MANAGEMENT

Dr. ANANDA KUMAR

Professor & Head,
Department of Management
Studies,
Christ College of Engg. & Tech.
Puducherry, India.
Mobile: +91 99443 42433
E-mail: searchanandu@gmail.com
MANAGEMENT
“Management is the process of designing and
maintaining of an environment in which
individuals working together in groups
efficiently accomplish selected aims.”
-Koontz & Weihrich

“Management is the art of knowing what do

you want to do and then seeing that it is done
in the best and cheapest way.”
- F. W. Taylor
MANAGEMENT
“Management is the coordination of all
resources through the process of planning,
organizing, directing and controlling in order
to attain stated goals.”
- Henry L. Sisk
MANAGERIAL SKILLS
1. Technical Skill
2. Human Skill
3. Conceptual Skill
1. Technical Skill
• It refers to the ability to the tools,
equipment, procedures and techniques.
• Effective supervision and coordinating of
the work of the subordinates. Therefore
depends on the technical possessed by
the lower level market.
2. Human Skill
• Human skill refers to the ability of the
manager to work effectively as a group
member and to build cooperative effort in
the team he leads.
• Human skills are concerned with
understanding of ‘people’.
• Manager’s skill in working with others is
natural and conditions.
3. Conceptual Skills
• This skill also called design and problem.
Solving skill involves the ability.
• To see the organisation and the various
components of it as a whole.
• To understand how its various parts and
functions mesh together.
• A higher degree of conceptual skill helps
in analyzing the environment and in
identifying the opportunities.
MANAGEMENT LEVELS

Top
Level
Management

Middle
Level
Management

Lower
Level
Management
Top Level Management:
The main functions of top management are
• To formulate goals and policies of the
company.
• To formulate budgets.
• To appoint top executives.
• To provide overall direction and leadership of
the company.
• To decide the distribution of profits etc.
Middle Level Management:
The important functions of middle level
management.
• To monitor and control the operating
performance.
• To train, motivate and develop supervisory
level.
• To co-ordinate among themselves so as to
integrate the various activities of a
department.
Lower Level or Supervisory Management:
The main functions of lower level
management
• To train and develop the efficiency of the
workers.
• To assign jobs to workers
• To give orders and instructions.
• To maintain discipline and good human
relations among workers.
• To report feedback information about workers.
FUNCTIONS OF MANAGEMENT
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
1. Planning:
Planning is simple looking ahead. It is preparing
for the future. Effective planning leads to efficient
management. Effective planning provides
answers to questions like – what to do? When to
do? How to do? Who is to do?
2.Organising:
Organizing establishes harmonious relationship
among all the workers of an organization by
providing them with suitable authority and
responsibility.
According to Louis A. Allen “Organisation
involves identification and grouping the activities
to be performed and dividing them among the
individuals and creating authority and
responsibility relationships among them for the
accomplishment of organizational objectives”.
3. Staffing
Staffing process involves selecting candidates for
positions, fixing salary, training and developing
them for effective organizational functions. The
manager performs the duties of job analysis, job
description etc. which come under the staffing
function.
4. Directing
One plans are made and the organisation is created
next step is to achievement of objectives of the
organisation.
Directing is involves activities like guiding,
supervising and motivating the subordinates in their
jobs. Motivation, leadership and communication are
three important sub function of directing. Motivation
helps to increase the performance of the workers.
Communication provides with proper information to
improve the effective management. Leadership the
process by which a manager guide and influences
the work of his subordinates.
5. Controlling
Controlling as a function of management deals
with checking and verifying the activities against
the predetermined standards. The process of
ensuring that actual activities conform to planned
activities. Controlling process involves the
following steps.
1. Establishing standards
2. Measuring current performance.
3. Comparing this performance to the established
standards.
4. Taking corrective actions of deviation are
detected.
IMPORTANCE OF MANAGEMENT
1. Attainment of group goals
2. Effective functioning of business
3. Resource development
4. Management control the organisation
5. Integrates individual efforts
6. Motivation
7. Communication
8. Coordination
9. Decision-making
10. Leadership quality
DIFFERENCE BETWEEN
ADMINSTRATION &
MANAGEMENT
 Points of Distinction Administration Management
1. Nature It is a determinative It is an executive or doing
thinking function. function.
2. Scope It is concerned with the It is concerned with the
determination of major implementation of
objectives and policies. policies.

3. Level It is mainly a top-level It is a largely a middle and

function lower-level function.
4. Influence Administrative decisions Managerial decisions are
are influenced mainly by influenced mainly by
public opinion and other objectives and policies of
outside forces. the organisation.

5. Direction of human It is not directly It is actively concerned

concerned with direction with direction of human
efforts of human efforts. efforts in the execution of
plans.
6. Main functions Planning and control are Directing and organizing
the main functions are the main functions
involved in it. involved in it.
7. Skills required Conceptual and human Technical and human
skills. skills.
 NATURE & CHARACTERISTICS
OF MANAGEMENT
1. Management is Universal
2. Management is Purposeful
3. Management is an Integrative Force
4. Management is a Social Process
5. Management is Multidisciplinary
6. Management is a Continuous Process
7. Management is Intangible
8. Management is an Art as well as a Science
 MANAGEMENT AS A
SCIENCE OR AN ART?
What is Science?
 The science portion of management is
apparent in the body of management knowledge,
its fundamental principles and what experience
and experimentation have shown.
 In some management subjects, we can build
models and use mathematics to prove our study
toward the scientific end of the spectrum.
 Management as a discipline fulfills the science
criterion. The application of these principles
helps any practicing manager to achieve the
desired goals.
What is Science?
 Science classified into two types. They are
exact science and inexact science. Exact
science where the results are accurate. In the
case of management it is an inexact science.
What is Science?
Management is inexact science because
 Every organizations human resources are
different attitude, aspirations and perceptions. So
standard results may not be obtained.
 Readymade and standard solutions cannot be
obtained
 Management is complex and unpredictable.
 Every organisation decisions are influenced by
the environment. The environment is so
complexes and unexpected changes.
 What is an art?
Art means application of skill in finding a desired
result. Art is the way of doing things skillfully.
Management is an art because of the following
facts.
 Management process involves the use of
practical knowledge and personal skill.
 Management is creative.
 Application of practical knowledge and certain
skills helps to achieve concrete results.
 Management is both – science
and an art:
Management is a science because it contains
general principles. It is also an art because it
requires certain personal skills to achieve desired
results.
 HENRY FAYOL’S
CONTRIBUTION – (1841 – 1925)
 Fayol was a contemporary of Taylor.
 He started his career as a junior engineer in a
coal mining company in France in 1860 and
became its general manager in 1880.
 We published his famous book Administration
Industrielle et Generale in 1916 which was
published in English in 1949 under the title
‘General and Industrial Management’.
 This book is now considered to be one of the
best classics in management.
 Principles of Management
1. Division of Work
2. Authority & Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual interest to General
interest
7. Remuneration of personnel
8. Centralization
 9. Scalar Chain
10. Order
11. Equity
12. Stability of Staff
13. Initiative
14. Esprit-de-corps
Case Study
ABI Ltd., is a medium sized company Mr.
Pramod has been working in the company for
over 12 years as a secretary. He has got an
excellent track record and recently he has been
raised to the position of Administrative Manager.
As a result of this change, the output of his work
in the office dropped considerably and morale
become low. There was alarming increased in
Staff turnovers.
 To study the situation, the managing director
engaged a consultant. His report while praising
the aspects of office administration pointing out
his incapabilities especially in dealing with
people. Surprisingly, Mr. Pramod enjoyed much
popularity of the senior executives of the
company. He won their appreciation for his
valuable service as a manager. They were much
worried over the incapabilities of Mr. Pramod in
dealing with people. They were helpless.
Questions:
1. What is the real possible cause of this
problem?
2. What can be done to rectify the situation
considering Mr. Pramod’s value to the
company?
ROLE OF A MANAGER
1. Director
2. Motivation
3. Human being
4. Guide
5. Friend
6. Planner
7. Supervisor
8. Reporter
 TASKS / RESPONSIBILITIES OF A
PROFESSIONAL MANAGER
1. Planning of work
2. Proper and Effective Communication
3. Co-ordination of Efforts
4. Getting co-operation of employees
5. Encourages a team spirit
6. Better utilization of Resources
7. Selecting the Procedure
8. Maintaining good human relations
9. Solve the problem
10. Arranging training and development facilities
 QUALITIES OF MANAGER
1. Physical
2. Mental
3. Moral
4. General Education
5. Special knowledge
6. Experience
 SYSTEM APPROACH TO
MANAGEMENT
Introduction: Like a human organism an
organisation is a system. In an organisation also
people, tasks and the management are
interdependent.
System concepts:
System theory was first applied in the fields
of science and engineering.
“A system is essentially a set or assemblage
of things interconnected or independent, so as to
form a complex unity”.
Just as a doctor effective manager should
collect information about all parts of the
organisation in order to diagnosis a problem and
take necessary corrective action.
Some key concepts:
Subsystem: While an organisation as a
whole is a system, the various components or parts
within it are called the subsystem. Thus a department is
a subsystem of the organisation.
Closed system: A system that does not
interact with its environment. A closed system has fixed
boundaries, its operation is relatively independent of the
environment outside the system.
Open system: A system that interacts with
its environment. Thus an open system is one which
constantly comes into contact with the environment.
Synergy: Synergy means that departments
that interact cooperatively are more productive than they
would be if they operated in isolation.
 Open system model of an
Organisation
External Environment

INPUTS OUTPUTS

Human Transformation Goods &

Machines Services
Money
Technology

Information

Feedback
SOCIAL RESPONSIBILITIES OF A
BUSINESS
1. Responsibility towards shareholder/owners
2. Responsibility towards Employees
3. Responsibility to customers
4. Responsibility towards Government
5. Responsibility towards community
1. Responsibility towards shareholder/owners
• a fair return on investment
• safety of investment
• steady appreciation of investment
• regular, accurate and full information about the
working and progress of the company.
2. Responsibility towards Employees
• Fair wages and salaries
• Good and safe working conditions
• Adequate service benefits such as housing,
medical facilities insurance cover, retirement benefits
• Recognition of workers’ rights to form trade unions,
to collective bargaining and strike
• Opportunities for education, training and promotion.
• Workers’ participation in decision-making.
3. Responsibility to customers
• Regular supply of quality goods at right time and
place
• Change reasonable prices
• Supply goods that meet the needs of different
classes and taste with different purchasing power.
• Prompt, adequate and continuous service
• Prompt, redressal of customers’ grievances
• True and fair information through advertisements
• Avoid unfair and unethical practices like
adulteration, hoarding and black marketing.
4. Responsibility towards Government
• To abide by the laws of the land
• To pay taxes honestly and in time
• To avoid corrupting public servants
• To encourage fair trade practices
• To avoid monopoly and concentration of economic
power
5. Responsibility towards community
• To make the best possible or efficient use of the
society’s resources
• To provide maximum possible employment
opportunities
• To keep the environment healthy and free from all
types pollution
• To refrain from indulging in anti-social and unethical
practice
• To improve public health, education and cultural life
of the community.
PLANNING
• Planning is the most basic of all management
functions.
• Lots of planning activities are done by the
management people at all levels.
• Planning is the process of selecting objectives
and determining the course of action required to
achieve these objectives.
• Planning bridges the gap from where we are
and where we want to go.
Definition

According to Koontz and O’Donnell, “Planning is

deciding in advance what to do, how to do it,
when to do it, and who is to do it. It is the
selection among alternatives of future course of
action for the enterprise as a whole and each
department within it. Plans involve selecting
enterprise objectives and determining ways of
achieving them”.
Definition
In the words of Mary Cushing Niles, “Planning is
the conscious of selecting and developing the
best course of action to accomplish an objective.
It is the basis from which future management
action spring”.
STEPS IN PLANNING PROCESS
 Identification of opportunities
STEPS IN PLANNING PROCESS
Establishment of objectives

Developing Planning Premises

Identification of Alternatives

Evaluation of Alternatives

Selecting an Alternatives

Formulating Derivative Plans

Establishing Sequence of Activities

1. Identification of Opportunities
Identification of awareness of the opportunity is
the starting point of planning. First of all, we
should identify the possible future opportunities
and analyze them clearly and completely. From
that, we should know:
 Where we stand,
 What is our strength and weakness,
 What problem we wish to solve and why, and
 What we expect to gain.
2. Establishment of Objectives
The next step in planning is to establish
objectives for the entire organization and then for
each subordinate units. Objectives specify and
indicate the results expected.
 What is to be done?
 Where is the primary emphasis to be placed?
 What is to be accomplished by the various types of
plans?
3. Developing planning premises
Planning premises are the assumptions that should
be made about the various elements of the
environment. It provides the basic framework in
which plans operate. These premises may be
internal or external.
Internal premises include organizational,
policies, resources of various types, sales forecasts
and the ability of the organisation to withstand the
environmental pressure. External premises include
the total factors in task environment like political,
social, technological, competitors, plans and actions,
and government policies etc.
4. Identification of Alternatives
A particular objective can be achieved through a
number of ways. The entire alternative cannot be
analysed. Some alternative can be rejected at its
preliminary stage itself by considering preliminary
criteria such as minimum investment required,
matching with the present business, market
conditions government control, skilled workers,
technique available etc.
Only the alternatives which meet the preliminary
criteria may be chosen for further detailed
analysis.
5. Evaluation of Alternatives
The alternatives considered for the analysis
according to preliminary criteria may be taken for
further evaluation. Each alternative course of
action is evaluated on the basis of profitability,
capital investment, risk involved, gestation period
etc. It presents a problem because each of these
alternatives may have certain advantages and
disadvantages. For instance, an alternative may
appear to be must profitable. But, it requires a
large cash outlet with slow payback; another may
be less profitable but involves less risk factors.
6. Selecting Alternatives
After the evaluation of various alternatives, the
most appropriate course of action is selected. If
more than one alternative is suitable, then any
are alternative may be chosen for execution.
When the situation changes and the selected
plan do not provide to be the best, the other
alternative may be tried.
7. Formulation of derivative plans
The derivative plans are formulated on the basis
of the major plans. There are several minor plans
required to support and execute the major plans.
These plans are known as derivative plans. The
various derivative plans are planning for buying
equipment, buying raw materials, recruiting and
training personal, developing new product etc.
8. Establishing sequence of
activities
After formulating basic and derivative plans, the
sequence of activities is determined so that plans
are put into action while formulating derivative
plans, a built in mechanism should be created for
periodic review and updating of various plans
whenever necessary. The starting and finishing
times are fixed for each piece of work so as to
indicate when and within what time that work is to
be commenced and completed.
PURPOSE or OBJECTIVES OF
PLANNING
1. Primary of Planning
2. To achieve objectives
3. To cope with uncertainty and change
4. To Facilitate control
5. To help in coordination
6. To increase organizational effectiveness
7. To guide decision making
PRINCIPLES OF PLANNING
1. Principle of the Contribution to objectives
2. Principle of the Primacy of planning
3. Principle of the Pervasiveness of Planning
4. Principle of the Flexibility of Planning
5. Principle of Periodicity
6. Principle of Planning Premises
7. Principle of Efficiency of Operations
ADVANTAGES OF PLANNING
1. Helps in achieving objectives
2. Better utilization of resources
3. Economy in operation
4. Reduces uncertainty and risk
5. Improves competitive strength
6. Effective Control
7. Coordination
8. Encourages Motivation
LIMITATIONS OF PLANNING
1. Lack of accurate information
2. Time and Cost
3. Inflexibility
4. Delay during emergency period
5. False sense of security
NATURE / CHARACTERISTICS
OF A SOUND PLAN
1. Primary
2. Continuity
3. Flexibility
4. Unity
5. Precision
6. Pervasiveness
RANGE OF PLANNING
 It involves deciding a future course of action,
plans always have some time frame-the period in
future that a plan covers.
 Based on the length of time involved, plans are
usually classified as strategic range and
operational plans or short range plans
LONG RANGE PLANNING / STRATEGIC
PLANNING / CORPORATE PLANNING
Strategies are the large scale action plans for
interacting with environment in order to achieve long
term goals.
Strategic plans focus on the board future of the
organisation and incorporate both external
environment demands and internal resources into
the actions managers need to take to achieve the
long term goals of the organization.
Typically, strategic plans cover the major aspects
of the organization, including its products, services,
finances, technology and human resources.
SHORT RANGE PLANNING / OPERATIONAL
PLANNING
Operational plans translate tactical plans into
specific goals and actions for small units of the
organization and focus on the near term, typically
12 months or less.
Strategic planning provides guidance and
boundaries for operational planning.
For example, if the strategic plan is to face
competition with new and innovative products,
major tasks to achieve this goal would be clarified
by operational planning.
OBJECTIVES
Objectives are the aims, purposes or goals that
an organization wants to achieve over varying
periods of time.
Objectives simply let people know what they are
trying to do, or what is expected of them at the
close of the evaluation period.
SETTING OBJECTIVES
Objective features in all branches of
management.
For setting the initial objectives, all
organizations have a formal, explicitly recognized,
legally specified organization.
In general, the overall objective of the
organization is set by the top management.
 Conti….
However, in some organizations, the
objectives are set by the vote of the shareholders;
in others, by a vote of the members, by a small
number of trustees or by a few individuals who
will win and run the organization.
In large organizations, objectives are set by
the board of directors, governing board, executive
committee.
MANAGING BY OBJECTIVES
(MBO)
“MBO is a process whereby the superior and the
subordinate managers of an enterprise jointly
identify its common goals; define each
individual’s major areas of responsibility in terms
of results expected of him, and use these
measures as guides for operating the unit and
assessing the contribution of each of its
members”.
- George Odiorne
 Conti….
MBO is a process whereby superiors and
subordinates sit together to identify the common
objectives and set the results which are to be
achieved by the subordinates.
THE PROCESS OF MBO
1. Setting Preliminary objectives
2. Fixing Key result areas
3. Setting subordinate’s objectives
4. Recycling objectives
5. Matching resources with objectives
6. Periodic performance reviews
7. Appraisal
BENEFITS OF MBO
1. Improvement of managing
2. Clarification of organization
3. Personnel satisfaction
4. Team work
5. Development of Effective Control
6. Fast Decision making
WEAKNESS OF MBO
1. Failure to teach the philosophy of MBO
2. Failure to give guidelines to goals setters
3. Difficulty of setting goals
4. Emphasis on short-term goals
5. Danger of Inflexibility
6. Time consuming
7. Increased paper work
REASONS WHY MBO FAIL
Lack of top management involvement and
support.
Lack of understanding of the philosophy behind
MBO.
Difficultly insetting realistic and meaningful
objectives.
Increased time pressure.
Lack of relevant skills.
Lack of individual motivation.
Poor integration with other systems
POLICIES
 A policy is a broad statement formulated to
provide guidance in decision making.
 “A policy is the statement or general
understanding which provides guidance in
decision making to members of an organisation in
respect to any course of action. - L.M. Prasad
 “Policies are general statements of
understandings which guide or channel thinking
in decision making or subordinates”. - Weihrich
and Koontz
NEED or IMPORTANCE or
PURPOSE OF POLICY
1. To operationalise objectives
2. To save time and effort
3. To facilitate delegation of authority
4. To speedup decision making
5. To control administration
FORMULATION OF A POLICY
1. Identification of area
2. Objectives
3. Analysis of Environment
4. Corporate Analysis
5. Collection of Information
6. Analysing the information
7. Identification of Alternatives
8. Appraisal of Policies
9. Selection of a Policy
10. Approval of policy
11. Communicating the policy
TYPES OF POLICIES
1. Formulated Policies
2. Appealed Policy
3. Imposed Policy
STRATEGIES
“Strategy is the determination of basis long-
term objectives and the adoption of the course of
action and allocation of resources to achieve
these goals’. - Alfred D. Chandler
A strategy may also be defined as a special
type of plan prepared for meeting the challenge
posted by the activities of competitors and other
environmental forces.
Strategy is a course of action through which
an organisation relates itself with environment so
as to achieve its objectives.
PROCEDURES
Policies are subdivided and stated in terms of
procedures.
For example: A company’s policy may be to sell the
obsolete products at a discount. The procedure may
explain how to decide which product is obsolete and
what percentage of discount is to be offered.
Procedures for placing orders for material and
equipment, for sanctioning different types of
employee’s leave, for handling grievances at the
shop floor level, etc., suggest how each of these has
to be handled.
PROGRAMMES
A programme is a broad term which includes
goals, policies, procedures, rules and steps to be
taken in putting a plan into action.
Terry and Frankin define programme as “a
comprehensive plan that includes future use of
different resources in an integrated pattern and
establishes a sequence of required and time
schedules for each in order to achieve stated
objectives’.
FORECASTING
In all organizations, managers plan their future
course of action based on some predictions of the
future. Forecasting provides them the knowledge
of the future trends.
Forecasting is the process of estimating the
future, based on the analysis of their past and
present behaviour. Its aim is to provide
information for planning and decision making.
BUDGETS
Budgets are used to quantify and allocate resource
to specific activities. In most organizations, budgets
are proposed and annually.
A variety of resources can be quantified in budgets,
but money is most commonly used. There are
several types of budgets. For example, a capital
expenditure budget specifies the amount of money to
be spent on specific items that have long term use
and require significant amounts of money to acquire.
These items might include such things as equipment,
land or buildings.
DECISION-MAKING
Decision-making is defined as the process of
choosing a course of action from among
alternatives to achieve a desired goal.
It is one of the functions of management and also
a core process of planning. The management
executive takes a number of decisions every day.
There are number of alternatives available to the
management. The best one is selected out of the
available alternatives.
Definition
Knootz and Weihrich, “Decision making is
defined as the selection of a course of action from
among alternatives”.
Georage R. Terry, “Decision making is the
selection based on some criteria from two or
more possible alternatives”.
DECISION MAKING PROCESS /
PHASES OF DECISION MAKING
Identification of Problem

Diagnosis and analysis the problem

Search for Alternatives

Evaluation of Alternatives

Selecting an Alternatives

Implementation and follow-up

ORGANISING
 Organising is the process of identifying and
grouping of activities required to attain the
objectives, delegating authority, creating
responsibility and establishing relationships for
the people to work effectively.
Definition
 According to Haimann, “Organising is the
process of defining and grouping the activities of
the enterprise and establishing the authority
relationships among them”.
 Koontz and O’Donnel define organizing as
“the grouping of activities necessary to attain
objectives, the assignment of each grouping to a
manager with authority necessary to supervise it,
and the provision for co-ordination horizontally
and vertically in the enterprise structure”.
NATURE OF ORGANIZATION
1. Common Objectives
2. Specialization or Division of Labour
3. Authority of Structure
4. Group of Persons
5. Co-ordination
6. Communication
7. Environment
8. Rule and Regulations
SPAN OF CONTROL or SPAN OF
MANAGEMENT
 Span of management means the number of
people managed effectively by a single superior
in an organization.
 The term “Span of management” is also
known as “Span of supervision”, “Span of
authority” and “Span of responsibility”.
 If the number of members is too large, it will
be very difficult to manage the persons and
perform the work effectively.
Definition
According to L. Urwick, the ideal number of
subordinates is four in case of higher level
management and eight to twelve in case of
bottom level management.
DETERMINATION OF SPAN OF
MANAGEMENT
1. Direct single relationship
2. Direct group relationships
3. Cross relationship
1. Direct single relationship: It is one in
which a supervisor has direct relationship with his
subordinates individually. If X supervises Y and Z
who are subordinates, there are two direct single
relationships.
Supervisor
X

Y Z
Subordinates
2. Direct group relationships: In direct
group relationship, a supervisor has direct
relationship with his subordinates jointly.

Supervisor
X
Consultation Consultation

Y Z
Subordinates
3. Cross relationship: In cross relationship,
a subordinate has relationship with another
subordinate mutually.

Supervisor
X

Relationship
Y Z
Subordinates
FORMAL ORGANISATION
A formal organisation typically consists of a
classical hierarchical structure in which
positions, responsibility, authority,
accountability and the line of command are
clearly defined and established.
Each and every person is assigned the duties
and given the required amount of authority and
responsibility to carryout the job.
The inter relationship of staff members can be
shown in the organisation chart and manuals
Advantages of Formal
Organisation
Since the definite boundary of each worker is
clearly defined, the conflict among the workers is
automatically reduced.
Overlapping of responsibility is easily avoided.
More stable organization can be ensured. It
makes the organization less dependent on one
man.
A sense of security arises from classification of
the task.
It motivates the employees.
INFORMAL ORANISATION
Informal organisation is an organisation which
establishes the relationship on the basis of
member’s interaction, communication,
personal likings and disliking, and social
contacts within as well as outside the
organisation.
It arises naturally on the basis of friendship or
some common interest which may or may not
be related with work.
Advantages of informal
organisation
Since informal organisation gives satisfaction
to the workers, it motivates workers and also
maintains the stability of the work.
It fills up the gaps and deficiency of the formal
organisation.
It fills up the gaps among the abilities of the
managers.
The presence of informal organisation
encourages the executives to plan the work
correctly and act accordingly.
DIFFERENCE BETWEEN FORMAL
AND INFORMAL ORGANISATION
Point of view Formal Organisation Informal Organisation

Origin It is created deliberately and It is created spontaneously

consciously by the frames of and naturally.
the organisation.
Purpose It is created for achieving It is created by the members
legitimate objectives of the of the organisation for social
organisation. and psychological
satisfaction.
Nature Planned and official Unplanned and unofficial.

Size It may quite large. It may be small in size.

Nature of groups It may be stable and continue It is quite unstable in nature.

 Point of view Formal Organisation Informal Organisation

Number of groups More Less

Structure Definite structure, Structure less, impersonal

mechanical and rational and emotional.

Authority Authority flows from top to It may flow upward to

bottom downwards from or
horizontally.

Communication Communication normally Communications pass

flows through the prescribed through the informal
chain of command. channels which do not have
one single form.
ORGANISATIONAL CHARTS
Organisational charts are prepared for the
purpose of describing the organisational
structure clearly.
An organisation chart is a graphical portrayal
of the various positions in the enterprise and
the formal relationships among them.
It shows the organisational relationships and
activities within an organisation.
KINDS OF ORGANISATION
CHARTS
1. Vertical Chart
2. Horizontal Chart or Left to Right Chart
3. Circular Chart or Concentric Chart
1. Vertical Chart
Chairmen

Managing Director

Production
Marketing Manager Personnel Manager
Manager

Supervisor for Supervisor for Supervisor for

Operation A Operation B Operation C

Workman I Workman II Workman III

2. Horizontal chart or Left to right chart

Managing Branch Salesman

Director Manager I I

Managing Managing Branch Salesman

President
Director Director Manager II II

Managing Branch Salesman

Director Manager III III
3. Circular Chart or Concentric Chart

Supervisor III

Supervisor II

Supervisor I
Production Marketing
Manager Manager

Chai
rman

Personnel Finance
Manager Manager
STEPS IN ORGANISING
PROCESS
1. Determination of Activities
2. Grouping of Activities
3. Assignment of Duties
4. Delegation of Authority
5. Establishment of Structural Relationship
6. Co-ordination of Activities
DEPARTMENTATION / FUNCTIONAL
DEPARTMENTATION
Departmentation means the process of
grouping of similar activities of the business
into department, division or other
homogeneous units. It is used for the purpose
of facilitating smooth administration at all
levels.
Departmentation involves grouping of people
or activities with similar characteristics into a
single department or unit.
DEPARTMENTATION BY
DIFFERENT STRATEGIES
1. Departmentation by Numbers
2. Departmentation by Time
3. Departmentation by Enterprise Function
4. Departmentation by Territory or Geography
5. Departmentation by Customers
6. Departmentation by Process or Equipment
1. Departmentation by Numbers
In this case, departments are created on the
basis of number of persons forming the
department. Similar types of activities are
performed by small groups.
In such case, the each group is controlled by a
supervisor or an executive.
For example, in the army soldiers are grouped
into squads on the basis of the number
prescribed for each unit.
2. Departmentation by Time:
Under this base, the business activities are
grouped together on the basis of the time of
performance.
For example, a manufacturing unit working in
three shifts of eight hours each per day may
group the activities shift wise and thus having
separate department for each shift.
The basic idea is to get the advantages of
people specialized to work in a particular shift.
3. Departmentation by Enterprise Function
President

Vice-president

MD

Marketing Dept Production Dept Personnel Dept Finance Dept

Production
Market Financial
Planning Recruitment
Research Planning
& Selection
Production
Market Engineering Budgets
Planning Training
Purchasing
Sales General
Administration Accounting
Tooling Labour

Advertising Cost
Repairs Accounting
4. Departmentation by Territory or Geography

President

Managing
Director

Northern Western Central Eastern Southern

Region Region Region Region Region
5. Departmentation by Customers

Branch Manager

Manager
Manager Manager
Cooperative
Business Loans Housing Loans
Loan

Manager
Manager
Agricultural
Personal Loans
Loans
6. Departmentation by Process or Equipment

President

General
Director

Dying & Packing &

Ginning Spinning Weaving
Printing Sale
7. Departmentation by Product or Service
General Manager

Heavy Engg
Automobile
Division

Finance Sales Finance Sales

Product Person Product Person

ion nel ion nel

Earth Moving Power Products

Equipment Division Division

Finance Sales Finance Sales

Product Person
Product Person
ion nel
ion nel
AUTHORITY
According to Hendry Fayol, “Authority is the
right to give orders and the power to exact
obedience”.
Koontz and O’Donnell have defined authority
as, “Authority is the power to command other
to act or not to act in a manner deemed by the
possessor of the authority to further enterprise
or departmental purposes”.
LINE AUTHORITY or LINE
ORGANISATION
Line authority exists between superior and his
subordinate.
Line authority is the direct authority which a
superior exercises over a number of
subordinates to carry out orders and
instructions.
In organisation process, authority is delegated
to the individuals to perform the activities.
 Manager

Superintendent 1 Superintendent 2

Foreman 1 Foreman 2 Foreman 1 Foreman 2

W W W W W W W W W W W W
STAFF AUTHORITY
Staff authority is exercised by a man over line
personnel.
The relationship between a staff manager and
the line manager with whom he works
depends in part on the staff duties.
In a management, staff refers to those
elements of the organisation which help the
line to work most effectively in accomplishing
the primary objectives of the enterprise, the
nature of the staff relationship is advisory.
The function of staff is to investigate research
and give advice to line managers.
Staff personnel’s having specialized
knowledge and skills reduce the burden of line
personnel’s.
DECENTRALISATION OF
AUTHORITY
 Centralization and decentralization refer to the
location of decision-making authority in an
organisation.
 “Centralisation” means that the authority for
most decisions is concentrated at the top of
the managerial hierarchy whereas
‘decentralisation’ requires such authority to be
dispersed by extension and delegation through
all levels of management.
Louis A.Allen has defined both the terms as,
“Centralisation is the systematic and
consistent reservation of authority at central
points within an organisation.
Decentralisation applies to the systematic
delegation of authority in an organisation-wide
context”.
MAKING DECENTRALISATION
EFFECTIVE
1. Centralized Top Policy
2. Appreciation of Concept of Decentralization
3. Development of managers
4. Competition among units
5. Open Communication
6. Effective Co-operation
DELEGATION OF AUTHORITY
 Delegation of authority is a process which
enables a person to assign works to others
and delegate them with adequate authority to
do it.
 Delegation consists of granting authority or the
right to decision-making in certain defined
areas and charging the subordinate with
responsibility for carrying through an assigned
task
COMPARISON BETWEEN DELEGATION AND
DECENTRALISATION
Sl.
No
Delegation Decentralization
1. It is the process of devolution of It is the end result achieved by the
authority. delegation.
2. It implies the relationship between a It implies the relationship between
superior and a subordinate. top management and various
departments and sections.

3. The delegation control rests entirely Here, the top management exercises
with the superior. only control and delegates the
authority for control to the
departmental heads.
4. It is must for management. It is optional

5. It is a technique of management to It is both technique and philosophy

get things done. of management.
6. It can take place without There cannot be decentralization
decentralization. without delegation.
STRATEGY AND ORGANIZATION
DESIGN
 A well-developed design enhances the
accomplishment of strategic objectives, and
these strategic objectives should have
carefully selected to ensure successful
organizational performance.
 Organization design is overall plans for
organizing the work, goals, relationships, and
decisions of an organization in such a way that
people can perform to the best of their abilities.
DESIGN ORGANIZATIONS TO
MATCH THEIR ENVIRONMENTS
Some of the pioneering work on the relationship
between organization design and environment
was done by Tom Burns and G.M. Stalker. They
found that successful organizations were
designed differently in different environments.
They distinguished between two types of
organization designs: a mechanistic design and
an organic design.
Mechanistic Designs: A mechanistic
design follows Weber’s bureaucratic model very
closely in that it is characterized by specialized
activities, specific rules and procedures, an
emphasis on formal communicational and a well-
defined chain of command.
Because mechanistic designs tend to be
inflexible and resistant to change, this type of
design is more successful in a stable
environment.
Organic Designs: In an organic design,
task activities are loosely defined, there are very
few rules and procedures, and great emphasis
falls on self-control, participative problem solving,
and horizontal communication.
Organic designs are more successful in dynamic,
rapidly changing environments that require
adaptability to change.
STAFFING
 Staffing is defined as filling and keeping filled,
positions in the organization structure.
 It includes identifying work force requirements,
inventorying the people available and
recruiting, selecting, placing promoting,
appraising and training developing both
candidates and current jobholders to
accomplish their tasks effectively and
efficiently.
ROLE OF STAFFING
 Massive increase in the number of employees.
 Technological innovations that require more
skilled and experienced staff.
 Changing employee roles and values.
 Increasing the percentage of woman
employees.
 Effective utilization of skills and potential of the
work force.
 Provision of job satisfaction to employees.
JOB ANALYSIS
 It is an attempt to match the jobs and job-
holders.
 Job analysis is a detailed study of a job to
identify the skills, experience and aptitude
required for the job.
 JOB ANALYSIS

Job Description Job Specification

Personal Characteristics:
Age, Sex, Education.
Job Title: A Title of the Job
Physical Characteristics:
Job Activities: Tasks
Length, Weight, Vision.
performed, materials used.
Mental Characteristics:
Working Conditions: Light,
General intelligence,
Heat, Noise.
Memory, Judgment.
Social Environment: Size of
Social & Psychological
work group members etc.
Characteristics: Emotional
Stability, Initiative, Creativity.
Job Description: Job description is a
written statement showing job title, tasks
duties and responsibilities involved in a job.
Job Specification: Job specification
also known as man or employee specification
is a statement of minimum acceptable qualities
required in a job incurrent for the effective
performance of the job.
JOB DESIGN
The job design is usually broad enough to
accommodate people’s needs and desires. It
may be especially appropriate to design jobs for
exceptional persons in order to utilize their
potential.
People spend a great deal of time on the job
and it is therefore important to design jobs so that
individuals feel good about their work.
Two important goals of job design are:
1.To meet the organisational requirement such as
higher productivity, operational, efficiency, quality
of product/service etc.
2.To satisfy the needs of the individual
employees like interests, challenge, achievement
etc.
TECHNIQUES FOR DESIGNING
JOBS
The following factors are the designing of jobs.
1. Job Enlargement
2. Job Rotation
3. Job Enrichment
Job Enlargement
Job Enlargement is several short tasks which are
given to one worker. Thus the scope of the job
is increased because there are many tasks of be
performed by the same worker.
Job enlargement does not increase the depth of
a job. Enlarged jobs require longer training
period because there are more tasks to be
learned. If workers are more satisfied with jobs,
job enlargement should be successful.
Job Rotation
 Job rotation refers in the movement of an
employee from the job to another.
 An employee who works on a routine job is
affected from boredom and monotony.
 Job rotation improves employees skills.
Thus the role of job rotation is motivating
people is limited.
Job Enrichment
Job enrichment is based on herzberg’s two-
factor theory of motivation. It is based on the
assumption that in order to motivate workers.
The job itself must provide opportunities for
achievement, recognition and responsibility.
The job enrichment approach to boring jobs is to
give the individual employee more autonomy in
the job. Employee receives a greater sense of
accomplishment as well as more authority and
responsibility.
RECRUITMENT

Recruitment is defined as “a process to discover

the sources of manpower to meet the
requirements of the staffing schedule and to
employ effective measures for attracting that
manpower in adequate members to facilitate
effective selection of an efficient work force”.
B.Flippo defined recruitment as “The process of
search for prospective employees and stimulating
them to apply for jobs in the organization”.
SOURCES OF RECRUITMENT

SOURCES OF
RECRUITMENT

EXTERNAL SOURCE INTERNAL SOURCE

Internal Sources:
 Present permanent employees
 Present temporary/Casual employees
 Retired employees
External Sources:
 Advertisements
 Employment exchanges
 Campus Recruitment
 Recruitment at the factory gates or gate hiring
 Jobbers / Contractors / Personnel consultants
 Recommendations of existing employees
SELECTION
Selection is the process that enables the
enterprise to pick up the candidates with the
required qualifications, training and skill for the
job after careful screening and rejecting the
undesirables at each successive step.
The selection procedure is the system of
functions and devices adopted in a given
company to ascertain whether the candidate’s
specifications are matched with the job
specifications and requirements.
STEPS OF SELECTION
PROCESS
Screening of Applications

Selection Tests

Preliminary Interview

Medical Examinations

Final Interview

Approval

Placement
PERFORMANCE APPRAISAL
Appraising the performance of individuals,
groups and organization is a common practice
of all societies.
Thus teachers evaluate the performance of
students, bankers evaluate the performance of
creditors, parents evaluate the behaviour of
their children and all of us consciously or
unconsciously evaluate our own actions from
time to time.
Meaning:
Performance appraisal evaluate not only the
performance of worker but also his potential for
development.
Performance appraisal is a continuous
process
Appraisals are arranged periodically
according to a definite plan.
The performance appraisal is the process of
determining and communicating to an employee
how well he is performing the job.
Performance appraisal is the employee’s job
relevant strength and weaknesses.
PROMOTION
Promotion means shifting of personnel to a higher
position carrying increased wages and
responsibilities. It is a movement from lower to
higher rank involving higher salary, responsibility
and increase in status.
TRAINING AND DEVELOPMENT

Training plays a very important role in human

resource development. Training involves the
department of skills that are usually necessary to
perform a specific job.
According to Edwin B.Flippo “Training is the act
of increasing the knowledge and skills of an
employee for doing a particular job”.
Development means all round improvement in
the job performance, personality growth in
proficiency, advancement and progress in all
other personality traits that make an employee
a better man and a better citizen.
NEED FOR TRAINING
Every organization should provide training to all
employees irrespective of their qualification, skill,
suitability of the job etc.
1. Training is necessary to prepare existing employees
for higher level jobs.
2. Training is necessary when a person is shifted from
one job to another.
3. Training is necessary to make employee mobile and
versatile.
4. Training provides a sense of security and self
confidence to employees.
 Cont…

5. Training is needed to bridge the gap between

what the employee has and what the job
demands.
6. Training develops new skill to the employees.
7. There are three other factors which could
necessitate training
TRAINING METHODS
Training Methods

On-the Job Training Methods Off-the Job Training Methods

1. Job Rotation 1. Lecture

2. Apprenticeship & 2. Conference & Seminars
Coaching 3. Role Playing
3. Committee Assignments 4. Case Studies
4. Experience 5. Programmed Instructions
5. Temporary Promotions 6. Business Game
7. In basket method
8. Sensitivity Training
ORGANISATIONAL CHANGE
The term change refers to an alteration in a
system whether physical biological or social.
Thus organisational change is the alteration of
work environment in organization.
1. Organisational change is a continuous
change.
2. Any changes may affect part of organization
positively or negatively.
3. When change occurs in any part of the
organization, it disturbs the old equilibrium
necessitating the development new equilibrium.
FACTORS INFLUENCING
ORGANISATIONAL CHANGE
Organisational Change

External Factors Internal Factors

1. Change in
1. Technologies
Managerial
2. Social
Personnel
3. Political
2. Deficiency in
Existing
organisation
ORGANISATION DEVELOPMENT
 Organisation development is a systematic and
continuous process of learning and growth. It
improves the managerial effectiveness. It is
basically long range programme.
 Organisational development is attempting to
change the behavioural attitudes and
performance of the total organisation.
 Organisation development is an education
strategy which focuses on the whole culture of
the organisation in order to bring about
planned change.
DIRECTING
Directing may be defined as the process of
instructing, guiding and inspiring human
factors in the organisation to achieve
organisation objectives.
It is not only issuing orders and instruction by a
superior to his subordinates but also including
the process of guiding and inspiring them to
work effectively.
 Cont..
Directing includes the following elements:
1. Leadership
2. Motivation
3. Communication
LEADERSHIP
Leadership is the process of influencing the
behaviour of other towards the
accomplishment of goals in a given situation.
Koontz and O’Donnel have defined,
“Leadership is the art of process of influencing
people so that they will strive willingly towards
the achievement of group goals”.
IMPORTANCE OF LEADERSHIP
1. Motivating employees
2. Leader develops team work
3. Better utilization of Manpower
4. Creating Confidence to followers
5. Directing group activities
6. Maintaining Discipline
TYPES OF LEADERSHIP STYLES

1. Autocratic or Dictatorial leadership

2. Participative or Democratic leadership
3. Laissez-faire or Free rein leadership
THANK
YOU