BASICS OF MANGEMENT B.SC.

ATHM
(SEMESTER-1)
ITFT, COLLEGE (AFFILIATED TO PUNJAB TECHNICAL UNIVERSITY) 2012-2013

SYALLABUS
MODULE I: Introduction to Management: Concept, Nature, functions, process, Traits of a successful manager and managerial role. Management and society: Business ethics and social responsibilities. MODULE II: Planning: Nature, purpose, Types and process of planning.

MODULE III: Organizing: Concept of organizing and organization. Line & Staff, Span of control. Delegation - Decentralization & Organization structure.

MODULE IV: Directing: Communication-Process and types of communication, Barriers and principles of effective communication, Motivation- Meaning, Theories Maslow and Herzberg, Co-ordination: Meaning, definition, Principles of co-ordination, Techniques of effective co-ordination

MODULE V: Leadership : Leadership- Concept, Qualities of a successful leader: factors influencing performance of leaders. Styles of leadership, Management Grid. Controlling Process. Methods and techniques.

MODULE I: INTRODUCTION TO MANAGEMENT

MANAGEMENT
Management is an exciting subject as it deals with setting, seeking and reaching objectives. Definition: (1) Management is a distinct process consisting of activities of planning, organizing, directing and controlling, performed to accomplish stated objectives with the use of human beings and other resources (Men, Money, Material, Machines, Methods and Markets) (2) Mgt. is a process of getting things done, effectively and efficiently, through and with other people. Mgt. is a process of planning, organizing, staffing, directing and controlling activities of others. It involves effective and efficient mobilization and utilization of physical and human resources for accomplishing organizational objectives.

MGT. CONCEPTS
Integration Concept: An integration of several activities to produce desired results. Leadership and Decision-making Concept: Mgt. is the process of decision-making and controlling the action of human beings for the purpose of attaining predetermined goals. Human Relation Concept: Mgt. is getting things done through and with other people. Productivity Concept: Mgt. is the art of knowing what you want to do in the best cheapest way. Functional Concept: To manage is to forecast and plan to organize, to command, to coordinate and to control.

CHARACTERISTICS OF MANAGEMENT
The various characteristics of management are: (a) Management is universal: It means that management is required for every type of organization. It may be a business organization or social or political. It may be a small firm or a large one. Management is required by a school or a college or university or a hospital or a big firm like Reliance Industries Limited or a small variety store in your locality. Thus, it is a universal phenomenon and is common and essential element in all organizations. (b) Management is goal directed: Every organization is created to achieve certain goals. For example, for a business firm it may be to make maximum profit and/or to provide quality

products and services. Management of an organization is always aimed at achievement of the organizational goals. Success of management is determined by the extent to which these goals are achieved.

(c) Management is a continuous process: Management is an ongoing process. It continues as long as the organization exists. No activity can take place without management. To perform all activities like production, sale, storage, operation etc. management is required. So, as long as these activities continue the process of management also continues to operate. (d) Management is an integrating process: All the functions, activities, processes and operations are intermixed among themselves. It is the task of management to bring them together and proceed in a coordinated manner to achieve desired result. In fact, without integration of men, machine and material and coordination of individual efforts to contribute successfully as a team, it will be difficult to achieve organizational goals. (e) Management is intangible: Management is not a place like a graphic showing Board meeting or a graphic showing a school Principal at her office desk which can be seen. It is an unseen force and you can feel its presence in the form of rules, regulation, output, work climate, etc. (f) Management is multi-disciplinary: Management of an organization requires wide knowledge about various disciplines as it covers handling of man, machine and material and looking after production, distribution, accounting and many other functions. Thus, we find the principles and techniques of management are mostly drawn from almost all fields of study like Engineering, Economics, Sociology, Psychology, Anthropology, Mathematics, Statistics etc. (g) Management is a social process: The most important aspect of management is handling people organized in work groups. This involves developing and motivating people at work and taking care of their satisfaction as social beings. All managerial actions are primarily concerned with relations between people and so it is treated as a social process. (h) Management is situational: The success of management depends on, and varies from, situation to situation. There is no best way of managing. The techniques and principles of management are relative, and do not hold good for all situations to come.

IMPORTANCE OF MANAGEMENT
The existence and success of any organization largely depends on the kind of management it has. No amount of quality resources is going to help unless they are put to productive use by efficient management. It is because of this reason that management is studied as a subject in almost every discipline of study. In todays scenario with globalization, job specialization, changing technologies, new responsibilities of business, consumerism, competition and emphasis on research and development, the role of management has grown multifold. Its importance is reflected in the positive result that the organization can get in respect of the following. (a)Attainment of Goals Every organization has a goal to achieve and each employee in the organization also has his own goals that he wants to achieve. Even at operational level each department, each unit or even each group has a goal that it wants to achieve. It is only through proper management by well thought of planning, good direction and proper coordination and control that effectiveness to the efforts of each group to achieve given goals can be ensured. (b) Stability and Growth Management strives to utilize the available resources of the organization effectively and efficiently. It controls the activities and operations, integrates the functions, motivates the employees and maintains the health of the organization in the ever changing environment. It thus, ensures stability to the working of the organization and contributes to its growth. (c) Change and Development Management keeps itself in touch with the changes in the environment and foresees development in the future. Accordingly, plans are made to keep the organization ready to meet the challenges. (d) Efficiency and Effectiveness By proper planning, staffing, organizing, coordinating, directing, and its controlling activities, the management helps in achieving efficiency and effectiveness to human efforts and operations.

LEVELS OF MANAGEMENT
Managers performing different types of duties may, thus, be divided into three categories: Top-Level Management Middle-Level Management Lower-Level Management

The following diagram will give you an idea about the functions, positions and relations of different levels of management.

The diagram shows that the top level management includes Board of Directors and the Chief Executive. The chief executive may have the designation of Chairman, Managing Director, President, Executive Director or General Manager. This level determines the objectives of the business as a whole and lays down policies to achieve these objectives (making of policy means providing guidelines for actions and decision). The top management also exercises an overall control over the organization.

The middle-level management includes heads of various departments, e.g., production, sales, etc., and other departmental managers. Sometimes senior departmental heads are included in the top management team. The objectives of the business as a whole are translated into departmental objectives for the middle level management. The heads of the departments then work out their own strategies so as to achieve these objectives. Middle-level managers are particularly concerned with the activities of their respective departments. The lower-level management consists of foremen and supervisors who look after the operative workers, and ensure that the work is carried out properly and on time. Thus, they have the primary responsibility for the actual production of goods and services in the organization. Carefully see the figure shown above once again. You will see that the number of people at each level increases as one move from top to bottom. Workers including crafts persons, manual labourers, engineers, scientists, etc. form the bulk of the organization membership. Within the managerial ranks, the number of managers at each level decreases as one move from lower-level to top-level management. At the top of the organization, there is usually one person.

Management as an Art
Art is the bringing about a desired result through the application of skills. It is concerned with the application of knowledge and skills. An art has the following features: It denotes personal skills It signifies practical knowledge It helps in achieving result It is creative in nature.

Every manager applies certain knowledge and skills while dealing with people to achieve the desired results.

Management as a Science
It has the following features: Mgt. is a systematic body of knowledge consisting of principles, generalizations, approaches and concepts to be applied in practical situations. The principles, generalizations, approaches and concepts of mgt. have been developed and formulated on the basis of observations and research. Mgt. principles are also based on relationship of cause and effect. They indicate that same cause under similar circumstances will produce same effect. o For Example: if workers are paid more, they produce more. Mgt. principles are universally applicable to all types of organization.

Management is both a Science and an Art

Science and Art are two types of Management A manager to be successful in his profession must acquire the knowledge of science of management and learn to apply this knowledge. Mgt. is called an art because managing requires certain skills which are the personal possession of the managers. It is considered as a science because it has an organized body of knowledge which contains certain universal truths. A manager should possess not only specialized knowledge of mgt. but also the skill to put his knowledge into practice. For Example: A teacher uses his knowledge (Science) to teach (Art) his students.

MANAGEMENT STYLE & TYPES

Since Management Process is to plan, organize, lead and control, it is crucial to perform all these components within the process. In a complex business environment today, the work environment varies accordance to the situation and people behaviors. As such, you need to understand this and apply the most appropriate management style. The most common mentioned management styles used in the real business environment are as follows:-

Autocratic Management Style In Autocratic management style, you give instruction to your staff to perform certain task without getting opinion or making consultation. If you are someone who likes to control an office situation, then you tend to use this autocratic style. Although decisions made are fast and prompt without involving others, work is usually completed on time. However this type of style may create a work environment where staffs are less motivated and build up a wait for boss instruction syndrome. In longer term, autocratic management style tends to drive away staff hence increase staff turnover.

When to apply: Autocratic Management style is most effective in situation when immediate decision must be made during crisis, fire, or emergency. Democratic Management Style A Democratic Management style encourages a manager to delegate work task to his staffs. This style involves other people to get things done. A democratic style of management must come along with responsibility and it work more effectively when authority to perform the task is granted at the same time. One important characteristic of this style of management is the staff who are been delegated the task must be given authority and must be competent enough to perform the task. When to apply: Democratic management style is most suitable if you want to train up your staff to make certain decision. Participative Management style Sound a little like democratic though this style is a way to get things done or make a decision with involvement of getting opinion from staffs. What is normally done is that you take the inputs from your staffs and modify them into your decision. This management style has the element of democracy but it involves more intensive input from others. And the key difference is decision is based on logical evaluation of various options rather than by majority. When to apply: Participative management style is used when you want to make certain changes of policy which affect one or more people benefits or morale. By doing so, the staff tends accept the decision more willingly. Laissez Faire Management style A laissez faire management style involves getting things done through people. However the way you get the job done is you set the tasks and give it to your staff a total freedom to finish the task entirely on their own. You do not or involve very little in the task. This type of style is sometime taken as irresponsibility because you are not really on top of the situation. Sometimes, it is a style of let the nature take its own course. When to apply: It is most appropriate to apply this management style when dealing with conflicts because you do not want to be seen as siding anyone. In conclusion, you need to understand each of these four common management styles and their application for different situation. In a business environment, situation changes all the time and you have staffs behave differently as well. The chances are you need to apply all the four types of management style in your work areas with acceptable degree of one particular style.

MANAGERIAL ROLES
Henry Mintzberg has studied the work roles of the Chief executive and has categorized these roles into three areas, which are explained below. 1.) Information Processing a. Managers role as a monitor: The managers are constantly monitoring their environment, collecting and studying information regarding their organization and outside environment affecting the organization. This can be done by reading reports and periodicals and through personal contacts. b. Managers role as a disseminator of information: They transmit the information regarding changes in policies or other matters to their subordinates, their peers, and to other members of the organization. This can be done through memos, phone calls or group or individual meetings. c. Managers role as a spokesman: The manager has to be a spokesman for his unit and represents his unit in either sending information to people or making some demands on behalf of his unit. This can be done through meetings and phone calls. 2.) Decision Making a. Managers role as an entrepreneur: The managers are constantly on the lookout for new ideas for product improvement or product addition. They ask for the suggestions from the employees for ways to improve the organization. This can be achieved through suggestion boxes, holding strategy meetings with project manager and research & development personnel. b. Managers role as a conflict handler: The managers are constantly involved as arbitrators in solving differences among the subordinates or the employees conflicts with the management. These conflicts arise due to demands for higher pay or other benefits. Managers try to resolve these problems and take corrective action. c. Managers role as resource allocator: Managers make budgetary allocations to different activities of the organization. They assign personnel to jobs, they allocate their own time to different activities and they allocate funds for new equipment, advertising, etc. d. Managers role as a negotiator: They negotiate contracts with the unions. The sales managers may negotiate prices with prime customers. The purchasing managers may negotiate prices with the vendors, etc. 3.) Interpersonal Relationships a. Managers as a figurehead: Managers act as symbolic figureheads performing social or legal obligations. These duties include greeting visitors, signing legal documents, taking important customers to lunch, attending subordinates wedding, or speaking at functions in schools, etc.

b. Managers leadership role: Since a manager is responsible for the activities of his subordinates he must motivate them to perform better. He must be an exemplary leader so that his subordinates follow his directions and guidelines with respect and dedication. c. Managers role as a liaison officer: The manager must maintain a network of outside contacts in order to assess the external environment of competition, social changes or changes in governmental rules and regulations. This can be achieved by attending meetings, conferences, through mails, etc.

MANAGERIAL SKILLS
Mgt. is a result-oriented process. To get better results, apart from application of mgt. knowledge, certain abilities are used by the manager. These abilities are known as managerial skills, which may be inherited and acquired. Classification of Managerial Skills: 1.) Conceptual Skills: These skills are used for developing thinking in an abstract form and to visualize and understand the future. Managers need these abilities for scanning the changing environment and discovering various opportunities, spotting problems and threats arising out of a dynamic situation, and relating them to strength and weaknesses of the organization. It also helps in formulating a basic strategy. 2.) Analytical Skills: These skills are more related with scientific attitude and thinking on the part of managers for solving different problems and making decisions. These abilities are used for breaking down complex and complicated phenomena into various components to get an insight into it. A manager may become analytical in his approach for judging performance of his subordinates, solving problems and making decisions. 3.) Decision Making Skills: It is the ability to see a problem and finding the best possible solution according to situation. If managers merely see the problem and become problem watchers, they will fail. Managers must also have those valuable skills of being able to design a workable solution in the light of the realities they face. 4.) Human Relations or Behavioral Skills: The basic responsibilities of every manager are to get things done by others. In this process, he needs behavioral skills. These skills refer to those abilities which are needed by the managers to effectively deal with their subordinates. Manager must understand their needs, interests and values. He interacts with them, guides, directs, leads and motivates them. Human relations skills are needed for providing dynamic and effective leadership and building a team spirit amongst employees.

5.) Administrative Skills: Decisions are made at higher levels and implemented by managers are at lower levels, which require administrative skills for it. It refers to abilities used for coordinating various activities seeking effective utilization of allocated resources and getting things done by subordinates. In applying these skills, a manager takes into account the ground realities and behaves like an administrative man with a practical approach. 6.) Technical Skills: These skills refer to specialized knowledge and proficiency in handling methods, procedures and techniques for doing specific jobs. Technical skills are needed by the managers for providing training to subordinates regarding use of new techniques and methods and for providing technical guidance. Conceptual skills are more important for managers at higher levels and technical skills are useful at lower levels, particularly at supervisor level. However, other types of skills are equally important for all managers at all levels.

MANAGEMENT THEORIES 1. Concept of Scientific Management: Frederick Winslow Taylor (F. W. Taylor 18651915, Father of Scientific Management), well-known management expert, worked as an apprentice, machinist, foreman and ultimately as the chief engineer of a steel company in U.S.A. Taylor suggested a new approach to management early in the twentieth century. This is known as Scientific Management. Principles of Scientific Management: 1. Science not Rule of Thumb: Development of a true scientific approach to management replacing the old rule of thumb method, which would enable managers, among other things, to determine the best method of performing each task. For solving problems and making decisions, the manager should adopt scientific attitude and use scientific thinking and methods, it means data should be collected and analyzed for finding a solution. 2. Harmony not Discord: Scientific selection and placement of workers so that each worker could be assigned the task for which he is best suited. There should be a complete harmony or coordination in their functioning and any kind of disagreement, clash or conflict if arises should be reduced to a minimum. 3. Employee Efficiency: The efficiency level of workers should be increased by providing scientific training and developing their potential abilities to the maximum for the prosperity of individual workers as well as the organization.

4. Cooperation not Individualism: Close co-operation between management and labour to ensure that work is carried out in accordance with the scientific principles which are developed. Credit should be given to all employees. 5. Maximum not Restricted Output: Production should be carried out up to the maximum capacity as production increases, economies of scale set in and cost decreases. A number of techniques like time study, motion study, standardization of equipment and working conditions, and rate of wages were also developed to facilitate scientific management.

2. Administrative Management
Scientific management was primarily concerned with increasing the efficiency of individual workers at the shop floor. It did not give adequate attention to role of managers and their functions. However, around the same time Henry Fayol (1841-1925), Director of a coal mining company in France made a systematic analysis of the process of management. He strongly felt that managers should be guided by certain principles, and evolved 14 general principles of management which are still considered important in management. Principles of Administrative Management 1. Division of Work: This principle suggests that work should be assigned to a person for which he is best suited. Work should be divided into compact jobs to be assigned to individuals. This facilitates specialization and improves efficiency. 2. Authority and Responsibility: Responsibility means the work assigned to any person, and authority means rights that are given to him to manage people and things to ensure performance. In other words, authority should go hand in hand with the responsibility for effective results. 3. Discipline: This principle emphasizes that subordinates should respect their superiors and obeys their orders. On the other hand, superiors behaviour should be such that they make subordinates obedient. If such discipline is observed, there will be no problem of industrial disputes. 4. Unity of Command: A subordinate should work under the supervision of one superior only from whom he gets instructions and to whom he is accountable. It avoids confusion in authority and instructions. 5. Unity of Direction: Each group of activities having the same objective must have one head and one plan of action. Otherwise, there may be wastage, over expenditure and useless rivalry among the managers.

6. Subordination of Individual Interest to General Interest: While taking any decision, the collective good and collective interest of the organization as a whole should be preferred to individual interests. The individuals interest should be subordinated to the overall interest of the organization. This ensures welfare of the organization as well as its individual members. 7. Remuneration: Management should try to give fair wages to the employees so as to ensure reasonable satisfaction of workers and productivity for the organization.

8. Centralization: When a single person controls the affairs of an organization, it is said to be complete centralization. In small concerns, a single manager can supervise the work of the subordinates easily, while in a big organization, control is divided among a number of persons to facilitate operational decision making at various levels. Fayols opinion was that there should be a proper balance between centralization and delegation of authority in an organization. 9. Scalar Chain: This is the chain of authority relationship from the highest to the lowest ranks. This implies that subordinates report to their immediate supervisors who, in turn, report directly to their own boss. The order of this chain should be maintained when some instructions are to be passed on or enquiries are to be made. 10. Order: Placement of men and materials should be properly made. Proper space should be made available where materials can be kept safely. Each man should be provided the work for which he is best suited. 11. Equity: This principle requires the managers to be kind and justice to workers. This promotes a friendly atmosphere between superiors and subordinates and motivates them to perform their duties efficiently. 12. Stability of Tenure: Employees should be provided stability and continuity of their tenure of employment. There should not be frequent termination of employees. This could be achieved through attractive remuneration and honorable treatment of personnel. 13. Initiative: This implies encouraging initiative among its personnel to chalking out and execution of a plan to achieve the desired results. 14. Esprit de Corps: These French words mean team spirit. Managers should infuse the spirit of team work and cooperation among the employees. It helps in developing an atmosphere of mutual trust and a sense of unity.

Fayol made it clear that these principles can be applied to most organizations, but these are not absolute principles. Organizations are at liberty to adopt those which suit them or to delete a few according to their needs.

TAYLOR VS.FAYOL
Basis Human aspect Taylor Taylor disregards human elements and there is more stress on improving men, materials and methods. Father of scientific management Stressed on efficiency Fayol Fayol pays due regards on human element. E.g. Principle of initiative, Espirit De Corps and Equity recognizes a need for human relations. Father of management principles Stressed on general administration It has macro-approach and discuses general principles of management which are applicable in every field of management.

Status Efficiency & administration Approach

It has micro-approach because it is restricted to factory only.

Scope of principles Achievement

These principles are restricted to These are applicable in all kinds of production activities. organization regarding their management affairs. Scientific management Administrative management

3. Human Relation Movement: Abraham Maslow, Elton Mayo, Mary Parker Follet, Douglas McGregor have been main contributors to this movement. The Human Relation Movement was marked by the following factors. Human organization was considered as psycho-social system. Primary focus of psychologists was on the employee as an individual, while sociologists concentrated on employees interaction with others in the group. This movement argues that apart from economic needs, the employees have other social and psychological needs such as recognition, appreciation, self-respect and dignity, etc. This movement says that managers must take care of workers interests and establish congenial interpersonal relationship, adopting sympathetic and friendly attitude towards them. It says that conflicts must be removed completely because it is not desirable in terms of healthy organizational functioning. To secure maximum contribution managers should get along with employees and workers. Sense of belongingness should be created among employees by giving them more importance and getting them involved in decision making.

This movement aims at providing high degree of satisfaction and motivation through improved work condition, style of supervision and sense of security.

MODERN APPROACHES TO MANAGEMENT

1. Quantitative Approach: This approach is also called the management science approach. It gained momentum during Second World War, when UK and USA were trying to find the solution of complex problems. A mixed team of specialists from relevant disciplines is called in, to analyze the problem and propose the course of action to the management. The team constructs a mathematical model to stimulate the problem. By changing the value of the variables in the model (such as increasing the cost of raw materials) and analyzing the different equations, the team can determine what the effects of each change would be. Focus of the quantitative is on decision making to provide quantitative tools and techniques for making objectively rational decisions. The keynote of this approach is precision and perfection which can be achieved by expressing relationships and facts in numerical, quantitative and mathematical terms. This approach is widely used in planning and controlling activities but its use is still uncommon in areas such as organizing, staffing and leading the organization where problems are more human than technical in nature. 2. Contingency Approach: According to this approach, managers instead of applying principles and practices of management uniformly to every situation irrespective of the nature of situation, they should study, analyze and diagnose the situation in terms of its variables and other characteristics, understand situational requirements and then apply management principles and techniques to deal with it effectively. This approach offers following guidelines: a. This approach is situation oriented. It focuses on finding the component variables of the situations and external factors affecting the situations. b. After the analysis of the situation, the managers are expected to prepare inventories of management theory, principles, techniques and concepts. c. In order to tackle the situation efficiently, applicability of management tools and techniques is to be examined and finally a package of these tools and techniques is prepared which is appropriate for that specific situation. The different situation requires different managerial responses. 3. Behavioural Science Approach: It may be defined as systematic as well as scientific analysis of human behaviour. This approach is also known as Organizational Behaviour Approach. This is an interdisciplinary approach of studying human behaviour consisting of psychology (which deals with human behaviour), sociology (dealing with behaviour of an individual in group), and anthropology (study of physical, biological, and cultural

variables affecting behaviour of an individual as a member of group). This approach is based on following assumption: a. An organization is socio-technical system which consists of individuals and their interpersonal and social relationship with each other on one hand and on the other various techniques and methods used by them for performing assigned jobs. b. It says that individual goals and interest of employees can be integrated with organizational goals as to avoid conflict and clash between them. c. Behavioural scientists recognize individual differences in terms of their personality, goals, beliefs, values and perceptions. These differences matter at the time of designing motivation process. d. Behavioural approach also assumes that people are the key to productivity and the technology, work standards and other physical factors do not guarantee higher performance. Instead it depends on wide range of variables such as satisfaction, morale and motivation. 4. System Approach: It looks at the organization from two different angles: 1. Overall picture of the organization as a unit and 2. Relationship between its internal components. 1. Overall Picture of the organization as a unit: We consider all the elements (internal & external) and their effects on each other simultaneously. This approach may be called the holistic view as it tries to reach the goal of an organization. a. For Example: Workers, technological development, finance, etc. 2. Relationship between its internal components: It gives the systematic view and examines the relationship between each element of the organization. a. For Example: Employer Employee Relationship The system approach focuses attention on the following aspects: It integrates all elements for the proper and smooth functioning of the organization. This approach helps in acquisition of resources (men, money, material, machinery, etc.) It allows adaptation to internal requirements and environmental changes in order to survive and grow.

FUNCTIONS OF MANAGEMENT
In every organization, the managers perform certain basic functions. These are broadly divided into six categories viz., planning, organizing, staffing, directing, coordinating and controlling. These are discussed basically hereunder. You will learn about all these functions in detail in the lessons to follow. (a) Planning: Planning is deciding in advance what is to be done, when it is to be done, how it is to be done. It is basically concerned with the selection of goals to be achieved and determining the effective course of action from among the various alternatives. This involves forecasting, establishing targets, developing the policies and programming and scheduling the action, procedure, etc. Thus, planning requires decisions to be made on what should be done, how it should be done, who will do it, where it will be done, and why it is to be done. The essential part of planning consists of setting goals and performing activities. (b) Organizing: After the plans have been drawn, management has to organize the activities and physical resources of the firm to carry out the selected programmes successfully. It also involves determining the authority and responsibility relationships among functions, departments and personnel at various levels to ensure smooth and effective function together in accomplishing the objective. Thus, the organizing function of management is primarily concerned with identifying the tasks involved and grouping them into units and departments, and defining the duties and responsibilities of people in different positions within each department for well coordinated and cooperative effort in the organization. (c) Staffing: Staffing is concerned with employing people for the various activities to be performed. The objective of staffing is to ensure that suitable people have been appointed for different positions. It includes the functions of recruitment, training and development, placement and remuneration, and performance appraisal of the employees. (d) Directing: The directing function of management includes guiding the subordinates, supervising their performance, communicating effectively and motivating them. A manager should be a good leader. He should be able to command and issue instruction without arousing any resentment among the subordinates. He should keep a watch on the performance of his subordinates and help them out whenever they come across any difficulty. The communication system, i.e., exchange of information should take place regularly for building common understanding and clarity. The managers should also understand the needs of subordinates and inspire them to do their best and encourage initiative and creativity. (e) Controlling: This function of management consists of the steps taken to ensure that the performance of work is in accordance with the plans. It involves establishing performance standards and measuring the actual performance with the standards set. If differences are noticed,

corrective steps are taken which may include revision of standards, regulate operations, remove deficiencies and improve performance. (f) Co-ordinating: Management has to ensure that all the activities contribute to the achievement of the objectives of the business as a whole. This requires integration of activities and synchronization of efforts. The heads of different departments should not treat each other as competitors but should work as organs of one body. As the proper functioning of every organ of a human body is important for a healthy body, the work of every department is important for the organization as a whole. Managers should, therefore, see that everybody in the organization understands its objectives and works in co-operation with others to achieve these objectives. This function of management is called co-ordination. It consists of harmonizing group effort so as to achieve common objectives.

MODULE II: PLANNING: PLANNING

Definition It is the basic function of management. (1.) According to Harold Koontz, Planning involves selecting mission and objectives and the actions to achieve them; it requires decisionmaking that is, choosing from alternative future courses of action. Thus, planning involves determining organizational objectives and deciding how best to achieve them. It involves looking ahead and relating todays events with tomorrows possibilities. It is rightly said Well plan is half done. (2.) According to Urwick, Planning means to think before acting and to act in the light of facts rather than guesses. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

CHARACTERISTICS OF PLANNING
Planning is goal-oriented. a. Planning is made to achieve desired objective of business. b. Planning identifies the action that would lead to desired goals quickly & economically. c. It provides sense of direction to various activities. E.g. Maruti Udhyog is trying to capture once again Indian Car Market by launching diesel models. Planning is looking ahead. a. Planning is done for future. b. It requires peeping in future, analyzing it and predicting it. c. Thus planning is based on forecasting. Planning is an intellectual process. a. Planning is a mental exercise involving creative thinking. b. It is not a mere guesswork but a rotational thinking. c. A manager can prepare sound plans only if he has sound judgement, foresight and imagination. Planning involves choice & decision making.

a. Planning essentially involves choice among various alternatives. b. Thus, decision making is an integral part of planning. c. A manager is surrounded by no. of alternatives. He has to pick the best depending upon requirements & resources of the enterprises.

Planning is the primary function of management / Primacy

of Planning.

a. Planning lays foundation for other functions of management. b. It serves as a guide for organizing, staffing, directing and controlling. c. All the functions of management are performed within the framework of plans laid out. Planning is a Continuous Process. a. Planning is a never ending function due to the dynamic business environment. b. Plans are also prepared for specific period of time and at the end of that period, plans are subjected to revaluation and review in the light of new requirements and changing conditions. Planning is all Pervasive. a. It is required at all levels of management and in all departments of enterprise. b. Of course, the scope of planning may differ from one level to another. c. The top level may be more concerned about planning the organization as a whole whereas the middle level may be more specific in departmental plans and the lower level plans implementation of the same. Planning is designed for efficiency. a. b. c. d. Planning leads to accomplishment of objectives at the minimum possible cost. Planning leads to proper utilization of men, money, materials, methods and machines. A plan is worthless or useless if it does not value the cost incurred on it. Therefore planning must lead to saving of time, effort and money.

Planning is Flexible. a. Planning is done for the future. b. Since future is unpredictable, planning must provide enough room to cope with the changes in customers demand, competition, and govt. policies etc. c. Under changed circumstances, the original plan of action must be revised and updated to make it more practical.

STEPS IN PLANNING PROCESS

Planning function of management involves following steps:1. Establishment of Objectives a. Planning starts with the setting of goals and objectives to be achieved. b. Objectives should be stated in a clear, precise and unambiguous language. c. Objectives should be stated in Quantitative (For Example: Number of men working, wages given, and units produced) as well as Qualitative terms (For Example: Performance of quality control manager, Effectiveness of personnel manager). d. Hence objectives should be practical, acceptable, workable and achievable. 2. Establishment of Planning Premises a. To find out what obstacles are there in the way of business during the course of operations. b. Establishment of planning premises is concerned to take such steps that avoid these obstacles to a great extent. c. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes. d. Internal premises are controllable whereas external are uncontrollable. 3. Choice of Alternative Course of Action a. After premises are established, a number of alternative courses of actions have to be considered. b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization. c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made. d. After objective and scientific evaluation, the best alternative is chosen. 4. Formulation of Derivative Plans a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan. b. These are meant to support basic plans. c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For Example: If profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization. 5. Securing Co-operation a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence. b. The purposes behind taking them into confidence are :-

i. ii.

Subordinates may feel motivated since they are involved in decision making process. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.

6. Follow up/Appraisal of Plans a. After the selected plan is implemented, it is important to appraise its effectiveness. b. This is done on the basis of feedback or information received from departments or persons concerned. c. This enables the management to correct deviations or modify the plan. d. This step establishes a link between planning and controlling function.

PURPOSE OF PLANNING
1. Planning facilitates management by objectives. a. In fact, it makes objectives more clear and specific. b. Planning helps in focusing the attention of employees on the objectives or goals of enterprise. c. Planning compels manager to prepare a Blue-print of the courses of action to be followed for accomplishment of objectives. 2. Planning minimizes uncertainties. a. Planning helps in reducing uncertainties of future as it involves anticipation of future events. b. Although future cannot be predicted with cent percent accuracy but planning helps management to anticipate future and prepare for risks. c. Therefore with the help of planning, uncertainties can be forecasted which helps in preparing standbys as a result, uncertainties are minimized to a great extent. 3. Planning facilitates co-ordination. a. All activities are directed towards common goals. b. There is an integrated effort throughout the enterprise in various departments and groups. c. It helps in finding out problems of work performance and aims at rectifying the same. 4. Planning improves employees morale. a. Planning creates an atmosphere of order and discipline in an organization. b. Employees know in advance what is expected of them. c. This encourages employees to show their best and also earn reward for the same. d. Planning creates a healthy attitude towards work environment which helps in boosting employees morale and efficiency. 5. Planning helps in achieving economies. a. It facilitates optimum utilization of resources which brings economy in operations. b. It also avoids wastage of resources by selecting most appropriate use that will contribute to the objective of enterprise. For example, raw materials can be purchased in bulk and transportation cost can be minimized. 6. Planning facilitates controlling.

a. It provides basis of controlling. b. Planning provides pre-determined goals against which actual performance is compared. c. In fact, planning and controlling are the two sides of a same coin. If planning is root, controlling is the fruit. 7. Planning provides competitive edge. a. Planning provides competitive edge to the enterprise over the others which do not have effective planning. b. With the help of forecasting not only the enterprise secures its future but at the same time it is able to estimate the future motives of its competitor. c. Planning improves quality of production and thus the competitive strength of the enterprise is improved. 8. Planning encourages innovations. a. In the process of planning, managers have the opportunities of suggesting ways and means of improving performance. b. Planning is basically a decision making function which involves creative thinking and imagination that ultimately leads to innovation of methods and operations for growth and prosperity of the enterprise.

TYPES OF PLANNING
1.) Corporate Plans This term is used for planning, undertaken by top level managers for the whole organization. It lays down basic objectives, strategies and policies to be pursued by managers for the whole organization. Corporate planning covers and integrates all those major and vital matters and issues which are directly concerned with survival, profitability, growth & development of the organization such as launching a new product, switching over to new technology, factory location decisions, etc. 2.) Operational Plans Operational plan is prepared for a short period, for less than a year. Operational planning is done at the departmental, divisional and operative levels of an organization. It directly helps in coordinating the various activities at the lower level. Operational planning helps in allocating resources to managers, delegating authority to them and making them accountable for the results. For Example: Publish 20 books this quarter. Operational plans can be a single-use plan or an ongoing plan. Single-use Plans apply to activities that do not recur or repeat, a one-time occurrence, such as a special sales program. These plans are designed to handle a unique problem and after that they become obsolete. For Example: Budgets, Projects, etc. Continuous or Ongoing Plans are repetitive in nature as these are designed to be used over and again. The following are examples of ongoing plans: Policies, Procedures, Rules, etc.

A Policy provides a broad guideline for managers to follow when dealing with important areas of decision making. Policies are general statements that explain how a manager should attempt to handle routine management responsibilities. For example: Employee hiring, terminations, performance appraisals, pay increases, and discipline. A Procedure is a set of step-by-step directions that explains how activities or tasks are to be carried out. For example: This procedure usually begins with a supervisor completing a purchasing requisition. The requisition is then sent to the next level of management for approval. The approved requisition is forwarded to the purchasing department and department will place an order. Procedures provide a standardized way of responding to a repetitive problem. A Rule is an explicit statement that tells an employee what he or she can and cannot do. Rules are DOs and Donts statements put into place to promote the safety of employees and the uniform treatment and behavior of employees. For example, rules about tardiness and absenteeism permit supervisors to make discipline decisions rapidly and with a high degree of fairness.

3.) Tactical Plans A tactical plan is concerned with what the lower level units within each division must do, how they must do it, and who is in charge at each level. Tactics are the means needed to activate a strategy and make it work. Tactical plans are concerned with shorter time frames and narrower scopes than are strategic plans. These plans usually span one year or less because they are considered short-term goals. Long-term goals, on the other hand, can take several years or more to accomplish. Normally, it is the middle manager's responsibility to take the broad strategic plan and identify specific tactical actions. 4.) Strategic Plans Strategic planning begins with an organization's mission. Strategic plans look ahead over the next two, three, five, or even more years to move the organization from where it currently is to where it wants to be. Requiring multilevel involvement, these plans demand harmony among all levels of management within the organization. Top-level management develops the directional objectives for the entire organization, while lower levels of management develop compatible objectives and plans to achieve them. Top management's strategic plan for the entire organization becomes the framework and sets dimensions for the lower level planning. 5.) Contingency plans Strong management requires a keeping all options open approach at all times that's where contingency planning comes in. Contingency planning involves identifying alternative courses of action that can be implemented if and when the original plan proves inadequate because of changing circumstances.

Unexpected problems and events frequently occur, which would force managers to change their plans. Management can then develop alternatives to the existing plan and use them when and if circumstances make these alternatives appropriate

DECISION MAKING
According to Peter Drucker, whatever a manager does, he does through decision making. In every situation, a manager faces a challenge of making correct, timely and effective decisions to get the best out of the situation. All decisions made by managers are directed at making the organization a functional and productive unit.

Characteristics of Decision Making

1.) Decision-making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem. 2.) Decision making process plays vital importance in the functioning of an organization. 3.) Decision making process can be regarded as check and balance system that keeps the organization growing both in vertical and linear directions. 4.) Since intellectual minds are involved in the process of decision making, it requires solid scientific knowledge coupled with skills and experience in addition to mental maturity. 5.) When one problem is solved another arises and so on, such that decision making process, as said earlier, is a continuous and dynamic.

Decision Making Process

1.) Define the Problem: First step in decision making process is defining the real problem. This will enable decision makers to see exactly what they are trying to accomplish and keep them on a specific path. 2.) Gathering Information and Collecting Data: Relevant and reliable information has a very important role in decision making. The required information is gathered from external and internal sources. This will help decision makers have actual evidence to help them come up with a solution. 3.) Developing Alternatives and weighing the options: Generally, for every problem there are alternative solutions and then pros and cons of these alternatives are listed. With the list of pros and cons, you can eliminate the solutions that have more cons than pros, which will help you in taking a right decision.

4.) Choosing Best Possible Option: Once you analyze each solution, you should pick the one that has many pros (or the pros that are most significant), and is a solution that everyone can agree with.

5.) Implementation of the Decision: Once the decision is picked, you should implement it right away. Decision must be communicated in clear, concise and understandable manner among the subordinates. Acceptance of decision by the subordinates is important and involvement of employees will facilitate the smooth execution of decisions. 6.) FollowUp: Sometimes a manager, in spite of his best efforts, may not make correct decision. This step allows manager to see what he did right and wrong and it also allows a manager to take corrective action or modify his plans at the earliest possible.

MODULE III: ORGANIZING: ORGANIZING

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, To organize a business is to provide it with everything useful for its functioning i.e. raw material, tools, capital and personnel. To organize a business involves determining & providing human and non-human resources to the organizational structure.

NATURE OF ORGANIZATION
The following are the important characteristics of an organization. 1.) Division of Work and Specialization The entire philosophy of organization is centered on the concept of Specialization and Division of Work. The Division of Work is assigning responsibility for each organizational component to a specific individual or group. It becomes Specialization when the responsibility for a specific task lies with a designated expert in that field. The efforts of the Operatives are coordinated to allow the process at hand to function correctly. Certain Operatives occupy positions of management at various points in the process to ensure coordination. 2.) Orientation towards goals Every organization has its own purposes and objectives. Organizing is the function employed to achieve the overall goals of the organization. Organization harmonizes the individual goals of the employees with overall objectives of the firm.

3.) Composition of individuals and groups Individuals form a group and the groups form an organization. Thus, organization is the composition of individual and groups. Individuals are grouped into departments and their work is coordinated and directed towards organizational goals.

4.) Differentiated functions The organization divides the entire work and assigns the tasks to individuals in order to achieve the organizational objectives; each one has to perform a different task and tasks of one individual must be coordinated with the tasks of others. Collecting these tasks at the final stage is called integration. 5.) Continuity An organization is a group of people with a defined relationship in which they work together to achieve the goals of that organization. This relationship does not come to end after completing each task. Organization is a never ending process.

IMPORTANCE OF ORGANIZATION
1. Specialization - Organizational structure is a network of relationships in which the work is divided into units and departments. This division of work is helping in bringing specialization in various activities of concern. 2. Well defined jobs - Organizational structure helps in putting right men on right job which can be done by selecting people for various departments according to their qualifications, skill and experience. This is helping in defining the jobs properly which clarifies the role of every person. 3. Clarifies authority - Organizational structure helps in clarifying the role positions to every manager (status quo). This can be done by clarifying the powers to every manager and the way he has to exercise those powers should be clarified so that misuse of powers does not take place. Well defined jobs and responsibilities attached helps in bringing efficiency into managers working. This helps in increasing productivity. 4. Co-ordination - Organization is a means of creating co- ordination among different departments of the enterprise. It creates clear cut relationships among positions and ensures mutual co- operation among individuals. Harmony of work is brought by higher level managers exercising their authority over interconnected activities of lower level manager. There is a saying, Authority without responsibility leads to ineffective behaviour and responsibility without authority makes person ineffective. Therefore, co- ordination of authority- responsibility is very important. 5. Effective administration - The organization structure is helpful in defining the jobs positions. The roles to be performed by different managers are clarified. Specialization is achieved through division of work. This all leads to efficient and effective administration.

6. Growth and Diversification - A companys growth is totally dependent on how efficiently and smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the managers, co-ordination between authority and responsibility and concentrating on specialization. In addition to this, a company can diversify if its potential grows. This is possible only when the organization structure is well- defined.

7. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every manager are clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in increasing mental satisfaction and thereby a sense of security in a concern. This is very important for job- satisfaction. 8. Scope for new changes - Where the roles and activities to be performed are clear and every person gets independence in his working, this provides enough space to a manager to develop his talents and flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or path to adoption of new techniques of production. This scope for bringing new changes into the running of an enterprise is possible only through a set of organizational structure.

PRINCIPLES OF ORGANIZING
The organizing process can be done efficiently if the managers have certain guidelines so that they can take decisions and can act. To organize in an effective manner, the following principles of organization can be used by a manager. 1. Principle of Specialization According to the principle, the whole work of a concern (Organization) should be divided amongst the subordinates on the basis of qualifications, abilities and skills. It is through division of work, specialization can be achieved which results in effective organization. 2. Principle of Functional Definition According to this principle, all the functions in a concern should be completely and clearly defined to the managers and subordinates. This can be done by clearly defining the duties, responsibilities, authority and relationships of people towards each other. Clarifications in authority- responsibility relationships help in achieving co- ordination. For example, the primary functions of production, marketing and finance and the authority responsibility relationships in these departments should be clearly defined to every person attached to that department. Clarification in the authority-responsibility relationship helps in efficient organization. 3. Principles of Span of Control/Supervision

According to this principle, span of control is a span of supervision which depicts the number of employees that can be handled and controlled effectively by a single manager. According to this principle, a manager should be able to handle what number of employees under him should be decided. This decision can be taken by choosing either from a wide or narrow span. There are two types of span of control:a) Wide span of control- It is one in which a manager can supervise and control effectively a large group of persons at one time. The features of this span are: Less overhead cost of supervision Prompt response from the employees Better communication Better supervision Better co-ordination Suitable for repetitive jobs b) Narrow span of control- According to this span, the work and authority is divided amongst many subordinates and a manager doesn't supervise and control a very big group of people under him. The manager according to a narrow span supervises a selected number of employees at one time. The features are: Co-ordination is difficult to be achieved. Communication gaps can come. Messages can be distorted. Specialization work can be achieved. 4. Principle of Scalar Chain Scalar chain is a chain of command or authority which flows from top to bottom. With a chain of authority available, wastages of resources are minimized, communication is affected, overlapping of work is avoided and easy organization takes place. A scalar chain of command facilitates work flow in an organization which helps in achievement of effective results. As the authority flows from top to bottom, it clarifies the authority positions to managers at all levels and that facilitates effective organization. 5. Principle of Unity of Command It implies one subordinate one superior relationship. Every subordinate is answerable and accountable to one boss at one time. This helps in avoiding communication gaps and feedback and response is prompt. Unity of command also helps in effective combination of resources, that is, physical, financial resources which helps in easy co- ordination and that lead to effective organization. Authority Flows from Top to Bottom Managing Director Marketing Manager

 Sales/ Media Manager Salesmen According to the above diagram, the Managing Director has got the highest level of authority. This authority is shared by the Marketing Manager who shares his authority with the Sales Manager. From this chain of hierarchy, the official chain of communication becomes clear which is helpful in achievement of results and which provides stability to a concern. This scalar chain of command always flows from top to bottom and it defines the authority positions of different managers at different levels.

TYPES OF ORGANIZATION
Organizations are basically classified on the basis of relationships. There are two types of organizations formed on the basis of relationships in an organization 1. Formal Organization - This is one which refers to a structure of well defined jobs each bearing a measure of authority and responsibility. It is a conscious determination by which people accomplish goals by adhering to the norms laid down by the structure. This kind of organization is an arbitrary set up in which each person is responsible for his performance. Formal organization has a formal set up to achieve pre- determined goals. Characteristics of Formal Organization It is based on division of labour and specialization. The authority and responsibility relationships created by the organizational structure are to be honoured by everyone. The principle of unity of command is usually observed. Organization structure is predetermined by the top management. It is based on delegation of authority.

2. Informal Organization - It refers to a network of personal and social relationships which spontaneously originates within the formal set up. Informal organizations develop relationships which are built on likes, dislikes, feelings and emotions. Therefore, the network of social groups based on friendships can be called as informal organizations. There is no conscious effort made to have informal organization. It emerges from the formal organization and it is not based on any rules and regulations as in case of formal organization. Characteristics of Informal Organization Informal relations are unplanned. They arise spontaneously. It reflects human relationships. Informal organization is based on common taste, language, religion, culture, etc. Formation of informal organization is a natural process.

The membership of informal organization is voluntary.

Relationship between Formal and Informal Organizations

Formal organization originates from the set organizational structure and informal organization originates from formal organization. For an efficient organization, both formal and informal organizations are required. They are the two phase of a same concern. Formal organization can work independently. But informal organization depends totally upon the formal organization. Formal and informal organization helps in bringing efficient working organization and smoothness in a concern. Within the formal organization, the members undertake the assigned duties in co- operation with each other. They interact and communicate amongst themselves. Therefore, both formal and informal organizations are important. When several people work together for achievement of organizational goals, social tie ups tend to build and therefore informal organization helps to secure co-operation by which goals can be achieved smoothly. Therefore, we can say that informal organization emerges from formal organization.

MODULE IV: DIRECTING ORGANIZATIONAL STRUCTURE

Organization is composed of individuals and groups of individuals which are oriented towards achieving common goals & differential functions. Structure is the arrangement of components or parts & positions in an organization. It provides guidelines on: division of work into activities; linkage between different functions; hierarchy; authority structure; coordination with the environment. Organizational Structure refers to the hierarchy of an organization and how the components of this hierarchy work together to achieve the objectives of the company. For example, in a particular area, there are staffs reporting to manager, who may report to another manager or directly to a CEO depending on (depending on the complexity of the structure or the size of the organization). Each of these groups of persons has their own distinct task(s) to complete that contributes to a main goal(s).An organizational structure can be either flat or tall, depending on the number of employees in the company PRINCIPLES OF ORGANIZATION STRUCTURE Modern organizational structures have evolved from several organizational theories, which have identified certain principles as basic to any organization. Specialization

Specialization facilitates division of work into units for efficient performance. According to the classical approach, work can be performed much better if it is divided into components and people are encouraged to specialize by components. Work can be specialized both horizontally and vertically . Vertical specialization in a research organization refers to different kinds of work at different levels, such as project leader, scientist, researcher, field staff, etc. Specialization enables application of specialized knowledge which betters the quality of work and improves organizational efficiency. At the same time, it can also influence fundamental work attitudes, relationships and communication. This may make coordination difficult and obstruct the functioning of the organization. Coordination Coordination refers to integrating the objectives and activities of specialized departments to realize broad strategic objectives of the organization. It includes two basic decisions pertaining to: (i) Which units or groups should be placed together; and (ii) The patterns of relationships, information networks and communication Hierarchy facilitates vertical coordination of various departments and their activities. Organizational theorists have over the years developed several principles relating to the hierarchy of authority for coordinating various activities. Some of the important principles are discussed below. Unity of Command Every person in an organization should be responsible to one superior and receive orders from that person only. Fayol (1949) considered this to be the most important principle for efficient working and increased productivity in an organization. The Scalar Principle Decision making authority and the chain of command in an organization should flow in a straight line from the highest level to the lowest. The principle evolves from the principle of unity of command. However, this may not always be possible, particularly in large organizations or in research institutions. Therefore Fayol (1949) felt that members in such organizations could also communicate directly at the same level of hierarchy, with prior intimation to their superiors. The Responsibility and Authority Principle For successfully performing certain tasks, responsibility must be accompanied by proper authority. Those responsible for performance of tasks should also have the appropriate level of influence on decision making. Span of Control This refers to the number of specialized activities or individuals supervised by one person. Deciding the span of control is important for coordinating different types of activities effectively. Some of the important situational factors which affect the span of control of a manager are:

 similarity of functions; direction and control needed by subordinates; coordination required between units; extent of planning required; and organizational help available for making decisions.

FUNCTIONS OF ORGANIZATIONAL STRUCTURE

Facilitates Specialization Organizational structure facilitates division of work since each boss has specialized knowledge on his field of work. He has better and accurate knowledge to guide his subordinates. The supervisor's task is to ensure that his department performs its best, regardless of whether other units are performing as well. The supervisor should also help his subordinates perform to their best in that area of specialization. Control over Resources Organizational structures simplify control over resources because these resources can be rationed and allotted to the various units. These resources should be used to their most productive uses at that level. Since resources are very scarce, they should be utilized effectively by eliminating unnecessary wastage. This can only be done if an organizational structure is clearly defined and there is control of employees through an effective organizational structure. Easier Communication Organizational structures clearly state who reports to whom. A subordinate cannot report directly to the manager before communicating with his immediate supervisor. This simplifies the work of executive employees so that they are not overwhelmed by the activities of the firm. Flow of information is controlled so that employees do not take advantage of insider information that may expose confidential information critical for the firm's survival. Better Employee Performance Organizational structures clearly show various jobs to be performed by employees and which supervisor will manage them. The supervisor trains them out of his own experience or from the rules of the organization and helps they become better performers. Supervisors punish and reward where necessary and this helps the employees learn from their own experiences Cost saving Since flat organizational structures feature fewer layers of management, flat organizations can incur smaller expenses on salaries. In addition, flat organizations often avoid granting salary raises and promotions for length of service, instead focusing their career development efforts on top performers.

Adaptability Employees and work groups in the organizations tend to be more adaptable in changing or unique circumstances, due to their smaller hierarchies and lack of bureaucracy. It mostly happens in the small organization. Stimulates creativity Sound organization stimulates creative thinking & initiative by providing well defined areas of work with provision for development of new & improved ways of doing things. Encourages use of human beings: Proper organization provides psychological satisfaction to employess.An individual contributes his best when he gets satisfaction from his jobs, his environment & his relationship.

SIGNIFICANCE OF ORGANIZATIONAL STRUCTURE

Organizational structure plays significant role in effective and efficient functioning of organization. There are many significance of organizational structure and they are as follows: 1. Clear cut authority relationships: Organizational structure helps in delivering authority and responsibility among employees in an organization. It signifies the duties and responsibilities concerned with particular post to concerned persons. It helps in recognizing roles for each employee and his accountability to the organization. It also correlates relationships of one organizational member to the other members. 2. Pattern of communication: It provides the patterns of communication and coordination in an organization. Organizational structure helps in grouping activities and people and so it facilitates communication between people centered as their job activities. The sharing of information helps person in solving their joint problems. 3. Location of Decision Centers: It determines the location of centers of decision making in the organization. 4. Proper Balancing: It helps in creating proper balance and lays emphasizes on coordination of group activities in the organization. 5. Stimulating creativity: An efficient and sound organization structure provides well defined patterns of authority that stimulates creative thinking and initiative among members of the organization. Every organizational member understands his power and utilizes it to perfection to get appreciation in the organization.

6. Encouraging growth: It provides the framework within which an enterprise functions. If the structure of organization is flexible then it will help in meeting challenges and creating opportunity for growth. It helps in facility growth of the enterprise by increasing its capacity so that increased level of activity can be handled. 7. Making Use of Technical Improvements: Adaptability to the change in a sound organizational structure and in making maximum use of latest technology. It modifies the existing pattern of authority responsibility relationship in respect to the technological improvements in the organization.

TYPES OF ORGANIZATIONAL STRUCTURE

Functional Organizations An organization with a functional structure groups jobs based on similarity in function. In an organization of this type, an individual is likely to have a specialized role and handle a large number of transactions. Functional structures are ideal for a stable work environment, and does well to promote efficiency.

Divisional Organizations An organization with a divisional structure has departments that represent the unique products, services, customers or geographic locations that the company is serving. In this structure, employees are more like generalists than specialists, and may be in charge of performing many different tasks in service of the product. This type of structure demands a higher calibre of employee, but is able to be more agile and adaptive to change.

Matrix organizations Matrix organizations achieved by pooling employees together from different departments in order to form a product, or functional, team that is lead by a separate manager. In this type of an organization, the company uses teams to complete tasks. This has the advantage of allowing the organization to maintain the detailed attention to specific products/functions afforded by the functional style, while increasing communication across departments. The disadvantage is that an employee may end up reporting to two or more managers, which can lead to conflict. . For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a different engineering manager or a project manager while working on that project. Therefore, each engineer may have to work under several managers to get their job done.

STRENGTHS facilitates coordination complex and independent activities better communication more flexibility efficient allocation of specialists

WEAKNESSES confusion created stress placed on workers unclear reporting relationships power struggles role conflicts

FACTORS AFEECTING ORGANIZATIONAL STRUCTURE

Size Size is many times the driving factor for a company. Smaller or home-based businesses do not usually have a vast structure because the business owner is usually responsible for all tasks. Larger business organizations usually require a more intense framework for their organizational structure. Companies with more employees usually require more managers for supervising these individuals. Highly specialized business operations can also require a more formal organizational structure. Life Cycle The company's life cycle also plays an important part in the development of an organizational structure. Business owners attempting to grow and expand their company, operations usually develop an organizational structure to outline their company's business mission and goals the chain of command increases from the business owner down to frontline employees. Mature companies usually focus on developing an organizational structure to improve efficiency and profitability. These improvements may be the result of more competitors entering the economic marketplace. Strategy Business strategies can also be a factor in a company's organizational structure development. High-growth companies usually have smaller organizational structures so they can react to changes in the business environment quicker than other companies. Business owners may also be reluctant to give up managerial control in business operations. Small businesses still looking to define their business strategy often delay creating an organizational structure. Business owners

are usually more interested in setting business strategies rather than developing and implementing an internal business structure. Business Environment The external business environment can also play an important part in a company's organizational structure. Dynamic environments with constantly changing consumer desires or behavior is often more turbulent than stable environments.. More time and capital can also be spent in dynamic environments attending to create and organizational structure. This additional capital is usually a negative expense for many small businesses. DEPARTMENTALIZATION Departmentalization the grouping of related functions into manageable units to achieve the objectives of the enterprise in the most efficient and effective manner. Departmentalization is conventionally based on purpose, product, process, function, personal things and place .

FUNCTIONAL Perhaps the oldest and most common method of grouping related functions is by specialized function, such as marketing, finance, and production (or operations). Sometimes this form of departmentalization may create problems if individuals with specialized functions become more concerned with their own specialized area than with the overall business. An example of departmentalization by function appears in Figure -1 below.

PROCESS Departmentalization can also take place by process. This type of departmentalization, which often exists in manufacturing companies, is illustrated in Figure -2 below.

PRODUCT

Whenever specialized knowledge of certain products or services is needed, departmentalization by product may be best. This usually occurs in large diversified companies. This form of departmentalization, is illustrated in Figure -3 below.

MARKET When a need exists to provide better service to different types of markets, departmentalization by market may be the appropriate form. An example of a business serving nonprofit markets, which uses the market form of departmentalization, is shown in Figure-4 below.

CUSTOMER Sometimes key or major customers warrant departmentalization by customer. This is often the case in banks. See Figure-5 below GEOGRAPHIC AREA When organizations are spread throughout the world or have territories in many parts of a country, departmentalization by geographic area may provide better service to customers and be more cost effective. A typical example for this form of departmentalization. is shown in Figure-6 below.

De-centralization and Centralization De-centralization refers to decision making at lower levels in the hierarchy of authority. In contrast, decision making in a centralized type of organizational structure is at higher levels. The degree of centralization and de-centralization depends on the number of levels of hierarchy, degree of coordination, specialization and span of control. Every organizational structure contains both centralization and de-centralization, but to varying degrees. The extent of this can be determined by identifying how much of the decision making is concentrated at the top and how much is delegated to lower levels. Modern organizational structures show a strong tendency towards de-centralization.

Line and Staff Relationships Line authority refers to the scalar chain, or to the superior-subordinate linkages, that extend throughout the hierarchy (Koontz, O'Donnell, 1980). Line employees are responsible for achieving the basic or strategic objectives of the organization, while staff plays a supporting role to line employees and provides services. The relationship between line and staff is crucial in organizational structure, design and efficiency. It is also an important aid to information processing and coordination. E.g. In an agricultural research organization, scientists and researchers form the line. Administrative employees are considered staff, and their main function is to support and provide help to scientists to achieve organizational goals . It is the responsibility of the manager to make proper and effective use of staff through their supportive functions. The staff may be specialized, general or organizational. Specialized staff conduct technical work that is beyond the time or knowledge capacity of top management, such as conducting market research and forecasting. General staff consists of staff assistants to whom managers assign work. Organization staff (such as centralized personnel, accounting and public relations staff) provide services to the organization as a whole. Their role is to integrate different operations across departments. Line and staff personnel have different functions, goals, cultures and backgrounds. Consequently, they could frequently face conflict situations. A manager has to use his skills in resolving such conflicts.

ORGANIZATION CHARTS
Organization charts or diagrams graphically show the structure of an organization. Organization charts may show the titles, departments, or responsibilities of personnel in an organization. They also serve to outline responsibilities and illustrate the chain of command. To be effective, limit organization charts to showing lines of authority, responsibility, the span of control, or functional relationships.

TYPES OF ORGANIZATIONAL CHARTS

Organisation charts can be prepared in different forms. However, all organisation charts may be classified into three broad categories: 1. Hierarchical: In Hierarchical organization chart the organization is divided in to different levels where the line of command follows downwards from the top level to the bottom or the lower level. Vertical Chart: This is the most widely used form. It shows the organisation structure in the form of a pyramid, the lines of command proceeding from top to bottom in lines. The highest position or person is placed at the top and after that the next highest. This process goes on up to the lowest level. Flat or Horizontal Chart:

In a horizontal chart the pyramid lies horizontally instead of standing vertically. The highest position is shown at the extreme left and the lowest position at the extreme right. In between each successive sub-ordinate position extends from left to right. Therefore, this chart is also called Left to Right chart. 2. Matrix: In matrix organizational chart the organization is divide such a pattern that the same skilled peoples are pooled together in a group reporting to the respective manager of there group.

DELEGATION OF AUTHORITY
What is Delegation? Delegation (or deputation) is the assignment of authority and responsibility to another person (normally from a manager to a subordinate) to carry out specific activities. However the person who delegated the work remains accountable for the outcome of the delegated work. Delegation empowers a subordinate to make decisions, i.e. it is a shift of decision-making authority from one organizational level to a lower one. Delegation does not mean surrender of authority by the

higher level manager. It only means transfer of certain responsibilities to subordinates and giving them the necessary authority. Delegation means the granting of authority to subordinates to operate within the prescribed limits. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results. Define Organization Design According to O. S. Miner, "Delegation takes place when one person gives another the right to perform work on his behalf and in his name and the second person accepts a corresponding duty or obligation to do that is required of him."

CHARACTERISTICS OF DELEGATION
1. Delegation is the authorization to a manager to act in a certain way independently. The degree of delegation puts a manager to act within the limits prescribed by his superior. Moreover, within the limits he is not free to act arbitrarily but subject to provisions of organizational policy, rule and regulation. 2. Delegation has a dual characteristic. A superior delegates authority to subordinates, however a superior at the same time still retains authority. 3. Authority once delegated can be enhanced, reduced or withdrawn depending upon the requirement. The changes in organization structure, organization climate, policy, procedure, and method require modifications in delegation of authority. Since, authority is delegated to an individual; the authority can be recovered back fully in the case of his exit from the organization. 4. A manager cannot delegate authority which he himself does not process. Moreover, he does not delegate the entire authority to his subordinates because if he delegates all his authority he cannot work. 5. Delegation may be specific or general. Similarly, it can be written or unwritten. Delegation is specific when course of action for specific objectives are specified; it is general when these are not specified, though objectives are specified.

PRINCIPLES OF DELEGATION There are a few guidelines in form of principles which can be a help to the manager to process of delegation. The principles of delegation are as follows: 1. Principle of result excepted- suggests that every manager before delegating the powers to the subordinate should be able to clearly define the goals as well as results expected from them. The goals and targets should be completely and clearly defined and the standards of performance should also be notified clearly. For example, a marketing manager explains the salesmen regarding the units of sale to take place in a particular day, say ten units a day have to be the target sales. While a marketing manager provides these guidelines of sales, mentioning the target sales is very important so that the salesman can perform his duty efficiently with a clear set of mind. 3.

2. Principle of Authority and Responsibility- According to this principle, the manager should keep a balance between authority and responsibility. Both of them should go hand in hand. 4. Principle of absolute responsibility- This says that the authority can be delegated but responsibility cannot be delegated by managers to his subordinates which means responsibility is fixed. The manager at every level, no matter what is his authority, is always responsible to his superior for carrying out his task by delegating the powers. It does not means that he can escape from his responsibility. He will always remain responsible till the completion of task. Every superior is responsible for the acts of their subordinates and are accountable to their superior therefore the superiors cannot pass the blame to the subordinates even if he has delegated certain powers to subordinates example if the production manager has been given a work and the machine breaks down. If repairmen are not able to get repair work done, production manager will be responsible to CEO if their production is not completed. 5. Principle of Authority level- This principle suggests that a manager should exercise his authority within the jurisdiction / framework given. The manager should be forced to consult their superiors with those matters of which the authority is not given that means before a manager takes any important decision, he should make sure that he has the authority to do that on the other hand, subordinate should also not frequently go with regards to their complaints as well as suggestions to their superior if they are not asked to do. This principle emphasizes on the degree of authority and the level up to which it has to be maintained. 6. The principles of unity of command The principle states that accountability to two bosses should be avoided and accountability should be unitary.

7. Authority flows from upward to downward and responsibility flows from downward to upward.

8. Principle of Trust and confidence: superior should trust in subordinate. Also the superior must have the confidence in the ability of subordinate to perform the duty. As an organization, there must be trust and confidence in between the subordinates/co-workers. Trust will bring drive and initiative in the work. It is possible only if the subordinate is mentally free to exercise his authority.

9. Principle of reward: An appropriate reward system to reward the subordinates will help the subordinates to take the more responsibility and assume more authority which will create a healthy environment and the growth of the organization. Effective delegation and utilization of the proper authority should be rewarded.

10. Principle of receptiveness: The superior who delegates authority should listen and accept the suggestions made by his subordinates to reach a healthy decision. Therefore, delegation needs and understanding between the superior and his subordinates.

11. Principle of Adequate Communication: Free flow of information between the superior and his subordinates are a necessity. It will help the superior to take necessary decision on time. Also it will help the subordinate to understand the nature of the assigned duty and the degree of his authority and perform accordingly.

PROCESS OF DELEGATION OF AUTHORITY

Delegation process involves four distinct stages. The process of delegation moves through these stages. The following figure shows the stages in the process of delegation of authority.

Four Stages In Process of Delegation of Authority

(A) Assignment of duties to subordinates Before delegating, the delegator has to decide precisely the duties which are to be delegated to the subordinate or a group of subordinates. The authority is delegated accordingly and the subordinate is told what is expected from him. The usual practice is to list the functions to be performed by the subordinate. If necessary, targets to be achieved by the subordinate are also spelt out. Subordinates may be assigned tasks either in terms of activities or results. The manager (delegator) must communicate clearly his expectations. Competent and responsible employees may be given general guidelines about what needs to be accomplished. Their less competent and responsible counter-parts need more specific guidelines. In brief, in the first stage of delegation process, duties are assigned to the subordinate. (B) Transfer of authority to perform the duty In the second stage of delegation process, the authority is granted by the delegator to his subordinate (delegate). Authority must be delegated strictly to perform the assigned duty. The performance of duties suffers serious setback when required authority is not delegated along with the duty. In brief, the transfer of authority should be adequate considering the duties assigned to the subordinate.

(C) Acceptance of the assignment In this third stage of delegation process, the subordinate/delegate has to accept or reject the task assigned to him in the first stage along with the authority given in the second stage. If the delegates refuse, the delegator has to make fresh plan of delegation or may consider some other subordinate who is capable and is willing to accept the assignment. On the other hand, the process of delegation will move to the fourth and the last stage, if the first delegates accept the assignment of work accompanying the authority. (D) Creation of Obligation / Accountability / Responsibility The fourth stage in the, delegation of authority is the creation of obligation on the part of the subordinate to perform duties assigned to him in a satisfactory manner by using the authority given. When subordinate accepts a task and the authority is given, an obligation is created. He has to perform the assigned task by using the authority granted to him. A subordinate is also responsible/accountable for completing the assigned work. He is held answerable to a superior for the satisfactory performance of that work assigned. The delegator has to help his subordinate as and when necessary as he is responsible to his superior/organization. ADVANTAGES / IMPORTANCE OF DELEGATION OF AUTHORITY 1. Relieves manager for more challenging jobs: Delegation makes it possible for the managers to distribute their workload to others. Thus, managers are relieved of routine work and they can concentrate on higher functions of management like planning, organizing, controlling, etc. 2. Leads to motivation of subordinates: Subordinates are encouraged to give their best at work when they have authority with responsibility. They take more initiative and interest in the work and are also careful and cautious in their work. Delegation leads to motivation of employees and manpower development. 3. Facilitates efficiency and quick actions: Delegation saves time enabling tile subordinates to deal with the problems promptly. They can take the decisions quickly within their authority. It is not necessary to go to the superiors for routine matters. This raises the overall efficiency in an Organization and offers better results in terms of production, turnover and profit. 4. Improves employee morale: Delegation raises the morale of subordinates as they are given duties and supporting authority. They feel that they are responsible employees. The attitude and outlook of subordinates towards work assigned becomes more constructive. 5. Develops team spirit: Due to delegation, effective communication develops between the superiors and subordinates. The subordinates are answerable to superiors and the superiors are responsible for the performance of subordinates. This brings better relations and team spirit among the superiors and subordinates 6. Maintains cordial relationships: The superiors trust subordinates and give them necessary authority. The subordinates accept their accountability and this develops cordial superiorsubordinate relationships. 7. Facilitates management development: Delegation acts as a training ground for management development. It gives opportunity to subordinates to learn, to grow and to develop new qualities

and skills. It builds up a reservoir of executives, which can be used as and when required. Delegation creates managers and not mere messengers. OBSTACLES / BARRIERS TO EFFECTIVE DELEGATION OF AUTHORITY (A) Obstacles / Barriers on the Part of Manager / Superior / Delegator 1. Fear of competition: A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him. Fear of subordinate's excellence may come in the way of delegation. 2. Lack of confidence in subordinates: A manager may hesitate to delegate authority, if he feels that his subordinate is not competent to deal with the problem and take decisions. Even fear of losing control over the subordinates acts as an obstacle to delegation. In addition, fear of being exposed due to personal shortcomings may act as an obstacle in the process of delegation. 3. Lack of ability to direct: Sometimes, a manager may experience difficulty in directing the efforts of his subordinates because of his inability to identify and communicate the essential features of his long-range plans and programmes. 4. Absence of controls that warn of coming troubles: An Organization might not have developed the controlling techniques to know in advance the serious problems lying ahead. It may happen due to concentration of power in the hands of few people. As a result, manager may resist delegation. (B) Obstacles / Barriers on the Part of Subordinates (Why Subordinates Resist Delegation?) 1. Too much dependence on the manager for decisions: Some subordinates avoid responsibility even when the superior/manager is prepared to delegate authority. They want the manager to tackle problems and take decisions. A subordinate who is not confident about his performance/ability will certainly try to shirk responsibility even though his superior is prepared to delegate functions and authority. 2. Fear of criticism: Subordinates express unwillingness to accept delegated authority because of the fear of criticism in the case of mistakes. They fear that they may be criticized by others if they commit mistakes. Such subordinates have the following feeling in their mind, "Why should I stick my neck out for my boss?" 3. Lack of information: A subordinate may hesitate to accept a new assignment, when he knows that necessary information to perform the job is not likely to be made available to him. He is reluctant to accept delegated functions and authority as he feels that he will not be able to perform well due to inadequate information available. 4. Absence of self-confidence: A subordinate may lack self-confidence about his ability to take quick and correct decisions. He may not like to accept new challenging functions as he lacks self-confidence. Thus, lack of self-confidence on the part of subordinates is one obstacle which comes in the way of delegation of authority. 5. Difficulty in decision-making: A subordinate may not have the skill and the expertise to take quick and correct decisions. He prefers to go to his superior (boss) and ask for his guidance or opinion. Such psychology acts as a cause for non-acceptance of delegation. A subordinate avoids delegation due to such mental tension or inferiority complex.

6. Poor superior-subordinate relations: Absence of cordial relations in between the superior and the subordinates hampers the process of delegation of authority. The attitude of the superior towards subordinate may not be friendly but hostile. There may be undue interference in the work assigned to the subordinate. Even the good work of subordinate may not be appreciated by the superior. Such situation creates unfavorable attitude of subordinate towards delegation. He avoids delegation as and when offered.

TYPES OF AUTHORIIY DECENTRALISATION

Decentralization of authority means systematic effort to bring spreading of decision making power to the lower levels of the Organization. In decentralization, only broad powers will be reserved at the top level. Such powers include power to plan, organize, direct and control and maximum powers will delegated to the authority at the lower level.Decentralisation is just opposite to centralization. Under centralization, authority is mostly concentrated at the top level management. Centralization and decentralization are mutually dependent. Definition According to Louis Allen, "decentralization refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central point ADVANTAGES / IMPORTANCE OF DECENTRALIZATION 1. Decentralization helps to improve the quality of decisions/decision-making at the top level management: Decentralization of authority among other executives at all levels in the Organization relieves the top executive of the excessive burden saving his valuable time, which he can devote to more important and long-term problems. This is bound to improve the quality of his decisions regarding such problems. Decentralization facilitates diversification of activities: It is a matter of common experience that an Organization with departmentation on the basis of products facilitates diversification of products or market even when the authority is centralized. Decentralization takes this process a step further. Managers of semi-autonomous product divisions are able to utilize their skills and experienced judgment. This has a bearing on their products and the market. The enterprise also attains maximum possible growth. Decentralization is beneficial when new product lines or new activities are introduced in an Organization. Such policy creates self sufficient units under overall co-ordination of top level management. Decentralization encourages development of managerial personnel: Most companies find lack of managerial talent as a limiting factor in their growth. A company cannot expand effectively beyond the scope and abilities of its managerial personnel. Capable managers, however, can be developed only by giving managerial jobs to suitable persons and delegating them the authority to make important decisions. Such wide exposure gives them opportunity to grow and to have self development for higher positions. The more talented and capable persons will learn and improve and qualify themselves for higher managerial positions. Only a decentralized Organization can offer such opportunities to future managers without

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involving additional expenditure. A decentralized Organization also allows its managers adequate freedom to try new ideas, methods or techniques. In brief, decentralization creates a team of competent managers at the disposal of the company. Decentralization improves motivation: Research conducted by social scientists has proved that the Organization structure itself exercises some influence on the motivation of the people working within it. An Organization structure which facilitates delegation, communication and participation also provides greater motivation to its managers for higher productivity. Decentralized Organization structure is most favorable for raising the morale and motivation of subordinates which is visible through better work performance. Decentralization makes decision-making quicker and better: Since decisions do not have to be referred up through the hierarchy, quicker and better decisions at lower levels can be taken. Divisional heads are motivated to make such decisions that will create the maximum profit because they are held responsible for the effect of their decisions on profits. Thus decentralization facilitates quick and result-oriented decisions by concerned persons. Decentralization provides opportunity to learn by doing: Decentralization provides a positive climate where there is freedom to make decisions, freedom to use judgment and freedom to act. It gives practical training to middle level managers and facilitates management development at the enterprise level.

LIMITATIONS OF DECENTRALIZATION
1. 2. Decentralization may lead to the problem of co-ordination at the level of an enterprise as the decision-making authority is not concentrated. Decentralization may lead to inconsistencies (i.e. absence of uniformity) at the Organization level. For example, uniform policies or procedures may not be followed for the same type of work in different divisions. Decentralization is costly as it raises administrative expenses on account of requirement of trained personnel to accept authority at lower levels. Even the services of such highly paid manpower may not be utilized fully, particularly in small organizations. Introduction of decentralization may be difficult or may not be practicable in small concerns where product lines are not broad enough for the creation of autonomous units for administrative purposes. Decentralization creates special problems particularly when the enterprise is facing number of uncertainties or emergency situations. The decision-making process gets delayed and even correct decisions as per the changing situations may not be possible.

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FACTOR AFFECTING DECENTRAIZATION

1. Size of the organization Large organization makes a lot of decisions. Their decisions are taken at different levels. So large organizations are more decentralized. Small organization makes few decisions. All their decisions are taken at the top level. So small organizations are less decentralized. Thus, we can say, the bigger the organization, the more the decentralization and vice-versa. 2. Cost and Importance of decisions

The most costly and important decisions are made by the top level of management. So, there is less decentralization of costly and important decisions. Thus, we can say, the higher the cost and importance of the decision the lesser the decentralization and vice-versa. 3. Uniformity If the management wants more uniformity, then there will be more centralization and less decentralization. 4. History of organization An organization which expands from within has more centralization. For e.g. Henry Ford made most of the decisions for Ford Motors. However, an organization which expands with the help of business combinations has more decentralization. 5. Management Philosophy The management philosophy also influences decentralization. If the management wants to make all the decisions themselves, then the organization will be more centralized and vice-versa. 6. Availability of efficient managers If more efficient managers are available, then there will be more decentralization. However, if there is a shortage of efficient managers then there will be more centralization. 7. Control Systems If there is a good control system in the organization, then there will be more decentralization. This is because authority cannot be decentralized and delegated without proper control techniques. 8. Types of Business If a business is old and slow moving, then it will have more centralization. However, if the business is new and fast moving, then it will have more decentralization. 9. Branches of organization If an organization has many branches at different places, then it will have more decentralization. However, if the organization does not have any branches, it may have more centralization. 10. Type of organization Joint-stock companies are generally more decentralized compared to sole trading concerns and partnership firms.

CENTRALIZATION OF AUTHORITY
Centralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. According to Allen, Centralization is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be:1. Reservation of decision making power at top level. 2. Reservation of operating authority with the middle level managers. 3. Reservation of operation at lower level at the directions of the top level. Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. For example, in a business concern, the father & son being the owners decide about the important matters and all the rest of functions like product, finance, marketing, personnel, are carried out by the department heads and they have to act as per instruction and orders of the two people. Therefore in this case, decision making power remain in the hands of father & son. ADVANTAGES OF CENTRALIZATION OF AUTHORITY The various advantages of Centralization of Authority are: 1. Reduced costThe standardized procedure and method helps in considerably reduction of office cost. Office cost is reduced as it does not emphasizes on more specialists, and more departmental machines and equipment. 2. Uniformity in action Uniformity in action is established throughout the organisation because of central administrative control. The same executive supervises the work and same type of office equipments are used which ensure uniform performance of activities. 3. Personal leadershipCentralization encourages and permits personal leadership. The introduction of personal leadership facilitates quick action, aggressive marketing and attainment of pin-pointed objective or purpose, 4. Flexibility Centralization permits flexibility and adaptability of the organisation to the changed circumstances. Occasional pressure of extra clerical work is handled with the existing staff.

5. Improved quality of workImproved quality of work is possible because of standardised procedure, better supervision and use of improved- machinery.

6. Better co-ordination Centralization facilitates better coordination among various operations. Direct control and supervision are facilitated which results in less likelihood of conflict of authority and duplication of work. DISADVANTAGES OF CENTRALIZATION OF AUTHORITY: Opponents attribute the following disadvantages against centralisation. 1. Delay in workCentralisation creates loss of man-hours and delay in performance of work because of transmission of records from and to the central control room. Quick decision is not possible which also results delay in office work. 2. Remote controlBetter supervision is not possible as the executives are under heavy pressure of work. Slackness in work is developed in the absence of better control and supervision. 3. No loyalty In centralisation there is no subordinate's initiative in work because they are required to do such works which they were asked for. Workers work like machine which results in no involvement in work and absence of zeal. All these factors stand as barrier in the development of loyalty to work. 4. No SecrecySecrecy is not possible in centralised set up organisation because here orders and decisions flow from one place and are conveyed to all. 5. No special attentionIn centralisation no special attention is given to special work as all works are done at one place.

COMMUNICATION
Introduction Communication (from Latin "communis", meaning to share) is the activity of conveying information through the exchange of thoughts, messages, or information, as by speech, signals, writing, or behavior. Communication is neither transmission of message nor message itself. It is the mutual exchange of understanding, originating with the receiver. Communication needs to be effective in business. Communication is essence of management. The basic functions of management (Planning, Organizing, Staffing, Directing and Controlling) cannot be performed well without effective communication. Business communication involves constant flow of information. Feedback is integral part of business communication. Organizations these days are very large. It involves number of people. There are various levels of hierarchy in an organization. Greater the number of levels, the more difficult is the job of managing the organization. Communication here plays a

very important role in process of directing and controlling the people in the organization. Immediate feedback can be obtained and misunderstandings if any can be avoided. There should be effective communication between superiors and subordinated in an organization, between organization and society at large. It is essential for success and growth of an organization. Communication gaps should not occur in any organization. Why do we communicate? To express a need - "I am hungry. Give me food" To express an experience - "I fell down today" To express an opinion - "I don't like to eat vegetables" To express a feeling - "I am happy" To ask a question - "What is this?" To make a choice - "I want music, not ball" To make a suggestion - "Blue paper will look better for wrapping the gift" To make friends - Hi, I am Rita. What's your name?

COMMUNICATION PROCESS

The main components of communication process are as follows: 1. Context - Communication is affected by the context in which it takes place. This context may be physical, social, chronological or cultural. Every communication proceeds with context. The sender chooses the message to communicate within a context. Sender / Encoder - Sender / Encoder is a person who sends the message. A sender makes use of symbols (words or graphic or visual aids) to convey the message and produce the required response. For instance - a training manager conducting training for new batch of employees. Sender may be an individual or a group or an organization. The views, background, approach, skills and knowledge of the sender have a great impact on the message. The verbal and non verbal symbols chosen are essential in ascertaining interpretation of the message by the recipient in the same terms as intended by the sender.

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Message - Message is a key idea that the sender wants to communicate. It is a sign that elicits the response of recipient. Communication process begins with deciding about the message to be conveyed. It must be ensured that the main objective of the message is clear. Medium - Medium is a means used to exchange / transmit the message. The sender must choose an appropriate medium for transmitting the message else the message might not be conveyed to the desired recipients. The choice of appropriate medium of communication is essential for making the message effective and correctly interpreted by the recipient. This choice of communication medium varies depending upon the features of communication. For instance - Written medium is chosen when a message has to be conveyed to a small group of people, while an oral medium is chosen when spontaneous feedback is required from the recipient as misunderstandings are cleared then and there. Recipient / Decoder - Recipient / Decoder is a person for whom the message is intended / aimed / targeted. The degree to which the decoder understands the message is dependent upon various factors such as knowledge of recipient, their responsiveness to the message, and the reliance of encoder on decoder. Feedback - Feedback is the main component of communication process as it permits the sender to analyze the efficacy of the message. It helps the sender in confirming the correct interpretation of message by the decoder. Feedback may be verbal (through words) or nonverbal (in form of smiles, sighs, etc.). It may take written form also in form of memos, reports, etc.

COMMUNICATION BARRIERS:
Following are the main communication barriers: 1. Perceptual and Language Differences: Perception is generally how each individual interprets the world around him. All generally want to receive messages which are significant to them. But any message which is against their values is not accepted. A same event may be taken differently by different individuals. For example : A person is on leave for a month due to personal reasons (family member being critical). The HR Manager might be in confusion whether to retain that employee or not, the immediate manager might think of replacement because his teams productivity is being hampered, the family members might take him as an emotional support. The linguistic differences also lead to communication breakdown. Same word may mean different to different individuals. For example: consider a word value. a. What is the value of this Laptop? b. I value our relation? c. What is the value of learning technical skills? Value means different in different sentences. Communication breakdown occurs if there is wrong perception by the receiver. 2. Information Overload: Managers are surrounded with a pool of information. It is essential to control this information flow else the information is likely to be misinterpreted or forgotten or

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overlooked. As a result communication is less effective. Inattention: At times we just not listen, but only hear. For example a traveler may pay attention to one NO PARKING sign, but if such sign is put all over the city, he no longer listens to it. Thus, repetitive messages should be ignored for effective communication. Similarly if a superior is engrossed in his paper work and his subordinate explains him his problem, the superior may not get what he is saying and it leads to disappointment of subordinate. Time Pressures: Often in organization the targets have to be achieved within a specified time period, the failure of which has adverse consequences. In a haste to meet deadlines, the formal channels of communication are shortened, or messages are partially given, i.e., not completely transferred. Thus sufficient time should be given for effective communication. Distraction/Noise: Communication is also affected a lot by noise to distractions. Physical distractions are also there such as, poor lightning, uncomfortable sitting, unhygienic room also affects communication in a meeting. Similarly use of loud speakers interferes with communication. Emotions: Emotional state at a particular point of time also affects communication. If the receiver feels that communicator is angry he interprets that the information being sent is very bad. While he takes it differently if the communicator is happy and jovial (in that case the message is interpreted to be good and interesting). Complexity in Organizational Structure: Greater the hierarchy in an organization (i.e. more the number of managerial levels), more is the chances of communication getting destroyed. Only the people at the top level can see the overall picture while the people at low level just have knowledge about their own area and a little knowledge about other areas. Poor retention: Human memory cannot function beyond a limit. One cant always retain what is being told specially if he is not interested or not attentive. This leads to communication breakdown.

OVERCOMING TO BARRIERS
1. Clarity of Purpose: The message to be delivered must be clear in the mind of sender. The person to whom it is targeted and the aim of the message should be clear in the mind of the sender. 2. Completeness: The message delivered should not be incomplete. It should be supported by facts and observations. It should be well planned and organized. No assumptions should be made by the receiver. 3. Conciseness: The message should be concise. It should not include any unnecessary details. It should be short and complete. 4. Feedback: Whether the message sent by the sender is understood in same terms by the receiver or not can be judged by the feedback received. The feedback should be timely and in personal. It should be specific rather than general. 5. Empathy: Empathy with the listeners is essential for effective verbal communication. The speaker should step into the shoes of the listener and be sensitive to their needs and emotions. This way he can understand things from their perspective and make communication more effective. 6. Modify the message according to the audience: The information requirement by different people in the organization differs according to their needs. What is relevant to

the middle level management might not be relevant to the top level of management. Use of jargons should be minimized because it might lead to misunderstanding and misinterpretations. The message should be modified according to the needs and requirements of the targeted audience. 7. Multiple Channels of communication: For effective communication multiple channels should be used as it increases the chances of clarity of message. The message is reinforced by using different channels and there are less chances of deformation of message. 8. Make effective use of Grapevine (informal channel of communication): The employees and managers should not always discourage grapevine. They should make effective use of grapevine. The managers can use grapevine to deliver formal messages and for identification of issues which are significant for the employees. The managers can get to know the problems faced by the employees and can work upon it.

TYPES OF COMMUNICATION
1. Verbal Communication Verbal communication is essentially the type of communication which uses words. It uses sounds in addition to the language, gestures and body language, used while communicating. Verbal communication helps in expressing thoughts, emotions and sentiments. A phone conversation, chat with a friend, an announcement made or a speech delivered are all verbal forms of communication. Here various types of verbal communication discuss below: a) Oral When most of us think of verbal communication, the spoken word automatically comes to mind. Oral communication consists of all spoken exchanges. Casual conversations among friends as well as political debates fall into this category. In oral communication, verbal feedback typically follows the initial message whether in the form of a question or comment. b) Written Another form of verbal communication requires no speech. Written communication, while technically nonverbal, commonly falls under the umbrella of verbal communication for the use of words to convey ideas. Books, letters, email, texts, memos, magazines, newspapers and personal journals are all examples of verbal communication. c) Formal Both oral and written communication take a formal turn when meeting within a business or legal setting. Official corporate communications such as meetings, speeches,

conferences, letters and memorandums serve as examples of formal communication. Legal documents and court proceedings constitute forms of formal exchanges. d) Informal Conversely, informal communication includes casual spoken and written exchanges. Informal conversations occur between friends, coworkers and even strangers. Informal communication typically requires a common bond; therefore, it takes place most frequently between close friends and family members. This form of verbal communication has no structure, time limit or topic guidelines. Advantages Of Verbal Communication No use of technology to interact that would waste natural resources. It is the fastest way of interaction with each other. It is less expensive to interact with people. It is more easier to understand a conversation than some other multimedia means of communication. During a verbal communication you can utilize nonverbal cues such as tone, body language, inflection. You can have long conversations. Disadvantage Of Verbal Communication It can be quickly forgotten Poor presentation of the message or the instruction can result in misunderstanding and wrong responses.

2. Non Verbal Communication Non-verbal communication is a process of communication without using words or sounds. Nonverbal communication uses gestures, body language, facial expressions, eye contact, clothing, hairstyles and every part of the body to communicate with the audience. Dances or a gesture made by a mother to a child, are the perfect examples of non-verbal communication. a) Facial Expression Facial expressions are responsible for a huge proportion of nonverbal communication. Consider how much information can be conveyed with a smile or a frown. While nonverbal communication and behavior can vary dramatically between cultures, the facial expressions for happiness, sadness, anger and fear are similar throughout the world. b) Gestures Deliberate movements and signals are an important way to communicate meaning without words. Common gestures include waving, pointing, and using fingers to indicate numeric amounts. Other gestures are arbitrary and related to culture.

c) Body Language and Posture Posture and movement can also convey a great deal on information. d) Touch We communicate a great deal through touch. Think about the messages given by the following: a firm handshake, a timid tap on the shoulder, a warm bear hug, or a controlling grip on your arm. The advantages of non-verbal communication You can communicate with someone who is hard of hearing of deaf. You can communicate at place where you are supposed to maintain silence. You can communicate if you are far away from a person. The person can see but not hear you. Non-verbal communication makes conversation short and brief. The disadvantages of non-verbal communication are: You can not have long conversation. Can not discuss the particulars of your message Difficult to understand and requires a lot of repetitions. Can not be used as a public tool for communication. Can not create an impression upon people/listeners.

PRINCIPLES OF EFFECTIVE COMMUNICATION

1. Principle of clarity: the beginning of all communication is some message. The message must be as clear as possible. No ambiguity should creep into it. The message can be conveyed properly only if it has been clearly formulated in the mind of the communicator. 2. Principle of objective: the communicator must know clearly the purpose of communication before actually transmitting the message. The objective may be to obtain information, give information, initiate action, and change another persons attitude and so on. If the purpose of communication is clear it will help in the choice of mode of communication. 3. Principle of understanding the receiver: understanding is the main aim of any communication. The communication must crate proper understanding in the mind of the receiver. Thus communication with an awareness of the total physical and human setting in which the information will be received. Picture the place of work; determine the receptivity and understanding levels of the receivers; be aware of social climate and customs; question the informations timeliness. Ask what, when and in what manner you would like to be communicated with if you were in the similar environment and position. 4. Principle of consistency: the message to be communicated should be consistent with plans, policies, programmes and goals of the enterprise. The message should not be

conflicting with previous communications. It should not crate confusion and chaos in the organisation. 5. Principle of completeness: the message to be communicated must be adequate and complete, otherwise it will be misunderstood by the receiver. Inadequate communication delayed action, poor public relations affects the efficiency of the parties to communication. 6. Principle of feedback: this principle calls for communication a two-way process and providing opportunity for suggestion and criticism. Since the receiver is to accept and carry out the instructions, his reactions must be known to the sender of message. The latter must consider the suggestion and criticism of the receiver of information. But feedback principle is often given a back seat by most managers, which defeats the very purpose of communication. 7. Principle of time: information should be communicated at the right time. The communicator must consider the timing of communication so that the desired response is created in the minds of the receivers.

MOTIVATION
Meaning Motivation is the word derived from the word motive which means needs, desires, wants or drives within the individuals. Motivation is the psychological feature that arouses an organism to action toward a desired goal, controls, and sustains certain goal directed behaviors. For instance: An individual has not eaten, he or she feels hungry, and as a response he or she eats and diminishes feelings of hunger. In the work goal means the psychological factors stimulating the peoples behavior can be

desire for money success recognition job-satisfaction team work, etc.

Motivation is to inspire people to work, individually or in groups in the ways such as to produce best results. It is the will to act. It is the willingness to exert high levels of effort towards organizational goals, conditioned by the efforts and ability to satisfy some individual need.

FUNCTIONS OF MOTIVATION

Motivation is a very important for an organization because of the following benefits it provides:1. Puts human resources into action Every concern requires physical, financial and human resources to accomplish the goals. It is through motivation that the human resources can be utilized by making full use of it. This can be done by building willingness in employees to work. This will help the enterprise in securing best possible utilization of resources. 2. Improves level of efficiency of employees The level of a subordinate or a employee does not only depend upon his qualifications and abilities. For getting best of his work performance, the gap between ability and willingness has to be filled which helps in improving the level of performance of subordinates. This will result intoa. Increase in productivity, b. Reducing cost of operations, and c. Improving overall efficiency. 3. Leads to achievement of organizational goals The goals of an enterprise can be achieved only when the following factors take place:There is best possible utilization of resources, There is a co-operative work environment, The employees are goal-directed and they act in a purposive manner, Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be effectively done through motivation. 4. Builds friendly relationship Motivation is an important factor which brings employees satisfaction. This can be done by keeping into mind and framing an incentive plan for the benefit of the employees. This could initiate the following things: a. Monetary and non-monetary incentives, b. Promotion opportunities for employees, c. Disincentives for inefficient employees. In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a manager. This would help in: iv. v. vi. Effective co-operation which brings stability, Industrial dispute and unrest in employees will reduce, The employees will be adaptable to the changes and there will be no resistance to the change, a. b. c. d.

This will help in providing a smooth and sound concern in which individual interests will coincide with the organizational interests, viii. This will result in profit maximization through increased productivity. 5. Leads to stability of work force Stability of workforce is very important from the point of view of reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they have a feeling of participation in the management. The skills and efficiency of employees will always be of advantage to employees as well as employees. This will lead to a good public image in the market which will attract competent and qualified people into a concern. As it is said, Old is gold which suffices with the role of motivation here, the older the people, more the experience and their adjustment into a concern which can be of benefit to the enterprise. IMPORTANCE & CHARACTERISTICS / OBJECTIVES Motivation is important to an individual as: 1. 2. 3. 4. Motivation will help him achieve his personal goals. If an individual is motivated, he will have job satisfaction. Motivation will help in self-development of individual. An individual would always gain by working with a dynamic team.

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Similarly, motivation is important to a business as: 1. The more motivated the employees are, the more empowered the team is. 2. The more is the team work and individual employee contribution, more profitable and successful is the business. 3. During period of amendments, there will be more adaptability and creativity. 4. Motivation will lead to an optimistic and challenging attitude at work place.

THEORIES OF MOTIVATION
1. Classical Theories of Motivation A. Maslows hierarchy of needs theory B. Herzbergs Two factor theory C. Theory X and Theory Y A. Maslows hierarchy of needs theory Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a classical theory of human motivation. This theory is based on the assumption that

there is a hierarchy of five needs within each individual. The urgency of these needs varies. These five needs are as follows1. Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words, physiological needs are the needs for basic amenities of life. 2. Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc. 3. Social needs- Social needs include the need for love, affection, care, belongingness, and friendship. 4. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration). 5. Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing.

FIGURE: Maslows Need Hierarchy Mode

B. Herzbergs Two-Factor Theory of Motivation In 1959, Frederick Herzberg, a behavioral scientist proposed a two-factor theory or the motivator-hygiene theory. According to Herzberg, there are some job factors that result in satisfaction while there are other job factors that prevent dissatisfaction. According to Herzberg, the opposite of Satisfaction is Dissatisfaction. Herzberg classified these job factors into two categoriesa. Hygiene factors- Hygiene factors are those job factors which are essential for existence of motivation at workplace. These do not lead to positive satisfaction for long-term. But

if these factors are absent / if these factors are non-existant at workplace, then they lead to dissatisfaction. Hygiene factors are also called as dissatisfiers or maintenance factors as they are required to avoid dissatisfaction. These factors describe the job environment / scenario. The hygiene factors symbolized the physiological needs which the individuals wanted and expected to be fulfilled. Hygiene factors include: Pay- The pay or salary structure should be appropriate and reasonable. It must be equal and competitive to those in the same industry in the same domain. Company Policies and administrative policies- The company policies should not be too rigid. They should be fair and clear. It should include flexible working hours, dress code, breaks, vacation, etc. Physical Working conditions- The working conditions should be safe, clean and hygienic. The work equipments should be updated and well-maintained. Status- The employees status within the organization should be familiar and retained. Interpersonal relations-The relationship of the employees with his peers, superiors and subordinates should be appropriate and acceptable. There should be no conflict or humiliation element present. Job Security- The organization must provide job security to the employees. b. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as motivators. The motivational factors yield positive satisfaction. These factors are inherent to work. These factors motivate the employees for a superior performance. These factors are called satisfiers. These are factors involved in performing the job. The motivators symbolized the psychological needs that were perceived as an additional benefit. Motivational factors include: Recognition- The employees should be praised and recognized for their accomplishments by the managers. Sense of achievement- The employees must have a sense of achievement. This depends on the job. There must be a fruit of some sort in the job. Growth and promotional opportunities- There must be growth and advancement opportunities in an organization to motivate the employees to perform well. Responsibility- The employees must hold themselves responsible for the work. The managers should give them ownership of the work. They should minimize control but retain accountability. Meaningfulness of the work- The work itself should be meaningful, interesting and challenging for the employee to perform and to get motivated. Limitations of Two-Factor Theory The two factor theory is not free from limitations: 1. Herzberg assumed a correlation between satisfaction and productivity. But the research conducted by Herzberg stressed upon satisfaction and ignored productivity. 2. The two factor theory is not free from bias as it is based on the natural reaction of employees when they are enquired the sources of satisfaction and dissatisfaction at work.

They will blame dissatisfaction on the external factors such as salary structure, company policies and peer relationship. C. Theory X and Theory Y In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human behaviour at work, or in other words, two different views of individuals (employees): one of which is negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the perception of managers on the nature of individuals is based on various assumptions. Assumptions of Theory X

An average employee does not like work and tries to escape it whenever possible. Since the employee does not want to work, he must be compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. Employees generally dislike responsibilities. People are lazy. People lack ambition. People resist change. People are not very bright An average employee needs formal direction.

Assumptions of Theory Y

People are energetic. People are ambitious and seek responsibility. People can be selfless. People want to contribute to business growth and change. People are intelligent. Employees may not require only threat, external control to work, but they can use selfdirection and self-control if they are dedicated and sincere to achieve the organizational objectives. If the job is rewarding and satisfying, then it will result in employees loyalty and commitment to organization. An average employee can learn to admit and recognize the responsibility. The employees have skills and capabilities.

Thus, we can say that Theory X presents a pessimistic view of employees nature and behaviour at work, while Theory Y presents an optimistic view of the employees nature and behaviour at work. If correlate it with Maslows theory, we can say that Theory X is based on the assumption that the employees emphasize on the physiological needs and the safety needs; while Theory X is based on the assumption that the social needs, esteem needs and the self-actualization needs dominate the employees.

COORDINATION
Introduction Co-ordination is the act of organizing, making different people or things work together for a goal or effect to fulfill desired goals in an organization. Coordination is a managerial function in which different activities of the business are properly adjusted and interlinked. coordination is an act of influencing other and putting them together in achieving the single goal. Co-ordination is the unification, integration of group members so as to provide unity of action in the pursuit of common goals. It is a hidden force which binds all the other functions of management. Management seeks to achieve co-ordination through its basic functions of planning, organizing, staffing, directing and controlling. That is why, co-ordination is not a separate function of management because achieving of harmony between individuals efforts towards achievement of group goals is a key to success of management. Co-ordination is the essence of management and is implicit and inherent in all functions of management. Definition According to Mooney and Reelay, Co-ordination is orderly arrangement of group efforts to provide unity of action in the pursuit of common goals. According to Charles Worth, Coordination is the integration of several parts into an orderly to achieve the purpose of understanding.

TECHNIQUES OF CO-ORDINATION:
The main techniques of effective co-ordination are as follows. 1. Sound planning unity of purpose is the first essential condition of co-ordination. Therefore, the goals of the organization and the goals of its units must be clearly defined. Planning is the ideal stage for co-ordination. Clear-cut objectives, harmonised policies and unified procedures and rules ensure uniformity of action. 2. Simplified organization a simple and sound organization is an important means of coordination. The lines of authority and responsibility from top to the bottom of the organization structure should be clearly defined. Clear-cut authority relationships help to reduce conflicts and to hold people responsible. Related activities should be grouped together in one department or unit. Too much specialization should be avoided as it tends to make every unit an end in itself. 3. Effective communication open and regular communication is the key to coordination. Effective interchange of opinions and information helps in resolving differences and in creating mutual understanding. Personal and face-to-face contacts are the most effective means of communication and co-ordination. Committees help to promote unity of purpose and uniformity of action among different departments. 4. Effective leadership and supervision effective leadership ensures co-ordination both at the planning and execution stage. A good leader can guide the activities of his subordinates in the right direction and can inspire them to pull together for the accomplishment of common objectives. Sound leadership can persuade subordinates to

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have identity of interest and to adopt a common outlook. Personal supervision is an important method of resolving differences of opinion. Chain of command authority is the supreme co-ordinating power in an organisation. Exercise of authority through the chain of command or hierarchy is the traditional means of co-ordination. Co-ordination between interdependent units can be secured by putting them under one boss. Indoctrination and incentives indoctrinating organisational members with the goals and mission of the organisation can transform a neutral body into a committed body. Similarly incentives may be used to create mutuality of interest and to reduce conflicts. For instance, profit-sharing is helpful in promoting team-spirit and co-operation between employers and workers. Liaison departments where frequent contacts between different organisational units are necessary, liaison officers may be employed. For instance, a liaison department may ensure that the production department is meeting the delivery dates and specifications promised by the sales department. Special co-ordinators may be appointed in certain cases. For instance, a project co-ordinator is appointed to co-ordinate the activities of various functionaries in a project which is to be completed within a specified period of time. General staff in large organisations, a centralised pool of staff experts is used for coordination. A common staff group serves as the clearing house of information and specialised advice to all department of the enterprise. Such general staff is very helpful in achieving inter-departmental or horizontal co-ordination. Task forces and projects teams are also useful in co-ordination. Voluntary co-ordination when every organisational unit appreciates the workings of related units and modifies its own functioning to suit them, there is self-co-ordination. Self-co-ordination or voluntary co-ordination is possible in a climate of dedication and mutual co-operation. It results from mutual consultation and team-spirit among the members of the organisation. However, it cannot be a substitute for the co-coordinative efforts of managers.

PRINCIPLES OF CO-ORDINATION
Mary Parker Follett has laid out four principles for effective co-ordination;

Direct personal contact according to this principle co-ordination is best achieved through direct personal contact with people concerned. Direct face-to-face communication is the most effective way to convey ideas and information and to remove misunderstanding. Early beginning co-ordination can be achieved more easily in early stages of planning and policy-making. Therefore, plans should be based on mutual consultation or participation. Integration of efforts becomes more difficult once the unco-ordinated plans are put into operation. Early co-ordination also improves the quality of plans. Reciprocity this principle states that all factors in a given situation are interdependent and interrelated. For instance, in a group every person influences all others and is in turn

influenced by others. When people appreciate the reciprocity of relations, they avoid unilateral action and co-ordination becomes easier. Continuity co-ordination is an on-going or never-ending process rather than a oncefor-all activity. It cannot be left to chance, but management has to strive constantly. Sound co-ordination is not fire-fighting, i.e., resolving conflicts as they arise.

MODULE V :LEADERSHIP LEADERSHIP

Meaning A leader is "a person who influences a group of people towards the achievement of a goal". Good leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never ending process of self-study, education, training, and experience. The activity of leading a group of people or an organization. In its essence, leadership in an organizational role involves (1) establishing a clear vision, (2) sharing that vision with others so that they will follow willingly, (3) providing the information, knowledge, and methods to realize that vision, and (4) coordinating and balancing the conflicting interests of all members .A leader comes to the forefront in case of crisis, and is able to think and act in creative ways in difficult situations. The leader has to be practical and a realist yet must talk the language of the visionary and the idealist. 'Eric Hoffer Definition: According to Keith Davis, Leadership is the ability to persuade others to seek defined objectives enthusiastically. It is the human factor which binds a group together and motivates it towards goals.

CONCEPTS OF LEADERSHIP
Leaders are made not born. If you have the desire and willpower, you can become an effective leader. Good leaders develop through a never ending process of self-study, education, training, and experience. This guide will help you through that process. To inspire your workers into higher levels of teamwork, there are certain things you must be, know, and, do. These do not come naturally, but are acquired through continual work and study. Good leaders are continually working and studying to improve their leadership skills.

Leadership is a process by which a person influences others to accomplish an objective and directs the organization in a way that makes it more coherent. Leaders carry out this process by applying their leadership attributes, such as beliefs, values, ethics, character, knowledge, and skills. Although your position as a manager, supervisor, lead, etc. gives you the authority to accomplish certain tasks and objectives in the organization, this power does not make you a leader, it simply makes you the boss. Leadership differs in that it makes the followers want to achieve high goals, rather than simply bossing people around. The basis of good leadership is honorable character and selfless service to your organization. In your employees' eyes, your leadership is everything you do that effects the organization's objectives and their well-being. Respected leaders concentrate on what they are (such as beliefs and character), what they know (such as job, tasks, and human nature), and what they do (such as implementing, motivating, and providing direction). What makes a person want to follow a leader? People want to be guided by those they respect and who have a clear sense of direction. To gain respect, they must be ethical. A sense of direction is achieved by conveying a strong vision of the future.

QUALITIES OF A GOOD LEADER

The followings are list of the characteristics of a good leader: 1.Vision Most good leaders have great vision. They know where they want to go and they know how to motivate people to believe in this same vision they have for their community, country and their lives. If you're not sure, how can your people be sure? You have to have strong focus and stay the course. 2. Enthusiastic and Courageous You can achieve great thing without enthusiasm and without courage you lack ability of taking risk. Without risk taking ability you cannot be a leader. In fact taking no risk and fear of making mistakes is the biggest risk in the world. 3. Build teams Leaders create productive teams that draw the best from people. They effectively coach teams in collaboration and conflict resolution. Learn how to improve your teambuilding skills: Avoid preconceived answers to every question. Concentrate on appreciating different points of view during discussions rather than just trying to prove your point. This same willingness to include others is the key to successful teambuilding.

4. Passionate Good leaders are very passionate people. They're intensely obsessed in whatever they are focused on. It could be business, sports or a hobby, these individuals are intensely focused. They operate with such a high level of passion that they get consumed in it. 5. Make decisions Leaders arent afraid to make difficult or unpopular decisions because they have confidence in themselves and in their abilities. They know how to use opportunities. 6. Charismatic Most good leaders are captivating. They're charming individuals and they tend to draw people in with their personalities. It could be in the way they talk, the way they carry themselves. They are excellent a building relationships and demanding performance from their peers. These individuals have an X-factor that you are drawn to. 7. Great Communicators Good leaders are usually great orators and persuaders. They're very comfortable with public speaking and are very inspiring people. It isn't surprising that they can develop a good following with this communication ability. 8. Persistent Good leaders are determined in attaining their goals. They know that reaching their destination can be filled with problems. Not with standing, they see that the advantages of attaining their goals are larger than that of the problems that occurred. This makes them intensely persistent individuals. 9. Integrity Good leaders mean what they say. They have integrity. They're individuals who keep their guarantees and they do not play the old political games that plenty of others do. People find them reliable and as such are dedicated to them. 10. Disciplined Most good leaders are very controlled in the pursuit of their goals. Where most individuals would be simply distracted, good leaders discipline their minds to keep focused and steady regardless of the situation.

FUNCTIONS OF LEADERSHIP

1. Initiates action- Leader is a person who starts the work by communicating the policies and plans to the subordinates from where the work actually starts. 2. Motivation- A leader proves to be playing an incentive role in the concerns working. He motivates the employees with economic and non-economic rewards and thereby gets the work from the subordinates. 3. Providing guidance- A leader has to not only supervise but also play a guiding role for the subordinates. Guidance here means instructing the subordinates the way they have to perform their work effectively and efficiently. 4. Creating confidence- Confidence is an important factor which can be achieved through expressing the work efforts to the subordinates, explaining them clearly their role and giving them guidelines to achieve the goals effectively. It is also important to hear the employees with regards to their complaints and problems. 5. Building morale- Morale denotes willing co-operation of the employees towards their work and getting them into confidence and winning their trust. A leader can be a morale booster by achieving full co-operation so that they perform with best of their abilities as they work to achieve goals. 6. Builds work environment- Management is getting things done from people. An efficient work environment helps in sound and stable growth. Therefore, human relations should be kept into mind by a leader. He should have personal contacts with employees and should listen to their problems and solve them. He should treat employees on humanitarian terms. 7. Co-ordination- Co-ordination can be achieved through reconciling personal interests with organizational goals. This synchronization can be achieved through proper and effective co-ordination which should be primary motive of a leader

LEADERSHIP STYLES
Some of the important leadership styles are as follows: 1. Autocratic leadership style: In this style of leadership, a leader has complete command and hold over their employees/team. The team cannot put forward their views even if they are best for the teams or organizational interests. They cannot criticize or question the leaders way of getting things done. The leader himself gets the things done. The advantage of this style is that it leads to speedy decision-making and greater productivity under leaders supervision. Drawbacks of this leadership style are that it leads to greater employee absenteeism and turnover. This leadership style works only when the leader is the best in performing or when the job is monotonous, unskilled and routine in nature or where the project is short-term and risky. 2. The Laissez Faire Leadership Style: Here, the leader totally trusts their employees/team to perform the job themselves. He just concentrates on the intellectual/rational aspect of his work and does not focus on the management aspect of his work. The team/employees are welcomed to share their views and provide suggestions which are best for organizational interests. This leadership style works only when the employees are skilled, loyal, experienced and intellectual.

3. Democrative/Participative leadership style: The leaders invite and encourage the team members to play an important role in decision-making process, though the ultimate decision-making power rests with the leader. The leader guides the employees on what to perform and how to perform, while the employees communicate to the leader their experience and the suggestions if any. The advantages of this leadership style are that it leads to satisfied, motivated and more skilled employees. It leads to an optimistic work environment and also encourages creativity. This leadership style has the only drawback that it is time-consuming. 4. Bureaucratic leadership: Here the leaders strictly adhere to the organizational rules and policies. Also, they make sure that the employees/team also strictly follows the rules and procedures. Promotions take place on the basis of employees ability to adhere to organizational rules. This leadership style gradually develops over time. This leadership style is more suitable when safe work conditions and quality are required. But this leadership style discourages creativity and does not make employees self-contented. MANAGEMENT GRID The managerial grid model (1964) is a behavioral leadership model developed by Robert R. Blake and Jane Mouton. This model originally identified five different leadership styles based on the concern for people and the concern for production. The optimal leadership style in this model is based on Theory Y. Understanding the Model The Managerial Grid is based on two behavioral dimensions:

Concern for People This is the degree to which a leader considers the needs of team members, their interests, and areas of personal development when deciding how best to accomplish a task. Concern for Production This is the degree to which a leader emphasizes concrete objectives, organizational efficiency and high productivity when deciding how best to accomplish a task.

Using the axis to plot leadership concerns for production versus concerns for people, Blake and Mouton defined the following five leadership styles:

Country Club Leadership High People/Low Production This style of leader is most concerned about the needs and feelings of members of his/her team. These people operate under the assumption that as long as team members are happy and secure then they will work hard. What tends to result is a work environment that is very relaxed and fun but where production suffers due to lack of direction and control. Produce or Perish Leadership High Production/Low People Also known as Authoritarian or Compliance Leaders, people in this category believe that employees are simply a means to an end. Employee needs are always secondary to the need for efficient and productive workplaces. This type of leader is very autocratic, has strict work rules, policies, and procedures, and views punishment as the most effective means to motivate employees. (See also our article on Theory X/Theory Y.) Impoverished Leadership Low Production/Low People This leader is mostly ineffective. He/she has neither a high regard for creating systems for getting the job done, nor for creating a work environment that is satisfying and motivating. The result is a place of disorganization, dissatisfaction and disharmony. Middle-of-the-Road Leadership Medium Production/Medium People This style seems to be a balance of the two competing concerns. It may at first appear to be an ideal compromise. Therein lies the problem, though: When you compromise, you necessarily give away a bit of each concern so that neither production nor people needs are fully met. Leaders who use this style settle for average performance and often believe that this is the most anyone can expect. Team Leadership High Production/High People

According to the Blake Mouton model, this is the pinnacle of managerial style. These leaders stress production needs and the needs of the people equally highly. The premise here is that employees are involved in understanding organizational purpose and determining production needs. When employees are committed to, and have a stake in the organizations success, their needs and production needs coincide. This creates a team environment based on trust and respect, which leads to high satisfaction and motivation and, as a result, high production. (See also our article on Theory Y.)

CONTROLLING
What is controlling? Controlling consists of verifying whether everything occurs in confirmities with the plans adopted, instructions issued and principles established. Controlling ensures that there is effective and efficient utilization of organizational resources so as to achieve the planned goals. Controlling measures the deviation of actual performance from the standard performance, discovers the causes of such deviations and helps in taking corrective actions According to Brech, Controlling is a systematic exercise which is called as a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs. According to Donnell, Just as a navigator continually takes reading to ensure whether he is relative to a planned action, so should a business manager continually take reading to assure himself that his enterprise is on right course. Controlling has got two basic purposes 1. It facilitates co-ordination 2. It helps in planning FEATURES OF CONTROLLING Following are the characteristics of controlling function of management1. Controlling is an end function- A function which comes once the performances are made in confirmities with plans. 2. Controlling is a pervasive function- which means it is performed by managers at all levels and in all type of concerns.

3. Controlling is forward looking- because effective control is not possible without past being controlled. Controlling always look to future so that follow-up can be made whenever required. 4. Controlling is a dynamic process- since controlling requires taking reviewal methods, changes have to be made wherever possible. 5. Controlling is related with planning- Planning and Controlling are two inseperable functions of management. Without planning, controlling is a meaningless exercise and without controlling, planning is useless. Planning presupposes controlling and controlling succeeds planning.

PROCESS OF CONTROLLING

Controlling as a management function involves following steps: 1. Establishment of standards- Standards are the plans or the targets which have to be achieved in the course of business function. They can also be called as the criterions for judging the performance. Standards generally are classified into twoa. Measurable or tangible - Those standards which can be measured and expressed are called as measurable standards. They can be in form of cost, output, expenditure, time, profit, etc. b. Non-measurable or intangible- There are standards which cannot be measured monetarily. For example- performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards. Controlling becomes easy through establishment of these standards because controlling is exercised on the basis of these standards. 2. Measurement of performance- The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when performance of manager has to be measured. Performance of a manager cannot be measured in quantities. It can be measured only bya. Attitude of the workers, b. Their morale to work, c. The development in the attitudes regarding the physical environment, and d. Their communication with the superiors. It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.

3. Comparison of actual and standard performance- Comparison of actual performance with the planned targets is very important. Deviation can be defined as the gap between actual performance and the planned targets. The manager has to find out two things hereextent of deviation and cause of deviation. Extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. The managers have to exercise control by exception. He has to find out those deviations which are critical and important for business. Minor deviations have to be ignored. Major deviations like replacement of machinery, appointment of workers, quality of raw material, rate of profits, etc. should be looked upon consciously. Therefore it is said, If a manager controls everything, he ends up controlling nothing. For example, if stationery charges increase by a minor 5 to 10%, it can be called as a minor deviation. On the other hand, if monthly production decreases continuously, it is called as major deviation. Once the deviation is identified, a manager has to think about various cause which has led to deviation. The causes can bea. b. c. d. Erroneous planning, Co-ordination loosens, Implementation of plans is defective, and Supervision and communication is ineffective, etc.

4. Taking remedial actions- Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives herea. Taking corrective measures for deviations which have occurred; and b. After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow up is an important step because it is only through taking corrective measures, a manager can exercise controlling.