DIRECTING AND CONTROLLING

Module 4

Topics to be covered

Directing and Controlling : Meaning and nature of

directing, leadership styles, Motivation theories
Communication Meaning and importance,
Co-ordination Meaning and importance, techniques of
co-ordination
Meaning and steps in controlling, essentials of a sound
control system, methods of establishing control.

Meaning of Directing

Direction means issuance of orders and leading and

motivating subordinates as they go about executing orders.
According to Haimann, Directing consists of the process
and techniques utilized in issuing instructions and making
certain that operations are carried on as originally planned.
According to Koontz and ODonnell, Direction is the
interpersonal aspect of managing by which subordinates
are led to understand and contribute effectively and
efficiently to the attainment of enterprise objectives.
Directing function consists of issuing orders and
instructions, guiding and helping subordinates to perform
tasks assigned to them, motivating them by designing a
good work environment and providing rewards in line with
their expectation and performance.

Functions of Direction

Giving orders to employees.

Leading and motivating them.

The three important components of directing function are:

Communicating

Leading

Motivating

Requirements/ Nature of effective Direction

Harmony of Objectives An organisation functions best

when the goals of its members are in complete harmony with
and complementary to the goals of the organisation.
Unity of Command This principle implies that the
subordinates should receive orders and instructions from one
superior only. The violation of this principle may lead to
conflicting orders, divided loyalties and decreased personal
responsibility for results.
Direct Supervision Every superior must maintain direct
face-to-face contact with his subordinates. Direct supervision
boosts the morale of employees, increases their loyalty and
provides them with immediate feedback on how well they are
doing.

Efficient Communication It is through

communication that the superior gives orders, allocates
jobs, explains duties and ensures performance. Efficient
communication not only enables the superior to know
how his subordinates feel but also helps the subordinates
to know how the company feels on a number of issues
concerning them.
Follow-through The manager should follow through
the whole performance of his subordinates not merely to
keep a check on their activities but to help them in their
act, to show them where their deficiency, if any, lies and to
revise their direction if it needs revision, and so on.

Leadership

According to Peter Drucker, Leadership is the lifting of

mans visions to higher sights, the raising of mans
performance to a higher standard, the building of mans
personality beyond its normal limitations.
Leadership is the ability to persuade others to seek
defined objectives enthusiastically.
Leadership is defined as the ability to influence people
towards accomplishment of goals. It is the ability to
influence behavior of others and direct them towards
achievement of group behavior of others and direct them
towards achievement of group or organisational goals.

Characteristics of Leadership

Leadership possess great influential power.

Leaders have followers and they influence the behavior of
followers.
Leaders have a great vision for future.
There is a reciprocal relationship between leaders and
followers.
Leaders create a shared vision among followers and direct
them to work towards the achievement of common goals.
Leadership is situational and effectiveness of leaders is
influenced by situational variables like environment,
interpersonal relationship, job content, group relations, size of
group, group norms etc.

Importance of Leadership

Leaders guide and inspire subordinates: leaders motivate their

followers and guide them towards accomplishment of group goals which
in turn contributes to the accomplishment of organisational goals.

Leaders build good work environment: leaders create a work

environment in which employees can contribute by performing to the
best of their abilities. The environment creates a relationship based on
trust.

Leaders build confidence in followers: leaders recognise abilities of

their followers and encourage them to develop to their potential by
building confidence in them.

Leaders secure cooperation from the group: leaders

influences the group-members in such a way that all the
members work collectively towards group objectives and thus
in still cooperation among all members.

Leaders act as change agents: organisations operate in an

environment which is subjected to continuous changes, and if the
organisations do not respond to these changes, then survival of the
organisation may be difficult. But organisational members resist any
changes, as they are accustomed to particular methods of work. It
requires great leadership to reduce the resistance to change and
convince the employees to accept the change. Thus leaders act as
change agents of the organisation and helps in implementing
successful positive changes in the organisation.

Leaders are representatives of the followers: on

one hand leaders direct the employees of the
organisation, but on the other hand they are also
representatives of their followers. They always take
personal interest in helping their followers. They always
take personal interest in helping their followers and
protect the interest of the followers while taking any
major organisational decisions.

Leaders develop great vision: leaders are known for

their great vision and they develop the vision for building
great organisations.

Difference between managers and leaders

Managers
Managers position is based on
formal authority defined by
organisational structure.
Managers gets the things done
by subordinated by exercising
their authority.
Managers are rationale in their
decisions.
Managers execute plans,
implement them and produce
results.
Managers exercise positional
power.

Leaders
Leaders position is based on
their personality and is not
formally defined.
Leaders inspire their followers
and make them work towards
common shared objectives.
Leaders are visionary
Leaders inspire followers,
articulate vision and motivates
them to achieve common
objectives.
Leaders exercise personal
power.

Leadership Styles

Autocratic Leadership In this type of leadership, the leader alone

determines policies and makes plans. He tells orders what to do and
how to do it. He demands strict obedience and relies on power. The
formula used by him is Do what I say or else meaning thereby
that an employee will be punished if he does not follow orders. This
style of leadership is also called as dictatorship.
Advantages:

Quick and consistent decisions are made.

Leaders enforce strict discipline among followers and get the work done by
making use of fear of punishment and rewarding power.
Suitable when subordinates are inexperienced and need direction from
leaders.

Disadvantages:

Low motivation among subordinates.

One way communication may result in misunderstanding.
Too much dependence on leadership.

Democratic Leadership In this type of leadership (also

known as participative or person-oriented leadership), the
entire group is involved in and accepts responsibility for goal
setting and achievement. Subordinates have considerable
freedom of action. The leader shows greater concern for his
people than for high production. A part of the leaders task is to
encourage and reinforce constructive inter-relationships among
members and to reduce intra-group conflict and tensions.
Advantages:

Better decisions are made.

Provides opportunity for managerial development.
Interests of followers are protected.

Disadvantages:

Very slow decision making and timely decisions are not made.
Maintaining discipline is very difficult.
Requires high maturity in followers.

Free Rein In this type of leadership, the leader exercises absolutely no

control. He only provides information, materials and facilities to his men
to enable them to accomplish group objectives. This type can be a
disaster if the leader does not know well the competence and integrity
of his people and their ability to handle this kind of freedom. Hence this
style of leadership may not be suitable in all the situations and it requires
subordinates who are knowledgeable, well trained and highly self
motivated.
Advantages:
Brings in innovation and creativity.
Can bring high motivation among subordinates and thus develop
managerial skills among subordinates.
Highly flexible.
Disadvantages:
Lack of control
May result in confusion and chaos.
Needs highly matured and knowledgeable subordinates.

Motivation

Motivation is the process of stimulating people to action

to accomplish desired goals. Motivation represents inner
drive within an individual which directs him to behave in
specific way.
Motivation is the process of challenging a persons inner
drives so that he wants to accomplish the goals of the
organisation.
The three key elements of motivation are:

Energy
Direction
Persistence

Relation between motivation and needs

Unsatisfied
Need

Tension

Drives

Reward

Need
Satisfaction
Or
Dissatisfaction

Performance

Behaviour

Reduction in
tension or
increase in
tension

Maslows Theory of Motivation Maslows

Hierarchy of Needs Theory

Maslows Hierarchy of needs

According to Abraham Maslow, motivation of individual depends on his or her
individual needs. These needs operate along a hierarchy and once a lower
need is satisfied, individuals would like to satisfy next higher level need in
the hierarchy.
Need

Description

Job Related factors which can satisfy

the need

Physiological
Needs

Food, shelter, clothing, water, Job with pay

air etc.

Security Needs

Security from physical and

emotional threats

Job security, insurance, retirement

benefits.

Social Needs

Love, affection,
belongingness etc

Good colleagues, informal work

groups, good quality supervision etc.

Esteem Needs

Status, prestige, recognition

etc.

Job title, designation, recognition,

responsibility

Self actualisation
Needs

Realization of life time

ambitions

Reaching a position one is capable of.



Physiological needs are those which arise out of the basic

physiology of life, for example, the need for food, water, air etc.
Security needs are the needs to feel free from economic threat
and physical harm.
Social needs are needs to associate with other people and be
accepted by them: to love and be loved.
Esteem needs are those which relate to respect and prestige. A
need for dominance may be thought of as one of the egoistic
needs.
Self-fulfillment needs are needs for realising ones potential.
These include the need for realising ones capabilities to the
fullest-for accomplishing what one is capable of accomplishing, a
musician must make music, a poet must write if he is to be
ultimately happy.

Abraham Maslow sought to explain why people are driven by

particular needs at particular times. According to Maslow,
human needs are arranged in a hierarchy, from the most
pressing to the least pressing. In their order of importance,
they are physiological needs, safety needs, social needs, esteem
needs and self actualization needs. People will try to satisfy
their most important needs first. When a person succeeds in
satisfying an important need, that need will cease being a
current motivator, and the person will try to satisfy the nextmost important need. For example, a starving man (need 1)
will not take an interest in Yoga, Meditation (need 5), nor in
how he is viewed by others (need 3 or 4), nor even in whether
he is breathing clean air (need 2), But when he has enough
food and water, the next most important need will become
salient.

Limitations

It has been found that needs not be along the hierarchy as

proposed by Maslow. For example individuals who are not
able to satisfy their lower level needs, may be already
operating on higher level needs.
It is also found that needs priority vary from country to
country. For example it is found that esteem needs are
more important for workers in Spain and Belgium than
security needs.
Individual behaviours may be directed at multiplicity of
motives and thus Maslows argument that one need is
satisfied at a time is not valid.

Herzbergs Two-Factor Theory

According to Herzberg, the absence of certain job factors tend to make

workers dissatisfied. However, the presence of these same factors in
themselves does not produce high levels of motivation. They merely help
avoid dissatisfaction and the problems it creates, such as absenteeism,
turnover and grievances. Herzberg called these factors maintenance or
hygiene factors since they are necessary to maintain a reasonable level of
satisfaction. Ten maintenance factors, namely:

Fair company policies and administration.

A supervisor who knows the work.
A good relationship with ones supervisor.
A good relationship with ones peers.
A good relationship with ones subordinates.
A fair salary.
Job security
Personal life
Good working conditions
Status

To build high levels of motivation, a different set of factors is necessary.

However, if these factors are not present, they do not in themselves
lead to strong dissatisfaction. Herzberg called these the motivators or
satisfiers. These are six in number:

Opportunity to accomplish something significant

Recognition for significant accomplishments.

Chance for advancement.

Opportunity to grow and develop on the job.

Chance for increased responsibility.

The job itself.
In the absence of maintenance factors, workers may feel dissatisfied.
There may be more absences, more quits and more grievances in
union organisations. But the presence of these factors does not
motivate them. Similarly, in the presence of motivators, workers may
feel motivated but their absence does not make them dissatisfied.

Theory X and Theory Y

According to Douglas McGregor managers hold two sets of assumptions

about their subordinates. Mangers assume that their subordinates belong
to either of two categories called category X and category Y.
Theory X assumptions

Theory Y assumptions

1. Employees inherently dislike work and

will try to avoid it.

1. Employees like work just like play and rest.

2. Since employees dislike work and try to

avoid it, they must be threatened with
punishment to get the work done and they
must be closely monitored and controlled.

2. People are capable of exercising self

direction and self control if they are
committed to work.

3. Employees do not like to take

responsibilities and always like to seek
formal direction.

3. Employees at all levels are capable of taking

up any responsibility.

4. Employees place job security above all

and display very little ambition.

4. Decision making ability is widely spread

across population and people at lower level
are capable of making creative decisions.

McGregor proposed that theory X and theory Y are

important tools in understanding human behaviour at
work and designing work environment. Neither the two
sets of assumptions are applicable in all situations. But
theory X is more applicable to unskilled and uneducated
lower level employees who may be working for
satisfaction of lower level needs. Theory Y is applicable to
educated, skilled and professional employees who are
capable of taking up responsibility. However they can be
exceptions.

McClellands Need for Achievement Theory

According to McClelland, the three important needs are

the need for affiliation, the need for power and the need
for achievement. The need for affiliation reflects a desire
to interact socially with people. A person with a high
need for affiliation is concerned about the quality of an
important personal relationship. Thus, social relationships
take precedence over task accomplishment for such a
person.
A person who has a high need for power concentrates on
obtaining and exercising power and authority. The person
is concerned with influencing others and winning
arguments.

A person who has a high need for achievement has three distinct
characteristics. These are:
1.
Preference for setting moderately difficult but potentially
achievable goals.
2.
Doing most things himself rather than getting them done by
others. He wants to take personal responsibility for his
success or failure and does not want to hold others or chance
responsible for it.
3.
Seeking situations where concrete feedback is possible.
If the needs of employees can be accurately measured,
organisations can improve the selection and placement
processes. For eg. An employee or recruit with a high need for
achievement could be placed in a position that would enable
the person to achieve.

Definition - Communication

Communication Latin word communis means common.

According to Allen Louis-Communication is the sum of all the

things, a person does when he wants to create an
understanding in the mind of another. It involves a systematic
and continuous process of telling, listening and understanding.

According to George Terry -Communication is an exchange of

facts, ideas, opinions or emotions, by two or more persons.

Communication is the process of transmission of information

or message from one person to another. It involves exchange
of information, facts, ideas, feelings etc between two or more
individuals.

Example of Two way communication

Ideation

An organizations policy to be circulated among all

employees through news bulletin.

Encoder

The editor/person who writes the policy.

Message

The content (policy details) and the words/pictures used

to convey the policy to the employees.

Channel

The medium in this case the news bulletin.

Receiver

The audience of the message for whom the policy is

intended and who read the bulletin.

Feedback

Employees reaction to the policy communicated.

Importance of communication in Management

Sense of unity of purpose and commitment to a single organisational

goal can be developed only through the inspiring and persuasive
power of communication.
Training and development programmes can be conducted through
effective communication.
In order to appraise employees, performance standards must be
properly and clearly communicated.
In order to increase employees job performance and effectiveness
by updating their knowledge.
To promote employees sense of belonging and commitment.
To effect changes smoothly.
To inform and convince employees about decisions and the reasons
behind those decisions.
To develop employees clear understanding of their roles and future
growth opportunities in the organization.
Resolving disputes in organizations , which lead to huge losses of
time, money and good human relations.

Communication according to organisational

structure

Formal Channel of Communication Means of

communication that is formally controlled by managers or
people occupying positions in an organization.This ensures
that the information flows orderly, in a timely and accurate
manner. Any information, decision, memo or reminder etc. will
also follow this path.

Informal Channel of communication- Side by side with

the formal channel of communication every organization has
an equally effective channel of communication namely that is
the informal channel. Given the name grapevine precisely
because it runs in horizontal, vertical and diagonal directions.
It flows around water coolers, down hallways, through lunch
rooms and wherever people get together in groups.

Communication according to Direction/

Dimension of expression
Communication is multidimensional or multidirectional.
There are various directions in which it flows.
Vertical Communication:
 Downward

Communication: Communication which flows from

supervisor to the subordinate is known as downward communication.
They include orders, rules, instructions etc. their nature is directive.

 Upward

Communication: this is just reverse of the downward

communication. It flows from subordinate to supervisor. Each
communication includes reactions and suggestions from workers,
their grievances etc. the contents of the upward communication are
reports, suggestions, reaction, statements and proposals prepared for
submissions to the supervisor.

Vertical Communication

MARKETING
MANAGER
UPWARD
COMMUNICATION

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

MARKETING
SUPERVISOR

DOWNWARD
COMMUNICATIO
N

Lateral or horizontal communication

When communication takes place between two or more persons who
are subordinates working under the same person, or those who are
working at the same level, it is called lateral or horizontal
communication. A good example of this kind of communication is
that between functional managers. They are serving the organisation
in different capacities but their goals are common and their
interaction is necessary to maintain co-ordination.
The best example of lateral communication can be seen in the
interaction of production and marketing departments. Strategies of
marketing cannot be fruitful unless plans are communicated to the
production department. The Marketing Manager has to be in
constant touch with the Production Manager, in order to meet
customer orders as per schedule.
Marketing Manager

Production Manager

Communication according to the way of

expression

Oral communication: in this type of communication

both parties to the process of communication exchange
their ideas orally either face to face or through devices like
phone, intercoms etc, meetings, conference, lecturers,
interviews etc.

Written communication: in this type of communication,

written words, graphs, diagrams, pictures etc are used. They
may take forms of circulars, rules, manuals, reports, memos
etc.

Barriers to communication
Individual barriers

Conflicting signals: difference in what one says and
what he does

Lack of reliable information sources

Lack of interest to communicate

Poor listening skills

Overcoming Individual Barriers

Develop good listening skill

Encourage two way communication

Organizational Barriers

Semantics : Misinterpretation of words, same word
having different meaning

Noise

Language differences

Overcoming Organizational Barriers

Have proper follow up

Reduce factors which causes noise

Regulate information flow

Be aware of language and meaning

Coordination

Coordination is the management of interdependence in

work situations.

Coordination can be defined as the orderly

synchronization or fitting together of the interdependent
efforts of individuals, in order to attain a common goal.

Coordination deals with the task of blending efforts in

order to ensure the successful attainment of an objective.
It is accomplished by means of planning, organizing and
controlling.

Importance of Coordination

Unity in diversity: organisations are made up of people and

people do have their own individual interests. Hence good
coordination ensures that people works towards common
goal rather than their own personal interests.
Specialization: the splitting of work into smaller and smaller
units through division of work creates the need for
coordination among many individuals who need to complete
the full task.
Teamwork: employees work in form of teams to complete a
project or activity undertaken by the organisation. Hence
individual efforts has to be synchronized to obtain overall
outcome of the team. This in turn creates a sense of shared
vision among the team.

Communication: effective communication is very much

essential for coordination. Communication ensures
harmonious relations among the individuals and different
departments.
Recognition of goals: defining clear objectives ensures
clarity of role and responsibility among individuals resulting in
better coordination.
Interdependency: organisation are made up of various units
and departments, which are interdependent. For example,
Marketing department depends on production department for
timely supply of products and services to customers.
Coordination function ensures that this interdependence
needs are met by ensuring good relations among all
departments.

Techniques of Coordination

Rules, Procedures, and Policies Common device to coordinate sub-units

in the performance of their repetitive activities. Standard policies, procedures
and rules are laid down to cover all possible situations.
Planning Under planning targets of each department, coordinate with the
targets of all other departments. For eg. By fixing the target of 10000 units of
additional production and sales for the production and sales departments
respectively, the head of the organization can be fairly sure that the work of
the two departments would be coordinated since their target so demand.
Hierarchy By putting interdependent units under one boss, some
coordination among their activities is ensured.
Direct Contact - In order to prevent top executives from becoming
overloaded with problems, as many problems as possible are resolved by the
affected employees at lower levels.
Task force This is a temporary group made up of representatives from
those departments which are facing a problem. It exists only as long as the
problem lasts.

Incentives- incentives like profit sharing ensures that people work

towards common objectives and they motivate them to work with each
other for timely completion of tasks.
Committees As certain decisions consistently arise the task forces
become permanent.These groups are labeled committees. This device
greatly eases the rigidity of the hierarchical structure, promotes effective
communication and understanding of ideas, encourages the acceptance of
the commitment to policies and makes their implementation more
effective.
Induction The device familiarizes the new employee with the
organization's rules and regulations, its dominant norms of behavior, values
and beliefs, and integrates his personal goals with the organisational goals.
Liaison Departments In some cases where there is a large volume of
contact between two departments, a liaison department evolves to handle
the transactions. This typically occurs between sales and production
departments.
Workflow A workflow is the sequence of steps by which the
organization acquires inputs and transforms them into outputs and
exports these to the environment. It helps in coordination.

Control

Control is checking current performance against

predetermined standards contained in the plans, with a
view to ensuring adequate progress and satisfactory
performance.

George Terry: controlling is determining what is being

accomplished that is evaluating the performance, and if
necessary, applying correct measures so that the
performance takes place according to plans

Purpose of control
Adapt to
environmental change

Limit the
accumulation of error

Control helps the organization

Cope with organizational

complexity

Minimize costs

Steps in a Control Process

Step 1. Establishing standards

Control standard is a target against which subsequent
performance will be compared
Some key areas in all business organizations are: profitability,
market position, productivity and personnel development.
1. It should be defined as far as possible in quantitative
terms. For eg. overheads must be reduced by 12%.
2. Standards need to be flexible in order to adapt to
changing conditions.
3.

It should be consistent with organizational goals.

Step 2: Measuring performance

Performance measurement is a constant and ongoing

activity
Performance measures must be valid.
Daily, weekly and monthly sales numbers measure sales
performance
Product quality or units produced or unit cost measure
production performance
Quality or quantity of output measure employees
performance

Step 3: Comparing performance against

standards

Measured performance will be compared against

established standards
Performance may be higher than, lower than or identical
[equal] to the standard
If performance is lower than expected manager has to
decide how much deviation from standard can be
allowed before taking remedial action
Comparison is mainly based on the importance and
complexity of the activity

Step 4: Corrective action



Courses of Action

Doing nothing maintaining status quo

Only

if deviation is judged to be insignificant.

Correcting actual (current) performance or deviation

 Immediate

corrective action to correct the problem at

once.
 Basic

corrective action to locate and to correct the

source of the deviation.

 Corrective Actions
 Change

strategy, structure, compensation scheme, or

training programs; redesign jobs; or fire employees

Contd..

Revising or change the standard

Examining the standard to ascertain whether or

not the standard is realistic, fair, and achievable.
Upholding
Resetting

too high

the validity of the standard.

goals that were initially set too low or

Essentials of effective Control System

Suitable - The control system should be appropriate to the

nature and needs of the activity. Controls used in the sales
department will be different from those used in finance and
personnel.
Timely and forward Looking The control system should
be such as to enable the subordinates to inform their
superiors expeditiously about the threatened deviations and
failures.The feedback system should be as short and quick as
possible.
Objective and Comprehensible Objective controls
specify the expected results in clear and definite terms and
leave little room for argument by the employees.
Flexible The control system should be flexible so that it can
be adjusted to suit the needs of any change in the
environment.



Economical The benefit derived from a control system

should be more than the cost involved in implementing it.
Prescriptive and Operational A control system in
order to be effective and adequate must not only detect
deviations from the standards but should also provide for
solutions to the problems that cause deviations.
Acceptable to Organization Members
Motivate people to High Performance Since most
people respond to a challenge, successfully meeting a
tough standard may well provide a greater sense of
accomplishment than meeting an easy standard.
Should not lead to less attention to other Aspects.

Types of Control

Managers can implement controls before an activity

begins, during the activity is going on, and after the
activity has been completed

Comparison of past-oriented and futureoriented controls

Input

Process

Outputs

Information

Future-oriented
control
Feedback
Feedforward

Past-oriented
control

Types of Control Methods

Past-oriented Control These are also known as post-action

controls and measure results after the process. They examine what
has happened in a particular period in the past. Examples of such
controls are most accounting records, inspection of goods and
services and school grade reports. These controls can be used to
plan future behavior in the light of past errors or successes.

Concurrent Control-Takes place while an activity is in progress.

Best known form of this type is DIRECT SUPERVISION. When
managers use management by walking around, where they visit
floor and contact employees directly, they are using concurrent
control. Ex: while typing in a word document, miss spelt words or
grammar errors are highlighted in a green or red color. Though
delay in managerial response to problem is there, it is minimal. One
can reduce the wastage because of damages, as you are preventing
major damages

Future-oriented control These are also known as

steering controls or feed forward controls and are
designed to measure results during the process so that
action can be taken before the job is done or the period
is over. They serve as warning-posts principally to direct
attention rather than to evaluate. Examples of such
controls are cash flow and funds flow analysis, network
planning etc. which enable managers to see that they will
have problems in such areas as cash or on-time delivery.

Control Techniques

Budgeting A budget is a statement of anticipated

results during a designated time period expressed in
financial and non-financial terms.
Standard costing One of the techniques of control
and it is being increasingly used by modern business
concerns for the purpose of cost reduction and cost
control.
Financial Statement and Ratio analysis The
trading profit and Loss Account and the Balance Sheet of
a company are the usual financial statements which are
prepared ex-post to indicate what financial events
occurred since the last statements.

Break-even analysis It involves the use of a chart to

depict the overall volume of sales necessary to cover
costs. It is that point at which the cost and revenue of the
enterprise are exactly equal.
Internal and External Audit Internal Audit is
conducted by an internal auditor who is an employee of
the organisation. He makes an independent appraisal of
financial and other operations.
External Audit is an independent appraisal of the
organisations financial accounts and statements.
Reports Preparing Reports to provide information to
the management for purposes of control and planning.

THANK YOU