MANAGEMENT

IN
ORGANIZATION
-By Sushant Sharma
1. Forms of Business Enterprise Risk /
Income /Management.
2. Management Theories Management Theories
3. Management Techniques 3. Management Techniques
4. Nature &Purpose of Management
5 Management Processes in 3D
6. Managerial Skills /Functions
PURPOSE OF STUDY
Work organization
-for Community goods &services
-for Shareholders- Dividends
-for Owners- Profits
-for Employees- service------------
jobs careers ,i ncome ,perks ,
welfare
BUSINESS ENTERPRISE
ENTERPRISE GOAL
OPTI MUM EFFI ECI ENCY
AND EFFECTI VENESS
(DI VERSI FI CATI ON
,EXPANSI ON /CAPI TAL
I NVESTMENT )
ENTERPRI SE GOAL
PROFITABILITY
NECESSARY FOR
SURVIVING
MEASURE OF SUCCESS BUT NOT
A GOAL
Three elements of form of ownership; Risk, Income, and Management.
In the individual proprietorship the three are centered in one man who risks his
own capital , undertakes the management, andreceives all the income.
Under the partnership form, the partners as a body, like the individual owner,
undertake the risk and management and receive the income; but among
themselves there may be an infinite number of combinations. One partner, for
instance, may supply all of the capital; another may supply the management;
andtheymay divide the income in any manner agreedupon.
Under the corporate firm the risk is taken by the various creditors and
shareholders who supply capital under the conditions that have been agreed
upon.
These creditors and shareholders divide the income in rough proportion to their
risk. The management, however, is not necessarily retained in the hands of the
people who contribute the capital, but may be turned over to directors and
officers who are not personallylarge shareholders.
The tendency has plainly been to separate the supplying of capital for the
business and the management of the capital so that they need not necessarily
be joinedin one man or even in a small groupof men.
Types of Business Organisations
Private Sector
Public Sector-
Controlled by State
Govt.
J oint Sector
State Enterprises-
M/s BHEL ,
IRCON,SAIL
Public Private
Organization
Capitalist Form
Non Capitalist Form
1 Propri etary Firms/
Proprietorship
2 Partnership
3 Joint Stock Company
Private Ltd. Co.
Public Ltd. Co.
Co-operative
Organizations
Forms of Business Enterprise
1. Proprietary &Partnership Firm
- Formed by individual /group of people
- Owners own capital
- No sharing of Profits/loss
- Unlimited Liability -if he fails to clear his business debts- all his private property attached to
creditors
- Easy to form Not subjected to any legislati on
2. Joint stock Companies
- Capital base is created by sale of shares
- Voluntary incorporated association of shareholders /stockholders who contribute to the common
stock
- Limited Liability Liability of the shareholders is limited ,hence risk faced by them are reduced.
- For Pvt Ltd company , shareholders cannot be more than 50.
- Shares not quoted on stock exchange
- Public Ltd Co. May be tightly /lightly held by a family
- Public sector Co. All shares held by Govt./Govt. controll ed Cos.
-
3. Multinational Corporations
Adv: 1. Business opportunities in many diff countries
2. can raise money for its operations worldwide
3. Can establish production overseas wherein access to natural resources
4. can recruit people worldwide labour pool
4. Entrepreneurship -
-The individual owning outright his own business and usually managing i t himself without
much cooperation or assistance.
-Entrepreneur undertakes economic ventures, owns ,organizes, promotes &manages it
taking risk of business
-
Attributes of an
Entrepreneur
1. Opportunity finding Maximization of
Opportunities
2. Problem Facing
3. Will to Manage
4. Need for Power
5. Capacity for Empathy
MANAGEMENT THEORIES
1. Scientific Management Theory (Fredrick Taylor)
2. Human relation Theory ( Elton Mayo)
3. Theory X &Y (Mc-gregor)
4. Motivation Theory (Herzberg)
5. Management System Theory ( Fayol)
6. Need Hierarchy Theory (Maslow)
7. Mckinsys 7s Approach
1. Scientific Management Theory (Fredrick Taylor)
- No inherent conflict between labour andemployers.
- Labour wanted more income,
- Employers wanted more profits
- Consumer wanted a better price.
- All benefited-Plant itself producedmore.
- Real problem -determining a fair days pay for a fair days
work.
- Derive Quantitative method
- worker could know the basis of his wages, which his income
movedup
- increase of efforts put in then he would be more rational and
more production-oriented.
- To be conducted by the employer
Scientific Management Theory (Fredrick Taylor)
It is for employers to establish a scientific approach to
management which he saidwas based on five basic rules:
i. Replacingthumb rule with organisedknowledge.
ii. Obtainingharmonyin group actionrather thandiscord.
iii. Achieving co-operation of all rather than chaotic
individualism.
iv. Working for maximum output rather than restricted
output.
v. Developing of workers ability to their fullest extent
possible for their own and their companys prosperity.
Further Taylor advise the employers to establish the following
four management practices:
i. Scientific management of work (Time and Motion
Studies).
ii. Clear procedures of work (Authority, Instructions,
Training, Manuals of Operations).
iii. A rational wage structure (making wage systemreflect
individual merit, moving up income with increased
inputs, incentive systems, pay scales etc.)
iv. Right man for the right job (systematic employment,
recruitment, selectionpolicies).
Scientific Management Theory (Fredrick Taylor)
-1st experimented by Elton Mayo (1924-44).
-The General Electric Plant at Hawthorne in 1923 was undergoing high
labour turnover, absenteeism and production fall for no explicable
reasons.
-Case- I Reason- Fatigue as well as lack of proper lighting and other
physical amenities at the work place. The needful was done.
- The production went up but the problemwas that while these conditions
were not present in the control group, its production also went up. This
indicated that the increased production could not be attributed to the
improvement in working conditions only. Mayo who was involved in these
experiments discovered that it was not the fact of giving better conditions
but the feeling that this action created amongst the employees that did the
trick. The employees felt the company cared for them.
2. Human Relations Theory (El ton Mayo)
-Case 2 Later when Mayo asked workers to elect representatives who
would sit with the management to decide on the introduction of changes in
daily working hours and other conditions of work, the output curve soared
up without regard to changes whether they were made or not. This
increased output was attributed to participative management.
-Case- 3 Another department of the same company had a different
problem. Whatever management did to improve production never worked.
Attempts to get tough, only made supervisors more disliked.
-- Everyone seemed to be busy and working but the production curve
never went up. No one reported on any one and no one got caught. On
some days production went up for no particular reasons and on other days
it went down also for no particular reasons.
Human Relations Theory (Elton Mayo)
Case-3 contd..
- The management were baffledas they did not feel in control of the situation.
- Mayo studied the situation and identified the role of informal groups in shop
floor management.
- He found that people organise themselves into small groups on the basis of
interests (caste, village, origin, language etc.) and someone emerged as a
leader of the group. Group pressure and loyalty to the group developed and
the informal group leader had more say in all matters. Whenever he felt good
about the company the production went up and on the other days it went
down.
- Mayo said that a management should accept the role of informal groups and
informal leaders in management. Informal group leaders should be identified,
accepted and involved in the management process. The formal management
i.e. managers, engineers, supervisors should be trained in human relations in
order to achieve better production.
Human Relations Theory (Elton Mayo)
3. Theory X and Y (McGregor)
Theory X of McGregor was a label for the traditional
management approach of pushing people and extracting
work out of them. It was basedon the premise that:
i. People did not like to work basically.
ii. Some kind of club, authority, threat of punishment,
needed to be held on their heads to make sure that
theyworked.
iii. People did not like to think for themselves. Therefore
theyshouldbe toldwhat to do.
Theory X and Y (McGregor)
In contrast to that theory, McGregor, based on his researches,
established what he called theory Y which was based on the
followingpremise:
i. People do not like or dislike work as such. Rather they
develop an attitude towards work based on their
experience in the past.
ii. While authoritarianmethods can get things done in the
shout it will not work in the long run.
iii. People select goals for themselves (what they want to
be to do, to achieve) if they see the possibility of some
kindof reward in it, material or psychological.
Theory X and Y (McGregor)
iv. Once a person sets a goal for himself he will pursue it
vigorously at least more than what a supervisor can
otherwise pressurise himto do.
v. Most people, under right circumstances, seek responsibility
for self-fulfilment. They do not shun responsibility.
Commenting on Theory X and Theory Y, McGregor said that they
needto be seen as a continuumandnot as two ends of a situation.
-He said that Theory y was not an invitation to disorder or softness or
abdication of management responsibilities.
-Theory Y recognised authority as a method of managerial control to be
used along with other methods such as self control, self-discipline and
self- regulation.
- The most powerful motivating force to an individual was the possibility of
financial gains coupled with the possibility of personal growth.
Fredric Hertzberg Two Factor Theory
Frederick IrvingHertzberg (1923 2000) -noted psychologist who became
one of the most influential names in business management.
Motivation-Hygiene Theory / Two factor theory (1959) of job
satisfaction.
According to his theory, people are influenced by two factors:
Satisfaction, which is primarily the result of the motivator factors.
These factors help increase satisfaction but have little effect on
dissatisfaction.
Dissatisfaction is primarily the result of hygiene factors. These
factors, if absent or inadequate, cause dissatisfaction, but their
presence has little effect on long-termsatisfaction.
Motivator Factors
Achievement
Recognition
Work Itself
Responsibility
Promotion
Growth
Hygiene Factors
Pay and Benefits
Company Policy and
Administration
Relationships with co-workers
Physical Environment
Supervision
Status
J ob Security
Salary
Management System Theory (Fayol)
Perhaps the real founder of modern management is the French
industrialist, Henri Fayol. Fayol wrote as a practical man of
business reflecting on his long managerial career and he set down
the principles based on his observations and experience. He said
that all activities of an enterprise could be divided into 6 groupviz.
i. Technical - production
ii. Commercial - buying, selling and exchange
iii. Financial - creatingresources andmaking
optimal use to capital
iv. Security - protectionof property, persons and
health
v. Accounting - book keeping statistics and feedback
vi. Managerial - planning, organisation, direction,
coordinationandcontrol
Management System Theory (Fayol)
Fayol pointed out that the first 5 activities are well-known and they
existed in businesses of any kind and size. Therefore he devoted
his attentionto the analysis of the 6
th
i.e. Managerial.
To being with Fayol said that persons responsible for management
must have the required managerial qualities which he listed as
below:
i. Physical i.e. good health and vigor
ii. Mental i.e. ability to understand, learn, judge, adopt and predict
iii. Moral i.e. energy, firmness, willingness to accept responsibility,
initiative, loyalty, tact, dignity
iv. Educational i.e. expert knowledge of ones own field and ability
to work with the techniques of other disciplines.
v. Technical i.e. expertise in ones own profession
vi. Experience i.e. performance in the past which a person is able
to analyse, codifyand use for work infuture.
Management System Theory (Fayol)
Thereafter, Fayol went on to identify and establish the following
fourteengeneral principles of management:
- Division of work
- Authorityand responsibility
- Discipline
- Unityof command
- Unityof direction
- Subordinationof self-interest to the corporate interest
- Humanrelations
- Centralisation
- Chainof authority
- Orderliness i.e. place for everything and everything in place
- Quality
- Stabilityof tenure i.e. offeringa career
- Initiative
- Teamsprit
MAN IS NEVER CONTENDED
When
fulfilled
When
fulfilled
Need for:
1. Hunger
2. Protection against nature &
3. Well being of self & family
Need for:
1. Social relationship
2. Belonging to a group
3. Recognition & Promotions
Need for:
1. Power
2. Social & Societal
esteeming
3. Psychological feeling of
being wanted desired &
recognized.
Needs
Hi er ar chy
Theor y
(Masl ow )
Needs Hierarchy Theory (Maslow)
Before this need is fulfilled another need emerges. Thus one need
replaces another and the process continues. It is in pursuit of needs that
people keep striving to get more and more.
Example :
If Ford or Rock feller or Birla work so hard for so long every day, certainly
they do not work for money.
Money is worth what it can buy and these people perhaps have all that is
worth having. Therefore, the needs that motivate themto keep striving to
work hard, to expand, must be of a different order altogether.
Maslow suggested that a management must recognize this reality of
needs. You cannot take people for granted.
You may have given the best today but the best of today has got changes
of becoming the minimumfor tomorrowand ground for further demands.
Todays motivators are likelyto become tomorrows hygiene factors.
Meaning of Management
Management is generally defined as the art and science of
getting things done through others. This definition
emphasizes that a manager plans and guides the work of
other people.
It is a process of utilizing physical &human resources to
accomplishdesign objectives
Relying on group effort for better results more than what is
producedby sumof total of individual effort
Management is the process of designing and maintaining
an environment in which individuals, working together in
groups, efficiently accomplishselectedaims.
Management Process
Process refers to a set of activities sequentially arranged
anddesigned to provide a specific output.
Difference between a function and a process is former is
focused on tasks, jobs, people, structures & latter on
activities.
For example, task of construction is important but wont
amount to much unless passes through planning,
organizing, staffingand controllingprocess.
Management is the process of planning, organizing,
leading, and controlling the efforts of organization
members and of using all other organizational resources to
achieve stated organizational goals. Management focuses
on the entire organization from both a short and a long-
termperspective.
Management is an organizational function, like sales,
marketing or finance. It doesn't necessarily mean
managing people. We can manage ourselves or the
material assigned to us at work. If you managed a project
very well on your own, it would mean that youdid the job in
a well-organized, efficient.
Meaning of Management
Management Process Management as a
matrix of functions and process
Function
Process
Technical Financial Marketing Personnel
or
HR
Procurement
Planning
Organising
Staffing
Coordinating
Controlling
Need & Purpose of Management
The need of management is:
Goal setting
Helping in achieving objectives
Operational strategy
Optimum utilization of physical resources
Optimum utilization of human resources
Reducing costs, time and efforts
Maintaining the quality of end product
Increasing the satisfaction
Securing the future plans
Policy making
Financial control
Responsibility of success
Innovation and specific
The Purpose of Management
The basic purpose of management is to learn about WHY
W WHAT TO MANAGE?
H HOW TO MANAGE?
Y YOUR GOAL AND PATH
The purpose of management is to align, encourage,
inspire, develop, and sustain individual contributors so
that organizational goals can be met. This is what should
be aspiredto in any healthy organizational culture.
Management must actively enable their resources to do
the tasks required of them.
Management is making the best use of resources
available (including human resource) under any given
circumstances for achieving the organizational goals.
The purpose of management is to identify opportunities
and threats in the economic environment and devise
strategies and vision to informand drive an entity's choice
of organizational goals. Management is further
responsible for providing the resources, people,
organization structure, processes, and motivation, and
leadershipneededto achieve the goals identified.
The purpose of management is to offer a purpose to an
organization, and within that context, to develop an
organization best suitedto achieving that purpose.
MANAGEMENT
TECHNIQUES
1.WHY TO BENCHMARK
2. WHAT SHALL WE BENCHMARK
3. WHAT MEASUREMENTS SHALL WE
APPLY
WHO SHALL WE BENCHMARK AGAINST
AND HOW
4. WHAT IS THE SCOPE AND NATURE OF
PERFORMANCE GAP
5. HOW CAN WE TRANSLATE THE DATA
INTO REAL IMPROVEMENTS
(I) BENCHMARKING
-A benchmark is a standard of performance
-Benchmarking is a process of continuously
comparing and measuring an organization
with leader anywhere in the world, to gain
information that will help it to take action to
improve its performance
Types of Benchmarki ng
Internal Benchmarking
- Comparisons with other parts of the same organizations-
departments, other sites, other companies within the same group,
either inthe same countryor abroad.
- Straightforwardtoarrange andfairlycommon.
- Easy to obtain all the information necessary for a good comparison
to be made.
- It the operations are similar across the different sites the data will
be instantly relevant and usable, but it is unlikely to yield
improvements, whichmeet worldbest practices
Competitors Benchmarking is muchmore difficult.
- An information obtained is likely to be very relevant but, for
reasons of confidentiality it will be almost impossible to get a full
pictureof howa direct competitor operates.
- Lookingat output andavailable figures cangive some information,
but they can also mislead if the processes that deliver the outputs
cannot be determined.
- Some of the larger organizations, however, do exchange
information in selected areas in the interest of jointly coming to
terms with best practice.
Types of Benchmarki ng
Functional Benchmarking
-Involves making comparisons with typically non-
competitive organizations, which carry out the same,
functional activity that you are interested in. Examples are
warehousing, procurement, catering etc.
-Advantages; functional leaders are easy to identify in
many areas: confidentiality is not usually an issue:
approaches which may be novel for your industry can be
discovered: two-way partnership can be developed.
-Weighting against these is likely to be problems in
adopting and adapting their practices for your operation.
Generi c Benchmarking
-goes a step further and may compare business processes,
which cut across various functions and in quite different
industries.
-Opportunities discovered by this process are likely to be most
innovative and to create breakthroughs for unprecedented
improvement.
-integration of novel concepts into a different industry is also
likely to be most challenging.
Best Practices
1. The approach towards benchmarking shall be to understand the
idea/ purpose behind the best practices and then adopt those ideas
to fit into our own processes and culture.
2. Competitors benchmarking shall be preferred only when
information obtained is likely to be relevant as it is almost impossible
to get full picture of how a competitor operates
3. Related processes to benchmarking impact on other processes
shall be evaluated
4. Benchmarking shall be used as motivational tool for employees
for innovation and breakthrough thinking.
Process - Consists of Policies .Procedures ,steps ,Technology
&personnel's needed to carry out significant segment of operation
within an organization
-Structured ,measured set of activities designed to
produce a specified output for a particular
customer/market
Business Process- Sequence of tasks &functions which together
leads to the objectives that contribute to the success of organization
Re-engineering Transformation of Company from the one based on
function (such as accounting /marketing /manufacturing ) to the
process based such as procurement of a machine , fulfillment of
customer expectations
- analyzing and altering the basic work processes of a business
(II) Business Process Re-engineering
(II) Business Process Re-engineering
Fundamental rethinking why do we do and
what we do ,
Radical redesign Getti ng to the root problem
achieve dramatic improvements in critical
,contemporary measure to cost, quality
,service and speed
Management Process
Process refers to a set of activities in logical
sequential l y arranged and designed to provide a
specifi c output.
This process is focused on tasks, jobs, people,
structures & latter on activities. These
management processes have to pass through
Planning, Organising, Staffi ng, Directing and
Controlli ng processes.
Planning Predetermining a course of action for
accomplishing organizational objectives.
Organizing Arranging the relationship among work units for
accomplishment of objectives and the granting of
responsibility & authority to obtain those objectives
Staffing Selecting and training people for positions in the
organization
Directing Creating an atmosphere that will assist and
motivate people to achieve desired end results
Controlling Establishing , measuring and evaluating
performance of activities towards planned
objectives
MANAGEMENT PROCESSES
1. Setting objectives
2. Making assumptions
3. Creating options/ alternatives
4. Selecting a course
5. Formularize derivative plans
6. Estimate resource requirement and their allocation.
1. Planning Steps
Levels of Planning
Inconstruction, three levels of planning are there.
1. Corporate Planning - This planning is done in
corporate level or by Top Level Management.
2. Project Planning This planning is done by
Middle Level Management.
3. Site Planning - This planning is done by Low
Level Management.
Types of Planning
Strategic Planning:
-Analyzing competitive opportunities and threats, as well as the strengths and
weaknesses of the organization, and then determining howto position the organization
to compete effectivelyin their environment.
-Strategic planning has a long time frame, 3years or more
-Strategic planning generally includes the entire organization and includes formulation
of objectives. Strategic planning is often based on the organization's mission, which is
its fundamental reason for existence.
-conductedby organization's top management.
Tactical Planning:
-Intermediate-range planning that is designed to develop relatively concrete and specific
means to implementthe strategic plan.
-Middle-level managers oftenengage in tactical planning.
-Tactical planning oftenhas a one- to three-year time horizon.
Operational Planning:
-Assumes the existence of objectives andspecifies ways to achieve them.
-Short termplanning that is designed to develop specific action steps that support the
strategic and tactical plans.
-Timehorizon, fromone week to one year
Rolling Planning : Refers between short &long-termplanning.
Contingency Planning : Emergencyor standby plans.
Steps in Planning Function
Planning function of management involves followingsteps:-
1. Establishment of objectives
1. Planning requires a systematic approach.
2. Planning starts with the setting of goals and objectives to be achieved.
3. Objectives provide a rationale for undertaking various activities as well
as indicate direction of efforts.
4. Moreover objectives focus the attention of managers on the end results
to be achieved.
5. As a matter of fact, objectives provide nucleus to the planning process.
Therefore, objectives should be stated in a clear, precise and
unambiguous language. Otherwise the activities undertaken are bound
to be ineffective.
6. As far as possible, objectives should be stated in quantitative terms.
For example, Number of men working, wages given, units produced,
etc. But such an objective cannot be stated in quantitative terms like
performance of quality control manager, effectiveness of personnel
manager.
7. Such goals should be specifiedin qualitative terms.
8. Hence objectives should be practical, acceptable, workable and
achievable.
2. Establishment of Planning Premises
1. Planning premises are the assumptions about the lively shape
of events in future.
2. Theyserve as a basis of planning.
3. Establishment of planning premises is concerned with
determining where one tends to deviate from the actual plans
and causes of such deviations.
4. It is to find out what obstacles are there in the way of business
during the course of operations.
5. Establishment of planning premises is concerned to take such
steps that avoids these obstacles to a great extent.
6. Planning premises may be internal or external. Internal includes
capital investment policy, management labour relations,
philosophy of management, etc. Whereas external includes
socio- economic, political and economical changes.
7. Internal premises are controllable whereas external are non-
controllable.
3. Choice of alternative course of action
1. When forecast are available and premises are established, a
number of alternative course of actions have to be considered.
2. For this purpose, each and every alternative will be evaluated by
weighing its pros and cons in the light of resources available and
requirements of the organization.
3. The merits, demerits as well as the consequences of each
alternative must be examined before the choice is being made.
4. After objective and scientific evaluation, the best alternative is
chosen.
5. The planners should take help of various quantitative techniques to
judge the stability of an alternative.
4. Formulation of derivative plans
1. Derivative plans are the sub plans or secondary plans which help in
the achievement of main plan.
2. Secondary plans will flow from the basic plan. These are meant to
support and expedite the achievement of basic plans
3. These detail plans include policies, procedures, rules, programmes,
budgets, schedules, etc. For example, if profit maximization is the
main aim of the enterprise, derivative plans will include sales
maximization, production maximization, and cost minimization.
4. Derivative plans indicate time schedule and sequence of
accomplishing various tasks.
Formulation of derivative plans
Securing Co-operation
1. After the plans have been determined, it is necessary rather advisable
to take subordinates or those who have to implement these plans into
confidence.
2. The purposes behind taking theminto confidence are :-
a. Subordinates may feel motivated since they are involved in
decision makingprocess.
b. The organization may be able to get valuable suggestions and
improvement in formulation as well as implementation of plans.
c. Also the employees will be more interested in the execution of
these plans.
Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise
its effectiveness.
c. This is done on the basis of feedback or information received
fromdepartments or persons concerned.
d. This enables the management to correct deviations or modify the
plan.
e. This step establishes a link between planning and controlling
function.
f. The follow up must go side by side the implementation of plans
so that in the light of observations made, future plans can be
made more realistic.
2. Organizing
Organizing is the function of management which follows planning.
-Brings together the basic resources of an enterprise in an orderly
manner,
-Arranges people and resources in an acceptable pattern so that they
could performthe required activities efficiently and effectively or,
-It is a function in which the synchronization and combination of human,
physical and financial resources takes place. All the three resources are
important to get results. Therefore, organizational function helps in
achievement of results which in fact is important for the functioning of a
concern.
A manager performs organizing function with the help of following steps:-
1. Identification of activities - All the activities which have to be
performed in a concern have to be identified first. For example,
preparation of accounts, making sales, record keeping, quality
control, inventory control, etc. All these activities have to be
grouped and classified into units.
2. Departmentally organizing the activities - In this step, the
manager tries to combine and group similar and related activities
into units or departments. This organization of dividing the whole
concern into independent units and departments is called
departmentation.
3. Classifying the authority - Once the departments are made, the
manager likes to classify the powers and its extent to the
managers. This activity of giving a rank in order to the managerial
positions is called hierarchy. The top management is into
formulation of policies, the middle level management into
departmental supervision and lower level management into
supervision of foremen. The clarification of authority help in
bringing efficiency in the running of a concern. This helps in
achieving efficiency in the running of a concern. This helps in
avoiding wastage of time, money, effort, in avoidance of duplication
or overlapping of efforts and this helps in bringing smoothness in a
concerns working.
4. Co-ordination between authority and responsibility -
Relationships are established among various groups to enable
smooth interaction toward the achievement of the organizational
goal. Each individual is made aware of his authority and he/she
knows whomthey have to take orders fromand to whomthey are
accountable and to whom they have to report. A clear
organizational structure is drawn and all the employees are made
aware of it.
Formal & Informal Organization
Formal organization means Intentional structure of roles in a formally
organized enterprise. The formal structure in each organization that has
been put in place by management has an accompanying informal
structure. Management does not and cannot control the informal
structure.
The informal structure has no written rules, is fluid in formand scope, is
not easy to identify, and has vague or unknown membershipguidelines.
For management, the informal structure may be positive or negative.
Positive qualities include the ability to quickly spread information and
provide feedback to the information. The informal structure gives people a
sense of being in the know. Management can feed information into the
informal structure at very low cost. The informal structure can also help
satisfyemployees' social needs.
The negative qualities of the informal structure mirror the positive
qualities in several ways. The more juicy a rumor, the more likely is the
informal structure to repeat it, expand it and make it into the "truth."
Management may not know what information is flowing through the
informal structure. Employees can waste a great deal of time nurturing
and participating in the informal structure. Finally, the informal structure
can fence out new employees, "rate breakers," and change agents no
matter the extent to which the formal structure makes .
Organizational Structure
Each organization has an organizational structure. By action and/or
inaction, managers structure businesses. Ideally, in developing an
organizational structure and distributing authority, managers' decisions
reflect the mission, objectives, goals and tactics that grew out of the
planning function. Specifically, they decide:
1. Division of labour - Division of labour is captured in an
organization chart, a pictorial representation of an organization's
formal structure. An organization chart is concerned with
relationships among tasks and the authority to do the tasks.
2. Delegation of authority - Authority is legitimized power. Power is
the ability to influence others. Delegation is distribution of
authority. Delegation frees the manager from the tyranny of
urgency. Delegation frees the manager to use his or her time on
high priority activities. Note that delegation of authority does not
free the manager fromaccountability for the actions and decisions
of subordinates
3. Departmentation- Departmentation is the grouping of jobs under
the authority of a single manager, according to some rational
basis, for the purposes of planning, coordination and control. The
number of departments in an organization depends on the
number of different jobs, i.e., the size and complexity of the
business.
4. Span of control- The span of control is the number of people a
manager supervises. The organizational structure decision to be
made is the number of subordinates a manager can effectively
lead. The typical guideline is a span of control of no more than 5-6
people. However, a larger span of control is possible depending
on the complexity, variety and proximityof jobs.
3. STAFFING:
Process through which competent employees are recruited; selected,
properly trained, effectively developed, suitably rewarded and their
combined efforts are harmoniously integrated and directed towards
achieving the desired results / objectives of the business enterprise.
Labour force is undoubtedly an active sensitive and essential factor of
production.
The process of staffing involves the following:
Assessment of manpower requirement.
Recruitment and selection of competent personnel.
Proper training and development of personnel.
Placement of selected personnel and orientation.
On the basis of the above, it can be safely defined that 'Staffing is a
managerial function that brings people with required skills into the
organisation and develop theminto valuable organizational resource:
Future / Nature of Staffing:
Staffing function of management involves the following
characteristics.
It is the function of management.
It is an integral part of management process.
It is continuous activity function of management.
It is concerned with human resources of an organisation.
It is a persuasive function of management.
It is separate fromphysical factors, because it is difficult and
tactful function.
It is concerned with the maximum utilization of human
resources such as direction, coordinate and control.
Need and Importance of Staffing:
The success of business depends upon the greater extent on the right
selection, training and development of the staff. Thus, competent, co-
operative and dedicated staff is the most precious asset of an
organisation.
The following grounds justify the need and importance in management
and effects the cost of production are given under.
Facilitating discovery of competent staff.
Ensuring maximumproductivity.
Developing personnel for shouldering greater responsibilities.
Meeting future requirements of talented person.
J ob satisfaction due to proper placement.
Maximumutilization work force.
Supplying information regarding transfer, promotion, recruitment,
death, demotions etc.
Steps of Staffing Function
a) Manpower Planning
1. Manpower planning is an essential pre-requisite of staffing.
2. It avoids shortage and at the same time also avoids surplus people.
3. Forecasting is the first step in manpower planning.
b) Recruitment
1. Recruitment follows planning.
2. Through recruitment organization attracts potential people and
induces themto apply for the positions/jobs.
3. Two sources of recruitment - Internal source and external source.
c) Selection
Selection has three parts;
1. Comparing the qualification and experience of the prospective
candidate with job requirement.
2. Eliminating those whose qualifications and experience does not
matchthe requirement.
3. Selecting those who satisfy the near.
TheselectionprocedureisassistedbyJobAnalysisandJobSpecification.
Placement
Defined as determination of the precise job to which a selected
candidate is assigned or assigning an appropriate job to the
selected candidate.
Proper placement ensures job satisfaction for the individual and
gives his best to the organization.
Training
It is an inseparable of staffing.
Training increase knowledge, develop skill and change the
attitude.
Training is an investment not a cost.
Its a continuous process in the any organization.
Types of training
(a) Induction training
(b) On job training
(c) Refresher training
4. Leading
Leading is the fourthfunction of management.
Leading involves influencing others toward the attainment of
organizational objectives. Effective leading requires the manager to
motivate subordinates, communicate effectively, and effectively use
power. If managers are effective leaders, their subordinates will be
enthusiastic about exerting effort toward the attainment of
organizational objectives.
To become effective at leading, managers must first understand their
subordinates' personalities, values, attitudes, and emotions. Therefore,
the behavioral sciences have made many contributions to the
understanding of this function of management. Personality research
and studies of job attitudes provide important information as to how
managers can most effectively lead subordinates.
Motivation, leadership, communication, decision making are the part of
leading process.
Leading Means Inspiring
A manager should strive to become an inspiration to the rest of the
employees. Employees will follow a manager because the manager is
the boss. However, a manager that is an inspiration means that
employees followthat person because they believe in what the manager
is doing and they are trying to help the company achieve its goals.
Finding ways to inspire employees means coaching themand motivating
themto succeed as integral parts of the company.
Leading Affects Morale
The way a manager leads greatly affects employee morale within the
department and company as a whole. Managers should create a climate
that encourages new ideas and employee input. The more the
employees feel that they have a say in the company, the more they will
be willing to share ideas and attempt to find better ways to improve
processes. For example, a good manager may reward employees with
monetary or benefit incentives if they can increase output of a product.
Another idea is a treasure box of goodies. Managers can set a goal early
in the week and employees who meet the goal by the end of the week
are allowed to take a prize fromthe treasure box.
Leading is Key to Effective Communication
For a manager to be an effective leader, he or she must also be an
effective communicator. A manager that shares information and lets
employees know the latest news in the company is someone that is
deemed trustworthy by his or her employees. Employees feel little loyalty
or trust towards a manager who does not readily give out information.
Leading Effectively Contributes More to the Bottom Line
An effective leader inspires employees, which allows those employees
to feel like they are making a meaningful contribution to the company.
Satisfied employees generally work harder and take more ownership in
their job positions. This can mean happycustomers and a higher level of
customer service.
MOTIVATION
Selection, training, evaluation and discipline cannot guarantee a high
level of employee performance. Motivation, the inner force that
directs employee behavior, also plays an important role. Highly
motivated people performbetter than unmotivated people. Motivation
covers up ability and skill deficiencies in employees.
Basic principles of delegation
1. Principle of delegation by results expected
It should be clear to the boss and to the subordinate what is being delegated, for what purpose or to what end
results.
2. Pri nciple of functi onal defi niti on -Boss should be sure that the subordinate has it in himto accomplish the
task even when authority is delegated to him. you are backing the competent horse.
3. Scalar principle- There is a limit to the number of persons that a boss can supervise effectively. Once that
limit is passed, authority must be delegated to subordinates who will make decisions within the area of their
assigned duties.
4. Authori ty level principle-Authori ty is delegated when decision making power is vested in a subordinate by
a superior. A superior cannot also delegate all this authority without passing over his own position. The
following considerations are important:
5. Princi ple of unity of command-It is argued that too specific delegation at senior levels robs the
executives of flexibility and they will not be able to develop in the best way. (it has been said that the
person who is most clear about his duties is the peon or the worker. The most confused man in the
organization is the top boss as all work is his and he has also no work the same being performed by
Executives). However, it is found prudent to delegate specifically and at the same time develop tradition
of flexibility.
6. Principle of absol ute responsi bili ty -A boss cannot delegate responsibility even when he is willing to
delegate authority. Once responsibility is delegated, his own position is finished. Therefore, when a boss
delegates authority, he retains responsibility, but exacts from the subordinate the responsibility to
complete the assignment. He holds the subordinate answerable to him but is willing to own the
responsibility for job not done by subordinate.
7. Pri nciple of parity of authorit y and responsi bilit y. Expecting a person to accomplish goals without the
authority to achieve themis meaningless. Workdelegation is to be accompanied by authority delegation.
CONTROLLING is a management function
that involves comparing actual performance
with planned performance and taking
corrective action if needed, to ensure the
objectives are achieved.
1. ESTABLISHING STANDARD.
2. MEASURING ACTUAL
PERFORMANCE AGAINST THE
STANDARDS AT STATED
INTERVAL
3. TAKING CORRECTIVE ACTIONS
WHENEVER UNWANTED
DEVIATIONS ARE FOUND
STEPS OF MONITORING AND CONTROL
Examples of Controls
Delegation(Accountability)
Evaluation(Performance)
Financial Statement (Budget Management)
PerformanceManagement (ObservationandFeedback)
Policies andProcedures (Behaviors in Workplace)
QualityControl andOperations Management
Risk, Safetyand Liabilities
Characteristics of Effective Control System
Controls need to focus on appropriate activities Effective
controls must focus on critical factors that affect both the
individuals and the organizations abilities to achieve
objectives.
Controls should be timely Information needed for
comparisons and control purposes needs to be in the
managements hands in order to make effective corrective
action. Delays in generating, gathering or disseminating
information can prolong the occurrence and extent of
deviation.
Controls must be cost effective The benefit of using appropriate
controls should be worth their cost of installation and operation.
Too much control can be worse than too little. The key is to
provide appropriate for the situation and provide savings greater
that the costs involved.
Should be accurate and concise Controls must provide
information about operations and people in sufficient quality and
quantity to enable managers to make meaningful comparisons to
operations standards. As with control, too much information can
be as bad as too little.
Controls should be accepted by the people they affect Controls
and their applicability to specific situations should be
communicated clearly to those responsible for implementing
themand to those who will be governed by them.
Characteristics of Effective Control System
Types of Control Systems
Feed forward controls are preventive controls that try to
anticipate problems and take corrective action before they occur.
Example a team leader checks the quality, completeness and
reliability of their tools prior to going to the site.
Concurrent controls (sometimes called screening controls)
occur while an activity is taking place. Example the team
leader checks the quality or performance of his members while
performingthe cpmon equipments in the site.
Feedback controls measure activities that have already been
completed. Thus corrections can take place after performance is
over. Example feedback fromfacilities engineers regarding the
completedjob.
Steps in the Control Process
Establishing Performance Standards A standard is a unit of
measurement that can serve as a reference point for evaluating
results. Management should set its sights on something it wants
to accomplish.
Managers should exercise control by comparing performance to
some standards or goals.
Types of Standards
A. Tangible clear, concrete specific and generally measurable.
1. Numerical Standards expressed in numbers items produced,
absences, percentage of sales, etc.
2. Monetary Standards measured in terms of money profit
margins, costs, etc.
3. Physical Standards quality, durability, size, weight and other
factors related to physical composition.
4. Time Standards refer to the speed with which the job is to be
done project completion dates..
B. Intangible Standards relate to human characteristics which
are not expressed in terms of numbers, money, physical
qualities or time desirable attitude, high morale, ethics and
cooperation.
Measuring Performance After setting the standards, managers must
monitor performance to ensure that it complies with the established
standards.
How Often to Measure Performance Determining how often to
measure performance is an important decision. A strategic control point
is a performance measurement point located sufficiently early in an
activity to allow any necessary corrective actions to be taken to
accomplishthe objective.
Types of Standards
Howto Measure This can be done throughthe following:
1. Personal observation.
2. Writtenor oral reports by or about employees.
3. Automatic methods.
4. Inspections, test or samples.
Comparing Performance with Standards and Analyzing Deviations.
Information receives regarding a serious departure from standards
should be investigated in order to determine what caused the
deviation. J umping into conclusion without analyzing the problem
might produce ineffective corrective action.
It is also important to check results that are substantially above
standards in order to determine why they varied from standards.
Operating procedures should be check to determine if these are being
followed correctly or if there is an improvement in operations that
should be included in the newstandards.
Taking Corrective Action if Necessary This is the final step in the
control process. Adjustments, fine-tuning, and perhaps drastic action
maybe necessary to pull off important tasks or to maintain standards.
Material
Money
Design
Methods
Process of
Construction
Output
Comparator
Standards
Effects &
Decision
Makers
Input
Sensor
Types of Control
Controls may be categorized in many different ways but 4 groups are
commonlyrecognized.
1. Production and operations control; regulate the actual
useful work of the organization e.g. employee performance,
attendance records, productivity etc.
2. Inventory control governs the level of material and supplies
of goods and services and finished goods kept in storage.
3. Quality control assures the acceptable quality of the goods
or services produced.
4. Financial control focuses on the flow of money and value
into, out of, and within organization.
MANAGING
PEOPLE -
TECHNIQUES
LEADERSHIP
Definitions
Influences others to accomplish a mission, task, and objective and
directs the organization in a way that makes it more cohesive and
coherent.
Leadership is the ability to influence a group towards the
achievement of goals.
Leader can create the memory &shadows of leadership create a
certain atmosphere or climate. Leaders not only face to face impact
on people.
Types of leadership
Autocratic leadership
Autocratic leadership is an extreme type of transactional leadership, where
the leader have absolute power over his or her subordinates and team
members have almost no opportunity for making suggestions, even if these
would create an improvement for the team or organization. Most people
become de-motivated being treated like this. Because of this autocratic
leadership usually leads to high levels of staff turnover or suiving. For some
unskilled or routine jobs, the style can in few cases remain effective where
the advantages of control outweigh and disadvantages.
Democratic Leadership
Although a democratic leader will make the final decision, he or she asks
to attend the other teammembers to contribute to the decision making
process. This increases job satisfaction by involving team members or
employees in whats going on, and helps to develop peoples skills. Team
members and employees increase their self confidence and feel in control
of their own destiny, such as promotion they want, and are motivated to
work hard and effective by more than just a financial reward. This
approach can be most suitable where working in a teamis indispensable,
and quality is more important than the speed of productivity.
Laissez-faire leadership
Laissez-faire leadership is translated to English means leave it be and
describes a leader who leaves his or her employees to set on with their
work. It may be effective if the leader knows what is being achieved and
communicates this to his or her teamregulators. Most often, Laissez-faire
leadership is suitable for teams in which the workers are very experienced
and highly trained self-starters. Unfortunately, it can also lead to situations
where the managers are not practicing sufficient control.
1.Leader as Initiator
2. Leader as Model
3. Leader as
Negotiator
4. Leader as Listener
5. Leader as Coach
6. Leader as Working
member
TECHNI QUES OF GOOD LEADERSHI P
-Drawing attenti on to the actions essenti al for
meeting team's goal.
-Shal l place themselves where they can
observe the connection between work &
proj ects hi gh level objectives
-Shall use thei r own behavior to shape up
other s behavior &performance .
--shal l be able to influence through his
behavior.
-Shall be negotiating savvy to obtai n the
resources &personnel .
-Shall be frame the situation in a positive way
as mutuall y benefici al
-Shall be able to gather si gnals from the
environment
-Indi cation of impending troubles ,team
members discontent &opportuni ti es for gain
-Shari ng knowledge /experience to maximi ze
team members potenti al
-Shall pitch in to do share of work wherein he
only has potenti al only /area of special
competence
MANAGER & LEADER
TEN COMPLEMENTARY CONNECTIONS
S.No. A Manager A Leader
1 Administers Innovates
2 Maintains Develops
3 Accepts Reality Investigates Reality
4 Focuses on Systems &
Structures
Focuses on People
5 Has a short range view Has a long range view
6 Asks how and when Asks what and why
7 Has his eyes on the bottom
line
Has his eyes on the horizon
8 Accepts status quo Challenges status quo
9 Imitates Originates
10 Relies on Control Relies on Trust
COMMUNICATION
1. OBJECTIVES
2. FORMS OF
COMMUNICATION
3.METHODS OF
COMMUNICATION
4.COMMUNICATION
MODEL
5.FEATURES OF
EFFECTIVE
COMMUNICATION
Objectives of Communications
1. Responds to the information&communicationneeds of stockholders
2. Aids manager for decision process through obtaining information within &
outsidethe organisation
3. It helps in appraising all about the goals of the organisation
4. Communication helps in co-ordination. In a large organisation work is carried
out on the basis of departmentation which might have been done on some
suitable basis like expertise of works, geographical locationof works etc.
5. Communication is essential for proper understanding amongst all the members
of the organisation.
6. Communication is essential for recruitment, training, performance evaluation etc.
of various people associatedwith the organisation.
Forms of Communications
Communication could be of three basic categories,
namely:
- Writtencommunication
- Verbal communication
- Non-verbal communication
1. Interactive Meetings/ Phone calls/ Video/
conferencing
2. Push Letters/ Memo /report/ Email /Fax/ Voice
mail / Press releases
3. Pull Intranet sites, e-learning, share point
portals
Methods of Communication
ENCODE
DECODE
SENDER
ENCODE
DECODE
MESSAGE
FEEDBACK
MESSAGE
ECODE Translate the thoughts/ ideas in to language understood by others.
DECODE To translate the message back into meaningful through/ ideas
COMMUNICATION MODEL
Any organization structure involves interacting of people working at different levels
with a viewto achieve the predeterminedgoals.
Communication is a process where sender transmit his ideas, behavior, opinion,
expression to the receiver.
Barriers in Communication
Improper Encodingof messages/Lackof clarity.
Distance
Noise
Culture
Education
Like/dislikes
Saythat its a badidea
Un-clarifiedassumption
Poor transmission.
Inappropriatechannel.
Inadequatefeedback.
Language
Inattentionof receiver.
Omissions: In the downward communication superiors withhold a part of
information thinking that it is not needed for subordinates while the latter
withholdunfavorableinformationin upward communication.
Untrustworthiness of the communicator: By his act or behavior the sender
(superior or subordinate) is considered as untrustworthy and
communications fromhimare not takenseriously
Poor retentionby the receiver
Faulty organization. The chain of command is too long and as a result the
communicationis poor.
Features of Effective Communication
i. Clear Purpose
ii. Appropriate Form&Medium
iii. Language- both written and verbal -understandable by the
receiver.
iv. Information/ message/ instruction should be compete and
unambiguous
v. Not to be based onany assumptions.
vi. Proper followup.
SWOT Analysis
S Strengths
W Weaknesses
O Opportunities-
T Threats
A SWOT Analysis is a powerful technique
for identifying Strengths and Weaknesses,
and for examining the Opportunities and
Threats your employees face.
Used in a personal context, it helps you
assist your employees to develop their
careers in a way that takes best advantage
of their talents, abilities and opportunities.
As managers we can focus and develop
their attributes while minimizing their
weaknesses and reducing the threats to
turnover onour teams
SWOT
What makes SWOT particularly
powerful is that with a little
thought, it can help you uncover
opportunities that your
employees are able to use to their
advantage.
By understanding their
weaknesses, you can manage and
eliminate threats that would
otherwise catch them unaware.
S.W.O.T Matrix
Internal Analysis
Strengths Weaknesses
External Analysis
Opportunities Threats
What Does A SWOT Evaluate?
Internal & Personal
Strengths Strengths Weaknesses Weaknesses
Opportunities Opportunities Threats Threats
External & Positive External & Negative
Internal & External Personal
Brainstorming Questions
Strengths
What do you do particularly well?
What do you do that is unique in the
marketplace?
What do your customers/clients/patrons
ask for you to do over and over again?
What do you have the right
tools/resources to accomplish? (1)
Weaknesses
Weaknesses
Factors that are within
an organizations
control that detract from
its ability to attain the
core goal.
Which areas might the
organization improve?
SWOT: External Factors
Opportunities
External attractive factors that
represent the reason for an
organization to exist and
develop.
What opportunities exist in the
environment, which will propel
the organization?
Identify them by their time
frames (1)
Opportunities
Are there new situations coming down the road
that you can take advantage of (new programs
being offered, new faculty joining the department,
new tools available to you)?
Are there gaps in the market that you can fill?
Are there partnerships that might be fruitful? (1)
SWOT: External Factors
Threats
External factors, beyond an
organizations control, which
could place the organization
mission or operation at risk.
The organization may benefit
by having contingency plans to
address them if they should
occur.
Classify them by their
seriousness and probability
of occurrence. (1)
Threats
Who is your competition and what do they
offer that you cant do as well or at all?
Are there environmental changes or
situations that could cause problems for
you and your programs?
What other roadblocks are being thrown in
your path?
Simple Rules SWOT Analysis
Be realistic about the strengths and
weaknesses of your organization or group
Distinguish between where your organization
is today, and where it could be in the future
Be specific: Avoid gray areas. (1)
Simple Rules SWOT Analysis
Always analyze in relation to
your core values, mission,
mandate, goals, vision.
Keep your SWOT short and
simple.
Avoid complexity and over
analysis
Empower SWOT with a logical
conceptual framework. (1)
SWOT (OTSW) MATRIX
Opportunities-external
1.
2.
3.
4.
5.
Threats-external
1.
2.
3.
4.
5.
Strengths-Internal
1.
2.
3.
4.
5.
Weaknesses-Internal
1.
2.
3.
4.
5.
Create a Plan of Action
Set goals and objectives, like with any
other plan. Limit 3-5
What steps can you take to:
Capitalize on your strengths
Overcome or minimize your weaknesses
Take advantage of some new opportunities
Respond to the threat (1)
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