Nature and Meaning of Management

8/8/2019 Nature and Meaning of Management

http://slidepdf.com/reader/full/nature-and-meaning-of-management 1/69

Nature and meaning of management

Meaning- management is a process of taking managerial decisions and putting them into

action. It determines the objectives of the organization and takes steps to achieve them. It is

concern with the motivation of the employees. Management is the brain of any organizationbecause it takes decision makes policies rules and regulations.

Every organization requires taking decisions, co-ordination of activities handling of

people and evaluation of performance of those directing towards attainment of objectives.

Features of management:- these are the following features of the management.

Its a process:- in studying management as a process, various managerial activities are taken as

a basis for defining management as a process of planning, organizing, directing and controlling

the activities of the people working in a group.

Its a social process:- management is a social process because management functions are

basically concerned with relation among the people, its called a social process . since the

efforts of human being have to be directed co-ordinate & regulated by management.

Its a group effort. Management always refers to group effort and does not apply to an

individual.

Its an attainment of pre-determined objectives:- group efforts in management are alwaysdirected towards the attainment of some pre-determined objectives. These objectives are the

final goal of an enterprises towards with all managerial activities have to be oriented.

Its a distinct entity:- management is a sapret & distinct entity. It is quite different from the

various functional activities and the techniques and procedures.

Its a system of authority:- decision making and organizing factions cannot be performed unless

management is consist a system of authority. Since management is a system of directing to

done a task authority to accomplish the work from others is implied by the vary concept of

system.

Universality of management:- universality of management is by character. Fayol was the man

who contributed fourteen principles of management which implies more or less in every

situation.



It is needed at all levels:- an important feature of management is that it applied at all levels of

organization. The lower level supervisor has also performed the function of decision making

alike top level executive.

Its a discipline:- it has its organized body of knowledge & techniques. Its also taught in colleges

and universities like other disciplines.

Its an integrated process:- the essence of management is integration of human. and other

resources in such as manager leads to effective performance..

Its an art as well as science.

--------------------------------------------------------------------

Objectives of management:- these are the following objectives of the management.

Optimum utilization of resources:- the most important objective of management is to use

various resources of enterprises in most economical way. The proper use of

man,money,meterial will help the business to earn sufficient profit.

Growth and development of business:- by proper planning organizing and directing

management leads a business to growth and development. It help in profitable expansion of

the business.

Better quality goods:- the aim of the sound management has always been to produce the

better quality product at minimum cost. Thus it will tries to remove all types of wastages of

business.

Ensuring regular supply of goods:- the another objective of management is to ensure the

regular supply of goods to the people. It checks the supply of goods in the market.

Discipline and moral:- the management maintains the discipline and boost the morale of the

employees to imply the principle of decentralization and delegation of authority.

Promotion of research and development:- management undertakes the research and

development to take lead over its competitor and meet the uncertainty of future.

Minimize the elements of risk:- management involves the function of forecasting through the

exact future can never be predicted , yet on the basis of previous experience and existing

circumstances management can minimize the element of risk.



8. improving performance:- management should aim at improving the performance of each

and every factor of production. The enviourment should be such that workers contribute the

best to enterprise.

9. planning for future:- another important purpose of management is to prepare a prospective

plan. No management should be satisfy with todays work. Future plan should take into

consideration what is to be done next.

--------------------------------------------------------------------------------

Scope of management

The scope of management is very vast. Under the scope of management the following activities

are included.

Planning organizing staffing directing coordinating control

--------------------------------------------------------------------------------------------------------

Functions of management:- management is a dynamic process consisting of several

activities. These activities which every manager have to perform are known as functions of

management.

Planning:- planning is the first and most important function of the management it is a

determination of course of action to be followed for achieving the organizational objective. I

the words of Koonz and Donnels planning is deciding in advance what do, how to do it, whento do it and who is to do it. It can be characterized by think before doing. Planning is selecting

a particular course of action out of several courses available to manager. If a situation changes

the course of action selected may not achieve the desires result and a manager may be force to

change the course of action. Rigidity should be avoided as far as possible. Planning is based on

estimate of the future and the success of the plan therefore lies in the managers ability to

forecast future situation correctly and accurately. Forecasting is an inseparable part of

planning.

Organizing:- its a process of diving work into sections and departments. It involves the

allocation of authority , responsibility and duty among all the members of the enterprise. The

management has to organize the enterprise by grouping the activities so that the work is

carried out as planned. Organization represent an organized effort to accomplish planned work.

Its a tool of managing because it helps in creating a environment for human performance.

Organization provides necessary framework within which people associate achievement of

business objective.



Staffing:- staffing means manning and keeping of right man at right place. This needs

manpower. A manpower management staffing process therefore provides the organization

with adequate competent and qualified personal at all levels of the enterprises. Since successful

performance in individual largely determined the success of the structure. Staffing function of

the management deserves sufficient care and attention of the management.

Staffing consist the following- manpower planning, recruitment selection and replacement,

training and development, promotion and operation, determination of employees wages.

Direction:- the organization does not start working till the manager gave direction. Direction

means guiding and supervising the coordinate. Directing is concerned with implementation of

plan in initiate organized action and ensure good performance by employees towards the

accomplishment of group objective. The main aim of direction is to integrate the efforts of the

people for the best interest of the enterprise. Directing is a continuous function of management

& it is performed by manager at all levels in a organization.

Sub functions of direction:- communication, leadership, motivation.

Coordinating:- it is unifying the actions of a group of people for some common purpose. It is

the job of harmonizing activities of different individual and group. Henry Fayol to coordinate is

to harmonize all the activities of a concern so as to facilitate its working and success.

Controlling:- control is to guide somebody or something in the direction in which it is intended

to go. In terms of managerial function control consist of the steps taken to ensure the

performance of the organization confirmed to the plan.

Henry fayol, control consist in verifying weather, everything accrue in confirmation with the

plan adopted the instruction issues and principles established. It has the object to point out

weakness and errors in order to rectify them and prevent re-occurrence.

Controlling enumerate the following four steps:-

1 establishing standards of accountability.

2 measuring actual performance with standard.

3 comparing of actual performance with standard.

4 interpreting results

5 taking corrective action.



Fayols principles of management:-

Division of work:- the object of division of work is to derive the benefit from the principle of

specialization, its advantages are widely recognized and it can be applied on any kind of work

employing large number of workers. It has its limits and work should not be sub divided beyond

these limits.

Authority and responsibility:- authority is the right to give order and power to extract

obedience. Its exercise must be occupied by reward and penalty and must carry with its

responsibility and in this principle Fayol pointed out that authority must not be concrete apart

from responsibility. Those who accept authority should be willing to share responsibility.

Discipline:- according to Fayol discipline is obedience, application and outward marks of

respect. We considered discipline as a absolutely essential for the smooth running of the

business. Management which involves direction of efforts of large bodies of people has to be invariably matched by marks. Discipline among the people whom skill and energy are to be

channelize in specific direction. Direction therefore is essential to consolidate the management

over the activities and affair of any undertaking.

Unity of command:- for any action an employee should receive order from one supervisor only.

Fayol warned that in all human associations, dual command is perpetual command of action.

The employees work will confuse if they have to report more than one supervisor.

Responsibility can be pin pointed only when there is unity of command.

Unity of direction:- this principle states that there should be at one plan for a group of actionhaving same object. It means one manager and one plan for all operations. Which have same

object in view, whereby activity, resources coordinate and direct to the same end.

Subordination of individual interest to general interest:- common interest is above the

individual interest and when they confused between the two common interest prevail. This

principle called reconciliation of the object.

Remuneration personnel:- rewards per work done as soon as possible give satisfaction to both

the employees and employer. Remuneration should be enable the employee to lead a

satisfactory life and in addition offer special incentives to those who are more monitorial.

Centralization:- everything that increase the important of subordinate role is centralization,

and that which reduces it is centralization. Management should centralize the authority to the

extent that neither there should be too much consolidation power nor it devices too much.



Scalar chain:- according to fayol scalar chain is of the superior ranging from the ultimate

authority to the lowest rank. The line of authority is the root followed by every link in the chain

but all communications starts from ultimate authority. According to the Fayol communication

should be short circuit as far as possible.

Order:- by order fayol means a place for everyone and everyone in his right place. The right

man at right place. Orderliness in work can be obtained by the management through suitable

organization for man and material. Right man for right thing right material for right person

could ensure systematic utilization of resources and manpower employed in the undertaken.

Equity:- the principle of fayol says that manager must treat employees with kindness.

Prejudices personals likes and dislike should be influence the managerial treatment of

subordinate. Equity ensure cordial elation between the manager and labor.

Stability of tenure of personnel;- no employee should be remove within a short period of time .

stability of tenure of personal generate prosperity of the organization. The employee should

not be related on different jobs vary frequently because considerable time is required to learn

each job. Frequent chain should be avoided.

Initiative: it is concerned with thinking out an execution of a plan. Initiative increase improve

energy of the employee. Manager should secure initiatives possible for the subordinate. It

suggest that manger should permit subordinate to exercise authority, employee should

welcome to make any suggestion which should receive proper consideration by management

information of its objectives and plan.

espirit the corps- (team spirit) this is the principle of union is strength liberally speaking the

phase espirit the corps means the spirit loyalty and devotion with unites. The devotion of

group harmony among the personal is a source of strength. Unity among the persons can be

accomplished through the proper communication and coordination. Manager should not drive

doubtful take advantage by divide and rule police.

Nature of management- Art of Science

Management as a art;- art is often considered as the application of skill and knowledge for the

effective accomplishment of results. Every art is practical in its approach because the proof of the competence of the proportional lies in the tentative result that able to show. Art is called

creative because it is concerned with a creation of something. The following are features of art.

Personal skill:- art is concerned with the application of personal skill and knowledge to achieve

useful results. Management is certainly aim art as a manager uses his personal skill and



knowledge in solving many complicated problems that concurrent him working in his enterprise

successfully.

Personal knowledge:- an art means practical knowledge. It is concerned with application of skill

and knowledge required. Management does not simply means the knowledge of principles of

management rather than it is the application of his knowledge with makes it effective and

useful.

Result oriented approach:- management process is directed towards the achievement of

results. Hence it have result oriented approach,

Regular practice:- like an artist management always tried to achieve higher goals with

regularity. Better efficiency can be achieved through regular practice.

Creativity:- every art has an element of creativity. In this sense management can be required as

most creating art it is concerned with getting things done through others b inspiring them towork.

Management as a science:- the word science literally means knowledge. It is systematic body

of knowledge acquired by mankind through observation and experimentation which is capable

of variation. Science is a systematic in the sense that certain relationship, principle and their

limitations have been discovered tested and established.

Features of management as a science:-

Systematile body of knowledge:- management is regarded as science as it is an organized bodyof knowledge, build up by management, spectaional thinkers and philosopher many period of

years.

Continuous observation: the principle of management has been developed after continuous

observation. The knowledge of management has been enquired through continuous efforts of

many practitioners after a period of time.

Universal approach:- management has rewards certain general principles of universal

applications.

Caused and effect relationship:- scientific principles establish cause and effect relationship

between different variable. When applies to management the principle of management also

established cause and effect relationship. Example good planning and plant layout cause higher

productivity.



Validity and predictability:- the principle of management has been put to several test and

found to be a valid for example and individual working under one manager will show better

results than the individual who have follow two or more managers. Further principle of

management caused and effect relation cause predicting future again.

BUSINESS FORECASTING

It is an art of predicting the future on the basis of present and past information.

Accurate forecasting is a key to success in business. Forecasting is the basis of planning because

it determined in the advance the nature of future business operation and provide basis for

managerial decisions relating to material, sale, and purchase. Business forecasting is the search

procedure to discover those economical, social and financial influences, business activity to

predict and estimate current future which company may have future.

Importance of business forecasting:- forecasting is at most important in setting up newbusiness. It is not a easy task to start a businesses as it is full of uncertainty. With the help of

forecasting the promoter can find out whether he can succeed in new business or he can face

the existing competition.

Estimation of financial requirement:- the importance of forecasting can never be ignored in

estimating the financial requirement of the concern. No business can service without adequate

capital, but adequacy of capital depends entirely on sound financial forecasting.

Smooth and continuous working of a concern:- forecasting of earning ensure smooth and

continuous working of an enterprise ,particular to newly established business.

Correction of management decision:- the correction of management decision to great extent

depends apon accurate forecasting.

Success in business:- the accurate forecasting of sale help to procure the necessary raw

material on the basis of which many business activities are undertaken in the absence of

accurate sale forecasting. It is difficult to decide how much production should do. The success

of a business depends apon accurate furcating.

Plan formation:- the importance of correct forecasting is apparent from key role played inplanning. It should not go uncounted that furcating is an essential element in planning. Since

planning premises includes some furcating.



Types of forecasting

General business forecast:- no business is completely independent hence general business

forecast is undertaken. It helps to read the future condition for business and to predict the

probable changes in business condition that are likely to occur in the rear future in the near

future. Political condition, control, population and national income etc have direct wearing on

the business. So it is necessary for manager to take into consideration out these factors to

forecasting the prospect of his enterprise.

Sales forecasting:- this type of forecasting decides the fate of the organization s the rules

determines the success of the company. Therefore sales furcating should be undertaken with

due care and precaution so as to see that whether planning debt has to decide is carried out to

promote the sale.

Capital forecasting:- every business enterprises will have to think of its financial plan. It shoult

be determine so as to meet the needs of the company with this object include forecasting of

capital requirement have become necessary and its taken as primary step in the organization.

Accurate forecasting helps the organization to employ its capital to fullest extend and can get

the optimum returns of its investment.

Techniques of forecasting:-

Direct or bottom up method:- under this method different departmental head and there

subordinate collect information and for different aspect of production, sale and purchase etc.

this data later on compiled together as the data for the company and their code. It meansevery department makes its own forecast which later on clubbed together as aggregate date

for the company.

Indirect or top down method:- the requirement of the entire trade industry are estimated

first and then share of particular unit is ascertained. The continuant department later on get

their share from company and hence the estimation have been made indirectly without giving

any free hand in the compilation of object.

Empirical method:- under this method the future is predicted in terms of past experience,

which is the basis of prediction. The empirical forecasting is based on the prediction methodwhich assume that business follow their better general business trend.

Scientific method. - in this case the business mostly rely apon the past experience of predicting

the future. Previous experience properly organized and interpret in terms of casual relationship

is the basis of scientific furcating.



Historic method: this method is just the reverse of the historic method. No past information is

taken into account. Under this method for deciding the future trend forecasting under this

method believe that old data become absolute after the laps of certain time and hence give

more emphasis on the current data available in the organization.

Joint opinion method:- any work of forecasting under this method is done in concerning with

person who are directly concern with the problem. The responsibility of exactness is shared by

many and the error of judgment is avoided to better extent. It is based on the committee as

such better understanding and cooperation is expected in arriving at the accurate judgment.



Planning

One of the most important function of management at any level is to plan. It is concerned with

the future course of action in advance. So as to achieve the desires results. It is concerned with

the thinking before doing planning is the primary managerial function concerned with the

determination of a course of action the action to achieve the desire results.

Nature and characteristics of planning;-

It is primary function of a management: the functions of management are broadly classified as

planning, organizing, directing and controlling. It is thus the first function of management at all

levels since planning is involved at all managerial functions it is rightly called as an essence of

management.

It is focuses on objectives: planning is process to determine the objectives of an enterprise. The

purpose of any plan is to contribute in the achievement of objective of an enterprise.

It is function of all mangers:- every manger must plan. A manager at all higher levels to devote

more time to planning as compare to person at lower level.

It is an intellectual process: it is a mental work basically concerned with thinking before doing.

It is intellectual process and involves creative thinking imagination.

It is a contiguous process:- it is a continuous process and permanent and has no end.

Planning is dynamic:- it is a dynamic function in the sense that the changes and modification

are continuously done in the planned course of action on account of changes in business

environment.

Planning secure efficiency economy and accuracy:- a pre request of planning is that it should

lead the attainment of objectives at the least cost. It should also help in the optimum utilization

of human a physical resources. It is also economical because it bring down the cost to the

minimum.

It involves forecasting:- planning largely depends apon accurate business forecasting helps to

projecting the present trend into future.

It has limitations:- the plan should be formulated in the light of limiting factors which may be

any one of five man money machine material and method.



Its realistic:- a plan always outline the results to results to attain or achieve or achieve and as

such it is realistic in nature.

Principles of planning:-

Principle of contribution to objects:- realization of organizational goals greatly depends aponeffective planning. Long term plan should be interwoven with medium term plan and which in

terms should be interrelated with short range planning in order to attain organizational

objectives more efficiently and economically.

Principle of meaningful abjectives:- the objectives of the organization should be clear and

attainable. Planning can be applied successfully if the goal of the organization are clear and

understandable.

Principle of limiting factor:- planning must take into consideration different limiting factors like

man money material methods machine. Objectives can be achieved by contributing them.

Principle of flexibility:-

Principle of rational process:- a planner should have a sound judgment, logical thinking while

planning. Planner should have rational thinking with an open mind forecasting the success of

the project so planned.

Principle of communication:- the plan finalized by the manager should be widely

communicated to the personnel at all levels of management. They should already know about

the basic objectives, program, policies, procedures and rules they are going to follow to achievethe plan.

Principle of competing strategy :- present is the age of competition. Strategy are the plan

undertaken to compete with the plans of the arrival thus strategy are formulated by keeping in

view the plans and policies followed by the competitor.

Principle of cause benefit analysis:- to see the effectiveness of the plan cause benefit analysis

undertaken. If cause of planning is more than the benefit derived from it then such a planning

must be rejected.



Strategic planning process

Determination of objects:- the first step in planning is to determine clearing objects of the

business. It is a strategy pint as everybody in the organization must know as to what is to be

achieved in the future. First of all objectives of the entire organization are laid down and the

objectives of the each department are specified .

Constructing planning premises:- the second step is to determine the forecast apon which the

planning shall be based. If these forecast are accurate the planning process will be more useful.

These forecast related to the price of a product, material, power, availability of personnel etc.

Collection analysis and classification of information.:- for effective planning all relevant should

be collected analysis and classified. All useful data should be included to formulate analysis and

interpretation.

Determine alternative courses:- the fourth step of planning is to discover the alternative

courses of action i.e. to develop more than one course of action. For example if more funds are

required these can be raised by the different way such as the issues of share capital, raising

loan from bank of financial institute.

Evaluating alternative course of action:- each alternative is evaluated in terms of its expected

result and benefit. The strong and weak point of each alternative should be carefully analysis

Selecting a plan:- the next step is to select the best alternative when the competitive results of

different alternatives are tabulated. The alternative which seen to be the best is selected.

Formulation of deliberative plan:- for achieving the objective of master plan subsidiary and

derivative plans are formed. In order to implement the master plan each department head

prepare a plan of his debt.

Communication of plan:- the next step is to communicate the plan to every manager in the

organization so that they cooperate in the implementation of plan.

Controlling the plan: the last step in planning is watching the program of a plan and note down

its shortcomings. These shortcomings should be deducted without any delay.



Types of plans

Standing and Single use plans:-

Standing plan:- a standing plan is a plan which serves as a guidelines to a managerial action.

Standing plan provides readymade answer to an given situation. In banks a request for a loan ishandled according to the standing plan. When an activity is to be occur repeatedly a standing

plan is used.

Single use plans:- single use plans are plans designed for a special purpose only. Once the object

of the plan is completed they are used again. These plans have a short life.

Long term and short term plans:-

Long term plan:- if an enterprise which is to be become a leader in the industry it has to make a

plan for a long period of time which may me vary from 3 to 5 years.

Short term plan:- short range plan are the plan for guiding the day to day action of a

undertaking. These plans are generally made for one year.

Financial and non financial plan:-

Financial- refers to monitoring plans such as raising of capital, loans etc.

Non-financial- refers to physical resources of concern.

Types of standing plans

Objectives:- the primary step in planning is to set objective of an enterprises. Objectives

decides the end point to which an individual or organization wants to move. all activities of the

undertaking are aimed at these goals. They specify the destination where we want to go.

Objectives are important because they provide a direction to organization.

According to Allen objectives are goals established to guide the efforts of the company and

each of its components.

Policy:- policy provides guide to action where we want to go and how we can reach there. A

policy is a general statement which guides thinking decision making and action in the

organization. Policies decide the limits within which management can take decision. Usually we

come across certain policies-personnel policies, price policies promotion policy etc. according

to Koontz and O Donnell A policy is a guide to thinking and actions of those who take

decisions



Procedure:- policies guide our thinking and procedures guide out action. Procedures are also

planned by they are more specific and show the sequence of definite acts. Procedures are plans

that established a required method of handling future activities. They specify the roots towards

objectives.

Methods:- a method is a standing plan which is more specific and detailed and dedicated than

a procedure. The procedure shows a series of step where as a method shows working of a

single step. It tells how that single step is to be done. Methods are standardized way of

accomplishing, repetitive and routine step in production tool room etc. standard method

describe one best way of doing a given task whereby facilitate the work of planning and also

keep operation running on the planned line. They prevent confusion and keep the

communication line clear.

Rules:- a rule is a specific action to be taken or not to be taken with respect to situation. Rules

spell out either specific required action or not allowing the discretion. Example no smoking isrule which allow me discretion on the part of anyone in organization.

Strategies:- the term strategy is derived from military terminology. In business this means plan

made in the terms of competitors. A planner should see the plan and policies of its competitor

then remodify is plans so that he may provide the superiority of his product and service

Single use plans

Program- program is a sequence of activities undertaken for implementing the policies and

achieving the objectives of the business. It is made of many small plans and each plancontribute to the accomplishment of the small objectives of the concern. A program involves a

number of activities, resources to be employed to many other activities, for example there may

be a program to increase sale by 20%. Several small plans to increase the sale through

advertisement, direct mailing etc. may be made.

Budget:- budgets are very useful tool for planning and control. A budged is a plan in term of

money i.e. review the cost. It is a tool of control in the sense that corrective action is taken in

care of any deviation. A budget quantifies the plan and raise down the target towards with

actual operation are directed.



Limitations of planning

Planning is costly:- on account of heavy cost involved in planning small and medium concern

find it difficult to make comprehensive plans. Since these concern are already short of capital. It

is difficult for them to spare money for collection of information forecasting and appointing

experts.

Time consuming process: planning require too much of time and the decision making process

yet delayed specially where immediate decisions are to be taken.

It reduces initiative of employee :- planning tends to bring rigidity in methods of work as

employees are required to work according to predetermined process.

Capital invested In fix assets limits planning: the decision regarding purchase of fixed assets

put the limits in the future action as huge amount is invested in the fixed assets. A manager

cannot do anything about the investment in future.

Inaccuracy in planning:- it is not possible to preplanning from human bias. Planning is based on

forecasting which can never be accurate. Forecast relates to future which is very difficult to

predict. A wrong assumption by the planner on account of his competence can result in

inaccurate planning and its value may be loss.

Planning may be effected by external limitations:- it is also effected by certain factors which

are not within the control of a planner. These factors are natural, political, social and

economical and technological. Various policies of a government may made plan of a business

concern workless.



Types of strategies:-

Tried by the iron is hot:- this strategy suggest that full advantage should be taken when the

situation is favorable. Action should be prompt to take advantage. A delayed action may not

yield desired results.

Camels heat in the tent:- it may be so happen that the plan is acceptable only to one person

not others. A favorable situation may be created by indirectly helping those who had favored

the plan. Once an number of person start accepting the plan that plan can favorably

implemented.

Strength in unity:- in order to achieve desired results a department head may request others to

unite so that he combine efforts are made if a functional manager want to increase the wages

of employee he may ask other managers to join him and put united effort to get this demand

accepted.

Divide and rule:- this strategy suggest that deviation should be created among the workers so

that they are not able to put collective pressure. Every person inspire for a position and status ,

by giving promotion to some management help in using them against others.

Timing is a great healer:- sometimes problems are allowed to be hangs on so that their

intensity cools down in the meantime. The best thinking for a manger is to solve a problem

when out in certain situation is knowingly delayed. Human memory is very short and things are

forgotten very easily.

One step ahead;- a strategy may be to keep one step ahead of others those things may be done

which the competitors have not yet thought of.



Decision making

It may be defined as a collection of one course of action from two or more alternative

courses of action. Thus decision making involves a choice making activity. In business

undertaking, decisions are taken at every step. All managerial functions planning organizing

staffing controlling are carried decision. Decision making is the core of managerial activities in

an organization . decision making is concern with selecting a course of action from various

alternatives to achieve a predetermined objectives.

According to George R Terry, decision making is the selection based on some criteria

from two or more possible alternatives.

Features of decision making

Goal oriented process:- decision making is a goal oriented process. It aims at achieving certain

specific goals of the organization.

Selection process:- decision making is a selection process in which best alternative course of

action is chooses from the given alternative course of action.

Continuous process:- decision making is a responsibility of manager at different level of

management.

Positive as well as negative:- decision making can be positive and negative i.e. it may bepositive to perform certain activity and negative not to perform certain activities.

Future course of action:- decisions are made for future course of action, based on some past

experience and present condition.



Types of decisions

Programmed and non programmed decisions:-

Programmed decisions are concern with the problems of repetitive nature or standard

procedure is followed to tackling such problems. These decisions are taken generally by loverlevel manager. These decisions may include purchase of a raw material, granting leave to an

employee etc.

Non programmed decision related to typical situation for which there is no easy solution. These

matters are very important for organization for example opening of a new branch of the

organization or introducing raw product in the market etc. these decisions generally taken by

higher level.

Routine and strategic decisions:-

Routine decisions are related to the general functions of the organization. They do not require

much evaluation and analysis and can be taken quickly . ample powers are delegated to lower

rank to take the decision.

Strategic decision effect organization its objectives and goals and other important policy

matters. These decisions usually involves large investment. These are non repetitive in nature

and taken after careful analysis an evaluation of many alternatives. These decisions are taken at

the higher level of management.

Policy and operative decisions:-

Decisions pertaining to various policy matters of the organization are policy decisions. These

decisions are taken by the top level and have long term impact on the functioning of the

concern. For example decision regarding location of plants, volume of production are policy

decisions.

Operative decision relates to day to day functioning or operation of business middle and lower

level managers takes the decision.

Organizational and personal decision

When individual take decision in the official capacity it known as organizational decision. If

decision taken by the executive in personal capacity it is called personal decision.



Major and minor decisions

Decision pertaining to purchase of a new factory building is a major decision pertaining to top

level.

Purchase of a stationary is a minor decision which is taken by the office staff.

Individual and group decisions:- when the decision are taken by the single individual, it is

known as a individual decision. Routine regular type of decisions are taken by individual within

the broad policy framework of the organizations.

Group decision are taken by group of individual in the form of a standing committee generally

very important matters for the organization are refer to this committee.

Steps in decision making

Define the problem:- the first and foremost step in decision making process is to define the real

problem. The manager should consider critical factors in defining the problem. These factors

are optimistic in the way of finding proper solution. These are also known as limiting factors. It

is also well said that, well defined problem is half solved

Analysis the problem:- after defining the problem the next important step is a systematic

analysis of the available data. Sound decisions are based on proper collection, classification and

analysis of facts and figures.

Developing alternative solutions:- after defining and analyzing the problem the next step is to

develop alternative solution. The main aim of defining alternative solution is to have the best

possible decision out of the available collective course of action.

Selecting the best type of alternative:- after developing the various alternatives the manager

have to select the best alternative. It is not a easy task. The following are the four important

points to be kept in mind in selecting the best from various alternatives.

(A) Risk element involved in each course of action against the expected gain.

(B) Economy of effort involved in each alternative.

(C) Proper timing of decision and action.

(D) Final selection of a decision is also affected by the limited resources available at our

disposal.



Implementation of the decision: under this step a manager has to put the selected decision into

action for proper and effective execution of the decision. Three things are impotent in it.

(a) Proper and effective communication of decision to the subordinate.

(b) Acceptance of the decision by the subordinate is important. Group participation and

involvement of employee will facilitate the smooth and continuous execution of

decision.

(c) Correct timing in the execution of decision minimizes the resistance to change.

Follow-up:- this system ensure the achievement of the plan. It is executed through control.

Simply stated it is concerned with process of checking the proper implementation of decision.

Monitoring & feedback:- feedback provides the means to determining the effectiveness of the

implemented decisions. If possible a mechanism should be build which would give periodic

report on the success of the implementation.

---------------------------------------------------------------------------------------------------------

Organization

Meaning of organization:- organization is defined as a group of persons working together for a

common purpose. A sound management is based on proper organizational structure which is

concerned with determining responsibility and assigning of authority to different superiors and

establishing proper inter relationship among them for achieving the desires objectives. An

organization is not an end in itself. It only acts as means towards the ends. That is

accomplishment of firmed goals.

According to George R Terry ,organization is the establishment of effective behavior

relationship among selected work persons and work places in order for the group to work

together effectively .

It is clear that organizing is as process of determining the total activities to achieve a

given objective grouping and assigning of activities to individual, delegating them authority

necessary to perform activities assigned and accomplishing authority relationship among the

different positions in the organization.

Characteristics of an organization

1. It is a group of individuals may be small or large.

2. The group in the organization work under leadership.



3. It is a mechanism of management.

4. It has some directing authority which controls the efforts of the group.

5. The division of labor, power and responsibility deliberatively planned.

6. It implies a structure of duties and responsibility.

7.

It is established for equipment of common objectives.

Process or steps in organizing

Clearly defined the objectives:- the first step in developing an organizational structure is to lay

down its objectives in very clear term. This will help in determining the type and basic

characteristics of the organization.

Determining objectives:- in order to achieve the objective of the enterprise certain activities

are necessary. These activities are well depend on nature and size of the enterprise, a

manufacturing company will have production, marketing and other activities.

Assigning duties:- the individual groups of activities are then allotted to different individual

according to their ability and aptitude. Responsibility of every individual should be well

defined clearly to avoid duplications and overlapping of efforts.

Delegating authority:- every individual is given the authority necessary to perform the designed

activities efficiently. Authority delegated to a person should match with his responsibility.

Coordinating activity:- the activities and efforts of different individuals are coordinated. Such

coordination is necessary to ensure effective performance of specialized function.

Providing physical facilities and right environment :- a success of an organization depends

apon the provision of power physical facilities and right environment. This is necessary for the

smooth running and prosperity of the enterprise.

Principles of organization

Division of work:- while constructing organization division of work should be considered as the

basis of efficiency. It is an established fact that group of individuals can secure better results by

making division of work.

Attention to objectives:- the objectives of an organization plan an important role in

determining the type of structure which should be develop, clearly defined objectives facilitates

grouping of activities, delegation of authority and coordination.

Span of management:- it is also refers that span of control signifies the number of subordinates

reporting directly to any executive. it is an established fact that large number of subordinate



reporting to one executive the more difficulty tends to him to supervise them and coordinate

then effectively.

Unity of command:- organizational structure should also be designed in such a way that there

exist unity of command. In the sense that single leader is an ultimate source of authority.

Flexibility:- while designing the organization structure it should be kept in mind that such

organizational structure should not be regarded as static. There must be sufficient room for

changes and modifications. The structure in the light of environmental changes is successful.

Management by exception:- this principle signifies that problems of unusual nature should be

only should be refers to top level and decided by executives where as the routine problems

should be based on to lower level and solved there.

Decentralization:- it implies selective dispersal of authority to help dept and units to run

efficiently and effectively without frequent interruption from the top of the enterprise. Itrequires very careful selection of, what decisions push down and what to hold at the top of

management.

Departmentation:- Departmentation is a process if grouping activities into units for purpose of

administration. The main advantage of Departmentation is that it enable individual executive to

manage his subordinate effectively. Since a managerial number of persons are brought under

the direct supervision of individual executive.

Efficiency:- the organization should be able to attain the predetermined executive at the

minimum cost.

Coordination:- the principle of coordination is underlines that there should be proper

coordination between different departments. Unity of efforts for the accomplishment of

desired objectives is main aim of organization.

Authority and responsibility:- authority should match with responsibility. While assigning the

responsibility required authority should also be assigned.



Organizational structure

As structuring organization is a network of internal authority, responsibility and relationship. It

is the framework of relationship of persons operating at various levels to accomplish common

objective. An organizational structure is systematic combination of people function and physical

facility. It constitutes a formal structure with dynamic authority and clear responsibility. In an

organizational structure both formal and informal organization takes shape. A formal

organization is preplanned and defined. The formal organization being laid down by the

common sentiments, interaction and other interrelated attributes of the people in the

organization.

Types of organization

Line organization:- it is the simplest and the oldest type of organization. It is characterized by

direct lines of authority, flowing from the top to down of the organization hierarchy line of responsibility flowing in an opposite but equal direct manner. An important characteristic of

such type of organization is superior subordinate relationship. Superior delegate authority to

another subordinate and so on. Under this type of organization, authority follows downwards.

Responsibility moves upward in the straight line. Taylors principle of unity of command is

strictly followed in line organization.

General manager

Manager

Authority Superintend responsibility

Forman

Workers

Characteristics of line organization

1. Order and instructions flow from top to bottom where as request and suggestions move

from bottom to up.

2. Principle of unity of command is the most important feature of this type organization.

3. The subordinates are accountable to their immediate superior.

4. There are limited numbers of subordinates under one superior.

5. This is simple to operate and control.

6. Coordination can easily be achieved.



Advantages of line organization:

Simplicity: - it is very simple to establish and operate.

Fixed responsibilities:- duties and responsibilities are clearly defined for each individual with

reference to the work assign to him.

Discipline:- the type of organization ensure better discipline in the enterprise.

Flexibility:- it is flexible in the sense that it is subject to quick adjustments suit to changing

conditions.

Coordination: it has to achieve effective coordination. All the activities pertaining to ingle

department are controlled by one person.

Direct communication:- as there will be direct communication between the superior and the

subordinates at the different level. It would be helpful in achieving promptness in performance.

Unity of command:- every worker is accountable to one boss in the department under this type

of organization.

Economical:- it is simple and economical in operation. It does not need any expert and

specialized person.

Quick decision:- on account of its simple operation and unified control and responsibility.

Decisions can be taken promptly.

Executives development:- under this organization the departmental head is fully responsible of

every activity in his department. He comes across many problems and obstacles in performing

duties. This provides him an opportunity to enhance his capability and its greatly helpful in his

overall development and performance.

disadvantages of line organization:

Overloading:- the main disadvantage of this system is that it tends to overload the existing

executive with too many responsibilities.

Lack of specialization:- absence of managerial specialization is the major drawback of this

organization on account of many functions and complexities. It is very difficult for a single



individual to control all the matters effectively. The executive may not the expert in all aspects

of managerial activities.

Scope of favoritism:- there may be a good deals of favoritism under this organization. As the

concern officers will judge the performance of the personnel and work according to his own

standards.

Lack of coordination:- in reality it is very difficult to achieve proper coordination among various

departments operating in all organization. This is because each departmental manger carries

the function of his department in accordance with the ways and means suitable to him.

Lack of initiative:- under line organization ultimate authority lies in the hands of top

management. Departmental managers have little role.

Lack of communication from lower rank:- under line organization suggestions move from down

to upward. The superior usually do not pay attention to suggestions sent by lower rank.

Functional organization

F.W Tailor who is known as the father of scientific management develop the concept of

functional organization. Functional organization implies that the organization should be based

on various functions. Tailors functional approach is mainly based on the principle of

specialization. Tailors concept of functional foremanship is a comprising of eight different

foremen discharging different function. Every worker in the organization is directly concerned

with these Foreman. The eight specialized foreman are:-

Route clerk:- he lays down the exact route or power to be fill by raw material transforming into

finished product.

Instructional card clerk:- he prepares detail instructions to be followed in doing the work as per

the route laid down by clerk.

Time and cost clerk:- he determines the total time to be taken in the completion of a product

and also works out the cost of production per unit.

Shop disciplinarian:- he is responsible for maintaining proper discipline in the organization.

Gang boss:- he makes the availability of different machine and tool requiring worker to carry

out their work.



Speed boss:- he controls the speed of different machine operating in the organization. He

undertakes proper supervision over speed within which a machine should operate.

Repair boss:- he is concerned with proper maintenance and repair of machine for keeping them

in working order.

Inspector:- he checks and certifies the quality of work whether or not it is up to predetermined

standard.

Advantages of functional organization:-

Specialization:- this system derives the benefit of specialization as every functional incharge is

an expert in his area. He will guide subordinate with specialization to attain the specific object.

Increase efficiency:- this type of organization ensure enhanced efficiency as workers operating

under the expert.

Limited duty:- the functional formation have to carry out the limited number of duties covering

their area of work.

Flexible:- it is flexible pattern of organization. A change can be made without disturbing the

organization.

disadvantages of functional organization:-

conflict in authority:- the authority relationship relates the principle of unity of command. It

creates several bosses instead of one line authority.

Difficulty in pin pointing responsibility: on account of the non application of the principle of

unity of control , it is difficult to fix the responsibility of a particular foreman.

Expensive:- this pattern of organization is impractical and expensive. Multiplicity of experts

increase the over held expenditure for the small organization. They cannot afford to install such

a system.

Lack of coordination:- appointment of several experts in the organization creates the problem

of lack coordination and delay in decision making. Especially when decisions are require theinvolvement of more than one specialist.



Line and staff organization

This organization is an improvement over the above two mentioned systems. Line organizations

concentrate too much on control, where as the functional system decentralized to great

extend. Line and staff organization ensure a proper balance between the two. Line and staff

organization ensure a proper balance between the two. in line and staff organization line

officers get the advice of the staff, which is very helpful in carry on the task in an efficient

manner. Staff role is advisory in nature. Line officers are usually assisted by staff officers

effectively for solving various business problems.

General manager

advisors Manager advisors

Authority Superintend responsibility

Forman

Workers

Advantages of line and staff organization:-

Specialization:- this type of organization is based on planned specialization and bring out the

expert knowledge for the benefit of the manager.

Better decision:- staff specialist help the line manager in taking better decision by providing

them adequate formulation of right types at right time.

Lesser burden on line officers: the work of line officers is considerably reduce with the help of

staff.

Training for line officer:- staff services hence proved to be an excellent training medium for

line officer.



Disadvantages of line and staff organization:-

Conflicts between line and staff authority:- there may be a chances of conflicts between the

line and staff authority. Line officer can complaints that staff does not always give proper or

correct advice. On the other hand staff officers complaints that there advice is not properly

carried out.

Problem of line and staff authority:- thee may be confusion about the relationship of line and

staff authority. Line officers considered themselves superior in comparison staff officers. The

staff officers object to it.

Lack of responsibility:- as the staff specialist are not accountable for the results. They may not

perform their duties well.

Expensive:- the appointment of experts involves a heavy expenditure. Small and medium size

organizations cannot afford such a system.

Reasons of conflicts between line and staff managers

Authority:- line members have authority to decide and to command. It is their choice whether

to obey it or to disobey the staffs advice. Staff has no authority to make implementation of

their advice.

Salary:- staff authorized are given less fees as compare to line authority. It is a reason for

conflict because staff authority consider himself superior as they are experts and demand more

salary.

Importance:- whenever any job get successful the credit goes to line managers but staff

authority says that the plan was their line mangers only implement it. So they want credit for

themselves.

Initiative:- it is another reason for conflict line authority says that staff authority do not take

any initiative they do the job only when they are asked to do. Staff advisors say that their ideas

are not implemented so why should they take initiative. This causes conflict.

Sense of responsibility:- whenever a work is successful both line and staff authorities want totake credit but whenever there is a failure no one want to take responsibility for it, so it is also a

base of conflict.



ways to avoid conflicts between line and staff managers

Understanding of authority relationship:- line officers should have authority for making

operational decisions as they are responsible for the successful operation of the organization.

Staff person should keep contributing by making recommendation to line officer they should

not rely apon authority of knowledge rather than the authority of position.

Proper use of staff:- line officers are dependent on staff officer for solving the problem which

require expertise knowledge and skill hence they make maximum use of staff officer. They

should not keep staff bury with unimportant problems. Also staff people should involve in basic

planning process.

Setting congenial organizational climate:- congenial organizational climate means full of

mutual trust, respect, self control and mutual help is another important factor for successful

operation of lie and staff personnel.

Difference between the line organization and line & staff organization.

line organization:- line & staff organization.

it is concerned with those position which have the

responsibility of achieving the main objectives of

organization

It is concerned with the positions which are mend

for providing advice and help to line officer in the

attainment of organizational goals.

Line organization has no expertise or specialist to

advise to the line officer

There are expertise and specialists to advice line

officer

It is not based on specialization It is based on specialization

There is complete discipline There is less discipline

There is no conflicts. There is n conflicts in line and staff officers.



Difference between the line organization and functional organization.

line organization functional organization

In it authority flows from top to bottom In it authority is functional

There is complete unity of command There is no complete unity of command, each

subordinate get instructions from his different

bosses.

In it there is complete discipline In it there is loose discipline

It is applicable to small scale organizations It is applicable to large scale organizations. Where

specialization is must

Formal verses informal organization

Formal informalthis organization is deliberatively created by

management

It arise continuously and not continuous effort

is made to make it.

It is based on rules and regulations It is based on attitudes and emotions of

people

It is predictable It is not predictable

In it main emphasis is placed on authority and

functions

In it stress is on people and their relationship.

It can be shown in organizational chart It cannot displayed on organizational chart



Delegation

The concept of delegation is inseparable part of the process of administration. The chief

executive is responsible to carry out every work himself. He cannot do the entire work himself.

In order to lesser the burden he delegates some of his powers to his immediate subordinate in

the managerial hierarchy. The powers are usually delegated to the departmental head by

whoever in turn delegate some of his powers to their immediate subordinate in their respective

department. Delegation of authority is an important managerial practice of getting things

through others by sharing the authority with them. Delegation is a means of assigning work to

others and giving them the necessary authority to do it.

Delegation is conferring authority from one executives organizational unit to another, in order

to accomplish particular assignment. George R Terry.

Just as the authority is the key to managers job, delegation of authority is key to organization.

Koonz & Donnell.

Elements of delegation

Assignment of duties:- duty means the activities which the superior is expected to perform by

virtue of his position in the organization. In simple words it is the work to be completed so in

it a person in delegation perform a job or completes a given work a according his

responsibilities.

Granting authority to perform the duty:- if a man is assigned certain duties he must also be

given authority necessary for the performance of such duty. Authority is the granted to an

individual to direct and influence his subordinate. Right use raw material, spend money to

purchase it etc.

Creation of an obligation:- it is obligatory on the part of the subordinate to satisfy his superior

that he performed his duties according to the best of his ability by accepting an assignment. A

subordinate gives him promise to do his best, carrying out his duties. Having taken a job he is

bound to complete it. He can be held accountable for results.



Principles of delegation:-

Authority should be coextensive with responsibility:- if a subordinate is given a responsibility

to do a task. He is also to be given responsibility to do a job. Authority should be always

delegated according to responsibility.

Assignment of duties in terms of results expected:- it is an important guideline to effective

delegation since it lies on the assumption that goals are set to achieve them. The authority

delegated to a manger should be adequate enough to accomplish the results expected of him.

Ultimate responsibility cannot be delegated:- by delegating a authority a manager cannot free

himself from his own obligation rather it increase its responsibility. He will now be accountable

to his superior for act of his subordinate also.

Unity of command:- there should exist unity of command in the sense that employee should

receive order and instruction from one superior only.

Definiteness of authority and responsibility:- to make any delegation effective the primary

requirement is to pass on clean cut authority to the subordinate with definite assignment.

Establishment of objectives with intelligent planning:- it is to be noted that work of delegation

should not begin until the objectives are laid down.

Free flow of information:- to make delegation effective free flow of information also have great

significance. There should be mutual understanding between superior and subordinate so that

authority may be properly interpreted and decisions can be taken without delay.

Obstacles or blocks in the delegation of authority or reasons of failure

in delegation of authority

On the part of superior

Feeling of perfectionism:- some manger think that they can do the task better that

subordinates. For this reason they do not delegate authority.

Lack of ability to direct: lack of ability of the executive to identify and communicate the

essential features of his plan creates obstacles for effective delegation.



Lack of confidence in subordinate:- delegation implies a mutual trust and confidence between

the manager and subordinate. Lack of confidence in ability, capacity and dependability of the

subordinate restrict the boss to delegate authority.

Conservative attitude and conscious temperament:- a conservative attitude of manger and his

conscious temperament generally acts as obstacle in the delegation of authority. As the process

of delegation involves risk which a manager with manage with conscious temperament would

not like to undertake.

Fear of competition from subordinate: in delegation of authority subordinate learns to take

decision. The manager may develop a feeling of fear of competition from subordinate.

On the part of subordinate: even if the superior are willing to delegate the authority, the

subordinate avoid shouldering responsibility because of following reasons.

Dependence on the boss:- an employee find it difficult to take authority from his superior when

he is not fully able to handle it and still dependent on superior.

Fear of criticism: if a subordinate finds that he will he will be criticized even for a small mistake

he will shirk from accepting authority.

Lack of self confidence or fear of failure:- a subordinate lacking in self confidence will generally

try to avoid delegation.

Lack of positive incentive:- a subordinate may be willing to accept more work, if he does not

get adequate positive incentive in the form of pay and promotion etc.

On the part of organization.

The difficulties in delegation of authority may also lie within the organization:-

Vague organizational structure:-

Non clarity of authority and responsibility relationship:-

Planning and policy formation:-



How to make delegation effective or principles, guidelines to

delegation, methods to make delegation effective.

Delegation is an art not science so there is no principle to improve the skill of

delegation. Manager will have to improve the skill only by experience. The experience of manyexpertises provides the foundation for these guide factors explains below.

Determine goals;- assignment should be clearly defined in terms of goals or results expected. If

the person has to accept the delegation should be provided with detailed information with

emphasis that work is both necessary and important.

Clarify responsibility and authority:- if a manager is to perform efficiently he need to know

what is job is and how much authority he has to perform it further a supervisor who is not sure

his authority will make every question to his chief for decision.

Motivate subordinate:- to get best results it is the duty of every manager to see that

subordinates are motivated to do their job willingly, unless they are motivated by better wages,

improved working conditions, promotion etc.

Provide training:- delegation is difficult process and can be accurse only by setting necessary

training. Manager should give proper training to his subordinate to accept delegation.

Establish adequate control:- control system in effective delegation should be such which can

free executive from routine inspection yet enable him to maintain this accountability. For this

the subordinate should be courage to follow the means of self control.

Two way communication:- there should be two way communication between the superior and

subordinate. The superior must give the instructions in clear words. He must allow the

subordinate to seek clarification and guidance whenever subordinate feel some difficulty.



Centralization

Under centralization the executive reserves the authority with himself instead of

delegating it to his subordinate but where he is forced to delegate he may do so by do not

delegating adequate authority so that subordinate must approach him to arrive at the

appropriate decision.

Centralization is that organization where the role of the subordinate is reduced Henry Fayol

Advantages of centralization

Facilitate personal leadership:- in a small company centralization is desirable since the leader

has to take quick decisions.

Less skilled subordinate:- an enterprise running on the lines of centralization need not to have

highly skilled personnel. It results in economy of wages and salary.

Handling emergency:- in the centralized organization emergency can be handled promptly.

Uniformity of action:- centralization of decision making is essential in case of multiunit and

multi branches of a company so that there is uniformity of action.

Limitations of centralization:

Centralization of authority increase the Burdon on the top executive and little time is left for

attending to important functions of management like planning organizing directing etc.

Centralization effects the growth and development of the subordinate as they do not given any

authority to take important decision.

It reduces the scope for specialization as the person taking decision at the top level are not all

around expert.



Decentralization

It is concerned with the decentralization of decision making authority to the lower level in

managerial hierarchy.

Decentralization refers to the systematic efforts to delegate to the lowest level or authority

except that which can only be centralized at central point Levis Allen

Advantages of decentralization

Reduces the burden of top executive: it reliefs the top executive from the burden of performing

various functions.

Executive development:- When the authority is decentralized executives in the organization will

get the opportunity to develop the talent by taking initiative which will also make them ready

for managerial positions.

It promotes motivation:- decentralization improve the moral of the employees as they get

involved in decision making process.

Facilitate diversification:- under it the diversification of product activities etc. can be effectively

done.

Distinction between and centralization

End responsibility:- in delegation a superior delegates some rights and duties to subordinate

but his responsibility in respect of that work does not end. On the other hand decentralization

receives him responsibility and the subordinate become liable for that work.

Need or requirement:- delegation is almost essential for the management. He get things done

in the organization. Decentralization may or may not criticize as a systematic policy in the

organization.

Final control:- in the delegation the final control over the activity of organization lies with the

top executive, while in decentralization the power of control exercised by unit heads.

Coordination:- delegation hardly faces any problem of coordination to the delegation of

authority where as decentralization faces a problem of coordination.

Size:- delegation is require and give good results in all types of organizations respect of their

size. Decentralization is effective only in big organizations.



Formation type: delegation is the result of human limitations to the span of management.

Decentralization is the result of big size and multi functions of enterprise.

Coordination

It is concerned with unifying the actions of a group of people for some common purpose. It is

the job of harmonizing the activities of different individual or group as also reconciling

conflicting interest. It is also unite all activities of the business. It is very close to effective

leadership. Coordination involves the integration of the various parts if the organization in

order to achieve goals of an organization both physical as well as mental coordination is

necessary.

To coordinate is to harmonize all the activities of a concern so as to facilitate it working and its

success Henry Fayol

Importance of coordination or need for coordination:

Specialization:- an organization is divided into various departments and each department is

headed by a specialist. Each specialist tries to over emphasis his role. Coordination of divest

activities of various department is of utmost important otherwise there may be a confusion.

Remove conflicts of individual and organizational goal:- it is very important for every

enterprise to bring about coordination between organizational goal and individual goal. If

individual is diverting him from the path of organizational goal he may be told to achieve the

objectives of the organization.

Line and staff structure:- the creation of line and staff structure in an organization is also

creates a problem of coordination. The staffs officers may be confuse their authority with line

officers. Thus coordination is necessary between line and staff officers for achieving the goals of

the organization.

Different outlook:- each individual in an organization is a complex and unique personality

individual access and interpret organization goal from their own view point hence management

has to coordinate the activities of these individual.

Principle of coordination:

Early beginning: coordination must starts from the very beginning of management process. It is

difficult to coordinate the plan which has already started. In other words coordination must

begin at the planning stage itself.



Direct contact among parties: it is important for coordination that there must direct and

personal contact among all levels of management. It helps in developing common

understanding and mutual trust.

Continuity : it is continuous process and not like solving a problem. Once there must be a

regular exchange of ideas through a good communication system.

Flexibility: process of coordination must be flexible it must such that it changes with the change

in internal and external environment.

Techniques of or methods of coordination.

Define clearly authority and responsibility: in an organization there is several vertical and

horizontal authority relationships. Authority flows from the top to bottom. Confusion regardingauthority increases the problems of coordination because the responsibility can be fixed only

when the authority and its sources are clearly defined.

Formulation of clear-cut policies and procedures:- coordination become very easy if there is

clear-cut and well defined policies and procedures. It will ensure unity of action.

Mutual communication:- effective communication is essential for coordination. Direct

communication helps to solve the individual and departmental differences. Through decision,

mutual exchange of ideas helps in varying harmony among the different departments of

enterprise.

Existence of community and interest:- in order to have an effective coordination it is essential

that there should be a common understanding of the main objectives of the organization. Every

member of the organization must consider his individual interest subordinate to interest of

organization.

Effective control: when an integrated control system is in existence it automatically ensures co

oriented group efforts.

Voluntary cooperation:- it facilitate cooperation, if all the members of the organization work as

team the results can be automatically follows.

Sound organization structure:- it is essential for coordination that here should be sound

organizational structure. There should be organizational chart job description as there help to

great extent in securing coordination.



Difference between coordination and cooperation.

Coordination

1. It is a proper method of group efforts to provide unity of action to achieve the goals of

enterprise.2. It is the result of concise efforts on the part of the management.

3. Its scope is boarder then cooperation

4. Its purpose is to attain the goals if the enterprises effectively and economically.

Cooperation

1. Its a collective action of a group of persons towards the common goal.

2. It happens through voluntary efforts of individuals.

3. It is an important element of the coordination.

4. Its main purpose is mutual help.

SWOT Analysis

Internal variables

Strength

Weakness

External variables

Opportunity

Threat

The term SWOT is acronym made of four words- strength, weakness, opportunity and threat.

The first two variables are internal to the organization, where as last two are external. Every

individual can make a best of his strength and weaknesses. An individuals weaknesses can be

converted into strength by recognizing it and by making an effort in that direction. Similarly it is

very important to be aware of the opportunity that comes to use at various parts of time and

possible trust that also come from other person.



SWOT Analysis

Internal external

Strength weakness opportunity threat

What is strength of business?

Technical expertise

Efficient human resources

Goodwill

Strong research and development

Joint venture with MNCs.

Weaknesses of business?

Less competent staff

Obsolete plant and machinery

Inefficient leadership.

Lack of proper distribution system.

Opportunity for business?

To extend the existing companies product line.

To find out new sale growth opportunity.

To enter the foreign market

To acquire rival firm.

Threats of business?

Loss of sale

New competitor.



Importance of SWOT analysis

it brings the light whether the business is heavy or sick.

An undertaking comes to know both internal as well as external functions effecting its success

and failure.

It helps in the formulation of a strategy, how to make preparation for the possible threat from

the competitor.

It evaluates the business environment in a delegated manner so as to take strategic decisions

for the future course of action.



Span of management

It describes the number of subordinate that reports to each manager. It also knows as a

span of control and span of specialization. It is a dimension of organization design measured by

the number of subordinate that report directly to a given manager. It refers to the number of

subordinates who can manage effectively by a superior. This concept effect organizational

design in a variety of ways including speed of communication flow, employees motivation and

administrative overhead. The number of subordinates who are responsible to a superior has

two important implications

1. It influences the complexities of individual managers job.

2. It determines the shape of organization. Fewer the number of subordinates reporting to

a manager, larger the number of superior required.

Early ideas of span of management

The classical approach to span of management has deal with embodying specific

number of subordinates for effective span. Classical writers have suggested before tree to eight

subordinates as ideal. A French management consultant has suggested that the fixation of

number of subordinates based on mathematical conclusion. He examined the superior

subordinate relationship and develop mathematical formulas. He identifies three types of

relationships.

1. Direct single relationship where direct individual contact the superior.

2. Direct group relationship arises in all possible combinations.3. Relationship arises because of mutual interaction of subordinates working under a

superior.

Types of management

Narrow span of management: a small or narrow span of control result in each manager

supervising small number of employees. A small span of management would make it necessary

to have more managers. The narrow span of management would result in slower

communication between lower level employees and top level managers of the firm.

Wide span of management:- wide span of management structure reduces the level of

management. Widen the control of management and is often more centralized.



Factors that may affect span of control

Job complexity: subordinates job that are complex, dynamic and complicated will require more

management involvement and a narrows span of management.

Similarity of subordinate job:- the more similar and routine the job that subordinates areperforming is the easier it is for a manager to supervise employees and the widen the span of

management that likely to be effective.

Physical proximity of subordinate: the more geographically dispersal a group of subordinate

have the more difficulty arises. It is for manager to be in regular contact with them and the

fewer employees the manager could reasonably oversee resulting in a narrow span of

management.

Ability of employee: manager who supervise more number of employees that lack ability of

employee. Motivation need to spend more time with employee. The request will be that the

manager cannot supervise as many employees and would be most effective with narrow span

of management.

Ability of the manager:- some managers are better at explaining things to subordinate and

more efficient in performing their job. Such managers can function efficiently with a wide span

of management.

Technology: cell phones email and other forms of technology that facilitate communication

and the exchange of information make it possible to manager for increase their span of

management, over manager who do not have access to the use of technology.



Management by objectives:- (MBO)

This term was firstly popularized by Peter Drucker in 1954. It is a process of agreeing apon

objectives within an organization. So that management and employees can understand their

job. The MBO process requires that the manager and employees agree to what the employee

will have to achieve in the period ahead and that employee accept the objective. MDO is a

process where by a superior and subordinates of an organization jointly identifies it confirm

goals and define each individuals major area of responsibility in forms of a results accepted of

him and use these measures as guide for operating the unit and accessing the contribution of

each of its members.

Process or steps of MBO.

MBO process can be divided into three steps.

1. Organizations objectives setting:- this step require the top manager of an organization

to review the purpose for which the organization exist with the mission in the mind the

supervisor and his staff must then set organizational objective in area where they will

concentrate its efforts during approaching the objective setting period. The objectives

are:

1. To provide direction to the entire organization.

2. To provide guideline for subordinate level manager to formulate their objectives.

Manager objective setting: each individual manager in the organization must now

determine the objectives for his office. This process takes place in three general steps.

Indentifies key result areas: the manager must identify the key result area of responsibility that

are assigned to his unit. It is important for the individual office manager to identify the areas of

his unit. Where most of results can obtained.

Writing objectives:- after a manager has identifies his key area of responsibility. He is ready to

sit down and write his objectives. The main criteria are that they should be specified,

measurable and result oriented.

Objectives review: after the setting of objective has been agreed apon by the officer and hisboss the stage is set for managing these objectives.

This managing process is the responsibility if the subordinate manager and it is

interrupted only by the mutually arranged formal review session with the superior. In the other

words MBO requires that each individual have the freedom to perform a well define task

without interference.



BCG (Boston Consulting Groupp)

The BCG matrix provides a graphic presentation for an organization to examine the different

businesses in its portfolio on the basis of their relative market share and industry growth.

Business can be classified on the BCG matrix as either low or high according to their industry

growth rate and relative market share. The vertical axis denotes the rate of growth in sales in

percentage for particular industry. The horizontal axis represent the relative market share.

High low

High

Industry growth rate

Low

Relative market share

The four cells of BCG matrix have been termed as stars, cash cows, question mark and

dogs. Each of the cells represents a particular type of business.

Question mark: business with high industry growth rate but low market share for a companyis question mark. They require large amount of cash to maintain a gain a market share.

Question mark businesses are usually new products or services which have a good commercial

potential. If the company feels that it can obtain a dominant market share it may select

expansion strategy otherwise retrenchment may be more realistic alternative.

Stars: stars are high growth and high market share business. A company generally presumes a

expansion strategy to establish a strong competition position with regard to stars business. In

the Indian contact there are many businesses which would be consider as stars for example

reliance communications, fast food etc.

Cash cows:- cash cows are businesses which generate large amount of cash but there rate of

growth is low. These businesses can adopt mainly stability strategy.

Dogs: those businesses which are related to slow growth rate and has a low market share

formed as dogs. The experience curve for the company show that problems are during low

stars Ques. mark

Cash cows dogs



market share. The only possibility for a company should be gain market share at expenses of

rival firm.

Limitations of BCG MATRIX

1. It is hard to clearly define the matrix as such it is difficult to measure accurately themarket share and growth rate.

2. The dividing of matrix into four cells is not simple. It does not recognize the market with

average growth rate and average market share.

3. It does not helps in comparing relative investment opportunities across different

business unit in this portfolio.

4. Strategic evaluation may require more than the market share and growth rate. A

business unit may be started because of technology.

Planning premises

Planning is undertaken under certain premises. Premises are the assumptions on which plans

are formulated. A major source of premises is forecasting which indicates that what is to be

expected in future and this provides a framework on which plans are formulated. Planning

premises are the anticipated environment in which plan are expected to operate. They include

assumptions of the future that will affect the plan. Planning premises can be classified as

follows:

(1) External premises:- these are based on factors that prevail outside the enterprise. In

other words external premises are those assumptions that are around the various types

of markets like product market, material market, capital market and labor market.

Various types of external premises are:-

1. National premises: it includes political social and environmental etc.

2. International premises: it includes international social and economic condition,market condition and cultural trends etc.

3. Tangible:- these can be measured in quantity like money, time and units of

production etc.

4. Intangible: those which cannot be quantifies such as goodwill of the concern.

5. Controllable:- these premises are controllable with the management for example

managerial policies.



6. Uncontrollable:- these are unpredictable and uncontrollable like natural climate.

7. Constant:- those premises which behave in the similar passion irrespective of action

taken. These include man, money and material.

8. Variable: these premises keep on varying in relation to course of action taken for

example also sale volume of organization cannot be partly controlled by themanagement but there are certain factors which effect the sales volume of the

enterprise.

(2) Internal premises:- these are internal to the organization and known as sources and

ability of the enterprise in the form of man, money, machine, competence of

management abilities and skill of labor. Commitment to certain plan wage incentives etc

these are fully controllable.

Decision tree analysis

In certain cases one decision depends apon the outcome of another and so on and in such

cases lot of certainty prevails. So it is very difficult for a decision maker to resolve

uncertainty. A solution to such problem is decision tree. It is a graphical method of

identifying various alternatives to a problem, estimating the responsibility and indicating

the expected pay of this decision tree. It helps the decision maker to study the pros and

cons of various alternatives to a particular problem.

Merits demands rural customer

Skinning market

Demerits demands of urban customer

Launch of a product

Merits demands rural customer

Penetrating market

Demerits demands of urban customer



Advantages or uses of decision tree

1. It gives answer to complex situations.

2. It makes possible to see at least major alternatives available and the results of

subsequent decision based on this decision alternatives.

3. It is possible with the help of probabilities to make true decisions leading to desired

results.

4. It accesses the outcomes in quantitative tenses.

Limitations

It is very complex method as the various alternatives and events sometimes make it difficult to

find solution.

It is based on the probability so no defined solution of a problem is given.

Finding out probabilities is only possible with the help of expert.

Many of the problems become so complex with decision tee that complexities are to be used to

solve the problems again the layman cannot use methods for taking decisions.

Topics

Departmentation

Social responsibility

Mission

Departmentation and basics of Departmentation.



Control

Control is a universal and important function of management. It is guide somebody in the

direction in which it is intended to go. In this sense control means power or authority to direct.

It is also implied a standard of comparison for the results of any operation of experiment. In

terms of managerial function control consist of the step taken to measure that , the

performance of the organization confirms to the plan.

Process of control:-

Fixing standard: a standard means a way of finding what a thing should be. In the context of

business enterprises, standard refers to the objectives to be achieved in order to judge whether

the actual performance is along the line. Standard serves as a basis of control. They should be

determined very carefully and scientifically. Slandered should be expressed in numeric form.

Like quantity of goods of product, cost to be incurred or profit to be earned.

Measurement of actual performance:- after fixing standard the second step is to measure

actual performance of various individual groups or units. This involves the lying down of

methods of evaluation performance. Observation done in cases where standard has been set in

numeric term.

A b c

1000 2000 2500 standard

900 2200 2500 actual performance

-100 +200 00 deviation

Comparing accrual performance with standard performance:- the third major step in the

control process in the attainment of actual and standard performance. It includes two steps.

1. Find out the extend of deviation: identifies the causes of such deviations. Management

should concentrate in significant deviation.

2. Correcting deviation: after the causes of deviation are known, suitable steps are taken

to avoid deviations in the future. This will involves taking certain decisions by the

management like modification of plan, reaffixing goals and standard etc.



Setting objectives

Measure actual performance

Correcting deviation

Take corrective action.

Types of control:

Feedback control:- the management control is generally observed as a system of feedback

refers to the process of adjusting future action on the basis of information about the past

performance. The following chart depicts the feedback process involved in a management.

Control gives them the idea of feedback system.

It is clear from the above chart that the system of management control is just a simple processof establishing standard, measuring performance and correcting the deviation if any. This is

because the feedback system involved in this process. Control is more complex and simple then

this simple process.

Concurrent control: it involves the regulation of ongoing activities that are part of

transformation process to ensure that confirm to organizational standards. These standards

rely on performance standards, rules and regulation for guiding employee task and behavior. It

measures whether the items being produced meet the quality standard. Employee monitor the

measurement. It they see that standards are not being met in some area, they make a

correction themselves or let the manager know that a problem is occurring.

Fixed forward control:- many managements by experience have find out that the time lack in

management. Control process necessitates future managerial control. Fixed forward control

can give the manager a correct and timely idea of not only taking corrective action but also

possibility of the occurrence of certain problem. Feed forward control focus on operation

Actualperformance

Measure accrualperformance

Compare actualwith standard

Identification of standard

Design program Program of

corrective action

Implementation

of corrective

action

Analyses

deviation



before they begin. There goals is to prevent a problem with regular maintenance. For example

it includes system safety etc.

Techniques of control

Traditional techniques:-

1. Budgetary control:- it is applied to a system of management and accounting control

by which all the operations and outputs are forecast as far as ahead, as possible and

actual results, when known are compared with the budget estimate. Budgetary control

involves the use of budget to plan coordinate and control day to day operation of

business in accordance with the overall objects of business. It facilitate control by

establishing budget in respect of each function and assigning responsibilities for control

of actual performance. Budgetary control involves the following three steps.

A) Preparation of budget

B) Continuous comparison of actual budget with the planned one.

C) Revision of budget in the light of changed circumstances.

Characteristics of budgetary control

1. Budgetary control assumes the existence of forecasted plans of various enterprises.

2. Budgetary control presumes that management has made budget for all departments of

the enterprise and these budgets are summarized into a master budget.

3. Budgetary control need recording of actual performance and continuous performance

with the budgetary performance and analysis the variation.4. Budgetary control is a system suggested suitable corrective action. It prevent deviation

in future.

2. Cost accounting and cost control: cost accounting is concerned with cost

determination and shows what is likely to be cost of process or a product under existing

conditions. Control through costing involves the control over cost in the light of certain

predetermined costs. Such standards are set in respect of total cost as a whole and its

various components like material, labor and overhead. Thus standard cost is in a

technique of cost accounting in which standard cost are used on recording certain

transactions and the actual cost are prepared with the standard cost to find out thereason of variation from the standard.

3. Statistical data quality control:- statistical data are widely used for the purpose of

managerial control. These may be presented in the form of statistical table and

graphical charts. The data presented can be meaningfully provided. It is prescribed in

such a way as to make a comparison with some predetermined standards. Time pass

events cannot be allowed. The manager must ensure that statistical reports shows



correct trend so that the person who views them can easily be understand the way

things are moving.

4. Special reports and analysis:- even though routine accounting and statistical

reports give a major information experience of certain area, a successful manager

reveals that this is inadequate in certain area. Such problem area calls for special reportsand analysis from special trained analytics meant for investigation and analysis such

special problems. Such special investigation generally discloses opportunity for lots

improvement. The non routine nature of such special analysis may highlight the unusual

things. While doing so they may reveal area where the management can achieve

significant improvement in the efficiency.

Modern techniques

1. Management audit:- management audit attempts to evaluate the performance of

various management process and functions. It is an audit to examine review and

approve the various policies and authority of the management on the basis of certain

objective standard. It goes beyond the conventional audit within the organizations . it is

a comprehensive and critical review of all aspects of management. It usually involves

the following steps.

(1) Identification of the objectives of organization.

(2) The overall objectives of the organization are to be broken up into detailed

targets i.e. plans for various segments.

(3) To organizational structure is to be reviewed to access whether it can

effectively fulfill the overall objectives of the detailed target.

(4) The performance of each financial area is to be examined on the basis of

above examination. Realistic course of action is to be suggested.

2. PERT(Project evaluation and review technique)

It is a basic network technique which includes planning, monitoring and controlling of

activities. The PERT is a network model that allows for randomness in activity

completion time. PERT was developed in the late 1950s for the US navy. It has the

potential to reduce both the time and cost required to complete a project. Pert planning

involves the following steps.

(1) Identify the specific activities.

(2) Determine the proper sequence of the activities.

(3) Construct a network diagram.

(4) Estimate the time require for the each activity.

(5) Determine the critical path

(6) Update the pert chart as the profit progress.



3. MIS (Management information system ) with the coming of computer the

management information system is becoming popular and growing very quickly. The

purpose of MIS is reporting & is to provide the necessary information to the managers

and supervisor at various levels to keep them continuing the functions of organizing,

planning, decision making & control. MIS is a scientific way of collecting, processingstoring and communication information relevant to the various functions of

organizations to various levels of management, so that management may be facilitated

In discharging its efficiency. MIS enhance the quality of management & growth of the

organization by providing timely accurate and meaningful information for planning,

organizing & controlling.

Difference between Japanese management and American management

1. Japanese believe in the life time employment they feel that the company has not right

in firing employees until they do a criminal offence.

American company usually tends to use short term employment.

2. Beside job securities Japanese believe that there should not be any reason for

employees, supplier, and customer to disturb organization. US companies are known to

disturb the one another. It they feel that there supplier is not giving them good deal

they tend to look for somebody else.

3. People in Japan feel that a person should not be evaluated or promoted until he has

served 10 years with company. During these years they taught everything with

company.

Americans dislike this method because they believe in rapid feedback and fastpromotion.

4. Japanese believes that it should not give employee a set target.

American in the other hand believe that in order to operate a business you must give

them there fix targets.

5. When a Japanese company has to make a decision they feel that the whole company

should be involved.

In US companies workers do not allow to make decisions. Only top level executive make

decisions.

6. In Japanese companies workers do not like the idea that one individual should berewarded for their performance. They believe that it is not right to compete workers.

Americans on the other hand like praising and believe if a worker worked hard he

should be rewarded for that.



Evaluation of management thoughts

Contribution by F.W. Taylor:- Fredrick Winslow Taylor is known as a father of

scientific management. He was an American engineer who sought to improve industrial

efficiency. He was one of the intellectual leaders of the efficiency movement and his ideas

broadly conceived were, highly influential in the progressive era.

Meaning of scientific management: scientific management is an art of knowing what exactly

you want from your men to do and see that is done in the best possible manner. In simple

words it is application of science to management. Scientific management characterized that

form of organization and procedure in which purposeful collective efforts witch rest on

principles or laws derived by the process of scientific investigation and analysis instead of

tradition.

Principles of scientific management

1. Science not a tool of thumb: according to this principle work assigned to any employee

should be observed and analysis in respect to time and part involved in it. The way of

doing a job should be clear to all. Taylor has emphasis the each job performed in the

organization should be based on scientific inquiry and not on institutional experience

and by hit and miss method.

2. Cooperation between employer and employees:- Taylor has advocated that there

should be harmonize relation between employees and employer. It is only through the

cooperation with the employees that manager can insure that the work is carried inaccordance with the standard.

3. Scientific relation training and development:- selection means to choose the best

employees according to the need. Their skill and experience must match the

requirement of the job. Training should give to all employees who are selected for the

job. So that they can perform the job efficiently. Scientific development refers the

criteria for promotion; transfer etc. so that work is done with full efficiency.

4. Division of work: the responsibilities of workers and management should be properly

divided and communicated so that they can perform them in an effective way and

should be suitably rewarded for the same.5. Mental resolution:- according to the Taylor the workers and manager should have a

complete mental revolution in respect to their mutual relationship. Workers should be

considered as part of organization. Employer should not treat worker mare wage

earner.



Contribution by Henry fayol

Henri Fayol¶s 14 Principles of Management

y Division of work A firms work should be divided into specialized, simplified tasks.

Matching task demands with workforce skills and abilities will improve productivity. The

management of work should be separated from its performance.

y Authority Authority is the right to give orders and the responsibility to accept the

consequences of using authority. No one should possess one without the other.

y Discipline Discipline is performing a task with obedience and dedication. It can be

expected only when a firms managers and subordinates agree on the specified tasks

that subordinates will perform.

y Unity of command Each subordinate should receive orders from only one hierarchical

superior.

y Unity of direction Each group of activities directed toward the same objective should

have only one manager and only one plan.y Individual versus general interests The interests of individuals and those of the whole

organization must be treated with equal respect. Neither can be allowed to supersede

the other.

y Remuneration of personnel The pay received by employees must be fair and

satisfactory to both them and the firm. Pay should be in proportion to personal

performance, but employees general welfare must not be threatened by unfair

incentive payment schemes.

y Centralization Centralization is the retention of authority by managers. It should be

used when managers desire greater control. Decentralization should be used, however,

if subordinates opinions, counsel, and experience are needed.

y Scalar chain The scalar chain is a hierarchical string extending from the uppermost

manager to the lowest subordinate. The line of authority follows this chain and is the

proper route for organizational communications.

y Order Order, or everything in its place, should be instilled whenever possible

because it reduces wasted materials and efforts. Jobs should be designed and staffed

with order in mind.

y Equity Equity means enforcing established rules with a sense of fair play, kindliness,

and justice. Equity should be guaranteed by management, because it increases

members loyalty, devotion, and satisfaction.

y Stability of tenure Properly selected employees should be given the time needed to

learn and adjust to their jobs. The absence of such stability undermines organizational

performance.

y Initiative Members should be allowed the opportunity to think for themselves because

this improves the distribution of information and adds to the organizations pool of

talent.



y Esprit de corps Managers should harmonize the interests of members by resisting the

urge to split up successful teams. They should rely on face-to-face communication to

detect and correct misunderstandings immediately.

Henry Fayol v/s Taylor

1. Concern: tailors main concern were task workers and supervision. Whereas Fayols work

was concerned with efficiency of administrative manager.

2. Emphasis:- Taylor laid great emphasis on standardization of work and tool but Fayol laid

emphasis on the principle of general management and the function of management.

3. Expression:- Taylor used the expression scientific management and Fayol expressed his

ideas as a general theory of management.

4. Focus;- Taylor tried to improve the productivity of the worker and eliminate all kinds of

wastage but Fayol tries to develop through better management.5. Starting point:- tailor wanted to improve the efficiency of the employee of the lowest

level and moved upward while formulating the principles of scientific management.

Fayol on the other hand began from the top level and proceed downwards with

emphasis only with unity of direction, unity of command and coordination.

Similarities between Fayol and Tailor:

1. Principle of both proves that management is universal in nature.

2. The principle of both was to improve the management practice.

3. There principle emphasis mutual cooperation between employer and employee.

4. The principle of both shows that management is required at all levels.

5. Both have emphasized that management qualities are acquirable.

6. Both have attempted to overcome managerial problems in systematic way.

7. Both have emphasized that management activities can be effective if these are based

on sound principles.



Contribution by Chester Barnard:

He was a telecommunication executive. He looked at the organization as system of

cooperation of human activities and was worried about the fact that they are typically

rather short lived. According to him, this happens because organization does not meet the

two criteria necessary for survival: effectiveness and efficiency.

He contributed the following theories to management which are very helpful even

today. These are the theory of authority and theory of incentive. Both are seen in the

context of communication system that should be based on some rules

- Everyone should know of the channels of communication.

- Everyone should have access to the formal channels of communication.

- Lines of communication should be as short and as direct as possible.

In the theory of authority he states that for a communication four conditions

should meet:

- It has to be understood by the subordinate.

- It should be possible to the subordinate to comply.

- The subordinate has to see no incompatibility between the communication and his

own goal.

-

The subordinate has to see no incompatibility between the communicating and theobjectives of the organization.

In the theory of incentives he sees two ways to of convincing subordinate to

cooperate:

- Tangible incentives

- Persuasion

He gives much more importance to persuasion then economic incentives.



Contribution by Dr. Likert:- he has conducted much research on human behavior

within organization, particularly in the industrial situation. He has examined different types

of organizations and leadership styles, and he asserts that to achieve maximum profitability

and good labor relationship and high productivity, every organization must make optimum

use of their human assets. Likert identified four main systems:

The exploitive authoritative system:

- where decisions are imposed on subordinates,

- where motivation is characterized by threats,

- where high levels of management have great responsibilities but lower level have

virtually none.

- Where there is little communication and no joint teamwork.

The benevolent authoritative system-

- where leadership is by a condescending form of mast servant trust,

- where motivation is mainly by reward,

- where managerial personnel feel responsibility but lower does not,

- Where there is a little communication and relatively little team work.

The consultative system-

- where leadership is by superiors who have substantial but not complete trust in their

subordinates,

- where motivation is by reward and some involvement,

- where a high proportion of personnel, especially those at the higher levels feel

responsibilities for achieving organizational goals,

- Where there is some communication (both vertical and horizontal) and a moderate

amount of teamwork.

Participative-group system-

- which is the optimum solution,

- Where leadership is by superiors who have complete confidence in their subordinates.

- Where motivation is by economic reward based on goals which have been set in

participation.

- Where personnel at all level feel real responsibilities for the organizational goal,

- Where there is much communication and a substantial amount of cooperative

teamwork.



Abraham Maslow:- a famous social scientist and philologist develop a theory of

motivation which is based on the hierarchy of needs. According to him there are five kinds

of needs are:

1. Physiological needs:- it refers to those needs which are very essential for life for

example food, shelter and clothing etc. the survival of human beings would be in danger

if these needs are not satisfied. These needs are biological in nature and keep the body

fit.

2. Safety needs:- after physiological needs are satisfied to a reasonable degree the safety

needs take place for example security of job, pension of old age, insurance plans etc. in

changing a job security need play an important role.

3. Social needs:- it include need for love, affection friendship and acceptance by group of

persons. A man is a social being and he has a need to love and to be loved. Workers

form informal group for having a meaningful relationship from others. Management

should not object to such group.

4. Esteem needs: these needs are concerned with once self esteem. Such as self respect,

self confidence, status recognition etc. the satisfaction of their needs produces a feeling

of self confidence among the employees.

5. Self actualization needs:- these needs include need for self development, self

actualization, desire to take an increase respect etc. not many employee try to satisfy

their needs but an employee who wants to develop will feel restless till he satisfied this

need.

Maslow motivation theory has these three basics

(a) A man is a social animal and always desire for more and more, his needs are of many

types.

(b) There is a hierarchy of these needs i.e. those needs are arranged in a serial of

preference after the lower level needs are satisfied the need of higher level take their

place.

(c) A satisfied need level worker works as a motivator.



Contribution by Weber

He was a German intellectual with interest in sociology, religion, economics, and political

science. According to Weber following are the essential elements for an organization.

1. Division of labor2. Hierarchy

3. Formulized rules

4. Impersonality

5. Selection and promotion of employee on the basis of ability.

Herzberg theory of motivation

Frederic Herzberg develops the two way factor theory popularly known as motivation

hygiene theory. It was based on the contents of interviews conducted on 200 engineer

and accountants. He has found that there a two set of needs.

1. Hygiene or environmental factors: these factors such as interpersonal relation with

supervisor, salary, security, working conditions. Although they results in job

satisfaction. The absence of hygiene factors cause dissatisfaction among the

employees. They are called extrinsic (external) factors because they work outside

the work being performed.

2. Motivational factors: these factors are intrinsic factors because they are rare

indicator of job satisfaction and primarily exist where the work is being carried out.

These factors include recognition, opportunity for growth, increase responsibility,

challenging work potential for personal growth etc.

In brief these theories lay down that

(1) The absence of first set of factors leads to dissatisfaction although they are not

motivational factors.

(2) The second set of factors is important as they provide satisfaction to employees and

are termed as motivational factors.

(3) According to this theory money is not a motivational factor as it has been included

in hygiene factor.

(4) His approach to a motivation is based upon the fact that country is rich.



Difference between Maslow and Herzberg

1. Maslow formulated his model as on the basis of experience where as Herzberg develop

his theory on the basis of empirical study.

2. Maslow takes into account all needs of individual where as Herzberg looks at only those

needs which are concerned with environment.

3. Maslow considers lower level need such as pay safety working condition etc. as

motivator where as Herzberg consider these only as hygiene factor and not motivator.

4. Maslows thoughts are applicable to all types of employees where as Herzberg theory is

mainly applicable to professional person.

Contribution by Elton Mayo in development of management thoughts

Elton Mayo was a first person to plead for the understanding for workers functions in the

context of growth of science and technology. He wished management to understand the

problems of workers and make effort to solve them. His main contributions are as follows-

1. Human relation approach:- he is rightly called the father of human relation movement.

He recognizes the importance of human being in management. He said that human

being is complex and influential input into organizational performance. The social and

physiological needs of human beings cannot be ignored. if management want to

enhance productivity .2. New economic reward;- the earlier assumption was that workers will work more if they

are offered more monitory incentive. He said that the techniques of economic incentive

were not only inadequate but also unrealistic. He was able to show that respectful

treatment, sense of participation and belongings recognition are some times more

important than monitory reward.

3. Social man:- he has developed a concept of social man. He said that man is basically

motivated by social needs and obtains his sense of identity through relationship with

other.

4.

Organization as a social system:- he was of the view that informal relationship in theorganization are more efficient then formal relationship. People form informal group to

seek guidance for the actions from such groups.



Contribution by Henry Gantt

He was a mathematical engineer and management consultant. Who is most famous for

developing the Gantt chart in 1910. These Gantt charts were implied on major

infrastructure project and still are important tool in project management. Henry Gantt

developed the Gantt chart which is used to scheduling multiple overlapping charts over

a time period. He focused on motivation scheme. Importing the greater effect of

developed a pay incentive system with a guaranteed minimum wage and bonus system

for people on fixed wages. Gantt also focused on the importance of the guidelines of

leadership and management skill in building effective industrial organization.

A Gantt chart is a horizontal bar chart developed as a production control tool in 1917 by

Henry L. Gantt, an American engineer and social scientist. Frequently used in project

management, a Gantt chart provides a graphical illustration of a schedule that helps to plan,

coordinate, and track specific tasks in a project.



Gantt charts may be simple versions created on graph paper or more complex automated

versions created using project management applications such as Microsoft Project or Excel.

A Gantt chart is constructed with a horizontal axis representing the total time span of the

project, broken down into increments (for example, days, weeks, or months) and a vertical axis

representing the tasks that make up the project (for example, if the project is outfitting your

computer with new software, the major tasks involved might be: conduct research, choose

software, install software). Horizontal bars of varying lengths represent the sequences, timing,

and time span for each task. Using the same example, you would put "conduct research" at the

top of the verticle axis and draw a bar on the graph that represents the amount of time you

expect to spend on the research, and then enter the other tasks below the first one and

representative bars at the points in time when you expect to undertake them. The bar spans

may overlap, as, for example, you may conduct research and choose software during the same

time span. As the project progresses, secondary bars, arrowheads, or darkened bars may be

added to indicate completed tasks, or the portions of tasks that have been completed. Avertical line is used to represent the report date.

Gantt charts give a clear illustration of project status, but one problem with them is that they

don't indicate task dependencies - you cannot tell how one task falling behind schedule affects

other tasks. The PERT chart, another popular project management charting method, is

designed to do this. AutomatedGantt charts store more information about tasks, such as the

individuals assigned to specific tasks, and notes about the procedures. They also offer the

benefit of being easy to change, which is helpful. Charts may be adjusted frequently to reflect

the actual status of project tasks as, almost inevitably; they diverge from the original plan.



Contribution by Douglas McGregor Theory X

Assumptions Role of Management

Theory X

1. The average human being has an

inherent dislike of work and will avoid

it if possible.

2. Because they dislike work, most people

must be coerced, controlled, directed,

or threatened with punishment before

they will put forth the effort toward

achievement of organizational

objectives.

3. The average human being prefers to be

directed, wishes to avoid responsibility,

has relatively little ambition, and wants

security above all.

Theory X

1. Managers are responsible for

organizing the elements of productive

enterprise money, materials,

equipment, people solely in the

interest of economic efficiency.

2. The managers function is to motivate

workers, direct their efforts, control

their actions, and modify their

behavior to fit the organizations

needs.

3. Without such active intervention by

managers, people would be passive

about or even resistant to

organizational needs; workers must be

persuaded, rewarded, and punished

for the good of the organization.

Theory Y

1. Expending physical and mental effort

at work is as natural as play and rest.

The average human being does notinherently dislike work.

2. External control and the threat of

punishment are not the only means to

direct effort toward organizational

objectives. People will exercise self-

direction and self-control in the service

of objectives to which then feel

committed.

3. Commitment to objectives is a function

of the rewards associated with theirachievement. The most significant

rewards the satisfaction of ego and

self-actualization needs can be direct

products of effort directed toward

organizational objectives.

4. Avoidance of responsibility, lack of

Theory Y

1. Managers are responsible for

organizing the elements of productive

enterprise money, materials,equipment, people in the interest of

economic ends.

2. Because people are motivated to

perform, have potential for

development, can assume

responsibility, and are willing to work

toward organizational goals, managers

are responsible for enabling people to

recognize and develop these basic

capacities.3. The essential task of management is to

arrange organizational conditions are

methods of operation so that working

toward organizational objectives is also

the best way for people to achieve

their own personal goals.



ambition, and emphasis on security are

not inherent human characteristics.

Under proper conditions, the average

human being learns not only to accept

but to seek responsibility.

5. Imagination, ingenuity, creativity, and

the ability to use these qualities to

solve organizational problems are

widely distributed among people.

THEORY X AND THEORY Y

THEORY X

1. Employees normally do not like to work and will try to avoid it.

2. Since employees do not like working, they have to be coerced, controlled, directed

and threatened with punishment to motivate them to work.

3. The average employee is lazy, shuns responsibility, is not ambitious, needs direction,

and principally desires security.

THEORY Y

1. Work is as natural as play and therefore people desire to work.

2. Employees are responsible for accomplishing their own work objectives.

3. Comparable personal rewards are important for employee commitment to achieving

work goals.

4. Under favorable conditions, the average employee will seek and accept

responsibility.

5. Employees can be innovative in solving organizational problems.



Management science

This approach is also known as mathematical and quantitative approach. The actions of which

can be expressed in mathematical term. The primary focus of this approach is the mathematical

model. Trough this model managerial and other problem can be expressed in the basicrelationship and where a given goal is sought. This approach draws many things from the

decision theory approach and provides many techniques for rational decision making.

Management science is the discipline of using mathematic and other analytical method to help

better decision making.

Features of this approach

1. Management is regarded as problem solving mechanism with the help of mathematical

rule.

2. Management activities can be quantifies.3. Operation research mathematical tool, simulation basic methodologies to solve

managerial problems.

Operation approach.

This approach is also known as management process approach. Operational research regards

the management as universally applicable body of knowledge. That can be brought to bear it all

levels of managing and in all types of enterprises. At the same time the approach recognize that

the actual problems manager face and the environment in which they operate may vary

between enterprises and level and it recognize that application of science by perceptive

practioner must take this into account in designing practical problem solutions.

Features of this approach are as follows.

(1) Emphasis of management function and principle involved in performing function.

(2) Management functions are universal in nature irrespective of the type of organization.

(3) Central core of managing revolves around planning, organizing , staffing, directing and

controlling etc.



The decision theory approach:

This approach is concerned with how real and ideal decision makers make or should make

decisions, and how optimal decisions can be reached. This approach looks at the basic problems

of management around decision making-selection of an suitable course of action out of given

alternatives. The major contribution in this approach has come from Simon. The major

emphasis of this approach is that decision making is the job of every manager. The manager is a

decision maker and organization is a decision making unit. Therefore the basic problem in

managing is to make rational decisions.

Features of this approach are as follows

(1) Management is essentially a decision making unit.

(2) Members of organization are decision maker and problem solvers.

(3) Organization can be treated as combination of various decision centers.

(4) Quality of decisions effect the organizational effectiveness.

(5) All factors effecting decision making are area of study for manager.

System approach:

It is an integrating approach which consider management in its totality , is based on empirical

data. The basic idea of system approach is that any object must rely on empirical data. The

basic idea of this approach is that a object must rely on the method of analysis involving

simultaneous variation of mutually dependent variables. System approach is based on the

generalization that everything is interrelated and interdependent; a system approach is

composed of related and dependent elements which in interaction form a unitary hole.

Example the world can be considered as system in which various national economies are sub

systems.

Close Versace open system

Open system:- open systems are those which interact with environment they import energy

and export out.

Close systems:- close systems are those which have no interaction with the internal and

external environment and self maintaining.



7-S McKinsey model

to better represent the challenges of a service marketing McKinsey has developed a new framework for

analyzing and improving organizational effectiveness, the 7s model.

The top 3s across the top of the model are described as hard ss

SharedValue

The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and

what it believes in. Central beliefs and attitudes.

Strategy

Plans for the allocation of firms scarce resources, over time, to reach identified goals. Environment, competition,

customers.

Structure

The way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized

(the trend in larger organizations); matrix, network, holding, etc.

The four across the bottom of the model are lies tangible in nature and termed soft ss by McKinsey

System

The procedures, processes and routines that characterize how important work is to be done: financial systems;

hiring, promotion and performance appraisal systems; information systems.

Staff

Numbers and types of personnel within the organization.

Style

Cultural style of the organization and how key managers behave in achieving the organizations goals.

Skill

Distinctive capabilities of personnel or of the organization as a whole.

Documents

Nature and Meaning of Management