125615569 Principles of Management

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PRINCIPLES OF MANAGEMENT

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PRINCIPLES OF MANAGEMENT

OBJECTIVE: This material attempts to give you an understanding of the concept Management

approaches.

Planning : Planning Nature and importance forms strategic and Tactical Type of plans Steps IPlanning, Decision Making Type of Decision Decision Making process Rationality in decision

making.

Organization: Organization Procts of organizing Organization structure departmentalization Span

of Management Delegation Authority, Responsibility, Accountability Decentralization.

Direction : Direction Principles elements Motivation Maslow, Hexrzberg, Varoom models

Communication : Process Forms Network Barriers Measuring effectiveness Co-ordination.

Leadership : Leadership theories Style Managerial Grid Control Controlling and Planning Types of control Concurrent and forward control Principles of control Areas of control Control

techniques.

REFERENCES:

1. Principles of Management : Koontz and ODonnel2. Principles of Management : Terry and Franklin

3. Management : James A.F. Stoner

4. Practice of Management : Peter F Drucker 5. Management Theory and Practice : Ernst Dale

6. Management and Organisation : Louis A. Allen

7. Management Process : Neumann

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CONTENTS

Sl. No. Lessons Pg.No.

1. Introduction to Management 4

2. Planning 14

3. Organisation 21

4. Direction 33

5. Motivation 35

6. Communication 41

7. Leadership 52

8. Co-ordination 57

9. Control System and Process. 59

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LESSON 1

INTRODUCTION TO MANAGEMENT

MANAGEMENT

Management is the process of designing and maintaining an environment in which individuals workingtogether in groups to accomplish selected aims efficiently.

It connotes different meaning indifferent contexts. The concept management may be used as

Collective noun - Board of directors or Executive Committee

Field of study - A branch of knowledge including the principles,

techniques, functions and problem management.

Function - Functions to be performed to attain the

organizational objectives-planning, organizingdirection, co-ordination and control

In a more important sense, management is a vital function concerned wth all aspects of the working ofan enterprise. Here the management is considered as a body of knowledge consisting of several

concepts, principles, techniques and theories which can be adopted in any group Endeavour.

DEFINITIONS

Management is an art of knowing what do you want to do and then seeing that is is done in the best

and cheapest way.-F. W. TAYLOR

To manage is to forecast, to plan, to organize, to command to co-ordinate and control.

- HENRY FAYOL

Management is a distinct process consisting of planning, organizing, actuating and controllingperformance t determine and accomplish the objectives by the use of people and resources,

- GEORGE R. TERRY

Management is the creation and maintenance of internal environment is an enterprise where

individuals working in groups can perform efficiently and effectively toward the attainment of group

goals. It is an art of getting the work done through and with people in formally organized groups.- KOONTZ ANDODONNEL

FEATURES OF MANAGEMENT

The important characteristics of management as a business function are:1. It is an art of getting things done through and with people.

2. Art and science of decision making and leadership.

3. It is a universal process for achieving results.4. It is an profession which involves specialized training and is governed by an ethical code.

5. It coordinates human factor and physical resources for the accomplishment of group objectives.

- by balancing and integration (or)- by innovation and adaptation

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IMPORTANCE OF MANAGEMENT STUDY

The need and significance of management functions in the modern organizations are given below.1. To increase the efficiency

2. to give a definite shape to management function.

3. to improve research in management.4. to attain social goals by effective utilization of resources.

NATURE OF MANAGEMENT FUNCTIONS

1. Universality : It has universal application in all kinds/nature and size of

business activities.

2. Dynamism: This body of knowledge is going on changing

continuously with respect changes that are taking place in

the organizational environment.3. Relativity : It embraces all business functions at different levels.

4. Regularity of

human nature : It helps to shape the human behaviour in the workenvironment.

APPROACHES TO THE STUDY OF MANAGEMENT

A brief discussion about different approaches of management is given below.

EMPIRICAL APPROACH

The empirical school of management bases its methods on a close study of past managerial experiencesand management cases. As such, it is also known as case approach or management experience

approach.

According to this approach, management is considered a study of manager in practice. The

intention of studying experience is to draw generalizations and to develop means to teachingexperiences to other practitioners and students. Attempts are made to duplicate successful experiences

while avoiding unsuccessful ones.This approach offers the most conventional way of acquiring skills in management, that is,

learning through the experience of others. This approach also helps in classroom, situations for

developing diagnostic and analytical skills in management students. Following limitations of this

approach are quite obvious.- This empirical approach, basing its generalizations on cases and past experiences has not

contributed anything fundamental to the development of management as discipline because of obvious

contradictions in various management experiences.

HUMAN BEHAVIOR APPROACHThe human behavior approach is the outcome of the thoughts developed by behavioral scientists wholook at the organization as collectivity of people. Since management involves getting things done with

and through people, the study on management must revolve round human behavior. This approach can

be divided into groups interpersonal behavior approach and group behavior approach. This approachsuggestion how the knowledge of human behavior can be used in making people more effective in the

organization.

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However, this approach is not free from limitations. It is true that manage can be better placed by

understanding human behavior but equating management with human behavior is untenable. There is

something more than mere human relations management. Human behavior approach provides only thediagnosis for human problems but problems have to be solved by taking many more factors which are

not explained by this approach.

SOCIAL SYSTEM APPROACHClosely resembling the human behavior approach and often confused intermixed with it is the social

system approach. The real pioneer of social system approach is Vilfred Pareto, a sociologist. His ideaswere later developed by Chest Bernard who has really developed the concept of social systems

approach management. According to this approach, the organization is essentially a culture system

composed of people who work in cooperation. As such, for achieves organization goals, a co-operativesystem of management can be developed only understanding the behavior of people in groups.

The social system approach has real significance to the practicing managers in the sense that

all managers operate n a social system and the organization is likely to succeed if the demands of the

society in which it operates as fully recognized. The approach, however, spreads the boundary andapplication of management beyond the true concept of organizations.

SOCIAL TECHNICAL SYSTEMS APPROACHThis approach believes that to solve organizational problems, it is not enough to look at the cooperative

social systems alone but technical systems (methods and machines) and how it affects and is affected

by social systems and a technical system. The real pattern of behavior in the organization is determinedby the interaction of the two.

The major contribution of this approach is that while analyzing management problem of

getting things done by people, adequate consideration should be given to technology as well asinformal interactions of people. Thus any change in technology must be viewed in subsequent change

in social interactions at the workplace. However, this approach is more suitable for managing the

problems at the shop floor leave rather thandandling the total management problems.

DECISION THEORY APPROACHThe major emphasis of this approach is that decision making is the job of every manager. The manageris a decision maker and organization is a decision-making unit. Therefore, the basic problem in

managing is to make rational decision.

The approach contributes to the sharpening of managerial tools specially for making suitable

decisions in the organization. The approach demonstrates how managers can discharge their functionseffectively. Decision-making is vital in every school of management. The vital aspect cannot be denied

but management is more than mere decision making.

MANAGEMENT SCIENCE APPROACH

Management science approach also known as mathematical or quantitative measurementapproach, visualizes management as a logical entity, the action of which can be expressed in terms ofmathematical symbol relationships and measurement data.

Management science approach is a fast developing one in analyzing and understanding

management. This has contributed significantly in developing orderly thinking in management whichhas provided exactness in management discipline. Various mathematical tools like sampling, linear

programming, games theory, time series analysis, emulation, waiting line theory etc, have provided

more exactness in solving managerial problems. However, it is very difficult to call it a separate school

of management because it does not provide the answer for the total managerial problems, Moreover,

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many managerial activities are not really capable of being quantified because of involvement of human

being who are governed by many irrational factors also.

SYSTEMS APPROACHThis approach is of comparatively recent origin, starting late 1950, it ha assumed

considerable importance in analyzing the phenomena of management. It is an integrating approachwhich considers management in its totality based on empirical data. The basic idea of systems approach

is that any object must rely on a method of analysis involving simultaneous variations of mutually

dependent variables. The implication of systems approach are given below.System approach of management provides and integrated approach of managing. This

considers management in its totality.

System approach of management provides an integrated approach of managing. Thisconsiders management in its totality.

System approach possesses the conceptual level of managerial analysis much higher than

any other approach. It provides a framework through which organization environment interaction can

be analyzed and facilitates decision-making, since the system within which managers make decisionscan be provided as a more explicit framework decision-making is easier to handle.

It is often suggested that system approach is too abstract to be of much use to practicing

managers. It merely indicate that various parts of the organization are interrelated.System approach of management lacks universality and its precepts cannot be applied to all

organizations.

CONTINGENCY OR SITUATIONAL APPROACHThe basic idea of contingency approach is that there cannot be a particular management

action which will be suitable for all situations. Rather, and appropriate action is one which is designedon the basis of external environment and internal states and needs. Contingency approach tries to fill

this gap by suggesting what should be done in response to an event in the environment.

Contingency approach, on the other hand suggests an active interrelationship between the

variables in a situation and the managerial actions devised. The implications of the contingencyapproach are given below.

It is the sophisticated approach to understand the increasing complexity of organizations.

It emphasizes the multivariate nature of organizations and attempts tounderstand how organizationsoperate under varying conditions. The approach is directed towards suggesting organizational designs

and managerial actins most appropriate to specific situations.

Inspite of the various contributions, contingency approach has not been acknowledged asa unified theory of management because it suffers from some limitations.

1. Inadequate Literature

Contingency approach suffers from inadequacy of literature.

2. Complex :

Determination of situation in which managerial action is to be taken involves analysis of a

large number of variables with multifarious dimensions.

3. Reactive not Proactive:

Contingency approach is basically reactive in nature. It merely suggests what managers can doin given situation.

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operations of each of the departments and sections. It stimulates people to action and also determines

their mode of action.

For eg. Sales manager plans his sales campaign

The purchasing Manager plans his purchasing and transporting operations

The production Manager plans his production programs.

Planning is an exercise in forecasting and decision making. It involves forecast of future conditions andan estimate of how the proposed plans would be affected by them.

Thus planning involves two aspects. First it involves mental formulations of an idea of what is desired

to be achieved. Upto this, it remains at the thinking level and is based on forecasts and estimates.

Secondly it determines the mode of action to be pursued to achieve what has been thought up. At thisstage, the idea takes a definite shape with a due regard to the ordinary and immediate circumstances

facing the enterprise.

ORGANISATIONTo organize means to put into working order and arrange in a system. In this sense, an

organization is an organized body or persons. Organising may be defined as arranging a number ofcomplex tasks into manageable units and defining the formal relationship among the people who are

assigned the various units of tasks. This definition is in the context of attainment of the goals and

objectives of an undertaking.Generally, identifiable units of tasks are put under the charge of a department, section or

division. The head of that department, section or unit being given with the authority to perform those

tasks. For eg. Business activities in an industrial concern may be grouped under :

1. Production2. Sales

3. Finance and

4. Personnel

After classification and analysis of functions to be performed by each department, persons possessing

requisite qualifications and experience may be appointed as head of each of these departments. Suchpersons should also be given proper authority to discharge their functions efficiently.

. Thus basically organization is concerned with grouping the activities required to attain the

planned objectives, defining responsibilities of the people in the organization, delegating theappropriate authority to them to discharge the respective responsibilities and establishing structural

relationships to enable Co-ordination of the individual efforts towards accomplishment of the enterprise

objectives. The main objective of organization is to establish well defined relationships as between

individuals and groups of individuals and between the activities performed by them.

STAFFINGIt has been defined as manning and keeping manned the positions provided by the organizationstructure. Thus staffing involves four things:

Assessment of personnel needs of the enterprise and selection and training of employees.

Determination of employees remuneration.

Evaluation of employees performance.Establishment of effective communication skills.

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Staffing is a difficult managerial function, because it is concerned with selection of properly qualified

and mentally well-adjusted persons and their retention in the enterprise as a contented and motivatedwork force.

DIRECTINGTo direct means to guide and supervise any action or conduct. It implies guidance or instructions about

what to do and how to do it. We have seen that in organisatin executives assign responsibilities and

duties to their subordinates and delegate to them with requisite authority to perform the assignedresponsibilities of duties. This in fact is of very essence of management the art and process of getting

things done by others. No doubt, executives have the authority to force their subordinates to comply

with their directives. In case any subordinates faisl or refuses to comply, be may be thrown out orpunished in some other manner. But this a wrong view of the enterprise entire process of management.

On any case, with strong trade unions and a number of labour laws to protect the worker, it would not

be wise to demand compliance from ones subordinated. For securing whole-hearted compliance from

subordinated, the function of direction assumes considerable significance.

Direction function involves

1. Issuing orders and instructions to subordinated.

2. Guiding, training, energizing and leading the subordinates to perform the work methodically.

3. Exercising supervision over the work done by subordinates to ensure tat it is n conformity withaims and objectives of the enterprise.

From all accounts, the function of directions is very important. Thus to make the organization click, itbecomes necessary to direct ones subordinates in a manner that they become effective instruments in

the realization of enterprise goods. The process of direction comprises of the following elements viz.

i. Leadershipii. Communication

iii. Motivation and

iv. Supervision

A detailed discussion about these aspects is given in the subsequent chapters.

CO-ORDINATIONSome authorities emphasis co-ordination as a separate function of Management. This approach has not

been adopted here because it is felt that co-ordination is emphasized in each of the functions ofmanagement process. Co-ordination must be sought from the very first step, namely, planning, so that

plans of all departments are integrated into a master plan, issuing the adequate co-ordination. Similarly

organizing of people into groups and work into activities involves adequate co-ordination. It can also

be secured through proper motivation of the workers towards organized efforts in terms oforganizational objectives and personal objectives of the employees through an integration of such

objectives. Finally the controlling aspect also indicates further co-ordination is required resulting in

improvements and fresh plans.

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CONTROLControlling can be defined as comparing results with plans and taking corrective actin when

results deviate from plans.

In an organizational set up, It every Managers responsibility to control the performance of

work and workers places under his charge.

Pre-requisites of control:

1. Control is possible only where is there is a plan according to which actual performance isintended to proceed.

2. The second requirement of control to measurement of the results of actual operations.

3. The third requirement of control is taking corrective action as soon as deviation from the plan isdiscovered.

Fundamentally, control is any process that guides activity towards some pre-determined goal. The

essence of this concept is in determining in whether the activity is achieving the desire results. This

is what control is all about. For control to be effective and fruitful, it must be based on a plan. Thenon the basis of information received from the operational level, there must be measurement of

actual performance to ascertain deviations.

Thus the above functions are said to be the important functions of Management.

ADMINISTRATION AND MANAGEMENTThe two terms administration and management are being used interchangeably for all practical

purposes. However these two terms are different from each other. Oliver Sheldon summaries the

distinction as follows.

Administration is the function in the industry concerned in the determination of corporate policy,

the co-ordination of finance production and distribution, the settlement of complaints of the

organization and ultimate control of executive.

Management is the function in the industry concerned in the execution of policy within the limits

setup by the administration and the employment of the organization for the particular object setbefore it.

William sprigeal distinguishes Administration as the determinate function and management as

the executive function.

Management is primarly concerned with carrying out of the broad policies laid down by the

administration. Thus the administration is concerned with the thinking function and management

with doing function.

The essence of management is highlighted by the definition given by KOONTZ and O DONEL

and by DONALD CLAGH. The later describe management a the art and science of decision

making and leadership. Art of getting things done through people and with people. Human factor inindustry has endless capacity for work provided planning and resources are made available to it.

The managers goal of attainment of enterprise objectives in the more efficient manner can be

accomplished only when the people in the enterprise work to the best of their ability in the spirit ofcooperation and zeal.

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MANAGEMENT : AN ART OR SCIENCE

MANAGEMENT AN ARTAccording to G. TERRY; Art is Bringing about a desired result through the application of will in

any activity is called as an art, The emphasis is on applying skills with knowledge andaccomplishing an end through deliberate effort. Thus the function of the art is accomplishing

concrete ends efforts, results; predict situations that would not come about without the deliberate

effort, to secure them.

MANAGEMENT IS A SCIENCEScience has been defined as body of systemized knowledge accumulated and accepted withrespect to the under standing of general tools concerning particular phenomenon subject or object

of study.

It is absolutely necessary that it should have codified principles and techniques that explains certain

truth with respect to basic phenomenon.

In this sense management is certainly regarded as science as it has also develop in to a systemizedknowledge regarding a particular phenomenon, namely, managerial function.

MANAGEMENT AS PROFESSION

Profession is defined as an occupation based upon the specialized intellectual study and training,

the purpose of which is to supply skilled service or advice to others for the definite fee or salary.

CHARACTERISTICS OF PROFESSION1. Existence of knowledge :

Profession emerges from the establishment of fact that there is a body of knowledge which cannotstarted around but has to be studied for being a successful professional.

2. Acquisition of knowledge :

An individual can enter profession only after acquiring knowledge and skills through formal training

for example, only the law graduates can enter the profession of legal practice.

3. Professional association :

An occupation which claims to be profession should have an association. However manager do not

have single unified professional group like Indian medical council for medical practitioners from thisnew management cannot be termed as trade profession.

4. Ethical code :

For every profession some ethical standards are provided and every individual of the profession isexpected to maintain conformity with these standards. In management also, code of conduct has been

formulated to suggest the behavioral pattern for professional managers.

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5. Service motive:

It is essential because the monetary value of professional service cannot be measured easily in absenceof market mechanism except the competition among the professionals themselves. The success of any

profession is measured not in terms of money. It earns but by the amount of social service it provides.

Similarly contributions of management cannot be measured in terms of money alone because withoutintegrating effort of management, resources worth millions of rupees may be useless.

Once organization grows beyond certain size, changes in the nature of management process demandsthat ownership and management should be divorced. So management positions should be held by

persons who have professional skill and adequate training.

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LESSON 2

PLANNING

MEANINGIt means determining what is to be done, how, when and by whom it is to be done. It lays down andobject to pursuit and chalks out a specific course of action to achieve it. It is the first step in the

management process concerned with establishment of objectives and goals to be attained in the futurein the light of an analysis of present limitations for attaining such goals with a views to their removal orreduction, anticipation and designing the course of action and programmes for attaining such pre-

determined goals.

DEFINITIONPlanning is the selecting and relating of facts and the making and using of assumptions regarding the

future in the visualization to achieve desire results.

GEORGE TERRY

Planning is deciding advance what to do, how to do it, when to do it, who is to do it. It bridges the gapform where we are, to where we want to go. It makes it possible for things to occur which would not

otherwise happen.

- KOONTZ & ODONNEL

Planning is the thinking process, the organized, foresight, the vision based on facts and experience that

is required for intelligent action.

- ALFORD & BEATTY

FEATURESAs a process, planning has certain features as given below.

- It s the thinking process.- Choosing is at the root of planning.

- It is pervasive prevailing in all activities- Accomplishment of enterprise objectives.

- Primacy of planning Prime

- It is all embracing.- It leads to increase in efficiency.

- It is an integrated process consisting of objectives, policies, procedures

IMPORTANCE OF PLANNINGThe significance of planning function could be indentified from the follows- To tackle increasing complexity in modern business.

- To face increasing competition.

- To provide for complex technological changes.- To insure against business failure.

- To meet the changing economic and political situations.

- To exercise effective control.- To bring greater economy.

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Merits of planning

Planning process facilities the managerial function on the following ways:-Selection of best objectives can be made with the help of planning Profits, prestige, Favourable

consumer reaction, High morale of workers, Man-power development.

- Unity of action could be ensured.

- Aid to co-ordination and control- Aid to growth and Expansion.- Aid to employee co-operation.

- Aid to economy.

- Aid to foreseeing the future.

- Increases the effectiveness of manager.

Limitations of planning

The effectiveness of planning process may be affected on the following reasos

1. Uncertainty Planning is based on forecasted results which will not

Hold good in uncertain situations.

2. Rigidity Prior determination of policy, programme, etc.

Makes it regid.

3. Unsuitability Business is a dynamic activity and hence planMay not be suitable in all situations.

4. Costly Planning is time consuming and costly affair

KINDS OF PLANNING

On the basis of the time factor, planning may be

Long Ranging planning - 5 10 years

Short Range planning - Not more than one year

On the basis of business function for when planning is to be drawn Product planning, project and

activity planning.

DECISION MAKING

It is ht process selection an alternative from two or more alternatives to determine an opinion or acourse of action.

- GEORGE TERRY

Factors involved in decision making :

Tangible factors: Profits, Quality of output and all other quantitative factorsSuch as Man-hours, Machine hours.

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Intangible factors:

a.) Employee morale.

b.) The prestige of business concern.

c.) Consumer behaviour.d.) Such other abstract factors.

Need :Weighing the consequences of each alternative course of action.

Steps in Decision-making process:

Defining and analyzing the problem,

Finding relevant facts.Developing alternative solutions.

Selecting the best solution.

Converting the decision into effective action.

Decision-making Process

Formulation

Selection

Deliberation

Investigation

Conception

Ption

CRITERIASome of the rationales to be adopted indecision-making process are:Reduction of cost, Maximization of profit, saving of time, development of managerial skill, increasing

productivity etc.

TYPES OF PLANS1. Standing or repeated use plans

1. Objectives2. Policies

3. Procedures.

4. Rules5. Strategies.

2. Single use of plans:

1. Programmes.2. Budgets

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A brief description about these sub-types of plans are given below:

a.) Objectives

It may be defined as the specific goals or targets to be accomplished viz., profit making, cost reduction,

increase in productivity goodwill, personnel development. Healthy employee relations, socialresponsibility.

Fixing of objectives in an organizational planning function ensures the following advantages.

It is vital to planning function.It helps to Integrate planning.

It ensure performance control.

Limitations :

However, fixation of objectives is subject to certain limitations viz.,Difficult to define the objectives.

Difficult to devise suitable means.

Difficult to avoid conflict.

Remedies:

1. Objectives should be specific,2. Objective should be realistic,

3. Objective should be backed by suitable sub-goals.

4. Objectives should be flexible.

b. Policies

It may be defined as a guide to thinking and action of those who have to make decisions in the course

of accomplishment of the enterprise objectives. They are formulated in broad forms and provide a

compressive and flexible course of action to be pursued to attain the given objectives

FEATURESIt is a broad outlines about the things to be done and the way in which they an to e done.

It is Consistent with that of the organizational plan.It is to be adequate in number to achieve organisationals goals.

It should be a sound one.It must ensure flexibility.

KINDS OF POLICIES1. Internal or originated polices.2. External or imposed policies.

3. Addealed policies.

4. State or explicit policies.5. Unstated or implied policies.

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Factors to be considered while formulation policies are :

1. Values, Beliefs, Ambitions, and Foresight of the owners and members of the top management.

2. Prevalent Technology.3. Finance availability.

4. Employee reaction.5. Accomplishment and activities of competitors,6. Governmental regulation and control.

7. General business environment.

8. Price levels.

9. Public attitudes and behaviour.

Merits :

1. Guide to think and act.2. Ensures Consistency in all actions.

3. Broader applicability.

4. Confidence booster.

Demerits :

1. It wont help to solve all problems.

2. Instant solutions to problems may not be available.

3. It cannot substitute human judgment.

4. It may nor encourage initiative.

c. Procedures

The process of establishing time sequences for work to be done.

They may be described as plans prescribing the exact chronological sequence of specific tasks requiredto perform designated work.

To determine the specific tasks to be performed.The time when those tasks will be performed.

The person who will perform them.

Merits :

1. Basis of control

2. Standardisation of activities can be done.3. Ensure consistency in all operations.

4. Aid to communication and co-ordination.

Limitations :

1. Redundacy may takes place in course of time.2. Updating becomes must.

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d. Rule :

It is decision made by the management regarding what is to be done and what is not to be done in a

given situation. It applies to specific situations. Rules do not leave any scope for decision making nordo they permit any deviation.

e. Strategies :It is derived form the greek word strategies, meaning general,

It means the art of projecting and planning the choice of means by which the enterprises forces ay beemployed most effectively in order to accomplish its intended goal. It is said to be formulated only to

meet the challenge posed by competitions policies and activity. The following factors may be

considered for formulating strategies.

- Correct assessment of reaction of the parties concerned.- What human and physical resources are available to draw up a strategy.

- Temperamental make-up of the persons to check-mate whom the strategy is being would up.

TYPES OF STRATEGIES- Strike while the iron is hot-act prompt a while the action is likely to get results.

- Camels head in the tent creation of confidence regarding plan to some- Unity is strength

- Time is greater heater.

- Offence if the best form of a defence.- Divide and rule.

Successful implementation of strategies :

1. Communicating strategies to all key decision-making managers.2. Developing and communicating planning premises.

3. Ensuring that action plans contribute to and reflect major objectives and strategies.

4. Reviewing strategies regularly.

5. Developing contingency strategies and program.6. Making the organization structure fit planning needs.

7. Continuing to emphasis planning implementing strategy.8. Creating a company climate that forces planning.

f. ProgrammeIt lays down the operation to be carried out to accomplish a given work. It prescribes how enterprise

resources should be used.

Merits

1. Action based practical guide to managerial action.2. Greater motivation.

Demerits

1. Greater risk of failure

2. Inadequate motivation.

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g. Budget

It is a plan relating to a period of time expressed in numerical terms. as a pre-determined statement of

management policy, during a given period, which provide a standard for comparison with the resultsactual achieved.

Objectives of Budgeting :

1. To ensure effective planning.

2. to facilitate Co-ordination function.

3. To exercise Controlling effective and achieving desire goals.4. To motivate the workforce for achieving desired results.

Merits :

Instrument of management policy

1. Time bound

2. Specific targets.

3. Synthesis of past, present and future.4. Right motivation.

5. Basis of control.

Limitations1. Cabined and confined.

2. Excessive reliance on past experience.

3. Danger of inaccuracy in estimates.

4. Hampers initiative rational and pragmatic initiative is stiffed.

PLANNING PREMISES

Managerial plans are based on certain assumptions which are called planning premises. They constitute

the ground on which plans will stand. Meaningful premises facilitate consistency and coordination ofplans. The premises may be of

Non-controllable premises such as economic conditions, political situations, tastes, preferences of

people etc.

Semi-controllable premises such as firms market shares, union management relations etc.Controllable premises such as policies of the organization, procedures, rules etc.

Effective Premising :To effectuate the planning premises following guidelines may be adopted.

Selection of the premises that bear materially on program.

Development of alternative premises for contingency planning.

Verification of the consistency of premises

Communication of the premises.

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LESSON 3

ORGANISATION

The term organization is derived form the word organism which means structure with parts so

integrated that their relation to each other is governed by their relation to whole.

The term organization is used both structural and functional sense. As a structure it means a developedenterprise being operated t achieve the given goals. As a function it refers to establishing relationship

between activities and authority pertaining to an enterprise.

Organization is nothing but a process of integrating and co-ordinating the efforts of men and materials

for the accomplishment of a set objective.

DEFINITION

Orgnisation is the process of identifying and grouping work to be performed defining and delegating

responsibility and authority and establishing relationship for the purpose of enabling people to work

most effectively together in accomplishing objectives.

-ALLEN

Organisation thus is an arrangement for internal administration of the enterprise. It describes the partwhich each employee is intended to play in the operation of an enterprise and ensures that concerned

endeavour of all of them will be conductive to the full implementation of the plans of the enterprise.

FACTORS INCLUDED IN THE CONCEPT OF ORGANIZATION

a) Assembly of business elements such as men, money and materials.

b) Creation of formal relationships between men employed at different levels through ahierarchy of authority.

c) Defining the functional role of the personnel and laying down the range of theirresponsibility for business performance.

d) Operating the organizational activities in conformity with the establishment

objectives of the enterprise.

PRINCIPLES OF ORGANIZATION1. Principles of objectives.

2. Principles of authority.3. Principles of ultimate authority.

4. Principles of formal authority5. Principles of the span of control6. Principles of decision

7. Principles of Exception

8. Principles of Definition9. Principles of Balance

10. Principles of Continuity

11. Principles of Organisation cost

12. Principles of Effective communication.

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ELEMENTS OF ORGANIZATION1. Division of work 2. Grouping of activities.

3. Assignment of Duties.

4. Delegation of Authority5. Establishment of relationship.

Hence internal organization, implies designing an administrative set-up consisting of individuals withdefined task and responsibility to be performed according to an orderly sequence procedures for

attaining the result.

ORGANISATIONAL CHARTIt is important tool for portraying net work of an organization structure. It shows

1. The main portion, nature of relationship between

2. Levels of management.

It is diagrammatic form which shows important aspects of an organization, including the major

function and their respective relationship, the channels of supervision and the relative authority of eachemployees who is incharge of each respective functions.

-FEORGE TERRY

TYPES OF CHARTS1. Vertical chart

2. Horizontal chart3. Circular chart

4. Tree chart

Merits of Organisational Chart :

1. Clarity in relationship

2. Easy to understand at a glance3. Familiarizing new employees

4. Helps in formulating training programme

5. Helps to organizational change6. It serves as a better method of visualizing the tone and character of an organisation.

Limitations

1. Likely to be outdated

2. Rigidity

3. It shows only relationships4. Shifting of responsibility to somebody else

5. Does not show extents of authority or responsibility.

6. It may go against teamsprit7. It ignores the informal aspects of orgnisation.

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TYPES OF ORGANIZATIONThe problem of organization is to select and combine the efforts of men of proper characteristics so as

to produce the desired result. Although character and type of organization would depend largely on the

size and nature of enterprise, the following broad patterns of organizing the personnel have been

evolved.

Line organization Staff Organisation

Functional Organisation Line and Staff OrganisationMatrix Organisation Projectised Organisation

A brief outline about the three basic organization structures are given below

LINE ORGANISATIONIt is the oldest type of organisation in use in which authority flows from the men at the top to the lowestman vertically. i.e., the directionsare issued by the person incharge of the whole organization and are

directly conveyed to the persons responsible forhte execution of the work. The advantages of this

structure are:Simple to understand and develop.Clear-cut division of authority and responsibility is possible

Discipline can be easily maintained.

It makes for quick action

However, this structure has following shortcomings:

Makes the organization more regid and inflexible

Lack of expert advice may be there.

Key man are loaded heavily.

Loss of one or two capable men may mar the organisatioin.

Line Organisation Chart

General Manager

Manager

Eastern Region

Manager

Western Region

Manager 1 Manager 2 Manager 3 Manager 4 Manager 5 Manager 6

LINE AND STAFF ORGNISATIONA manager today cannot hope to think of all possible factors in a given situation. Therefore, he hs a setof expert advisers. Those functions which have direct responsibility for accomplishing the major

objectives of the firm are called line functions. The staff functions are supposed to help and assist the

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line in discharging their responsibility. The staff position established as a measure of support for the

line organization may be of personal staff, specialished staff and general staff. This form has certain

advantages and limitations. They are

It is based planned specialization

It brings expert knowledge to bear upon managementIt provides more opportunity for advancement for able workers.

Limitations:Relationship between line and staff member may creates confusion.Lack of authority may affect the interest of the staff member.

Prestige and influence of line member ay suffer in front of specialist.

FUNCTIONAL ORGANISATIONHere the whole task of management and direction of subordinates should be divided according to

the type of the work involved. The functional management carries this idea to its logical limit and

divides up management into a number of functions such as production, sales, finance and personae, andresearch and development etc. Each of these departments would serve its best for the organization. Its

advantages are;

It ensures a greater division of labour

It Improves the efficiency of the organization.

It brings specialization and innovations.It facilitates mass productin.

However, it has certain limitations as given below;

Strict enforcement of discipline is questionable.

Creates complexity in structuring activities.Responsibility cannot be fixed effectively.

A model of line staff and functional organization structure is given below.

Chairman

PA to Chairman

Director Personal Director Production Director Purchasing Director Finance

GM 1 GM 2

ManagerPersonal

ManagerProduction

ManagerFinance

ManagerPersonal

ManagerProduction

ManagerFinance

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FORMAL ORGANISATIONA Network of personal and social relation not established or required by the formal organization but

arising spontaneously as people associate with one another.

Types of informal groups

1. Social overlays2. Functional overlays

3. Decision overlays

4. Power overlays5. Communication overlays

Benefits1. Sense of belonging

2. Safety value for emotional problem

3. Aid to the job

4. Breeding ground for innovation and originality5. Important channel of communication

6. Social control

7. Check of authority8. Self policing

9. Fills gaps in a managers abilities

10. Gives the managers feedback about employees and their work experience

Limitations

1. Resistance to change

2. Suboptimization3. Rumor

4. Group think philosophy

AUTHORITY AND RESPONSIBILITYAuthority is the basis of organization in as much as organization is described as a system of

authority relationships. Authority is the power to command others to act in a manner deemed by thepossessor of the authority to further enterprise or departmental purpose. It is the power to make

decisions which guide the actions of others. The person who makes the decisions is the superior and the

person who accepts them and is guided by them is called one subordinate.

Authority is the right to give orders and the power to exact obedience.

- HENRI FAYOL

Authority may be of formal authority, acceptance authority, authority of situation, position authority,and technical authority.

Authority Power

1 It is the institutionalized right of a

superior to command and compel his

subordinates to perform a certain act.

It is the ability of a person to influence

another person to perform an act.

2 It rests in the chair It rests in the person

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3 It is delegated It is earned by own efforts

4 It is well defined It is undefined

5 It is what exists in the eye

It is a dejure concept

It exists in fact.

It is defacto concept

6 Basis for formal organization Basis for informal organ

Responsibility is an obligation of the individual to perform assigned duties to the best of his abilityunder the direction of his executive leader.

- KEITH DAVIS

Responsibility refers to duty, activity or sometimes even authority. It really means that the obligation of

a subordinate to perform the duty assigned to him. The essence of responsibility is, then obligation. In

the normal functioning of an enterprise much of the responsibility in the nature of continuing obligationwhich means that the subordinate has an obligation to discharge his functions as required by the

superior continually. Responsibility involves Compliance, obedience and Dependability. A failure toobserve these elements may call forth a penalty, punishment or disciplinary action against the erring

subordinate.The term accountability can also be used as a substitute for responsibility. Accountability

refers to the liability of a subordinate for a proper discharge of his functions. It includes responsibility

and arises from it. But accountability cannot be delegated. Thus to be accountable is to be answerablefor the fulfillment or non-fulfillment of the authority or responsibility assigned.

DELEGATIONTo delegate means to grant or confer. Delegation means conferring authority from one manager

to organizational unit to another in order to accomplish particular assignments. Delegation determines

the effectiveness of the manager in his work. The way in which delegation will influence therelationship between the subordinate and his superior and through it the performance of the

subordinate. In the absence of delegation, he may receive orders from many people and may, therefore,

be unsure of his job.

ELEMENTS OF DELEGATIONThe process of delegation involves three basic actions whether expressed or implied. They are

The delegator should assign duties to subordinates.He has to grant authority to subordinates to the delegated part of his work.

Delegation should create obligation on the part of subordinate to complete the job.

Merits

1. Relieves managers workload.

2. Leads to better decisions.3. Speed up decision builds up morale.

4. Train subordinates and

5. Helps to create formal organization structure.

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BARRIERS TO DELEGATION.On the managers side:

1. Fear of loss of power 2. Lack of confidence in subordinates.

3. Fear of being exposed.

4. Difficulty in briefing.

On the subordinates side:

1. Fear of criticism2. Lack of adequate information

3. Lack of self confidence and initiative and resources.

4. No positive personal gain.

GUIDELINES FOR EFFECTIVE DELEGATION1. Clarity in assigning the task

2. Proportionate authority.3. Limits of subordinates authority.

4. Positive incentive for accepting responsibility.

5. Proper training of subordinates.6. Create climate for mutual trust and goodwill

7. No over laps or slips in delegation.

STEPS IN DELEGATIONThe entire process of delegation of authority can be completed through the following steps.

Determination of results protected.Assignment of duties.

Authorization for action.

Creation of obligation.

SPAN OF MANAGEMENTIt is one of the organization principle. It refers to the number of subordinates for whose activities an

executive should be held responsible. The limit to the number of subordinates who can be effectivelymanaged by a manager.

The factors determining span of control of a superior are:

1. Nature of activities involved.

2. Ability of the superior (knowledge)

3. Nature and ability of subordinates.4. Time available.

5. Place available etc.

GRAICUNAS FORMULAFrench management consultant V. A. Graicuna offer analyzing subordinate and superior relationship

developed a mathematical formula. His theory identifies three types of the subordinates & superior

relationships namely.

1. Direct single relationships.

2. Direct group relationships.3. Cross relationship between subordinates.

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These relationships vary (considenancy) with the size of the subordinates group while the supervisions

own direct relationship with individuals increase n (proption) to the addition to subordinates the groupsand cross relationships increase much more than proportionately.

He said the total number of relationships grows in geometrical ratio, every time a new subordinates isadded.

FORMULA

R = Nx [2n-1+(n-1)

Where N = Number of subordinatesR = Total relations.

1. When two subordinates R = 6

2. 4 Subordinates R = 44

= 4 x ( 24-1+(4-1))

= 4 x [23+(3)}

= 4 x{8+3}

= 44

Span of supervision require following skills :

Supervision requires attention.Supervision requires Emotional stability.

Supervision requires time.

Supervision requires ability of subordinates.Supervision requires nature of work.

USE OF GRAICUNAS FORMULAIt clearly shows complexity and difficulty of wider spans.1. It reminds manager of wisdom of striking to narrower spans.

Limitation1. Mathematical precision is debatable

2. Direct group relation may be far fetched.

3. The main problem is not number of RL but their frequency and the volume of stress andstrain they generate.

4. It does apply in cases of cross relations of a big enterprise.

Limited span of control ensures the following

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- Makes it more difficult to have a uniform policy.

- Decentralization leads to problem in co ordination.

- May be limited to External forces.- Leads to increase in cost.

- May some time leads to mis-use of power in high levels.

- Leads to expenses in training a manager.- May be limited by the availability of qualified managers.

DELEGATION VsDECENTRALIZATION

1. Delegation is the process while decentralization is the end result.

2. Superior is responsible for delegation where as in decentralization subordinates are

responsible.3. Delegation is vital and decentralization is optional.

DEPARTMENTATION

First task in designing an organization structure is the identification of activities and to group them

properly. The process of grouping activities is commonly known as departmentation.

NEED AND IMPORTANCE OF DEPARTMENTATIN

The basic need for departmentation arises because of specialization of work and the limitation on the

number of subordinates controlled by a superior.

1. Advantages of specialization :

Thus if the managerial function is conceived as a set of activities facilitating the work of organization,

these activities can be carried out more efficiently and effectively through the division of work leadingto a specialization of managerial function.

2. Fixation of responsibility

Departmentation helps in fixing the responsibility and consequently accountability for the results.

3. Developed of managers

Departmentation helps in the development of managers.

4. Facility in Appraisal

Managerial performance can be measured when the area of activities can be specified and standards inrespect of these can fixed. Depertmentation provides helps in both these areas.

5. Feeling of Autonomy :

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Deprtmentation provides motivation by developing feeling of autonomy to the extent possible. There

are several bases of departmentation. The more commonly used bases are function, produt, territory,

process, customer, time etc. Some of these bases are internal-operation oriented like function,process, time while others like product, territory and customer are output-oriented.

FUNCTIONAL DEPARTMENTATIONThe grouping of common or homogeneous activities to form an organization unit is known as

functional departmentation. Functional departmentation is the most widely used basis for organizing

activities and is present almost in every large organization at some level.Functional departmentation is most commonly used because it offers certain advantages which

include advantages of specialization, ensuring performance of activities necessary for the achievement

of organizational objectives, elimination of un-necessary activities, easier control over functions, easierway for pinpointing training need of the managers and maintaining the relative importance of functions

in the organization.

PRODUCT WISE DEPARTMENTATIONProduct departmentation involves the grouping together of all actibities necessary to

manufacture a product or product line. Product departmentation is preferred for product expansion and

diversification when manufacturing and marketing characteristics of each product are of primaryconcern. Product departmentation offers several advantages places attention to product lines, reduces

problems of coordination for different products, provides opportunities for further diversification and

expansion of organization and provides product specialization necessary for managers specially wheneach product is different from other.

TERRITORY WISE DEPARTMENTATIONTerritorial or geographical departmentation is specially useful to large-sized organizations

having activities which are physically or geographically spread such as banking, insurance,

transportation etc., Territorial departmentatin provides certain efficiency in operation. Local factors

such as customers, culture, styles, preferences etc., always affect organizational functioning.

PRODUCTION PROCESSES WISE DEPARTMENTATIONIn process departmentation, processes involved in production or various types of equipments

used are taken as basis for departmentation. When the production activities involve the use of several

distinctive processes, these can be used as the base for grouping of activities. Such activities may be

textiles, oil production etc., The process are set in such a way that a series of operations is feasiblemaking operations economic. It provides advantages of specialization required at each level of total

processes, maintenance of plant can be done in better way, and manpower can be utilized effectively.

CUSTOMER WISE DEPARTMENTATION

Customer based departmentation is basically market oriented in which departments are createdaround the markets served or around marketing channels. The basic idea of this departmentation is to

provide services to clearly identified groups of customers. Each group of customers has different

purchase behavior, payment schedule, demand pattern etc., Therefore they can be attracted to the

organizations business by satisfying them by providing services, payment schedule demand patternetc.

CHOICE OF BASES FOR DEPARTMENTATION

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The selection of bases for departemntation involves a consideration of the relative advantages of each

base for the organization. Ideally speaking, a suitable basis of departmentation is one which facilitates

the performance of organizational functions efficiently and effectively so that its objective areachieved.

1. Specialization:

The basis of departmentation should reflect the specialization in performing the work.

2. Coordination:

Coordination involves that all the related activities are performed in a way that their performance is

synchronized so that each activity contributes to others.

3. Economy

A balance should be maintained between the cost of creating a department and its contribution. The

existence of a department is desirable only when it contributes more than its cost.

4. Focus on Result

Those activities which contribute to the achievement to these results should be given proper attention.

5. Local Conditions :

Local requirements of the organization should also the taken into account while creating departments.

6. Human Considerations :

Departments should be created on the basis of availability of personnel, their aspirations and valuesystems, informal work groups and attitudes of people towards various forms of organization structure.

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Lesson 4

Direction

Direction is instructing the subordinates to follow a certain process to attain a give objectives. It is

getting the work done through instructions and orders. It is the function of diversion in the managementprocess to get the work from the subordinates by means of guiding, motivation, communication,

supervising, leading and if need be commanding.

It is sum of total of managerial efforts that is applied for guiding and inspiring the working teams to

make better accomplishments in the organization.

It is the heart and soul of management.

PROCESS OF DIRECTION1. Defining the objectives.2. Organizing the efforts.

3. Measuring the work.

4. Developing the people.

Ever manager in the organization gives direction to his subordinates as superior and receives direction s

subordinate from his superior.

Direction may be defined as the function of management which is related with instructing, guiding and

inspiring human factor in the organization to achieve organization objective. The direction is not

merely issuing orders and instructions by a superior to his subordinates, but is includes the process ofguiding and inspiring them. The analysis of definition reveals that direction function consist of three

elements.

- Motivation- Leadership

- Communication

Direction has the following characteristics

- Direction is an important managerial function. Through direction management can initiatesactions in the organization.

- Direction function is performed at every level of management.

- Direction is a continuous process and it continuous through out the life of the organization.- Direction initiates at the top level in the organization follows and bottom through there

hierarchy. It emphasizes that a subordinates is to be directed by his own superior only.

IMPORTANCE OF DIRECTIONThe importance of direction function in the organization can be presented as follows.

- Direction initiates action.- Direction integrates employees efforts.

- Direction attempts to get maximum out of individuals.

- Direction facilitates charges in the organization.- Direction provides stability and balance in the organization.

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PRINCIPLES OF DIRECTION

Direction is one of the most complex function of the management as it ideals with people whose nature

itself is quite complex and unpredictable.

1. Principles of relating to the purpose of directing

a. Principles of maximum individual contribution.b. Principle of harmony of objectives.

c. Principle of efficiency of direction.

2. Principle relating to direction process:

a. Principle of unity of command.

b. Principle of appropriateness of direction technique.c. Principle of managerial communication.

d. Principle of comprehension.

e. Principle of use of informal organization.f. Principle of leadership.

g. Principle of follow through.

Thus one of the basics functions of management is direction. Direction means the use of leadership and

motivation to guide the performance of subordinates towards the achievement of the organizations

goals. Important requirements for effective direction are : Harmony of objectives, Unity of command,

direct supervision, efficient communication and follow-up.

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LESSON 5

MOTIVATION

Motivation is an art of stimulating someone or oneself or oneself to get designed course of action, topush the right button to get desire action. Motivation is an act of inducement.

Motivation Results Satisfaction

M = is a drive t satisfy a want

S = is experienced when the outcome has been achieved.

The basic principle of motivation is based upon the following policy i.e., carrot or stick policy.

Put a carrot in front of donkey to make it move or Jab his with a stick being.

NATURE OF MOTIVATION- It is a psychological concept

- It is total not piecemeal.- Determined by human needs.

- May be financial or non financial.

- Constant process

NEED FOR MOTIVATION* Maximum utilization of factors of production.

* Reduce labour turnover.* Easy availability of right personnel.

* Increased the efficiency and output.

* Create sense of belonging.

KINDS OF MOTIVATION1. Positive motivation2. Negative motivation

3. Financial motivation

4. Non-financial motivation

THEORIES OF MOTIVATIONManagement experts have formulated different theories on motivation at different dimensions. They

are :

1. Maslows theory of motivation.2. Herzbergs theory3. Mcgegors theory

4. Vrooms theory.

Need hierarchy theory: Abraham Maslows book on motivation and personality emphasizes

multiplicity of human needs are arranged in an order.

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* Physiological needs

* Safety needs

* Social needs* Esteem needs

* Self actualization.

The first two sets of needs are called Lower order needs (1,2)

The other sets of needs are called Higher order needs (3,4)

According to him when one needs fulfils another need will emerge automatically. While going for

achieving the particular need, people like to give priority to the pressing needs first and the rest in next.

Short coming of Maslows theory are:

- Order cannot be regarded as rigid.

- No indication regarding satisfaction of needs.- It may not have universal applicatibility.

- Motivation is piecemeal exercise by means of splitting of human needs.

HERZBERGS THEORYAccording to Herzberg, factors that give real satisfaction to an individual are motiators. He classified

the factors in to two viz,

Factors that prevent dissatisfaction - Hygiene factors.

Factors that give satisfaction - Motivators (feeling of achievement,significance of growth)

Maintenance factors Motivators1. Fair co policy and administration Opportunity to accomplish

something significant.

2. Supervisor knows the work Recongnition.

3. Supervisors relationship Chance for development4. Peers relationship Opportunity to grow

5. Fair salary Chance for increased

responsibility6. Job security The job inself

7. Subordinates relationship

8. Personal life

9. Status10. Good working condition

Needs priority, to a great extent, characterizes the types of behavior. It will be either directed towardsachieving certain desirable positive goals, or conversely, towards avoiding other undesirable negative

consequences. Thus, a question may arise as to what variables are perceived to be desirable goals to

achieve and conversely undesirable conditions to avoid. In this connection a research study was

conducted by Frederick. Herzbergls of Case-Western reserve University and associates. This studyconsisted of an intensive analysis of the experiences and feeling of 200 Engineers and accountants in 9

different companies in Pittsbrug area, U.S.A. During the structured interview. They were agreed to

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desirable a few previous job experience in which they felt exceptionally good or exceptionally bad

about jobs. They were also agreed to rate the degree to which their feelings were influenced for better

or worse by each experience which they described.

In concluding the information from the interview, Herzberg concluded that there were two categories

of needs essentially independent of each other affecting behavior indifferent ways. His findings are thatthere are some job conditions which operate primarily to dis-satisfy employees when the conditions are

absent, their presence does not motivate them in a strong way. Another set of job conditions operatesprimarily to build strong motivation and high job satisfaction, but their absence carely proves stronglydissatisfying. The first 80 job conditions has refused to as maintain or hygiene factors and second set

job conditions as motivational factors.

HYGIENE FACTORSAccording to Herzberg there are 10 maintenance or hygiene factors. They are company

policy and Administration technical supervision, inter-personal relationship with supervisors with

peers, with subordinates, salary, job security, personal life, working conditions and status. These arenot intrinsic part of job but they are related to conditions under which a job is performed. They produce

no growth in a workers output; they only prevent prevent losses in workers performance due to work

restrictions. These maintenance factors are necessary to maintain a reasonable level to satisfactionemployees; however any cut below this level will dis-satisfactory them. As such these are also called

dis-satisfiers since any increase to these factors will not affect employees level of satisfaction. Hence,

these are in no way motivation them.

MOTIVATIONAL FACTORSThese factors are capable of having a positive effort on job satisfaction often resulting in

an increasing ones total output. Herzberg includes 6 factors that motivate employees. These are

achievement, recognition, advancement work itself, possibility of growth and responsibility. Most of

these factors are related with job contents. An increase in these factors will satisfy the employees;

however, any decrease will not affect their level of satisfaction. Since, thee increase level ofsatisfaction in the employees can be used in motivating them for higher output. Herzgerg maintains that

potency to various factors is not entirely a function to factors themselves. It is also influenced by the

personality characteristics to the individuals. From this point of view, individuals may be classified intotwo parts. Motivation seekers, maintenance seekers. The motivation seekers generally are individuals

who are primarily motivated by the satisfiers such as advancement, achievement and other factors

associated with work itself. On the other-hand, the maintenance seekers tend to be more concernedwith factors surrounding the job such as supervision; working conditions, pay etc.

The shortcomings of Herzbergs theory are:

1. Infact job satisfaction and dis-satisfaction are two opposite points on a single continuumIndividuals on the job are affected by any change either in the job environment or in the job

content.2. Herzberg model is method bound and a number of other methods used for similar study

have shown different results not supporting his contentions other the theory has limitation is

general acceptability.

3. This theory does not attach much importance to pay, status, or inter-personal relationshipswhich are help generally as important contents of satisfaction.

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Comparison of maslows and herzberg theory

MASLOWS NEED THEORY HERZBERG THEORY

1. Self actualization

M

O

T

IV

AT

O

R

Challenging work, achievement, growth in

the job.

2. Esteem or status Responsibility, Advancement and

recognition

3. Social needs

M

AI

N

TE

N

A

NC

E

F

AC

U

L

TY

Status, Interpersonal, working conditions.

5. Physiological needs Job security, salary

MC GREGORES THEORYProf. Douglas Mc. Gregore has introduced a fresh dimension in the discussion on theories relating to

motivation. He has classified the prevalent theories into two groups viz.,

1. Traditional or X theory and

2. Modern or y theory.

Traditional or X theory.It completely excludes workers from the process of managerial decision making the theory stress

that would here only when forced to do so through ruthless exercise of managerial authority over them

through constant rebuking scolding reprimanding. Decisions whether right or wrong have to be madeby managers only, the only rule assigned to workers being to mainly incline the decision.

Assumptions of X theory1. Lack of inclination to work.

2. Fear can alone force action.

3. Inbuilt dislike for responsibility4. Living off others.

5. Obession with security.

6. Money alone can make the people to work.

7. Labour is only a factor of production.8. Authority is synonymous with control.

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Modern theory or Y theory

It is the exact opposite of x theory, it gives workers a pride of place in the process of management. Itemphasis fuel and active cooperation, between workers and management to accomplish the enterprise

objectives as per theory if workers are properly maturated, they would willingly accept responsibility

and show the sense of creativity and imagination in their work performance. It can be said to bepositive and optimistic outlook.

Assumptions of Y theory

1. Work is reward in itself

2. Inherent sense of responsibility

3. Recongnition.

4. Sense of security.5. Financial reward is not the only inspiration.

6. Decision making ability is not the monopoly

7. Democratically inclined

GROUP DYNAMICSEssentially dynamics is a branch of physics which means any matter in motion. It also

means a moral force that produce activity or change. Group dynamics means the action of a group

engaged in a common endeavor. The world dynamics comes from the Greek work meaning force. The

phrase Group Dynamics thus means a study of cohesive and disruptive force operating within a group.The importance of group dynamic to a manager lies in the fact that many people tent to

behave differently as individual and member of a group. The manager must thus study them both as

individual and as group, as these are two interrelated elements of a motivational situation. The group

dynamic will be structured around the three key element such as basic element of group behaviour,group cohesiveness and the group structure.

The three basic elements which generally of use in understanding the behavior of a group

are activities, interactions and sentiments. Group cohesiveness refers to the degree to which its

members are attracted to the group, are motivated to remain in the group, and mutually influence onanother. Highly cohesive groups are more likely to conform to group pressures than are members of

low-cohesive groups. Group structure if meant that the nature and characteristics of theinterrelationships among the members of a group and the roles they play in it.

THE EXPECTANCY THEORY OF MOTIVATION VICTOR H. VROOMPeople will be motivated to do things to reach a goal if they believe in the worth of that goal and

if they can see that what they do will help them in achieve it.

Vroom makes the point that motivate is a product of the anticipated worth that an individual

places on a goal and the chances the or she sees of achieving that goal. He states that:

FORCE = VALENCE * EXPECTANCY

Force = Strength of the person motivation.

Valence = Strength of an individual preference for an outcome.

Expectancy = Probability that a particular action will lead to a desiredoutcomes.

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LESSON 6

COMMUNICATION

The word communication originates from the latin word communis denoting common. It involves

imparting a common idea or understanding and covers any type of behavior resulting in an exchangeof facts, ideas, opinions, or emotions by two or more persons.

Management tasks of planning, directing, coordinating and motivation can be carried out by the process

of receiving issuing recording and interpreting.

The information of facts and figures related to the varied aspects of business activities necessarily

implies transmission of information intended to convey the idea of what is desired or required to bedone. This would necessitate determination of information to link all the leavels and enable the

concerned officers and operative to act upon such information. This process of transmitting information

as between different levels of authority and among the officers at the same level is calledcommunication.

- Louise Allen

CHARACTERISTICS OF COMMUNICATION1. Giving information on matters regarding things done or to be done.

2. Receiving information on matters of actins expedited or yet to be expedted3. Creating under standing in others about their responsibility and position and prospects of a

situation concerning then.

4. Making others listen attentively to the facts, figures, views, opinions under transmissions.5. Identifying the common intentions and interest by interaction of views through channels of

commutations.

IMPORTANCE OF COMMUNICATIONSCommunication is described as one of the crucial fouls of management. It helps in handling the

major managerial tasks of planning direction coordination motivating and controlling. It enables thetop management.

To formulate the comprehensive plans and policies on scientific basis.

To put the policies and decisions into action results in accurate and efficient performance.

Helps the management to remain informed to the problems difficulties, grievances of personnel.They arise mainly due to communication gap.

It is essential for coordination which is the essence of management. It brings about mutualunderstanding between the officers and personnels at all levels and fosters the sprit of cooperation.

It helps in securing largest possible participation or consumption indecision making, planning andgeneral administration. This will give democratic character to managerial process and strengthen

the moral of the staff.

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LIMITATION OF DOWNWARD COMMUNICATION1. Under Communication and over communication

Downward communication is often made by either under communication or over communication i.e.

a superior may either talk to little or too much about a job under communication may also involved

incomplete instructions, which will inevitably lead to unsatisfactory performance over communicationor talking too much, on the other hand may lead to the leakage of confidential information.

2. Delay :

The lines of communication in downward communication being very long transmitting information to

the lowest worker in time consuming process. By the time information reaches him it may have lostmuch of as significance, or it may have caused damaging delay.

3. Loss of information :

Unless the communication is fully written, it is not likely to be transmitted downwards in its entirely. A

part of it is almost contains to be lost.

4. Distortion

In long lines of communication, information is not only distorted. Exaggerating making understatements giving unconscious taints to facts are a part of human nature.

5. Built in resistance

Downward communication causes of too much authority flow. The subordinates do not get any

opportunity of participating in the decision making process they are expected to receive policy

decisions and directive without questioning their appropriateness, utility or validity which they resent.

ESSENTIALS OF EFFECTIVENESS DOWNWARDS COMMUNICATION.1. Managers should keep themselves well informed of the objectives and achievements of their

organization. It they are themselves in possession of adequate information, they will be also

to transmit information to their re-subordinated in an effective manner.

2. Managers must work according to communication plan. They must decide before how

much information is to be communicated and at what time.3. There should not be over communication of authority at the highest level. If an organization

is so structured that orders and instructions can originate at various levels, the lines of

communication will be shortened.4. The information must be passed on to correct persons inherently.

UPWARD COMMUNICATIONIf the managers have transmit information down the lines of authority they have also to receive

information continuously emanation from levels below them the communication channel which pushes

the flow of information upwards is known as the upward channels of communications. Managers haveonly recently come to the recognize the importance of upward communication.

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IMPORTANCE OF UPWARD COMMUNICATION1. Providing feed back

This communication provides the management with necessary feed back. The management is able to

ascertain whether the directive issued the lower statuses have been properly understood and followed it

also gets the valuable information on what the employees think of the organization and its policies.

2. Out let for the sent-up emotions:

Upward communication is the employee and opportunity to sent their problems and grievances.

Although the management often these things and it knows and realizes the grievances of the

employees, The later hardly feel convinced and satisfied.

3. Constructive suggestions

Often employees often constructive suggestion to promote the welfare of the organization. Some ofthese suggestion when implemented definitely prove beneficial. They develop source of participation in

the decision making process.

4. Easier introduction of new schemes

Since the employees feels themselves to be party to the decision making process, it helps theorganization to introduce new schemes without unduly antagonizing the employees.

5. Greater harmony and cohesion :

It art as a kind of lubricant. It makes the atmosphere more congenial are creates great harmony and

cohesion between the management and the employees.

METHODS OF UPWARD COMMUNICATIONSome of the more commonly used methods of upward communication are discussed below.

1. Open door policy:

The employees are given a feeling that the managers doors are always open to them, whenever the likethey can walk in to his room, without any hesitation what so where and talk to him about their

problems.

2. Complaints and suggestions boxes:

In some convenient places n the offer or the factory complaints and suggestions boxes are installed.The employees are encouraged to drop their complaints or suggestion if any, in to these boxes. Theseboxes are opened at regular intervals and the inform gathered scrutinized.

3. Social gatherings:

Social gathering are frequently arranged in different departments. These gatherings offer a very

informal atmosphere in which ate employees shed the inhibitions and feel free to talk about theirproblems.

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4. Direct correspondence:

Some times the manager may directly write to an employees and ask him to communicate with him.

5. Reports:

Employees may be required to submit repatriates about the progress of their work a regular intervals.

6. Counseling

In some organization workers are encouraged to seek the counsel of their superiors on their personal

problems. As they feel encouraged to talk about themselves freely, they provide the managers withvaluable information.

LIMITATIONS OF UPWARD COMMUNICATIONThe shortcomings of the upward communication are:

1. Employees are usually reluctant to initiative upward communication. The managers might

keep their doors open, but they cannot force the employees to walk in to their problem.2. Employees often feel that if they communicate their problems to their superiors, it may

adversely reflect on their own efficiency.

3. Upward communication is more prone to distortion them downward communication. Indownward communicate distortion is often unconscious. But upward communication is

deliberately distorted.

4. Sometimes in the process of upward communication, workers become to bold, ignore their

immediate superiors and directly approaches the top most authorities with their suggestionsor complaints.

ESSENTIALS OF EFFECTIVE UPWARD COMMUNICATION1. In order to enable the workers to over come the awe of authority, the managers should keep

on encouraging them to come out of their shell and communicate freely.

2. Distortion by editing can be avoided if the lines of communication are kept as shortestpossible.

3. All communicate should be properly analyzed genuine grievances deserve to be

immediately resolved.

HORIZONTAL COMMUNICATIONCommunication between departments or people on the same level in the managerial hierarchy of anorganization may be termed as horizontal or lateral communication. It is the most frequently used

channels of communication. Workers communicating with one another, &&&&&&& exchanging

information with one another, supervisors holding a coffee break section s to discuss some organization

are all engage in horizontal communication.

Diagrammatical representation of horizontal communication

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Production

Purchase

Accounts Sales Public relations

Administration

IMPORTANCE OF HORIZONTAL COMMUNICATIONHorizontal communication is extremely important for promoting understanding and

coordinating among various departments. Not much imagination is needed to visualize he embracing

situations that the lack of co-ordination might create for the organization. The purchasing department

might keep on purchasing material which is neither immediately needed nor can be adequately stored.The stores may report shortage of material when production is fully given up. Scarcity of raw material

may cause the production to slow down but the sales department may continue booking orders free

flow of horizontal communication among various departments can easily avert the incidents of suchsituations.

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Documents

125615569 Principles of Management