MANAGEMENT PRINCIPLES
SYLLABUS
CHAPTER 1 - CONCEPT AND NATURE OF MANAGEMENT
CHAPTER 2 – MANAGEMENT PROCESS – FUCTIONS AND PRINCIPLES
CHAPTER3 – EVOLUTION OF MANAGEMENT THOUGHT
CHAPTER 4 – PLANNING
CHAPTER5 – DECISION MAKING
CHAPTER6 – HUMAN RELATION AND MOTIVATION
CHAPTER7 – ORGANISATION AND DELEGATION
CHAPTER 8- CO-ORDINATION
CHAPTER 9 – COMMUNIACTION
CHAPTER 10- SPAN OF CONTROL
CHAPTER11- CENTRALISATION AND DECENTRALISATION
CHAPTER12 – LINE AND STAFF RALEATIONSHIP
CHAPTER 13- CONTROL
CHAPTER 14- COMMITTEES
CHAPTER 15- STAFFING
CHAPTER 16- LEADERSHIP- STYLES AND FUNCTIONS
CHAPTER17- SOCIAL INSTITUTIONS AND BUISSNESS ORGANISATIONS
REFERENCE BOOKS
THE MANAGEMENT PROCESS - BY DR RUSTOM S. DAVAR
PRINCIPLES OF MANAGEMENT-
CHAPTER 1 - CONCEPT AND NATURE OF MANAGEMENT
CONCEPT OF MANAGEMENT:
The term ‘management’ conveys different meaning depending upon the context in which it is
used. Some of the important concepts of management are given here:
MANAGEMENT AS AN ECONOMIC RESOURCE:
Like land, labour, capital and entrepreneurship, management is a vital factor of production. An
entrepreneur establishes the organization as its owner. But it is management that transforms the
various resources into a productive entity. The inputs of labour, capital and materials do not by
themselves ensure growth. They require the catalyst of management to produce results. It is
management that coordinates various factors of product. Therefore, management occupies a
central place among productive factors. As a factor of production, management can be made
efficient through the training and development of managers.
MANAGENT AS A TEAM:
As a team or a group of persons, management consists of all personnel having managerial
responsibility (those individuals who guide and direct the efforts of other individual to achieve
specified objective). Managers occupy position at different levels of authority but perform the
basic functions. Top-level managers have greater authority than middle – level managers who in
turn have greater authority than operating manager. In this way a system of authority (called
chain of command) is created in every organization.
MANAGEMENT AS A PROCESS:
Perhaps the best way to describe management is in terms of what managers do. It involves
organizing; directing and controlling human effort to accomplish pre determine goals. As a
process management refers to a series of inter related elements or functions.
These are:
(a) Defining the aims or objectives of the organization.
(b) Formulating policies, procedures, programmes etc, to attain these objectives efficiently and
economically;
(c) Bringing together men, money, materials, machinery and other factors of production;
(d) Assigning work or duties to people and defining their authority and responsibility;
(E) Guiding and inspiring people to perform the assigned tasks as planned; and
(f) Exercising control over the performance of people.
This concept of management is the simplest and the most pragmatic. It also highlights the
universal nature of management. However, it does not take into account the social and human
aspects of management.
MANAGEMENT AS A HUMAN PROCESS:
The concept of management as a human process has the following implications:
1). A manager achieves results through and with other people, i.e., both leader and led are
important.
2). In order to get things done through other people, a manager must delegate authority
effectively.
3). It is necessary to make decisions at all levels and in all situations.
4).Effective motivation and democratic managerial leadership are the keys to sound
management.
5). People cannot be motivated to yield best results through negative instruments such as fear of
punishment, threat of unemployment , fines and penalties.
6). All managerial functions are essential for getting things done through other people.
7). Getting things done through others becomes easier when people do things because they
themselves want to do and not because their boss wants them to do.
8). Management by participations, management by objectives or results and management by
delegation are helpful in getting things done through others.
MANAGEMENT IS CONCERNED WITH IDEAS, THINGS AND PEOPLE:
Management involves judicious development of resources for the development of resources for
the achievement of certain goals. Management is a creative process. In these process ideas,
things and people are vital inputs. Management is concerned with ideas and people in the
following ways:
MANAGEMENT OF IDEAS:
Management of ideas is very crucial for economic and social development. It is the job of
management to generate, organize and articulate creative ideas and transform them into
operating results. These ideas relate to new products, new markets and improvement in existing
products and markets. Management of ideas is very relevant in the context of rapidly changing
technologies, consumer preferences, product market configurations, social values and
government involvement in business. Management of ideas involves intellectual, creative and
innovating processes. Ideas provide the basic inputs and inspiration in the management
processes. Decision making process involves conversion of ideas and information into action.
Ideas help management in ensuring the survival and growth of organizations. Management
theory is the major source of ideas for management practice.
Thus, management of ideas has three main implications (a)it requires a practical
philosophy of management to regard management as a distinct and scientific approach,(b)it
involves the planning phase of management, and (c) it requires innovation and creativity.
Creativity implies generating new ideas and innovation means transforming ideas into viable
realities and utilities.
MANAGEMENT OF THINGS:
Management of things refers to the mobilization, allocation and development of materials,
machinery, technology and other facilities to convert ideas into results and performance. It is the
conversion of resources into outputs efficiently that determines the success of management.
Ideas will remain ideas unless they are converted into results through the conversion process.
MANAGEMENT OF PEOPLE:
Management of people refers to the procurement, development, maintenance and
integration of human beings working in the organization. It is the most important task of a
manager because without people no manager can manage ideas and things. In the early stages of
the evolution of the HAWTHORNE EXPERIMENTS it has been realized that people are the
most critical factor in management. Since then there has been growing concern for people inside
the organization as customers, investors, suppliers and the general public. Management must
understand and fulfill the needs, aspirations and values of people. Management is the direction of
men, not of things.
Thus, management may be defined as the process of converting ideas into results by
getting things done through and with people in an organized setting.
MANAGEMENT IS THE EFFECTIVE UTILISATION OF HUMAN AND MATERIAL
RESOURCES TO ACHIIEVE THE ENTERPRISE OBJECTIVES:
A manager’s job is to achieve the objectives of his enterprise. In order to achieve these
objectives, he guides and directs and efforts of a group of persons in the organization. He defines
the objectives of his group keeping in view the overall objectives of the enterprise. Each member
of his group is assigned a specific task or duty so that the objectives of the group as a whole may
be achieved which is, in turn, necessary for achieving the objectives of the enterprise.
ENTERPRISE OBJECTIVES:
The enterprise objectives which management is expected to achieve include the following:
a) Probability, i.e., a reasonable and fair result on investment.
b) Reasonable safety and appreciation of the investment;
c) Survival and growth of the enterprise; and
d) Fulfillment of the enterprise’s responsibilities towards customers, employees,
suppliers, government, community, etc.
Thus, the objectives of the enterprise are multiple. Sometimes, there may be conflict between the
different objectives. Therefore, management has to create and maintain an equitable balance
among the conflicting objectives.
HUMAN AND MATERIAL RESOURCES:
A manager gets things done through other people. These people (human resources) use
material resources, e.g., money, materials, machinery, etc. It is the responsibility of managers to
ensure that the employees utilize these resources in the most efficient (optimum) manner. When
resources are utilized efficiently the cost per unit is the minimum possible one. There is
minimum wastage of resources and maximum return is obtained on the investment made in the
resources. Similarly, an enterprise spends considerable amount of money on the acquisition,
training, remuneration, motivation, etc, of its employees. Unless the employees work with
devotion and care their performance will be poor. They will not make effective utilization of
human resources is even more important. Management is said to be effective when the enterprise
is utilizing its human and material resource.
Whatever managers do, they do it in order to achieve enterprise objective through the
effective utilization of human and material resources. Therefore, it appears true to say that
management is the effective utilization of human and material resources to achieve the enterprise
objectives, but this does not mean that the human resources should be utilized only as resources.
Employees are human beings with emotions and aspirations of their own. It is also the duty of
management to treat employees with human dignity and sense of belonging on a wider
perspective. Management should keep in view the interests and welfare of other sections of
society in which the enterprise is functioning.
DEFINTIONS OF MANAGEMENT:
One widely quoted definition of management is: ‘Management is the art of getting things
done through others”. This definition has become popular because it is very brief and concise. It
stresses that management is basically an art and that a manager directs the efforts of other people
rather than performing the task himself. This definition also highlights the attainment of
objectives.
Some more definitions of management are given below:
HAROLD KOONTZ: “Management is the art of getting things done through and with people in
formally organized groups.”
This definition is an improvement over the earlier definition as it reveals that a manager
works with the cooperation of others and through formal organization structure. It clearly defines
the objects (achieving results) and obligations of management. It also highlights the practical
side of management. But it suffers four main limitations, namely: (1) it completely ignores the
scientific aspect of management. (2) It does not identify the managerial functions (3) it overemphasizes the attainment of objectives and overlooks the social and human obligations of
management and (4) it overrates the workers ‘contribution of other factors of production towards
the attainment of objectives.
D.J. CLOUGH: ‘Management is the art and science of decision- making and leadership.’
This definition highlights both the practical (art) and theoretical (science) aspects of
management. It also emphasizes the role of decision- making in management. It stresses that a
manager should serve as a leader to win the wholehearted co-operation of employees in the
attainment of common objectives. But management is much wider than decision- making and
leadership.
E.F.L. BRECH: “Management is a social process entailing responsibility for the effective (or
efficient) planning and regulation of the operations of an enterprise.”
This definition reveals the management is a social process and its aim is effectiveness and
efficiency. It also points out the two major functions of management, i.e., planning and control.
But the other functions of management are not clear from this definition.
M.J.DUNCAN: “Management consists of all organizational activities that involve goal
formation and accomplishment, performance appraisal and the development of an operating
philosophy that ensures the organization’s survival within the social system.”
This definition appears to be comprehensive and gives due importance to the social
system in which an organization operates. But it does not throw light on the art and science in
management.
PETER F. DRUCKER: “Management is a multipurpose organ that manages a business and
managers manages worker and work.”
This definition reveals three main jobs of a manager: (1) to create economic results,(2)to make a
productive enterprise out of human and material resources, and (3) to make work most suitable
for human beings and to organize people so as to make them work effectively. But this is
somewhat complex definition from which managerial functions are not quite clear.
KOONTZ AND O’DONNELL: “Management is a creation and maintenance of an internal
environment in an enterprise where individuals, working in groups, can perform efficiently and
effectively toward the attainment of group goals.”
This definition contains three main elements (1) managers are responsible for creating an
environment conducive to good performance (2) Management operates through individuals and
groups of persons, and (3) the aim of management is to achieve efficiently and effectiveness in
the accomplishment of common objectives.
The above definition, however, fails to identify the art and scientific aspects of
management. The managerial functions are also not clear from this definition.
MANAGEMENT AS AN ART:
Art involves the practical application of personal skills and knowledge to achieve concrete
results. It is the practical way of doing specific things. The function of the art is to effect change
and to achieve desired results. Art represents how human behavior or the know- how to do work.
Art is a personalized process and every artist has his own style. Art is essentially creative and the
success of an artist is measured by the results he achieves. Art is practice based and perfection of
time. A carpenter making furniture out of wood and a goldsmith shaping gold into ornaments are
examples of art. Music, dancing and painting are also arts.
Thus the main elements of art are:
Personal skills
Practical know how
Result orientation
Creativity and,
Constant practice aimed at perfection
Management is basically an art because of the following reasons:
(1) Like any other artist, a manager applies his knowledge and skills to coordinate the efforts of
his people.
(2) Management seeks to achieve concrete practical results, e. g, Profits, growth, social service
etc, in a given situation.
(3) Management is a personalized process. Every manager adopts his own approach toward
problems depending upon his perception and the environmental conditions.
(4) Effective management leads to realization of organizational and other goals. The success of a
manager is measured by the results achieved.
It is very much like the saying that saying that the proof of the pudding lies in eating. Mastery in
management requires a sufficiently long period of experience in managing. The managerial art
can be refined through continuous practice.
MANAGEMENT AS A SCIENCE:
The essential elements of science are as follows:
(1) Science is a systematized body of knowledge pertaining to a particular field of inquiry. It is
systematized in the sense that it establishes cause and effect relationship between different
variables.
(2) It contains underlying principles and theories developed through continuous observation,
experimentation and research.
(3) The principles have universal applicability. They can be applied under different situations
barring a few exceptions which can be logically explained. The principles are verifiable and lead
to predictable results.
(4) The organized body of knowledge can be taught and learnt in the classroom and outside.
Physics, chemistry, mathematics and economics are some examples of science.
Management is a science because it contains all the essentials of science.
First, there is now a systematized body of knowledge. Principles and theories are now available
in every area of management. For instance, there are several principles to serve as guidelines for
effective delegation of authority.
Secondly, principles of management have been evolved through practical experience and
theoretical research over several decades.
Thirdly, managerial principles have a wide and repetitive range of application. Application of
management theory can be demonstrated through the quasi-laboratory method of case studies.
Lastly, management theory and principles can be taught in classrooms and in industry.
MANAGEMENT AS A PROFESSION:
The development of management theory, separation of ownership from management in large
corporations and growing administrative complexities have led to the demand for giving
management the status of a distinct profession. An occupation must satisfy certain criteria in
order to claim the status of a profession. This criterion refers to the essential attributes of a
profession which are given below.
1). A WELL-DEFINED AND ORGANISED BODY OF KNOWLEDGE:
There is an organized body of specialized knowledge pertaining to a particular field. Such a
systematized body of theoretical knowledge contains principles, theories and techniques. These
principles establish cause and effect relationships and capable of universal application. They
must be evolved through scientific methods of observation, experiment and experience.
2). LEARNING AND EXPERIENCE:
There must be satisfactory formalized arrangements for imparting theoretical knowledge and
practical to those desiring to enter the profession. A professional is a person who has undergone
certain vigorous training to acquire certain knowledge certain knowledge and skills. The
knowledge must be transferable through the medium of formal teaching, training and practice.
There must be competent application or knowledge of problems.
3). ENTRY RESTRICTED BY QUALIFICATIONS:
Anybody who wants to enter the profession must pass the prescribed examinations and obtain the
degree of diploma. Minimal educational qualifications and training are laid down to ensure that a
professional is proficient in the specialized body of knowledge. Nobody can enter the profession
without acquiring the prescribed qualifications. For example, nobody can become a lawyer
without being a law graduate.
4). RECOGNISED NATIONAL BODY:
There must be an institute, association or similar well-accepted authority. Such a representative
body is needed to prescribe minimal qualifications for entry, to impart educational and training,
to conduct examinations, to award diplomas and degrees and to enforce discipline among the
professionals. It regulates and develops the professional activities and enjoys legal powers as a
statutory body.
5). ETHICAL CAODE OF CONDUCT:
There must be suitable code of conduct or ethics. Such a code lays down the norms which the
members must observe while dealing with their clients. It must be fairly homogenous over all
members of profession wherever they function. Every member of the profession is expected to
observe the ethical standards laid down for that profession. The code requires self-control.
Members who violate the code can be derecognized and disqualified from the profession.
Professionals derive their social status from success in their work not from birth or political
power.
6. DOMINANCE OF SERVICE MOTIVE:
A professional is expected to give priority to service in preference to selfish gain. Financial gain
is subsidiary. A profession and its aim must be in tune with objectives and changing needs of
society. A profession, however, provides full- time occupation and means of livelihood with
reasonable remuneration (fee) for its members.
CHAPTER – II
MANAGEMENT PROCESS: FUNCTIONS AND PRINCIPLES
NATURE OF THE PROCESS OF MANAGEMENT:
In the previous chapter, management was defined as a process. Process means a series of
operations or action necessary to achieve certain results. A process has a beginning and a
termination. It consists of some distinct stages or steps which take place in sequential manner.
The process of management is characterized by the follow features:
1. CONTINUITY:
Management is a continuous process. This process is analyzed into several elements
planning, organinising, staffing, directing and controlling. But, this does not mean that the
process always begins with planning and comes to an end with controlling. The elements of
functions may be fused and the sequence may begin with any function and the entire process
cycle may be completed. It is therefore, undesirable to insist that a manager must perform the
functions always in a definite chronological sequence. The management cycle is never
ending and is repeated over and over again.
2. CIRCULAR:
The managerial functions are interactive in nature. This means they are contained within each
other. For example, planning, organising, directing and controlling all may occur within the
planning process.
In a way, all functions may be considered as sub functions of each other. A preceding
element of the management process influences all the succeeding elements and is in turn
influenced by them. Therefore, management is a circular and not a linear process.
3. SOCIAL:
Management is a human and social process and not a mechanical one. It influences
significantly the people inside and outside an organization and the society as a whole.
Management has far-reaching social consequences. Therefore, a manager while taking
decision must remember the likely impact of the decision on society. Moreover, the
management process is carried out by people, through people and for people
4. COMPOSITE:
ALL the managerial functions must be considered in their totality because
management process is an organic and integrated whole. Each function makes a distinct
contribution to this process but cannot be considered in isolation. All the functions
contribute to the whole and derive strength from each other. The final outcome is greater
than the aggregates of their individual contributions. A manager performs the various
functions simultaneously in a continuum.
CLASSIFICATION OF MANANGERIAL FUNCTIONS:
MANAGERIAL FUNCTIONS AND SUB-FUNCTIONS
FUNCTIONS
Planning
Organizing
SUB-FUNCTIONS
Forecasting, decision making, strategy formulation
Policy-making, programming, scheduling,
Budgeting, problem solving, innovation,
Investigation and research.
fictionalization, divisionalisation,
Departmentalization, delegation, decentralization,
Activity analysis, task allocation.
Staffing
Manpower planning, recruitment, selection, training
Placement, compensation, promotion, appraisal ,etc
Directing
supervision, motivation, communication, leadership
Activating, etc
fixation of standards, recording, measurement,
Reporting, corrective activation.
Controlling
MANAGEMENT THEORY:
Theory is a systematic grouping of interrelated principles. It ties together significant
knowledge and gives it a framework. The most important index of the maturity of a science is the
state of its theory. This includes the character of the general conceptual scheme in the field, the
kinds and degree of logical integeration of the different elements which make it up and the ways
in which it is actually used in empirical research.
A theory requires clear concepts which are its building blocks. Unless the concepts are
clear and meaningful to those who use them, different people will mean different things. Lack of
clear and consistent terms is the main hurdlein the development of management theory. The
same term is often used to imply different things by different people.
PRINCIPLES OF MANAGEMENT:
It has been stated above that management is a science consisting of certain principles. A
principle is a fundamental statement of truth. It establishes a cause and effect relationship
between two or more variable. The principles of management are the result of manager’s
experience over a long period of time. Management theory is a systematic grouping of
interrelated principles of management.
Management principles are fundamental truths of general validity which have value in
predicting the results of managerial action. These principles are helpful in providing the
groundwork for a science of management. A management principles distills and organizes
knowledge that has been built through experience and research. Even though science of
management is very inexact, the understanding and application of principles can significantly
improve the quality of management practice. Management, like engineering and medicine, will
never be scientific knowledge must be supplemented with a great deal of personal judgment.
NEED FOR PRINCIPLES OF MANAGEMENT:
Principles are needed in all areas of management on account of following reasons:
1. TO INCREASE EFFICIENCY:
Principles provide the key to the understanding of problems. They serve as guidelines for the
thinking an actions of managers. Application of principles avoids the need for trial and error and
improves the quality of management practice. Principles contain combined wisdom or distilled
experience. Therefore, they help to save time and effort in understanding and solving managerial
problems. In this way principles help to reduce risk and to improve efficiency.
2. TO CRYSTALLISE THE NATURE OF MANAGEMENT:
Development of principles is helpful in analyzing and understanding the scope of management
theory of management provides a useful framework for the education and training of managers.
Without principles such education and training will become haphazard.
3. TO IMPROVE RESEARCH IN MANAGEMENT :
Codification of principles leads to the science of management. Management principles
serve as the focal point of expanding future horizons of knowledge through research. The most
significant index of maturity of a science is the state of its systematic theory containing a set of
principles.
4. TO ATTAIN SOCIAL GOALS:
The standard of living in a society depends upon the quality of management. Competent
management results in more efficient utilization of human and material resources thereby
improving the quality of life. Competent management in turn requires principles of management.
CHAPTER III: EVOLUTION OF MANAGEMENT THOUGHT
Management has been practiced in some form or the other since the dawn of civilization. Ever
since human beings started living together in groups, techniques of organization and
management were employed. The Sumerian civilization dating back to 300 B.C. had an efficient
system of tax collection. The pyramids of Egypt, the Chinese civil service, the Roman Catholic
Church and military organizations also offer good examples of early application of management.
Despite ancient origins, very little conceptual and organized body of knowledge was
developed in management till the end of 19th century. A systematic study and analysis of
management as a science began in the 20th century after the industrial revolution. Since then
management has developed as a distinct discipline and a social science. Before the scientific
management movement several pioneers, like Robert Owen, Charles Babbage, Henry Vernun,
gave some concepts of management.
PRESCIENTIFIC MANAGEMENT PERIOD:
Pre-scientific management era refers to the period immediately preceding the scientific
management movement started by F.W.TAYLOR and his associates. During the pre-scientific
management era, many pioneers made significant contributions to management thought.
Prominent among them were Robert Owen, Charles Babbage, Henry Vernum poor, Henry
Robinson Towne, James Watt, Mathew Boulton and Captain Henry Robinson towne, James watt,
Mathew Boulton and Captain Henry Metcalfe.
ROBERT OWEN (1771-1858):
Robert Owen managed a group of textile mills in Denmark (Scotland) during 1800-1828. He
carried out experiments and introduced many social reforms. He believed that workers’
performance was influenced was influenced by the total environment in which they worked. He
said employees are vital machines. Their maintenance was as necessary as that of inanimate
machines. He believed that workers should work because they want to work and not because
they have to work. Throughout his life, Owen worked for the building up of a spirit of cooperation between the workers and the management. He believed and practiced the idea that
workers and the management. He believed and practiced the idea that workers should be treated
as human beings. Owen suggested that investment in human resources was more profitable than
investment in machinery and other physical resources. He introduced new ideas of human
relations, e.g., shorter working hours, housing facilities, education of children, provision of
canteen, rest pauses, training of workers in hygiene, etc. He suggested that proper treatment of
workers pays dividends and is an essential part of every manager’s job. Owen also began cooperative movement in 1828 in Rockdale, England.
Owen; approach was paternalistic but he is known as the father of personnel management. His
ideas and philosophy may be considered as a prelude to the development of the behavioral
approach to management.
CHARLES BABBAGE (1792- 1871):
Babbage was a professor of the mathematics at Cambridge University from 1828 to 1839.
He wrote nine books and over 70 papers and pamphlets on mathematics, science and philosophy.
His best known book is ‘on the economy of machinery and manufacturers’ published in 1832. He
visited many factories in England and France. He found that manufacturers were totally
unscientific and mast of their work was guess work. Factories were run by traditional method
with little use of science or mathematics. They relied upon old opinions instead of investigations
and accurate knowledge. Babbage perceived that the methods of science and mathematics could
be applied to the operations of factories.
JAMMES WATT AND MATHEW ROBINSON SOLUTION:
Watt (1796- 1848) and bulton (1770-1842) were the sons of the distinguished inventors
of steam engine. They applied several management techniques in their engineering factory at
Soho (Birmingham, UK). These techniques were:
1. Market research and forecasting.
2. Standardization components and parts.
3. Production planning.
4. Planned machine for better workflow.
5. Elaborate statistical records.
6. Maintenance of advance control reports and cost accounting procedures.
7. Provision of employee welfare with sickness benefit scheme administered by
an elected committee of employees and,
8. Scheme for developing activities.
APPROACHES TO MANAGEMENT:
A heterogeneous group of management practitioners, thinkers and social scientists have
contributed to the accumulation of knowledge in management. Therefore, several approaches to
the study of management have emerged over the years. Some of the approaches are described
here.
CLASSICAL APPROACH:
The classical approach is also known as traditional approach, management process
approach or empirical approach. The main features of this approach are as follows.
1. Management is viewed as a systematic network (process) of interrelated functions. The
nature and content of these functions, the mechanics by which each function is performed and
the interrelationship between these functions is the core of the classical approach.
2. On the basis of experiences of practicing managers, principles are developed. These
principles are use as guidelines for the practicing executive.
3. Functions, principles and skills of management are considered universal. They can be
applied in different situations.
4. Formal education and training is emphasized for developing managerial skills in
would-be managers. Case study method is often used for this purpose.
5. Emphasis is placed on economic efficiency and the formal organization structure.
6. People are motivated by economic gains. Therefore, organizations control economic
incentives.
The classical approach was developed through three main streams- scientific
management, administrative theory and bureaucracy. Scientific management was developed by
engineers and technicians like F.W.Taylor, Harrington Emerson, Henry Gantt, Frank Gilberth
and Lillian Gilberth. They looked at management mainly from technical viewpoint. i.e.
Improving efficiency in the use of men and machines. Scientific management was a powerful
and lasting contribution to management thought. It revealed that human work could be analyzed
and improved in terms of its elementary parts. Administrative theory or functional approach was
developed by management practitioners and thinkers like, Henry Fayol, Lyndall F.Urwick,
James D. Mooney, Allan C. Reiley and others.
They focused attention on the development of managerial functions and principles for
universal application. They adopted a wider perspective by attempting to improve efficiency of
the total organization rather than technical efficiency alone. Bureaucracy was evolved by a
German sociologist, Max Weber. It visualizes a machine model of organization characterized by
a hierarchy of authority, a web of rules and regulations and impersonal control over human
beings.
BEHAVIOURAL APPROACH:
While the classical approach focused on the jobs, the behavioral approach stresses the
individuals performing these jobs. Here attention is directed towards the human aspects of
management. The neglect of human factor and over- emphasis on the machines and materials led
to the development of this approach. Prof. Elton Mayo is considered to be the founder of the
behavioral school of thought. He conducted the famous Hawthorne experiments. These
experiments revealed the overwhelming influence of social and psychological factors on the
employee morale and productivity. The findings had a significant impact on the management
thought. The job holder became the focal point of attention in place of the job. A new movement
known as human relations movement emerged.
The pioneers of human relations movement point out that management involves getting things
done with and through people. There on the study of management should be based on the
interpersonal relations. They concentrated on the study of the individual and their sociopsychological motives. The human relation scientists neglected on the behavioral patterns of
groups. This led to the development of organizational behavior. It involves the study of attitudes,
behavior and performance of individuals and groups in organizational setting. The behavioral
pattern of groups in an organization is analyzed on the pattern of groups in an organization is
analyzed on the pattern of groups in an organization is analyzed on assumption that an enterprise
is a social organism. Behavioral approach is multidimensional and interdisciplinary in nature.
Under it the knowledge drawn from behavioral science (e.g., Psychology, sociology,
anthropology) is applied to explain and predict human behavior. Therefore, this approach is also
known as behavioral science approach. Several sociologists and psychologists like
F.J.Roethisberiger, Abraham h Maslow, Douglas McGregor, Frederick Herzberg, Rensis Likart,
kurt Lewin, Keith devis, Chris Argyris, Dubin, Selzink, L.R.Sayles and George Homans have
made lasting contributions to the development of this approach.
The behavioral science approach is thus an improved and modern version of the human
relations approach. It Focuses on human behavior in organization and seeks to promote verifiable
propositions for scientific understanding of human behavior in organizations. This approach
draws heavily its concepts from psychology and sociology. Motivation, leadership,
communication, group Dynamics and participative management are the core of this approach.
The basic propositions of the behavioral science approach are as follows:
1. An organization is a socio-technical system.
2. A wide range of factors influence interpersonal and group behavior of people in the
organization.
3. There should be a fusion between organizational goals and human needs.
4. Several differences in the attitudes, perceptions and values of employees exist and
influence their behavior and performance.
5. Some degree of conflict may be inevitable and even desirable in organizations.
DISTINCTION BETWEEN HUMAN RELATIONS AND BEHAVIOURAL APPROACH:
HUMAN RELATIONS
BEHAVIOURALAPPROACH
1. Focus on interpersonal relations.
Focus on group relationship
2. Study of individual, his needs and Study of groups and group behavior
behavior
Main concepts are group dynamics and
3. Main concepts are motivation and
informal organization.
Job satisfaction.
4. Originated
from
Hawthorne Improved and wider version of human
Experiments.
5. Pioneered by Elton Mayo and his
associates.
relations
Pioneered by Keith Davis, Rensis likert and
others
QUANTITATIVE APPROACH:
Also known as management approach, mathematical approach, decision theory approach,
operations research approach etc, this approach gained momentum during and after world war II.
During the war interdisciplinary groups of scientists were undertake applied scientific research
into strategic and tactical military operations. These groups were expected to develop optimal
decisions about development of military resources. Mathematical model building was sought to
be applied to find optimal solutions to military and logistical problems.
The main postulates of the quantitative approach are as follows:
1. Management is a series of decision- making. The job of a manager is to secure the best
solution out of series of interrelated variables.
2. These variables can be presented in the form of a mathematical model. The model is a
prototype of the decision situation. It consists of a set of functional equations which set out the
quantitative interrelationship of variables.
3. If the model is properly formulated and the equations are correctly solved, one can
secure the best solution to the model.
4. Organizations exist for the achievement of specific and measurable economic goals.
5. In order to achieve these goals, optimal decisions must be made through scientific
formal reasoning backed by quantification.
6. Decision making model should be evaluated in the light of set criteria like cost
reduction, return on investment, meeting time schedules, etc.
7. The quality of management is judged by the quality of decisions made in the diverse
situations.
Over the years, a large number of operations research techniques have been developed.
Linear programming, Queuing theory, Game theory, Probability theory, sampling theory, Critical
path method. Programme evaluation and review technique are some of these techniques. These
are now widely used in business as well as in non-business organizations. Several thinkers like
Herbert Simon, Von Newman, R.M. Cyret, James March, W.C.churchman and Russel ackoff
made significant contributions to the development of this approach.
SYSTEMS APPROACH:
The General Systems Theory was applied to organization and management during the fifties.
Many pioneers such as Kenneth Boulding, Ludwig Von Bertalanffy, Nisbet Wiener, E.L.Trist,
F.E.Kast, R.A. Johnson and Chester Barnard have made significant contributions towards the
development of systems approach to management. A system is a set of distinguishable but
interdependent and interrelated parts operating in a logical manner or sequence in order to
achieve a goal. Each part affects the others and the system as a whole. Every system operates
within a wider system. A system is goal-oriented and operates in a logical manner in accordance
with some plans. Each system is comprised of interrelated parts. Thus system denotes order and
arrangement.
Systems are of several types. A static system, e.g., a petrol engine operates repetitively
combating the same cycle of functions without change or deviation. On the other hand , a
dynamic system, undergoes changes, it grows or decays.
Biological systems e g, plants, animals and human beings are dynamic. An open system
continually interacts within its environment and takes feedback to adjust its activities. Business
organization is an open adaptive system. Its management is open to suggestions, criticism, etc
(feedback for improvement)
CONTINGENCY OR SITUATIONAL APPROACH:
The contingency approach is relatively new approach to management. It is an extension of
systems approach. The basic theme of the contingency approach is that organizations have to
cope with different situations in different ways. There is no single best way of managing
applicable to all situations. In order to be effective, the internal functioning of an organization
must be consistent with demands of the external environment. The managers must keep the
functioning of an organization in harmony with the needs of its members and the external forces.
The main features of the contingency approach are as follows:
1. Management is entirely situational. The application and the effectiveness of any
Technique is contingent on the situation. In other words, the condition and complexity of
the situation determine which measure or technique is applicable and effective.
2. Management should, therefore, match or fit its approach to the requirements of the
particular situation. To be effective management policies and practices must respond to
environmental changes. The organization structure, the leadership style, the control
system all should be designed to fit the particular situation.
3. Since management’s success depend on its ability to cope with its environment. It should
understand that its diagnostic skills so as to anticipate and comprehend the environmental
changes.
4. Managers should understand that there is no one best way to manage. They must not
consider management principles and techniques universal.
The contingency approach is the outcome mainly of the research studies conducted by
Tom Burns and G.W.Stalker, Joan Woodward, Paul Lawrence and jay Lorsch, James
Thompson and others. There experts analyzed the relationships between the structure of an
organization and environmental conditions. In the 1950s, Burns and stalker analyzed the
environments and structures of some British and Scottish firms. They identified two types of
organizational structures (1) mechanistic, and (2) organic; and two types of environment (i)
stable and (ii) dynamic. Mechanistic structure was found to be common in organizations
operating in stable environment while the organizations operated in dynamic environment
preferred organic structure. During the 1960’s, Joan Woodward analyzed the influence of
technology on the organization structure of about 100 industrial firms in the U.K. She found
that the type of technology used (unit or small batch, mass or large batches and continuous
process production) was a major determinant of span of control, use of committees,
participative decision – making and other structural characteristics. Lawrence and Lorsch
asserted that organizations functioning in a complex environment adopted a much higher
degree of differentiation and integration than those operating in a simple environment.
OPERATIONAL APPROACH:
The operational or Universalist approach to management attempts to draw together the
pertinent knowledge of management by relating it to the managerial job. Management is
looked upon as an operational and dynamic process consisting of certain elements which
are common to all organizations. The operation lists seek to put together the management
concepts, principles and techniques which underlie the practice of managing. This central
core of knowledge is supplemented with the knowledge derived from other fields and
approaches, e.g. group behavior, cooperative systems, mathematical techniques,
communication, leadership and decision-making. Koontz and O’Donnell have advocated
the use of the operational approach because of its integrative nature. According to them,
“The operational approach regards management as a universally applicable body of
knowledge that can be brought to bear on all levels of managing and in all type of
enterprises. At the same time, the approach recognizes that application of science by a
perceptive fractioned must take this into account in designing practical solutions.” The
operational approach is a modified form of the functional or management process
approach. It accepts the universality of management but at the same time recognizes the
significance of environmental variables and quantitative techniques in the management
practice. George R. Terry strongly supports this approach in the following words: “Since
the activities of a manager are basic, the process school provides an- excellent framework
not only for the study of management using this fundamental approach, but also from the
view point of utilizing valuable contributions offered by the other schools of
management. The recommendation here is to follow such an approach which can be
termed the ’electric process school’ of management and features the basic framework of
the process approach modified by certain theories from other appropriate schools of
management thought.”
CONTRIBUTIONS OF LEADING THINKERS:
FREDERICK WINSLOW TAYLOR (1856-1915)
F.W.Taylor is known as the’ father of scientific management ‘. His ideas about
management grew out of his wide- ranging experience in three companies: Midvale steel
works, Simonds Rolling Mills and Bethlehem steel Co. He conducted several
experiments in these companies, e.g., the pig iron handling experiments, etc. He found
that the main cause of general inefficiency and wastage in factories was ignorance on the
part of both workers and management. Traditional, unscientific and rule of thumb
methods were used without finding facts and without making experiments. He was
convinced that there is a science for doing each job. He made all- out efforts to replace
the primitive rule of thumb methods by modern scientific methods based on
investigation, analysis and measurement. He thought that there was ‘one best way’ of
doing things applicable to all situations.
Taylor defined as ‘the art of knowing exactly what you want men to do and seeing that
they do it in the best and cheapest way’. He stated that best management was a true
science based upon certain clearly defined laws, rules and principles. He exhorted both
workers and managers to substitute exact scientific investigation and knowledge for the
individual Judgment and institution in all matters relating to the work done in the
establishment. Taylor’s philosophy and ideas given in his book, ‘Principles of Scientific
Management’ published in 1911.
Taylor gave the following principles of scientific management.
1. Develop a true science for each element of a worker’s job to replace rule of thumb.
2. Scientific selection, training and development and development of workers for each
job.
3. A more equal division of responsibility between management and workers. Planning
should be separated from doing, the former being the responsibility of management and
the latter of workers.
4. Close co-operation between management and labour to maximize efficiency and
productivity.
To sum up, Taylor’s philosophy:
Science, not rule of thumb
Harmony, not discord
Maximum output, in place of restricted output
Development of each man to his greatest efficiency
Maximum propensity of employer, coupled with maximum propensity of each
employee Co-operation, not individualism.
HENRI FAYOL (1841- 1925)
Fayol was a contemporary of Taylor. He started his career as a junior engineer in a coal mining
company in France in 1860 and became its general manager in 1880. He published his famous
book Administration Industrial le et General in 1916 which was published in English in 1949
under the title General and Industrial Management. This Book is now considered to be one of the
best classics in management. Fayol’s contribution to management thought may be analyzed
under the following heads.
CLASSIFICATION FO BUSINESS ACTIVITIES:
According to Fayol, all activities of a business enterprise could be divided into six categories:
1. Technical (manufacturing or production).
2. Commercial (buying, selling and exchange).
3. Financial (Search for and optimum use of capital ).
4. Security (Protection of property and persons);
5. Accounting (including statistics); and
6. Managerial.
FUNCTIONS OF MANAGEMENT:
Fayol said’ to manage is to forecast and plan, to organize, to command, to coordinate and to
control’. In this way he identified five elements or functions of management process:
Planning (to foresee and provide means for the future).
Organizing (to provide a business everything useful to its functioning-raw materials,
tools, capital and personnel).
Commanding (Maintaining activity among personnel).
Co-Coordinating (Unifying and harmonizing all activities and efforts).
Controlling (seeing that everything occurs in conformity with established rules and
expressed command).
MANAGEMENT PRINCIPLES:
Fayol gave the following general principles of management:
1. Division of work, 2. Authority and Responsibility, 3. Discipline, 4. Unity of
command, 5. Unity of direction, 6. Subordination of Individual to General Interest, 7.
Remuneration of personnel, 8. Centralization, 9. Scalar Chain, 10. Order, 11.Equity,
12. Stability of Tenure of personnel, 13. Initiative, 14. Esprit de corps.
MARY PARKER FOLLETT (1868 – 1933)
Mary Parker Follett was a political and social philosopher. At the age of 32 she began a
career of public service in the Boston area of USA. As a political scientist she examined the
activities of several organizations in England and the United States. Her main interest was the
Psychological foundations of all human activity. Later on she became adviser to businessmen on
personnel problems. She adopted a Psychological approach to the problems of power, authority,
conflict and control. Her publications include The New State (1920), Creative Experience
(1924), Business Management as a profession (edited by Henry Metcalfe 1921), Dynamic
Administration (edited by Urwick and Metcalfe 1941) and Freedom and Coordination ( edited by
Urwick, 1949).
Follett’s contributions to management thought may be summarized as follows:
1. CONSTRUCTIVE CONFLICT:
According to Follett, conflict can be constructive. It can be harnessed for service of
the group much as an engineer uses friction. The best way to resolve conflict is not domination
or compromise but integration. Under integration, individual differences are integrated to form a
new opinion with which everyone is satisfied. The parties concerned examine together new ways
of achieving their conflicting desires in a cooperative manner.
2.
LAWS OF THE SITUATION :
Follett suggested depersonalize the giving of orders. One person should not give orders
to another but should agree to take the orders from the situation. For example, the sales manager
should not issue orders to production
manager or vice versa. The two should analyse the
market and take a final decision according to market requirements. If orders are simply part of
the situation the question of someone giving and someone receiving orders does not arise. When
both parties see the logic of a situation and try to gain full understanding of all factors bearing on
that situation, the conflict is dissolved.
3. LEADERSHIP:
Follett believed that leadership is not a matter of dominating personality and,
therefore, managers should not be autocratic. Leadership is the product of knowledge rather than
of position. The role of a leader is to understand the importance of group activity and to integrate
the efforts of all for serving a common purpose.
4. AUTHORITY AND RESPONSIBILITY:
According to Follett authority in terms of subordination of one man to another
offends human emotions and cannot be the foundation of good organization. Therefore, the
concept of final authority inherent in the chief executive should be replaced by an authority of
function in which each individual has final authority for his own allotted task. Authority and
responsibility go with function.
5. PRINCIPLES OF CO-ORDINATION:
Follett believed that co-ordination was the core of management which would
produce a whole greater than the sum of its parts. She suggested four principles to achieve
effective co-ordination: (a) co-ordination in the early stages, (b) Co-ordination by direct personal
contact among the persons concerned, (C) co-ordination as a reciprocal relation of all the factors
in a situation and (d) Co-ordination as a continuous process.
6. GEORGE ELTON MAYO (1880-1949)
Mayo was a professor at the Harvard Business School. He published several
books, e.g. Human problems of an Industrial Civilization (1933), Social Problems of an
Industrial Civilization (1945), Training for Human Relations (1949), etc. He served as the leader
of the team which carried out the famous Hawthorne experiments at the Hawthorne plant of the
Western Electric Company (USA) during 1927-32. These experiments are experiments are
summarized below:
ILLUMINATION EXPERIMENTS:
These experiments revealed that productivity could be increased not only by improving working
conditions (e.g. , level of lighting ) but through informal social relations among the members of
the work group.
RELAY ASSEMBLY TEST ROOM EXPERIMENT:
In this experiment a small homogeneous work group was constituted. Several new
elements were introduced in the work atmosphere of this group, e.g., shorter working hours,
appropriate rest periods, improved physical conditions, friendly and informal supervision, free
social interaction among group members, etc. Productivity and morale increased consistently
during the period of the experiment. Morale and productivity were maintained even if
improvements in working conditions were withdrawn.
The research concluded that socio-
psychological factors such as feelings of being important, recognition, attention, participation,
small informal cohesive work group, non-directive supervision held the key for higher
productivity.
MASS INTERVIEWING PROGRAMME:
A large number of workers were interviewed to elicit information on their perceptions
and orientations on the working life.
The results again confirmed the importance of informal
relations social and psychological needs and their influence on the behaviors of workers.
BANK WIRING OBSERVATION ROOM EXPERIMENT:
A group of fourteen workers was observed with regard to their work behavior. The
observations revealed the informal production norms set by workers and the existence of
informal cliques in the group.
The Hawthorne Experiments led to the following conclusions:
1. A factory is not only a techno-economic unit by psycho-social organization too. Work
force develops a culture of its own.
2. Workers spontaneously form small informal groups. The norms and values of such
groups exercise significant influence on the behavior and performance of workers.
3. Physical conditions of work exercise some influence on workers’ morale and
productivity. But a far greater influence is exercised by their inter-personal relations,
attitudes of the supervisor and other social and psychological factors.
4. Generally workers act or react not as individuals but as members of a group.
5. Informal leaders play an important role in setting and enforcing group norms.
6. Workers are not mere economic beings motivated by money along. They respond to the
total work situation including work design, recognition, participation, etc.
7. Management much understands and recognizes interpersonal and group relations on the
job.
CHESTER I. BARNARD (1886 – 1961)
As the president of the New Jersey Bell Telephone Company, Barnard was a practitioner.
He also served in several civic, philanthropic and government organizations. His publications
include The Functions of the Executive (1938), Organization and Management (1948) and
Elementary conditions of Business Morals.
The main contributions of Barnard are summarized below:
1. CONCEPT OF ORGANISATION.
Barnard defined organization as ‘a system of consciously coordinated activities of two or more
persons’. It is a social system that requires human co-operation. He has highlighted three
characteristics of the organization (a) the persons are able to communicate with each other, (b)
they are willing to contribute to the action and (c) there is a common purpose.
2. FORMAL AND INFORMAL ORGANISATIONS:
Formal organization has consciously coordinated interactions having a deliberate and common
purpose. On the other hand, informal organization refers to social interactions which do not have
common or consciously coordinated joint purpose.
3. ELEMENTS OF ORGANISATION
Every formal organization must have the following elements (a) a system of fictionalization so
that people can specialize, (b) an efficient effective incentive system for inducing people to
contribute to group action, (c) a system of authority that will lead group members to accept the
decisions of executives and, (d) a system of logical decision-making.
4. FUNCTION OF THE EXECUTIVE
Barnard has identified the following functions of an executive (a) the maintenance of
organizational communication, (b) securing essential services from individuals in the
organization and, (c) formulating and defining the purpose.
5. AUTHORITY:
Barnard developed a new concept of authority known as acceptance authority.
He said,
“Authority is the character of communication (order) in a formal organization by virtue of which
it is accepted by a contributor to (member of) the organization as governing the action he
contributes, that is, as governing or determining what he does or is not to do, so far as the
organization is concerned”. Barnard suggested that a person will accept the communication as
authoritative only when four conditions are satisfied. (a) he can understand the communication,
(b) he believes that it is consistent with organizational purpose, (c) he believes it be compatible
with his own personal interest as a whole and,(d) he is mentally and physically able to comply
with it.
6. MOTIVATION:
Barnard pointed out that financial rewards beyond the subsistence level are ineffective except to
a limited number of persons. He stressed upon pride of workmanship, pleasant organization,
participation, opportunity for power, feeling of belongingness and mutually supporting personal
activities to motivate people.
7. INTERACTION BETWEEN FORMAL AND INFORMAL ORGANIZATIONS.
Within every formal organization, there exists an informal organization. Both depend upon each
other and their continuous interaction between them. In fact, Barnard suggested that executives
should develop informal organizations to serve as means of communication, cohesiveness and
of protection of individuals.
8. ORGANISATIONAL EQUILIBRIUM.
The organizational equilibrium is dynamic not static. It depends upon the individuals
working in the organization other organizations and the society as as whole. The organizational
equilibrium can be perceived not only through logical appraisal but through analysis and
intuition because the decision-making people also depend upon intuition and beliefs.
9. EXECUTIVE EFFECTIVENESS.
A high order of leadership is required in order to make an executive effective.
Leadership is a creative and indispensable process. It requires an element of conviction which
means identification of personal codes and organizational codes for the future of the leader.
HERBERT A SIMON
Simon, the Noble Laureate in economics (1978), is an American political and social
scientist. He started his career in local government. His publications include Administrative
Behavior (1947), Public Administration organization (1958), the new Science of Management
Decision (1960) and The Shape of Automation for Men and Management (1965).
Simon analyzed the classical principles of management Due to their ambiguous and
contradictory nature; he criticized these principles as ‘Myths’, ’slogans’ and, ’homely’ proverbs’.
He analyzed the problem of management from the socio-psychological viewpoint. But he is best
known for his work in the field of decision-making and administrative behavior. Simon’s main
contributions are summed up as follows.
1. CONCEPT OF ORGANIZATION.
According to Simon, an organization is a complex network of decisional processes, all
pointed towards their influence upon the behavior of the operatives. It contains
distribution and allocation of decision-making functions.
2. DECISION-MAKING:
Simon’s major contribution is in the field of decision-making. To him management
means decision-making. He envisages three stages in decision-making process: (a)
intelligence activity, the initial phase consisting of searching the environment to identify
the conditions requiring decision, (b) design activity, involving finding and developing
alternative course of action and (c) choice activity, relating to selection of a particular
course of action. Subsequently March and Simon added the fourth stage, i.e., review
activity consisting of follow-up action for correcting deviations.
3. BOUNDED RATIONALITY:
Simon is of the view that man is not completely rational and does not insist on optimal
solutions. Rather he has only bunded rationality and is satisfied with ‘good enough’
solutions. As a manager cannot maximize due to several constraints he seeks to take
satisfying decision.
4. ADMINISTRATIVE MAN:
Simon has given the concept of administrative man as a model of decision-making. This
model is based on several assumptions, e.g. man can make choice without first
determining all possible alternatives.
5. COMMUNICATION:
Simon has paid considerable attention to the problem of communication in a organized
system. He believes that informal channels are more important for transmission of
information.
6. INFLUENCE:
Simon examined in detail different components of influence mechanism. He suggests that
a manager should efficiently utilize all forms of external influence.
RENSIS LIKERT 1903-1972)
Likert was a leading social psychologist. In 1948 he became the Director of the Institute
of Social Research at the University of Michigan (USA). He conducted extensive
research in the field of leadership. His famous publications are new patterns of
Management (1961) and Human Organization (1967). Likert believed that the traditional
job-centered supervision was mainly responsible for low morale and low productivity.
Therefore, he suggested the employee-centered supervision wherein maximum
participation would be given to workers in the decision-making process. Likert is best
known for his classification of management styles into four categories.
SYSTEM 1 (Exploitative autocratic): Leaders have to confidence in subordinates.
Therefore, subordinates are given no participation in decision –making .
SYSTEM 2 (Benevolent autocratic) : Management has condescending confidence in
subordinates just as a master has towards a servant.
SYSTEM 3 (Participative): Leaders have substantial but not total confidence in
subordinates. Employees are allowed to participate meaningfully in decisions affecting
their lives.
SYSTEM 4 (Democratic): Leaders have full confidence in subordinates. Therefore,
participation is meaningful.
DOUGLAS McGregor (1906-1964)
McGregor was a professor of management at the MIT (USA). He was an
individual psychologist and a leading expert on personnel relations. His famous books
include The Human side of Enterprise (1960), The Professional Manager, Leadership and
Motivation – Essays of Douglas McGregor (edited by warren G. Bennis and Edgar H.
Schein)
McGregor is known for the development of motivation theory. He developed
Theory X and Theory Y (explained in the Chapter on Motivation). Theory X represents
the traditional and narrow view of human nature. McGregor was of the opinion that
Theory Y assumptions are more valid in practice. He advocated motivation by
participation and job enrichment. He emphasized the significance of social and
psychological factors of the organizational world.
McGregor applied behavioral sciences to explain and solve managerial problems.
His Theory X and Theory Y have had tremendous influence on managerial thinking in
modern organization. These theories led to new insights into the problem of human
motivation at work. They exploded the myth of the ‘Economic Man’. He developed a
theory of motivation from the view point of the human relations.
McGregor believed that the objective of an organization should be to create
satisfied and happy employees. Such employees are more efficient and productive. He
tried to implement his theories in real life situations when he was the President of the
Antioch College from 1948 to 1954.
PETER F. DRUCKER
Drucker was born in Vienna in 1909 and is at present a professor of Social
Science at Clarmount Graduate School. California (USA). He is a leading management
consultant and a prolific writer. He is a leading proponent of managerism. He has
become a legendary figure through his writings, lectures and consultancy. He has written
twenty books and innumerable articles on different facets of management. Some of his
well-known books are The Practice of Management (1954). The Future of Industrial Man
(1942), The Concept of the corporation (1946) Managing for Results (1964. The effective
Executive (1967), Technology, Management and Society (1970). Management: Tasks
Responsibilities and Practices (1974) Managing in Turbulent Times (1983). Educational
films have been produced on several of his books.
Drucker considers management as the dynamic, life-giving element in an
organization. He writes about management as it is rather than as it should be. His
contributions may be analyzed under the following heads:
1. NATURE OF MANAGEMENT :
Drucker stresses upon creative and innovating management. He considers
management more as a practice than a profession. He has criticized the licensing of
managers and limiting access to management career to persons with a degree in
management. He places more emphasis on practice than on formal education.
2. MANAGERIAL FUNCTIONS:
According to Drucker, there are three functions of a manager: (i) to manage
managers, (ii) to manage workers and, (iii) to manage work. He considers management a
multipurpose organ.
3. ORGANISATION STRUCTURE:
Drucker believes that an enterprise should be organized for business performance.
It should contain the least possible number of management levels. It must facilitate the
testing and training of future managers. He has identified three phases of organizingactivity analysis, decision analysis and relations analysis.
4. DECENTRALISATION :
Drucker has advocated federal decentralization wherein decentralized decisionmaking is combined with centralized control.
5. MANAGEMENT BY OBJECTIVES.
One of the major contributions of Drucker is the concept of management by
objectives and self-control. It is a philosophy resting upon human behavior and human
motivations. It applies to every manager and to every enterprise. Drucker has identified
eight key result areas in which clear objectives must be laid down: market standing
innovation, productivity, physical and financial resources, profitability, managerial
performance and development, worker performance and attitude and, public
responsibility.
6. FUTURITY
Drucker has all along been concerned with futurity. He is obsessed by rapid pace
of technology and its impact on the society.
Drucker’s extensive writings are landmarks in management.
He has been a
consultant to the top corporations of the world. He has exercised a major influence on
contemporary management thought and practice.
His real contribution lies in his
innovative ideas which generate vigorous thinking. He shows tremendous far-sightedness
and understanding of contemporary management.
RECENT TRENDS IN MANAGEMENT THOUGHT:
1. INFORMATION TECHNOLOGY
Decision –making process in business has become more complex due to fastchanging environment and due to the growing number of groups both inside and outside
the organization which feel they have a stake in the decision-making process. Managers
need accurate and up-to-date information at a short notice to take rational decisions . As a
result computerized information systems are being increasingly used in management.
Information technology challenges many long-established practices and doctrines.
Therefore, managers will have to rethink some of the attitudes and values which have
been taken for granted. In particular, managers are required to reappraise their traditional
notions about the worth of the individual as opposed to the organization. The availability
a better understanding of alternative courses of action. But it becomes more difficult to
identify one ‘best solution’ than when the manager had only fragmentary data for a
decision.
2. PROFESSIONALISATION
History and experience that once provided a sense of security and stability to
preceding generations of managers are becoming obsolete due to fast rate of change. The
managerial climate changes so swiftly those outstanding solutions to problems in the past
often prove miserable failures in the present or future. Therefore, managers have to
continuously review and update their knowledge through books, seminars and executive
development programmers. Institutes of management are regularly organizing
educational programmers for executives.
3. FLEXIBLE ORANISATION:Due to growing size and complexity, the traditional organization structure is
providing inadequate. More flexible structures like matrix, project and task force have
been evolved to meet the needs of business. The organizational relationships are tending
to approximate the wheel shape rather than the pyramid.
4.
SITUATIONAL APPROACH :The application of management techniques and practices is becoming contingent
upon the existing environment. For affective management, a manager should adapt the
approaches to management according to the demands of the situation. The specific tasks
to be performed and the nature of leadership to be provided by the managers have to fit
the demands of the situation. As an open-adaptive system, an organization must be
related to the total environment. Managers need diagnostic skills, innovation and
creativity for this purpose.
5. HUMAN RELATIONS:
Increasing attention is being given to the management of human relations.
New generation of employees with higher education level and changing value systems
are more difficult to motivate. The new workforce asks for higher degree of participation
and avenues for self-fulfillment. Unquestioning acceptance of rules and regulations is
decreasing. Non- financial motivation is becoming increasingly important for which
managers need knowledge of psychology and philosophy.
6. FUTUROLOGY :
Forecasting of technological, social and other trends is becoming
essential for effective management of resources. Futurology is the science of
forecasting future possibilities and of converting these possibilities into preferred
possibilities. Futurology is becoming increasingly used to monitor the environment
and to design appropriate strategies for effective management.
7. COMMUNITY LEADERS:
A manager is today expected to act as an arbiter among the different groups
(labour, consumers, investors, government, etc.). He is being asked to participate
increasingly in community affairs and to contribute time and money for social work.
Managers have to educate the public opinion for which they need political skills.
CHAPTER –IV
PLANNING
Planning is the most basic of all managerial functions. Not only is planning a basic
function for all managers at all levels in any enterprise, but also the four other functions of the
manager must reflect it. Therefore, a manager organizes staffs, leads and controls in order to
answer the attainment of goals through the plans designed to achieve them.
Planning is a rational approach to preselected objectives. Because this approach does not
take place in a vaccum, good planning must consider the nature of the environment in which
planning decisions and actions are intended to operate. The planning decisions and actions are
intended to operate. The planning function of managing is the area where innovation plays a key
part.
In designing an environment for the effective performance of individuals working
together in groups, a manager’s most essential task is to see that everyone understands the groups
purposes and objectives and its methods of attaining them. Planning Involves selecting among
alternative future courses of action, for the enterprise as a requires selecting enterprise objectives
and departmental goals and determining as of achieving them. Plans thus provide a rational
approach to preselected objectives.
Planning is deciding in advance what to do, how to do when to do and who is to do it.
Planning bridges the gap from where we are to where we want to go. Although we can seldom
predict the exact future and although factors beyond our control may interfere with the best laid
plans, unless intellectually demanding process. It requires that we consciously determine courses
of action and base our decisions on purpose, knowledge and considered estimates.
THE NATURE OF PLANNING:
We can highlight the essential nature of planning by examining its four major
aspects of its contribution to purpose and objectives, its primary among the manager’s tasks its
persuasiveness and the efficiency of resulting plans.
Contribution of planning to Accomplishing Purpose and objectives:
The purpose of every plan and its supporting plans is to contribute to the
accomplishment of enterprise purpose and objectives. This principle derives from the nature of
organized enterprise, which exists for the accomplishment of group purpose through deliberate
co-operation.
PRIMARY OF PLANNING:
Planning logically precedes the execution of all other managerial function. A manger
must plan in order to know what kind of organization relationships and personal qualifications
are needed, along which course subordinates are to be led and what Kind of control is be applied.
Planning and control are inseparable. Un planning action cannot be controlled, for
control means keeping activities on course by correcting deviation from plans. Any attempt to
control without plans is meaningless, since there is no way for people to tell whether they are
going where they want to go unless they first know where they want to go. Plans thus furnish the
standards of control.
PERSUVATIVENESS OF PLANNING:
Planning is a function of all managers, although the character and breadth of planning
will vary with each manager’s authority and with the nature of policies and plans outlines by
superiors.
It is virtually impossible to limit manager’s jobs so that they can exercise no
discretion and unless they have some planning responsibility, they are not truly managers.
One manager, because of him or her authority or position in the organization, may do
more and more important planning than another, or the planning of one may be more basic and
applicable to a larger portion of the enterprise then that of another. However, all managers-from
presidents to first-level supervisors plan.
EFFICIENCY OF PLANS:
We measure to efficiency of a plan by its contribution to our purpose and objectives,
offset by the costs and the factors required to formulate and operate it. A plan may enhance the
attainment of objectives, but at necessary high costs. Plans are efficient if they achieve their
purpose at a reasonable cost, when it is measured not only in terms of time or money or
production, but also in the degree of individual and group satisfaction as well.
IMPORTANCE OF PLANNING:
Obviously before doing something, it is better to be clear as to what is to be done and
how it should be done. Despite the obvious importance of planning, in practice is often neglected
and managers allow things to happen instead of making things happen. Sometimes excuses are
made on the ground that the time required for planning is not available and immediate action is
required. In fact many managers are more concerned with putting out fires or solving problems
as they arise, rather than wanting to look forward and plan to avoid such problems or fires in the
future.
TYPE OF PLANS:
There are different ways in which plans are classified for example, plans may be
classified according to the time dimension into (1) short-term plans extending up to one year, (2)
medium-term plans of more than one year but less than five years, and (3) long-term plans for
five years or a longer period. Plans could also be classified in terms of functions like production
planning. Another way to classify plans is to divide them into.
1. Objectives and goals 2. Strategies and tactics 3. Standards 4. Budgets
5. Policies
6. Procedures. 7. Programmes 8. Rules, and
9. Methods.
These are now briefly described below.
1. OBJECTIVES OR GOALS :
Objectives are the ends towards which activities aimed. Objectives have to be
crystallized for the enterprise as a whole which could constitute the basic plans of the
organization. Besides objectives or goals for each department have also to be planned.
Thus objective gives direction to the activities and result from planning.
2. STRATEGIES AND TACTICS:
Whilst plans generally specify direct goals and the ordinary means for obtaining
them, strategies are aimed at counteracting the actions or opponents and in that sense is a
special type of plan. The purpose of strategies is to determine and communicate, through
a system or major objectives and policies, a picture of what kind or enterprise is
envisioned. Tactics on the other hand are immediate decisions based on the executive’s
judgment and experiences whilst facing an actual situation. Terry distinguishes the term
strategic planning as being normally used “with reference to fundamental issues, broad
perspectives and long-term periods” from tactical planning which deals with determining
the most efficient use of the resources that have been allotted for achieving given and
specific objective” Thus he clarifies that the differences are in the time enterprise
activities covered.
3.
STANDARDS:
A standard is a measure of the level of achievement expected. It is a model of the
level of achievement expected. It is a model for comparisons or evaluation. Standards are
therefore very useful in evaluating deviations from the plan.
4. BUDGETS:
A budget is a statement of expected results expressed in numerical terms. It may
be referred to as a “number zed” program. In fact the financial operating budget is often
called a “profit plan” . It may be expressed either in financial terms or in terms of labour
hours, units of product machine-hours, or any other numerically measurable term. The
budget formulation forces the organization to plan ahead and made a numerical, logical
compilation to give direction and control limits.
5. POLICIES:
Policies are general statements aimed at guiding, thinking while making
decisions. All policies are not statements; since they are often merely implied form the
actions of managers. Policies need not necessary be written as they may be implied from
the past actions of managers. An example of a policy would be that “promotions must be
from within the company or the existing staff” if such a policy is prescribed, it gives a
direction or guidance for future promotions.
6. PROCEDURES:
Procedures are plans that establish a required method of handling future activities.
They are truly guides to action, rather than to thinking, and they detail the exact manner
in which sequences of required actions. Procedures are therefore more definite than
policies, defining specific activities to be accomplished to words a pre determined goal
procedures exist throughout the organization.
7. PROGRAMMES:
Programmes are complexes of goals, policies, procedures, rules, task assignments,
steps to be taken, resources to be employed and other elements necessary to carry out a
given course of action; they are ordinarily supported by necessary budgets. Programmes
integrate policies, procedures, etc., required for affecting a certain course a action. It thus
integrates the activities which are diverse but related. It may be looked upon as “planned
actions, integrated into a unity and designed to bring about a stated objective”
8. RULES:
Rules spell out specific required action or non action allowing no discretion. They
are the simplest type of plans. Rules are related to procedures as they guide action but
there is no time sequence attached to them. An example of rules would is “No smoking
allowed” Again, the procedure for handling correspondence may require observance of
the rule that “all letters received must be answered on the same day” The rules thus
allows no deviation.
9. METHODS:
The method prescribes specially and in detail how a task is to be done constituting
the best manner of performing such task.
ADVANTAGES OF PLANNING:
The following are briefly some of the advantages offered by adequate planning:
1. Planning leads to more effective and fasten achievement in any organization. It
replaces random operation by orderly and meaningful action. Planning guides the
enterprise to traverse along a safe and short pate of reaching its destination.
2. Planning gives a competitive edge to companies that forecast and plan. In the context
of changing and uncertain business horizon. Planning is the best way for ensuring an
orderly progress of the enterprise. As planning gives an added strength to the business
for its continuous growth and prosperity.
3. Planning secures unity of purpose, direction and effort by focusing attention of
objectives. Isolated and distinct activities are co-ordinate towards one common goal,
and at the same time, duplication overlap and cross-purpose working are avoided
throughout the organization. It produces a mighty stream of operation and effects a
thorough utilization of facilities.
4. Planning minimizes costs of performance. With background knowledge of current
situations and future setting of actions, planning involves the selection of one
profitable course of action that would yield the greatest at the least cost. Because of
consistency and balance of efforts, planning introduces an even flow of work without
any friction or dissipation of energy. It removes false steps and protests against
improper deviations.
5. Planning has unique contributions towards the efficacy of other managerial functions.
The overall picture of business presented through planning makes the managerial
functions of direction and control more effective in the organization and points our
clearly the need for further assistance or for revision in the course of action.
6. Planning provides the basis for control in an organization. Planning expresses the
goals and targets in numerical data, and as such, it supplies the standard for
subsequent work performance.
7. Planning increases the effectiveness of a manager. As his goals are made clearer,
adequate planning would help the manager in deciding upon the most appropriate act.
LIMITATIONS OF PLANNING:
The following are briefly some of the limitations claimed for planning:
1. The effectiveness of the plans depends upon the correctness of assumptions –
planning is based on information available.
2. Planning is expensive – some claim that his planning involves a considerable amount
of time and often works by specialists the expenditure incurred is high.
3. Planning delays actions – some claim that encouragement of the planning activity
gets people into the habit of avoiding immediate decisions.
4. Planning encourages a false sense of security some emphasize that a manager who is
given a plan feels secure in the belief that all that he has to do is to effectuate the plan
and that would avoid all possible risks of things going wrong. The dangers of the
future cannot be obviated in this way.
To avoid such limitations and to make planning more effective, the objectives
must be clearly defined. The plan should be simple and capable of being understood by
those who have to effectuate it. The plan should be flexible of attainment as unattainable
objectives would lead to frustration.
GUIDELINES FOR A SUCCESSFUL PLANNING:
Apart from the limitations of planning, unless proper guidelines are
followed, planning is likely to fail. Malcolm planning ton suggests the following five
guidelines, namely.
1. Involve top management only at key points in the planning processes.
2. Involve line executives in developing the plans.
3. Do not look for the perfect answer
4. Planning must provide realistic targets and alternative ways to achieve them, and
5. Planning should start on a small scale and be expanded only when the executives
have learned the techniques and have become convinced of their usefulness.
Top management should not be unduly harassed in the planning process. They
should be involved where they can make a unique contribution. The knowledge and
experience of line executives should be utilized in formulating the plans.
DEFINITIONS OF PLANNING:
William N. New man and Charles E. Summer. Jr. Say that “ the process of
planning covers a wide range of activities all the way from initially sensing that
something needs doing to firmly deciding who does what when. It is more than logic or
imagination or judgment. It is a combination of all these that culminates in a decisiondecision about what should be done. The decision phase of planning is so important that
we shall use the expression decision making as a synonym of planning”
George terry defines planning as“Planning is the selecting and relating of facts and the making and using
of assumptions regarding the future in the visualization and formulation of proposed
activities believed necessary to achieve results”
Billy E. Goetz emphasizes that the planning is fundamentally choosing
and that.” A planning problem arises only when an alternative course of action is
discovered “.
Koontz and O’Donnell also describe planning as the selection form among
alternatives for future courses of action for the enterprise as a whole and each department
with it”
Again, Richard N. Parmer and Barry M Richman, observe that
“The planning function determines organizational objectives and the
policies, programmes, schedules, procedures and methods for achieving them. Planning is
essentially decision-making since it involving choosing among alternatives and it also
encompasses innovation. Thus planning is the process of making decision on any phase
of organized activity.
CHAPTER V
DECISION MAKING
The life of the manager is filled with making decisions. Decisions
determine both managerial and organizational action. Decision making is the sole way in which
managers can discharge their functions of managing. The task of decision making is the
distinguishing mark that identified a person as the manager of any under taking. Management
and decision making are bound up inseparably, and they go hand in hand.
THE NATURE OF DECISION MAKING:
The life of a manager is a perpetual choice – making activity. To solve problems or
provide for their prevention in the future, he has to weigh alternative course of action, before
taking a decision. When decision involves the future the ultimate outcome is uncertain.
Decision making can be defined as the selection based on some criteria of one behavior
alternative, from two or more possible alternatives. Decision making involves two or more
alternatives because if there is only one alternative. There is not decision to be made. To decide
means to cut off or, in practical content to come a conclusion. The selection is based on some
criteria such as winning a greater share of the market, reducing costs, saving time, increasing
volume, and enlarging the prestige of the enterprise.
A decision essentially involves choosing a particular course of action, after considering
the possible alternatives. The chosen course of action may consist in deciding after to proceed on
a particular line or what must not be done in a given situation. It may be expressed in words in
the forms of policies, rules, orders instructions, and the like, or it may be implied from behavior.
RATIONALIT AND DECISION MAKING
Effective decision making requires a rational selection of a course of action. Rationality
is introduced through the human brain which has the ability to learn, think and relate complex
facts and variable whilst arriving at a decision making is rational in that the manager taking a
decision is selecting and evaluating decision alternatives to achieve desirable goals by selecting
the more desirable ones. He is comparing the alternative anticipated out comes in terms of
achievements of organizational goals. There are however limits to this rationality in view of the
intermingling of personal objectives the need for the ability to anticipate all possible course of
actions or alternatives, and the fact that some factors are beyond the manager’s control. Herbert
Simon refers to such limits of rationality. According to this principle, the manager seldom tries
to find the optimum decision as after defining the probable different out-comes he selects one of
the strategies that result in a satisfactory outcome. Thus complete rationality in decision making
is not possible in view of limitations such as the human beings ability to crystallize all possible
alternatives and course of action
THE PROCESS OF DECISION MAKING:
A decision is generally not taken in isolation as it is affected by previous behavior as well
as consequences anticipated in the future. It is therefore necessary to understand making as a
process as the question of final selection of choice from alternatives should not result on false
emphasis ignoring the lengthy complex process which precedes that final choice. Thus there are
three time aspects of decision, namely,
1. The past in which the problems were developed and information collected
2. The present where alternatives have to be selected; and
3. The future where the decisions will be carried out.
DECISION, PROCESS, STEPS:
The decision-making task can be divided into six steps. Which are stated in order of their
sequence as follows?
1. Making the diagnosis: The first step is to determine what the real and correct
problem is if the problem is not ascertained correctly at the beginning money
and effort expanded for the decision over a wrong problem are sure to go in
waste.
2. Analyzing the problem: the problem should be thoroughly analysed to find out
adequate background information and data relating to the situation. This
analysis may provide the manager with revealing situation that help him to
gain an insight into the problem. The whole approach to the problem should,
however, be based around the limiting or critical factors, there can be
innumerable factors involved in any situation: some of which are pertinent
and some others are remote.
3. Searching alternative solutions: The analysis of the problem can never become
through and satisfactory unless attempts are made to search for several
alternatives. There is hardly any course of action wherein alternatives cannot
be developed. The search for alternatives forces the manager to see things
from many view points to study cases from their proper perspectives, and to
unearth troubled spots of the problem. In the absence of alternatives, the
decision making process becomes a mechanical job.
4. Selecting the best solution: The selection of one best course of action out of
several alternatives developed requires an ability to draw distinctions between
tangible and intangible factors as well as between facts and guesses. Four
criteria have been suggested by Drucker in selecting the best solution.(a) the
proportion of risk to the expected gain(b) the correspondence between
economy of efforts and possibility of results (c) the timing consideration that
meet the needs of the situation and (d) the limitation of resources.
5. Putting the decision into effect: Even the best decision may become
inoperative due to the opposition of employees. The decision can be made
effective only through the action of other people. To overcome, the opposition
or resistance on the part of employees’ managers must make necessary
preparations for putting the decisions into effect. There are three important
things relating to this preparation viz communication of decision securing
employees acceptance and the timing of decisions.
6. Following up the decisions: In spite of their best Endeavour managers cannot
make infallible decision for two reasons. First, some amount of guess work
becomes inevitable in almost every decision. Secondly, wrong decisions arise
from the limited capacity of the manager himself. The fear of incorrect
decision prevents many managers from taking any decision at all. However as
safeguard against this incorrect decision. Managers are required to institute
system of follow-up to decisions so as to modify them at the earliest
opportunity.
TYPE OF DECISIONS:
Decision making behavior is of different types, often involving different methods. The
different types of decisions can be divided into the following namely.
1. ORGANISATIONAL DECISIONS:
When a manager acts normally in his expected role in an organization, he makes
organizational decisions which become the organization’s official decisions. Such
decision making power is delegated to others also and calls for decisions at subordinated
levels supporting it. They thus touch off a chain or this authority is a powerful instrument
in the hands of the executive. These decisions are aimed at achieving the best interest of
the organization.
2. PERSONNEL DECISIONS:
These decisions are made by an executive as an individual and not as a part of an
organization. A manager who changes jobs or organizations in making a personnel
decision. Such decisions do not result in organizational behavior of other although such a
resignation might affect the organization in the sense of the sense of the need to replace
him. It is difficult at times to distinguish personnel as against organizational decisions.
However an executive takes a more objective decision when he is convinced that he is
taking it as an organizational decision which might differ from personal beliefs.
3. BASIC OR NON-PROGRAMMED DECISIONS:
Certain types of decisions are basic in that they result in long range commitment or
involve large investments or have a degree of importance affecting the welfare of the
whole organization.
4. ROUTINE OR PROGRAMMED DECISIONS:
Whilst policy decisions fall under the category of basic or non-programmed
decisions. There are many decisions, of a routine, type which require relatively less
thinking or are made more often. They have a small effect on the welfare of the
organization as a whole. A large number of these types of decision can be helped by
laying down adequate procedures. Most decision are of respective or routine nature
GROUP DECISIONS:
Another method of classifying decision is the way they are taken, i.e., by
an individual or a group. As participation makes a decision more readily by subordinates
group decision making has emerged as a modern method. The main disadvantage of a
group decision is the fact that all the members of a group cannot be hoisted with the
ultimate responsibility for the decisions outcome. The ultimate responsibility for a
decision must rest on the executive concerned. Group decision is also taken at the higher
level, e.g. the board of directors.
ADMINISTRATION PROBLEMS INVOLVED IN DECISION MAKING:
The objective of administration is to maintain an organization of managers at top
middle and lower levels, whose decisions will be sound as possible, as decisions play a
central role in the managerial task. The relevant factors in this behalf are:
1. THE SOUNDNESS OF DECISIONS :
The quality and reliability of decisions naturally depend on:
I] the sophistication of the decision maker;
Ii] The information available to him and
Iii} the techniques to which he can resort.
As already discussed, pure rationally does not generally exist in decisions in view
of problems, particularly regarding accuracy of information and inability to visualize all
possible alternative courses of action available in a situation.
2. THE DECISION ENVIRONMENT:
The atmosphere in the organization physical as well as psychological has its effect
on the nature of the decisions that emanate. In some organizations an atmosphere of
indecisiveness may prevail. This attitude is handed from the top down to the managerial
levels and can be improved only through a change in leadership.
3. The timing of decision :
Timing of decision often constitutes part of a strategy, e.g., In case of the
introduction of a new package or a product, whether it should be introduced immediately
or whether time should be allowed for further research. The latter may result in
competitors finding out and launching a similar product first.
THE PSYCHOLOGICAL FACTORS IN DECISION MAKING:
Finally the attitude of the manager towards making decisions is important. There are the
non-decision makers who would rather appoint a committee to look into a problem such a person
uses diversionary tactics instead of meeting the problem. The good decision maker is normally a
generalist who can co-ordinate the efforts of specialists and has the ability to switch quickly from
one problem to another. He has a positive approach and is willing even to look for problems
rather than be surprised by them.
Decision making is at the core of planning. Experience, experimentation, and research
and analysis also come into play. In making decision, some modern approaches to decision
making to the outcomes of decision; decision trees, which physically illustrate the decision
points chance events, and probabilities of each possible course of action; and preference theory,
which takes into account managers willingness or unwillingness to take certain risks.
Chapter –V HUMAN NEEDS AND MOTIVATION
Managing requires the creation and maintenance of an environment in which individuals
work together in groups toward accomplishment of common objective. A manager cannot do this
job without knowing what motivates people.
Direction is a managerial function that has
exclusive concern with human beings of the enterprise. It is the direction of human beings that
secures greater or lesser efforts from employees that makes satisfactory or unsatisfactory
performance in the organization. To summarize the role of direction in the words of Urwich and
Srech, it is the guidance; the inspiration, the leadership of these men and women that constitute
the real core of the responsibilities of management.
HUMAN RELATIONS:
Research on human relations has indicated that there are some peculiar characteristics of
human behavior. Study of human relation problems in business by psychologists, sociologists
and cultural anthropologists has provided important insights into the pattern of human behavior.
ROLE OF CLTURE:
Culture consists of the common way in which way in which people live, think and work
in any society. Culture shapes the behavior patterns, beliefs, customs or habits among people
through learning from other members of the society. Some cultural practices become deeply
embedded in the nature of human beings who show significant attachment to them and put
values.
STATUS SYSTEMS:
Status implies prestige or standing that a person enjoys among people. Status differences
exist within the business organization in the same way as they are evident in the society. Status
may be organizationally imposed through official titles, privileges, skill knowledge and
experience. The social distance between organization levels may increase so as to reduce the
scope for effective co-operation.
INFORMATION SOCIAL GROUPS:
The social structure of an organization includes not only superior subordinate
relationships, but also many informal relationships or associations that develop spontaneously
among work groups. Man is a social being and desires the association or friendship of other
people. When the information and operation of informal social groups cannot be eliminated by
management in any organization, it becomes essential for managers to recognize their
importance and to utilize them constructively from achieving company objectives.
GROUP BEHAVIOUR:
Group behavior is something different and separate from the name total individual
behaviors of group members. All groups have some established norms specifying the acceptable
standards of behavior that are widely shared by group members. Where group goals are in
alignment with organizational goals, productivity is high. But when such goals differ,
productivity cannot be improved. Irrespective of the degree of cohesiveness among group
members.
PERCEPTION OF FACTS:
Human beings perceive facts and situations from their own view points. Individual
viewpoints constitute the real world or facts of life, even though they differ materially from real
facts and situations. Both managers and operators may be subject to this perception of facts
rather than knowing the real facts and their behavior is moulded accordingly.
LOGIC AND EMOTION:
Human beings have capacity for both thinking and feeling. They are capable of logical
thought in solving many problems and choosing their own word and careers. Emotions play a
great role in shaping the actual behavior of persons.
MOTIVATION OF PERSONNEL:
Organization members are to be persuaded and inspired for contributing their efforts
towards the achievement of enterprise objectives. Needs which are fulfilled case to act as a
motivating force of human behavior and employees take such needs for granted. It is the
unsatisfied need that dominates in one’s thinking and provides motivation to him. Motivation is
not only concerned with the stimulation of efforts for the minimum performance but it also the
object of securing superb or peak performances from all personnel of the organization.
Motivation is a general term applying to the entire class of drives, desires, needs wishes,
and similar forces. To say that managers motivate their subordinates is to say that they do those
things which they hope will satisfy these drives and desires and induce the subordinates to act in
a desired manner.
THE HAWTHORNE EXPERIMENTS:
To understand the theories of motivation, it is important to appreciate the transition from
scientific management to the early human relations movement which is highlighted in the
Hawthorne Experiments. So far employees had been considered as mechanistic elements in the
production system. For example the Gilberth said: If has been proved in most output can be
achieved by applying oneself steadily less steadily and having no rest period. However, the
Hawthorne experiments indicated a different picture. Again, for example, it was thought that
apart from giving rest periods mechanistic aspects such as extent of illumination affection the
rate of output.
IMPLICATION OF HUMAN NEEDS:
Need can be defined as “a condition requiring supply or relief,” “the lack of anything
requisite desired, or useful”. A motivating situation has both (1) a subjective and (2) an objective
aspect. The subjective said is a need, a drive or a desire. The objective side is called the
incentive or goal.
MASLOW’S NEED HIERARCHY CONCEPT:
However, as human needs have to be inferred from human behavior there are differing
theories. But one classification widely accepted is the one advanced by Maslow, a psychologist
who developed a theory of motivation.
He classifies human needs into five categories.
According to him, there is a hierarchy of needs in the order of priority. McGregor supports this
and states.
Man is a wanting animal as soon as one of his needs is satisfied another appears in its
place. This process is unending…… it continues from birth to death……. Man’s needs are
organized in a series of levels- a hierarchy of importance.
According to the concept of the “need hierarchy” the satisfaction of the “psychological
need”, which are the most fundamental, results in the “safety need” becoming more powerful and
felt by the individual concerned. Once these are fulfilled, the need for belonging “becomes
uppermost and the persons behavior is directed towards securing a respected place in his group
consisting of both his superiors and his equals. Ultimately, the needs for “esteem” and self
actualization come into play. An important consideration to remember is that a satisfied need is
not a motivator of behavior.
This, according to McGregor, is regularly ignored in the
conventional approach to management. However, a very assures the possibility of motivation in
all human beings, whenever placed in the management hierarchy.
Maslow further suggests that these levels are interdependent and overlapping. Each
higher need level emerges before the lower needs have completely satisfied. Again, in our
society most people tend to be partially satisfied in each need and a partially unsatisfied and have
higher satisfaction at the lower need level than at the higher need levels.
BUSINESS MOTIVES:
It has been stated that the fundamental motivating force behind individual activity is the
pursuit of self-interests. All other motives can be shown to be subordinate to the first or primary
one. Negative aspects may also enter into the picture. Not all people render service to society in
pursuing their interests. These business men who do render services to society are looked upon
as noble or at least as good citizens. Those that don’t are shady, dishonest, or criminal society
therefore is faced with the problem of motivating individuals to render service to it while they
pursue individual goals. In the free enterprise system this is does not by supplanting the in
primary motive of self-interest with a desired to solve society but by causing these two moves to
coincide and be interrelated to the extent that the first cannot be satisfied without the other in
turn causing satisfaction of the latter.
This same approach can be used in analyzing individual industrial incentives, whether
they are financial in nature by developing men who are efficient and productive and who desire
to be productive because of individual incentives, society can enjoy a rising standing of living.
The increases in living standards are not brought about by substituting a new motive for the self-
interest of each individual, but by making these increases the result of the activates of individuals
seeking personnel rewards.
There are numerous goals of managers which may or may not run parallel to the goal of
the owners. For eg. Business may be a goal in itself rather than a means to an end. This is
consistent with the emphasis often placed upon doing things first or on the grandest scale.
Managers also realize that increases in the overall size often are accompanied by increases in
managerial salaries, prestige and power. Therefore, some managers may pursue expansion
policies even though such policies may not be in the best interest of their firms.
CHAPTER VIII
ORGANISATION AND DELEGATION
INTRODUCTION:
The concept of living is based essentially on the gregarious nature of the living beings,
which leads to the importance in the organizing of individuals in groups. On the social front, we
have the family, the clubs the societies and art and cultural (ethnic) groups. In business, too,
there are groups in the forms of firms companies and conglomerates. It is this presence of groups
that gives rise to the concept of ‘organization’.
CONCEPT:
The organization theory may be defined as the study of structure, functioning and
performance of organizations and the behavior of groups and individuals with them.
It has been defined as “a set of interrelated constructs (concepts),
Definitions,
groups and subgroups and subgroups interacting in some relatively patterned
sequence of activity, the intent of which is goal-directed”- Tosi.
IMPORTANCE OF ORGNISATION THEORY:
The theory focuses its attention on that special category of social or human grouping that
is designed as an organization. The objective of this study of organization is to furnish a general
frame of reference, taking into account both the internal atmosphere and the external
environment, for understanding and explaining behavior patterns in organization, and for
providing scientific planning to improve organizational effectiveness.
APPROACHES:
There are three broad approaches to the concept of organization:
1. Classical
2. Neo classical
3. modern
Each theory has its own characteristics and shortfalls. But the point that is sought to be
made clear is that. Whatever the theory or approach, the end-goal is of prime importance. The
end-goal is organization and that is dependent on the nature and social set up of the business in
question.
FACTORS IN INFLUENCING ORGANISATION STRUCTURE:
In order to understand the actual concept of organization structure, we need a view of the
factors that influence the ultimate structure.
ENVIRONMENT:
The environment which forms encompassment of the tighter organization set up, includes
all conditions, circumstances and influences surrounding and affective the working of the total
organization or any of its internal parts. These elements are dynamic and will vary for each
organization.
Environmental complexity which offers to the heterogeneity of the Environment
influences the organization in the diversity dimension.
Environmental variability affects the task performance. A static structures, for instance is
characterized by clearly specified rules regulations, authority and responsibility and interaction
through vertical levels. An organic structure is typified by a horizontal relationship flexible rules
and regulation and flexible departmentation.
TECHNOLOGY:
Technology can be in terms organizational task or in the nature of work flow. The
technology limits the amount of discretion which subordinates can be given, hence affecting the
organization structure. The nature of work flow is in terms of unit or mass production.
DESIGN:
The organization structure, being abstract, is not visible in the same way as a biological
system. James G Miller states that “the structure of system is the arrangement of its sub system
and components in three dimensional spaces at a given moment of time. Process is dynamic
change in the matter, energy or information of the system over time” thus the concept of
structure and process can be viewed as the static and dynamic features of organization.
DESINGING THE BASIC STRUCTURE INVOLES THE FOLLOING STEPS:
1. INDENTIFICATION OF ACTIVITES:
In order to achieve a particular goal, the steps and functions or activities that must be
performed have to determine through the deductive method. The major activities are
classified into a number of sub activities. These sub activities are co-ordinated in order to
establish a synchronized whole.
2. GROUPING OF ACTIVITIES:
Closely related and similar activities are grouped together to form departments, divisions or
grouped together to form departments, divisions or sections Groupings are assigned various
positions occupied by various individuals who have to perform the assignment or tasks
assigned to the position occupied by them.
3. DELEGATIONOF AUTHORITY:
Since the assignment of the job to an individual creates responsibility on his part, he must
have corresponding authority to discharge his obligations.The process interaction in the
official hierarchy.
4. ORGANISATION CHARTS:
Charts are an important tool for providing information about organizational relationships.
They provide guidelines for defining relationships clearly.
Shown below is sample of organization chart
Board of Directors
Managing Directors
Production
Marketing
Finance
Market research
Advertising
Sales.
Personnel
FEATURES OF A GOOD ORGANISATION STRUCTURE:
Like the technocrat who designs his module to meet the specifications, the
organization planner applies certain principles in order to meet the various needs of the
firm. The following are given as major considerations.
1. CLEAR LINES OF AUTHORITY:
Clarity in the lines of authority from top to bottom is achieved through delegation
by steps from the leader to the worker level. Lack of clarity results in friction and
inefficiency.
2. ADEQUATE DELEGATION OF AUTHORITY:
Responsibility without adequate authority is purposeless mission. Practice of
proper delegation ensures quick decisions at crucial sports and the elimination of
bottlenecks.
3. APPLICATION OF ULTIMATE RESPONSIBILITY :
The responsibility of higher levels for acts of its subordinates is absolute. This is
the concept of ultimate responsibility. The authority flows from the superior to the
subordinate along with the assignment of the duties. When duties are assigned, the
person discharging them becomes responsible for that position proportionately. However,
the superior is responsible for the portion that he executes himself and also to the part
delegate to his subordinates.
4. MINIMUM MANAGERIAL LEVELS:
The greater the number of levels the longer is the chain of command and the
longer it takes for instructions to travel down and up within the organization. Though a
fixed figure cannot be prescribed the principle of minimum level will be applicable.
5. UNITY OF DIRECTION:
This is based on the principle of specialization. A combination of ill-treated
assignments often seems to work only so long as a particular person holds a post.
But it will eventually lead to conflict and inefficiency.
6. PROPER EMPHASIS ON STAFF ACTIVITIES:
Line functions should be separated from staff functions whenever possible.
A line activity helps an organizational objective directly as in the case of production
function. The staff function involves the indirect route through helping the line
function.
7. SPAN OF CONTROL:
This refers to the number of people one manager can directly supervise. It is
dependent on the nature of the superior, the subordinate, the work, planning
decentralization, staff assistance, communication and supervisory techniques. These
factors must be considered while designing this span of control.
8. PROVISION FOR TOP MANAGEMENT:
In a corporate form of organization which is an artificial person, created by law
and existing only in contemplation of law, it is imperative to provide some means by
which shareholders and members of board participate in management process. These two
groups are diverse but affect the organizational function seriously. Thud this relationship
should be clearly reflected through the organizational structure to establish workable
relations.
9. SIMPLICITY:
Provision of various networks is essential but it should not lead to confusion and
ambiguity. Too many levels, committees, communication, channels, multiple
commands often lead to complex problems.
Ideally speaking. Their number should be determined objectively with the needs
of the organizations in mind.
10. FLEXIBILITY:
The organization design should take the future time dimension into consideration.
This can be achieved only when it is flexible enough to adapt itself to the changing
environments. Besides, there may be other compelling needs such as simensification and
expansion of activities which necessitate changes in organization structure.
DELEGATION:
Delegation may be defined as the assignment to another person of formal
authority and responsibility for carrying out specific activities. When formal authority
and responsibility for carrying out specific activities .When
formal authority is
conferred, the power to reward and punish goes with it to some extent.
The extent to which managers delegate is influenced by factors like the
nature and style of the organization, the situation, relationship and the capabilities of the
subordinates.
Responsibility for specified tasks is assigned to the lowest organization
level at which there exists sufficient ability and information to carry them out
competently. A corollary of this rule is that for individuals in the organization to perform
tasks effectively, they must be delegated sufficient authority to do so.
A necessary part of the delegation of responsibility and authority is
accountability-being held answerable for results. By accepting authority and
responsibility, individuals in the organization also agree to accept credit or blame for the
way in which they carry out their assignments. Not only are managers held responsible
for their own performance but them also accountable for the performance of their
subordinates.
THE SCALAR PRINCIPLE:
For delegation to work effectively, members of the organization should
know where they stand in the chain of command. The scalar principle suggests that there
must be a clear line of authority running step by step by step form the highest level to the
lowest. This shows the organizational members.
A). to whom they can delegate
b). who can delegate to them and
c). to whom they are accountable.
Unassigned tasks called ‘gaps’ have to be avoided because otherwise it is likely
that the tasks will remain unperformed.
Similarly, there should be no ‘over taps’
(responsibility for the same task assigned to more than one individual) and no ‘splits’
(responsibility for the same task shared by more than on organizational unit).
UNITY OF COMMAND:
This principle states that every person in the organization should report to only
one superior. Reporting to more than one superior makes it difficult for an individual to
know whom he is accountable to and whose instruction he must follow. This also
encourages individuals to avoid responsibility, since they can easily blame poor
performance on the fact that with several losses they have too much to do and they have
to cope with conflicting orders.
BARRIERS:
RELUCTANCE TO DELEGATE:
“I can do better than myself”, attitude among superiors is a factor which
eludes proper delegation. An additional cause of reluctance to delegate is a manager’s
lack of ability. Improper organization, insecurity and lack of confidence in subordinates
could be other causes for non-delegation.
RELUCTANCE TO ACCEPT DELEGATION:
Work shirkers try to avoid responsibility by pretending to be ignorant to perform
a task that is delegated to them. Fear of criticism of dismissal in case of adequate rewards
for hard work could be yet other causes to avoid delegation.
The basic prerequisite to effective delegation is the willingness of managers to
give their subordinates real freedom to accomplish delegated tasks. Subordinates may
commit errors in carrying out their tasks. But they must be allowed to develop their own
solutions to the problems and learn from their mistakes.
A useful method for overcoming barriers to delegation is to increase the
complexity of delegated assignments and the degree of delegation over a span of time.
Thus a manager can delegate successively more tasks and the subordinates will accept
more responsibility for particular tasks.
*******
CHAPTER –VIII
CO-ORDINATION
INTRODUCTION:
The earlier concept of co-ordination as one of the functions of management has been
giving the go-by-and it is now regarded as the essence of the management process. Co-ordination
is the integration, synchronization or orderly pattern of group effects in the enterprise towards
the accomplishment of common objectives. To ensure harmonious and smooth working of an
enterprise with a number of its division, departments or units, the activities in all areas are
required to be pulled together unified and blended so as to give them a commonness of purpose.
NATURE OF CO-ORDINATION:
Co-ordination should be confused with co-operation. The concept co-ordination is much
broader than of co-operation. Co-ordination includes co-operation plus something else. Cooperation implies the collective efforts put in by a group voluntarily in the performance of any
work, and it has no time quantity or direction elements associated. With group efforts. Coordination must have time, quantity and direction dimension. It is concerned effort of requisite
quality and quantity arranged as the proper time through deliberate executive action. However
both co-operation and co-ordination are essential in management for getting things done by
others. “Co-operation without co-ordination and co-ordination without co-operation provides the
foundation on which co-ordination can raise the managerial edifice.
The efforts are not exerted through co-operation, co-ordination becomes a futile exercise.
The ever changing horizon of the business makes co-ordination highly dynamic in
character. Business operations are continually being modified by external influences as well as
by internal actions and decisions. In the face of theses alterations co-ordination tends to focus
attention on new strength and forces, and it tries to eliminate weakness and inconsistencies.
PROBLEM OF CO-ORDINATION:
Problem of co-ordination exists both horizontally and vertically in the
organization, though the impact of horizontal co-ordination is much higher that of vertical coordination. Under horizontal co-ordination, the dissimilar activities of many hybrid units are to
harmonized and unified with overall objectives and fixed patterns of the enterprise, vertical coordination on the other hand demands the symmetrical action of people at various levels for
accomplishing enterprise objectives through the linkage of individual contributions to the total
performance.
NEED FOR CO-ORDINATION:There are some disintegrating forces that emphasize the need for co-ordination in many
enterprises. The disintegrating forces which act as barriers to co-ordination may be put under
following four heads:
2.
DIVERSE AND SPECIALISED ACTIVITIES:
Co-ordination becomes necessary only when the principles of specialization have
been introduced in the enterprise to run its affairs. Total activities are divided into several
units and sub units on the basis of either product specialization or some other forms of
specialization. The greater the number of people with varying skills and personal
specialization, the more difficult becomes the task of securing co-ordination of enterprise
activities and human abilities.
3. EMPIRE BUILDING TENDENCIES:
To exaggerate self-importance and personal ego, the empire building motive is
deeply implanted in human nature. This motive causes the individual department to be
isolated from others thus turning it as a separate entity.
3. PERSONAL RIVALRIES AND DEALOUSIES:
Human organizations give rise in course of time to the development of
organizational politics among members. Under such situation, co-ordination is
deliberately sabotaged by members of the rival groups. The perpetual conflict between
line and staff position or between personnel of production and sales departments is a
pointer to this problem.
4. CONFLICT OF INTERESTS:
Sub-ordination of general interest to individual interest act as a bar to coordination. This subordination may arise from a number of causes like laziness,
incompetence and ambition as well as lack of loyalty. Integrity or initiative on the part of
employees. Poor managerial leadership that cannot bring a psychological unit worker’s
motives fails to harmonize personal needs with the company needs.
IMPORTANCE OF CO-ORDINATION:
There are four important benefits of co-ordination which may be stated follows:
1. QUINTESSENCE OF MANAGEMENT:
Co-ordination is the one word in which all management functions can be
summarized. It is the end result of the management process. It is an all important and all
inclusive concept in management.
2. CREATIVE FORCE:
Management creates something new out of individual efforts through the
work of co-ordination. Group efforts, when co-ordinate, create a result greater than the
sum total of individual and isolated efforts. The dovetailing and assembling of efforts for
a higher accomplishment become possible only when members of the organization
participate in the work willingly and wholeheartedly. This type of composite effort is
brought about by executive actions of human relation and leadership.
5. UNITY OF DIRECTION:
Co-ordination enables the managers to see the enterprise as a whole from
its different segments. It ensures unity of direction by way of securing spontaneous
collaboration on the part of different departments. Despite the continuous existence of
disruptive forces in all organizations it is co-ordination that molds different segments and
parts into one entity, one integrated whole. All members of the organization are induced
to view their work from the stand point of the enterprise and its objectives.
6. HIGH EMPLOYEE MORALE:
In addition to promoting efficiency in a number of ways co-ordination
tones up the general level of employee morale and provides job satisfaction. Orderly
nature of operations established through a team spirit and executive leadership permits
the employees to derive personal contentment and social satisfaction from the work.
Because of job satisfaction and favorable environment of work the enterprise can secure
the service of good personnel with a steady growth in their capacity.
PRINCIPLES OF CO-ORDINATION:
There are four important principles of co-ordination which every manger should
take into account in discharging his managerial functions.
1. The first principle is that co-ordination is to be arranged in the early stage of the
management process. As the thinking function of management precedes the doing function, coordination endeavors must start at the planning stage, otherwise it become impossible to secure
co-ordination of activities and efforts in the execution of work.
2. The second principle stresses the importance of direct personal contact in removing
misunderstanding and conflict between personnel or between departments. In contrast to
personal discussion, the written communication may result in the misinterpretation of words and
the growth of opposite view points between parties.
3. The third principle stresses that co-ordination is a continuous and ongoing activity that
permeates through each managerial function. A constant Endeavour must be made to
secure co-ordination in the management process, and some machinery of co-ordination
must always be there to give continued services.
4. The fourth principle calls for an integration of all efforts actions and interests towards
some common purpose for this co-ordination demands the establishment of reciprocal
relationship among all pertinent factor by way of balancing blending and dovetailing the
factors with one another.
TECHNIQUES OF CO-ORDINATION:
Co-ordination in the total performance is achieved through co-ordination
to efforts. As managerial functions are designed to get things done through the efforts of
other personnel, the managerial functions some phases of the work like communication,
supervision, leadership, departmentation and authority delegation have unique
contribution toward co-ordination. Effective communication is arranged not only by
building a net work of communication system but also by allowing wide participation
decision making on the part of affected persons.
Standing plans like policies and
proceedings as well as standing orders and instruction communicate the expected pattern
of behavior required for co-ordinate action. Because of checking, observation and
guidance involved in overseeing, supervision aids much in developing co-ordinate
efforts. Leadership provides individual motivation and persuades the group to have an
identity of interests and outlook in group efforts. Departmentation arranges for necessary
correlation and interconnection of activities in an analytical manner.
Apart from basic managerial functions, some special techniques are
employed to obtain desired co-ordination. Conferences and group meetings are an
effective device for securing co-ordination. Direct contact permits the management
members to exchange their ideas, prejudices and difficulties as well as to understand each
other’s view point.
CO-ORDINATION INTERNAL AND EXTERNAL:
Co-ordination is the blending of all efforts, activities and forces operating
within and without the enterprise. Co-ordination is necessary among individuals of a
group, among departments of the enterprise as well as among various functions and
activities.
INTERNAL CO-ORDINATION:
Although the list of fundamental management functions does not include coordination, yet managers discharge their functions in such a manner as to facilitate coordination in the enterprise. Strictly speaking, every managerial function is in exercise in
co-ordination. The basic functions contribute to co-ordination in the following way.
1. PLANNING
Planning is a well-thought out course of action to be taken for realizing
certain objectives though the available means. A good plan requires a perfect
harmonization between means and ends, and this in itself in an act of co-ordination. To
reach the ends, and this in itself in an act of co-ordination. To reach the ends all plans
include a program mapping out the orderly course of action. To draw up an orderly
course of action, all activities and efforts are to be interlinked. Interwoven and dovetailed
for their guidance towards the desired ends. Thus the plan of action is largely a matter of
co-ordination among various activities and efforts.
2. ORGANIZATION:
Organization is set up with the primary purpose of securing co-ordination
particularly inter-departmental and inter-personnel. Department and division are
established to ensure a smooth flow of work without friction, failing or delaying
correlated activities are generally placed in charge of a manager so that he can obtain
necessary co-ordination.
3. DIRECTION:
Direction is concerned with making the human efforts more effective and
productive through the exercise of leadership, guidance motivation supervision,
communication etc. Managers exercise leadership with the object of deriving team work
from employees and of directing their efforts towards some common channels.
Supervision is a cementing force for securing better performance from workers.
Supervisor gives assistance, advice or direction to the group so as to obtain cohesive
group efforts, Interpersonal relationship and group satisfaction are maintained by the
supervisor for improving productivity of personnel.
4. CONTROL
Control ensures the realization of planned objectives through the process
of work evaluation. The work progress is analyzed and appraised in terms of quantity,
quality, time use and cost. In other words control is to see how far co-ordination has
become effective in the organization. If any deficiency is found, corrective actions are
taken to bring back needed co-ordination into full play for putting the performance on the
proper track.
EXTERNAL CO-ORDINATION:
No enterprise operates in a vacuum. As a social institution, it is affected
by the ever changing social influence and the dynamic political and economic
environment in which the enterprise has to work.Whether the external forces are properly
recognized or not, they affect the working and even the very existence of the enterprise
continually. The external forces that usually exert a profound influence on the working of
any business may be stated as follows:
1. THREE INTERESTED PARTIES:
There are three interested parties the customers, the employees and the owner-whose
conflicting needs and demands have to be satisfied by managers of any business.
Consumers desire an uninterrupted supply of quality goods and services at fair prices and
expect a steady improvement in the quality of goods and services so as to give them a
higher standard of living. Employees demand fair wages, congenial working conditions,
steady employment, and social satisfaction from the work as well as protection against
hazards of accident sickness or old age. Owners want the conservation of assets, an
efficient and continuous operation of business fair returns on investments and an accurate
information on several aspects of the business.
2. OTHER ENTERPRISE:
An enterprise affects and is affected in turn by the activities of other
enterprises, particularly those in the same line of business. All enterprise purchase
materials and services from other enterprises. In this way, many enterprises are usually
chained together by their customer buyer relationships. Non availability of materials may
lead to forced stop-pages of production on the part of some enterprise.
3.
GOVERNMENT REGULATIONS:
The government at city, state or central level exerts potent forces that are
to be recognized by all managers Regulatory measures of the Government have become
so extensive in character that no enterprise can stay in business without becoming
thoroughly familiar with the socio economic trends which produces these restrictive or
prohibitive regulations. Compliance with various laws relating to tax, tariff, labour etc., is
an obvious necessity.
4. GENERAL BUSINESS ECONOMY:
The business horizon is pulsated with regular ebbs and flows of the trade
cycle. Enterprises must adjust themselves with the swings of the trade cycle through
economic forecasting and trend study. The minimum sales volume required for the
survival of the business over a period can be found out by utilizing the tool of “breakeven-analysis”
5. TECHNOLOGY ADVANCES :
An enterprise must secure the benefit of new technology which is being
made continually available in our society through research and inventions. Technological
advances contribute significantly towards the reduction of cost and the improvement of
productivity. An enterprise cannot go ahead and even stay in business, without
introducing these technological changes with the advent of the electronic and atomic age
technological co-ordination and the use of automation and computer have appeared to be
of great significance to the managers of tomorrow.
*******
CHAPTER –IX
COMMUNICATION
INTRODUCTION:As a result of their different jobs and ranks in organizations, people play different
jobs that also affect their communication patterns. For example, the job of public relations
director is quite different from that of lathe operator. The director’s job interest is focused
outside the organization toward the public, but the operator’s interests are focused narrowly on
day-to-day production activities. The director is a member of top management and draws a
substantial salary, but the operator has a more limited income. These differences are as much a
barrier to communication as geographical distance is. The public relations director probably feels
free to contact a vice-president either formally or informally, but the lathe operator may not feel
free to do so. If contact is made, the lathe operator will communicate differently form the public
relations director.
ORIGIN:
The word “communication” originates from the Latin word communiqué denoting
‘common’. Communication therefore involves in parting a common ideas or understanding and
covers any type of behavior resulting in exchange of meaning. The traditionalist generally
emphasized the communication purpose as being to provide the means whereby a plan can be
implemented and action co-ordinated towards the common goal or end result. The behaviorists
look upon communication as a means where by the persons in the organization can be motivated
to execute such plans enthusiastically and willingly. Effective communication requires an
appreciation not only of its meaning and nature and also of the barriers which harm effective
communication.
DEFINITION:
Communication is the process of passing information and understands from one person to
another. To communicate is to inform, to tell, to show or to spread the information. Thus
communication may be defined as inter-change of thought or information to bring about mutual
understanding and confidence or good human relations. It is the inter course by words, letters,
symbols or message. It is the inter change of facts, view points and ideas about unity of interest,
purpose and effort in any organization. Literally nothing happens in management until
communication takes place. The success of anyone who manages depends more on his ability to
communicate than any other skill.
THE COMMUNICATION PROBLEM:
Thus the communication problem in one of transmitting meaning from on individual or
group of individuals to another individual or group. Where X wishes to communicate to Y the
problems of perception and language come into operation. The communicator must translate or
code his perceptions into a message drafted from a language which is mutually understood.
Thereafter the message is transmitted through a channel to Y who, in his turn decodes the sounds
or symbols into his own perceptions.
THE PERCEEPTION PROBLEM:
Perception varies with an individual’s awareness of his environment as well as past
experience. Parsons generally perceive particular learned patterns. Even expectations generated
by previous perceptual experiences often result in extra phenomena being added which do not
actually exist in the perceived. Motives also influence perceptions as persons lend to select
elements essential to their needs and omit things which conflict with their preconceived ideas.
This results in differences in perception. Thus perceptive vary because of various reasons such
as:
1. Sensory factors like the ability of an individual to hear, see, smell and feel.
2. The world in which the people live such as the young against the old.
3. Different in sex is the perception of men and women.
4. Differences generated by educational and economic level and even regional locational factors.
Awareness of this problem of perception is essential to effective communication.
This is because, whilst transmitting perceptions and communicating the message the same
message must convey the same perception to the person to whom the message is communicated.
Perceptions are also affected by the language used which can cause distortions in reality.
LANGUAGE AND SEMANTIC PROBLEM
Language consists of a systematic body of sings, signals used to transmit meaning from
one person to another such as Gujarati, Hindi, Marathi, English, French and Tamil. Even more
code and mathematics are languages used for communication purposes. The systematic study of
the meaning of words is described as “semantics” and is the science of meaning. The basic
elements in communication are signs and symbols to which one responds, according
to
psychologists, through the conditioned response. For example the the sound of the dinner bell
caused the salivary glands to operate, being the cue or sign to remind one of food. If one has
learned to respond in this way to the ring of a bell.
Symbols are complex kinds of signs. Even words are symbols, as a word stands for an
idea which one learns to associate the word according to one’s perceptions. The problem of
communication is formed because people do not see the same meaning in a word as words are
interpreted differently according to one’s own experiences. Therefore, in communication, ideas
have to translate to the other person into a set of symbols whether they be words, numbers,
action or pictures. Thus, the sender, through speaking, writing, acting or drawing, transmit the
symbol to the receiver who receives them through listening, reading or observing.
COMMUNICATION PROCESS:
Communications are largely structured that is, they go through authorized channels. The
following are, briefly the communication channels in terms of structure namely,
1. DOWNWARD COMMUNICATION:
Communication downward in an organization means that flow is from higher to
lower authority. This usually is considered to be from management to employees, but
much of it also is within the management group. Downward communication is used more
by authoritative managers.
In downward communication, management has its disposal a multitude of
elaborate techniques and skilled staff assistance. Even with all this help, it has done a
poor job on many occasions. Fancy booklets, expensive films and noisy public address
systems often have failed to achieve employee understanding.
DOWNWARD ORAL COMMUNICATION:
1. Personal instruction
2. Lectures, Conference, Meeting etc.
3. Interviews, Counseling
4. Telephone and Public address system
5. Bells and Signals
6. Social functions including union activities
7. Grapevine, gossip and rumours.
DOWNWARD WRITEN COMMUNICATION:
1. Instruction and orders
2. Letters and memos
3. Circulars, notices, bulletins and news letters
4. Information racks and handouts
5. Hand-book and manuals
6. Annual reports
7. Union publications
8.
wall posters
UPWARD COMMUNICATION:
Information must be fed upwards to enable management to evaluate the
effectiveness with which its orders have been carried out as well as to become the basis
of fresh orders and directions. Where the superior has open mind or open door attitude
there are likely to be more upward communications. In fact, participative management
tries to foster this upward communication. If the two way flow of information is broken
by poor upward communication management loses touch with employees, needs and
lacks sufficient information to make sound decisions. It is therefore they are unable to be
supportive of work group needs.
UPWARD ORAL COMMUNICATION:
1. Face to face communication
2. Interviews
3. Telephone conversation
4. Meetings and conferences
5. Social affairs
6. Union representatives joint consultations
UPWARD WRITIEN COMMUNICATION:
As traditional management theorists stressed the co-coordinating responsibility of
the executive, they emphasized vertical communication flow and did not elaborate example for
difficulties in horizontal communications. Line staff conflict is an example of difficulties in
horizontal communications. The state of technology also indicates to a large extent the frequency
or content of horizontal interactions. For example, Simpson observed that communications
among foreman were mainly horizontal in view of the mechanized nature of their work.
INFORMAL COMMUNICATION:
When the employees are unable to communicate the required information to
higher authorities because of a communication barrier they may start to informal systems of
communication. Distortions may appear in the transmission of such message through grapevine
in the form of rumors and gossips. Such informal systems may be resorted to by the managers
when they find that it is not possible to gather information through established channels in
formal organizations. Thus informal communication co-exists with the formal communication
systems in the organization.
Informal communication or grapevine arises from social interaction. It is the
expression of their natural motivation to communicate. Its speed is very fast as compared to
formal communication. A study conducted by Keith Davis revealed that wife of plant supervisor
had a baby 11.00 p.m. A plant survey the next day at 2 p.m. showed that 6% of the management
personnel knew of it through the grapevine.
Grapevine is more influential either favorable or unfavorably. Managers of today
realize this and make use of it and try to influence it. They try to integrate its interests with those
of formal communication and to get on the grapevine in order to learn who its leaders are how it
operates and what information it carries. Thus they attempt to feed, water and cultivate the
grapevine. They feed facts into it so that motivation for rumour mongering is reduced. But some
people object to feeding the grapevine because they think that such action gives tactic
management approval to its mode of operation. The dark of the grapevine information is known
as “rumour”
BARRIERS TO ERRECTIVE COMMUNICATION:
A good manager is generally a good communicator although a good communicator may
not be a good manager. In fact, communication is part of management and has to be used at
every stage, whether it is in terms of planning or directing or controlling. Despite its importance
communication is often faulty because of certain barriers which exists and are not noticed or
corrected.
FAILURE OF COMMUNICATION:
Generally the following are the reasons or causes of failure of communication, namely:
1. Communication
The communication gap exists because mutual understanding in often
presumed. Merely because one has spoken, he presumes the other has heard. Even hearing is not
sufficient as the mind must receive the message. Besides, the receiver must perceive the message
in the same way as the communicator. However one’s perception is based cator and the recipient.
Thus the interpretation of the two persons involved in communication are different and cause the
communication gap.
2. INTERNATIONAL BLOCKS:
This is because all communications are not necessarily worth
disseminating. With centralization of information through computerization or otherwise, such
blocks will increase. This is because although the persons will receive all the information they
need to do their job, they will not have access to information they might have liked to have but,
in fact, do not need.
3. ORGANISATIONAL BLOCKS:
Communication is affected by the organizational hierarchy itself which
imposes the idea of channels through which communications officially must travel. Thus results
often in rigidity and hardship on members who must contact others through their immediate
superiors or subordinates.
4. STATUS BLOCKS:
To the position in the management a certain status is automatically
attached. This can no doubt be enhanced by the personality of the occupant of that position. Thus
status here reflects the degree of importance placed on an individual or on his position by the
others in the organization. Status is also indicated by status symbols such as air-conditioned
cabins, rungs on floor, number of telephones on the table and so on.
5. FAULTY EXPRESSIONS AND TRANSLATIONS:
Before communication takes place, something has happened which is
perceived and translated by the recipient before he become a communicator. The information so
received might have been translated faulty before communication took place.
6. FAULTY LISTENING:
Finally communication is complete only when it has entered the mind of
the recipient. Speaking is waste of time unless someone is listening. Listening require greater
mental effort than speaking.
This is often not realized whilst one hears with the ears, one listens with the mind.
Importance of communication:
1. PROMOTION OF MANAGERIAL EFFICIENCY:
In pointing out the important of communication, George R. Terry says “It serves as the lubricant
fostering the smooth operation of the management process. Management members deal with the
personnel in giving orders and instructions, in allocating jobs and duties, in approving work and
recognizing performance, in explaining objectives and policies and in seeking their effective cooperation.
2. AID TO PLANNING AND DECISION MAKING:
Planning and for that matters, decision-making are greatly are greatly dependent upon
communication. Facts figures, information problems or issues are conveyed to the managers
every and then through the medium of communication for enabling them to carry on their
operations.
3. STRENGTHENING CONTROL AND OPERATIONS:
In every step of control process, communication comes to the rescue of control. By conveying
standards collecting progress reports and suggesting corrective actions communication keeps
performance under the proper track through better controlling.
4. CO-OPERATION THROUGH UNDERSTANDING:
Good communication induces human being to put forth greater efforts in their
work performance. The importance of the work is required to be mentally accepted before the
doing of such work. That is the will to do must precede the actual doing.
4. BASIS FOR LEADERSHIP ACTION:
Leadership action is impossible without making communication between
the leader and his followers. The leader can only exert his influence through conveying ideas
feelings, suggestions and decisions to his followers. Followers too can convey their response
feelings, attitudes and problems to the leader through the medium of communication.
5. MEANS OF CO-ORDINATION
Communication helps in securing required co-ordination in enterprise operations
by building communication networks throughout the organization. As teamwork is essential for
the accomplishment of ideas in many cases, co-ordination appears to be of paramount
importance.
6. PROVISION OF JOB SATISFACTION:
Mutual trust and confidence between managers and operatives can be increased by the
communication of what the manager wants and what the employees perform. A clear cut
understanding provides job satisfaction to employees, creates their confidence in the ability of
managers and promotes their loyalty towards the enterprise.
CONCLUSION:
Communication is the transfer of information from the sender to the receiver.
With the information being understood by both the sender who encodes an idea which is sent in
oral, writing or visual form to the receiver. The receiver decodes the message and gains an
understanding of what the sender wants to communicate. Communication, is hurdled by barriers
and applying the guides for effective communication and listening
facilitates not only
understanding but also managing.
********
CHAPTER –X
SPAN OF CONTROL AND AUTHORITY
Effective organizing does not end merely with dividing the organization into
smaller homogeneous units. These units have to be wedded together and their efforts directed
towards an effective attainment of the preselected objectives. This knitting together of the
various unit is a accomplished through the establishment of vertical and horizontal relationships
and more in partially, through the sharing of authority affected by delegation. The authority of
the chief Executive of an organization is to operate a Company’s business has to be redelegated
to others. The first layer of such redelegation is to the top management team. Thereafter, the top
management team in its turn redelegates a part of each member’s authority to other managers.
Thus the concept of authority arises from the chain which ties together the actions emanating
from different persons in the organization.
AUTHORITY:
It is rightful power to command or to extract action from others in any
organization (Power to command others)
SOURCES OF AUTHORITY
1. The formal authority
2. The acceptance authority
3. The competence authority
LIMITS OR AUTHORITY:
1. SUBORDINATE’S COMPETENCY:
A manager cannot decide and enforce an activity which is not within the capacity
of the subordinate. It must be within the capacity of the subordinate to perform.
2. ACCEPTED PLANS AND POLICIES:
Authority must be within the limits of the organizations accepted plans.
3. SOCIAL CONSTRAINTS:
The activities decided must conform to the groups fundamental social
beliefs, creeds, habits and codes to result in effective exercise of the power.
3. LEGAL LIMITS:
Legislations may place several restrictions on the Exercise of authority by managers.
SPAN OF CONTROL:
The problem of the span of control rose its ugly head ages ago. The main
problems involved in posed in the question “how many subordinates can a manager manage
effectively”
FACTORS DETERMINING THE SPAN:
The limit to the number of subordinates who can be effectively managed
by a manager would largely depend up on the limitations of
1. Time 2. Place 3. Knowledge 4. Personality 5. Attention.
It is difficult to control the limitation of the span of time as the number of seconds cannot
be varied. This would include the time taken in planning communicating and decision making.
Those function again interlinked with the element of place. Mangers endowed with greater
knowledge of personality and having abundant energy can control more persons than others who
are not so gifted.
ADVANTAGES OF SPAN CONTROL:
1. Tighter control and closer supervision
2. Case of managing fewer and more specialized people and activities.
3. Availability of time to think and plan for future.
CRITICISM:
1. Additional costs of having more managers with their respective staffs.
2. Added complexity introduced n connection with communications by having more
levels.
3. Prevention of democratic participation within the organization.
****
CHAPTER –XI
CENTRALIZATION AND DECENTRALIZATION
Centralization and decentralization relate to the centralization or decentralization
of authority or the concentration or dispersion of authority. These words however are sometimes
used in practices to refer to concentration or dispersion of physical facilities or employees for
example, centralization of typing would mean that all the typists would be in one central pool or
location.
In practice, whilst an organization is small it exercises centralization of authority.
Here the top executives are in touch with all the activities and can keep proper control of what is
happening. However as the organization grows it becomes necessary to delegate authority
resulting in greater decentralization with increase in the size of the operations.
BENEFITS OF CENTRALIZATION:
1. PRESTIGE SYMBOL: - the Chief Executive gets more power prestige and feeling of
importance.
2. Greater uniformity centralization results in greater uniformity of policy, practice and
decision.
3. LOWER COSTS: - under centralization smaller number of specialists would be
required as all of them are centralized. Besides physical facilities required would be
less then if such facilities had to be extended at decentralization level.
4. TIGHTER CONTROL : With centralization it is possible to minimize the danger of
actions drifting and getting off the course in different divisions or units.
BENEFITS OF DECENTRALIZATION:
1. RELIEVES THE HIGHER EXECUTIVES:
A decentralized organization structure required delegation of authority which
relieves the top managers of their routine work. This is our answer to the problems of expanding
the size of the organization. The top executive can concentrate more on important decisions
relating to planning for the future. Whilst delegating the operating decisions to self contained
units with competent managers.
2. FACILITATES MANAGERIAL DEVELOPMENT:
It encourages the development of generalists facilitating succession into the
position of general managers
3. POSTERS CO-ORDINATION:It results in the promotion of intimate personal ties and relationships
which result in greater employee co-ordination and enthusiasm.
4. FACILITIATES CONTROL:
Profit centre concept can be used for controlling divisional operation by
measuring performance.
5. GREATER EFFICIENCY:
Trouble spots can be located and remedied more easily which results in
more efficiency
6. INFUSES MAXIMUM MOTIVATION:
By placing greater decision making power on down the line, initiative is promoted
and the employees are motivated to higher performance.
FACTORS DETERMINING THE EXTENT OF DECENTRALIZATION:
1. Size of operations
2. High cost decisions
3. Highly differentiated product lines
4. Availability of managerial manpower.
5. Top management philosophy
6. Environmental influences
7. Expansion plans of the organization.
CHAPTER –XII
LINE AND STAFF RELATIONSHIP
The explanation often given is that executives having line authority and
responsibility are responsible to ensure that the work is accomplished and in this they are
assisted by executives with staff responsibilities and authority who help in formulation of the
plans as well as by giving advice and suggestions. Thus the line executive is assisted by a staff
officer who is able to supply help in formulating plans and in detailing the action to be taken
because of his specialized training, experience and organization position.
Thus by line and staff organization structure, is meant an organizational pattern in
which individual specialists and group of specialists advise the line officers concerning certain
specialized aspects of their activities. In short staff officers provide specialized services to the
line officials. In this way the line officials are kept free to devote their attention to the execution
of the important aspects of their work. However, it should not be overlooked line relationship
exist within a staff department itself.
LINE AUTHORITY:
Thus in authority is created in any department by vertical growth. A
superior delegates his authority to a subordinate manager, who in turn redelegate authority to
other subordinate managers. In this way authority is delegated down the line to the very bottom
level of the organizational structure. This like authority is created by the process of delegations
setting up a chain of superior subordinate relationship down the line.
STAFF SUTHORITY:
Staff refers to those elements of the organization that help the line to work
most effectively in accomplishing the primary objectives of the organization.
LINE AND STAFF DEPARTMENTATION:
Often in practice line and staff are looked upon as types of departments.
Whilst this is true in the sense that certain departments, it is better to distinguish line and staff by
authority relationship rather than by activities grouping. Take the example of personnel
department which performs the helpful function of assisting the other departments in the
selection and training of staff in such departments. In this sense with regard to other departments
it perform a staff function. However within the department itself there are line relationships as
the personnel manager has line authority over his own subordinates.
The character of line and staff relationship become apparent in terms of the total
organization when the organization structure is viewed as a whole, certain departments clearly
perform mainly staff or advisory functions.
LIMITATIONS OF THE STAFF CONCEPT:
1. Absence of responsibility for results
2. Undermining of line authority
3. Disrupting unity of command
4. Feeling of a sense of superiority
CHAPTER-XIII
MANAGEMENT CONTROL
The management process aims at crystallizing certain objectives and providing for their
attainment more planning, organizing and motivating are meaningless unless the planned results
are secured. As an aid in this direction next function is controlling. Although planning
organizing, staffing, motivating generally precede the control stage it is better to visualize them
as a circular relationship controls the result of plans, objectives and policies laid down and yet
control many result in modification of future plans.
CONTROL PROCESS:
a. Establishment of standards for measuring performance
b. Checking or appraising of performance against such standard
c. Taking corrective action.
ESTABLISHMENT OF STANDARDS:
Standards are established to constitute criteria against which the results can be
measured the judged. In planning the overall objectives of the organization are crystallized,
which then become standards for evaluating the organization’s overall performance. These
standards may be fixed in:
1. Physical terms
2. Monetary terms.
TYPE OF STANDARDS FOR CONTROL:
1. PHYSICAL STANDARDS:
These physical standards like quantities in units and man hours, deal with non-monetary
measurements and are used more often at the operating level where materials are used, labour
employed and goods manufactured.
2. COST STANDARD:
Monetary measurements are also common at the operating level and give some monetary
value to the cost of the operation involved.
3. REVENUE STANDARD:
These standards attach a monetary value to the sales.
4. CAPITAL STANDARD.
These standards are expressed in terms of capital invested by the organization and are
thus related to the balance sheet.
5. INTANGIBLE STANDARDS:
These standards are expressed in neither physical non-monetary measurements and yet
they exist in an organization. They relate to the measurement of intangible such as competence
of managers and employees or the success of a public relation programme
6. APPRAISAL OF PERFORMANCE:
The next step in the control process is to check the performances against the
standard fixed. Thus the actual performance must be compared in the established or the
predetermined standards. This can be done by personal observation. In case of the standard set
are clear cut and means are available to measure results objectively appraisal of performance
becomes fairly simple.
7. TAKING CORRECTIVE ACTION:
Once actual performance is compared against the standards set and deviations
highlighted, the next step is to correct these deviations from the standard. However, it is not
every deviation from the standard. That needs correction. It is only significant deviations which
require immediate attention. Before taking the correction actions, it must be ascertained the
reasons for the occurrence of such deviations. The reasons which caused deviations can suggest
the appropriate actions. It is not enough to correct the mistake, it is more important to remove the
real cause of the difficulty.
**********
CHAPTER –XIV
COMMITTEES
In order to bring about co-ordination committees are used at the top and intermediate
levels of an organization of directors is an example of a committee. The executive committee of
the large organization usually exercises the following three important responsibilities.
1. It determines the broad, basic policies for the operations of the organizations.
2. It selects the man to carry out these operations.
3. It maintains a continuous review and seeks to make a fair and objective appraisal of the
conduct of business to make sure that the man selected is doing a good job.
TYPE OF COMMITTEES
1. Line and staff committees
2. Permanent and temporary committees
3. Formal and informal committees
4. Functional committees
ADVANTAGES OF COMMITTEES:
1. Securing integrated group judgment and knowledge
2. Inducting greater co-ordination and team work
3. Involving interested groups
4. Motivating through participation
5. Transmitting information
6. Fostering executive development
7. Consolidating authority.
DISADVANTAGES OF COMMITTEES:
1. Avoidance of decision
2. Diluted solutions
3. Higher cost
4. Delayed decision
5. Splitting the responsibility
6. Minority domination.
ESSENTIALS OF THE EFFECTIVE USE OF COMMITTEES:
The defects of the committee system indicate that the committees must be
appropriately constituted. The following are the suggestion for more effective use of the
committee system.
1. Clearly define the scope and authority of the committee
2. Prevent membership being too large
3. Select appropriate members
4. Select an efficient chairman
5. Prescribe effective procedure
6. Select suitable subject matter
7. Provide adequate assistance.
CHAPTER – XV
STAFFING
INTRDUCTION:
Of all the ‘M’ is in management of materials machines, methods and money the
most important is management of personnel for the manager. As it is the manager who
determines the ultimate mix of all the resources available to the organization, and the resultant
productivity. Every organization must therefore, ensure a continued existence of high quality
managers which above can assure the attainment of appropriate pre-selected adjectives. Thus
adequate staffing must be available to an organization, is an essential requisite for organizational
success.
Where an organization has a personnel department, the question arises as to who
is responsible for performing this staffing function. Although the personnel department by reason
of its expertise can help the staffing functions performed by every manager right form the top
man level down to the lowest manager having sub-ordinates. A Superintendent who selects his
foreman is performing the staffing function. Thus the responsibility for staffing must rest right
from the top executive downwards as all managers. The personnel department if any, only
performs the service function of helping line management in this activity.
MANAGERIAL MANPOWER PALANNING:
All planning require looking into the future so that adequate provision can be
made in terms of need planning is no exception. Continuity of successful operation of the
enterprise must be ensured. The top management must ensure that the organization has adequate
man power in terms of future organization growth.
MAN POWER PLANNING STEPS:
This need to anticipate and provide for future man power requirement has led to
the importance of man power planning as a vital function in the area of staffing or the personnel
function. Man power planning is obviously concerned with the optimum use of human resources
and can be of benefit at national level it would be concerned levels. For example at national level
it would be concerned with population economic development, provision of facilities for
education, geographical mobility etc., and would be the responsibility of the government. Man
power planning studies can even be undertaken at the trade association level for a particular
industry. What we are concerned with here is an individual organization desiring to anticipate its
manpower requirements and provide for the smooth working of organization. Man power
planning involves the following steps:
1. To determine the period of forecasting requirements of manpower in the future.
2. From the number available at the commencement of the period, the next step is to
deduct the expected wastage through death, resignation, retirements and discharges.
These two companions would result in an ascertainment of the manpower
requirements at the end of the period concerned.
3. In case of shortages, the next step would be to consider how such shortages are to be
met through fresh recruitment and or promotions from within and whether any training or
development facilities would be required for this purpose.
4. Where surpluses are anticipated, the next step would involved deciding how these
surpluses will be dealt with, like through early retirements, discharges, lay-offs etc.
In this way man power planning seeks to ensure that the required personnel possessing
the necessary skills are available at the right time. Management can ensure control of labor costs
by avoiding both shortages and surpluses of manpower through the proper man power planning.
It is stated that under-estimation either regarding quality or quantity of manpower requirements
would lead to shortfalls of performance. Whist over estimation would result unavoidable costs to
the organization.
It is stated that it is necessary to project deep in to the future for skills, which
would require longer period. Too long period selected are likely to be less accurate in view of the
inability to predict effectively the likely changes in the economic social and technological
spheres. Keeping this caution in mind, forecast can be made short-term upto two years medium
term for a period of three to five years and long term plans longer than five years. Reasonable
accuracy can however be expected only in case of short term forecasts upto two years. In any
event such forecasts ought to be periodically reviewed and readjusted.
SOURCES OF RECRUITMENT:
Basically the sources of recruitment can be divided into two kinds namely:
1. From inside the organization 2. Outside sources
From the motivational point of view new blood in the organization is
undesirable, particularly when existing personnel can be absorbed into higher position. However,
when the inside candidate are too advanced in age of do not have the requests skills, new staff
have to be selected from outside the organization.
BENEFITS OF RECRUITING FROM WITHIN:
1. It ensures stability from continuity of employment.
2. It creates a sense of security among the employees
3. It builds loyalties among the employees
4. The valuable contracts with major suppliers are kept.
5. The person are familiar with the organization’s activities and requirement
6. It encourages other staffs in the lower ranks to look forward to rising to a higher
levels
7. if will enhance the motivation of the existing employees
BENEFITS OF USING EXTERNAL SOURCES:
1. Fresh viewpoints
2.New talents
3. Varied experiences
4. Old habits are changed.
EXTERNAL SOURCES:
1. Advertisement in the newspaper and magazines.
2. Placement agencies
3. Supplies
4. Educational Institution
5. Professional Associates.
6. Friends and relatives
7. Trade unions
SELECTION PROCESS:
The selection process involves certain steps. Once the number of staffs required is
determined by an analysis of the needs highlighted in advance through a proper man power
planning programme. The first step in the selection procedure is a Job Analysis from which will
be prepared a job description the job in detail on to what the employee will have to do including
the difficulties that may have to face in performing the job. In the light of this job description a
man specifications can be prepared prescribing the qualities required in the person best suited to
fill such a job. Thereafter the question of sources of recruitment whether internal or external
must be considered.
Where selection is made externally an application blank or questionnaire
has to be prepared keyed to man specification. The completed application blank, if properly
constructed can give information as to how fair the applicant is suitable in terms of the man
specification. The application blank can also subsequently constitute a history sheet giving the
employee’s background which may be useful for future reference. A careful scrutiny of the
application blanks received can results in the rejection of many of the applications.
The next step is generally is to select a few applicants for a personal
interview. At the interview the officials come face to face with the applicant and can size up
certain characteristics which are not obvious from the printed application blank. Psychological
tests are sometimes utilized by certain organization. The idea of these tests is to measure the
abilities, aptitudes emotional attitudes and individual patterns of behavior. However, these tests
are not too reliable as they usually measure interest more than ability and can be easily be faked.
After screening the list of possible candidates the real job of evaluating the
candidate commences.
1. Exhaustive checking of references and recommendations received.
2. Having the candidates interviewed by the other members of the management team for
their impressions and recommendations.
3. Final interview by the board or chairman or the board in case of higher appointments.
Based on the final interview, recommendation can be sought form the
board members .A firm decision must be taken for selection the right candidate for the
organization .once a parson is selected for the organization, concern department head can be
asked to issue a letter of appointment which should clearly specify all details regarding the job
when the candidate actually report to the job, a induction program must be arranged so as to
induct himself to the organization without any difficulty. During the induction programme clear
orientation about the organization, his job, nature of work, to whom to report, etc., must be
clearly given as a matter of policy. Thus the staffing function can be implemented in the
organization.
Chapter – XVI
Leadership
In traditional management theory, the leader has always occupied central
role and a people have been made to identify a leader type or a person possessing certain
qualities which would make leader any where under any conditions.
Leadership Styles:
Research has indicated the existence of different leadership patterns or
styles among leader and among the organizations and the leadership style which emanates is
determined largely by the larder’s own philosophy and personality as well on his experiences and
value system. In addition it depends on the type of his followers as well as the atmosphere
prevailing in the organization itself.
Positive Vs. Negative Leadership:
One way of distinguishing style is to divide them into two types namely 1)
negative 2) positive on the basis of the type of approach adopted by the leader to influence his
subordinates as followers. The negative approach adopted by the leader using fear, force towards
attaining the organizational goals. This type of leadership relies heavily upon control and the use
of formal authority of the leaders position to fine repairmen, discharge, hold upto ridicule his
subordinate. The positive approach on the other hand is based mainly up on regard, incentive and
possible gain the follower, who directs his energy towards the goals prescribed by the leader.
The positive type of lairdship is generally less used because of its complexity as it is based
fundamentally as an analysis of human needs for maximum motivation. It requires a study of
individual to ascertain his needs and wants to provide a work situation which enables the
follower to satisfy such needs simultaneously satisfying the needs of the organization. This
stresses the necessity for an integration of goals and objectives.
Autocratic Leadership:
In case of the autocratic leader decision making is solemnly kept with
himself. He heavily uses negative influences gives the order which the subordinated must take
resulted in the employers becoming resentful and quarrelsome. Basically the autocratic lesder is
one who makes his subordinates act as directs without scope for the subordinates to influence the
decision. He uses fear, threats and authority and insists on getting his own way. This style is
based on the assumption that the leadership is the right vested in a particular employee to the
extent of his authority.
Basically the autocratic type presumes that people are generally lazy and
avoid work and shrink responsibility. It stress that basically people work for money and wants
security. Based on this assumption the leadership style which emanates is tighter control and
supervision over the subordinates who are driven by fear rather than through job satisfaction.
Besides it can cause frustration and final result might be that the employs will work just to
enable them to escape punishment.
Democratic Leadership:The democratic type of leader operates differently in that he tries to lead
mainly through persuasion and example rather than through fear status or force. He encourages
participation in decision making.
The following are the assumption for democratic leadership:
1. External control and the threat of punishment are not the only means for bringing
about effort towards organizational objectives. Man will exercise self direction
and self control in the services of objectives to which he is committed;
2. Commitment to objective is a function or reward associated with their achievement.
3. The average human beings learn under proper condition not only to accept but to
seek responsibilities:
4. The average human being does not inherently disline work.
Laissez-Faire Leadership:
In case of Laissez-faire leadership more anxiety and tension may be caused as no
direction or control is exercised over the people and the organization is likely to flounder. In case
of a laissez-faire leadership the responsibility for decision making is sought to be passed on the
leader to or no direction is passed.
Paternalistic Leadership:
This style of leadership adopts the paternal or fatherly attitude as the right one for
the relationship between leader and his group. Its objective is to help, guide, perfect and keep the
followers happy. It emphasis good working conditions, fringe benefits and employee services in
the desire to be good. This type of leadership style is very much successful in Japan in its
cultural background.
Chapter – XVII
Social Institutions and business organization
The principles of management apply to both social and business institutions which
includes Government Circuitries also.
Social institutions are the organization established with the view of providing the
required services without the profit motive. Services are same both in the social institutions and
the business organization. But the absence of profit or gain is vital significance in the social
intuitions.
Regarding the style of management the principles are the same as with of the business
organization. In this context we will discuss some of the important social institutions.
1. Hospital :
In modern India hospital is considered as business organization because of the
profit concept which is recently introduced in the modern hospitals in India. However, in
considering out population and the need for health care and the health care personnel’s. We can
still consider hospital is a social institution by which service must be rendered through this social
institution to the common people. The administrative aspect is as same as with the business
organization. Every social institution having their objectives defined clearly to attain the said
object the principles of management must be introduced to this institution. Thus the
organizational objectives could be achieved with the maximum efficiency. If the management is
not introduced. There will be a deep crisis which will result in widening up of the gap. In order
to bridge this gap the style of management is extremely important.
2. EDUCATIONAL SERVICES:
If we consider the case of our country, the population and the available facility for our
children to study in schools and colleges the gap is very wide. In such institutions the
principles of management is not introduced. There will be a deep crisis which will
result in widening up of the gap. In order to bridge this gap the style of management
is extremely important.
Business Organizations:
The main different between the business organization and the
social institution are the element of profit. To achieve the maximum profit with the minimum
resources which can be rightly termed as the management principles. Business organization my
not have the only objective of profit. But also social objectives towards the employees,
consumer’s government and the public at large. In such cases it is extremely useful not only to
the organization but also to the common people. Ultimately this will result in enhancing the
standard of living among the people in the country which will lead to prosperity of the country.
Assignment Questions
Answer all the questions
1. Define Management how is it different from ‘administration’ Trade the growth of scientific
management.
2. (a) Describe the process of decision- making
(b) Differentiate between programmed and non-programmed decisions.
3.
Elaborate on the concern of “need hierarchy” Describe Maslow’s theory and state how
employee in your organization can be motivated.
4.
What do you mean by “informal” communication? Describe its influence on the
organization how can it be made beneficial to the organization.
5.
country
What are the different leadership styles? Which style would best suit (i) our
(ii) your organization? Explain reasons.