Business College
Department of business
Administration
Managerial Reading in English
Dr. Faraj Harahsheh
Chapter 1
CONCEPTS OF BUSINESS
MANAGEMEN
CONCEPTS OF BUSINESS MANAGEMEN
Meaning of Management
The term Management is: a process of planning, organizing, motivating
and controlling the enterprise resources for achieving the goals of the
organization.
At other times, it is used to describe it as a function of managing people.
It is also referred to as a body of knowledge, a practice and discipline.
There are some who describe management as a technique of leadership
and decision-making while some others have analyzed management as
an economic resource, a factor of production or a system of authority.
Management is a process for the utilization of minimum in-put for the
production of maximum profit’.
* John F. Mee. * Mary Cushing Niles. -Management is the
art of getting things done’
‘Management is the function of executive leadership’. * R.C. Davis *
J.N. Schulze.
Management is the development
in people and not the direction of things. It is personnel
administration.’ * James D. Mooney.
Characteristics of Management
1. Management is universal
2. Management social process.
3. Management is goal oriented.
4. Management is activity.
5. Management is an integrative process.
6. Management is a group activity.
7. Management is intangible.
8. Management is dynamic.
9. Management is a multi-disciplinary subject.
10. Management accomplishes results through others.
11. Management is both a science and an art.
Objectives of Management:
1. Higher efficiency.
2. Satisfaction of customers.
3. Adequate return on capital.
4. Satisfied workforce.
5. Better working conditions.
6. Relationship with suppliers.
7. Contribution to national goals.
Importance of management
1. Determination of objective.
2. Accomplishment of objectives.
3. Efficient use of resources.
4. Meeting challenges.
5. Role in national economic development.
6. Innovation.
7. Co-ordination and team-spirit8. Social responsibilities-
Social Responsibilities of Management
Management has very wide ranges of responsibilities towards society.
Management has to play the most important role in the development
of social values and in the growth of the business and industrial
environment Social Responsibility can be defined as the obligation of
management towards the society and others concerned.
Business enterprises are creatures of society and should respond to the
demands of society. If the management does not react to changes in
social demands, the society either will force them to do so through
laws or will not permit the enterprise to survive.
Scope of Management Process
1. Production management.
2. Financial management.
3. Marketing management.
4. Personal management.
5. Development management.
6. Purchasing management.
7. Transport management.
8. Development management.
9. Total Quality management.
10. Human Resources management.
11. Maintenance management.
12. Office management.
13.Public Management.
14.Business management.
15.Strategic Management.
16.Relationship Management.
17.Financial Management.
18.Development Management.
19.Changes Management.
20.Crisis Management.
21.Knowledge Management.
.22.Operation management..
23.Sales Management.
QUALITIES OF A SUCCESSFUL MANAGER
1. General knowledge regarding Industry.
2. Quality of effective Leadership.
3. Capacity of Making Quick Decision.
4. Intelligent.
5. Professional Experience
6. Good Communication Skills
7. Time management Skills.
8 .Know Your Limits
9. Confidence.
10. Never Stop Improving
11. Learn From The Past
12. Inspires others.
13. Foresightedness.
14. Offers strategic View.
Levels of management
Top managers — Responsible for performance of an organization as a
whole or for one of its larger parts.
Middle managers — In charge of relatively large departments or
divisions in the Organization.
Lower Level of Managers -Lower level is also known as supervisory /
operative level of management. It consists of supervisors, section
officers.
Types of managers
• Line managers are responsible for work activities that directly
affect organization’s outputs.
• Staff managers use technical expertise to advise and support the
efforts of line workers.
• Functional managers are responsible for a single area of activity.
• General Managers are responsible for more complex units that
include many functional areas.
• Administrators work in public and nonprofit organizations.
Manager’s roles:
1. Interpersonal roles.
2. Informational roles.
3. Decisional roles.
4. Resource allocator.
5. Risk Sensor.
6. Negotiating role.
Four functions of management
1. Planning
The process of setting objectives and determining what actions should be
taken to accomplish them; Planning is the first function of management
process.
2. Organizing
The process of assigning tasks, allocating resources, and arranging the
coordinated activities of individuals and groups to implement plans,
organizing is the second function of management process.
3. Leading:
The process of arousing people’s, enthusiasm to work hard and direct
their efforts to fulfill plans and accomplish objectives, leading is the
third function of management process.
4. Controlling:
The process of measuring work performance, comparing results to
objectives, and taking corrective action as needed, Controlling is the
fourth function of management process.
Administration and Management
Management: “Management means getting things done through other
people successfully.”
‘Administration’: “Administration is mainly a top level function
related with the deciding of major objectives and policies.”
Management as a ‘Science’ or an ‘Art’
The above-mentioned points reveal that management combines features
of both sciences as well as art. It is considered a science because it has an
organized body of knowledge containing certain universal truths. It is
called an art because managing requires certain skills which are personal
possessions of managers.
Bureaucracy theory
Max Weber’s Concept of Bureaucracy Max Weber, a German Social
Scientist and Philosopher made valuable contribution to the general
administration theory through his concept of Bureaucracy. According to
Weber there are three types of authority systems as follows.
1) Charismatic Authority System: It is based on the extraordinary qualities or magnetic personality of the leader.
2) Traditional Authority: Here a person enjoys authority
because of his status derived by inheritance. The extent of authority is
decided by the custom. Traditional authority system ignores whether the
particular person has necessary leadership qualities and competencies.
3) Bureaucracy: According to Weber both the
charismatic and traditional authority systems are not suitable to large
business organizations because they are person-centered and instable in
nature. Hence, Weber has advocated Bureaucracy model based on
rationality and legality.
The model bureaucracy suggested Weber has the following
characteristics.
1) Division of Labour : In bureaucracy jobs are broken into simple
routine and well-defined tasks and assigned to various employees on the
basis of their abilities, skills and aptitudes.
2) Hierarchy of authority : Bureaucracy works on a well-defined
hierarchy of authority. Higher officials or offices supervise lower officials
3) Formal selection: All persons in the organization are selected and
placed on the basis of their technical qualifications.
4) Formal rules and regulations: The organization functions according
to formal rules and regulations. These rules and regulations are in written
form and communicated to all employees
5) Impersonality: There is no place for emotions, sentiments and
personal attachment.
6) Career orientation: In bureaucratic organization, the officers are
‘professionals’ rather than owners of the organization.
7) Continuity: The official business is conducted on continuous basis.
The organization enjoys continuity of operations because of rational-legal
anthority structure.
8) Separation between official business and personal affairs : The
official business of employees and their personal affairs are treated as two
separate things.
9) Rational-legal Structure: Weber’s bureaucracy model is
characterized by rationality and legality.
Essential managerial skills
Skill — the ability to translate knowledge into action that results in
desired performance.
Technical skill — the ability to apply a special proficiency or expertise to
perform particular tasks, Technical skills refer to a measurable skill or
trait related to the subject of your work or industry.
Human skill — the ability to work well in cooperation with others,
Example communication, Understanding body language, Empathy, Selfawareness.
Conceptual skill — the ability to think critically and analytically to
solve complex problems, Conceptual skills are the abilities that allow an
individual to better understand complex scenarios and develop creative
solutions, The ability to motivate others, Example, Decision-making,
,team work, Professionalism
Competencies for managerial success
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Appreciating and Encouraging Teamwork
Self-management
Leadership
Critical thinking
Professionalism
Transparency
Excellent Communication
Listening Skills
Consistency and Reliability
Making Decisions
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Rewarding and Recognizing Employees
A Willingness to Change
Conflict Resolution
Collaboration
Organizations are open systems
Any organization can be described as a “system.” A system is a
group of components (or parts) that interact with each other and
dependent on each other to serve a common goal. Organizations
and other social systems can be “closed” or “open” systems.
Closed systems have boundaries that cannot be penetrated by new
information or ideas. Open systems have boundaries which allow
things to pass-through them.
1-Composed of interrelated parts that function together to achieve a
common purpose.
2-Interact with their environments.
3-Transform resource inputs into product outputs (goods and
services).
4-Environmental feedback tells organization how well it is meeting
the needs of customers and society.
System elements are:
1. Inputs: consist of human or other resources, such as information,
energy, and materials, coming into the system. Inputs are acquired
from the system’s external environment.
2. Transformations Process: are the processes of converting inputs
into outputs.
3. Outputs: are the results of what is transformed by the system and
sent to the environment.
4. Feedback. Any Information, notes, complaints, suggestions that
reach the organization from the external environment, especially
from customers, suppliers, etc.
Management by Objectives (MBO)
Management by objectives (MBO) is a management model that aims to
improve the performance of an organization by clearly defining
objectives that are agreed to by both management and employees.
According to the theory, goal setting and action plans, encourages
participation and commitment among employees, as well as aligning
objectives across the organization. The term was first outlined by
management guru Peter Drucker in his 1954 book.
MBO principles
1. Setting goals and objectives.
2. Specific objectives for each member.
3. Participation decision making
4. Explicit time period.
5. Performance evaluation and feedback.
FAYOL’S PRINCIPLES OF MANAGEMENT
Henry Fayol, The French industrialist is regarded as the real father of
modern management science. A brief description of Fayal's fourteen
principles of management, which he described in his book ‘General
and Industrial Management', is given below:
1. Division of work
This principle implies that every employee should be assigned only one
type of work. It aims at the maximum production with least efforts. It
also helps in securing the maximum efficiency.
2. Authority and responsibility
Authority is the right to give orders to the subordinates. Responsibility
means the duty which the subordinates is expected to perform.
Sufficient authority should be delegated to a subordinate to enable him
to discharge his duties.
3. Discipline
Discipline means getting obedience to rules and regulations of an
organization. In the absence of discipline, the organization cannot
succeed. Discipline depends upon effective leadership.
4. Unity of Command
A subordinate should receive orders from one supervisor only. If he
get orders from two or more officers at the same time, he gets
confused.
He cannot discharge his duties properly. Unity of command is related to
functioning of personnel.
5. Unity of Direction
Unity of direction means that each group of persons having same
objects must have one head and one plan. It will help in establishing
the coordination and uniformity in the activities. It is related to the
functioning as whole.
6. Remuneration of Personnel
The remuneration of personal must be fair and satisfactory. The wage
system must motivate the employee, to do better and more and may
ensure safety and security of the employees. The wage system must be
satisfactory to both the employees and employers.
7. Centralization
It means concentration of authority at one place or at one level in the
organization. A proper balance between centralization and
decentralization must be maintained. Small firms have absolute
centralization but in large concerns, there is less degree of
centralization.
8. Decentralization.
Decentralization means dispersal of authority to the lower levels in the
organization.
9. Scalar Chain
This principle emphasizes that there must be a clear line of authority right
from the top management to the bottom. Orders of management and
feeling of subordinates must pass through the proper channels of
authority. Such types of channels must be short cut only when it is
essential to do so.
10. Order
This principle is related to the arrangement of things and the placement
of people. Order means everything should be in a proper arrangement.
There should be a place of everything, and everything should be in its
place.
Similarly, there should be right man in the right place.
11. Equity
Personnel must be treated with kindness and equity if loyalty is expected
to them. This principle does not mean that all the employees of the
organization are equal and must be treated and paid equal.
12. Stability of Tenure
This principle requires that there must be stability in the service of the
employees. The employees should not be transfer from one place to
another very quickly in business activities, because it lowers the
progress of activities. Management should remove the feelings of
insecurity of job from the minds of personnel. If the job of a person is
not secure, he will be no lookout for the job elsewhere and his work
will not be satisfactory.
13. Incentives
The subordinate should be given an opportunity to take some
initiatives in making and executing the plans. The employees should be
provided proper incentives in planning activities schedule for the
enterprise.
14. Group work.
The management and workers must work together as a team for the
accomplishment of the targets of the organization. This principle is
based upon two theories – “union is strength” and “unity of the staff is
the foundation of success in any organization”.
Elements of Management
Henry Fayol has divided the function of management into five parts:
a) Planning.
b) Organization.
c) Direction.
d Co-ordination.
e) Control.
Meaning of Scientific Management
It refers to the use of scientific method in decision making to resolve
management problems rather than depending on trial and error method.
Principles of Scientific Management:
1. Separation of planning and doing.
2. Job analysis.
3. Time study.
4. Motion study.
5. Fatigue study.
6. Standardization.
7. Scientific selection and training of workers.
8. Functional foremanship.
9. Financial incentives.
10. Replacement of Old Rule of Thumb Method
11. Maximum Output
12. Equal Division of Responsibility.
13. Co-Operation between Labor and Management.
14. Mental revolution.
Objective of Scientific Management
The objective of scientific management may be summarized as under:
1. Higher production.
2. Quality control.
3. Cost reduction.
4. Elimination of wastes.
5. Right man for the right work.
6. Incentive wages.
Organizational Design
The process of creating a system in which people can work together to
achieve common goals is highly complex. Organization design”
involves the creation of roles, processes and structures to ensure that
the organization’s goals can be realized
Principles of organizational design:
1. Co-ordination principle.
2. Knowledge and competence principle.
3. Control and commitment principle.
4. Innovation and adaptation principle.
5. Specialization principle.
What is manager?
Manager is a person in an organization who directly support and helps
activate the work efforts and performance accomplishment of others.
The people who are manager’s help are the ones whose tasks represent
the real work of the organization.
What is leader?
A leader is someone who inspires passion and motivation in •
followers.
A leader is someone with a vision and the path to realizing it. •
A leader is someone who ensures their team has support and •
tools to achieve their goals.
An effective leader has a shared vision aligned with core values •
Responsibility of team leaders •
1.Plan meeting and work schedule •
2. Clarify goals and tasks and gather ideas for improvement. •
3. Appraise performance and counsel team members. •
4. Recommend pay raises and new assignments. •
5. Recruit, develop and train team members. •
6. Encourage high performance and teamwork. •
Quality of work life •
An indicator of the overall quality of human experience in the
workplace.
Quality of work life indicators: •
•
1.Fair pay •
2. Safe working conditions. •
3.Opportunities to learn and use new skills •
4.Room to grow and progress in a career
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5. Protection of individual rights. •
6. Pride in work itself and in the organization. •
Characteristics of managerial work •
1.Managers work long hours. •
2.Managers work at an intense pace. •
3.Managers work at fragmented and varied tasks. •
4.Managers work with many communication media. •
5.Managers work largely through interpersonal relationships. •
Managerial competency •
A skill based capability that contributes to high performance in a
management job.
Managerial competencies are implicit in: •
1. Planning.. •
2. Organizing. •
3. Leading. •
4.Controlling •
5. Informational. •
6. Interpersonal. •
7. Decisional roles. •
8. Agenda setting and networking. •
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Chapter 2
Planning
Planning
Meaning of Planning
“Planning is an intellectual process, the conscious determination of
course of action, “Planning is the thinking process, the vision for any
organization. , Planning is the first function of management process,
planning is the fundamental management function, which
involves deciding, When a manager plans what is to be done, when is it
to be done, how it is to be done and who is going to do it., which lays
down an organization's objectives and develops various courses of
action, by which the organization can achieve those objectives, how to
attain a specific goal.
In the planning process, manager anticipate the future and accordingly
decide what activities must be undertaken.
Objectives of Planning
Following objectives of planning in business may be underlined:
1. Helpful in forecasting.
2. Helpful in facing competition.
3. Helpful in accomplishment of budgets.
4. Forecast the risks.
5. Give specific direction.
Importance of planning
Planning lays the foundation for other management function. It is vital
importance in managerial process. It facilitates decision-making and
coordination. Importance of planning can be explained as follows:
1. Attainment of objectives.
2. Minimize uncertainty.
3. Facilities decision-making.
4. Improve coordination.
5. Facilitates control.
6. Economical operation.
7. Greater efficiency.
8. Encourage innovation.
9. Improves competitive strength.
10. Better Utilization of Resources.
11. Minimizes Cost.
12. Better Use of Technology Resources.
13. Facilitates Decision-Making.
14. Intellectual process.
15. Primary function.
16. Continuous process;
17. Planning involves selection among alternatives.
18. Related with Future.
Kinds of Plans •
1. Strategic plans. •
Define the framework of the organization’s vision and how the •
organization intends to make its vision a reality. Set broad
comprehensive and longer – term action directions for the entire
organization.It is the determination of the long-term objectives
of an enterprise.
2.Tactical Plans •
Tactical plans describe the tactics that the managers plan to •
adopt to achieve the objectives set in the strategic plan.
Tactical plans span a short time frame (usually less than 3 years) •
and are usually developed by middle level managers.
3. Operational Plans •
Operational plans are short-term (less than a year) plans •
developed to create specific action steps that support the
strategic and tactical plans, define what needs to be done in
specific areas to implement strategic plans, they are usually
developed by the manager to fulfill his or her job
responsibilities. They are developed by supervisors, team
leaders, and facilitators to support tactical plans.
Steps in Planning Process
1. Forecasting of Professional Opportunities
2. Establishment of objectives
3. Forecasting
4. Establishing the sequence of Activities.
5. Deterring of Alternative Courses.
6. Selection of Alternative Course
7. Budgeting
8. Follow-up
Functional Types of Planning
A): Financial Planning:
B): Production planning:
C): Personnel planning/Human Resource planning:
D): Marketing Planning:
Elements of Planning:
Following are the important elements, which must be provided for while
making plan;
1. Objectives. 2. Policies;
3.Procedures. 4. Rules.5. Methods.
6. Strategies. 7. Programmers. 6. Projects. 7. Budgets.
The strategic planning process is continues:
1-Identify current mission, goals, values
2-Environmental assessment
3-Development of operational plans and budgets
4-Implementation
5-Evaluation and feed back
Tools for Planning
1-Environmental scanning and forecasting
2-SWOT analysis
3 Benchmarking
4-Operational research
5-Standards and guidelines
Benefits of planning:
1. Improves focus and flexibility. •
2. Improves action orientation. •
3. Improves coordination. •
4. Improves time management.
5.Improves control
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Kinds of Plan
1. Standing plans. Policies and procedures that are designed for repeated
use.
Policy: broad guidelines for making decisions and taken action in specific
circumstances.
Procedures: plans that describe exactly what actions are to be taken in
specific situations.
2.Single-Use Plan •
These plans are made for handling non-recurring problems. •
Single-use plans are also known as ‘specific plans’ since their
objective is to solve a particular problem. These plans are
formulated to handle a non-repetitive and unique problem.
Short-range, Intermediate-range, long-range plans •
Short-range plans = 1 year or less
Intermediate-range plans = 1 to 2 years
Long-range plans = 3 or more years
Forecasting
-Making assumptions about what will happen in the future.
-Qualitative forecasting uses expert opinions.
-Quantitative forecasting uses mathematical and statistical analysis.
-All forecasts rely on human judgment.
-Planning involves deciding on how to deal with the •
implications of a forecast.
Contingency planning •
Identifying alternative courses of action that can be implemented to
meet the needs of changing circumstances. Contingency plans
anticipate changing conditions. Contingency plans contain trigger
points.
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Requirements of a good plan •
A good plan should possess the following features: •
1. The plan should be simple. •
2. The plan should be specific rather than general. •
3. The plan should be logical and practical. •
4. The plan must be flexible in nature. •
5. The plan must be capable of being controlled. •
6. The plan should be stable. •
7. The plan must be complete. •
Meaning of Decision Making •
Decision-making is the selection of best possible alternative from •
among the various alternatives available for the solution of a given
problem. “Decision Making is the selection based on some criteria
from two or more alternatives”.
Decision- Making is a crucial and central Job. Decision is a choice •
whereby a person concludes about the solution of given problem. It
is an intellectual and continuous process. In case of industry to
achieve the objectives of the business and to face, the problems of
organizations management needs to select the best alternative out
of many alternatives.
Characteristics of Decision Making •
1. Selection of best alternatives. •
2. Rational selection. •
3. A job of top management. •
4. Decision are mean. •
5. A human and social process. •
6. Uncertainty and risk. •
7. Decision may be positive or negative. •
8. Intellectual Activity •
9. Goal- Oriented – Decision •
10. Continuous Activity •
11. Related to Situation. •
Elements of decision-making •
1. Continuity. •
2. Selection of best alternative. •
3. Environment of decision-making. •
4. Time of decision-making. •
5. Psychological factors. •
6. Participation of employees. •
7. Communication of decision-making. •
Process of Decision – Making – Process
1) Setting Specific Objective
2) Identification of Problem
3) Searching for Alternatives
4) To Evaluate & select alternative
5) Action & Follow-up
Types of Decision Making •
Main types of decision making may be described as follows; •
1. Impotent decision.
2. Routine decision.
3. Departmental decision.
4. Personal decision.
5. Programmed decision.
6. Non- programmed
decision.
7. Individual
decision.
8. Group decision.
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Principles of Decision Making •
These principles are discussed below: •
1. Principle of individual self –interest. •
2. Principle of reasonable behavior. •
3. Principle of proration. •
4. Principle of dynamic. •
5. Principle of alternatives. •
6. Principle of timing. •
7. Principle of maximum profits. •
Methods of Decision Making •
There are two methods of decision-making: •
1- Traditional Method •
Under this method, the business manager decide some definite •
solutions for some definite problems based on their experiences.
2- Scientific Method •
Under this method of decision, making a scientific process is •
applied for making decision. Peter F. Drucker has described this
process as under:
1. Determine the problem. •
2. Analyze the problem. •
3. Development of alternative solutions. •
4. Selection of the best alternative. •
5. Convert the decision into effective action. •
6. Following-up the decision. •
Chapter 3
Organizing
Organizing
The process of assigning tasks, allocating resources, and arranging •
the coordinated activities of individuals and groups to implement
plans.
Organizing involves the grouping of activities necessary to
accomplish goals and plans, the assignment of these activities to
appropriate departments and the provision for authority delegation and
coordination.’
Nature of the organizing •
The following are the nature of the organizating: •
1. Organizing is a basic function of management. •
2. Organizing is a process. •
3. Organizing is always relate to objectives. •
4. Organizing is connotes a structure of relationship. •
Process of Organizing: •
Organizing as a process will involve the following steps: •
1. Determination of activities. •
2. Grouping the activities. •
3. Allocation of work among employees. •
4. Delegation of authority. •
5. Coordination and balance. •
Importance of Organizing •
The following are the advantages of good organizing: •
1. It facilitates efficient management. •
2. It facilities coordination and communication. •
3. It facilitates growth and diversification. •
4. It provides for optimum use of technological innovation. •
5. It ensures an optimum use of human resources. •
6. Smooth Management /Administration- •
7. Training and Development •
8. Foster Coordination •
9. Effective Control •
Principles of organizing •
The Importance principle of organization is discussed below: •
1. Consideration of objectives. •
2. Unity of action. •
3. Division of work. •
4. Definition of jobs. •
5. Scalar principle. •
6. Unity of command. •
7. Balance of various factors. •
8. Flexibility. •
9. Continuity. •
10. Delegation of authority. •
11. Management by exception. •
12. Span of control. •
13. Simplicity. •
14. Efficiency. •
Kinds of organizing •
1.Formal and Informal Organizing •
Formal organizing: refers to the structure of well-defined jobs, •
authority, responsibility and accountability.
2. Informal organizing: refers to the relationship between people •
in the organization based on personal attitudes, emotions, likes,
dislikes. etc.
Organization Structure •
The process of arranging people and other resources to work •
together to accomplish goal.
An organization structure shows the authority and responsibility, •
relationships between various positions in the organization and
clarifies who report to whom.
Kinds of Organization Structure •
1.Line Organization Structure •
It is the oldest and simplest form of organization structure and is •
known as the scalar or military type. Under this forms of
organization, the line of authority flows vertically from the top
most executive to the lowest subordinate throughout the entire
organizational structure. The authority is in the highest at the top
and reduces through each successive level down the organizational
scale.
Merits of Line Organization Structure •
Following are the merits of line organization: •
Simplicity, determination of responsibility, Easy to control, Quick •
decisions, Effective co-ordination, Proper discipline, Economy.
Demerits of Line organization Structure •
Line organization suffers from the following disadvantages: •
Over burden upon top executives, Autocrat leadership, Lack of •
initiative at lower level, Lack of specialization, Over dependence
of top executives, Inflexibility, Lack of the spirit of cooperation
and groups.
2.Functional Organization Structure •
Functional organization is based on the principle of
specialization.
Under this form of organization, the work is divided and one •
particular officer must be responsible for a particular work, so that
he may be expert in his work. Under this form of management, one
particular employee is responsible to one officer only who gives
the necessary orders and direction to him.
3.Line and Staff Organization •
Line and staff organization is that form of organization, which •
combines the advantages of both of these forms and tries to do
away with their disadvantages. this form of organization is very
popular and widely accepted and recognized
Merits of Line and Staff Organization •
Merits of line staff organization may be described as follows: •
1. Service of experts. •
2. Encouragement to specialization. •
3. Encouragement to research and investigation. •
4. Good opportunity for efficient employees. •
5. Clear distinction between counseling and execution. •
6. Unity of command. •
7. Undivided responsibility. •
8. Better decisions. •
Demerits of Line and Staff Organization •
Line and Staff Organization has the following disadvantages: •
1. Expensive method. •
2. Inappropriate. •
3. Dependence on experts. •
4. Conflicts. •
5. No responsibility of experts. •
6. Lack of coordination. •
4. Network structure •
A type of corporate organizational structure in which managers control
the internal and external relationships of the company. Companies that
rely on this organizational structure are likened to a large work force
composed of self-managed teams, characterized by freedom and
flexibility in carrying out their tasks.
4. Matrix structures:
To adopt the matrix structure effectively, the organization should modify
many traditional management practices.
5. Flat structure •
In a flat organizational structure, most levels of middle •
management are removed so there is little separating staff-level
employees from upper management. Employees are given more
responsibility and decision-making power without the usual
hierarchical pressures or supervision and can often be more
productive. This type of structure is mostly used by small
companies and early-stage start-ups because they often have
fewer employees and projects to manage. It may also be referred
to as a “horizontal structure.”.
Delegation of Authority •
The process of entrusting work to others by giving them the right
to make decisions and take action. The manager assigns
responsibility grants authority to act and creates accountability.
Authority should be commensurate with responsibility. •
Guidelines for effective delegation •
1.Carefully choose the person to whom you delegate. •
2.Define the responsibility. •
3.Agree on performance objectives and standards. •
4.Agree on performance timetable. •
5.Give authority. •
6.Show trust in the other person. •
7.Provide performance support. •
8.Give performance feedback. •
9.Help him. •
10.Don’t forget your accountability for performance results. •
•
Chapter 4
Direction
Meaning of Direction
Direction is the third function of management
process, Direction as a function of management is concerned with
instructing, guiding and inspiring people in the organization to achieve
its objectives. It is that part of management process which is concerned
with making the people in the organization act efficiency and
effectively.
Nature of Direction
Following are included in the characteristics of direction:
1. Important function of management.
2. Continuity.
3. Order.
4. Coordination.
5. Supervision.
6. Guide.
7. Performance at levels of mangers.
Elements of Direction
Direction is a continuous process involving the following elements:
1. Communication.
2. Leadership.
3. Motivation.
4. Supervision.
Communication
Communication is often defined as transmission of human thought from
one person to another.
Nature of communication
The basic characteristics of communication are as follows:
- Communication involves at least two persons.
- Communication is a two-way traffic
- Create understanding - Communication may take several forms. -
Importance of communication
The role of communication is summarized in the following points:
- Communication facilities planning in a number of ways.
-It induces cooperation and understanding.
- It promotes managerial efficiency
- Communication is the basis for leadership action. -It is an effective means of coordination - Communication provides job satisfaction. -
Communication Process
The process of communication begins when one-person (The sender)
wants to transmit a fact idea, opinion or other information to someone
else (the receiver). This fact, Idea or opinion has meaning to the sender
whether it is simple or complex. The next step is to translate or convert
the message into a language, which reflects the idea that is the message
must be encoded.
Elements of Communication
The system of communication consists of the following elements:
1. Communication message.
2. Communication symbol.
3. Communication Channel and Receiver.
Kinds of communication
1. Formal communication
Formal communication refers to official communication which takes
place following the chain of command such communication generally
relates to the officially accepted and recognized activities of the
organization. The organization structure reflecting SupervisorSubordinate relationship determines the flow of formal
communication.
- Downward Communication
Downward communication refers to the flow of communication from
the higher level to lower level. Communication from supervisor to
subordinates at different levels of the organization is known as
downward communication.
- Upward Communication
Upward communication flows from a subordinate to his supervisor in
the hierarchy. It may consists of information relating to subordinates
work performance, opinion, grievances and suggestions etc.
- Horizontal Communication
Flow of communication between persons holding position at the same
level of the organization of is known horizontal communication.
- Gestural Communication
Gestural Communication is very much helpful to motivate the
subordinate. As for instance. Handshake with subordinate, head shake.
- Oral Communication
Oral communication refers to message sent or received verballyface-to-face or through electronic devices like telephone.
- Written Communication
Messages conveyed in written form are known as written
communication. It may be in the form of notes, letters, memos, notices
etc.
2. Informal communication
Communication between individuals and groups, which are not
officially recognized, is known as informal communication.
leadership
The process of influencing the behavior of the people at work towards the
realization of specific goals.
Characteristics of leadership
1. Followers.
2. A personal quality.
3. A common goal.
4. Active relations.
5. Practical approach.
6. It is a process.
Importance of Leadership
Importance of leadership may be studied conveniently under following
heads:
1. Determination goals.
2. Organization of activities.
3. Achieving coordination.
4. Representation of workers.
5. Providing guidance.
6. Inspiring employees.
7. Self-confidence.
8. Human relation attitudes
Types of Leadership
Following are the types of leadership, which may be found in the
enterprise:
1. Democratic leader.
2. Laissez faire leadership.
3. Autocratic leader.
4. Institutional leader.
5. Personal leader.
6. Impersonal leader.
7. Persuasive leader.
8. Creative leader.
9. Bureaucratic leader.
Theories or approaches of leadership
1. Traits theory of leadership.
2. Situation theory.
3. Follower's theory of leadership.
4. The elected of leadership.
5. Functional approach.
6. Behavioral theory.
7. Great man theory.
8. Relationship theory.
Qualities of a Good Leader
The qualities of a successful leader can be summarized as:
1. Intelligence.
2. Physical features.
3. Maturity vision and foresight.
4. Inner motivation.
5. Open mind Acceptance of responsibility.
6. Self-confidence.
7. Human relations attitude
Meaning of Motivation
Motivation is a psychological phenomenon, which arises from the
feelings of needs and wants of individuals. Motivation is a continuous
process because human needs are ever growing and never fully
satisfied.
Nature of Motivation
The characteristics of motivation may be described as under:
1. Incentive.
2. Unending process.
3. Psychological concept.
4. Power of act.
5. Increase in efficiency.
6. Increase in morale.
Importance of Motivation
Importance includes the following:
1. Motivations sets in motion the action of people.
2. Improves efficiency.
3. Ensures achievement of organization goals.
4. Motivation creates supportive work environment.
5. Reduction in resistance to change.
6. Reduction in employee's turnover.
Methods of Motivation
1) Positive and Negative Incentives
- Positive Incentives
Positive Incentives are the incentives which motivate the employees
to do their best and to produces more and better quality by providing
them more wages and salaries and bonus… etc.
- Negative Incentives
Negative Incentives are the incentives, which compel the
employees of the enterprise to do more work, because of the fear of
punishment or penalty.
2) Individual and Collective Incentives
- Individual Incentives
These Incentives are offered to those employees who contribute their
special effort and who cause extra benefit by their effort to the
enterprise.
- Collective Incentives
Collective incentives are the incentives, which are offered
collectively to a group of workers.
3) Monetary Incentives and Non-Monetary incentives
- Monetary incentives are associated with monetary or financial benefits
to the employees. Such incentives can be expressed in terms of money.
Wages and salaries, bonus, profit sharing, leave with pay, medical
benefit in cash, housing allowances, retirement benefits and so on.
- Non-Monetary incentives, which are not measurable in terms of
money, are known as non-monetary incentives. Non-Monetary
incentives may include Competition: job security; and praise;
Opportunity for growth; Group recognition; and suggestion system.
Supervision
The term ‘supervision’ is normally used in management to mean,
overseeing the employees at work. It implies, instructing, observing,
monitoring, and guiding the subordinates at workplace to ensure that
plans and procedures are implement as intend.
Types of supervision
Following are the types of supervision in practice:
1. Democratic supervision.
2. Independent supervision.
3. Autocratic supervision.
8. Grievance handling; Industrial safety •
8. Grievance handling; Industrial safety. •
Functions of supervision •
A supervision has to discharge the following functions: •
1. Planning the work. •
2. Issuing orders. •
3. Providing guidance and leadership. •
4. Motivation. •
5. Preserving records. •
6. Controlling output. •
7. Liaison between management and workers. •
Coordination •
Coordination is the process of achieving unity of action among
interdependent.
•
Nature of Coordination •
Coordination is an essence of management since, it helps in •
achieving harmony of individual efforts towards the
accomplishment of group goals It is a continuous process applies to
group effort, unity of efforts and has a common purpose.
Objective of Coordination •
The importance of coordination can easily be explained under the
following heads:
1.Unity of command.
•
2.Unity in diversification.
•
3.Increase in efficient employees.
•
4.Increase in morals. •
5.Development of employee. •
6.Emphasize upon human relations. •
7.Establish proper balance. •
•
8. A Key to other managed function. •
Types of Coordination: •
1- Internal Coordination •
Internal coordination establishes relationship so as coordinate
the activities of all department etc.
2- External coordination •
External coordination refers to the establishment of •
relationship to coordinate the activities of those who are not the
part of organization, but their activities are coordinated for the
benefit of the enterprise as a whole.
•
Chapter 5
Controlling
Controlling
Meaning of controlling
Controlling as function of management, means the measurement and
corrections of performance of activities of subordinate in order to make
sure that enterprise objectives and plans are achieved.
Objectives of Controlling
The following are the objectives of controlling:
1. Comparison of performance with standards.
2. Comparison with plans and programs.
3. To establish deviation with errors.
4. To take corrective measures.
Meaning of order
An order means all the directions issued by top management to the
subordinates to do or not to do a particular work. The order may relate
to the procedure of doing work or the time to do a work etc.
Process of order
1. Plan.
2. Preparation.
3. To order.
4. Reception.
5. Act.
6. Checking.
7. Evaluation.
Nature of Control
Managerial Control has the following features:
1. Last process.
2. Dynamic process.
3. Continuous process.
4. Control on future events.
5. Based on scientific principles.
6. Attainment of goals.
Importance of Controlling
The following points highlight its importance and significance:
1. Control provides the basis for future action.
2. Control facilitates decentralization of authority.
3. Control facilitates decision-making.
4. Control improves planning.
5. Control facilities supervision.
6. Control helps in coordination.
The process of Control
The process of control includes the following;
1. Establishment of standard.
2. Measurement of performance.
3. Appraisal of performance.
4. Taking corrective action.
Chapter 6
Managerial concept
Ethics
Code of moral principles that set standards of conduct. Ethics is a
branch of philosophy that is concerned with human conduct, more
specifically the behavior of individuals in society. Ethics examines
the rational justification for our moral judgments
Ethical expectations for modern businesses:
-Integrity and ethical leadership
-Natural environment
-Consumer protection
-Human rights.
Organization
A collection of people working together to achieve a •
common purpose. Organizations provide useful
goods and/or services that return value to society and
satisfy customer needs.
Organizing and organization structure •
Organizing •
The process of arranging people and other resources to work •
together to accomplish a goal.
Organization structure •
The system of tasks, workflows, reporting relationships, and •
communication channels that link together diverse individuals and
groups.
Decentralization with centralization •
Centralization is the concentration of authority for making most •
decisions at the top levels of the organization.
Decentralization is the dispersion of authority to make decisions •
throughout all levels of the organization.
Meaning of Authority, Responsibility, Accountability •
1. Authority: is the sum of powers and rights to use financial, •
materials and human resources as well as the right to decide, act or
not to act.
2. Responsibility: refers to the work assigned to a person, position •
or job;
3. Accountability: is the obligation to carry out the assigned tasks, •
duties and responsibility.
Elements of Authority •
After studying above definition, we conclude that the authority
included the following elements:
1. Use of power. •
2. Influential personality.
3. Performance.
•
4. Effective leadership.
5. Influence the subordinates.
Sources of Authority •
There are three theories regarding the sources of authority.
These are as follows:
- Formal authority theory. •
-Competence theory •
Acceptance theory. •
Factors Affecting the Successful Use of Authority •
The following factors must be kept in mind while
1.Favorite atmosphere.
2. Justified Behavior. •
3. Mural cooperation and faith. •
4. Interests to the work. •
5. Respect the superiors. •
Delegation of Authority •
•
•
It owes its existence to the fact that a manger cannot perform •
the entire work assigned to him alone. Of course, there are certain
tasks, which the manager must do himself because they are unique
to the position he holds. But there are numerous other tasks, which
he can entrust to his subordinates.
Delegation is the process of entrusting responsibility and authority •
and creating accountability of the person whom responsibility or
work has been assigned. the process of entrusting work to others by
giving them the right to make decisions and take action.
Authority should be commensurate with responsibility. •
Guidelines for effective delegation •
1. Carefully choose the person to whom you delegate. •
2. Define the responsibility. •
3. Agree on performance objectives and standards. •
4. Agree on performance timetable. •
5. Give authority. •
6. Show trust in the other person. •
7. Provide performance support. •
8. Give performance feedback. •
9. Help him. •
10. Don’t forget your accountability for performance results. •
Importance of Delegation of Authority •
Management scholars have highlighted its impotence in many
ways:
1. Reduction of workload. •
2. Quick decision-making. •
3. Technique of motivation. •
4. Tools of training. •
5. Healthy relations. •
6. Business growth. •
Principles of Delegation of Authority •
The Principles of Delegation may be explained as under: •
1. Delegation by results expected. •
2. Clarification of Limits of authority. •
3. Party of authority and responsibility.
4. Unity of command.
5. Scalar chain.
6. Two-way
communication.
Staffing
Meaning of staffing •
The management function of staffing involves managing the •
organization structure through proper and effective selection,
appraisal and development of personnel to fill roles designed into
the structure.
Nature of staffing •
Successful staffing function provides the following benefits: •
1. Efficient performance. •
2. Use of latest technology. •
3. Development of manpower. •
4. Optimum use of manpower. •
5. Proper motivation. •
6. Higher morale. •
Elements of staffing •
Staffing is a continuous process and includes some inter- •
dependent activates as follows:
1. Manpower planning. •
2. Recruitment. •
3. Selection. •
4. Placement of personal. •
5. Induction. •
6. Remuneration. •
7. Training. •
•
•
8. Development. •
9. Performance appraisal. •
10. Promotion and transfer. •
11. Human relations. •
Recruitment •
Recruitment is the process of searching for prospective
employees and simulating them to apply for jobs in the
organization.
•
Sources of Recruitment •
1.internal source of recruitment, which are discussed below: •
A) Transfer •
It involves the shifting of an employer from one job to another.
One unit to another, one shift another.
B) Promotion •
It leads to shifting an employee to a higher position and •
carrying higher responsibilities, facilities, status and pay.
2.External Source of Recruitment •
The external source of recruitment are discussed below: •
Direct employment; unsolicited applications; Advertisement; •
Employment exchanges run by government; Educational
institutions; Recommendations; Consultancy firms.
•
Selection •
Selection is the process of discovering the most suitable and •
promising candidates to fill up the positions vacant.
Steps in selection process •
The various steps in selection process are discussed below: •
1. Preliminary interview.
•
2. Receiving applications.
•
3. Screening the applications. •
4. Employment tests.
5. Employment interview.
6. Checking references.
7. physical/Medical examination. 8. Final selection and
Appointment letter.
Placement •
It is a process through which the newly appointed employees
to their job.
Induction •
Induction means the introduction of newly appointed •
employees to their job, to their fellow workers and to organization.
•
Training •
Training is the act of increasing the knowledge and skills of
an employee for a particular job.
Advantages of Training to Employers •
The major benefits of training to the employers are discussed
below:
- Less learning period. •
-Better performance.- •
-Uniformity of Procedures. •
-Economy of material and equipment. •
- Fill manpower needs. •
-Less supervision. •
-Good human relations •
-Fewer accidents. •
-.Opportunity for promotion.
- High morale
•
Advantages of Training to Employees •
The major benefit of training to the employees are discussed •
below:
1. New skills. •
2. High productivity. •
3. Fewer accidents. •
4. Opportunity for promotion. •
5. Increase mobility. •
6. High morale. •
•
Managerial Development •
Managerial development is the programmed, by which •
executive capacities to achieve desired objectives are increased.
Managerial appraisal •
Managerial appraisal means the evaluation of ability and
potentialities of managerial executives for their jobs.
•
•
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