Professional Documents
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Practices
Management
Amity Directorate
of Distance &
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CONTENTS
UNIT 1. INTRODUCTION TO MANAGEMENT
1.1
Introduction
1.2
Unit Objectives
1.3
Definitions of Management
1.4
Management Functions
1.5
Levels of Management
1.6
1.7
Classical Approach
1.8
Behavioral Approach
1.9
Quantitative approach
1.10
1.11
Summary
1.12
1.13
Further readings
Introduction
2.1
Unit Objectives
2.2
Planning: An Overview
2.3
Importance of Planning
2.4
2.5
Forecasting
2.6
Summary
2.7
2.8
Further Reading
UNIT 3 : ORGANISING
3.0
Introduction
3.1
Unit Objectives
3.2
3.3
Importance of Organising
3.4
Span of Control
3.5
Delegation of Authority
3.6
3.7
3.8
Summary
3.9
3.10
Further readings
1-14
15-26
27-40
41-52
Structure
4.0
Introduction
4.1
Unit Objectives
4.2
Job Analysis
4.3
Manpower Planning
4.4
Recruitment
4.5
Selection
4.6
4.7
Performance Appraisal
4.8
Summary
4.9
4.10
Further readings
UNIT 5 : DIRECTING
53-79
Structure
5.0
Introduction
5.1
Unit Objectives
5.2
Motivation
5.3
Co-ordination,
5.4
Communication
5.5
Decision Making,
5.6
5.7
Summary
5.8
5.9
Further readings
Introduction
6.1
Unit Objectives
6.2
Meaning of Control
6.3
Process of Control
6.4
6.5
6.6
6.7
Summary
6.8
6.9
Further readings
80-90
Unit Objectives
1.2
Introduction
1.3
Definitions of Management
1.4
Management Functions
1.5
Levels of Management
1.6
1.7
Classical Approach
1.8
Behavioral Approach
1.9
Quantitative approach
1.10
1.11
Summary
1.12
1.13
Further readings
1.2 INTRODUCTION:
Although management is implicit in all organized group effort over which human civilization
is built up, its systematic study and analysis is only of recent origin. Till almost the end of
19th century, management was being practiced as an art of getting things done through
people. Very little conceptual and theoretical body of knowledge was developed. Only during
the 20th century, a concerted attempt to look closely at the practice of management has
been made to identify certain patterns and relationships and to understand the dynamics of
individual and group behavior in organizational settings. A broad theory of organization and
management is in the process of evolution around certain basic concepts, principles and
propositions. Management has emerged as a distinct discipline in the social sciences with
a tremendous potential for a dynamic process of development.
Notes :
d)
Increasing number and size of organizations as also competition among them and
the need to utilize and conserve resources in a most efficient and economic manner
and to plan the strategy of coping with the fast changing environment.
e)
The evolution of management theory over the nine decades of the 20th century is of
interest to us to get an insight into the different streams of ideas and the interplay of forces
that have contributed to the development of knowledge on management. Familiarity with
historical and theoretical perspectives of management thought is helpful to us to gain a
proper and balanced perspective on the theory and practice of management.
may range from planning to define the overall purposes and objectives of an organization to
planning for a specific action. Planning helps a firm decide its future course of action.
Organizing: Organizing is the process of assigning tasks and allocating resources to
individuals to enable them to accomplish organizational goals. Organizing is a continuous
process of determining (1) which tasks are to be performed, (2) how tasks can best be
combined into specific jobs, (3) how jobs can be grouped into various units, and (4) the
authority and reporting relationships within the corporate hierarchy. The organizational
structure of a firm is a key element in determining its success or failure. It plans are not
organized properly even the best of plans can fail. On the other hand, the pitfalls associated
with a poor plan can be eliminated by excellent organization.
Staffing: Today, staffing is better known as "human resource management" and involves
manning or filling the various positions in the organizational hierarchy. Activities like
determining manpower requirements, assessing the number of people presently available
in the organization, recruiting and selecting candidates, training and placing them in the
organization come under the purview of staffing. This function also deals with compensation,
performance appraisal, promotion and career planning.
Leading: Leading is defined as "the management function of influencing, motivating,
and directing people towards the achievement of organizational goals." It is the management
function that involves influencing and inspiring team members to perform well and accomplish
corporate objectives. Leading involves (1) communicating with others, (2) leadership styles
and approaches, and (3) motivating people to put forth the effort required to achieve
organizational goals. In simple words, it is the act of making things happens through others.
Controlling: The final step in the management process is to monitor the progress of an
organization towards its goals. Controlling can be defined as the continuous measurement
and analysis of actual operations against the established industry standards developed
during the planning process and corrections of deviations, if any.
The basis control process involves (1) comparing performance with standards, (2) determining
where negative deviations occur, and (3) developing remedial measures to correct deviations.
Notes :
Notes :
administrative theory and bureaucratic management - are Frederick W. Taylor, Henry Fayol
and Max Weber respectively.
Scientific Management
Scientific management became increasingly popular in the early 1900s. In the early
19th century, scientific management was defined as "that kind of management which
conducts a business or affairs by standards established, by facts or truths gained through
systematic observation, experiment, or reasoning". In other words, it is a classical
management approach that emphasizes the scientific study of work methods to improve
the efficiency of the workers. Some of the earliest advocates of scientific management
were Frederick W. Taylor (1856-1915), Frank Gilbreth (1868-1924), Lillian Gilbreth (18791972), and Henry Gantt (1861-1919).
Workers feared that if they increased their productivity, other workers would lose
their jobs.
ii.
iii. Outdated methods of working handed down from generation to generation led to a
great deal of wasted efforts.
Taylor felt that the soldiering problem could be eliminated by developing a science of
management. The scientific management approach involved using scientific methods to
determine how a task should be done instead of depending on the previous experiences of
the concerned worker.
In essence, scientific management as propounded by Taylor emphasizes:
i.
ii.
iii. Establishing harmonious relations between management and workers so that the
job is performed in the desired way.
The two major managerial practices that emerged from Taylor's approach to management
are the piece-rate incentive system and the time-and-motion study.
Time-and-motion study
Taylor tried to determine the best way to perform each and every job. To do so, he
introduced a method called 'time-and-motion' study. In a "time-and-motion" study, jobs are
broken down into various small tasks or motions and unnecessary motions are removed to
find out the best way of doing a job. Then each part of the job is studied to find out the
expected amount of goods that can be produced each day. The objective of a time-andmotion analysis is to ascertain a simpler, easier and better way of performing a work or job.
The principles of scientific management revolve round problems at the operational level
and do not focus on the management of an organization from a manager's point of view.
These principles focus on the solutions of problems from an engineering point of view.
b)
The proponents of scientific management were of the opinion that people were "rational"
and were motivated primarily by the desire for material gain. Taylor and his followers overlooked
the social needs of workers and overemphasized their economic and physical needs.
c) Scientific management theorists also ignored the human desire for job satisfaction.
Since workers are more likely to go on strike over factors like working conditions and
job content (the job itself) rather than salary, principles of scientific management, which
were based on the "rational worker" model, became increasingly ineffective.
Administrative Theory
While the proponents of scientific developed principles that could help workers perform
their tasks more efficiently, another classical theory - the administrative management theory
- focused on principles that could be used by managers to coordinate the internal activities
of organizations. The most prominent of the administrative theorists was Henri Fayol.
Notes :
Notes :
Henri Fayol
French industrialist Henri Fayol (1841-1925), a prominent European management
theorist, developed a general theory of management. Fayol believed that "with scientific
forecasting and proper methods of management, satisfactory results were inevitable," Fayol
was unknown to American managers and scholars until his most important work, General
and Industrial Management, was translated into English in 1949. Many of the managerial
concepts that we take for granted today were first articulated by Fayol.
According to Fayol, the business operations of an organization could be divided into
six activities.
Technical
Commercial
Financial
Security
Accounting
Managerial
Fayol focused on the last activity, managerial activity. Within this, he identified five
major functions: planning, organizing, commanding, coordinating and controlling. Fayol's
five management functions are clearly similar to the modern management functions planning, organizing, staffing, leading and controlling. Fayol's concept of management
forms are cornerstone of contemporary management theory.
2.
Authority and responsibility: Authority is defined as "the right to give orders and the
power to extract obedience". Authority can be formal or personal. Formal authority is
derived from one's official position and personal authority is derived from factors like
intelligence and experience. Authority and responsibility go hand-in-hand. When a
manager exercises authority, he should be held responsible for getting the work done
in the desired manner.
3.
4.
Unity of command: Each employee should receive orders or instructions from one
superior only.
5.
Unity of direction: Activities should be organized in such a way that they all come
under one plan and are supervised by only one person.
6.
7.
8.
9.
Scalar chain: This refers to the chain of authority that extends from the top to the
bottom of an organization. The scalar chain defines the communication path in an
organization.
10. Order: This refers to both material and social order in organizations. Material order
indicates that everything is kept in the right place to facilitate the smooth coordination
of work activities. Similarly, social order implies that the right person is placed in the
right job (this is achieved by having a proper selection procedure in the organization).
11. Equity: All employees should be treated fairly. A manager should treat all employees in
the same manner without prejudice.
12. Stability of tenure of personnel: A high labor turnover should be prevented and managers
should motivate their employees to do a better job.
13. Initiative: Employees should be encouraged to give suggestions and develop new and
better work practices.
14. Espirit de corps: This means "a sense of union." Management must inculcate a team
spirit in its employees.
Bureaucratic Management
Bureaucratic management, one of the schools of classical management, emphasizes
the need for organizations to function on a rational basis. Weber (1864-1920), a contemporary
of Fayol, was one of the major contributors to this school of thought. He observed that
nepotism (hiring of relatives regardless or their competence) was prevalent in a most
organizations. Weber felt that nepotism was grossly unjust and hindered the progress of
individuals. He therefore identified the characteristics of an ideal bureaucracy to show how
large organizations should be run. The term "bureaucracy" (derived from the German buro
meaning office) referred to organizations that operated on a rational basis. According to
Weber, "a bureaucracy is a highly structured, formalized, and impersonal organization." In
other words, it is a formal organization structure with a set of rules and regulations.
The term "bureaucracy" is sometimes used to denote red tapism and too many rules. However,
the bureaucratic characteristics of organizations outlined by Weber have certain advantages.
They help remove ambiguities and inefficiencies that characterize many organizations. In addition,
they undermine the culture or patronage that he saw in many organizations.
Notes :
Notes :
Illumination experiments
These experiments, initiated by Western Electric's industrial engineers, took place between
1924 and 1927. These experiments involved manipulating the illumination for one group of
workers (called the experimental or test group) and comparing their subsequent productivity
with the productivity of another group (the control group) for whom the illumination was not
changed. The results of the experiments were ambiguous. For the test group, performance
improved as the intensity of the light increased. The result was expected. However, the
performance of the test group rose steadily even when the illumination for the group was made
so did that the workers could hardly see. To compound the mystery, the control group's productivity
also tended to rise as the test group's lighting conditions were altered, even though the control
group experienced no changes in illumination. Since there was a rise in performance in both
groups, the researchers concluded that group productivity was not directly related to illumination
intensity. Something besides lighting was influencing their performance.
At this point of the Hawthorne Experiments, researchers from Harvard University, under
the guidance of Elton Mayo, were invited to participate in conducting the next phase of
experiments.
Interview phase
During the course of the experiments, about 21,000 people were interviewed over a
three-year period - between 1928 and 1930 - to explore the reasons for human behavior at
work All the employees in the Hawthorne plant were interviewed. The generalizations drawn
from these interviews are given below:
1.
2.
Objects, persons and events carry social meaning. Their relation to employee satisfaction
or dissatisfaction is purely based on the employee's personal situation and how he
perceived them.
3.
4.
The position or status of the worker in the company is a reference from which the
worker assigns meaning and value to the events, objects, and features of his
environment, such as hours of work, wages etc.
5.
The social organization of the company represents a system of values from which the
worker derives satisfaction or dissatisfaction according to his perception of his social
status and the expected social rewards.
6.
The social demands of the worker are influenced by social experiences in groups both
inside and outside the workplace.
Notes :
10
Notes :
The procedures, analysis of findings, and the conclusions reached were found
to be questionable. Critics felt that the conclusions were supported by little
evidence.
2.
The relationship made between the satisfaction or happiness of workers and their
productivity was too simplistic.
3.
workers are lazy, have little ambition, dislike work, want to avoid responsibility and need to
be closely directed to make them work effectively. Theory Y is more positive and presumes
that workers can be creative and innovative, are willing to take responsibility, can exercise
self-control and can enjoy their work. They generally have higher-level needs which have
not been satisfied by the job. Like Maslow's theory, McGregor's Theory X and Theory Y
influenced many practicing managers. These theories helped managers develop new ways
of managing the workers.
Management Science
The management science approach stresses the use of mathematical models and
statistical methods for decision-making. It visualizes management as a logical entity, the
11
Notes :
12
Notes :
Production scheduling
Aircraft scheduling
Various mathematical tools like the waiting line theory or queuing theory, linear
programming, the program evaluation review technique (PERT), the critical path method
(CPM), the decision theory, the simulation theory, the probability theory, sampling, time
series analysis etc. have increased the effectiveness of management decision making. To
apply a quantitative approach to decision-making, individuals with mathematical statistical,
engineering, economics and business background skills are required. Since one person
cannot have all these skills the quantitative method requires a team approach to decisionmaking. This approach has been criticized for its overemphasis of mathematical tools.
Many managerial activities cannot be quantified because they involve human beings who
are governed by many irrational elements.
Operations Management
Operations management is an applied form of management science. It deals with the
effective management of the production process and the timely delivery of an organization's
products and services. Operations management is concerned with [i] inventory management,
(ii) work scheduling (iii) production planning, (iv) facilities location and design, and (v) quality
assurance. The tools used by operations manages are forecasting, inventory analysis,
materials requirement planning systems, networking models, statistical quality control
methods, and project planning and control techniques.
Systems Theory
Those who advocate a systems view contend that an organization cannot exist in
isolation and that management cannot function effectively without considering external
13
environmental factors. The systems approach gives managers a new way of looking at an
organization as a whole and as a part of the larger, external environment. According to this
theory, an organizational system has four major components: inputs, transformation
processes, output and feedback. Inputs -money, materials, men machines and informational
sources - are required to produce goods and services. Transformation processes or
throughputs - managerial and technical abilities - are used to concert inputs into outputs.
Outputs are the products, services, profits and other results produced by the organization.
Feedback refers to information about the outcomes and the position of the organization
relative to the environment it operates in.
The two basic types of systems are closed and open systems. A system that interacts
with the environment is regarded as an open system and a system that does not interact
with its environment is considered a closed system. Frederick Taylor, for instance regarded
people and organization as closed systems. In reality, all organizations are open system
as they are dependent on interactions with their environment. Whether it is a new product
decision or a decision related to the employees of the organization, the organization must
consider the role and influence of environment factors.
Contingency Theory
This is also known as the situational theory. This approach has been widely used in
recent years to integrate management theory with the increasing complexity of organizations.
According to this theory, there is no one best way to manage all situations. In other words,
there is no one best way to mange. The response "it depends" holds good for several
management situations.
The contingency approach was developed by managers, consultants, and researchers
who tried to apply the concepts of the major schools of management thought to real life
situations. Managers who follow this approach make business decisions or adopt a particular
management style only after carefully considering all situational factors. According to the
contingency approach, "The task of managers is to identify which technique will, in a particular
situation, under particular circumstances, and at a particular time, best contribute to the
attainment of management goals".
Check your progress
Tick mark the most appropriate answer
1. Which perspective opposes the concept of finding the one best way to managing
organizations?
a)
Universal
b) Behavioral
c) Scientific
d)
Contingency.
Elton Mayo
c) F. W. Taylor
b)
Max Weber
d)
Henri Fayol.
Kurt Lewin
c)
Elton Mayo
b)
Adam
d)
Hezberg.
F.W. Taylor
c) Henri Fayol
Notes :
14
Notes :
b)
Max Weber
d) L. Urwick.
d)
Negotiating skill
b) Technical skill
e)
c) Conceptual skill
1.11 SUMMARY
The Industrial Revolution provided the impetus for developing various management
theories and principles. Preclassical theorists like Robert Owen, Charles Babbage, Andrew
Ure, Charles Dupin and Henry R. Towne made some initial contributions that eventually led
to the identification of management as an important field of inquiry. This led to the emergence
of approaches to management: classical behavioral, quantitative and modern
The classical management approach had three major branches: scientific management,
administrative theory, and bureaucratic management. Scientific management emphasized
the scientific study of work methods to improve worker efficiency. Bureaucratic management
dealt with the characteristics of an ideal organization, which operates on a rational basis.
Administrative theory explored principles that could be used by managers to coordinate
the internal activities of organizations.
The behavioral approach emerged primarily as an outcome of the Hawthorne studies.
Mary Parker Follet, Elton Mayo and his associates, Abraham Maslow, Douglas McGregor
and Chris Argyris were the major contributors to this school. They emphasized the importance
of the human element which was ignored by classical theorists in the management of
organizations. They formulated theories that centered on the behavior of employees in
organisations. These theories could easily be applied to the management of organizations.
The quantitative approach to management focuses on the use of mathematical tools to
support managerial decision-making. The systems theory looks at organizations as a set
of interrelate parts. The systems theor4y looks at organizations as set of interrelated parts.
According to the contingency theory, managerial action depends on the particular parameters
of a given situation. One important emerging approach to management thought is Theory Z.
This approach combines the positive aspects of American and Japanese management
styles. All these views on management have contributed significantly to the development of
management thought.
Unit Objectives
2.1
Introduction
2.2
Planning: An Overview
2.3
Importance of Planning
2.4
2.5
Forecasting
2.6
Summary
2.7
2.8
Further Reading
Overview of Planning
2.1 INTRODUCTION
Planning is the first of the four primary management functions and sets of a direction for
the organization. Planning is undertaken after the mission of the organization is defined and
its goals and objectives are established. It involves a set of decisions required to initiate a
set of activities that are undertaken to achieve the goals and objectives of the organization,
consistent with its mission. The successful implementation of policies, procedures and
rules, as prescribed during the planning process, ensures the success of the organization.
Planning is required at all levels of management relative to what managers at these levels
do. Strategic planning, undertaken by top management focuses on where the organization
will be in the distant future, tactical planning emphasizes on how it will be done. Operational
plans are short range plans and specify the operational aspects of the activities. Of course,
all such plans should have contingency plans to modify the existing plans and change
them, if necessary.
15
Notes :
16
Notes :
these goals. The extent and complexity of planning would depend upon the complexity and
multiplicity of objectives. Consider, for example, the planning undertaken by the Atlanta
Committee for the Olympic Games (ACOG) held in Atlanta, Georgia in 1996. While the
planning process started more than five years before the due date of the games, consider
the challenging task faced by ACOG in 1993, as reported by Business Week.
Staging the Asian Games in New Delhi in 1982 required extensive planning for years
before the games, in building the stadium, new roadways, flyovers and the residential Asiad
Village for participating athletes from all over the world. Without proper and detailed planning,
success for such colossal events cannot be assured. Similarly organizing Commonwealth
Games in Delhi in 2010 require extensive planning and forecasting. Earlier in Delhi construction
of one flyover used to cause snarling traffic jams, however it is the result of proper planning by
Metro that traffic is smooth despite so much of construction in Delhi.
Planning is particularly important because of scarce resources and an uncertain
environment, with a fierce competition for these resources. The basic purpose of planning
is to reduce the risk of uncertainties and to initiate a coordinated effort within the organization
for the purpose of organizational success. It also involves the process of preparing for
change and the dynamics of the environment.
As such the planning function has three characteristics. First, planning is anticipatory
in nature. This means that a decision has to be made now as to what to do and how, before
it is actually done. Second, planning is a system of decisions. It involves a process of
making decisions, which will define as to what is to be achieved in the future and the
formation of action plans for achievement of goals. Third, planning is focused on desired
future results. It is a means of ensuring that the important organizational objectives are
accomplished as and when desired.
2.
3.
4.
the future as accurately as possible. This would minimize the chances of haphazard
decisions. Since the future needs of the organization are anticipated in advance, the
proper acquisition and allocation of resources can be planned, thus minimizing wastage
and ensuring optimal utility of these resources.
5.
6.
Planning helps in the process of decision making: Since planning specifies the
actions and steps to be taken in order to accomplish organizational objectives, it serves
as a basis for decision making about future activities. It also helps managers to make
routine decisions about current activities since the objectives, plans, policies; schedules
and so on are clearly laid down.
Advantages and Potential Disadvantages of Planning are as follows.
Advantages
1.
Planning gives manages some purpose and direction. Since planning is future oriented,
it forces managers to look beyond the present. Also, it creates a unity of purpose,
since the objectives are formally expressed and the methods and procedures to obtain
these objectives clearly defined.
2.
Proper planning helps in the process of motivation. If plans are properly communicated to
all levels of the organization, then every one can feel involved in carrying them out. When
people get involved, their sense of belonging increases and thus they are highly motivated.
3.
Planning provides a framework for decision making. Knowing the organizational objectives
and the methods to achieve these objectives eliminates ambiguity in the decision making
process. Furthermore, planning provides for feedback, periodic evaluation of programs
and indication for any deviation so that corrective action can be taken, hence making
the decision making process a little easier. Also, systematic planning requires an
understanding and evaluation of many variables which influence events, hence it is
highly unlikely that an important variable will be overlooked which could adversely affect
either the decision process or the operation.
4.
5.
Since accurate forecast of future events is an integral part of effective planning, it reduces
the elements of risks and uncertainty. Also, since planning is done in advance of actions,
it prevents hasty judgments and haphazard decisions and results in disciplined thinking.
6.
It improves the competitive strength of the company in two ways. First, since the
operations are planned in advance: the company is able to take its time in shopping
17
Notes :
18
around for the best and competitive rates of raw materials, equipment and part and
human resources. Second, proper planning gives the company an advantageous edge
if it decides to make changes in its line of products or expansion in its plant capacity
or changes in methodology.
Notes :
7.
Formal planning forces managers to examine all areas of the organization from all
angles and efficiently coordinate the activities of all these areas. Without this process,
these managers may ignore or overlook some critical aspect due to time pressures or
other factors, thus affecting the outcome in a negative way.
Disadvantages
1.
Planning is expensive and time consuming. A good deal of time, energy and capital is
involved in setting up the planning machinery for the purpose of gathering and analyzing
data and testing of various alternatives in order to select the one which is most
appropriate. Accordingly, the cost of planning and the benefits derived from it must be
adequately balanced. Sometimes, proper planning takes up so much time that some
useful opportunities can be lost if they require immediate action and such immediate
action cannot be taken without proper planning.
2.
3.
Planning can sometimes be very frustrating because it requires an extremely detailed, careful
and analytical thought process. Accordingly, it is more of an intellectual exercise. It requires
a high level of imagination and analytical ability in addition to total commitment. The talents
required and the maintenance of high quality planning together, are difficult to achieve.
Keep aims crystallized: The aims and objectives must be clear, unambiguous solid,
reasonable and attainable. Badly defined objectives do not lend to accurate and effective
planning.
2.
Develop accurate forecasts: Accurate events and trends in the future are the most
important inputs of the planning process. Accordingly, the managers making the forecasts
must be highly skilled and must use quantitative methods wherever applicable in addition
to intuitional judgments to improve the accuracy of the forecasts.
3.
Involve subordinates in the planning process: This will ensure the acceptance of
the plans by those who are going to implement them. Studies have indicated that
people, who put the plans into operation, do so much better when they participate in
the formulation of the plans than when such plans are simply assigned to them.
4.
The plan must be a sound one: In order for a plan to be effective, it must be based
on sound assumptions and correct information. Mitroff and Emshoff suggest a devil's
advocate approach, in which someone deliberately criticizes the plan in order to eliminate
any inconsistencies in the plan and thus refine it further.
continue to stick to the plan if it is not working out as expected. However, the criteria for
abandoning a particular project should be established in the beginning. For example, if
a particular advertisement commercial does not increase sales by ten per cent in six
months, then such a commercial should be replaced.
7.
Keep your plan flexible: Keep the progress of your plan under constant review so
that it can be revised and modified as the situation demands. Future trends should also
be assessed by continuously monitoring economic, social, political, technological and
competitive trends. Any changes in these variables may require changes in the original
plans.
8.
Review long-range plans on a short-range basis: Long-range plans are risky due
to dynamic environment. Accordingly, long-range strategic plans should be split-up into
manageable periods and the basic assumptions underlying the strategic plan as well
as its progress should be measured and reviewed at such set intervals as planned so
that any reasons for under-performance or over-performance can be identified and new
decisions made relative to the plan.
9.
Fit the plan to the environment: Assess the current as well as future environment. If the
environment is comparatively stable, a plan can be more rigid. However, if the environment
is volatile, the plan must remain highly flexible to accommodate necessary changes.
Types of Plans
Organisation plans are usually divided into two types, namely standing plans and
single-use plans. Standing plans are those, which remain roughly the same for long
periods of time and are used in organizational situations that occur repeatedly. The most
common kinds of standing plans are policies, procedures and rules. Single-use plans
focus on relatively unique situations within the organization and may be required to be
used only once. These plans can be subdivided into programme and budgets. These
plans are explained below:
Standing Plans
Policies: A policy is a statement and a pre-determined guideline that provides direction
for decision making and action taking. Policies are usually general enough to give the
manager sufficient freedom to take judgments, while at the same time they are specific
enough to establish constraining boundaries. For example, regarding employment, a
company policy may be to employ personnel on merit alone without regard to race, sex or
age and within the bounds of this policy, a manager can make decisions. Policies must be
based upon a thorough analysis of objectives and should be consistent with the company's
mission and philosophy. Policies, being formal statements, serve as ready guides for
answering numerous questions and making many day-to-day routine decisions, especially
about recurring problems, thus freeing management's time for more important and unique
decisions. This helps improve the efficiency of operations. If the policies are clearly understood
and adhered to by all, then there will be fewer problems and fewer complaints to start with.
There may be separate policies for separate functions but they must be all coordinated,
thus serving the consistency of purpose.
Appropriate policy guideline enables manages to anticipate and take action for a
given set of situational variables. There are organizational policies formulated for all
types of situations and functions. There may be sales policies, production policies,
personnel policies and so on. For example, personnel policies would specify decisions
regarding selection, training, remuneration, labour relations, and promotion of personnel
and so on.
19
Notes :
20
Notes :
According to Newman, Summer and Warren, a policy may 1. Be specific or broad in nature
2. Deal with one or many aspects of a problems or a situation
3. Place wider or narrow limits within which action is to be taken
4. Specify the steps to be taken when a decision is to be made
Policies are useful indicators of the conduct and the philosophy of the company and
about what the company stands for. These policies being formal statements can easily be
communicated to the organizational members as well as the outside public.
Procedures: While policies cover a broad area of action, procedures prescribe the
exact manner in which an activity is to be completed. They are a series of steps established
to accomplish a specific project. They generally indicate how a policy is to be implemented
and carried out. They are more precise guidelines permitting little or no individual discretion.
Procedures can be defined as a series of related tasks that make up the chronological
sequence and the established way of performing the work to be accomplished. For example,
some companies have a policy of reimbursing employees for procedure, such as filling a
form, attaching a copy of courses taken and grades received, taking it to the personnel
office for processing and then wait for the reimbursement check.
Rules: Whereas procedures specify a chronological sequence of steps to be performed,
rules are very specific and narrow guides to action. These are plans that describe exactly
how one particular situation is to be handled. For example, a company may prescribe a
number of safety rules, such as No Smoking on company premises. No eating in the
classroom is a rule in all schools and colleges.
A rule is meant to be strictly followed and is generally enforced by invoking penalties.
For example, if it is a rule to report on duty at 9 am then any person who consistently
breaks this rule can be fired. A recent New York State law requires that all car drivers not
wearing safety belts while driving a car are subject to a fine.
Single-Use Plans
Programmes: A programme is a single-use plan designed to carry out a special project,
solving a problem or achieving a group of related goals. This project or problem is not
intended to be in existence over the entire life of the organization like the standing plans.
The programme exists to achieve some purpose identified by the organization and this
achievement is expected to benefit the organization. For example, an organization may
have instituted a management development programme to build special managerial skills
such as handling international competition or meeting the management challenges of the
next century.
Similarly, a college may have a programme to build a new laboratory or add new class
rooms. A business may have a programme to automate its systems. All these programmes
are one-time programme, no matter how long it takes to complete a given programme or a
project. Once the programmes goals are achieved, that programme is discontinued.
Budgets: A budget is another single-use programme, which is a financial plan that
covers a specified period of time. This plan identifies as to how funds will be raised and how
these funds will be utilized for procuring resources such as labour, raw materials, information
systems and other business functions such as marketing, research and development and
so on. Every organization prepares a budget for its various activities. These budgets are
usually for a one-year period at a time. When a specific budget period ends, the value of
that budget as a planning device is finished, even though it may form the basis for the
budget for the following period. In that respect, it is a single-use plan.
2.5 FORECASTING
Forecasting plays a pivotal role in the operations of modern management. It is an
important and necessary aid to planning and planning is the backbone of effective operations.
Many organizations have failed because of lack of forecasting or faulty forecasting on which
the planning was based. For example, Curtiss-Wright, one of the major aero plane
manufacturers, the equal of Douglas and Boeing combined in 1945 - decided to put its
money into an improved piston engine instead of jets. The management of Curtiss-Wright
did not accurately forecast the market for jets and hence failed. The importance of forecasting
is emphasized by Lonis A. Alphen: "A systematic attempt to probe the future by inference
from known facts helps integrate all management planning so that unified overall plans can
be developed into which divisional and departmental plans can be meshed. It enables a
company to commit its resources with greatest assurance to profit over the long term. By
helping to identify future demand patterns, it facilitates development of new products".
Forecasting implies the act of making a detailed analysis of the future and planning is
impossible without either predicting the future as accurately as possible or making intelligent
assumptions about it. Forecasting may be a form of intentional and considered judgment
based on feelings, opinions and experiences, and these judgments, at best will be educated
guesses. It could also be based upon a rational study and analysis of pertinent data and
this process is known as "scientific forecasting". It would depend upon an analysis of past
events and current conditions with a view to drawing inferences and conclusions about
future events. Some of the areas in which accurate forecast about future events and trends
are necessary for organizational success and growth are:
Economic development: The economic conditions of the country as well as global
economy would have significant effect on the operations of an organization. The necessary
elements of such forecasts include predictions relating to GNP and GDP, currency strength,
industrial expansion, job market, inflation rate, interests rate, balance of payments and so
on. Healthy economic trends assist in the growth of the company. On the other hand, for
example, the economic depression of 1929-1930 put many companies out of business.
The knowledge about economic trends would assist the management in making plans for
their organization as an effective response to such trends.
Technological forecasts: These forecasts predict the new technological developments
that may change the operations of an organization. For example, the advent of the transistor
put the vacuum tube totally out of business. The age of the electronic calculators totally
wiped out the market for slide rules. An aggressive organization keeps up to date with new
technological development and readily adopts new methods to improve performance.
Competition forecasts: it is equally necessary to predict the strategies your competitors
would be employing to acquire gains in the market share, perhaps at the cost of your
market share. The competitor may be planning to employ a different market strategy for the
product or to bring out a substitute for the product, which could be cheaper and easily
acceptable by consumers.
Social forecasts: These forecasts involve predicting changes in the consumer tastes,
demands and attitudes. Consumers have already established a trend for convenience,
comfort and for products and that are easy to use and manage. Matters of taste and
preference may change over a period of time. For example, in the 1970s, the trend was to
buy small economic cars. In the 1990s, the trend returned to luxury and comfort. While
these trends partly do depend upon the general economic trends they also depend on the
21
Notes :
22
Notes :
consumer tastes. For example, trends in women's fashions and clothing change almost
every year. The Nehru jacket, highly popular is the 1960s, is unheard of today. Accordingly,
in the area of consumer goods, social trends are important aspects of forecasting.
Forecasting as a strategy is widely used today, and some of these forecasts, specially
the short-term ones, are fairly reliable. Some forecasts, using scientific methods or
instrumentations can be fairly accurately made. For example, short-range weather
forecasting, forecasting the paths of meteorites and comets or solar and lunar eclipses are
quite accurate. However, accuracy becomes less dependable as we extend forecasting
farther into the future.
Forecasting human behaviour or situational trends is much more difficult to assess
and may result in faulty estimates. How people will respond to certain actions taken by the
organization is difficult to predict. Perhaps, one of the classical examples of failure in
correctly forecasting people's attitudes as well as economic trends was the total failure of
Ford Motor Company's "Edsel" car, which was built in the early 1950s, after a thorough
investigation of all the factors that determine future events. The Bulova Watch Company
suffered huge losses when it failed to accurately forecast the full impact of digital watches.
On the other hand, IBM's correct forecast of the impact of its third generation computer
system 360 in the 1960s was a major benchmark in the continuing success story of IBM.
The uncertainty of future events overshadows the fact that even the most skilled forecasters
using the most sophisticated tools and example would be the faulty predictions about the
population of America for the 1970s and 1980s, made in the 1950s. The actual population
was much less than anticipated. Some of the assumptions on which these predictions
were based did not include variables that became apparent later on in time. These variables
were legal abortions, social attitudes towards birth control, late marriages and a decline in
social pressures to have children.
Techniques of Forecasting
The future can never be known with certainty, but there are some techniques that have
proved to be effective in reducing the degree of uncertainty. There are basically two broad
categories of forecasting techniques. These are:
Qualitative Techniques: These techniques are primarily based upon judgment and
intuition about the environment and are used especially when sufficient quantitative information
and data is not available so that complex quantitative techniques cannot be used. Under
certain situations, qualitative judgments about the future are more reliable than quantitative
conclusions because the quantitative methods are based on the analysis of the past data
and its trends, which may or may not remain the same. Secondly, quantitative techniques
follow a certain pattern and do not provide for accommodating any unexpected occurrences.
Opinions of sales persons: This approach involves the opinions of the sales force and
these opinions are primarily taken into consideration for forecasting future sales. The sales
people, being closer to the consumers, can estimate future sales in their own territories
more accurately. Based on these and the opinions of the sales manages, a reasonable
trend of the future sales can be calculated. These forecasts are good for short-range planning,
since sales people are not sufficiently sophisticated to predict long-term trends. This method,
also known as the "grass roots" approach lends itself to easy breakdowns of product,
territory, and customer and so on, which makes forecasting more elaborate and
comprehensive.
Consumer expectations: This method involves a survey of the customers as to their
future needs. This method is especially useful where the industry serves a limited market.
Based on the future needs of the customers, a general overall forecast for the demand can
be made. The major problem with this method is that the future "needs" do not necessarily
mean future "commitments" to buy, since needs may change depending upon the
circumstances. However, the method is fairly reliable where the target market is small
such as buyers of industrial products and where the customers are knowledgeable and
cooperative.
The Delphi method: The Delphi method originally developed by Rand Corporation
in 1969 to forecast military events has become a useful tool for other areas also. It is
basically a more formal version of "jury of executive opinion" method. A panel of experts
is given a situation and asked to make initial predictions about it. On the basis of a
prescribed questionnaire, these experts develop written opinions. These responses are
analyzed and summarized by a central coordinator and submitted back to the panel for
further consideration, evaluation and refinement. All these responses are anonymous
so that no member influenced by other's opinions. This process is repeated until a
consensus is obtained. This method is very useful where either the past patterns are
not available or where the past data is not indicative of future events and the issues are
general in nature such as future energy needs, possible after-effects of a nuclear war
and so on.
Quantitative Techniques: These techniques involve mathematical and statistical
analyses of data banks, which is primarily the information related to past activities.
These techniques are fairly sophisticated and required experts in the field to use them.
"Time Series Analysis" is a popular statistical forecasting technique. It extrapolates
the past trends into future. "Economic Models" for forecasting are more complex in
nature and involve inter-relationships of many variables tied together in a mathematical
model. Complex computer models simulate future events based on probabilities and
multiple assumptions. "Statistical Surveys" use statistical analysis of opinion polls
and attitude surveys to predict such variables as future consumer tastes, employee
preferences, and political choices and so on. The major disadvantage of using quantitative
techniques is that the conclusions derived from quantitative models are only as good
as the assumptions and judgments made about the variables that are put into the
model. Faulty assumptions will yield inaccurate results. No matter what model or method
is used, forecasting basically rests on human judgment. Accordingly, forecasts should
serve as guidelines and not as indicators of certainty. Henry Albers has summarized
his assessment of forecasting:
A successful forecast is something of a miracle and often occurs for the wrong reasons.
However, it should not lead to the assumption that nothing has been accomplished. There
are some good "rule of thumb" forecasts. A part of the problem is that too much is expected
from forecasting. People want more precise answers than are possible in an environment
characterized by uncertainty."
23
Notes :
24
Notes :
It improves the utilization of human resources by helping the management forecast the
recruitment needs in terms of both numbers as well as the types of skills required, and
develops ways to avoid or correct problems before they become serious and disrupt
operations.
It helps focus the recruitment efforts on the most likely sources of supply. This will cut
down the total costs of hiring and training personnel and reduce costs associated with
hiring mistakes.
It makes provisions for replacement or back-up staff from either inside or outside the
organization whenever the need arises either on a temporary or permanent basis. These
available sources of supply are important to identify specially in the case of any
emergencies that might occur.
It helps achieve an integration of personnel plans with other operating as well as strategic
plans by making available the personnel management information base to other
organizational activities.
Anticipated growth of the organization: This growth rate can be calculated from
the past trends on the assumption that all variables affecting this growth will remain
constant.
2.
Budget constraints and allocations: The budget allocation specifically for the
purpose of new employees will determine the number of new workers that can be
hired, thus putting a ceiling on the maximum number.
3.
4.
5.
Minority hiring goals: The goals established by the organsation about hiring
minorities or the handicapped, as a part of the affirmative action policies, may
affect the demand for the total number of employees, specially when it is difficult
to match the skilled, semi-skilled or unskilled minority workers to the specific
job requirements.
Forecasting Supply
1.
Promotions of employees from within the organization: Promotions are a good and
a reliable source of supply of experienced and skilled personnel, who do not need
to be extensively trained and who are also familiar with the organizational goals,
policies, and philosophy
2.
Availability of required talent in the external labour market: This may be assessed
by unemployment figures, a survey of private and public employment agencies
and other sources.
3.
Competition for talent within the industry: If the competition is very tough then it
will be more difficult to tap the supply and the cost of additional workers will become
very high. Conversely, if the need for a particular talent is not very high in the
competitive industry, then the supply will remain flexible.
4.
Population movement trends: The demographical changes will also affect the sources
of supply. For example, if there is a tendency for people to move from rural areas to
urban areas, then the supply in the rural areas will dry up. Similarly, most new
immigrants from outside have a tendency to settle in cities, thus increase the
supply in the urban areas.
5.
b)
c)
25
Notes :
26
Notes :
b)
b)
An intellectual process
2.6 SUMMARY
Planning is a decision-making activity requiring the process of ascertaining objectives
and deciding on activities to attain these objectives. In planning, managers assess the
future, determine the goals of the organization and develop the overall strategies to achieve
these goals. The importance of formal planning has already been discussed. A vigorous
and detailed planning programme helps managers to be future oriented. It gives the managers
some purpose and direction.
Planning is a critical managerial activity. It is the process of determining how the
organization can get where it wants to go. It is primary function of management because all
other functions depend upon how the organization plans to achieve its objectives.
Forecasting implies the act of making a detailed analysis of the future and planning is
impossible without either predicting the future as accurately as possible or making intelligent
assumptions about it. There are basically two broad categories of forecasting techniques
qualitative and quantitative techniques.
UNIT - 3 : ORGANISING
Structure
3.0
Unit Objectives
3.1
Introduction
3.2
3.3
Importance of Organising
3.4
Span of Control
3.5
Delegation of Authority
3.6
3.7
3.8
Summary
3.9
Importance of Organising
Span of Control
Delegation of Authority
3.1 INTRODUCTION
The organizing function of management follows the planning function and strives to
capture the plans and convert them into tasks, to be divided in jobs. The work flow of the
organization designed around a network of authority-responsibility relations. Thus, the purpose
of organising is to evolve a structural framework within which managers and other perform
their functions and play their roles.
27
Notes :
28
activities are to be performed to achieve organisational goals? How are they to be divided
and sub-divided into tasks and jobs? Where are they to be positioned? How are they to be
Notes :
29
combined and grouped into work units? How is authority divided and dispersed into
managerial positions? How are the various managerial positions tied together with the work
units? How are tasks assigned to people and their roles defined?
The organising process consists of two sub-processes. They are differentiation and
integration.
Differentiation is defined as the process of dividing and sub-dividing a unit of activity or
authority and segmenting it into identifiable sub units. The need for differentiation arises
because the total activity or authority of an organisation cannot be handled by on man.
(Unless it is a very small organisation). It has to be divided and sub-divided to reduce its
complexity and to make it more manageable by assigning the divided pieces of work or
authority to different individuals.
Integration is the process of tying the differentiated or sub-systems together. For
bringing about unity of effort and for ensuring harmony in the functioning of the organisation.
The need for integration arises because all the differentiated units have to be pulled together,
as otherwise they will remain isolated and fragmented. The larger and more complex an
organisation is, the more is the imperative of differentiation. The more the degree or
differentiation, the greater is the need for integration.
More specifically, the following steps are involved in the organising process.
(a) Identification of the activities required to achieve organisational goals.
(b) Division of the activities into compact tasks and their further sub-division into individual
job units, by using the concepts of division of labour and specialization.
(c) Grouping of the jobs into homogeneous work units, sections, departments and divisions.
This is the function of departmentalization. Various bases can be used for grouping
purposes; functional, territorial, products, process, customer and so forth.
(d) Establishment of relationship among the job and departments and positioning them
into a horizontal structure.
(e) Analysis of the decisions required to be made for managing the activity sub-groups.
(f)
(g) Establishment of the required integration system, linking the various managerial positions
and activity groups.
30
The creation of staff units to take over some of the work load of line managers is meant
to give the latter some respite, so as to enable them to concentrate on their day-to-day
management functions.
(g) Several processes which are part of the organising function for example, division of
tasks, creation of compact and homogeneous work units, determination of appropriate
spans of management, unity of command, parity of authority and responsibility etc. are
meant to protect the members of the organisation from the perils of over-work, confusion,
inter-position clashes, harassment and so on.
Notes :
Notes :
31
The behavior of above factors differs from organisation to organisation and from level to
level. Hence the appropriate span of management is also variable.
32
(c) He has to be assigning the tasks to his individual subordinates. As far as possible, the
task content assigned to subordinates has to be kept compact and homogeneous.
(d) He has to delegate a part of his authority to his subordinates to enable them to perform
the assigned tasks. He has to ensure that his subordinates are given enough authority
content to enable them to function effectively.
(e) He has to impose a personal obligation or accountability on each of his subordinates for
effective performance of the assigned tasks and for proper exercise of delegated authority.
Need for delegation of authority and its importance: management is the art of getting
things done through people occupying various managerial and other positions in the
organisation. Delegation of authority which includes assignment of tasks and imposition of
accountability are implicit in this function. Delegation is based on the elementary principle
of division of labour among managerial positions.
In most cases, the set of tasks and the amount of authority vested in each managerial
position are such that the person occupying the position cannot shoulder them alone. He
has to share them with his subordinates by an explicit and formal process of delegation.
Otherwise, he is most likely to be over-burdened with the work. Delegation of authority is a
mechanism by which is manager segregates his activities into those that he himself should
do and those that he can pass on to his subordinates.
Delegation of authority in a planned manner permits managers at every level to concentrate
on those key activities which really need their attention - such important aspects of decision
making, planning, organising, direction and control. Certain other functions which
subordinates can carry out equally well deserve to be transferred to them. Delegation is an
important step which managers have to take to multiply their own effectiveness.
Delegation is a means of management development. A well-planed delegation results in
creation of multiple centers of managerial authority and competence for purposes of timely
decision making and action. It activates interaction among managers and their subordinates,
thereby promoting better understanding, motivation and involvement among them.
It is obvious that a manager cannot delegate his entire authority; if he does so, he
cannot justify his continuance in the organisation. He has to retain those tasks, which by
virtue of his organisational position, he alone should do. These include setting goals,
planning, and allocation of tasks, motivating subordinates to perform, ensuring control over
their performance and bringing about overall coordinated action of his unit. Also in an
emergency, he should be willing to assume total authority and responsibility.
Reasons for non-delegation of authority: In many organisations, managers do not properly
practice the art of delegation of authority. The entire do not delegate or delegate only
marginally. Several assumptions can be thought of as to why managers do not delegate
their authority. They are listed as follows:
(a) Some managers find problems in segregating their tasks into those which can be
delegated and those which they have to do themselves. They tend to feel that they
have to do everything because every thing is important and cannot be delegated. In
reality, they are fond of doing things themselves.
(b) Managers fear that their subordinates (i) are not able exercise authority and assume
responsibility (ii) lack willingness to cooperate with their boss (iii) cannot be trusted
and (iv) will dominate them and eventually will replace them.
(c) Some manages are over-confident of their own competence to handle all things effectively;
they feel that subordinates will mess up things.
(d) Managers are not able to guide, train and motivate their subordinates to perform the delegated
Notes :
33
Notes :
(e) Managers are very fond of authority and the associated status. They fear that delegation
of authority means loss of authority with its adverse consequences. They believe that
management is exercise of authority and not its delegation.
(f)
Managers are afraid that since their responsibility and accountability to their superiors
cannot be delegated, there is no point in delegating authority. They feel that if they do
things themselves, they can have more control.
(g) There are no proper organisational arrangements, which facilitate delegation, like an effective
communication and control system, a clear set of policies and procedures, management
training and development programmes, equitable reward system and so on.
Signs of ineffective delegation of authority: Some of the major signs of defective delegation
of authority are indicated as follows:(a) When managers do not really have the delegated authority but they believe that they
have it. This will lead them to make decisions on matters beyond their authority.
(b) When managers do have the delegated authority but believe that they do not have it.
This will lead to a situation in which they are always hesitant to decide and act.
(c) When too much authority or too little is delegated to managers in relation to the tasks
assigned, with the result that they will fail either to get the tasks performed or to
exercise their authority to the optimum extent.
(d) When authority is delegated to people without considering their ability and experience
to understand the implications of its exercise.
(e) When the superior manager persistently interferes with the functioning of his subordinate
manager to whom has delegated the authority.
(f) When the higher level manager does not design the mechanism to ensure that his
subordinates exercise their authority properly, carry out the assigned tasks and meet
with their obligations or accountability.
(g) When such authority is delegated in an ad-hoc matter to meet with situations and
crises as they of necessity to do so.
(h) When authority, once delegated to a subordinate cannot be withdrawn by the superior
manager, in case of necessity to do so.
(i) When the superior manager takes a very serious view of even incidental errors of judgment
in the exercise of authority by the subordinate.
Guidelines for effective delegation of authority: In order to improve managerial functioning,
some more guidelines on delegation of authority are suggested as under:1.
There should be a match between the aptitude and abilities of the subordinates
and the tasks entrusted to them. The principle of fitting jobs to individuals should
be followed as far as possible.
2.
The delegating manager has to know the nature of tasks and functions which he
himself should handle and which he cannot delegate. These relate to important
planning and control functions and certain decision-problems which are to be handled
at his own level.
3.
34
4.
Each subordinate should know as to how his tasks are related to the tasks of his
other colleagues in the section. This will bring out cases of overlapping tasks
which can either be justified or rationalized to make them non-overlapping.
5.
6.
In the case of those subordinates who are new to the job, the superior manager
should delegate authority and responsibility in a gradual manner. In the initial
stages, the degree of authority and responsibility delegated should be low while
supervision and guidance should be high. As the subordinate gains experience
and confidence, the extent of guidance and close supervision should be reduced
while the content of delegation should be increased.
7.
Once tasks are assigned and authority is delegated, the manger should allow the
subordinates to function with a measure of freedom. In other words, the superior
manager should avoid the temptation of constantly interfering with or closely
supervising the work of his subordinates. This does not however, mean that the
manager should not provide advice and support to his subordinates. But this should
be of a facilitating type, to help the subordinate in developing and sharpening his
managerial competence and skills.
8.
The manager should have the necessary skill to provide inputs to his subordinates
to develop their talents and performance competence. He should establish a
supportive relationship with his subordinates, be a friend, guide and philosopher to
them, set an example to them by his own behavior and motivates them to take
initiatives and bold responsibilities.
9.
The manager should also maintain open lines of communication with his
subordinates. The latter should feel free to get in touch with the former as and
when necessary, to get clarifications or information pertaining to their problems.
The manager also should be prompt in passing on any important information to his
subordinates. He may also create conditions in which his subordinates can
exchange views and ideas among themselves and with him at regular intervals on
matters of common interest.
10. Delegation does not mean abdication of authority by the manager in favour of his
subordinates. The manager has an absolute responsibility for making the process of
delegation a working and effective way of getting things done though his subordinates.
For this purpose, he should establish adequate norms of performance for his
subordinates and evaluate their performance in terms of these norms.
Centralisation
Centralisation of authority means retention or concentration of management authority
in a relatively few key managerial positions at the nerve centre of the organisational structure
Notes :
Notes :
35
viz. at the top level. It covers the kind and content of authority retained at the top management
level.An organisational structure is said to be highly centralized if all or most of the
management authority is concentrated at the top and if managers below the top level are
vested with little or no authority.
In a highly or excessively centralized organisational structure, the top management
assumes total and exclusive responsibility for running the organisation and for achieving its
goals. It takes upon itself the entire range of tasks of planning, organising, direction and
control. Top management seeks to get things done by a rather continuous process of
making almost all decisions and taking action initiatives. It undertakes close supervision
and control over every aspect of organisational functioning. Very little managerial authority
is delegated to the middle and lower level managerial personnel. Managers at these levels
are required to execute the decisions made at the top level in the manner prescribed and to
carry out all the orders.
Advantages: Conceptually and theoretically, certain advantages are attributed to
centralisation of authority in the above sense in organisations. These are briefly listed as follows:1.
2.
3.
Since much authority is concentrated at the top, it tends to make the top
management strong and powerful. This adds to the stature and personality of the
organisation. A strong top management is especially needed to overcome crisis
situations, and to provide effective leadership in moving the organisation towards
its goals.
4.
5.
2. Concentration of managerial power at the top may lead to its abuse. The adage
'power corrupts and absolute power corrupts absolutely', implies in this context.
An alternative possibility is that top management fails to exercise its authority
36
properly for purposes of decision making, overall direction and control of the
organisation. This situation arises when top management mistakenly equates its
authority with wisdom and does not bother to seek reliable and timely information
from the right sources at middle and lower levels.
3.
There is no real management structure at the middle and lower levels, which can
share some managerial workload of top management. The latter will not be above
to cope with the heavy workload of total direction and management. As an
organisation grows, its top management's capability to handle the work load
becomes weak. It tends to concentrate on eash-to-solve, day-to-day problems
and crises in a routine manner neglecting the major issues and problems.
4.
5.
6.
Absolute or excessive centralisation of authority for all matters of decision making and
action is generally found in small owner-managed enterprises. The owner-manager cannot
think of any need for devolution of authority by creation of levels of management. This is
because of the small size of the enterprise. Over-centralisation of authority is also not
uncommon in some medium and large sized enterprises in India and abroad. In India, there
is evidence that in many fairly big sized enterprises, all major and many minor decisions
are made at the top level only in name; they are not allowed to do a thing on their own.
Decentralisation
Decentralisation means partial dispersal and devolution of management authority from
the central or top management to lower operational management levels in a formal and
purposeful manner. In a decentralized structure, authority is partly segregated and pushed
down though all managerial levels including the supervisory level. Managers at all levels are
vested on an enduring basis with appropriate degree of authority commensurate with the
tasks and responsibilities assigned to them.
While there could be absolute or almost absolute centralisation of authority, there could
not be absolute or total decentralisation of authority. In a decentralized setting, top
management retains the needed amount of authority to permit itself to function as the
central source of strategic direction and control. It retains overall jurisdiction over the
organisation. Such authority could not be delegated to lower levels. This means that a
decentralized organisational structure contains some amount of centralisation also. Without
such centralisation, decentralisation has no meaning; it will fail. Like any other human
innovation, decentralisation has both merits and demerits. The merits constitute strong
compelling reason for organisations to go for decentralisation of authority and activities.
Several merits are listed as follows:-
Merits
1.
Notes :
37
the simplicity of small unit management. It is a way of integrating total corporate
unity of purpose with the diversity of sub system environment. It binds together
the diverse sub systems of large and fast growing organisations.
Notes :
2.
3.
4.
5.
6.
It facilitates the development and utilization of executive talent and skills at the
middle and lower managerial levels because managers at these levels are called
upon to assume authority and responsibility for making decisions and taking action
initiatives. The operating units in a decentralised organisation serve as training
grounds for managers with general or top managerial potential, who can eventually
move to the top corporate level.
It should be obvious from the above that decentralisation shares quite a few advantages
of delegation of authority. In fact, delegation and decentralisation are closely related. The
relations and distinction between these concepts will be discussed shortly.
Limitations
At the same time, one has to understand the limitations, associated with
decentralisation, which are outlined as follows:1.
Loss of control: Decentralisation, if carried too far without proper planning, tends to
create powerful 'States within States' which behave in their own ways. There is a
danger that the top corporate management loses its hold over the functioning of
semi-autonomous units. The latter may drift away from the central corporate system.
They may mistake their autonomy for independence to do whatever they want; this
amount to abuse of autonomy granted to them. They may seek to pursue their
narrow goals as if they are ends in themselves. They may not observe the policy
guidelines while making operational decisions. They may go beyond the autonomy
38
and make decisions on matter which really fall within the jurisdiction of top management.
2.
3.
4.
5.
6.
Perhaps the foremost criterion is the cost of the decision. The costlier the decision
in terms of monetary and other implications, the greater will be the desirability of
making it at relatively higher managerial levels.
Another criterion is that decisions and action initiatives which have inter departmental
or inter-divisional implications should be made at a higher level where authority
extends over more than one department.
Decisions which commit the organisation over a long period of time should also be
made at a relatively higher level.
Problem areas where familiarity is required for solving them should be decentralised
to the point where such familiarity is present. Matters calling for spot decisions
need also be decentralised.
Notes :
Notes :
39
be properly combined, balanced and integrated because they are mutually dependent
processes. For a large and growing organisation, centralisation of managerial authority for
strategic decisions and action initiatives goes hand in hand with decentralisation of
managerial authority for making operational and administrative decisions at lower levels. A
strong and dynamic central management is imperative for designing and keeping the various
subsystems together and for activating them in concerted manner. At the same time, the
decentralised units have also to be given sufficient autonomy for decision making on
operational matters. They have to be allowed to become effective contributors not only in
achievement of their goals but also of over-all corporate goals.
Centralisation of authority is a means to promote corporate unity and identity, overall
consistency and uniformity of decisions and moves, achievement of certain economies in
staff services and facilities and so on. Decentralisation of authority is effected in recognition
of the diversity of environments of various operating units and the need for relating decisions
to the nature of problems, information, situational knowledge and points of action.
Centralisation and decentralisation are mutually dependent since they ensure fusion of
corporate unity and diversity, freedom and control, creativity and conformity, economies of
large sized organisation and the informal simplicity of small sized organisation.
2.
Life Span: Delegation is task specific and thus has shorter life span. The delegation
ceases as soon as task is complete. Decentralisation is brought about when its
need is felt through an organisation wide effort keeping a balance between central
management and decentralized unit. Once an organisation is decentralised it will
remain so until its need is felt again.
3.
4.
40
5.
Decentralization
c)
Centralization
b)
Stabilization
d)
Organization
c)
Formal chart
b)
d)
Organization chart.
Authority chart
c)
Managerial Characteristics
b)
d)
Strategy
Notes :
Notes :
41
4. The ability to see the organization as a whole and being aware how changes in any one
part of the organization affect all the other parts is known as:
a)
Leading skill
c) Conceptual skill
b)
Human skill
d) Organising skill
c)
Cross relationship
b) Group relationships
d)
Personal relationship
3.8 SUMMARY
In this chapter we have covered a large number of concepts, processes and dimensions
of organizing. The organizing function involves the determination of activities that are required to
be done to achieve the organizational objectives. It also involves assigning these activities to
persons qualified for the specific activities. In general, organizing is the function of gathering
resources, establishing orderly uses of these resources and structuring tasks to fulfill
organizational plans. It is an important function of managers and is related to the other
functions in several ways.
3.10 FURTHER READINGS:-Tripathi P. C., and Reddy P.N., Principles of Management, Tata McGraw Hill,2008
Robbins,Stephen P ,Management Prentice Hall,1991
Brech,E.F.L.,Principles and Practice of Management(London: Pitman,1972)
Miner,John B., The Practice of Management(Columbus: Charles E.Merrill Publishing
Co. 1985)
42
UNIT - 4: STAFFING / HUMAN RESOURCE MANAGEMENT
Structure
4.0
Unit Objectives
4.1
Introduction
4.2
Job Analysis
4.3
Manpower Planning
4.4
Recruitment
4.5
Selection
4.6
4.7
Performance Appraisal
4.8
Summary
4.9
Job Analysis
Manpower Planning
Recruitment
Selection
Performance Appraisal
4.1 INTRODUCTION
Human Resource Management (HRM) may be defined as the organised function of
planning for human resource needs, recruitment, selection, development, compensation
and evaluation of performance to fill those needs. The HRM process is an ongoing function
that aims to keep the organization supplied with the right people in the right positions, when
they are needed. The HRM process includes five basic activities: (1) human resource planning,
(2) staffing, (3) training and development, (4) performance appraisal, and (5) compensation.
jobs,
consisting of
identifying and
examining
what
is
required of the
person
assigned to the
job, and the
elements and
characteristics
of the job.A job
analysis
involves three
steps.
43
44
Notes :
responsibilities that the job involves. It can be utilized for a number of important HRM
functions - selection of new employees, their orientation and training, and the appraisal
process. A clearly written job description gives a sense of direction to the new recruit. When
responsibilities listed in the job description are well qualified, they help in evaluating the
employee's performance.
45
Notes :
46
Notes :
chart) that shows the major managerial positions, current incumbents, potential
replacements for each position, and the age of each person on the chart. . Using a manager
inventory chart, the GM can identify where he stands with respect to the staffing position
eg. finance manager as the GM's potential successor perhaps the finance manager has
the immediate scope to be promoted and also has a subordinate as a potential successor.
Further, there is one other potential candidate within this department who can be promoted
within a year. A look at other departments shows that the production manager is acceptable
but cannot be promoted. There is one individual in this department one level lower in the
hierarchy who is suitable for promotion, while other employees in this department fall between
the extremes of non-promotability and good. Thus, the staffing pattern in this department
can be considered unsatisfactory. The personnel manager has the potential for promotion,
but needs to improve his performance further before he is finally promoted. The subordinates
in this department have potential for promotion within a year. Therefore, personnel department
will not face the problem of succession even if the personnel manager is promoted to higher
position. In the marketing department, though the marketing manager is suitable for
promotion, his subordinates do not have the potential to be promoted in the near future.
The chart provides a clear idea about the present and future staffing situation of an
organization.
2.
The chart gives a clear indication of the future internal supply of managers by
indicating who is promotable within a year.
3.
When manages who have the potential for future promotion are identified, they can
be easily given a suitable position in the organization. This will stop the managers
from moving out of the organization and reduce their propensity to seek employment
outside the company.
4.
The manager inventory chart helps to identify the employees who are not performing
up to expectations and can help in training or replacing them, whichever is necessary.
5. With the help of the chart, managers can be transferred from one department to
another. This not only helps in enhancing the managers' experience, but also
helps to strengthen weak departments.
The chart does not show the position to which the manager may be promoted. If a
vacancy occurs in another unit of the organization, the person with the potential to
be promoted may not necessarily fit the position, since it may require him to have
knowledge or skills in specialized areas. A manager from the sales department,
who is promotable, can hardly fill the post of a Vice-President (Purchases).
2.
Top-level managers may be reluctant to make their charts available to other top
level managers due to the fear of losing competent subordinates to other
organizational units.
Succession planning: The third method of internal labor supply is a means of identifying
individuals with high potential. In contrast to replacement planning, which focuses on
identifying specific candidates who could fill designated managerial positions, succession
planning ensures that individuals receive appropriate training and job assignments, and
thus assists in their long-term growth and development. Succession planning, thus, provides
the organization with a well-qualified pool of individuals from which top-level and middle-level
managers can be selected in the future.
External labor supply Organisational expansion and/or employee attrition makes it
necessary for the organization to sometimes turn to the external labor supply.
4.4 RECRUITMENT
Recruitment is the process of identifying and attempting to attract candidates who are
capable of filling job vacancies appropriately. In other words, the primary objective of
recruitment is to attract those applicants who are best qualified to fill the vacancies. A wellplanned and well-operated recruiting system generates the required number of qualified
applicants. Selection made from the available well-qualified applicants ensures that the
people hired have the potential to meet organisation's needs. Thus, effective selection
depends on effective recruitment.
47
Notes :
48
Notes :
Sources of recruitment
The sources of recruitment can be both internal and external.
Internal recruitment
Internal recruitment involves identifying the potential candidates within the organization
who can fill the vacant positions. Apart from identifying the candidates, they have to be
encouraged to accept the vacant organizational positions. Most multinational firms, such
as IBM, General Motors, and Procter & Gamble, have a policy of recruiting or promoting
from within the organization, except in exceptional circumstances. This method of filling
vacant positions by promotions from within the organization helps to build employee morale
and prevent high-quality employees from leaving organization. In order to fill high-level
positions, a skills inventory may be used to identify internal candidates, or managers may
be asked to recommend individuals who should be considered for these positions. The
main disadvantage of recruiting from internal sources is its "ripple effect." That is, when an
employee is promoted to a different job, it becomes essential to find someone else to take
his or her place in the organization.
External recruitment
External recruitment involves attracting people from outside the organization to apply
for vacant positions in the organization. There are a variety of sources from which external
job candidates can be obtained. These include advertising, educational institutions,
employment agencies, voluntary applicants and referrals by current employees.
Advertising Advertising in newspapers and journals is the most popular method of
recruitment from external sources. Advertising in local newspapers is a good source of
recruiting people for lower level positions. Though advertisements reach a large audience,
they are likely to attract many unsuitable candidates. This increases the burden of the
initial screeners. In order to avoid this problem, it is essential that the advertisements
describe the job qualifications appropriately. The following are some of the elements that
should be included in an advertisement in order to make it effective - name of the company,
the product (the post for which the advertisement is given), and the place where the vacancies
are to be filled, hiring qualifications, compensation plan and benefits, and the way to contact
the employer.
Educational institutions Educational institutions are an excellent source of potential
employees for entry-level positions in organizations. However, some large firms look to
educational institutions for high-level positions as well. Business colleges, vocational schools
and universities are good sources of external recruits. Although most graduates lack work
experience, they have the conceptual and technical knowledge that firms seek. Almost all
colleges have a placement cell; a company representative usually works with the placement
cell to set up an interview schedule and to have company brochures distributed.
Employment agencies Employment agencies are a good source for recruitment. But
if the employment agency chosen is not a good one, the entire process of recruitment can
be adversely affected. Hence, the recruiting firm should be careful to select a reliable
employment agency, and should develop a good working relationship with it. Both the job
description and job qualifications for the position to be filled must be conveyed clearly to
the agency. The candidates are initially screened by the agency before they are sent to the
recruiting firm. Therefore, the recruiter needs to spend time only with those candidates who
are well qualified for the job. Private employment agencies usually offer positions and
applicants of a higher caliber. They charge a fee for the services rendered, from the employer
and/or the employee. Management consultants are specialized private employment
agencies. They conduct executive search to identify potential recruits, especially for middle
and top-level placements.
Voluntary applicants "Walk-ins," whether they reach the employee by letter, telephone
or in person, are also a source of prospective applicants. Some firms view walk-in applicants
as aggressive and self-reliant individuals. Others reject all unsolicited applications because
they believe that the proportion of qualified applicants from this source is low. Unsolicited
applications often have a short life, so if the firm wishes to respond and has a vacancy, it
should do so quickly. Alternatively voluntary applications can be kept in the database for
later use by the organization, whenever vacancies arise.
Referrals by current employees Existing employees can be asked to furnish the
names and details of people who they think are suitable for a particular vacancy in the
organization. The employees may suggest the names of friends who work for another firm,
or for relatives. This type of external recruitment can prove to be effective as the employees
can provide information on the applicant's ability to perform on the job and how well he or
she can get along with others.
One major issue related to external recruitment is the tendency of the recruiters to give
candidates a very positive view of the organization in order to attract new employees.
Unfortunately, this strategy sometimes backfires. An individual who accepts a position with
unrealistic expectations may become dissatisfied and leave soon. An alternative approach
is to present the job candidate with a balanced view of both the positive and negative
aspects of the organization. Presenting a realistic job preview may reduce the number of
candidates interested in the job, but will most likely have a positive effect on job satisfaction
and performance.
4.5 SELECTION
Once an adequate number of applicants has been sourced, the process of selection
begins. Selection is the second step in the staffing process. The selection process involves
choosing the candidates who best meet the qualifications and have the greatest aptitude
for the job. The objective of effective selection is to match individual characteristics (ability,
experience, and so on) with the requirements of the job. The aim of selection should be to
choose candidates who can meet the organisation's goals.
49
Notes :
50
A typical selection process follows a standard pattern and consists of the following steps:
Notes :
Preliminary screening
Application blank
Selection test
Comprehensive interview
Reference check
Physical examination
Knowledge tests: Knowledge tests evaluate the applicant's knowledge about the
company, its competitors and customers, its products, the target market and the like.
Performance or work sample tests: Such tests are a means of measuring practical
ability on a specific job. In performance or work sample tests, the applicant completes
some job activity under structured conditions. For instance, a person who had applied for
the post of a service representative may be asked to handle a simulated situation involving
a complaining customer. Although they can be costly if special facilities and equipment are
needed, performance tests, when devised to closely reflect important aspects of the job,
tend to be valid predictors of future performance.
Comprehensive interview: A comprehensive or an in-depth selection interview is
designed to find out more about the applicant as an individual and, in general, obtain
information of interest to the interviewers so that the suitability of the candidate for the job
and the organization can be determined.
In this stage of the selection process, the interviewer matches the information obtained
about the candidate through various sources, such as the application blank, screening and
testing. Clarification and elaboration of brief responses given in the application blank are
also sought in the interview process. Unlike the screening interview which is usually conducted
by a member of the human resources department, the in-depth interview is usually conducted
by the manager to whom the candidate would report if hired.
The three widely used types of interviews include structured interview, semi-structured
interview, and unstructured interview. In a structured interview, the interviewer asks the
candidate a predetermined set of questions in the specified sequence with virtually no
deviations. This type of interview is very useful if the interviewer has to interview a large
number of candidates or when the interviewer is relatively untrained.
Unstructured interviews are informal and unorganized. There are no pre-planned questions.
The candidate is allowed to talk freely on general questions and the purpose of the interview
is to find about the kind of person the candidate is.
In comparison to an unstructured interview, a structured interview yields more valid data.
However, there are certain disadvantages of structured interviews. They are almost mechanical
in their approach and may convey disinterest to the candidate. Also, they do not allow the
interviewer to probe interesting or unusual issues that may arise during the interview.
To overcome these disadvantages and still acquire reasonably valid data for making a
selection decision, interviewers can use a semi-structured interview, which is a combination
of structured and unstructured interviews. Here the interviewer uses a set of pre-planned
questions and also allots time for interaction and discussion.
Reference checks: Applicants are required to furnish names of persons who can be
contacted by the recruiting firm if it wishes to know about the character and suitability of the
applicant. References assure the recruiting firm that the information given by the applicant
is reliable. Reference checks can be obtained by mail, by telephone, and in person. Such
checks are conducted to verify information on application blanks and sometimes, to collect
additional data that will facilitate the selection decision. References from individuals who
are familiar with the candidate's academic achievements and from the applicant's former
employees are more helpful than other types of references.
Physical examination: The physical examination is the last step before taking a final
decision on whether to select an applicant or not. Physical examinations are designed to
ensure that the candidate can perform effectively in the position for which he or she is
51
Notes :
50
Notes :
c) Central Tendency
b) First impression
d) Halo effect.
51
Job Description
c)
Job Evaluation
b)
Job Specification
d)
Job Design.
c)
d)
to each duty
4. What does recruitment involve?
a)
b)
5. Making the candidate uncomfortable by asking blunt and often discourteous questions
typify what type of interview?
a)
Non-directive
c) Board
b)
Stress
d)
Group
4.8 SUMMARY
The HRM process includes five basic activities (1) human resource planning, (2) staffing
(3) training and development (4) performance appraisal and (5) compensation.
HR planning is designed to ensure that the personnel needs of the organization will
be constantly and appropriately met, HR planning involves three steps: (1) forecasting
manpower demand, (2) forecasting manpower supply, and (3) human resource actions.
Staffing is an integral part of the HRM process. It is a set of activities aimed at attracting
and selecting workers for the purpose of achievement of the organization's goals. The
two basic steps involved in staffing are recruitment and selection. The recruitment
process begins with finding and attempting to attract candidates who are suitable for
filling job vacancies. The recruitment process involves five steps: (1) performing job
analysis, (2) designing job description, (3) identifying job specification, (4) attracting a
pool of recruits, and (5) selecting the best recruits. Recruitment can be conducted
internally as well as from external sources. Internal recruitment is the process of finding
potential internal candidates (present employees) and encouraging them to apply for
and/or be willing to accept organization positions that are vacant. External recruitment
involves attracting people for obtaining external job candidates. These include
advertisements, educational institutions, employment agencies, voluntary applicant,
and referrals by present employees. Once the candidates are attracted to job positions,
the management needs to find qualified people to fill the available jobs through the
selection process. The selection process consists of seven steps: (1) preliminary
screening, (2) application blank (3) selection tests, (4) comprehensive interviews, (5)
reference checks, (6) physical examination, and (7) making the selection. To integrate
the newly hired employees into the organization, managers must adopt a systematic
socialization process.
Notes :
52
Notes :
UNIT - 5: DIRECTING
Structure
5.0
Unit Objectives
5.1
Introduction
5.2
Motivation
5.3
Co-ordination,
5.4
Communication
5.5
Decision Making,
5.6
5.7
Summary
5.8
5.9
Further readings
5.1 INTRODUCTION
After plans have been made and the organisation has been established and staffed, the
next step is to move towards its defined objectives. This function can be called by various
names: "leading", "directing", "motivating", actuating", and so on. But whatever the name
used to identify it, in carrying out this function the manager explains to his people what they
have to do and helps them do it to the best of their ability. Directing thus involves three subfunctions - communication, leadership and motivation. Communication is the process of
passing information and understanding from one person to another. Leadership is the process
by which a manager guides and influences the work of subordinates. Motivation means
arousing desire in the minds of workers to give their best to the enterprise. It is the act of
stimulating or inspiring workers. If the workers of an enterprise are properly motivated they
will pull their weight effectively, given their loyalty to the enterprise, and carry out their task
effectively. Two broad categories of motivation are: financial and non-financial. Financial
motivation takes the form of salary, bonus, profit-sharing etc. While non-financial motivation
takes the form of job security, opportunity of advancement, recognition, praise etc.
5.2 MOTIVATION
Meaning of Motivation
One of the key variables which enable us to understand the conscious work behaviour
53
Notes :
54
Notes :
of individuals in organizations and the differences among them is 'motivation'. The term
motivation is a broad-based concept used to explain the inner psychological forces and
processes in an individual which arouse in him the desire to act or not to act in particular
ways. It is the state of an individual's willingness, desire or inclination to put in effort in a
particular direction to meet his goals. It partially explains conscious goal-directed action
behaviour of an individual. Since it is an inner, psychological process, it cannot be directly
observed but can only be inferred from behaviour. An individual's motivation is one of the
elements which make him to put in his energy and efforts, to apply his knowledge and
skills and to perform things in particular ways. He feels stimulated to do so as to satisfy
his motives with respect to his needs, and goals in an environment that offers him certain
opportunities, and threats. His motivation is also partly influenced by his perceptions,
learning, abilities and personality traits and qualities. Thus, motivation is a complex
behavioural phenomenon and can be understood in a systems perspective.
The state of morale in a group or in an organization is a function of the total job situation and
the internal organizational climate, as perceived by the members.
The above definition suggests that morale is a phenomenon embedded in a group of
people. However, another version of the definition of morale suggest that it could also be an
individual phenomenon. One author has defined morale as the extent to which an individual's
needs are fulfilled, and the extent to which the individual perceives that satisfaction is
stemming from his total job situation. In this sense, morale refers to an individual's state of
psychological health, level of satisfaction and self-confidence which he gets out of his job
situation-the way he perceives his job, performs his tasks, fulfills his needs and interacts
with his superiors, colleagues and subordinates.
It appears to be more logical to view morale as more a group situation than an individual
may often derive their morale from the group of which they are members. It is the totality of
a group's state of mind; the morale of a group is more than the sum total of morale of its
individual members.
Distinction between motivation and morale: Motivation and morale are conceptually
and otherwise different. They could be distinguished along the following lines:(a) Motivation is an individual's state of disposition and decision to do or not to do things,
to behave or not to behave in a particular way, in response to stimuli, whether internal
or external. But morale, as explained above, is more a group situation.
(b) Motivation is only one of the factors that explains the 'why' of individual behaviour and
performance. An individual's overall behaviour and performance is a function not only of
motivation but also several other factors. Morale represents the totality of impact of
several interacting forces in the atmosphere or a group.
(c) A well motivated individual tends to experience a high degree of morale also. As against
this, an individual or group characterized by a high state of morale may or may not have
a high degree of motivation to perform. The causation between morale and motivation
is not strong.
(d) It is possible to build up motivation in an individual or group by a combination of rewards
and penalties. But morale can be built up only by positive and favourable means, i.e.
carrots and not in combination with sticks.
(e) Organisations in general, devote more direct attention towards motivational aspects of
people's behaviour than to aspects of morale. The field of motivation is more extensively
explored than morale by theorists and several theories of motivation were discussed
earlier. This is perhaps because motivation is more sharply related to effort and performance
than morale. The latter is almost taken for granted, if motivation is taken care of.
55
Notes :
56
Notes :
behaviour. The factors instrumental for motivation and job satisfaction are somewhat
common, although there could be several mutually exclusive factors. Motivation is aroused
by an individual's expectations how his needs are likely to be met by the outcomes he gets
through his performance in his job. Job satisfaction is a measure of the individual's
assessment on how his expectations and needs are actually met on the job.
Further there is a circular relationship between motivation and job satisfaction. Job
satisfaction tends to arouse motivation for good performance in future. This means that
satisfaction causes performance. It is also true to some extent that motivation which leads
to performance also causes satisfaction. This means that performance leads to satisfaction.
Theories of Motivaion
Human motivation in general, and the motivation of individuals working in organizations
in particular, has long been an important topic of research and theory building by behavioural
scientists. Several theories of motivation have been advanced to serve as bases for
description, explanation and prediction of work behaviour of people in organizations. These
are briefly discussed as follows:Needs hierarchy Theory: Abraham Maslow, an eminent U.S. Psychologist, was
one of the earliest theorists who provided a systematic conceptual model of human needs
and the associated behaviour. In a classic paper published in 1943, he advanced his 'Need
Hierarchy Theory' of human motivation to explain how needs influence human behaviour.
Maslow categorized human needs into five broad types and structured them into a five-tier
hierarchy. At the base of the hierarchy are the physiological needs which include basic
needs like food' shelter, clothing, rest and recreation. The progression along the hierarchy
is from physiological needs to safety needs (freedom from pain and threat, assurance of a
protected and cosy atmosphere, economic and social security etc.), social affiliation needs
(which refer to needs for love, affection, friendship, and belongingness), ego or esteem
needs (such as needs for self-respect, respect and appreciation from others, status and
prestige in society) and self-actualisation needs (need for realisation of one's full potential
of development, maturity and autonomy). The last category of needs is placed at the apex
of the hierarchy and hence are the highest level needs.
(Challenging Job)
(Job Title)
(Friends at
Work)
Safety Needs
Physiological
Needs
Pension
Salary
The progression of needs and their fulfillment along the hierarchy, is sequential and
step-by-step and on the basis of their dominance. Maslow argued that human beings
generally strive to satisfy their basic needs or lower order needs first before looking for
gratification of non-basic or higher order needs. He also made the following propositions as
part of his theory:
i)
ii) Lower order needs in the hierarchy claim prior attention over higher order needs.
iii) Relative satisfaction of needs at a particular level in the hierarchy activates the
urge for fulfillment of the next higher level needs.
iv) A satisfied need ceases to be a motivator; only unfulfilled needs motivate human
behaviour.
Maslow's Theory is attacked by theorist from several angles. It is pointed out that the
theory cannot be tested and validated in practice and lacks empirical support. It is a simplistic
theory which fails to capture the complexity of human needs and behaviour. The structuring
of human needs in the form of a hierarchy gives them a non-existent order, sequence and
progression. Humans are unlikely to behave in such a neat, step-by-step manner while
perceiving and gratifying their needs. Humans are motivated not only by their needs but
also by many other things which include their expectations, experiences and exigencies of
circumstances. It is doubtful whether deprivation of a needs dominates behaviour and whether
a satisfied need ceases to be a motivator.
57
Notes :
58
Notes :
1.
2.
3. It should relate the goals of the organization with the individual goals of participants.
4.
It should give due weightage to group dynamics. Motivation is not a mere individual
phenomenon but is very much influenced by inter-personal situations. Similarly,
other environmental influences are also to be taken to consideration in a sound
motivational system.
5.
6.
7.
The system should rule out manipulatory devices to motivate people by such
superficial gimmicks of socialization, paternalism and patronizing attitudes and so
on towards people.
10. The linkages between abilities and efforts, and performance efforts and rewards
need to be clarified in unmistakable terms.
11. There should be contingent provisions for penalty for persistently unacceptable
performance and behaviour on the part of some people.
5.3 COORDINATION
Meaning and Definition of Coordination
Coordination is a synchronization of group efforts to achieve a common objective.
According to E.F.L. Brech, "Coordination is balancing and keeping together the team by
ensuring suitable allocation of tasks to the various members and seeing that the tasks are
performed with due harmony among the members themselves."
According to Mc Farland, "Coordination is the process whereby an executive develops
an orderly pattern of group efforts and secures unity of action in the pursuit of common
purpose." This definition views coordination as the task of integrating the individual needs
with organizational goals through proper linking.
Coordination is the centre point of managerial tasks. For example, planning is ineffective
if departmental plans are not properly integrated and coordinated and it is required in each
managerial function.
Characterstics of Coordination
Following are the characteristics of coordination:
59
Notes :
60
Notes :
The importance of coordination need not be over emphasized. The primary task of
management is to coordinate all the activities effectively. It is a creative force through which
employees are encouraged to continue to group goals voluntarily, willingly and
enthusiastically. Coordination allows personal and social satisfaction among employees.
Type of Coordination
Depending upon the nature, coverage and flow, coordination may be divided into
more effective. Organisations are not free from the influence of external environment. External
environment includes technology, competition, market forces, customers and Government
policies. External co-ordination tries to coordinate all these forces to the advantage of an
organisation.
5.4 COMMUNICATION
Communication is critical to the success of any organization and all the more so to
a business organisation. It links not only the various components of the organisation
but also its internal world with the external world. It has a very significant impact on the
ultimate effectiveness of the whole organisation. Communication is derived from the
Latin word communis which means "to share", that is sharing of ideas, concepts, feelings
and emotions. It is through communication that the information, ideas, attitudes or
emotions get to be conveyed from one person to another, from one person to a group or
vice versa, from one group to another, via the media or online. Communication is also
described as the "glue that holds an organization together" - the very essence of an
organisation. Communication is a means by which behaviour is modified, change is
effected, information is made productive and goals are achieved." Dalton Mcfarland
defines communication as "The process of meaningful interaction among human beings."
More specifically it is the process by which meanings are perceived and understandings
are reached among human beings.
61
Notes :
62
Limitations of Downward Communication
Notes :
1.
2.
3.
4.
5.
Resistance: People at lower level have high degree of fear towards such
communication as all companies' rules and policies are conveyed through this
type of communication.
2.
Hierarchical: Many managers do not like to be 'told' by their juniors. They may not
be patient enough to listen to them or may even suppress the message sent to them
from below. In such a situation the employees may feel let down. In order to tide
over such problems an Ombudsperson plays an important role. The concept of
Ombudsman or Ombudsperson was first used in Sweden to go into the complaints
of lower level employees against government officials or agencies. Now a number of
companies in many countries have established positions for persons to investigate
employee's complaints and grievances. An Ombudsperson, therefore, effectively
mediates between the employers and the employees and smoothens upward
communication.
Limitations
(1) Fear of Infringement: The superior may feel it an infringement that his subordinate
has been given undue importance and that he has been by passed.
(2) Resistance to compliance: The superior may not implement the suggestion as
he has not been consulted.
(3) Anarchy: The lack of accepted procedures may lead internal anarchy and external
animosity.
Forms of Communication
Broadly speaking, there can be three forms of communication: oral, written and non-verbal.
Oral Communication
In oral or verbal communication, information is given directly, either face to face or
through a telephone or intercom system. Generally, in meetings, lectures, interviews,
conferences, etc. the communication is oral. Some of the merits of oral communication
are: (a) It is a time and money saving device. (b) As there is element of personal touch, it is
comparatively more effective. (c) Doubts can be clarified on the spot and the communication
can be understood easily. (d) Important points may be emphasized through body language.
(e) The effects of communication can be easily measured. (f) Provides for greater flexibility.
Oral communication, however, suffers from certain limitations. These are: (a) it is not
useful where the parties are very far from each other, even beyond telephone range. (b) It is
not suitable for lengthy communications. (c) There is no permanent record of communication.
(d) Sometimes, oral communication is not taken seriously by the recipients. (e) If the
communication is poor in vocal expression, oral communications are likely to be
misunderstood and misinterpreted.
Written Communication
Written communication, which is always in black and white can take the form of a
report, statement, circular, note, manual, handbook, letter, memo, etc., some of the merits
of written communication are as follows: (a) It is suitable for lengthy communications. (b) If
the parties are far from each other, even beyond telephonic range, written communication is
63
Notes :
64
Notes :
the only way out. (c) It can be kept as a permanent record and at times be referred to as
evidence. (d) There are fewer chances of missing out a point. (e) Written communication
serves as a solid base for taking action against a subordinate who disobeys it.
Some of the disadvantages of written communication are as follows:(a) There is a
greater chance of the communication being misunderstood. (b) It is very time consuming.
(c) There is no scope for face to face discussion. (d) It is difficult to maintain secrecy about
the matter communicated. (e) It suffers from a lack of flexibility. (f) Poorly written messages
followed by numerous clarifications both written and oral, may lead to a lot of confusion.
Non-verbal Communication
All of us constantly send clues about our feelings-not by what we say, but by what we
do. This is called non-verbal communication. Much non-verbal communication is expressed
through the body - the facial expression, posture, gestures, etc.
Barriers to Communication
There is no such thing as perfect communication. There are continuous forces at
work-called barriers which tend to distort communication and promote disorganization.
We may summaries these barriers as under:
1. Badly expressed message: People may talk too fast. They may lack coherence.
They may organize their ideas poorly or may omit certain essential details. They
may structure their sentences awkwardly or may make errors in their selection of
words. All of these may distort a message.
2.
3.
invariably lose the trust and confidence of their subordinates. Subordinates do not
take their communications seriously.
4.
5.
Poor retention: Studies show that employees retain only 50 per cent of
communication information.
6.
7.
Inattention: Another common barrier is that many receivers simply do not pay
attention to the message. One reason people do not pay attention is selective
listening. Selective listening results from a common tendency to block out information
that conflicts with what we believe. When we listen to a speech or read a newspaper,
we generally pay attention only to those things that confirm out beliefs. Sometimes
people do not pay attention to communication because they are victims of
communication overload or because the information is unsolicited. The source of
communication, and the way in which it is presented also determine for its recipient
how much attention he gives it. Major barriers to horizontal communication are
inter-departmental rivalries, incorrect grouping of activities, inter-personal conflicts
and indifference toward organizational goals.
8.
Physical barriers: These are environmental factors which prevent or reduce the
sending or receiving of communication. They include physical distance, distracting
noises, and similar interferences.
9.
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66
Notes :
Classification of decisions
Managers make a variety of decisions in their day-to-day working life without really bothering
much about what types of decisions these are. For a better understanding about the nature
of decisions, it would be desirable to conceptualise them into a few categories as under:
Programmed and non-programmed decisions: One categorisation adopted by
Herbert Simon is programmed decisions. Programmed decisions refer to decisions made
on problems and situations by reference to a pre-determined set of precedents, procedures,
techniques and rules. These are well-structured in advance and are time-tested for their
validity. As a problem or issue for decision-making emerges, the relevant pre-decided rule
or procedure is applied to arrive at the decision. For example, in many organisations, there
is a set procedure for receipt of materials, payment of bills, employment of clerical personnel,
release of budgeted funds, and so on.
Programmed decisions are made with respect to familiar, routine, recurring problems
which are amenable for structured solution by application of known and well-defined operating
procedures and processes. Not much judgment and discretion is needed in finding solutions
to such problems. It is a matter of identifying the problem and applying the rule. Decision
making is thus simplified.
Organisations evolve a repertory of procedures, rules, processes and techniques for
handling routine and recurring situations and problem, on which managers have previous
experience and familiarity. One characteristic of programmed decisions is that they tend
to be consistent over situations and time. Also managers do not have to lose much sleep
in brooding over them. However, programmed decisions do not always mean solutions to
simple problems. Decision-making could be programmed even to complex problems such as resource allocation problems for example - by means of sophisticated mathematical/
statistical techniques.
Non-programmed decisions are those which are made on situations and problems
which are novel and non-repetitive and about which not much knowledge and information
are available. They are non-programmed in the sense that they are made not by reference
to any pre-determined guidelines, standard operating procedures, precedents and rules by
application of managerial intelligence, experience, judgment and vision to tackling problems
and situations which arise infrequently and about which not much is known. There is no
simple or single best way of making decisions on unstructured problems, which change
their character & form time to time, which are surrounded by uncertainty and enigma and
which defy quick understanding. Solutions and decisions on them tend to be unique or
unusual - For example, problems such as a sudden major change in Government policy
badly affecting a particular industry, the departure of a top level key executive, drastic
decline in demand for a particular high profile product, competitive rivalry from a previously
little known manufacturer etc. do not have ready-made solutions.
It is true that several decisions are neither completely programmed nor completely
non-programmed but share the features of both.
Strategic and tactical decision: These notions could also be applied to decisions for
dividing them into strategic and tactical decisions. Strategic decisions are made at the top
level of organisation to handle problems critical to the survival and success of the organisation.
They have a vital impact on the direction and functioning of the organisation -as for example,
decisions on plant location, introduction of new products, making major new fund-raising
and investment operations, adoption of new technology, acquisition of outside enterprises
and so on. Much analysis and judgement go into making strategic decisions.
In a way, strategic decisions are comparable to non-programmed decisions and they
share some of their characteristics. Strategic decisions are made under conditions of partial
knowledge or ignorance.
On the other hand, tactical decisions (which are also called operations decisions) are
made to implement strategic decisions. A single strategic decision calls for a series of
tactical decisions which are of a relatively structured nature. Tactical decisions are relatively
short, step-like spot solutions to break-down strategic decisions into implement able
packages. The other features of tactical decisions are : they are more specific and functional;
they are made in a relatively closed setting; information for tactical decisions is more
easily available and digestible; they are less surrounded by uncertainty and complexity;
67
Notes :
68
Notes :
decision variables can be forecast and quantified without much difficulty and their impact is
relatively localised and short-range. Tactical decisions are made with a strategic focus.
The distinction between strategic and operational decisions could be high-lighted by
means of an example. Decisions on mobilisation of military resources and efforts and on
overall deployment of troops to win a war are strategic decisions. Decisions on winning a
battle are tactical decisions.
As in the case of programmed and non-programmed decisions, the dividing line between
strategic and tactical decisions is thin. For example, product pricing is a tactical decision
in relation to the strategic decision of design and introduction of a new product in the
market. But product pricing appears to be a strategic decision to down-line tactical decisions
on dealer discounts.
Individual and group decisions: Many decisions, even critical ones, in organisations
are made by individual managers, who assume full responsibility for the consequences of
such decisions. In fact, individual managers are vested with enough authority to make a
large number of decisions' they are paid for the job. The individual managers at their
respective levels-right from the chief executive down to first line supervisor - are called upon
to decide many things. They may get information, factual analytical reports, pros and cons
of alternatives and suggested courses of action from their subordinates or from specially
established committees. But the responsibility and authority or the onus of making the
final decision rests with the concerned manager himself. He cannot delegate or abdicate
this authority.
Group decisions are those which are made by more than one manager joining together
for the purpose. In an organisation, two or more mangers at the same or different levels put
their heads together, jointly deliberate on the problem, information and alternatives and
hammer out a decision for which they assume collective responsibility. Decisions which
have inter-departmental effects - for example, a product related decision affecting
manufacturing, purchasing and marketing departments, are sometimes made by forming a
committee composed of responsible executives of the three departments.
Group decision-making is not new in organisations. The Board of Directors is a decisionmaking unit. As a group, the board members make several vital corporate decisions. It is a
plural executive body. At lower levels, there may be important committees such as management
committee, planning committee, and operations committee, comprising of senior managers
entrusted with key decision-making and coordinating functions. Thus, in organisations, individual
managers as a group make decisions. Apart from the above mentioned formal groups, managers
at any level may informally involve their subordinates or colleagues in decision-making
processes on matters of common concern. For example, the marketing manager may call
his area sales managers of a region and pose an important marketing problem to them for
collective deliberation and decision-making. He enlists their co-operation and contribution in
finding a solution for the problem. This is an exercise in managerial participative decisionmaking. There may also be cases where a first line supervisor invites his group of rank and file
subordinates for a small meeting and converts the group into a decision making unit on a
matter affecting the members' interests. He himself keenly participates in the decisionmaking deliberations but he leaves the final decision to the collective judgment of his group of
subordinates. Sometimes, group involvement in decision-making processes may be confined
to a few stages like problem identification, collection of information, development of alternative
courses of action and their evaluation. The final act of choosing from the alternatives may be
reserved by the manager concerned. To this extent, group decision-making is different from
group participation in decision making.
Several virtues are claimed on behalf of group decision-making as against individual
decision-making. The decision-making function and process get enriched by the pooling of
diverse expertise, knowledge, authority and perspectives represented by the group. Elaborate
group deliberation and consideration of alternative courses from several angles tend to
ensure that decisions of high quality are made. To the extent that authority for making
decisions in entrusted to the group, it gets diffused among the members. It is more desirable
to vest a high degree of decision-making authority in a group than in an individual. The latter
may not be able to use it properly and fully. In the case of some problems of an interdepartmental nature the groups of managers representing the concerned departments are
more competent to make appropriate collective decisions, than an individual manager as
such. Also, in cases where a manger involves his group of subordinates in decision making,
the decisions so reached tend to enjoy a high degree of acceptance and pragmatism. Their
implementation becomes easy.
The disadvantages of group decision-making are delays in decision-making, lack of
rationality and responsibility among group members, dilution of the quality of decisions by
compromise and conformity among members of the group and so on.
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Notes :
70
Notes :
uncertainty associated with the problem and the alternative courses of action. The manager
has to design or rely on the information system so that he gets the relevant and required
information bearing on the decision environment. Information may be quantitative or
qualitative, internal or external, historical or projected. Considerations of availability,
adequacy, reliability, timeliness and cost are important in this connection. Collection of
information is especially critical for the subsequent step of generating and evaluating
alternative course of action.
(e) Search for alternative courses of action: In this stage, the manager tries to
discover and develop alternative courses of action, which are in the nature of potential and
possible solutions or strategies to the decision problem. Some alternative courses may be
quickly developed by the manager by reference to his experience or expertise. New
alternatives or options have to be generated through creative thinking and other processes.
The availability of alternative courses of action provides an opportunity for the manager to
make a choice. In a large organisation staff experts may be of some help in generating
alternative courses. The search for alternative courses is an exciting venture and tends to
be productive.
(f) Evaluation of alternative courses of action: Alternatives have value to be
extent that their outcomes are likely to meet the goals of the manager. Hence, evaluation
of alternatives by reference to some objective criteria is essential. The expected outcomes
or values of alternative courses have to be estimated through forecasting and other devices.
The computation of quantitative value of alternatives may sometimes be so complex that
managers may resort to computerization or similar data processing mechanism. In
evaluating the alternative courses, both qualitative and quantitative factors have to be
taken into account.
(g) Making the final choice: The choosing process involves the narrowing down of
the range of alternative courses by a progressive elimination process by reference to the
predetermined objective criteria. A large number of alternatives normally get eliminated in
the initial screening process. Those which survive the screening are further subjected to
critical evaluation. The manager has to apply his judgmental skills in making the final
choice, which is governed by several factors, such as its congruence with the objectives
and values of the manger, the feasibility and acceptability of the decision, relative simplicity
of the likely outcomes and so on. The final choice is also a matter of trade-off between
risks and returns, costs and benefits, both quantitative and qualitative. The tendency in this
step is to optimise the manger's 'utility' function in the context of his responsibility as a
manager. While making the final choice, the manger tends to be guided by the organisational
policies, strategies, previous decisions, committed resources, inter-personal and human
factors, and so on.
(h) Implementation of the decision: It is the manger's responsibility to operationalise
the decision and make it implement able. He has to make the necessary structural,
administrative and logistic arrangements for translating the decision into effective action
initiatives and outcomes. Authority and responsibility for implementing the decision have
to be specifically assigned, necessary financial and other resources have to be allocated
and committed, the individuals who have to implement the decision or likely to be affected
by it have to be taken into confidence and adequate controls have to be established to
ensure that what is decided upon is implemented in a faithful but flexible manner.
71
Collection of Relevant
Information
Implement Decision
Nature of objectives
Objectives state the end results to be achieved by the organization. They form the
basis of all good planning processes. The overall objectives of an organization need to be
supported by its sub-objectives. Objectives form a network as well as a hierarchy.
Hierarchy of Objectives
Objectives form a hierarchy, ranging from the overall aim of the organization to specific
individual objectives. At the top of the hierarchy is the socio-economic purpose, which
requires an organization to contribute to the welfare of society by providing goods and
services at a reasonable cost. At the second level is the underlying purpose of the business
or mission. Mission or purpose states what the firm plans to achieve. As there is only a fine
distinction between the two terms, many management writers use these terms
interchangeably. The third level of hierarchy contains more specific objectives for those
areas in which the success of the enterprise depends on its performance. These areas are
Notes :
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Notes :
called key result areas. There is no consensus among management scholars about what
should be the key result areas of a business. Peter F. Drucker suggests the following the
key result areas in business: productivity, physical and financial resources, profitability,
market standing, innovation, managerial performance and development, worker performance
and attitude, profitability and social responsibility. Of late, two other key areas are gaining
strategic importance. These are service and quality issues.
The Process of Formulating Objectives and the Organizational Hierarchy
Managers at different levels in the organization are concerned with formulating different
kinds of objectives. The purpose, the mission, the overall objectives of the firm, and the
objectives in the key result areas are evolved by the board of directors and top managers.
Middle-level managers are involved in formulating divisional and departmental objectives.
The lower-level managers are concerned with deciding objectives for their departments and
units as well as for their subordinates. Individual objectives such as performance and
development goals are placed at the bottom of the hierarchy. This does not mean that
these objectives are meant only for managers at the lower-levels or that they are less
important. Managers at the top levels also should set objectives for improving their own
performance and development. In fact, their objectives should be much more challenging
than those of their subordinates.
The organization can use either the top-down approach or the bottom-up approach for
setting objectives. There is often conflict among management theorists as to which is the
better method. In the top-down approach, top-level managers determine the objectives for
subordinates themselves attempt to formulate objectives and present them to their superior
for approval. The supporters of the top-down approach argue that the organization needs
clarity in direction by way of corporate objectives set by the CEO and the board of directors.
On the other hand, proponents of the bottom-up approach argue that top management
should ascertain information from lower levels in the form of objectives. It has been observed
that either approach alone is insufficient. There is no hard and fast rule as to where and
when one should use a particular approach. Both approaches are equally important and
can be used according to the situation and can be modified depending on factors such as
the size of the organization, the organization culture and the urgency of the plan.
A Network of Objectives
Objectives and planning programs are co-existential and correlational. They support
one another to form a network of expected outcomes and results. If the objectives are not
linked with each other and if they do not support one another, it is impossible that individuals
may carry out their plans, keeping in mind only their individual or departmental goals. This
may be harmful for the organization.
Goals and plans are very rarely linear, instead they form an interlocking network. Each
program within such a network can be again subdivided into another interlocking network.
For instance, a new product design program may comprise of a network of programs such
as development of preliminary schematic design, and other elements. Each of these can in
turn be subdivided into a series of interlocked programs.
Multiplicity of Objectives
Organization usually has numerous aims and objectives. Similarly, there are likely to
be numerous goals at every level in the hierarchy of objectives. It is usually assumed that
a manager can effectively pursue only a few objectives. Pursuing too many objectives may
result in dilution of the drive needed to accomplish them. It may also result in unnecessarily
highlighting minor objectives.
There is no definite number of objectives for an organization. If there are too many
objectives none of them may receive adequate attention, thereby making planning ineffective.
Nevertheless, the number for objectives also depends on how much the managers will do
themselves and how much they will delegate to their subordinates.
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plans. MBO is expected to help subordinates gain a clear idea of what they should
achieve. The MBO process not only gives subordinates as sense of direction, it also
allows them to evaluate their own progress. As a result, supervisors need not get involved
in the day-to-day activities of subordinates. However, they need to be kept informed
about the progress and about any unforeseen difficulties. If the subordinates encounter
any problems while implementing plans, their supervisor should provide them adequate
training and organizational support.
Periodic review
As plans are implemented, the monitoring of performance becomes important. Periodic
reviews have to be done to ensure that plans are being implemented properly and that
objectives are being achieved. Such reviews allow managers to measure results, identify
and remove obstacles, solve problems, and make changes to the action plans that are not
achieving the expected results. They also help the managers determine whether the plans
and goals are appropriate for the organization or need to be changed. Changes can be
made to the existing goals or new ones can be added. Reviews are usually done on a
quarterly basis, but they can be done more frequently if the business environment is
undergoing rapid change. Periodic reviews give the managers an excellent opportunity to
provide timely feedback to their subordinates.
Performance Appraisal
At the end of an MBO cycle, typically one year after the original goals were set, the
final performance is matched with the previously agree-upon objectives. The managers
evaluate each subordinate's performance over the preceding year. The performance appraisal
focuses on the extent to which goals have been achieved, extent of shortfall in the
achievement of goals, reasons for the shortfall and preventive action that it necessary to
avoid such difficulties in the future. The appraisal session also recognizes the areas in
which subordinates have performed effectively. It also includes identification of areas in
which individuals could improve by acquiring some specialized skills. The goals and plans
for the nest MBO cycle can also be discussed at this stage.
Though performance appraisal is the last step of the MBO process, the feedback
provided during this stage is used as input for developing new objectives.
Benefits of MBO
MBO can be practiced in various organizational activities like performance appraisal,
organization development, long-range planning, integration of individual and organizational
objectives, and so on. When used as an approach to management, MBO yields a wide
range of benefits. These benefits are discussed below.
Better Managing: MBO helps managers allocate organizational resources and plan
activities effectively. As a part of the MBO process, managers have to chart out a method
for accomplishing results and decide what resources and assistance they will require for
achieving objectives. Thus managers are forced to focus on the results when planning
activities. Moreover, MBO not only aids planning it also facilitates evaluation and control.
Thus, MBO facilitates better management.
Clarity in Organizational Action: MBO identifies the key result areas where
organizational efforts are needed. A clear definition of the objectives in the key result
areas helps relate the organization with its environment. Organizational objectives are
always influenced by the external environment in which the organization functions. Thus,
if there is any change in the external environment, it must be taken into account at the
objective-setting stage itself to help the organization develop effective short-term as well
as long-term plans.
Encouragement of Personal Commitment: The biggest advantage of MBO is that it
encourages personal commitment to goals by employees. The MBO program gives
employees the responsibility of setting their own objectives, gives them the opportunity of
having their ideas included in the planning program, provides them a clear picture of their
area of discretion or authority, and facilitates assistance from superiors for accomplishing
their goals. Thus an MBO program makes a subordinate feel more involved and strengthens
his commitment to the organizational goals. It increases the enthusiasm of subordinates
by putting them in charge of achieving goals.
Personnel Satisfaction: MBO brings about personnel satisfaction by allowing
employees to participate in setting their objectives and by appraising their performance in a
rational manner. Individuals derive a great deal of professional satisfaction from setting and
achieving goals. And as MBO ensures rational performance appraisal, employees are assured
that they will be judged impartially and that their appraisal will not be affected by managerial
prejudices, biases and other personal factors. This, in turn, leads to better performance
among employees.
Basis for Organizational Change: Every organization has to be flexible and adaptable
to change in order to keep up with changes in the external and internal environments.
However, bringing about organizational change is not an easy task and requires a great deal
of effort on the part of managers. The MBO process stimulates organizational change,
provides the framework and guidelines for planned change, and helps managers overcome
resistance to change (by employees). Thus, the MBO process helps top management
initiate, plan, direct and control the direction and speed of change.
Development of Effective Controls: Since MBO forces management to clearly state
objectives, it leads to the development of effective controls. Management control involves
the measurement of results and taking corrective action to check deviations from plans. A
clear set of verifiable goals helps managers determine what should be measured and what
action should be taken to correct deviations.
ii.
iii.
iv.
v.
vi.
Limitation of MBO
MBO is not without its problems and weaknesses. Some of the problems are inherent
in the MBO process itself while others are due to shortcomings in the implementation of
MBO concepts. Some of the limitations of MBO are discussed below:
Failure to teach MBO philosophy: MBO is an innovative philosophy for managing
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Notes :
organizations. Not only should managers understand and appreciate this approach, they
should also make their subordinates understand how the process will benefit them and
what part it will play in appraising their performance. The MBO philosophy is built on the
concepts of self-direction and self-control. These concepts are aimed at making managers
become more professional in their approach. Failure to understand and make others
understand the philosophy of MBO leads to the failure of the MBO process itself.
Failure to give guidelines to goal setters: Like any other kind of planning, MBO
requires that adequate guidelines be provided to those who are expected to set goals. In
other words, managers must understand what the corporate goals are and how their own
activities will contribute toward achieving these goals. If the corporate goals are vague,
unreal or inconsistent, it may not be possible for managers to tune their activities to match
the goals. Managers should also be aware of the planning premises and the major policies
of the company. They should have a good understanding of how organizational policies
affect their areas of operation. This will help them to effectively plan their activities to ensure
that their departmental goals match that of the organization.
Difficulty in goal-setting: MBO requires verifiable goals against which performance
can be measured. However, it may be quite difficult to set such goals. Also, excessive
emphasis on economic results puts undue pressure on individuals and may even lead to
unethical behaviors. In order to reduce the chance of the use of unethical means for achieving
goals, top management must set reasonable objectives and clearly state behavioral
expectations. It should also give a high priority to ethical behaviors and ensure that unethical
behaviors are punished.
Emphasis on short-term goals: In order to achieve quick results, managers generally
emphasize short-term goals. As a result, there is always the danger of emphasizing shortterms goals at the expense of long-term goals. Therefore, top-level manages should ensure
that short-term goals contribute to the achievement of the long-term goals of the organization.
Inflexibility: When there are revisions in organizational objectives, premises and
policies, managers must make corresponding changes in their own objectives. If they do
not, their goals become obsolete. However, managers are often unwilling to change their
goals. Striving for goals that have become obsolete nullifies the efficacy of revising
organizational objectives, and modifying its policies.
Other Dangers: The implementation of MBO gives rise to some problems. For instance,
in their desire to make goals verifiable, manages may make excessive use of quantitative
goals, or may set quantitative goals in areas where they are not applicable. In the process,
they may downgrade important goals that are difficult to state in terms of end results.
Often, in spite of having the participation and assistance from superiors, managers may fail
to use objectives to bring about constructive change in the organization. There is also the
fear of managers getting excessively involved in the MBO process and forgetting that
managing involves more than goal-setting. Difficulties may also arise in applying goaloriented planning in a dynamic and complex environment. Some other weaknesses of
MBO are listed below:
1. It takes too much time and effort and involves too much paperwork
2. It necessitates training of managers
3. It tends to falter without strong, continual commitment from top management
4. Its emphasis on measurable objectives can be used as a threat by overzealous
managers
5. It can lead to considerable frustration if one manager's efforts to achieve goals are
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the success of MBO programs lies in the beliefs, assumptions and attitudes of subordinates
and managers. MBO techniques work well when manages hold Theory Y assumption and
the actions and attitudes of subordinates are consistent with these assumptions. In other
words, Theory Y managers and subordinates are an ideal combination for MBO.
If managers follow the assumptions made by Theory X, and subordinates fit these
assumptions, successful implementation of MBO is highly unlikely. Although managers
may use these techniques, inwardly they may believe that this approach will not work. In
addition, the subordinates may also feel uncomfortable trying to put a new management
approach. The manager's belief that this concept will not work would therefore be supported
by the subordinates' discomfort with the new procedures.
Unlike the earlier two combinations, the outcome of the MBO process may also depend
on who changes -the manager or the subordinate. The manager's positive view of his
subordinates and MBO procedures may change subordinates who believe in Theory X and
develop them to the point where they fit Theory Y assumptions. In such a case, an MBO
program would have a good chance of succeeding. If the situation turns out to be as
described, success can result if the manager applies MBO techniques carefully and
earnestly, even though he or she doubts its efficacy. Managers may reevaluate some basic
assumptions based on the positive reactions of subordinates.
Check your progress
Tick mark the most appropriate answer
1. Which of the following factor emphasize the need of Coordination:a) Increasing specialization
b)
Basic pay
c)
b)
Safety Regulations
d)
Training.
Loss of control
c)
Communication problem
b)
Imbalance
d)
c) Job enrichment
d)
Job description.
5. Which of the following refers to the flow of information among people on the same or
similar organizational levels?
a)
Diagonal
c) Horizontal
b)
Upward
d) Downward.
5.7 SUMMARY
One of the basic functions of Management is direction. Direction means the use of
leadership and motivation to guide the performance of subordinates towards the achievement
of the organization's goals. Important requirements for effective direction are: Harmony of
objectives, unity of command, direct supervision, efficient communication and follow up.
Objectives are the important ends towards which organizational and individual activities
are directed. Clear and verifiable objectives facilitate the effective and efficient management
of organizations. Management by objectives (MBO) is an effective planning tool that helps
supervisors set objectives. MBO has come a long way since it was first suggested by Peter
Drucker as a way of promoting managerial self-control. It has been used to appraise
performance, to motivate individuals, and recently, for strategic planning.
MBO aims at achieving organizational objectives and enhancing employee commitment
and participation. MBO is a cyclical process. It involves developing overall organizational
goals, clarifying organizational roles, establishing specific goals for various departments
and individuals, formulating action plans for various departments and individuals, implementing
and maintaining self-control, carrying out periodic reviews, and conducting performance
appraisal of employees.
MBO offers benefits. It leads to better management of resources, clarity in organizational
action and more satisfied personnel. It encourages personal commitment, provides a basis
for organizational change and leads to the development of effective controls. However, MBO
has its drawbacks. It takes up too much time and money and can be inflexible. Moreover,
failure to teach the MBO philosophy and lack of proper guidance to goal-setters may lead to
its unsuccessful implementation. In order to overcome these limitations and make MBO
effective, the support of the top-level managers is essential. They must formulate clear
objectives, encourage participation at all levels, and provide training to people who would be
implementing the MBO program.
5.8 Questions and exercisesQ.1
Q.2
Q.3
Q.4
Q.5
Q.6
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Structure
6.0
Unit Objectives
6.1
Introduction
6.2
Meaning of Control
6.3
Process of Control
6.4
6.5
6.6
6.7
Summary
6.8
6.9
Further readings
6.0 OBJECTIVE
This module explains the controlling function, its meaning, processes, dimensions and
techniques. The topics covered are:
Meaning of Control
The process of control
Requirements of an effective control system
Some Techniques of Control
Behavioral Aspects of Management control
6.1 INTRODUCTION
Control is one of the most important functions of management, second perhaps; only
to the function of decision-making. Control has very broad application both in the personal
as well as industrial work, which ensures that events turn out the way they are intended to.
Control is a powerful force if applied properly. For example, energies like nuclear power,
controlled air and controlled water run machines and industries. Control is asset of
mechanisms used to evaluate organizational performance against the set standards. When
deviations occur, appropriate steps are taken to correct these deviations to ensure that the
organization stays on course. This unit discusses the concepts, characteristics, and
techniques involved in managerial control.
make things happen, to secure results, to remove obstacles and to gain command over the
forces of uncertainty and complexity. To control also means to regulate and check i.e. to
structure and condition the behaviour of events and people, to place restraints and curbs on
undesirable tendencies, to make people conform to certain norms and standards, to measure
progress to keep the system on track and to ensure that what is planned is translated into
results, to keep a watch on proper use of resources, on safeguarding of assets and so on.
The control function involves monitoring the activity and measuring results against preestablished standards, analyzing and correcting deviations as necessary and maintaining/
adapting the system.
The accent of management is on organizational performance and effectiveness and to
develop the ability of the organization to produce planned results over prolonged periods of
time. The task of control is intended to enable the organization to continuously learn from
its experience and to improve its capability to cope with the demands of organizational
growth and development.
b)
c)
A mechanism (i) for comparing the actual results with reference to the standards
(ii) for detecting deviations from standards and (iii) for learning new insights on
standards themselves.
d)
A mechanism for feeding back corrective and adaptive information and instruction to the
system, for effecting the desired changes to set right the system to keep it on course.
When linked logically and sequentially together, the control process, often called the
control cycle, is portrayed below:
Determine goals Plan
Programmes
Determine workloads
Determine Required resources
Acquire Authority
Perform work
Evaluation of performance
Taking corrective action.
The elements of the control cycle are briefly explained as follows:
(i) Determination of objectives or goals: Objectives are the desired end results of
an activity for a specific time span. In the context of control, objectives are to be
determined with respect to quantity of output, quality, cost and time.
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(2) The control system should be sensitive enough to point out deviations from plans
immediately so that corrective action can be initiated with little loss of time and
before any damage is caused.
(3) The control system should be flexible and forward looking just like the planning
system, to enable the organization and its sub-systems to adapt and adjust their
goals and the means of reaching them in turn with the change in the environment
i.e., to maintain a sort of dynamic equilibrium.
(4) The control system should focus on strategic and key activity areas or points
which are critical to overall performance.
(5) The control system should enable managers to utilize their time and talent most
effectively by concentrating on major or exceptional deviations from plans.
(6) The control system should be formal and objective as far as possible, in fairness
to those whose performance is monitored, regulated and evaluated. To some
extent, quantification of performance standards meets this requirement.
(7)
(8) Controls are nothing more than means to certain ends. They are not ends in
themselves. They should constantly focus on goals to be achieved, on values to
be preserved and on interests to be promoted.
(9) The control system should be economical to operate; economy need not however
be exercised at the cost of effectiveness. Sometimes, a simple inexpensive
control system may match with expensive, highly sophisticated one in terms of
effectiveness.
(10) The control system should give due allowance to factors or variables which cannot
be controlled but which affect the performance of people.
(11) The control system should be designed to measure and evaluate the diverse
dimensions of performance of individuals and activity areas, giving appropriate
weightage to all the relevant variables having a bearing on performance: qualitative
variables or factors deserve to be taken into consideration, while evaluating
performance.
(12) The means adopted to achieve goals should also be kept under watch by the
control system, because both means and ends are important.
(13) Finally, the control system should be understandable to those whose performance
is sought to be regulated. The requirements of control should be communicated
in a simple and straightforward manner to those who are to abide by the system.
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whether the members of the work unit perform as per the plans, schedules and work norms
and whether they abide by the policies, procedures and rules. The regular presence of the
manager on the work spot and his keen involvement with the progress of the work has an
important controlling influence over the performance and behaviour of subordinates. Even
the chief executive of an enterprise should frequently visit the various work units and
departments of the enterprise to see how things are going on, though he will not be in a
position to supervise and observe every piece of work all the time and in all the places.
Personal supervision and observation is likely to inject a measure of work discipline among
the subordinates apart from providing an opportunity to the supervisor to understand the
dynamics and problems in the work spot, and to remove the hurdles to the smooth work
flow, to the extent he can.
2. Budgetary Control: The concept of budgets was discussed as one of the
techniques of planning. Here we shall look at budgets as means of control. Budgets are
useful as tools of control to the extent that they, permit, monitoring, measurement, evaluation,
regulation and correction of enterprise activity along desire pre-determined directions.
The essential elements of budgetary control are outlined as follows:
(i)
Translation of enterprise goals into sub goals of the various operating units which
are further operationalized as standards of performance, and targets of achievement
(sales, market share, production, profit etc.) over a short period of time say, six
months or one year.
(ii) Determination of the volume of resources required to achieve the operational goalsfunds, material, labour, equipment, time and so forth.
(iii) Accord of general sanction of the acquisition and allocation of budgetary resources
to various activity units over the budgetary period.
(iv) Devolution of necessary authority and fixing up of accountability for the planned
performance standards and targets, among the various executive positions.
(v) Establishment of appropriate system for monitoring, measuring and evaluating the
pace and quality of operations on continuous basis. This includes initiation of
required measures to ensure that actual performance is in conformity with budgeted
performance. Deviations and variances are analysed and remedial measures are
taken to set them right.
Several benefits are claimed on behalf of budgetary control. We shall briefly state
some of the major benefits as follows:
(i)
Budgetary control establishes a clear relation and balance between the inputs of
assets, materials, labour, funds and time and the outputs of production, performance
and profits.
(ii) By enforcing budgetary discipline and order it reduces the extent of variability and
perversity in enterprise functioning.
(iii) It saves managerial time to large extent. Managers at operational levels need not
obtain sanction every time for acquisition of resources. Budgetary control provides
a concrete frame of reference to managers in their day-to-day decision activity,
thereby obviating the occasion for reflection and deliberation. It facilitates
management by exception. Only exceptional variances or deviations are reported
to the higher managerial level.
(iv) Budgetary control ensures more freedom of action to managers who value
predictability or operations and precision in performance results.
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means that the question of information overload does not arise and that only optimum
information is provided. The information is also update on a continuous basis so as to
make it more relevant. MIS avoids furnishing of overlapping information as it will create
confusion in the minds of managers. There is thus the desired degree of focus and selectivity
in the information content.
MIS in many large organizations is designed with a systems perspective, by taking
into consideration the network of processes, resource flows, and information needs of the
organization. Often, managers at many levels are involved and consulted in the design and
implementation of MIS. These steps are needed to make the role of MIS rooted in the
realities and requirements of the organization and to make it responsive to the changing
information needs of managers.
The role of MIS stems from the fact that it is an arrangement meant for pulling together
all the diverse bits of data available in the organization conveniently accessible to managers
at various levels and units of activity. In a well-designed MIS, data are comprehensively
processed, analysed and interpreted so as to make them directly useful to managers.
MIS may be manual, mechanized or computerized. But there is relative advantage in
computerized MIS especially in large organization. The role of MIS gets enlarged both in
scope and quality in a computerized setting, to the extent that the modern, electronic
computer has capacity to process huge volumes of data accurately, makes complex
calculations and combinations at a very high speed and retrieves information instantaneously.
With its enormous memory a computer can safely store large volume of data. The advent
of electronic data processing facilities has considerably revolutionized the role of MIS as a
management support system. It has smoothened the possibility of designing a totally
integrated MIS characterized by a central data base and inter-linkage of information flows
among all the major sub-systems of the organization.
6. Management Audit: The term 'Management Audit' is defined as systematic
evaluation of the functioning, performance and effectiveness of management of an
organization. It is a thorough-going, critical and constructive review of the quality of
management and is generally conducted at the instance of top management. The audit
work is generally done by an independent team of experts from relevant areas. They
naturally adopt some of the tried and tested principles of auditing. The aim is to make an
objective assessment of the manner in which the affairs of the organization are managed.
The audit is conducted on a periodic basis. The audit team collects evidence from historical
records about the various aspects of the functioning of the organization. It may also generate
data through questionnaires circulated among the members of the management team, the
other members of the organization and representative cross-section of the client groups.
The audit team forms its opinions and conclusions on the basis of analysis of the evidence
and information, so collected and generated, against a set of relevant criteria of performance
and effectiveness, if possible. The opinions and conclusions so arrived at could take the
form of recommendations for future guidance of management and could form the basis for
reform of the process and practices of management of the organization in question.
(a) Formulation of organizational objectives, strategies, policies and programmes of
action and the manner in which they pursued, as also the extent of success
achieved.
(b) Design and operation of organizational structures of roles, activities and relationships.
(c) The manner and efficiency with which resources and assets are mobilized,
developed, allocated, utilized and safeguarded, including the human resources.
(d) Design and functioning of various systems and operations within the organization.
(e) The manner in which the management team anticipates and sizes up external
environmental elements and designs appropriate adaptive strategies to cope with
them.
(f)
(g) The quality of managerial decisions: their soundness, timeliness and effectiveness.
The management audit function goes beyond statutory audit and internal audit of the
organization, because of its distinct content and character. As is to be expected, professional
accountants and auditors have shown considerable interest in popularsing the efficacy of
management audit and have taken several initiatives in this regard especially in USA.
7. Control by Return on Investment Technique: The ownership group of business
organizations, whether public or private, seeks a return on their investment as a reward for
risk taking. The excess of revenue over the costs of doing business generally accrues to
the ownership group in the form of profit, whether it is distributed to them or retained in the
business. The rate of return on investment (ROI) is an overall measure of the financial
performance of a business enterprise or individual divisions thereof. The calculation of ROI
is done as under:
ROI
Net Income
Net income is the residue of revenue through sales after deducting the cost of sales.
Net income before and after corporate taxes can be used for purposes of comparison. Total
investment includes working capital and fixed assets used in business.
Management can increase in ROI by stepping up sales volume proportionately more than
total investment. Another way to increase ROI is by reducing the total investment without
disturbing the sales volume or by reducing the former proportionately more than the latter. A
third way is by increasing the sales volume proportionately more than the cost of sales or by
reducing the cost of sales proportionately more than the decrease in sales volume.
The ROI criterion is a good yardstick for comparing the bases of financial performance
of the enterprise and its divisions over a period of time. It is also very useful for interorganisational and inter-divisional analysis of financial performance at any point of time. It
indicates the basic streams which contribute to the financial performance of the enterprise
and suggests areas where remedial action is called for to improve ROI. It is powerful and
popular managerial technique of control.
The ROI approach was originally adopted by the DuPont Company, USA in 1919 and
subsequently many enterprises have accepted the soundness of the approach. The
advantage of the approach is that it focuses on efficient enterprise performances as measured
by profit not in isolation but firmly related to the resources employed and to the efforts
made. It indicates an integrated or systems approach for improved enterprise performance
in a financial sense. The several elements that form part of the process of achieving and
improving efficient enterprise performance need to be properly and systematically integrated.
8. Self-Control: Behavioral scientists assert that control is most effective when it is
self-directed. The implication is that most 'organization men' feel more at home under
conditions of self-control. Sense of responsibility for results is said to be at a more desirable
level when persons are assigned the task of exercising self-control. Some people are
somewhat uncomfortable when subjected to externally imposed control. They perceive that
their zone of freedom is being unduly restricted by outside control. But once these people
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are given opportunity for more self-control, they will respond with good results. Self-control
includes a measure of freedom to set one's own standards of performance, pace of work
and evaluation and feedback of results and correction of negative deviations. It should,
however, be understood that people who volunteer for self-control are binding themselves to
a deeper commitment than those who do not. While freedom is more under conditions of
self-control, responsibility for results is much more.
Some personality types however are either incapable or unwilling to accept the concept
of self control. Perhaps they are not articulate enough to exercise control over themselves.
Perhaps they regard that commitment of self-control is bother-some and involves more
responsibility. They seek safely in being subjected to close control by their superiors,
whoever they are. In a sense, they too want to have a measure of freedom from responsibility
implicit in self-control.
Thus, it is clear that the willingness or otherwise to assume self-control has do with the
need for freedom. Those who enthusiastically assume self-control do so because it gives them
freedom for working out and fulfilling their commitment and responsibility for results. Those
who willingly submit to external control do so because it gives them freedom from working out
and fulfilling their commitment and responsibility for results. Both the sets of personality types
are thereby seeking to optimize their satisfactions which freedom provides them.
It is to be admitted that some self-control is implicit even in situations of totally external
control systems. For example, there cannot be minute to minute regulation of a subordinate's
pace of work by his supervisor. When the former is assigned a task, some responsibility
is imposed upon him to work according to the dictates of the latter. Similarly, a person
cannot be left entirely to the virtues of his self control. A measure of externally inducted
influence, whether it is formally termed as control or not, is always present. Thus, it is
more appropriate to view self control and imposed control in relative terms and degrees
than as absolutes.
89
Excessive number of controls may limit flexibility and creativity. This may lead to
low levels of employee satisfaction and personal development.
5.
Controls may influence the generation of invalid and inaccurate information. For
example, if the top management habitually reduces budget requests when reviewing
them (a control activity), then the lower management, when proposing a new budget
or a new project, may overstate the cost of resources needed. Similarly, managers
may set objectives lower than what are attainable so that a higher output will look
better at performance appraisal time.
6. Controls can be resented by employees if they have no control over the situation.
For example, if a professor's is appraised over the number of publication of books
and research articles, but he is not afforded the freedom of time to do so because
of heavy teaching load and excessive committee work, then it can result in
frustration, which may be detrimental to the entire control system. Similarly, a
manager will become highly frustrated if his performance evaluation is based upon
profits achieved by his department but he does not have the authority and control to
make operational changes such as hiring and firing of workers.
7.
The control systems must be synchronized to create a balance among all affecting
and interconnected variables. The standards should compliment each other and not
contradict each other. For example, a control system which emphasizes increased
sales as well as reduction in advertising expenditure at the same time may seem
contradictory to the marketing manager and thus may be frustrating for him.
c) Management audit
b)
Budgetary control
d)
Decision-making.
b)
d)
Establishing standards
b)
To increase productivity
c)
To facilitate communication
Notes :
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b)
d)
Notes :
6.7 SUMMARY
Control is necessary to make sure that actual results of an activity do not deviate from
the expected results of the same activity. The function of control is to accomplish
organizational goals by implementing previously determined strategies and policies so that
whatever needs to be done is done properly. In other words, control maintains equilibrium
between means and ends or between efforts and output. The process of control involves
establishing standards for outcomes of activities, assuring performance of workers in relation
to such activities by employing such measuring devices as previously determined to be
suitable and relevant to measuring such performance, comparing such measured
performance with performance standards previously set, noting any deviations positive or
negative and taking corrective actions for any negative deviations. Positive deviations should
also be investigated to determine as to why underestimations were made so that new
revised estimates can be established.
There are several types of control techniques implemented for effective management of
the organization. The techniques range from traditional to modern ways of managerial
control. These techniques have their own advantages and disadvantages but ultimately
provide some guidance to effective controlling.
Control can have some behavioral implications. Wherever managers exert excessive
control, it can be considered as misuse of power by the employees and thus in turn would
negatively impact their morale. Accordingly, it will be advisable to get the workers involved
in establishing standards and in determining performance-evaluation methods. This would
improve affiliation of the workers to the company.
Q.3
Q.4