond his authority. They (subordinates) should also know what is expected from them. This principle justifies establishment of the hierarchical structure within the Organisation.
5. Clarity of Delegation: The principle of clarity of delegation suggests that while delegating

authority to subordinates, they should be made to understand the limits of authority so that they know the area of their operation and the extent of freedom of action available to them. Such clarity guides subordinates while performing their jobs.
6. Absoluteness of Responsibility: This principle of delegation suggests that it is only the

authority which is delegated and not the responsibility. The responsibility is absolute and remains with the superior. He cannot run away from the same even after delegation. Even when the manager delegates authority to his subordinate, he remains fully accountable to his superiors because responsibility cannot be divided between a superior and his

subordinate. No superior can delegate responsibilities for the acts of his subordinates. He is responsible for the acts and omissions of his subordinates.
7. Use of Exception Principle: This principle of delegation indicates that when authority is

delegated, it is expected that the subordinate will exercise his own judgment and take decisions within the purview of his authority. He is to be given adequate freedom to operate within his authority even at the cost of mistakes. He should refer the problems to the top level management only when he is unable to take decisions. Unnecessary interference in the work of delegates should be avoided. This normal rule can be given up under exceptional circumstances. Here, the superior can interfere in the work of his subordinate and even withdraw the delegated duties and authority. The superior takes this decision under exceptional circumstances.
8. Completeness of Delegation: This principle of delegation suggests that there should be

completeness in the process of delegation. The process of delegation should be taken to its logical end. Otherwise, there will be confusion of authority and accountability.
9. Effective Communication Support System: This principle suggests that there should be

continuous flow of information between the superior and the subordinates with a view to furnishing relevant information to subordinate for decision-making. This helps him to take proper decisions and also to interpret properly the authority delegated to him. Delegation system may not work smoothly in the absence of effective communication between the superior and subordinates.
10. Reward for Effective Delegation: This principle suggests that effective delegation and

successful assumption of authority should be rewarded. This will facilitate fuller delegation and effective assumption of authority within the Organisation. Reward for effective delegation will provide favorable environmental climate for its fair introduction.

Importance of Delegation of Authority

1. Relieves manager for more challenging jobs: Delegation makes it possible for the

managers to distribute their workload to others. Thus, managers are relieved of routine work and they can concentrate on higher functions of management like planning, organising, controlling, etc. 2. Leads to motivation of subordinates: Subordinates are encouraged to give their best at work when they have authority with responsibility. They take more initiative and interest in the work and are also careful and cautious in their work. Delegation leads to motivation of employees and manpower development. 3. Facilitates efficiency and quick actions: Delegation saves time enabling subordinates to deal with the problems promptly. They can take the decisions quickly within their authority. It is not necessary to go to the superiors for routine matters. This raises the overall efficiency in an Organisation and offers better results in terms of production, turnover and profit.

4. Improves employee morale: Delegation raises the morale of subordinates as they are

given duties and supporting authority. They feel that they are responsible employees. The attitude and outlook of subordinates towards work assigned becomes more constructive. 5. Develops team spirit: Due to delegation, effective communication develops between the superiors and subordinates. The subordinates are answerable to superiors and the superiors are responsible for the performance of subordinates. This brings better relations and team spirit among the superiors and subordinates 6. Maintains cordial relationships: The superiors trust subordinates and give them necessary authority. The subordinates accept their accountability and this develops cordial superior-subordinate relationships. 7. Facilitates management development: Delegation acts as a training ground for management development. It gives opportunity to subordinates to learn, to grow and to develop new qualities and skills. It builds up a reservoir of executives, which can be used as and when required. Delegation creates managers and not mere messengers.

Barriers to Effective Delegation of Authority

1. Unwillingness of the manager to delegate authority: Some superiors/managers tend to

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think that they can do the job better when they themselves handle the job. The attitude that 'I can do it better myself' on the part of superior acts as an obstacle to delegation. Some managers (superiors) who are autocratic and power worshippers feel that delegation will lead to reduction of their influence in the Organisation. A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him (manager) and may be promoted. Fear of competition: A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him. Fear of subordinate's excellence may come in the way of delegation. Lack of confidence in subordinates: A manager may hesitate to delegate authority, if he feels that his subordinate is not competent to deal with the problem and take decisions. Even fear of losing control over the subordinates acts as an obstacle to delegation. In addition, fear of being exposed due to personal shortcomings may act as an obstacle in the process of delegation. Lack of ability to direct: Sometimes, a manager may experience difficulty in directing the efforts of his subordinates because of his inability to identify and communicate the essential features of his long-range plans and programmes. Too much dependence on the manager for decisions: Some subordinates avoid responsibility even when the superior/manager is prepared to delegate authority. They want the manager to tackle problems and take decisions. A subordinate who is not confident about his performance/ability will certainly try to shirk responsibility even though his superior is prepared to delegate functions and authority. Fear of criticism: Subordinates express unwillingness to accept delegated authority because of the fear of criticism in the case of mistakes. They fear that they may be criticized by others if they commit mistakes. Such subordinates have the following feeling in their mind, "Why should I stick my neck out for my boss?" Lack of information: A subordinate may hesitate to accept a new assignment, when he knows that necessary information to perform the job is not likely to be made available to

him. He is reluctant to accept delegated functions and authority as he feels that he will not be able to perform well due to inadequate information available. 8. Absence of positive incentives: Positive incentives like recognition of work and rewards go a long way in building up the morale of subordinates. In the absence of such incentives in the form of recognition, appreciation or monetary benefit, a subordinate may not be prepared to accept delegation of authority. 9. Absence of self-confidence: A subordinate may lack self-confidence about his ability to take quick and correct decisions. He may not like to accept new challenging functions as he lacks self-confidence. Thus, lack of self-confidence on the part of subordinates is one obstacle which comes in the way of delegation of authority.

Span of control
The span of management refers to the number of subordinates who report directly to the superior. It is also known as the number of subordinates who are efficiently managed by a single superior manager. If the subordinates who report to a superior are more in number, it is called the wide span and the vice versa is called the narrow span. A wide span means that there is direct communications and interactions between the manager and their many reports (i.e. people who report to them.)

The benefits of this are that everyone deals with the same manager, and as a result everyone is more likely to be aligned with the managers vision of what should be done. The disadvantages are the cost to the manager in terms of time to deal with each staff member. A narrow span means that there are more layers of management between the frontline and the top level management, and as a result there is the opportunity for the vision and communications from the top to be muddied by misinterpretation. The benefits of this model are that the managers all have more time to spend on each person and the work at hand.

Factors affecting Span of Control

1. Job complexity: Subordinate jobs that are complex, ambiguous, dynamic or otherwise

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complicated will likely require more management involvement and a narrower span of management. Similarity of subordinate jobs: The more similar and routine the tasks that subordinates are performing, the easier it is for a manager to supervise employees and the wider the span of management that will likely be effective. Physical proximity of subordinates: The more geographically dispersed a group of subordinates the more difficult it is for a manager to be in regular contact with them and the fewer employees a manager could reasonably oversee, resulting in a narrower span of management. Abilities of employees: Managers who supervise employees that lack ability, motivation, or confidence will have to spend more time with each employee. The result will be that the manager cannot supervise as many employees and would be most effective with a narrower span of management. Abilities of the manager: Some managers are better organized, better at explaining things to subordinates, and more efficient in performing their jobs. Such managers can function effectively with a wider span of management than a less skilled manager. Technology: Cell phones, email, and other forms of technology that facilitate communication and the exchange of information make it possible for managers to increase their spans of management over managers who do not have access to or who are unable to use the technology.

Unit VIII: Coordination & Direction Concept Introduction: Coordination

Business operations are performed by a number of departments and individual employees based on plans, objectives and goals. The total business operations include procuring of raw material, producing the products, mobilizing and managing financial resources, acquiring the required human resources, providing them to various departments, marketing the product etc. each department performs only one kind of operation based on its specialization. Similarly, each employee also performs one kind of operations based on his/ her specialization. These activities need to be coordinated as each individual employee and department performs the business activities from their own perspective rather than from the perspective of organizational objectives. Meaning and Definition Coordination as a function of management refers to the task of integrating the activities of separate units of an organization to accomplish the goals efficiently. It permeates all levels and all departments of management. Hence, it is regarded as the essence of management. According to Henri Fayol, Coordination harmonizes, synchronizes and unifies individual efforts for better action and for the achievement of the business objectives. According to Mooney and Railey, Coordination is the achievement of orderly group efforts and unity of action in the pursuit of a common purpose. According to Mcfarland, Coordination is as the process whereby an executive develops an orderly pattern of group efforts among his subordinates and secures unity of action in the pursuit of a common purpose. According to George Terry, the orderly synchronization of efforts to provide the proper amount, timing, and directing of execution resulting in harmonious and unified actions to stated objective. Co-ordination and co-operation the two should not be confused because the two terms denote quite different meanings. Co-operation refers to the collective efforts of people who associate voluntarily to achieve specified objectives. It indicates merely the willingness of individuals to help each other. It is the result of a voluntary attitude of a group of people. Co-ordination is much more inclusive, requiring more than the desire and willingness to co-operate of the participants. It involves a deliberate and conscious effort to bring together the activities of the various individuals in order to provide unity of action. It requires concurrence of purpose, harmony of effort and concerted action. It is much more than mere reconciliation of differences or avoidance of friction. Co-operation provides the foundation for co-ordination by enlisting voluntary efforts which facilitate co-ordination, but by itself it cannot guarantee co-ordination. Co-ordination does not arise automatically from the voluntary efforts of the manager. For instance, a group of six persons who attempt to move a heavy object are willing and eager to co-operate with one another. They are fully aware of their common purpose and are trying their best to move the object, but they cannot be successful in their attempt unless one of them co-ordinates their efforts. He must give proper directions to all members of the group to apply the right amount of effort, at the right place and at the right time. Co-operation is a necessary, but not a sufficient condition of co-ordination.

Difference between co-ordination and co-operation:

Difference between co-ordination and co-operation are given below.

Status co-ordination is the essence of management and it is vital for the success of all managerial functions. Co-operation, on the other hand, does not enjoy the status of the essence of management. Co-operation is no doubt essential for successful co-ordination, but it is more of a personal attitude rather than organisational. Nature of work in the organisation, the nature of work is such that it needs to be divided and then integrated. Co-ordination of all interdependent activities is utmost necessary, but co-operation does not arise out of any limitations of organisation structure. The individuals may learn to co-operate with each other even though their activities may not be related. Deliberate co-ordination requires deliberate and intentional efforts of a manager. On the other hand, co-operation is voluntary. In other words, co-ordination is a contrived process, whereas co-operation is a natural process. Scope co-ordination is broader in scope than co-operation. It includes both co-operation and deliberate efforts to maintain unity of action and purpose.

According to McFarland, co-ordination is a far more inclusive term embracing the idea of co-operation. Co-operation, that is mere willingness of individuals to help each other, cannot serve as a satisfactory substitute for co-ordination. Co-operation is for most part the result of voluntary attitudes on the part of people in an organisation. Co-ordination, on the other hand, cannot be voluntarily produced by a number of co-operating persons. Co-ordination is a state of affairs which an executive brings about through deliberate action on his part. Thus, co-ordination is much more than co-operation. Co-ordination is the epitome of all managerial functions while cooperation is an attitude of an individual or group. Need for co-ordination arises due to limitations of formal organisation structure, but co-operation is necessary even in case of non-interdependent activities. Thus, co-ordination is a broader concept than co-operation, but to be effective an organisation requires both. Co-operation will be ineffective in the absence of co-ordination just as co-ordination is not possible without co-operation.

Importance and need for coordination

The extent of coordination needed in an organization depends on the nature of tasks and degree of interdependence of people in various units performing them. When these tasks require high degree of communication between the units then high degree of coordination is required. The need for coordination arises because of the following factors: 1. Encourages team spirit: There exist many conflicts and rivalries between individuals, departments, between a line and staff, etc. Similarly, conflicts are also between individual objectives and organisational objectives. Coordination arranges the work and the objectives in such a way that there are minimum conflicts and rivalries. It encourages the employees to work as a team and achieve the common objectives of the organisation. This increases the team spirit of the employees.

2. Gives proper direction: There are many departments in the organisation. Each department performs different activities. Coordination integrates (bring together) these activities for achieving the common goals or objectives of the organisation. Thus, coordination gives proper direction to all the departments of the organisation. 3. Facilitates motivation: Coordination gives complete freedom to the employees. It encourages the employees to show initiative. It also gives them many financial and non-financial incentives. Therefore, the employees get job satisfaction, and they are motivated to perform better. 4. Makes optimum utilisation of resources: Coordination helps to bring together the human and materials resources of the organisation. It helps to make optimum utilisation of resources. These resources are used to achieve the objectives of the organisation. Coordination also minimise the wastage of resources in the organisation. 5. Helps to achieve objectives quickly: Coordination helps to minimise the conflicts, rivalries, wastages, delays and other organisational problems. It ensures smooth working of the organisation. Therefore, with the help of coordination an organisation can achieve its objectives easily and quickly. 6. Improves relations in the organization: The Top Level Managers co-ordinates the activities of the Middle Level Managers and develops good relations with them. Similarly, the Middle Level Managers co-ordinates the activities of the Lower Level Managers and develops good relations with them. Also, the Lower Level Managers co-ordinates the activities of the workers and develops good relations with them. Thus, coordination overall improves the relations in the organisation. 7. Leads to higher efficiency: Efficiency is the relationship between Returns and Cost. There will be higher efficiency when the returns are more and the cost is less. Since coordination leads to optimum utilisation of resources it results in more returns and low cost. Thus, coordination leads to higher efficiency. 8. Improves goodwill of the organization: Coordination helps an organisation to sell high quality goods and services at lower prices. This improves the goodwill of the organisation and helps it earn a good name and image in the market and corporate world. Principles of coordination
1. Principle of early introduction: Coordination must be visualized right from the early

stages of planning and policymaking. At the time of preparation of the plan, mutual cooperation, consultation, give and take become the necessity. In case the plan is prepared without coordination then it becomes difficult to supply the required materials or results in the misallocation of the duties.
2. Principle of continuity: According to this principle, coordination should be followed in

the organization on continuous basis and it should be taken as a regular activity. Managers should treat coordination as the never ending exercise.

3. Principle of direct contact: According to the principle of direct contact, coordination can

only be established through the direct contact of the parties whose activities are to be coordinated. As through direct contact the parties can discuss the methods, plans, actions, activities and work for the achievement of overall organizational goals.
4. Principle of mutual relation: This principle states that every employee should understand

the problems faced by the other employees and try to solve them. For the purpose of coordination, there should be perfect adjustment and sense of fellow feeling among the employees.

Methods of achieving effective coordination

The main-techniques of effective coordination are as follows: 1. Sound planning: Unity of purpose is the first essential condition of coordination. Therefore, the goals of the organization and goals of its units must be clearly defined. Every member of the organization must understand fully how his job contributes to the overall objectives. Planning is the ideal stage for coordination. Clear-cut objectives, harmonized policies and integrated procedures ensure uniformity of action. Various plans should be integrated properly. Precise policies and comprehensive programmers facilitate coordination of activities and individuals. Standard procedures and rules create uniformity in repetitive operations. 2. Simplified organization: A simple and sound organization is an important means of coordination. The line of authority and responsibility from top to the bottom of the organisation structure should be clearly defined. Clear-cut definition of authority and responsibility of each department and individual helps to avoid conflicts. Clear-cut authority relationships help to reduce conflicts and to hold people responsible. Related activities should be grouped together and jobs should properly inter-relate. Well-drawn organization charts, organizational manuals and proper allocation of work make for uniform action. In some cases, rearrangement of departments may be necessary to chief coordination of thought and action. 3. Effective communication: Open and regular communication is the key to coordination. Effective inter-change of opinions and information helps in resolving differences and in creating mutual understanding. Personal or face-to-face contacts are the most effective means of communication and coordination. Committees help to promote unity of purpose and uniformity of action. They provide an opportunity for free and frank exchange of views.

Coordination becomes easier when different functional groups are represented in the decisionmaking process. Committees are helpful in integrating the activities of different departments. Committee decisions are collective decisions and such group decisions themselves provide coordination among different departments or functions in the enterprise. Personal or face-to-face communication may be supplemented by written communication. Informal communication can also be utilized for the purpose of coordination. 4. Effective leadership and supervision: Effective leadership ensures coordination of efforts both at the planning and the execution stage. A good leader can continuously guide the activities of his subordinates in the right direction and can inspire them to pull together for the accomplishment of common objectives. Sound leadership can persuade subordinates to have identity of interests arid to adopt a common outlook. Effective leadership reduces the dependence on such formal means of coordination as authority, rules and procedures. In fact, no technique of coordination can replace effective leadership. Personal supervision is an important method of resolving differences of opinion. It helps to ensure that work proceeds as planned. Coordination is a human task and a manager can accomplish it through interpersonal relations. Informal contacts with subordinates help to create climate of mutual trust and cooperation which is the foundation of coordination, Luther Gallic has called coordinating by ideas to describe the use of leadership in coordination. 5. Chain of Command: Authority is the supreme coordinating power in an organization. Exercise of authority through the chain of command or hierarchy is the traditional means of coordination. Chain of command brings together the different parts of an organization and relates them to a central authority. Coordination between interdependent units can be secured by putting them under one boss. Because of his organizational position, a superior has the authority to issue orders and instructions to subordinates. He can resolve inter-positional and intergroup conflicts. However, behavioral scientists have warned against over-dependence on chain of command. According to Chris Argyrols, the hierarchy technique of coordination makes individuals dependent upon and passive towards the leader. It is inconsistent with the needs of mature personality. The hierarchical structure may impair communication and decision-making. 6. Indoctrination and incentives: Indoctrinating organizational members with the goals and mission of the organization can transform a neutral body into a committed body. Similarly, incentives may be used to rebate mutuality of interest and to reduce conflicts.

For instance, profit- sharing is helpful in promoting team-spirit and cooperation between employers and workers. Such mutuality of interest reduces strife and insures better coordination. 7. Liaison departments: Where frequent contact between different organizational units is necessary, liaison officers may be employed. For instance, a liaison department may ensure that the production department is meeting the delivery dates and specifications promised by the sales department. Special coordinators may be appointed in certain areas. For instance, a project coordinator is appointed to coordinate the activities of various functionaries in a project which is to be completed it in a specified period of time. Liaison officers act as 'linking pins' in organization and compensate for lack of face-to-face contacts.' 8. General staff: In large organizations, a centralized pool of staff experts is used for coordination. A common staff group serves as the clearing house of information and specialized advice to all the departments of the enterprise. Such general staff is very helpful in achieving inter-departmental or horizontal coordination. 9. Voluntary coordination: When every organizational unit appreciates the working of related units and modifies its own functioning to suit them, there is self-coordination. Self-coordination or voluntary coordination is possible in a climate of dedication and mutual cooperation. It results from mutual consultation and team-spirit among the members of the organization. It arises when every member of the group takes cognizance of the effects of his actions on others. Under self-coordination, members of an organization voluntarily adjust their behavior according to the needs of the situation. Self-coordination is the voluntary efforts of independent units or subunits of an organization to achieve the harmonious performance of their respective responsibilities. But self-coordination requires that individuals have sufficient knowledge of organizational goals, adequate information concerning the specific problem of coordination, and the motivation to do something on their own. Managers cannot rely on self-coordination as these conditions are not always fulfilled. Self-coordination cannot be a substitute for coordination from above. Managers have to make deliberate efforts to bring unity of purpose in the activities of subordinates. In the words of Harman, "neither the principle of self-coordination nor the concept of selfadjustment is a substitute for coordination. It takes the efforts of the leader or the manager to bring about coordination, and the goal of the enterprise cannot be successfully obtained without it."

Introduction: Direction
Mr. N.R.Narayanamurthy, mentor of Infosys, makes his employees believe in themselves, the organization, its value system and the philosophy including its targets. He tells the employees how

to achieve the targets. He shares his ideas, opinions, attitudes etc. with all his subordinates. Sometimes he orders them, sometimes he counsels them and sometimes he consults them. Thus, he informs and instructs the employees how to do their job and achieve the targets. All these efforts of Mr. Narayanamurthy are called direction. This process requires directing the people, motivating them and leading them towards doing the work. The managers have to direct the people, tell them how to do the work and order them to achieve the targets after they plan and organize various activities. All these activities constitute direction

Meaning and Definition

Directing as a function of management is concerned with instructing, guiding and inspiring people in the organization to achieve its objectives. It involves overseeing people at work, making provision for the necessary facilities and creating a work environment, whereby employees may perform to the best of their abilities. It consists of issuing orders and instructions by a superior to his subordinates. It also includes the process of motivation subordinates and providing leadership with an understanding of their hopes, beliefs and behavior pattern. Through the directing function managers bring about a balance between individual interests of employees and the interests of the organization as a whole. Directing is a function of all managers of the organization. It is an ongoing activity of managers. According to William Newman and E. Kirby Warren, Directing deals with the steps a manager takes to get subordinates and others to carry out plans. According to Koontz and ODonnel, Direction is a complex function that includes all those activities which are designed to encourage subordinates to work effectively and efficiently in both the short and long run.

Importance of Direction
Directing or Direction function is said to be the heart of management of process and therefore, is the central point around which accomplishment of goals take place. A few philosophers call Direction as Life spark of an enterprise. It is also called as on actuating function of management because it is through direction that the operation of an enterprise actually starts. Being the central character of enterprise, it provides many benefits to a concern which are as follows:1. It Initiates Actions - Directions is the function which is the starting point of the work

performance of subordinates. It is from this function the action takes place, subordinates understand their jobs and do according to the instructions laid. Whatever are plans laid, can be implemented only once the actual work starts. It is there that direction becomes beneficial.

2. It Ingrates Efforts - Through direction, the superiors are able to guide, inspire and instruct

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the subordinates to work. For this, efforts of every individual towards accomplishment of goals are required. It is through direction the efforts of every department can be related and integrated with others. This can be done through persuasive leadership and effective communication. Integration of efforts brings effectiveness and stability in a concern. Means of Motivation - Direction function helps in achievement of goals. A manager makes use of the element of motivation here to improve the performances of subordinates. This can be done by providing incentives or compensation, whether monetary or non monetary, which serves as a Morale booster to the subordinates Motivation is also helpful for the subordinates to give the best of their abilities which ultimately helps in growth. It Provides Stability - Stability and balance in concern becomes very important for long term sun survival in the market. This can be brought upon by the managers with the help of four tools or elements of direction function - judicious blend of persuasive leadership, effective communication, strict supervision and efficient motivation. Stability is very important since that is an index of growth of an enterprise. Therefore a manager can use of all the four traits in him so that performance standards can be maintained. Coping up with the changes - It is a human behaviour that human beings show resistance to change. Adaptability with changing environment helps in sustaining planned growth and becoming a market leader. It is directing function which is of use to meet with changes in environment, both internal as external. Effective communication helps in coping up with the changes. It is the role of manager here to communicate the nature and contents of changes very clearly to the subordinates. This helps in clarifications, easy adoptions and smooth running of an enterprise. For example, if a concern shifts from handlooms to power looms, an important change in technique of production takes place. The resulting factors are less of manpower and more of machinery. This can be resisted by the subordinates. The manager here can explain that the change was in the benefit of the subordinates. Through more mechanization, production increases and thereby the profits. Indirectly, the subordinates are benefited out of that in form of higher remuneration. Efficient Utilization of Resources - Direction finance helps in clarifying the role of every subordinate towards his work. The resources can be utilized properly only when less of wastages, duplication of efforts, overlapping of performances, etc. doesnt take place. Through direction, the role of subordinates become clear as manager makes use of his supervisory, the guidance, the instructions and motivation skill to inspire the subordinates. This helps in maximum possible utilization of resources of men, machine, materials and money which helps in reducing costs and increasing profits.

From the above discussion, one can justify that direction, surely, is the heart of management process. Heart plays an important role in a human body as it serves the function pumping blood to all parts of body which makes the parts function. In the similar manner, direction helps the subordinates to perform in best of their abilities and that too in a healthy environment.

Principles of Direction
Direction is a complex function as it deals with people whose behaviour is unpredictable. Effective direction is an art which a manager can learn and perfect through practice. However, managers can follow the following principles while directing their subordinates:

1 Harmony o objectives: Individuals join the organisation to satisfy their physiological and psychological needs. They are expected to work for the achievement of organisational objectives. They will perform their tasks better if they feel that it will satisfy their personal goals. Therefore, management should reconcile the personal goals of employees with the organisational goals. 2. Maximum individual contribution: Organisational objectives are achieved at the optimum level when every individual in the organisation makes maximum contribution towards them. Managers should, therefore, try to elicit maximum possible contribution from each subordinate. 3. Unity of command: A subordinate should get orders and instructions from one superior only. If he is made accountable to two bosses simultaneously, there will be confusion, conflict, disorder and indiscipline in the organisation. Therefore, every subordinate should be asked to report to only one manager. 4. Appropriate techniques: The managers should use correct direction techniques to ensure efficiency of direction. The techniques used should be suitable to the superior, the subordinates and the situation. 5. Direct Supervision: Direction becomes more effective when there is a direct personal contact between a superior and his subordinates. Such direct contact improves the morale and commitment of employees. Therefore, wherever possible direct supervision should be used. 6. Strategic use of informal organization: Management should try to understand and make use of informal groups to strengthen formal or official relationships. This will improve the effectiveness of direction. 7. Managerial communication: A good system of communication between the superior and his subordinates helps to improve mutual understanding. Upward communication enables a manager to understand the subordinates and gives an opportunity to the subordinates to express their feelings. 8. Comprehension: Communication of orders and instructions is not sufficient. Managers should ensure that subordinates correctly understand what they are to do and how and when they are to do. This will avoid unnecessary queries and explanations. 9. Effective leadership: Managers should act as leaders so that they can influence the activities of their subordinates without dissatisfying them. As leaders, they should guide and counsel subordinates in their personal problems too. In this way, they can win the confidence and trust of their subordinates. 10. Principle of follow through: Directing is a continuous process. Therefore, after issuing orders and instructions, a manager should find out whether the subordinates are working properly and what problems they are facing. He should modify, if necessary, his orders in the light of these findings.

Characteristics of good direction

Direction is one of the most complex functions of management which can be learned and perfected only through long experience. However, some important principles or requirements of effective direction may be as follows.

1) Harmony of objectives: an organization functions best when the goals of its members are

2)

3)

4)

5)

in complete harmony with and complementary to the goals of the organization. Such an ideal situation seldom exists in any organization. Nor should a manager ever expect this situation to exist. But in directing subordinates he must take advantage of individual motives to gain group goals. In other words, he must direct the subordinates in such a way that they perceive their personal goals to be in harmony with enterprise objectives. Thus, for example, if employees are told to work hard so that the companys profits may increase, they probably will not. But if they are told to do so in their own interest they are more likely to work hard. Unity of command: this principle implies that the subordinates should receive orders and instruction from one superior only. The violation of this principle may lead to conflicting orders, divided loyalties and decreased personal responsibility for results. Another reason why this principle should not be violated is that the immediate boss is the only person who knows best about the nature of his subordinates and about their responses to different motivation techniques. Direction supervision: every superior must maintain face to face direct contact with his subordinates. Direct supervision boosts the morale of employees, increases their loyalty and provides them with immediate feedback on how well they are doing. Efficient communication: communication is an instrument of direction. It is through communication that the superior gives orders, allocates jobs, explains duties and ensures performance. Efficient communication is a two way process. It not only enables the superior to know how his subordinates feel but also helps the subordinates to know how the company feels on a number of issues concerning them. In communication, comprehension is more important than the content. How much information is correctly understood by the subordinates is more important than what is said and how it is said. This can be ensured only if the manager makes provision for a proper feedback. Follow through: direction is not only telling subordinates what they should do but also seeing that they do it in the desired way. The manager should, therefore, follow through the whole performance of his subordinates not merely to keep a check on their activities but to help them in their act, to show them where their deficiency, if any, lies and to revise their direction if it needs revision, and so on.

Unit IX: Control Introduction:

The final phase of the management process is controlling. "Controlling means monitoring employees' activities, determining whether the organization is on target toward its goals, and making correction as necessary (Richard Daft ). Controlling ensures that, through effective leading, what has been planned and organized to take place has in fact taken place. Three basic components constitute the control function:

Elements of a control system Evaluating and rewarding employee performance Controlling financial, informational, and physical resources.

Controlling is ongoing process. An effective control function determines whether the organization is on target toward its goals and makes corrections as necessary.

Meaning and Definition

Controlling is the process through which managers assure that actual activities conform to the planned activities. It is employed to make things happen in accordance with the plans and programmes and rules and procedures lay down. According to George R. Terry, Controlling is determining what is being accomplished, that is, evaluating the performance and, if necessary, applying corrected measures so that the performance takes place according to plans. According to Robert N. Anthony, Management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of an organizations objectives. According to Koontz ODonnel, Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans. According to H. Koontz and ODonnell, Controlling is the measuring and correcting of activities of subordinates to ensure that events conform to plans.

Planning-control relationship
Planning is required at the very outset of management whereas control is required at the last stages. If planning is looking ahead, control is looking back. Planning and controlling are two separate functions of management, yet they are closely related. The scopes of activities if both are overlapping to each other. Without the basis of planning, controlling activities becomes baseless and without controlling, planning becomes a meaningless exercise. In absence of controlling, no purpose can be served by. Therefore, planning and controlling reinforce each other. According to Billy Goetz, Relationship between the two can be summarized in the following points
1. Planning proceeds controlling and controlling succeeds planning. 2. Planning and controlling are inseparable functions of management. 3. Activities are put on rails by planning and they are kept at right place through controlling.

4. The process of planning and controlling works on Systems Approach which is as follows:

Planning Results Corrective Action Planning and controlling are integral parts of an organization as both are important for smooth running of an enterprise.
5. Planning and controlling reinforce each other. Each drives the other function of

management. In the present dynamic environment which affects the organization, the strong relationship between the two is very critical and important. In the present day environment, it is quite likely that planning fails due to some unforeseen events. There controlling comes to the rescue. Once controlling is done effectively, it gives us stimulus to make better plans. Therefore, planning and controlling are inseparable functions of a business enterprise.

Control Cycle

Feed Back

Goals

Action Plan

Performa nce Evaluatio n Performa nce Comparis on

Resourc e Allocatio n Authorit y Delegati on

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

Measure actual performance

Compare performance with the standards

1. Establish standards to measure performance. Within an organization's overall strategic plan, managers define goals for organizational departments in specific, operational terms that include standards of performance to compare with organizational activities. 2. Measure actual performance. Most organizations prepare formal reports of performance measurements that managers review regularly. These measurements should be related to the standards set in the first step of the control process. For example, if sales growth is a target, the organization should have a means of gathering and reporting sales data. 3. Compare performance with the standards. This step compares actual activities to performance standards. When managers read computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for the reporting period alongside the actual performance for the same period and by computing the variancethat is, the difference between each actual amount and the associated standard. 4. Take corrective actions. When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centered environment, workers and managers are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth stepcorrective action. The most effective course may be prescribed by policies or may be best left up to employees' judgment and initiative. These steps must be repeated periodically until the organizational goal is achieved.

Types of Controls
Control can focus on events before, during, or after a process. For example, a local automobile dealer can focus on activities before, during, or after sales of new cars. Careful inspection of new cars and cautious selection of sales employees are ways to ensure high quality or profitable sales even before those sales take place. Monitoring how salespeople act with customers is a control during the sales task. Counting the number of new cars sold during the month and telephoning buyers about their satisfaction with sales transactions are controls after sales have occurred. These types of controls are formally called feed forward, concurrent, and feedback, respectively.

Feed forward controls: sometimes called preliminary or preventive controls, attempt to identify and prevent deviations in the standards before they occur. Feed forward controls focus on human, material, and financial resources within the organization. These controls are evident in the selection and hiring of new employees. For example, organizations attempt to improve the likelihood that employees will perform up to standards by

identifying the necessary job skills and by using tests and other screening devices to hire people with those skills. Concurrent controls: monitor ongoing employee activity to ensure consistency with quality standards. These controls rely on performance standards, rules, and regulations for guiding employee tasks and behaviors. Their purpose is to ensure that work activities produce the desired results. As an example, many manufacturing operations include devices that measure whether the items being produced meet quality standards. Employees monitor the measurements; if they see that standards are not being met in some area, they make a correction themselves or let a manager know that a problem is occurring. Feedback controls: involve reviewing information to determine whether performance meets established standards. For example, suppose that an organization establishes a goal of increasing its profit by 12 percent next year. To ensure that this goal is reached, the organization must monitor its profit on a monthly basis. After three months, if profit has increased by 3 percent, management might assume that plans are going according to schedule.

Traditional Techniques & Modern Techniques of Control

Control techniques provide managers with the type and amount of information they need to measure and monitor performance. The information from various controls must be tailored to a specific management level, department, unit, or operation. To ensure complete and consistent information, organizations often use standardized documents such as financial, status, and project reports. Each area within an organization, however, uses its own specific control techniques, described in the following sections. Traditional Techniques 1. Direct Supervision and Observation: 'Direct Supervision and Observation' is the oldest technique of controlling. The supervisor himself observes the employees and their work. This brings him in direct contact with the workers. So, many problems are solved during supervision. The supervisor gets first hand information, and he has better understanding with the workers. This technique is most suitable for a small-sized business. 2. Financial Statements: All business organisations prepare Profit and Loss Account. It gives a summary of the income and expenses for a specified period. They also prepare Balance Sheet, which shows the financial position of the organisation at the end of the specified period. Financial statements are used to control the organisation. The figures of the current year can be compared with the previous year's figures. They can also be compared with the figures of other similar organisations. Ratio analysis can be used to find out and analyse the financial statements. Ratio analysis helps to understand the profitability, liquidity and solvency position of the business

3. Budgetary Control: A budget is a planning and controlling device. Budgetary control is a technique of managerial control through budgets. It is the essence of financial control. Budgetary control is done for all aspects of a business such as income, expenditure, production, capital and revenue. Budgetary control is done by the budget committee. 4. Break Even Analysis: Break Even Analysis or Break Even Point is the point of no profit, no loss. For e.g. when an organisation sells 50K cars it will break even. It means that, any sale below this point will cause losses and any sale above this point will earn profits. The Breakeven analysis acts as a control device. It helps to find out the company's performance. So the company can take collective action to improve its performance in the future. Break-even analysis is a simple control tool. Modern Techniques 1. Return on Investment (ROI): Investment consists of fixed assets and working capital used in business. Profit on the investment is a reward for risk taking. If the ROI is high then the financial performance of a business is good and vice-versa. ROI is a tool to improve financial performance. It helps the business to compare its present performance with that of previous years' performance. It helps to conduct inter-firm comparisons. It also shows the areas where corrective actions are needed. 2. Management Audit: Management Audit is an evaluation of the management as a whole. It critically examines the full management process, i.e. planning, organising, directing, and controlling. It finds out the efficiency of the management. To check the efficiency of the management, the company's plans, objectives, policies, procedures, personnel relations and systems of control are examined very carefully. Management auditing is conducted by a team of experts. They collect data from past records, members of management, clients and employees. The data is analysed and conclusions are drawn about managerial performance and efficiency. 3. Management Information System (MIS): In order to control the organisation properly the management needs accurate information. They need information about the internal working of the organisation and also about the external environment. Information is collected continuously to identify problems and find out solutions. MIS collects data, processes it and provides it to the managers. MIS may be manual or computerised. With MIS, managers can delegate authority to subordinates without losing control. 4. PERT and CPM Techniques: Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) techniques were developed in USA in the late 50's. Any programme consists of various activities and sub-activities. Successful completion of any activity depends upon doing the work in a given sequence and in a given time. Importance is given to identifying the critical activities. Critical activities are those which have to be completed on time otherwise the full project will be delayed.

So, in these techniques, the job is divided into various activities / sub-activities. From these activities, the critical activities are identified. More importance is given to completion of these critical activities. So, by controlling the time of the critical activities, the total time and cost of the job are minimised. 5. Self-Control: Self-Control means self-directed control. A person is given freedom to set his own targets, evaluate his own performance and take corrective measures as and when required. Self-control is especially required for top level managers because they do not like external control. The subordinates must be encouraged to use self-control because it is not good for the superior to control each and everything. However, self-control does not mean any control by the superiors. The superiors must control the important activities of the subordinates.

Unit X: Comparative study

Japanese Management and Theory Z
The managerial practices followed in Japan are quite different from those followed in economically advanced countries in the West. In recent years, more and more companies have started using Japanese management practices to increase productivity.

Special features of Japanese Management

1. Scientific selection process: Few Japanese attend graduate school and graduate training in

business but percentage is rare because there are only 30 top business colleges who get admission and study in that colleges only those students have the chance to work in large company. Those large companies conduct competitive examination. Those students passed the examination they can gain jobs but company provide their own training.
2. Lifetime employment: Lifetime employment refers to recruitment of employees

immediately upon graduation generation of employment until retirement, and mandatory retirement. Though there is no formal contract, employers and employees have an unwritten mutual understanding regarding their expectation about the job. Under lifetime employment an employee spends his entire working life with a single enterprise. This helps generate a feeling of job security in the employee and a feeling of belongingness towards the enterprise.
3. Seniority system: This concept is closely related to the concept of lifetime employment

companies following this concept; provide privileges to older employees who have been with it for a long time. Promotion and wage increases are based on employees length of service in the company, not job performance.

4. Continuous training: The secret of the success of Japanese managers may lie in

continuous training" In western organizations, employees receive training only to acquire a new skill or to move to a new position. In Japanese firms however, every young manager has a godfather, who is never his boss or anyone in the direct line of authority. The godfather is not part of the top management, but is highly respected by others.
5. Emphasis on group work: In most Japanese organizations, a task is not assigned to an

individual; instead several tasks are assigned to a group, which consists of a small number of people are treated like family members. Kaisha means my or ones company the community to which one belongs and which is an important part of ones life. Probably this is the reason why employees take great pride in their company and its success.
6. Decision making: The practice of managerial decision-making in Japan is built on the

concept that change and new ideas should come primarily from personnel belonging to lower levels in the hierarchy. Thus in Japan lower level employees prepare proposals for higher-level personnel. The ringi system refers to decision-making by consensus. The word ringi consists of two parts rin which means submitting a proposal to ones superior and getting his approval, and gi meaning deliberations and decisions.
7. Complicated performance evaluation: When job descriptions are not well defined and

when tasks are performed by groups, it becomes difficult to evaluate individual job performance objectively. The evaluation of workers and managers in Japanese corporations takes a very long time up to ten years and requires the use of qualitative and quantitative information about performance.
8. Father leadership: As a kacho, the task of a leader is not only to supervise his people at

work, but also to show fatherly concern for their subordinates private life. Since, promotion is based on seniority; it is not easy to move on to a kacho position. Sufficient training and experience are essential for an individual to be promoted to this position.
9. Good benefits for employees: Japanese companies provide substantial benefits to their

employees are provided benefits such as family housing and transportation allowances. Some companies also provide bachelor accommodation, scholarships for employees children, and low-interest housing loans. Salary enhancements become rapid after about seven years of employment with the firm. Since the seniority-based wage system assumes that the longer the experience, the more valuable the employee
10. Simple and flexible organisation: In Japanese firms, very often people are trained to be

generalists. For this reason, the organization structure in Japan is relatively simple flexible, and it possible for people to take up a new challenge or a new task by forming a new formal or informal group. Informal organization wield considerable power in formal organization

Differences between American and Japanese Management Practices

William Ouchi proposed the concept of theory Z organizations. The concept was developed in his efforts to understand the best practices of Japanese management which can be used in companies of USA. He identified the differences between American and Japanese organizations in some aspects. American Organizations Japanese Organizations Short-term employment Lifetime employment Individual decision making Collective decision making Individual responsibility Collective responsibility Rapid evaluation & promotion Slow evaluation & promotion Explicit control mechanisms Implicit control mechanisms Specialized career paths Non-specialized career paths Segmented concern for employee as an employee Holistic concern for employee as a person